Exhibit 2.8
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT dated as of December 6, 2001 (the
"Agreement") is made by and between Roseville Telephone Company, for itself and
on behalf of its division RTC Alarm Monitoring Services (the "Seller"), a
California corporation having offices at 000 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, and KC Acquisition Corp. (the "Buyer") a New Jersey
corporation having offices at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000. Together, the Seller and the Buyer are the "parties" hereto and each
individually is a "party".
RECITALS
Seller is owner of certain assets used in the conduct of a fire and
security alarm monitoring business, which business is located primarily at 000
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx (the "Business"). Seller desires to sell
certain contract monitoring assets of the Business to Buyer.
Buyer desires to acquire certain of the assets of the Business owned by
Seller.
NOW, THEREFORE, intending to be legally bound hereby, the parties agree
as follows:
The Transaction.
1.1 Sale and Purchase of Assets. On and subject to the terms and conditions
contained in this Agreement, at the Closing (as hereinafter defined), Seller
shall sell to Buyer, and Buyer shall purchase from Seller, free and clear of any
Liens, the following assets (collectively, the "Assets"):
(A). Certain of the equipment, fixtures, furniture, office equipment
and supplies, inventory and other tangible and intangible assets used or usable
in the Business on the date of Closing as specifically listed on Exhibit 1.1(A)
Asset Schedule, but specifically excluding the Excluded Assets (as hereinafter
defined);
(B). Custody of all of Seller's records specifically relating to the
Assets (and not relating to any other assets of Seller).
(C). All of the Seller's rights to and goodwill in connection with the
Assets.
(D). Seller's rights under all of its Retail Contracts and Dealer
Contracts which are WRMR Contracts, including leases and other contracts which
are necessary to the use and enjoyment of the Assets, as listed on Exhibit
1.1(D) Closing Contracts Schedule attached hereto (including any and all
security deposits) (collectively, the "Contracts").
(E). Seller's claims, causes of action and rights of recovery
(including warranty and indemnity claims and the like) against manufacturers
and/or suppliers of any assets included in the Assets.
(F). Seller shall grant and assign to Buyer, its successors and
assigns, non-exclusive right to use its name "RTC Alarm Monitoring Services"
or any other name including the words "RTC" and "alarm" or otherwise (with the
understanding that "Alarm" must be part of the name) in connection with the
Buyer securing the full use and benefit of the Assets, but limited to a period
of forty five (45) days
Page -1-
from Closing (other than for collection efforts and agreed upon press releases
which may require longer use) (the "License Period"). From and after Closing for
the duration of the License Period, Seller and its officers shall take all steps
to make the said name available to the Buyer for its non-exclusive use at the
time of Closing and at all times thereafter during the License Period in
connection with the Assets. Buyer admits the validity of, and agrees not to
challenge any of Seller's rights in and to the name "RTC, Alarm Monitoring
Services". Buyer also agrees that any and all rights that may be acquired by the
use of that name by Buyer shall inure to the sole benefit of Seller. Buyer shall
not use that name or any part thereof as part of its corporate name except with
the disclaimer that it is not affiliated with Seller or any Affiliate thereof.
Buyer shall not use any name or xxxx confusingly similar to that name, subject
to the license granted hereunder.
(G). All of Seller's rights to the use of all telephone numbers and
telephone lines (with customer consent as to customer-owned lines). Seller
agrees to cooperate with Buyer to have such telephone numbers and telephone
lines assigned to the Buyer by the telephone company.
(H). All advertising materials and all other printed or written
materials relating to the Assets.
(I). The right to receive and open mail, notes and accounts receivable
remittances and payments and other communications addressed to Seller as
relating to the ownership or use of the Assets on or alter the Closing.
(J). All rights of Seller arising out of expenses that Seller has
prepaid in connection with any of the Assets and as necessary for Buyer to
conduct business at any location as Seller has heretofore conducted business
there.
(K) All Accounts Receivable of Seller in regard to the Business.
1.2 Excluded Assets. The following assets of Seller are, without limitation.
specifically excluded from the assets sold and purchased under this Agreement
(collectively, the "Excluded Assets"):
(A). The corporate records of Seller other than as relating exclusively
to the Assets or Contracts being assigned hereunder.
(B). Cash, bank deposits and bank accounts.
(C). Intercompany receivables with respect to any Affiliate of Seller.
(D). Any and all claims by Seller with respect to transactions
occurring before the Closing, including claims for any refund of taxes paid by
or on behalf of Seller or any Affiliate thereof to any federal, state or local
governmental authority.
(E). All contracts other than the Contracts.
(F). Any bonus, pension, profit sharing, retirement, credit union,
deferred compensation, group health, major medical or life insurance plan or
similar plan, contract or commitment providing benefits to the employees of the
Business.
(G). Insurance policies and bonds maintained by or on behalf of Seller
with respect to the
Page -2-
Business.
(H). Logos, trademarks and service marks used in connection with the
Business (other than as permitted in Section 1.1(F) above).
1.3 Exclusion of Liabilities. At the Closing, Buyer shall assume none of the
Seller's liabilities, except as defined herein on Exhibit 1.3(A) Assumed
Liabilities Schedule. Buyer does not and shall not assume or become obligated to
pay any liabilities of Seller of any kind, whether incurred, accrued, or arising
prior to or after the Closing, and all such liabilities shall remain the sole
responsibility of Seller, which Seller agrees to pay and satisfy in full and in
a timely manner.
Without limiting the generality of the foregoing, and notwithstanding
any implication (as opposed to express statement) to the contrary contained in
this Section 1.3 above, the Assumed Liabilities do not encompass any liability
of or to any officer or shareholder of Seller and also do not encompass any of
Seller's liabilities or obligations:
(A). under this Agreement;
(B). for any payment of any bank or other loan;
(C). for expenses, taxes or fees incident to or arising out of the
negotiation, preparation, approval or authorization of this Agreement or the
consummation (or preparation for the consummation) of the transactions
contemplated hereby, including any attorneys' and other fees and any sales, use
and transfer taxes;
(D). arising by reason of any violation of federal, state or local law
or any requirement of any governmental authority;
(E). which would not have existed had each of the representations and
warranties of Seller in Article 2 been true;
(F). which relate to any employment, consulting, retirement, pension,
profit-sharing or other compensation or benefit plan; arrangement or obligation,
including any severance obligations to any employees of Seller;
(G). in respect of any amount of federal, state or local taxes
(including any interest, penalties, and additions to such taxes), whether
imposed on or measured by the income of Seller for any period or otherwise
imposed or measured, including any taxes arising from or in connection with the
operation of Seller's Business prior to the Closing or from or in connection
with the sale of the Assets to Buyer;
(H). for any credits or allowances or for related services, whether
related to warranties, breach of contract or otherwise;
(I). for claims or lawsuits (without regard to when, the product or
service involved was sold or performed or alleged to have been sold or
performed, or when any accident, damage or loss occurred or occurs or is alleged
to have occurred, or when any accