EXHIBIT 2.9
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of October 19, 2004 (this "Agreement"),
by and among Access Integrated Technologies, Inc., a Delaware corporation
("Access Integrated"), FiberSat Global Services Inc., a Delaware corporation and
a wholly-owned subsidiary of Access Integrated (the "Purchaser"), FiberSat
Global Services LLC, a California limited liability company (the "Company"),
Xxxxxxx Xxxxx, Xxxx Xxxxx, XxXxxxxx Communications, Globecomm Systems, Inc.,
Xxxxxxx Xxxxxxxxxx, Xxxxx Xxxxx and Xxxxxxx Xxxxxx, the members of the Company
(collectively the "Members").
WHEREAS, the Company is engaged in the business of operating Teleport
Facilities (as defined herein) to provide services utilizing satellite ground
facilities and fiber-optic connectivity to receive, process, store, encrypt and
transmit television and data signals globally (the "Business"); and
WHEREAS, the Members are presently the owners of all of the Company's
outstanding membership interests; and
WHEREAS, the Purchaser desires to purchase, and obtain the assignment of,
from the Company, and the Company desires to sell, convey, assign and transfer
to the Purchaser, the Purchased Assets (as defined in Section 1.1 below),
including the Leased Property (as defined in Section 1.1(a) below), held by the
Company and utilized in the operation of the Business, upon the terms and
subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants, and agreements contained in this Agreement, the parties, each
intending to be legally bound hereby, agree as set forth below:
ARTICLE I.
PURCHASE AND SALE
1.1. PURCHASE AND SALE OF ASSETS. At the Closing (as defined in Section
1.9 below), the Company shall sell, assign, transfer, convey, and deliver to the
Purchaser, and the Purchaser shall purchase and accept from the Company, all of
the Company's rights, title and interests in and to the Purchased Assets, free
and clear of all mortgages, security interests, charges, encumbrances, liens,
assessments, covenants, claims, title defects, pledges, encroachments and
burdens of every kind or nature whatsoever ("Encumbrances") except for any
Encumbrances for taxes and assessments not yet past due or otherwise being
contested in good faith and for which appropriate reserves have been
established, any Encumbrance arising out of deposits made to secure leases or
other obligations of a like nature arising in the ordinary course of business,
and those encumbrances listed on SCHEDULE 1.1 ("Permitted Encumbrances"). The
term "Purchased Assets" means the assets, properties, rights, contractual rights
of the Company, and claims of the Company, in respect of the Business, set forth
below:
(a) The leasehold interests of the Company in and to those certain
satellite transmission facilities (the "Teleport Facilities") operated by the
Company, located at 00000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx and 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx (the "Leased Property"), and all right, title and
interest of the Company under its lease agreements in respect of the Leased
Property, both of such leases which are attached hereto as EXHIBIT A (the
"Leases");
(b) All improvements and fixed assets constructed and/or installed by the
Company and located at the Leased Property as of the date of the Agreement (the
"Improvements");
(c) All fixtures, furniture, machinery, computers, computer and other
equipment and all other tangible personal property owned by the Company and
currently located at the Leased Property, and all items owned by the Company
that are currently used in the operation of Business;
(d) All rights, title and interest of the Company in and to the build-out
of the Teleport Facilities, including, without limitation, any and all racks,
wiring, satellite equipment, digital content processing equipment, cages,
power-distribution equipment, cabling and fuse panels, and all other machinery,
equipment and all other items owned by the Company that are used in the
operation of the Teleport Facilities;
(e) All customer contracts, licenses and agreements and any customer
security deposits, letters of credit or pre-paid service charges, and all rights
and claims thereunder (collectively, the "Assumed Contracts"), the assignment of
which shall be in a form reasonably acceptable to the Purchaser;
(f) To the extent transferable and as included in the Assumed Contracts,
all rights under all warranties, representations, and guarantees made by
suppliers, manufacturers, and contractors;
(g) All rights under confidentiality, nondisclosure and similar agreements
to the extent transferable, included in the Assumed Contracts and/or related to
the Purchased Assets;
(h) All books and records of the Company relating to the Purchased Assets
and/or the Leased Property, including, without limitation, any and all
information with regard to customers of the Teleport Facilities, data processing
records, records relating to suppliers, supplier lists, cost information, vendor
data, specifications and drawings, correspondence and lists, product literature,
artwork, design, development and manufacturing files, quality records and other
data;
(i) All operations manuals, methods and procedures, to the extent owned by
the Company, and to the extent the same relate to the Business, Purchased Assets
and/or the Teleport Facilities;
(j) Any and all Intellectual Property of the Business as defined in
Section 2.18 below;
(k) Any interest in and to any refund of taxes relating to the Purchased
Assets or the operations of the Teleport Facilities to the extent such taxes are
for, or applicable to, any taxable period (or portion thereof) beginning after
the Closing Date;
(l) Any and all accounts receivable, cash (except for $75,000 which shall
be used by the Company with respect to the payment of the Retained Liabilities
and the wind-down of the business and operations of the Company) and current
assets as of the Closing Date;
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(m) The licenses, and rights to have such licenses transferred to
Purchaser, issued to the Company by the Federal Communications Commission
("FCC") and set forth on SCHEDULE 1.1(M); and
(n) The right to the name "FiberSat Global Services" or any derivation
thereof, and all e-mail and Internet addresses of the Company.
1.2. RETAINED ASSETS. The Company shall retain, and the Purchased Assets
shall not include, the following assets: (i) the consideration to be delivered
to the Company pursuant to this Agreement; (ii) all other assets of the Company
not relating to or associated with the operation of the Teleport Facilities;
(iii) the Company's other rights hereunder; (iv) the Company's minute books,
stock books and seal; (v) all claims, choses in action, causes of action and
judgments in respect of any litigation matter and with respect to the Retained
Liabilities (as defined in Section 1.3 hereof); (vi) $75,000 in cash to be used
in connection with the payment of the Retained Liabilities and the wind-down of
the business and operations of the Company; and (vii) any asset located at the
Company's facility at 00000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx (collectively,
the "Retained Assets").
1.3. ASSUMED LIABILITIES; RETAINED LIABILITIES. At the Closing, the
Purchaser shall assume from the Company, and undertake to discharge the
liabilities and obligations arising from: (a) the Company's liabilities to
General Electric Capital Corporation ("GE") described on SCHEDULE 1.3; (b) the
Company's Current Liabilities (as defined below), provided that (i) if Current
Liabilities exceed Current Assets (as defined below) on the Closing Date, such
excess shall be the responsibility of the Company and shall constitute Retained
Liabilities, and (ii) if the Company prepays any Settlement Liabilities (as
defined herein) during the period from the date of execution of this Agreement
to the Closing Date, such prepayment amount shall be added to the amount of
Current Assets; (c) the Leases; (d) the Assumed Contracts; and (e) any liability
arising after the Closing Date relating to the Business (to the extent all of
such liabilities and obligations do not arise as a result of any default by the
Company prior to the Closing). The assumed liabilities described in subsections
(a) through (e) above are collectively referred to as the "Assumed Liabilities".
"Current Assets" means all of the Purchased Assets as of the Closing Date that
would be classified as "current assets" under GAAP using the same accounting
methods, policies, practices, principles and procedures with consistent
classifications as were used in the preparation of the Financial Statements (as
defined herein). Notwithstanding the foregoing, Current Assets shall not include
$75,000 of cash. "Current Liabilities" means all of the liabilities of the
Company as of the Closing Date that would be classified as "current liabilities"
under GAAP, using the same accounting methods, policies, practices, principles
and procedures with consistent classifications that were used in the preparation
of the Financial Statements. The parties agree that all indebtedness of the
Company owed to GE described on SCHEDULE 1.3 and all Settlement Liabilities
shall not constitute Current Liabilities. Except as expressly provided in this
Section 1.3, the Purchaser and Access Integrated do not and shall not assume or
in any way be liable or responsible for or undertake to pay, perform, satisfy or
discharge any other liabilities, commitments or obligations, whether known or
unknown, disclosed or undisclosed, absolute, contingent, inchoate, fixed or
otherwise, of the Company, including, without limitation, all liabilities,
commitments or obligations relating to or arising from the Purchased Assets or
the use thereof (the "Retained Liabilities") and the Company shall pay and
satisfy when due (unless the Company in good faith is disputing a specific
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liability or attempting to settle a specific liability), in accordance with
Section 5.6 hereof, all of the Retained Liabilities. The parties further agree
that except as expressly provided in Section 1.10 with respect to sales taxes,
Purchaser and Access Integrated are not assuming any liability for taxes of the
Company. Xxxx XxXxxxxx, Xxxxx XxXxxxxx and/or XxXxxxxx Communications, a
California corporation (collectively, the "XxXxxxxx Parties"). are guarantors of
certain of the Assumed Liabilities (collectively, the "XxXxxxxx Guarantees"). If
some or all of the XxXxxxxx Guarantee(s) are not released by the Closing Date,
Purchaser shall indemnify the XxXxxxxx Parties with respect to such XxXxxxxx
Guarantee(s).
1.4. SETTLEMENT LIABILITIES. SCHEDULE 1.4 sets forth the liabilities
("Settlement Liabilities") of the Company that the Company, with the assistance
of Purchaser and Access Integrated, will use its reasonable best efforts, during
the period between execution of this Agreement to the Closing Date (the
"Period") to reduce, settle, satisfy, compromise, pay-off, or enter into
agreement or arrangements to accomplish such actions, provided however that the
Company shall not be obligated to commit to settlements of the Settlement
Liabilities that exceed (in the aggregate) the Settlement Amount. The parties
acknowledge and agree that prior to the Period, the Company has been working to
resolve the Settlement Liabilities. The Company shall not resolve any Settlement
Liability prior to the Closing Date without Purchaser's consent. On the Closing
Date, Purchaser and Access Integrated shall provide to the Company $500,000 in
cash and 100,000 shares of Access Integrated's Common Stock ("Settlement
Amount") (the Company shall have the option to exchange up to 50,000 of the
100,000 shares of Common Stock valued at $5.00 per share to increase the cash,
and thereby decrease the Common Stock, portion of the Settlement Amount based on
a ratio of one share of Common Stock for each $5.00 of additional cash requested
by the Company) to pay-off the Settlement Liabilities. In the event that on the
Closing Date the Settlement Liabilities exceed the Settlement Amount, the
Company shall be responsible for such excess and such excess shall constitute
Retained Liabilities. If the Company pays any Settlement Liability during the
Period, such payment shall be added into the amount of Current Assets determined
on the Closing Date.
1.5. INITIAL PURCHASE PRICE; ADDITIONAL PURCHASE PRICE; PURCHASE PRICE
ADJUSTMENT. PURCHASE PRICE.
(a) The aggregate purchase price (the "Purchase Price") for all of the
Purchased Assets shall consist of 500,000 shares ("Shares") (plus any
adjustments required by Section 1.5(c) below) of Access Integrated's Class A
Common Stock, par value $.001 per share ("Common Stock"), the further transfer
of which shall be restricted under the Securities Act of 1933, as amended (the
"Securities Act"), and as provided under Sections 3.4 and 3.7 hereof; and
(b) The Shares shall be issued and delivered to the Members at the
Closing, each in the denominations set forth opposite each Member's name on
SCHEDULE 1.5(B) hereto under the caption "Purchase Price to Company" (plus each
individual's proportionate share of any adjustments required by Section 1.5(c)
and Section 1.6 below).
(c) (i) Each of the Shares issued at Closing, which shall become Pricing
Eligible Shares (as defined below), shall be subject to a one-time adjustment by
the issuance of additional shares of Common Stock, on the applicable Pricing
Date (as defined below) for such shares, if and to the extent that on such
Pricing Date the Minimum Value (as defined below) shall exceed the Fair Market
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Value (as defined below). In such event, Access Integrated shall issue
additional shares of Common Stock ("Additional Shares") to each holder in
accordance with the following formula:
(PRICING ELIGIBLE SHARES X MINIMUM VALUE) - (PRICING ELIGIBLE SHARES X
FAIR MARKET VALUE) / FAIR MARKET VALUE = Additional Shares
Notwithstanding the foregoing, in no event shall the aggregate number of
Additional Shares issued by Access Integrated exceed 100,000 shares of Common
Stock (as adjusted pursuant to Section 1.5(d)).
(ii) Fair Market Value. For purposes of this Section 1.5, "Fair Market
Value" for any day means: (a) if the principal market for the Common Stock is
the New York Stock Exchange, the American Stock Exchange or any other national
securities exchange or the Nasdaq National Market, the average closing price of
the Common Stock for each day of the Applicable Period as reported by such
exchange or market, or on a consolidated tape reflecting transactions on such
exchange or market or (b) if the principal market for the Common Stock is not a
national securities exchange or the Nasdaq National Market and the Common Stock
is quoted on the National Association of Securities Dealers Automated Quotations
System, the average of the mean between the closing bid and the closing asked
prices for the Common Stock for each day of the Applicable Period as quoted on
such System, or (c) if the principal market for the Common Stock is not a
national exchange or the Nasdaq National Market and the Common Stock is not
quoted on the National Association of Securities Dealers Automated Quotations
System, the average of the means between the highest bid and lowest asked prices
for the Common Stock for each day of the Applicable Period as reported by Pink
Sheets LLC; PROVIDED, HOWEVER, that if none of (a), (b) or (c) above is
applicable, or if no trades have been made or no quotes are available for such
day, the Fair Market Value of the Common Stock shall be determined, in good
faith, either by (i) the board of directors of Access Integrated or (ii) if the
Member Representative (as defined herein) objects to such determination, by an
independent appraiser mutually acceptable to both Access Integrated and the
Member Representative and the costs of such appraiser shall be paid for by the
Members.
(iii) "Applicable Period" means in respect of any of the Pricing Eligible
Shares, the ninety (90) days immediately preceding the Pricing Date.
(iv) "Pricing Eligible Shares" means, with respect to each Member, the
number of shares of Common Stock held by such person on the Pricing Date that
are either registered for resale under the Securities Act, or are freely
transferable pursuant to Rule 144 promulgated under the Securities Act.
(v) "Minimum Value" means eighty percent (80%) of the Fair Market Value on
the Closing Date by the parties hereto.
(vi) "Pricing Date" means, with respect to any of the Pricing Eligible
Shares, the first trading day on which such shares may be sold by the holder
pursuant to Rule 144 promulgated pursuant to the Securities Act or an effective
registration statement.
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(d) The number of shares of Common Stock to be issued shall be adjusted so
as to give the holders the economic benefit of any stock dividends,
reclassifications, recapitalizations, split-ups, exchanges of shares, or
combinations or subdivisions of the Common Stock (each, a "Share Adjustment")
effected between the date hereof and the Closing Date for purposes of Section
1.5(c) hereof or between the Closing Date and, if applicable, each date of
issuance of Earn-Out Shares in accordance with and as defined in Section 1.6
hereof (each, an "Issuance Date"). In particular, without limiting the
foregoing, if, prior to an Issuance Date, Access Integrated should effect a
split, reclassification or combination of Common Stock, Access Integrated shall
adjust the total number of shares (rounded to the nearest whole share) to be
issued so that such holders shall be entitled to receive such number of shares
of Common Stock as such holders would have received pursuant to such Share
Adjustment had the record date and the issuance date therefor been immediately
following such Issuance Date.
1.6. ADDITIONAL PURCHASE PRICE.
(a) Following the Closing, an additional purchase price (the "Additional
Purchase Price") will be paid by Access Integrated solely in additional shares
of Common Stock ("Earn-Out Shares") to the Members (in accordance with Section
1.6(e) hereof) as follows:
(i) An Additional Purchase Price shall be paid to the Members in the event
that EBITDA in respect of the Business for the 12-month period beginning on the
first day of the month following the month in which the Closing occurs ("Year
One") shall exceed $600,000 (the "Annual Base"). The Additional Purchase Price
for Year One shall equal in the aggregate two-thirds (2/3) of such excess.
(ii) An Additional Purchase Price shall also be paid to the Members in the
event that EBITDA for the 12-month period beginning on the day immediately
following the last day of Year One ("Year Two") shall exceed the higher of (A)
the Annual Base or (B) the sum of the Annual Base, plus one hundred percent
(100%) of the amount, if any, by which Year One EBITDA is less than the Annual
Base. The Additional Purchase Price for the Year Two shall equal in the
aggregate two-thirds (2/3) of such excess.
(iii) An Additional Purchase Price shall also be paid to the Members in
the event that EBITDA for the 12-month period beginning on the day immediately
following the last day of Year Two ("Year Three") shall exceed the higher of (A)
the Annual Base or (B) the Annual Base, plus one hundred (100%) percent of the
amount, if any, by which Year Two EBITDA is less than the higher of the amounts
set forth in Section 1.6(a)(ii)(A) and (B) above. The Additional Purchase Price
for Year Three shall equal in the aggregate two-thirds (2/3) of the amount of
such excess.
(b) For purposes hereof, "EBITDA" shall mean the earnings of Purchaser and
Access Integrated attributable to the Business, before deduction for interest,
corporate income taxes, depreciation and amortization (but after deduction for
amortization of capitalized research and development costs in accordance with
generally accepted accounting principles in the United States of America, as in
effect from time to time, ("GAAP")) related to the Business in each case,
without accounting for any extraordinary items (as defined under GAAP). EBITDA
shall not be reduced by any allocated portion of Access Integrated or
Purchaser's overhead or administrative charges, but shall be reduced by any
charges incurred in connection with the Business's use of the data center or
other services provided by Access Integrated or Purchaser and assessed at prices
not greater than those charged in arm's-length transactions.
(C) Within 120 days after the end of each of Year One, Year Two and Year
Three, Purchaser shall deliver, or cause to be delivered, to the Members the
following: (i) unaudited statements of income in respect of the Business for
each applicable Year, (ii) Purchaser's written statement containing, in
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reasonable detail, Purchaser's calculation of (x) EBITDA for the applicable Year
and (y) the Additional Purchase Price payable, if any (each, an "EBITDA
Statement") and (iii) Purchaser's and Access Integrated's audited financial
statements for its fiscal year most recently ended.
(d) The Members shall have thirty (30) days from delivery of each EBITDA
Statement to raise any objection thereto by delivery of written notice to
Purchaser and Access Integrated setting forth such objections in reasonable
detail. In reviewing the information provided to the Members pursuant to Section
1.6(d) the Members will have the right to communicate with the individuals and
accountants who have prepared such information, and to review the work papers,
schedules, memoranda and other documents Purchaser and Access Integrated
prepared or reviewed in preparation thereof. All financial information contained
therein, in respect of which no such objection is so delivered within such
30-day period (or written notice of Purchaser's and Access Integrated's failure
to comply with this Section 1.6 which has resulted in the Member's inability to
determine objections to such matters), shall be deemed final and binding on the
parties. In the event that any such objections are so delivered by the Members
(or written notice describing the failure of Purchaser and Access Integrated to
comply with its obligations as described above), Purchaser, Access Integrated
and the Members shall attempt, in good faith, to resolve such objections and, if
unable to do so within ten (10) days of delivery of such objections, shall,
within five (5) business days thereafter designate a nationally recognized firm
of independent public accountants (the "Independent Accountants") mutually
satisfactory to Purchaser, Access Integrated and the Members. In the event that
Purchaser, Access Integrated and the Members are unable to agree on the
Independent Accountants within such five-business day period, the Independent
Accountants shall be designated jointly by the independent accountants of
Purchaser, Access Integrated and the Members within ten (10) business days
thereafter. The Independent Accountants shall resolve all remaining objections
to the EBITDA Statement made by the Members in accordance herewith within twenty
(20) business days from their date of designation. The determination of the
Independent Accountants shall be final and binding on the parties for purposes
of this Section 1.6. The fees and expenses of the Independent Accountants shall
be borne by Purchaser and Access Integrated, unless the final determination of
the applicable EBITDA by the Independent Accountants in accordance with this
Section 1.6(d) is not greater than one hundred five percent (105%) of such
EBITDA as set forth in the applicable EBITDA Statement, in which event Members
shall bear all of the fees and expenses of the Independent Accountants.
(e) The Additional Purchase Price paid in respect of Year One, Year Two or
Year Three (each an "EBITDA Measurement Period"), if any, shall be paid to the
Members in shares of Common Stock pursuant to Section 1.5(b). The number of
shares of Common Stock comprising the Earn-Out Shares shall be determined by
dividing the portion of the Additional Purchase Price to such EBITDA Measurement
Period by the Fair Market Value, PROVIDED, that, for purposes hereof, the
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Applicable Period shall mean the twenty (20) trading days immediately preceding
the date of final determination of EBITDA in accordance with Section 1.6(d)
above.
(f) In the event that the Members shall be entitled to an Additional
Purchase Price pursuant to this Section 1.6, Access Integrated shall, promptly
after final determination of an EBITDA Statement that is definitive and binding
on the parties in accordance with Section 1.6(d), but in no event later than
five (5) business days thereafter, issue and deliver to Members shares of the
Common Stock comprising the Earn-Out Shares.
1.7. PAYMENT OF INITIAL PURCHASE PRICE AND ADDITIONAL PURCHASE PRICE.
(a) INITIAL PURCHASE PRICE. At the Closing, (i) the Initial Purchase
Price shall be paid by the Purchaser to the Company by issuing Common Stock to
the Members in accordance with Section 1.5(b); (ii) the Purchaser shall assume
the Assumed Liabilities pursuant to the provisions of Section 1.3; and (iii) the
Purchaser shall provide the Settlement Amount set forth in Section 1.4 to pay,
or satisfy the obligation to pay, the Settlement Liabilities in accordance with
the provisions of Section 1.4.
(b) ADDITIONAL PURCHASE PRICE. After the Closing, the Additional
Purchase Price shall be paid subject to the provisions of Section 1.6 above.
1.8. ESCROW OF SHARES. On the Closing Date, 100,000 shares ("Escrowed
Shares") of Common Stock, representing thirty percent (30%) of the Shares to be
issued to Xxxxxxx Xxxxx, shall be placed into escrow for one year after the
Closing Date pursuant to the terms and conditions of an escrow agreement
("Escrow Agreement") by and among Purchaser, Access Integrated, Company, and
Xxxxxxx Xxxxx and an escrow agent ("Escrow Agent"). The parties agree that
Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx, P.C., counsel to Access
Integrated and Purchaser, shall serve as Escrow Agent and Purchaser shall pay
its fees. Purchaser and Access Integrated shall have the right to have Escrowed
Shares released to them to satisfy their indemnification claims under Section
8.3 of this Agreement. Any Escrowed Shares that are still held in escrow on the
first anniversary of the Closing Date that have not been released to Access
Integrated and Purchaser or are not attributable to pending claims of Purchaser
and Access Integrated on such date shall be released to Xxxxxxx Xxxxx pursuant
to the terms and conditions of the Escrow Agreement. A form of the Escrow
Agreement is attached hereto as EXHIBIT B.
1.9. CLOSING. Subject to Article 6, the transfer of the Purchased Assets,
delivery of the Shares, the assumption of the Assumed Liabilities, and the
payment or agreement or arrangement for payment of the Settlement Liabilities
contemplated hereby shall be deemed to take place at a closing (the "Closing")
at the offices of the Purchaser on or before November 15, 2004 (the "Closing
Date") (such date is a projected Closing Date), or on such other date as the
Purchaser, Access Integrated and the Company may mutually agree to in writing,
subject to termination pursuant to Section 7.1 hereof.
1.10. ALLOCATION OF PURCHASE PRICE; SALES TAXES. The Purchase Price shall
be allocated among the Purchased Assets pursuant to the Purchase Price
allocation schedule set forth at SCHEDULE 1.10. The Purchaser, Access Integrated
and the Company shall report the federal, state and local income and other tax
consequences of the purchase and sale contemplated hereby in a manner consistent
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with such allocation and shall not take any position inconsistent therewith upon
examination of any tax return, in any refund claim, in any litigation, or
otherwise. Any sales tax attributable to the sale or transfer of the Purchased
Assets shall be paid by Purchaser based upon the amounts set forth in the
Purchase Price allocation schedule set forth at SCHEDULE 1.10. The Company
agrees to timely sign and deliver such certificates or forms, if any, as may be
necessary or appropriate to establish an exemption from (or otherwise reduce),
or file tax returns with respect to, such sales taxes. In addition: (i)
Purchaser may, in its sole discretion, file a notice of bulk sale with the
appropriate state tax authorities with respect to the transactions contemplated
by this Agreement. The Company shall cooperate with Purchaser and Access
Integrated and any such state tax authorities in addressing issues and
communications that arise in the process of and as a result of filing such
notice. The Company shall promptly provide any information and correspondence to
Purchaser and Access Integrated that it receives with respect to or as a result
of such notice; and (ii) Purchaser and Access Integrated shall prepare and
provide to the Company and the Company shall reasonably accept, any exempt use,
resale or other certificate supporting exemption from applicable sales or other
transfer taxes that might otherwise apply to part or all of the transfers
contemplated by this Agreement.
1.11. PASSAGE OF TITLE. Title to all of the Purchased Assets shall pass
from the Company to the Purchaser at the Closing, subject to the terms and
conditions of this Agreement. The Purchaser assumes no risk of loss to any of
the Purchased Assets prior to the Closing.
1.12. PIGGY-BACK REGISTRATION RIGHTS. If during the period from the
Closing Date to three (3) years thereafter, Access Integrated shall determine to
prepare and file with the Securities and Exchange Commission ("SEC") a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans, then Access Integrated shall send to each Member written notice of such
determination and, if within fifteen (15) days after receipt of such notice, any
such Member shall so request in writing, Access Integrated shall include in such
registration statement all or any part of such Members' Shares (not already
covered by an effective registration statement) such Member requests to be
registered, subject to customary underwriter cutbacks applicable to all holders
of registration rights and/or restrictions set forth in prior registration
agreements, provided that in a registration statement covering a secondary
offering by selling stockholders of Access Integrated, underwriter cutbacks
shall be imposed pro rata on the Members and all other holders selling shares
pursuant to the registration statement based upon all shares registered under
the registration statement, and PROVIDED FURTHER that Access Integrated is not
prohibited from including the Members' Shares in such registration statement
pursuant to the restrictions set forth in such registration rights agreement or
other agreement. The rights to registration set forth in this Section 1.12 may
be exercised on an unlimited number of occasion.
1.13. MEMBER'S REPRESENTATIVE. The Members appoint Xxxxxxx Xxxxx as the
Member representative ("Member Representative"). The Member Representative is
hereby is appointed, authorized, and empowered to act on behalf of the Members,
in connection with, and to facilitate the consummation of, the transactions and
in connection with the activities to be performed on the Members' behalf under
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this Agreement, for the purposes and with the powers and authority set forth in
this Section 1.13 and in the Escrow Agreement, which will include the power and
authority: (i) to execute and deliver after the Closing Date such waivers and
consents in connection with this Agreement and the Member Representative, in his
reasonable discretion, may deem necessary or desirable to give effect to the
intentions of this Agreement, including, without limitation, Section 1.6 and the
Escrow Agreement; (ii) as the Member Representative deems necessary are
desirable, to enforce and protect the Members' rights and interests and to
enforce and protect the Members' rights and interests arising out of or under or
in any manner relating to this Agreement and the Escrow Agreement and, in
connection therewith, to (A) assert any claim or institute any action, (B)
investigate, defend, contest or litigate any action, initiated by any
Indemnified Person, or any other person, against the Members, and compromise or
settle on such terms as the Member Representative will determine to be
appropriate, give receipts, releases and discharges on behalf of all or any
Members with respect to any such action, (C) file any proofs, debts, claims and
petitions as the Member Representative may deem advisable or necessary, (D)
settle or compromise any claims related to the transactions contemplated by this
Agreement, it being understood that the Member Representative will not have any
obligation to take any such actions, and will not have liability for any failure
to take any such action; and (iii) to effect and enforce the appropriate release
of the stock escrowed under the Escrow Agreement. The grant of authority
provided for in this Section 1.13 is coupled with an interest and is being
granted, in part, as an inducement to the Purchaser and Members to enter into
this Agreement and to the Members to approve the transactions contemplated
hereby, and will be irrevocable and survive the death, incompetency, bankruptcy
or liquidation of any Member and will be binding on any successor thereto. In
dealing with this Agreement, the Escrow Agreement and any instruments,
agreements or documents relating thereto, and in exercising or failing to
exercise all or any of the powers conferred upon the Member Representative
hereunder or thereunder, (i) the Member Representative will not assume any, and
will incur no, liability whatsoever to any Member because of any error in
judgment or other act or omission performed or omitted hereunder or in
connection with this Agreement or the Escrow Agreement, and (ii) the Member
Representative will be entitled to rely on the advice of counsel, public
accountants or other independent experts experienced in the matter at issue, and
any error in judgment or other act or omission of the Member Representative
pursuant to such advice will not subject the Member Representative to liability
to Purchaser, Access Integrated, or any other Person.
1.14. STRUCTURE. At the option of and request of the Purchaser and Access
Integrated, prior to the Closing Date, the Company and the Members agree that
they will take all steps necessary for (a) the Company to transfer to a limited
liability company wholly-owned by the Company ("New FiberSat LLC") the Purchased
Assets and Assumed Liabilities; and (b) the Company to transfer to the Purchaser
all of the membership interests of New FiberSat LLC at the Closing in lieu of
delivering the Purchased Assets and Assumed Liabilities. In the event that
Purchaser and Access Integrated exercise the option set forth in this Section
1.14, all of the terms and provisions of this Agreement shall remain in full
force and effect, except that the structure of the transaction shall be New
FiberSat LLC selling its membership interests to Purchaser for the Purchase
Price instead of the Company selling the Purchased Assets to Purchaser. In the
event that Purchaser and Access Integrated exercise this option, Access
Integrated and Purchaser agree that from the Closing Date until the two year
anniversary of the Closing Date, NewFiberSat LLC will continue to own the
Business and shall not be liquidated.
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ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser and Access Integrated
as follows:
2.1. DUE ORGANIZATION AND QUALIFICATION. The Company is a limited
liability company duly formed, validly existing and in good standing under the
laws of California. The Company has all requisite limited liability company
power and authority to own, lease and operate its assets and properties, and to
carry on the Business as presently conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
nature of its business or the locations of its property requires such
qualification, except where the failure to do so would not have a Material
Adverse Effect. "Material Adverse Effect" means any event, circumstance,
condition, development, change or occurrence causing, resulting in or having (or
with the passage of time likely to cause, result in or have) a material adverse
effect on the Business, taken as a whole, provided that in no event will any
event, circumstance, condition, development, change or occurrence that results
from changes affecting the economy generally or changes affecting the satellite
transmission industry be taken into account in determining whether there has
been or would be a Material Adverse Effect.
2.2. POWER AND AUTHORITY. The Company has the requisite limited liability
company power and authority to execute and deliver this Agreement and all other
agreements contemplated by this Agreement and all of the agreements, schedules,
exhibits, documents and instruments specifically provided for hereunder to be
executed and/or delivered by the respective parties (the "Transaction
Documents") and to perform its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and the Transaction
Documents have been duly authorized by all necessary limited liability company
action on the part of the Company. This Agreement has been duly executed and
delivered by Company and is the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, moratorium, insolvency,
reorganization or other similar laws now or hereafter in effect generally
affecting the enforcement of creditors' rights, specific performance, injunctive
or other equitable remedies. When executed and delivered by the Company at the
Closing, each of the Transaction Documents will be the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
moratorium, insolvency, reorganization or other similar laws now or hereafter in
effect generally affecting the enforcement of creditors' rights, specific
performance, injunctive or other equitable remedies.
2.3. COMPLIANCE WITH LAWS. The Company is in compliance in all material
respects with all Federal, state, local and foreign laws, statutes, ordinances,
regulations, orders, judgments, injunctions, awards or decrees (collectively,
"Laws") applicable to it or any of its properties or operations. The Company has
not received any notice of material violation or alleged material violation of
any Law by it. The Company has all material licenses, permits, orders and
approvals of Federal, state, local and foreign governmental or regulatory bodies
necessary for the conduct of the Business.
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2.4. NO BREACH; CONSENTS. Except as set forth in SCHEDULE 2.4, neither the
execution and delivery of this Agreement or any of the Transaction Documents to
which the Company is or is to become a party, the consummation of the
transactions contemplated hereby or thereby nor the compliance with or
fulfillment of the terms, conditions or provisions hereof or thereof by the
Company will (i) contravene any provision of the certificate of formation or
operating agreement (the "Governing Documents") of the Company; (ii) conflict
with, result in a breach of, constitute a default or an event of default (or an
event that might, with the passage of time or the giving of notice or both,
constitute a default or event of default) under any of the terms of, result in
the termination of, result in the loss of any right under, or give to any other
person or entity the right to cause such a termination of or loss under, any of
the material Assumed Contracts; (iii) result in the creation, maturation or
acceleration of any of the Assumed Liabilities or any other material liability
(meaning any liability in the amount of $20,000 or more) of the Company
affecting any of the Purchased Assets (or give to any other Person the right to
cause such a creation, maturation or acceleration); (iv) violate any material
Laws or violate any judgment or order of any court, government (Federal, state,
local or foreign), department, commission, board, bureau, agency, official or
other regulatory, administrative or governmental authority or instrumentality (a
"Governmental Body") to which the Company is subject and by which any of the
Purchased Assets may be bound or affected; or (v) result in the creation or
imposition of any Encumbrance (other than Permitted Encumbrances) upon any of
the Purchased Assets, or give to any other person or entity any interest or
right therein. Except for the Landlord's Consent and except for the consents set
forth on SCHEDULE 2.4, no consent, approval or authorization of, or registration
or filing with, any person or entity or Governmental Body is required in
connection with the execution and delivery by the Company of this Agreement or
any of the Transaction Documents to which the Company is or is to become a party
pursuant to the provisions hereof or the consummation by the Company of the
transactions contemplated hereby or thereby.
2.5. CONDITION OF ASSETS; BUSINESS; TITLE. The Purchased Assets have been
maintained in accordance with customary industry practice and subject to
ordinary wear and tear, are in good working order and are reasonably suitable
for the purposes for which they are used in the Business. The Purchased Assets
include all assets that are currently used in the operation of the Business and
include all assets that are necessary to operate the Business. The Company has
good, marketable and exclusive title to all of the Purchased Assets and upon the
consummation of the transactions contemplated hereby, the Purchaser will acquire
good, marketable and exclusive title to all of such Purchased Assets, free and
clear of all Encumbrances (other than Permitted Encumbrances).
2.6. COMPANY FINANCIAL INFORMATION. Set forth at SCHEDULE 2.6 are the
Company's unaudited, Company-compiled financial statements, including a balance
sheet, income statement and statement of cash flows, for the years ended
December 31, 2002 and 2003, and the eight-month period ended August 31, 2004
(collectively, the "Financial Statements"). Such Financial Statements have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP"), except they do not include footnotes, and fairly present in
all material respects the financial condition of the Company and are correct,
complete and consistent with the Company's books and records as of the dates and
for the periods indicated thereby. Except as set forth on SCHEDULE 2.6, the
revenues set forth on the Financial Statements for the eight-month period ended
August 31, 2004 do not reflect any revenues that are more than ninety (90) days
past due unless the customer has made a payment within the last thirty (30)
days, or unless the Company has provided for an adequate reserve.
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2.7. LITIGATION. Except as set forth on SCHEDULE 2.7 hereto, there are no
suits or actions, administrative, arbitration or other proceedings or
governmental investigations pending or, to Company's Knowledge (as defined
below), threatened against or affecting any of the Purchased Assets or the
Assumed Liabilities or the transactions contemplated by this Agreement or any of
the Transaction Documents. There are no judgments, orders, injunctions, decrees
or awards against the Company in respect of the Purchased Assets or the Assumed
Liabilities that are not satisfied or remain outstanding or that would prohibit
the execution and delivery of this Agreement or any of the Transaction
Documents. For purposes of this Agreement, "Knowledge" means the actual
knowledge of Xxxx Xxxxx, the President of the Company after reasonable
investigation conducted consistent with the ordinary course conduct of his
duties.
2.8. ABSENCE OF UNDISCLOSED LIABILITIES. The Company does not have any
liabilities, commitments or obligations, whether accrued, absolute, contingent
or otherwise that have not been (i) in the case of liabilities, commitments and
obligations of a type customarily reflected on the financial statements or
footnotes thereto of the Company, contained in the Financial Statements at
SCHEDULES 2.6 or incurred, consistent with past practice, in the ordinary course
of business since August 31, 2004 and that are not material either individually
or in the aggregate or (ii) in the case of all other types of liabilities and
obligations, described in SCHEDULE 2.8 hereto.
2.9. ABSENCE OF CERTAIN CHANGES. Since August 31, 2004, the Company has
conducted the Business only in the ordinary course. Without limiting the
generality of the foregoing sentence, since August 31, 2004, except as set forth
on SCHEDULE 2.9 hereto, there has not been any: (i) Material Adverse Effect on
the Business; (ii) material damage or destruction to or loss of any of the
Purchased Assets or any portion of the Teleport Facilities, whether or not
covered by insurance; (iii) creation of any Encumbrance (other than Permitted
Encumbrances) on any of the Purchased Assets or the Teleport Facilities; (iv)
disposition of any of the Purchased Assets for less than fair market value; (v)
any failure to pay any of the Assumed Liabilities or the Retained Liabilities
when due; (vi) creation, termination or amendment of, or waiver of any right
under, any of the Assumed Contracts; or (vii) agreement or commitment to do any
of the foregoing. The parties agree that if LATV, LLC terminates, cancels or
does not renew its Contract for Satellite Uplink (Ground Segment Only) dated
September 24, 2003, as amended, which expires by its terms on November 30, 2004
("LATV Contract") with the Company, on or prior to the Closing Date, such event
shall constitute a Material Adverse Effect on the Business.
2.10. TAXES. The Company has no liability for any tax in respect of the
Purchased Assets or the Teleport Facilities except for taxes disclosed on
SCHEDULE 2.10 hereto.
2.11. ASSUMED CONTRACTS; COMPLIANCE; EMPLOYEES. The Company has delivered
to the Purchaser a true, complete and correct copy of each of the Assumed
Contracts. SCHEDULE 2.11 sets fort a list of each Assumed Contract other than
Assumed Contracts that may be terminated within 30 days without penalty. Each of
the Assumed Contracts is the legal, valid and binding obligation of the Company
and is in full force and effect. The Company has performed all material
obligations required to be performed by it under each of the Assumed Contracts,
and to the Company's Knowledge, (i) the Company is not in material breach or
default, (ii) the Company is not alleged to be in material breach or default, in
13
any respect thereunder, and (iii) no event has occurred and no condition or
state of facts exists (or would exist upon the giving of notice or the lapse of
time or both) that would become or cause a breach, default or event of default
thereunder, would give to any person or entity the right to cause such a
termination or would cause an acceleration of any obligation thereunder. Except
as set forth in SCHEDULE 2.11, the Company is not currently renegotiating any of
the Assumed Contracts nor has the Company received any notice of non-renewal or
any other modification that would adversely affect the rights of the Company
with respect to any of the Assumed Contracts. Except for an employment letter
between the Company and Xxxx Xxxxx dated February 23, 2004 (which agreement the
Company and Xxxxx agree they will terminate prior to the Closing Date and the
Company shall be liable for any amounts owed under such agreement), none of the
officers or employees of the Company are parties to an employment agreement with
the Company.
2.12. LEASED PROPERTY.
(a) To the Knowledge of Company, except as disclosed on SCHEDULE 2.12(B),
any improvement made under the Leases, conforms in all material respects to all
Leases' restrictions (if any), restrictive covenants and applicable Laws. The
Company has not received written notice of any pending, threatened or
contemplated action to take by eminent domain or otherwise to condemn any part
of the Leased Property.
(b) To the Company's Knowledge, the Company has not received any written
notice of any proposed, planned or actual curtailment of service of any utility
supplied to the Teleport Facilities. The services provided by such public
utilities are all in good working order and are adequate to service the
operations of the Teleport Facilities as currently conducted.
(c) Except as provided in the Leases and on SCHEDULE 2.12(D), none of the
Leased Property is leased, sublet or assigned to any person. Each Lease is in
full force and effect in accordance with its terms and has not been modified or
amended, except as set forth in SCHEDULE 2.12(D), and, to the Company's
Knowledge, no party thereto is in material default under any of the terms
contained therein.
2.13. ENVIRONMENTAL MATTERS. The Company has operated the Business and the
Leased Property and any other leased property in compliance with all applicable
laws relating to public health and safety arising out of the environment or
protection of the environment, including common law nuisance, property damage
and similar common law theories ("Environmental Laws"). To the Company's
Knowledge, the Company is not subject to any liability, penalty or expense
(including legal fees), and the Purchaser and Access Integrated will not suffer
or incur any loss, liability, penalty or expense (including legal fees) by
virtue of any violation of any Environmental Law by the Company in respect of
the Leased Property and any other leased property occurring prior to the Closing
or any environmental activity conducted by the Company on or with respect to the
Leased Property and any other leased property at or prior to the Closing.
2.14. CUSTOMER RELATIONS. To the Company's Knowledge, there exists no
condition or state of facts or circumstances involving the Company's customers,
suppliers, distributors or representatives in respect of the Teleport Facilities
that could reasonably be expected to have a Material Adverse Effect after the
14
Closing Date. The parties agree that if the LATV Contract is terminated,
cancelled or not renewed prior to the Closing Date, such event shall constitute
a Material Adverse Effect on the Business.
2.15. INSURANCE. The Purchaser and Access Integrated have been provided
with a copy of each insurance policy for the last three (3) years as to which
the Company is the owner, insured or beneficiary, whether on an "occurrence" or
a "claims made" basis, together with a summary of such policies and copies of
certificates of insurance executed by each insurer or its authorized agent
evidencing such insurance.
2.16. FINDERS' FEES. Neither the Company, nor any of its officers,
members, managers or employees, or their affiliates, has employed any broker or
finder or incurred any liability for any brokerage fee, commission or finders'
fee in connection with any of the transactions contemplated hereby or by any of
the Transaction Documents.
2.17. ACCURACY OF INFORMATION FURNISHED. To the Company's Knowledge, no
representation or warranty by the Company contained in this Agreement, including
the Schedules hereto, and no statement contained in any certificate or other
document furnished or to be furnished by or on behalf of the Company at the
Closing, contains or will contain as of the date such representation and
warranty is made or such Schedule or certificate is delivered any untrue
statement of a material fact or, to Company's Knowledge, omits or will omit to
state as of the date such representation or warranty is made or such Schedule or
certificate is delivered any material fact that is necessary to make the
statements contained herein or therein not misleading.
2.18. INTELLECTUAL PROPERTY RIGHTS. The Purchased Assets include all
Intellectual Properties (as defined below) necessary to conduct the Business as
presently conducted, excluding (i) any unregistered copyrights with respect to
items other than software and related documentation utilized in the Business,
and (ii) shrink wrap or off-the-shelf software products licensed by the Company
(collectively, "Company Intellectual Properties"). "Intellectual Properties"
shall mean each and all of the following items, if any: all United States or
foreign patents, trademarks, tradenames, servicemarks, software, software codes,
and applications for any of the foregoing, copyrights or other author's rights,
whether or not registered, and any goodwill associated with any of the
foregoing, whether or not any of such Intellectual Properties are set forth on
SCHEDULE 2.18 hereto. Except as set forth on SCHEDULE 2.18 hereto, (i) the
Business as is now conducted does not infringe or conflict with the Intellectual
Properties of others; and (ii) to the Knowledge of the Company, there is no
infringement by others of any Company Intellectual Properties. All employees of
the Company have executed non-disclosure, confidentiality, inventions or "work
for hire" agreements or such other agreements pursuant to which such employees
have assigned any and all rights, title and interest in and to any of the
Intellectual Properties to the Company. No officer, member, manager, or employee
of the Company, or any of their Affiliates or Associates, has any ownership or
other interest in any of the Company Intellectual Properties. Moreover, to the
extent any consultant, independent contractor or agent of the Company has
contributed to or has rights to any of the Intellectual Properties, the Company
has secured or will secure, at its own expense, agreements with such
consultants, independent contractors or agents such that all rights, title and
interest in and to the Company Intellectual Properties will either belong to the
Company or will not otherwise conflict with any of the provisions of this
Section 2.18.
15
2.19. FCC LICENSES. The Company's FCC licenses listed on SCHEDULE 1.1(M),
are valid and in full force and effect, and, to the Company's Knowledge, no
proceedings are pending to revoke or terminate such licenses.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF MEMBERS
Each Member represents and warrants to Purchaser and Access Integrated as
follows:
3.1. EXPERIENCE. The Member has sufficient knowledge and experience in
investing in companies similar to Access Integrated so as to be able to evaluate
the merits and risks of its investment in Access Integrated and has the capacity
to protect his or its own interests.
3.2. ACCREDITED INVESTOR. The Member is an "accredited investor," as
defined in SEC Regulation D promulgated pursuant to the Securities Act (an
"Accredited Investor").
3.3. MEMBER STATUS. The Member is not acting with any other Member
involved in the transactions contemplated by this Agreement as a partnership,
limited partnership, syndicate, or other group for the purpose of (i)
facilitating the acquisition of the Shares described herein, or (ii) acquiring
holding, or disposing of shares of Access Integrated as contemplated in Section
13(d)(3) of the Exchange Act. The purchase is in the ordinary course of business
and not with the purpose or intent of changing or influencing control of Access
Integrated nor in the connection with any transaction involving the Member
having such purpose.
3.4. RULE 144. The Member acknowledges that the Shares must be held
indefinitely unless subsequently registered for resale under the Securities Act
or unless an exemption from such registration is available. The Member is aware
of the provisions of the SEC's Rule 144 promulgated under the Securities Act,
which permit limited resale of securities purchased in a private placement,
subject to the satisfaction of certain conditions, including, among other
things, (i) the existence of a public market for the securities, (ii) the
availability of certain current public information about Access Integrated,
(iii) the resale occurring not less than one year after a party has purchased
and fully paid for the security to be sold, (iv) the sale being effected through
a "broker's transaction" or in a transaction directly with a "market maker," and
(v) the number of securities being sold during any three-month period not
exceeding specified limitations.
3.5. ACCESS TO INFORMATION. The Member has had an opportunity to discuss
Access Integrated's business, management and financial affairs with its
management. The Member understands that such discussions, as well as any written
information issued by Access Integrated, were intended to describe certain
aspects of the Access Integrated's business and prospects. Neither such
inquiries nor any other due diligence investigation conducted by the Member or
any of its advisors or representatives shall modify, amend or affect the
Member's right to rely on Access Integrated's representations, warranties and
covenants contained herein. The Member understands that investment in the Shares
involves a high degree of risk.
3.6. ORGANIZATION; AUTHORIZATION. The Member is an individual or a
corporation, a limited liability company or a partnership duly formed, validly
existing and in good standing under the laws of the jurisdiction of its
organization. The Member shall acquire the Shares in the ordinary course of
business, without any agreement, plan or understanding, directly or indirectly,
16
with any person to distribute such Shares. If an entity, the Member has the
requisite power and authority to enter into and to consummate the transactions
contemplated by the Agreement and otherwise to carry out its obligations under
the Agreement. If an entity, the purchase by the Member of the Shares hereunder
has been duly authorized by all necessary action on the part of the Member. This
Agreement, when executed and delivered by the Member, will constitute a valid
and binding obligation of the Member, enforceable in accordance with its terms,
subject to bankruptcy laws and equity principles.
3.7. RESTRICTIVE LEGEND. The Member understands that the certificates
evidencing the Shares will bear the following legends when issued:
"these securities have not been registered under the
securities act of 1933, as amended (the `securities act"), or
the securities, or "blue sky," laws of any state or other
domestic or foreign jurisdiction. these securities have been
acquired for investment and not with a view to distribution
and resale and may not be sold or offered for sale except
pursuant to a registration statement in effect under the
securities act and other applicable laws or unless the
transferor delivers to the company a written opinion of
counsel reasonably satisfactory to the company that such
registration is not required and that an exemption from such
registration is available for such transactions under the
securities act and other applicable laws."
In addition, the Member acknowledges that each certificate for Shares
shall bear any additional legend required by any other applicable domestic or
foreign securities or blue sky laws.
Access Integrated will direct its transfer agent and registrar to maintain
stop transfer instructions on record for the Shares until it has been notified
by Access Integrated, upon the advice of counsel, that such instructions may be
waived consistent with the Securities Act and applicable domestic and foreign
securities laws. Such stop transfer instructions will limit the method of sale
or transfer of the Shares, consistent with Rule 144 or other available
exemptions from registration under the Securities Act. Any transfers other than
pursuant to a registration statement under the Securities Act will require an
opinion of counsel reasonably satisfactory to Access Integrated and its counsel
prior to such transfers.
3.8. NO GOVERNMENTAL REVIEW. The Member understands that no United States
federal or state agency or any other government or governmental agency or
authority has passed upon or made any recommendation or endorsement of the
Shares or the contents of any of the SEC Reports (as defined in Section 4.7).
17
3.9. DOMICILE AND PRINCIPAL EXECUTIVE OFFICE. The Member is domiciled
and/or has its principal executive office in the jurisdiction set forth
immediately below the Member's name on the signature page to this Agreement.
3.10. INVESTMENT INTENT. The Member is acquiring the Shares for investment
for his or its own account, not as a nominee or agent, and not within the view
to, or for resale in connection with, any distribution thereof; provided,
however, that by making the representations herein, the Member is not prohibited
from selling or otherwise disposing of any of the Member's Shares in compliance
with applicable federal and state securities laws and as otherwise contemplated
by this Agreement. The Member understands and agrees that the Shares have not
been registered under the Securities Act by reason of the exemption from the
registration provisions of the Securities Act contained in the Securities Act
and/or regulations thereunder, the availability of which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
the Member's representations, warranties and covenants as expressed herein,
which are being relied upon by the Purchaser and Access Integrated.
3.11. NO MANIPULATION. Neither the Member, nor, to the Member's knowledge
if the Member is an entity, any of its directors, officers, members, managers,
subsidiaries, controlling persons or other affiliates, has taken, or presently
plans to take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has constituted, under
the Exchange Act, the stabilization or manipulation of the price of the Common
Stock to facilitate the sale of the Shares. Since the time of becoming aware of
the transactions contemplated hereby until the Closing, such persons have not
engaged in any (i) "short sales" (as such term is defined in Rule 3b-3
promulgated under the Exchange Act) of the Common Stock, including, without
limitation, any such transaction that transfers to another, in whole or in part,
any economic consequences or ownership, or otherwise disposes of, any of the
Shares or (ii) hedging transaction which establishes a net short position with
respect to the Shares.
3.12. BROKER'S FEES. The Member has incurred no liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payments in connection with the Agreement or the transactions
contemplated therein and the Member shall indemnify and hold harmless the
Purchaser and Access Integrated from and against any such claims arising from
the Member's actions by parties claiming a relationship to the Member.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND ACCESS
NTEGRATED
The Purchaser and Access Integrated represent and warrant to the Company
as follows:
4.1. DUE ORGANIZATION AND QUALIFICATION. Each of the Purchaser and Access
Integrated is a corporation duly organized, validly existing and in good
standing under the laws of Delaware. Each of the Purchaser and Access Integrated
has all requisite power and authority to own, lease and operate its assets and
properties. Each of the Purchaser and Access Integrated is duly qualified to
transact business and is in good standing in each jurisdiction in which the
18
nature of its business or the locations of its property requires such
qualification, except where the failure to do so would not have a material
adverse effect on its respective business, operations, assets or condition
(financial or otherwise).
4.2. POWER AND AUTHORITY. Each of the Purchaser and Access Integrated has
the requisite corporate power and authority to execute and deliver this
Agreement and all other agreements contemplated by this Agreement (the
"Transaction Documents") and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Transaction Documents have been duly authorized by all necessary corporate
action on the part of the Purchaser and Access Integrated. This Agreement has
been duly executed and delivered by Purchaser and Access Integrated and is the
valid and binding obligation of the Purchaser and Access Integrated, enforceable
against the Purchaser and Access Integrated in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, moratorium,
insolvency, reorganization or other similar laws now or hereafter in effect
generally affecting the enforcement of creditors' rights, specific performance,
injunctive or other equitable remedies. When executed and delivered by the
Purchaser and Access Integrated at the Closing, each of the Transaction
Documents will be the valid and binding obligation of the Purchaser and Access
Integrated, enforceable against the Purchaser and Access Integrated in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, moratorium, insolvency, reorganization or other similar laws now or
hereafter in effect generally affecting the enforcement of creditors' rights,
specific performance, injunctive or other equitable remedies.
4.3. NO BREACH; CONSENTS. Neither the execution and delivery of this
Agreement or any of the Transaction Documents to which the Purchaser or Access
Integrated is or is to become a party, the consummation of the transactions
contemplated hereby or thereby nor the compliance with or fulfillment of the
terms, conditions or provisions hereof or thereof by the Purchaser and Access
Integrated will (except for the Landlord's Consent and as set forth on SCHEDULE
2.4 hereto): (i) contravene any of the Governing Documents of the Purchaser or
Access Integrated; or (ii) violate any Law or violate any judgment or order of
any Governmental Body to which the Purchaser or Access Integrated is subject.
Except for the Landlord's Consent and as set forth on SCHEDULE 2.4, no consent,
approval or authorization of, or registration or filing with, any person or
entity or Governmental Body is required in connection with the execution and
delivery by the Purchaser and Access Integrated of this Agreement or any of the
Transaction Documents to which the Purchaser or Access Integrated is or is to
become a party pursuant to the provisions hereof or the consummation by the
Purchaser or Access Integrated of the transactions contemplated hereby or
thereby.
4.4. LITIGATION. There are no suits or actions, administrative,
arbitration or other proceedings or governmental investigations pending or, to
Purchaser's or Access Integrated's knowledge, threatened against or affecting
any of the transactions contemplated by this Agreement or any of the Transaction
Documents. There are no judgments, orders, injunctions, decrees or awards
against the Purchaser or Access Integrated that are not satisfied or remain
outstanding and that would prohibit the execution and delivery of this Agreement
or any of the Transaction Documents.
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4.5. FINDERS' FEES. Neither the Purchaser nor Access Integrated nor any of
their officers, directors or employees has employed or dealt with any broker or
finder or incurred any Liability for any brokerage fee, commission or finders'
fee in connection with any of the transactions contemplated hereby.
4.6. ISSUANCE OF THE SECURITIES. The Shares have been duly authorized and,
when issued and paid for in accordance with this Agreement, will be duly and
validly issued, fully paid and nonassessable, free and clear of all
Encumbrances. Access Integrated has reserved from its duly authorized capital
stock a number of shares of Common Stock to be issued to the Members equal to
the Shares, and any additional shares of Common Stock that may be issued
pursuant to Sections 1.5 and 1.6.
4.7. SEC REPORTS; FINANCIAL STATEMENTS. Access Integrated has filed all
reports required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, since August 6, 2003
when Access Integrated filed its initial Form SB-2 registration statement (the
foregoing materials being collectively referred to herein as the "SEC Reports")
on a timely basis and has filed any such SEC Reports prior to the expiration of
any such extension. Access Integrated has delivered to the Company a copy of all
SEC Reports filed within the ten (10) days preceding the date hereof. As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state 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.
ARTICLE V.
CERTAIN COVENANTS
5.1. CONDUCT OF BUSINESS PENDING CLOSING. From and after the date hereof
and until the Closing Date or earlier termination hereof, unless the Purchaser
and Access Integrated shall otherwise consent in writing, the Company shall
conduct its affairs as follows:
(a) ORDINARY COURSE; COMPLIANCE. The Business shall be conducted only in
the ordinary course and consistent with past practice. The Company shall use
commercially reasonable efforts to maintain the Purchased Assets, the Teleport
Facilities and the Assumed Liabilities in a manner consistent with historical
practices of the Company and shall use commercially reasonable efforts to comply
in a timely fashion with the provisions of the Leases and all Assumed Contracts
and its other agreements and commitments in respect of the Purchased Assets or
the Teleport Facilities. The Company shall use commercially reasonable efforts
to keep available the services of certain of its present employees at the
Teleport Facilities to preserve the goodwill of its suppliers, customers and
others having business relations with it in connection with the Teleport
Facilities. The Company shall maintain in full force and effect its policies of
insurance, subject only to variations required by the ordinary operations of the
Business, or else shall obtain, prior to the lapse of any such policy,
substantially similar coverage with insurers of recognized standing.
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(b) TRANSACTIONS. The Company shall not: (i) transfer or dispose of any of
the Purchased Assets; (ii) enter into any contract or commitment, the
performance of which might extend the Closing Date; (iii) fail to pay any of the
Assumed Liabilities, Settlement Liabilities or Retained Liabilities when due
(unless the Company in good faith is disputing a specific liability or
attempting to settle a specific liability); (iv) take any action or omit to take
any action that will cause a breach or termination of the Lease or any of the
Assumed Contracts; or (v) take any other actions that would cause the
representations and warranties in this Agreement not to be true in any material
respect on the Closing Date.
5.2. PURCHASER'S ACCESS TO AND INSPECTION OF THE PURCHASED ASSETS. The
Company covenants and agrees that from and after the date of the execution of
this Agreement until the Closing or earlier termination of this Agreement, the
Purchaser and Access Integrated and their employees, contractors, agents and/or
representatives (including accountants, attorneys, environmental consultants and
engineers) may enter upon any portion of the Teleport Facilities or the Leased
Property from time to time during reasonable business hours, or otherwise at a
time agreed to by the Company, without any disruption of the normal conduct of
the Company's Business at the Teleport Facilities, and upon reasonable notice to
the Company, for the purpose of inspections, making surveys and testing, and
examination of title and operating condition of the Purchased Assets, Teleport
Facilities and Leased Property. The Company shall similarly make available to
the Purchaser, Access Integrated, their employees, contractors, agents and/or
representatives all of the properties, books, contracts, commitments, records,
officers, personnel and accountants (including independent public accountants
and their workpapers) of the Company, and shall furnish the Purchaser and Access
Integrated all such documents and copies of documents and all information with
respect to the Purchased Assets, Teleport Facilities and Leased Property as the
Purchaser and Access Integrated may reasonably request.
5.3. ACQUISITION PROPOSALS. The Company and the Members shall not (nor
shall they permit any of their affiliates to) directly or indirectly, solicit,
initiate or encourage any inquiries or the making of any proposals from, engage
or participate in any negotiations or discussions with, provide any confidential
information or data to, or enter into (or authorize) any agreement or agreement
in principle with any person or announce any intention to do any of the
foregoing, with respect to any offer or proposal to acquire all or any part of
the Purchased Assets, the Leased Property or the Teleport Facilities, whether by
merger, purchase of membership interests or assets or otherwise.
5.4. FULFILLMENT OF AGREEMENTS. The Purchaser, Access Integrated and the
Company shall use commercially reasonable efforts to cause all of those
conditions to the obligations of the other under Article VI that are not beyond
its reasonable control to be satisfied on or prior to the Closing Date and shall
use commercially reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
Without limiting the foregoing, the Company shall, prior to the Closing, use
commercially reasonable efforts to obtain the Landlord's execution of the
Landlord's Consent and any other consents necessary to effectuate the Closing.
5.5. CERTAIN TRANSITIONAL MATTERS. The Company and the Members shall
cooperate with and assist the Purchaser and Access Integrated (at their cost)
and their authorized representatives in order to provide, to the extent
reasonably requested by the Purchaser and Access Integrated, an efficient
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transfer of control of the Purchased Assets and Teleport Facilities and to avoid
any undue interruption in the activities and operations of the Business and
Teleport Facilities following the Closing Date, including any attempts made by
the Purchaser to hire any of the Teleport Facilities employees. The Company
shall use its commercially reasonable efforts to ensure that all of the Assumed
Contracts, are properly assigned to Purchaser by the Closing Date.
5.6. RETAINED ASSETS AND RETAINED LIABILITIES. From and after the Closing
Date, the Company shall keep the Retained Assets and shall satisfy when due
(unless the Company in good faith is disputing a specific liability or
attempting to settle a specific liability) all Retained Liabilities and
Settlement Liabilities.
5.7. COMPANY'S EMPLOYEES. On or prior to the Closing Date, the Purchaser
agrees to offer employment to each of the employees of the Company on an at will
basis at current compensation levels and with substantially similar benefits to
those benefits currently in effect for such employees.
5.8. COVENANT AGAINST COMPETITION AND DISCLOSURE. The Company and each of
Xxxxxxx Xxxxx, Xxxx Xxxxx and Xxxxxxx Xxxxxxxxxx ("Three Members") agree that it
and they shall not directly or indirectly: (i) for a period of three (3) years
after the Closing Date, control (as hereinafter defined) directly or indirectly
the operation of any teleport facility within a one hundred (100) mile radius,
measured by automobile, of any collocation facility owned and controlled,
directly or indirectly, by the Purchaser or Access Integrated on the Closing
Date, as set forth on SCHEDULE 5.8 hereto; or (ii) disclose to anyone, or use in
competition with the Purchaser or Access Integrated, any information with
respect to any confidential or secret aspect of the operations of the Business.
The Company and the Three Members acknowledge that the remedy at law for breach
of the provisions of this Section 5.8 will be inadequate and that, in addition
to any other remedy the Purchaser and Access Integrated may have, they will be
entitled to an injunction restraining any such breach or threatened breach,
without any bond or other security being required. If any court construes the
covenant in this Section 5.8 or any part thereof, to be unenforceable because of
its duration or the area covered thereby, the court shall have the power to
reduce the duration or area to the extent necessary so that such provision is
enforceable. Until the second (2nd) anniversary of the Closing Date, the Company
shall not directly or indirectly solicit or offer employment to any person who
is then an employee of the Purchaser and Access Integrated or was an employee of
the Purchaser or Access Integrated at any time after the Closing to engage in
any business similar to or in competition with the business of the Company as it
has been conducted prior to Closing. As used herein, the term "control" shall
mean, directly or indirectly, either voting or operational management authority
sufficient to determine the conduct of a business, or the right to make
financial, booking and/or personnel decisions for the business. The ownership of
50% of the equity of a corporation or 50% of an interest in a partnership shall
be deemed control, with or without any operational or any other authority.
5.9. BOOKS AND RECORDS. (a) The Company and the Members shall, from and
after the date hereof until the Closing Date or earlier termination hereof, make
available to Purchaser and Access Integrated all financial statements, trial
balances, accounts receivable and accounts payable records, and fixed asset
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details for a period of up to three (3) fiscal years plus the period from the
last fiscal year throughout the Closing Date, including, without limitation, any
and all documents necessary for Purchaser's and Access Integrated's accountants
to conduct an audit for such time period. Purchaser and Access Integrated shall
have the right to have audited financial statements prepared at Purchaser's and
Access Integrated's cost and the Company and Members shall use commercially
reasonable efforts to cooperate and assist Purchaser and Access Integrated in
preparing such audited financial statements, including executing any documents
required by the auditors (the "Audit"). Each of Purchaser, Access Integrated,
the Members and the Company shall use commercially reasonable efforts to
cooperate with such auditors to enable the Audit to be completed as soon as
practicable. The Company and the Members shall not destroy or dispose of any
books, records or files relating to the Business, the Purchased Assets or the
Teleport Facilities or the Company to the extent that they pertain to the
Business prior to the Closing Date for a period of three (3) years from the
Closing Date or for the applicable statute of limitations for any tax liability.
5.10. ASSIGNMENT OF LEASES; PERFORMANCE OF LEASE OBLIGATIONS. On or before
the Closing, the Company and Purchaser shall use their reasonable best efforts
to obtain an assignment of the Leases, on terms no less favorable than the
Leases, including the form, rent, and other material provisions of the Leases,
and reasonably satisfactory to the Purchaser (the "Lease Assignment"); PROVIDED,
HOWEVER, that, the Company and Purchaser shall not be required to take any act
to their economic detriment in seeking such Lease Assignment and, PROVIDED
FURTHER in the event that the Company shall not be able to obtain the Lease
Assignment, the Purchaser and the Company shall use their collective
commercially reasonable efforts to effect a new lease agreement or agreements (a
"New Lease") between the Purchaser and the Landlord in respect of the Teleport
Facilities on terms no less favorable than the Lease Assignment. Prior to and up
until the Closing Date, the Company shall perform all of its obligations under
the terms of the Leases. Subject to Section 6.1(h) hereof, from and after the
Closing Date, the Purchaser shall perform all of the obligations of the Company
under the terms of the Leases, and the Purchaser will use its commercially
reasonable to remove the Company from any post-Closing obligations under the
Leases.
5.11. SUPPLEMENTAL DISCLOSURE. The parties agree that, with respect to
their representations and warranties made in this Agreement, they will have a
continuing obligation to promptly provide detailed disclosure to Purchaser and
Access Integrated with respect to any matter hereafter arising or discovered
that, if existing or known at the date of this Agreement and on the Closing
Date, would have been required to be set forth or described in the schedules
hereto; PROVIDED, HOWEVER, that none of such disclosures shall be deemed to
modify, amend or supplement the representations and warranties of the Company or
the schedules herein unless the Purchaser and Access Integrated shall have
consented thereto in writing. Within five (5) days before the Closing, the
Company shall provide to the Purchaser and Access Integrated updated
Company-prepared financial statements, including a balance sheet, income
statement, and statement of cash flows, as of the last day of the month
preceding the Closing, which shall have been prepared in accordance with GAAP
(except for the absence of footnotes).
5.12. RECEIPT OF ACCOUNTS RECEIVABLES. On or prior to the Closing, the
Company shall have used commercially reasonable efforts to make arrangements to
ensure that the Purchaser will receive all Accounts Receivable on and after the
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Closing Date. To the extent that subsequent to the Closing Date, the Company
receives any funds with respect to any Accounts Receivable that are included in
the Purchased Assets, the Company will forward such funds to Purchaser.
5.13. POST-CLOSING COVENANTS.
(a) The Company agrees to change its name no later than thirty (30) days
after the Closing Date to a name dissimilar from "FiberSat Global Services".
ARTICLE VI.
CONDITIONS TO CLOSING
6.1. CONDITIONS OF PURCHASER'S AND ACCESS INTEGRATED'S OBLIGATION TO
CLOSE. The obligation of the Purchaser and Access Integrated to close under this
Agreement is subject to the satisfaction of the following conditions, any of
which may be waived by the Purchaser and Access Integrated in writing at or
prior to the Closing:
(a) INTENTIONALLY OMITTED.
(b) AGREEMENTS AND CONDITIONS. On or before the Closing Date, the Company
and the Members shall have complied with and duly performed in all material
respects all agreements, covenants and conditions on their part to be complied
with and performed pursuant to or in connection with this Agreement on or before
the Closing Date.
(c) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company and the Members contained in this Agreement, or otherwise made in
connection with the transactions contemplated hereby, shall be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on and as of
the Closing Date, except where any failure of such representations and
warranties to have been accurate and complete, individually or in the aggregate,
have not had a Material Adverse Effect.
(d) NO LEGAL PROCEEDINGS. No court or governmental action or proceeding
shall have been instituted or threatened to restrain or prohibit the
transactions contemplated hereby, and on the Closing Date there will be no court
or governmental actions or proceedings pending or threatened against or
affecting the Company that involve a demand for any judgment or liability, that
could reasonably be expected to have a Material Adverse Effect.
(e) SETTLEMENT LIABILITIES; ABSENCE OF MATERIAL CHANGES. The Company shall
have settled, discharged, satisfied, paid off in full, or made agreement or
arrangements with respect to the foregoing, the Settlement Liabilities pursuant
to the provisions of SECTION 1.4 on or prior to the Closing Date. The Company
shall have not suffered any Material Adverse Effect since the date hereof,
PROVIDED (i) the loss by the Company of its services agreement with Hotelvision,
Inc. shall not constitute a Material Adverse Effect event under this Agreement;
and (ii) the termination, cancellation or non-renewal of the LATV Contract shall
constitute a Material Adverse Effect event under this Agreement.
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(f) CERTIFICATE. The Purchaser and Access Integrated shall have received a
certificate dated the Closing Date and executed by the Members and an authorized
officer of Company to the effect that the conditions expressed in Sections
6.1(b), 6.1(c), 6.1(d) and 6.1(e) have been fulfilled or not occurred as
applicable.
(g) CONSENTS. The Purchaser and Access Integrated shall have obtained the
assignments of the Assumed Contracts set forth in SCHEDULE 6.1(G) and FCC
Licenses.
(h) LEASE ASSIGNMENT The Company shall have obtained the Lease Assignment
or the Purchaser shall have executed a New Lease.
(i) OPINION OF COUNSEL. The Company shall have furnished to the Purchaser
and Access Integrated a favorable opinion of Akin Gump Xxxxxxx Xxxxx & Xxxx LLP,
counsel for the Company, dated as of the Closing Date, in form and substance
satisfactory to the Purchaser and Access Integrated in the form of EXHIBIT I.
(j) BILLS OF SALE. The Purchaser and Access Integrated shall have received
such bills of sale, assignments and other documents in form and substance
satisfactory to the Purchaser and Access Integrated conveying the Purchased
Assets to the Purchaser.
(k) UPDATED FINANCIAL STATEMENTS; AUDIT. The Purchaser and Access
Integrated shall have received a copy of the updated financial statements from
the Company as provided in SECTION 5.11, which shall not reflect a material
decrease in the Company's Revenues or a material increase in the Company's
expenses. The Purchaser and Access Integrated shall have completed and received
the Audit.
(l) CLOSING DELIVERIES. The Purchaser and Access Integrated shall have
received at or prior to the Closing all documents set forth in this Section 6.1
and such other documents, instruments, or certificates as the Purchaser and
Access Integrated may reasonably request, including, without limitation, a
certificate signed by an authorized representative of the Company attesting to
the authenticity of the resolutions authorizing the transactions contemplated by
this Agreement.
(m) EMPLOYMENT AGREEMENTS. Xxxx Xxxxx shall have entered into an
employment agreement with Purchaser and Access Integrated, containing customary
provisions including a non-competition provision. B. Xxxxx Xxxxxxx shall have
entered into an employment agreement with Purchaser and Access Integrated.
(n) ESCROW AGREEMENT. The parties shall have executed the Escrow
Agreement.
6.2. CONDITIONS OF THE COMPANY'S AND MEMBERS' OBLIGATION TO CLOSE. The
obligations of the Company and the Members to close under this Agreement are
subject to the following conditions any of which may be waived by the Company
and the Members in writing at or prior to the Closing:
(a) AGREEMENTS AND CONDITIONS. On or before the Closing Date, the
Purchaser and Access Integrated shall have complied with and duly performed in
all material respects all agreements, covenants and conditions on their
25
respective parts to be complied with and performed pursuant to or in connection
with this Agreement on or before the Closing Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Purchaser and Access Integrated contained in this Agreement, shall be true
and correct in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made on
and as of the Closing Date.
(c) NO LEGAL PROCEEDINGS. No court or governmental action or proceeding
shall have been instituted or threatened to restrain or prohibit the
transactions contemplated hereby.
(d) CLOSING CERTIFICATE. The Company shall have received a certificate
dated the Closing Date and executed by authorized officers of the Purchaser and
Access Integrated to the effect that the conditions contained in Sections
6.2(a), 6.2(b) and 6.2(c) have been fulfilled.
(e) CONSENTS. The Company shall have received all consents necessary to
effectuate this Agreement and to consummate the transactions contemplated
hereby.
(f) CLOSING DELIVERIES. The Company shall have received at or prior to the
Closing all documents set forth in this Section 6.2 and such other documents,
instruments, or certificates as the Company may reasonably request, including,
without limitation, a certificate signed by authorized representatives of the
Purchaser and Access Integrated attesting to the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement.
(g) OPINION OF COUNSEL. Purchaser and Access Integrated shall have
furnished to the Company an opinion of Xxxxxxx, Del Deo, Dolan, Griffinger &
Xxxxxxxxx, P.C., counsel for Purchaser and Access Integrated, dated as of the
Closing Date, in form and substance satisfactory to the Company, in the form of
EXHIBIT J.
(h) ASSUMPTION AGREEMENT. Purchaser and Access Integrated shall have
provided to the Company an assumption agreement in the form of EXHIBIT K in
which Purchaser agrees to assume the Assumed Liabilities.
(i) SETTLEMENT LIABILITIES; WORKING CAPITAL AT CLOSING.
(i) The Company shall be unable by the Closing Date to satisfy and
pay in full the Settlement Liabilities for an amount equal to the Settlement
Amount AND Purchaser shall not have made an offer or arrangements to assume,
settle or pay-off in full the Settlement Liabilities exceeding the Settlement
Amount, or Purchaser shall have waived this right.
(ii) The amount of the Company's Current Liabilities shall have
exceeded Current Assets on the Closing Date (in determining the amount of
Current Assets, the amount of any Settlement Liability paid by the Company
during the Period shall be credited to Current Assets) AND Purchaser shall have
not made an offer or arrangement to assume, settle or pay-off in full the amount
by which Current Liabilities exceed Current Assets on the Closing Date or
Purchaser shall have waived this right.
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(j) ESCROW AGREEMENT. The parties shall have executed the Escrow
Agreement.
ARTICLE VII.
TERMINATION
7.1. TERMINATION.
This Agreement may be terminated at any time prior to Closing:
(a) at any time by the mutual consent in writing of the parties hereto;
(b) by the Company or the Purchaser and Access Integrated in writing if
the Closing shall not have occurred by December 1, 2004, but only if the Closing
shall not have occurred for a reason other than the breach by such terminating
party of any of its representations, warranties, covenants or agreements
contained herein;
(c) at any time by the Purchaser and Access Integrated in writing upon a
material breach of any of the representations, warranties, covenants or
agreements of the Company contained in this Agreement; or
(d) at any time by the Company in writing upon a material breach of any of
the representations, warranties, covenants or agreements of the Purchaser and
Access Integrated contained in this Agreement.
In the event of termination of this Agreement by the Company or the
Purchaser and Access Integrated prior to the Closing as set forth above, this
Agreement shall forthwith terminate and there shall be no liability on the part
of the Company or the Purchaser and Access Integrated; PROVIDED, HOWEVER, that
no party shall be relieved of any loss, damage or liability occurring or
sustained as a result of a termination following such party's material breach of
any representation, warranty, covenant or agreement contained in this Agreement.
Notwithstanding any termination of this Agreement, the provisions of this
Section 7 and Section 9 hereof shall survive.
ARTICLE VIII.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.1. SURVIVAL OF REPRESENTATIONS. The representations and warranties of
the Company in this Agreement or in any document delivered pursuant hereto shall
survive the Closing Date for a period of one (1) year, and shall then terminate;
PROVIDED, HOWEVER, that (i) any such representation and warranty shall survive
the time it would otherwise terminate only with respect to claims of which
notice has been given as provided in this Agreement prior to such termination
and (ii) such time limitation shall not apply to the representations and
warranties set forth in Sections 2.5, 2.8, 2.10, 2.16, and 4.5 hereof, which
shall survive until the expiration of the applicable statute of limitations.
8.2. INDEMNITORS; INDEMNIFIED PERSONS. For purposes of this Section 8,
each party that, pursuant to this Section 8, shall agree to indemnify any other
person or entity shall be referred to, as applicable, as the "Indemnitor", and
27
each such person and entity who is entitled to be indemnified by any Indemnitor
shall be referred to as the "Indemnified Person" with respect to such
Indemnitor.
8.3. INDEMNITY OF PURCHASER. The Company hereby agrees to defend,
indemnify, hold harmless and reimburse the Purchaser and Access Integrated and
their directors, officers, agents and employees from and against any and all
claims, liabilities, losses, damages and expenses incurred by such Indemnified
Persons (including reasonable attorneys' fees and disbursements) that shall be
caused by or related to or shall arise out of: (a) any material breach (or
alleged breach in connection with a claim asserted by a third party) of any
representation or warranty of the Company contained in this Agreement and in any
certificate delivered by the Company pursuant hereto; (b) any breach of any
covenant or agreement of the Company contained in this Agreement; and (c) any
failure by the Company to satisfy the Retained Liabilities and the operation of
the Business prior to the Closing (other than the Assumed Liabilities), and
shall reimburse such Indemnified Persons for all costs and expenses (including
reasonable attorneys' fees and disbursements) as they shall be incurred, in
connection with paying, investigating, preparing for or defending any action,
claim, investigation, inquiry or other proceeding, whether or not in connection
with pending or threatened litigation, that shall be caused by or related to or
shall arise out of such breach (or alleged breach in connection with a claim
asserted by a third party), whether or not any such Indemnified Person shall be
named as a party thereto and whether or not any liability shall result
therefrom. The Company further agrees that it shall not, without the prior
written consent of the Purchaser and Access Integrated, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
unless such settlement, compromise or consent shall include an unconditional
release of each Indemnified Person under this Section 8.3 from all liability
arising out of such claim, action, suit or proceeding.
8.4. INDEMNITY OF COMPANY. The Purchaser and Access Integrated hereby
agree to defend, indemnify, hold harmless and reimburse the Company from and
against any and all claims, liabilities, losses, damages and expenses incurred
by them (including reasonable attorneys' fees and disbursements) that shall be
caused by or related to or shall arise out of: (a) any material breach (or
alleged breach in connection with a claim asserted by a third party) of any
representation or warranty of the Purchaser or Access Integrated contained in
this Agreement; (b) any breach of any covenant or agreement of the Purchaser or
Access Integrated contained in this Agreement and in any certificate delivered
by Purchaser and/or Access Integrated pursuant hereto; and (c) any failure by
the Purchaser and Access Integrated to satisfy the Assumed Liabilities and the
operation of the Business (exclusive of the Retained Assets and Retained
Liabilities) after Closing, and shall reimburse such Indemnified Persons for all
costs and expenses (including reasonable attorneys' fees and disbursements) as
shall be incurred, in connection with paying, investigating, preparing for or
defending any action, claim, investigation, inquiry or other proceeding, whether
or not in connection with pending or threatened litigation, that shall be caused
by or related to or shall arise out of such breach (or alleged breach in
connection with a claim asserted by a third party), whether or not such
Indemnified Persons shall be named as a party thereto and whether or not any
liability shall result therefrom. The Purchaser and Access Integrated further
agree that they shall not, without the prior written consent of the Company,
28
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder unless such settlement, compromise or consent shall
include an unconditional release of each Indemnified Person under this Section
8.4 from all liability arising out of such claim, action, suit or proceeding.
8.5. PROCEDURES FOR INDEMNIFICATION; DEFENSE. Promptly after receipt by an
Indemnified Person of notice of the commencement of any action or proceeding
with respect to which indemnification may be sought hereunder, such Indemnified
Person shall notify the Indemnitor of the commencement of such action or
proceeding, but failure to so notify the Indemnitor shall not relieve the
Indemnitor from any liability that the Indemnitor may have hereunder or
otherwise, unless the Indemnitor shall be materially prejudiced by such failure.
If the Indemnitor shall so elect, the Indemnitor shall assume the defense of
such action or proceeding, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall pay the fees and
disbursements of such counsel. In the event, however, that such Indemnified
Person shall reasonably determine in its judgment that having common counsel
would present such counsel with a conflict of interest or alternative defenses
shall be available to an Indemnified Person or if the Indemnitor shall fail to
assume the defense of the action or proceeding in a timely manner, then such
Indemnified Person may employ separate counsel to represent or defend it in any
such action or proceeding and the Indemnitor shall pay the reasonable fees and
disbursements of such counsel; PROVIDED, HOWEVER, that the Indemnitor shall not
be required to pay the fees and disbursements of more than one (1) separate
counsel for all Indemnified Persons in any jurisdiction in any single action or
proceeding. In any action or proceeding the defense of which the Indemnitor
shall assume, the Indemnified Person shall have the right to participate in (but
not control) such litigation and to retain its own counsel at such Indemnified
Person's own expense except as otherwise provided above in this Section 8.5, so
long as such participation does not interfere with the Indemnitor's control of
such litigation.
8.6. LIMITATION ON INDEMNIFICATION. (A) Notwithstanding any provision of
this Section 8 to the contrary, no Indemnified Person shall be entitled to
assert any claim for indemnification in respect of claims for breach of
representations or warranties under each of Sections 8.3(a) and 8.4(a) hereof
until such time as claims for indemnification thereunder shall exceed $50,000
and then only to the extent of such excess.
(a) Subject to the provisions of this Section 8, Purchaser and Access
Integrated shall satisfy their indemnification claims against the Company
pursuant to Section 8.3 only by delivery to it of shares of Common Stock
escrowed under the Escrow Agreement as set forth in Section 1.8, and the
escrowed shares shall represent the limitation of Purchaser and Access
Integrated's recovery under this Section 8.
8.7. EXCLUSIVE REMEDY. Each of the Purchaser, Access Integrated and the
Company acknowledges and agrees that from and after the Closing that (absent
fraud and subject to applicable Law) its sole exclusive remedy (at law or
equity) with respect to any and all claims against the other party shall be made
pursuant to the indemnification provisions set forth in this Section 8.
29
ARTICLE IX.
MISCELLANEOUS
9.1. COSTS AND EXPENSES. The Purchaser, Access Integrated and the Company
shall each pay their respective costs and expenses incurred in connection with
the negotiation, preparation, execution and performance of this Agreement and
the Transaction Documents and the consummation of the transactions contemplated
hereby and thereby, including, without limitation, all fees and expenses of
agents, representatives, counsel, brokers or finders and accountants. All
transfer taxes incurred as a result of the transfer of the Purchased Assets
shall be paid by the Company.
9.2. FURTHER ASSURANCES. Each party shall, at any time and from time to
time on and after the Closing Date, upon request by the other party and without
further consideration, take or cause to be taken such actions and execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring, assigning,
delivering, assuring and confirming the Purchased Assets to the requesting
party.
9.3. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given when delivered by hand, by
established overnight delivery service or by facsimile transmission, when
telexed, or upon receipt when mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to the Purchaser or Access Integrated, to:
Access Integrated Technologies, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxx Xxxx Xxxxxxx, Esq.
Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx, P.C.
Xxx Xxxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
30
(b) if to the Company, to:
FiberSat Global Services, LLC
00000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: President
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
(c) if to the Members, to:
The Member's address set forth in the signature page hereto.
Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.
9.4. GOVERNING LAW; JURISDICTION. (a) This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such jurisdiction.
(b) Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of New York, County of New York, or, if it
has or can acquire jurisdiction, in the United States District Court for the
Southern District of New York, or in the courts in the State of California,
County of Los Angeles, or, if it has or can acquire jurisdiction, in the United
States District Court for the Central District of California, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
9.5. TRANSFERABILITY. This Agreement and all the rights and powers granted
hereby shall bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns. This Agreement and the rights,
interests and obligations hereunder may not be assigned by any party hereto
without the prior written consent of the other parties hereto, except that the
Purchaser may make such assignments to any affiliate of the Purchaser and Access
Integrated, PROVIDED, that the Purchaser and Access Integrated remain liable
hereunder.
9.6. AMENDMENT AND WAIVER. To be effective, any amendment or waiver under
this Agreement must be in writing and be signed by the party against whom
enforcement of the same is sought. Neither the failure of any party hereto to
31
exercise any right, power or remedy provided under this Agreement or to insist
upon compliance by any other party with its obligations hereunder, nor any
custom or practice of the parties at variance with the terms hereof shall
constitute a waiver by such party of its right to exercise any such right, power
or remedy or to demand such compliance.
9.7. ENTIRE AGREEMENT. Except as set forth in this Section 9.6, this
Agreement and the Schedules and Exhibits hereto set forth all of the promises,
covenants, agreements, conditions and undertakings between the parties hereto
with respect to the subject matter hereof, and supersede all prior or
contemporaneous agreements and understandings, negotiations, inducements or
conditions, express or implied, oral or written.
9.8. SEVERABILITY. If any term or other provision of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
9.9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
32
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
PURCHASER:
FIBERSAT GLOBAL SERVICES INC.
By: /S/ A. XXXX XXXX
-----------------------------------
Name: A. Xxxx Xxxx
Title: President
ACCESS INTEGRATED TECHNOLOGIES, INC.
By: /S/ A. XXXX XXXX
-----------------------------------
Name: A. Xxxx Xxxx
Title: President
COMPANY:
By: /S/ XXXX X. XXXXX
-----------------------------------
Name: Xxxx X. Xxxxx
Title: President
33
MEMBERS:
/S/ XXXXXXX XXXXX
----------------------------------------
Name: Xxxxxxx Xxxxx
Address: 0000 Xxxxxx Xxx
Xxx Xxxxxxx, XX 00000
/S/ XXXX X. XXXXX
----------------------------------------
Name: Xxxx X. Xxxxx
Address: 00000 Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000
/S/ XXXXXXX XXXXXXXXXX
----------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Address: 00000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxx, XX 00000
XxXxxxxx Communications, a California
corporation
/S/ W. XXXX XXXXXXXX
----------------------------------------
Name: W. Xxxx XxXxxxxx
Title: Chief Executive Officer
Address: 00000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Globecomm Systems, Inc.
/S/ XXXXXXX X. XXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
Address: 00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
/S/ XXXXX XXXXX
----------------------------------------
Name: Xxxxx Xxxxx
Address: 0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, XX 00000
/S/ XXXXXXX XXXXXX
----------------------------------------
Name: Xxxxxxx Xxxxxx
Address: 000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
34
UPDATE
SCHEDULES
SCHEDULE 1.1 - Permitted Encumbrances
SCHEDULE 1.1(M) - FCC Licenses
SCHEDULE 1.3 - Assumed Liabilities -- General Electric Capital Corporation
SCHEDULE 1.4 - Settlement Liabilities
SCHEDULE 1.5(B) - Purchase Price -- Shares of Common Stock to Members
SCHEDULE 1.10 - Purchase Price Allocation
SCHEDULE 2.4 - Consents
SCHEDULE 2.6 - Financial Statements
SCHEDULE 2.6 - Aging Schedule
SCHEDULE 2.7 - Litigation
SCHEDULE 2.8 - Undisclosed Liabilities
SCHEDULE 2.9 - No Changes
SCHEDULE 2.10 - Taxes
SCHEDULE 2.11 - Assumed Contracts
SCHEDULE 2.12 - Description of Leased Property
SCHEDULE 2.18 - Company Intellectual Properties
SCHEDULE 5.8 - A Collocation Facility of Purchaser or Access Integrated
SCHEDULE 6.1(G) - Assignments--Assumed Contracts
35
EXHIBITS
EXHIBIT A - Lease
EXHIBIT B - Escrow Agreement
EXHIBIT C - Form of Company and Members Closing Certificate
EXHIBIT D - Form of Purchaser and Access Integrated Closing Certificate
EXHIBIT E- Form of Xxxx of Sale
EXHIBIT F - Form of Assignment and Assumption of Lease
EXHIBIT G - Landlord's Consent
EXHIBIT H - Intentionally Omitted
EXHIBIT I - Opinion of Counsel to Company
EXHIBIT J - Opinion of Counsel to Purchaser and Access Integrated
EXHIBIT K - Assumption Agreement for Assumed Liabilities
36
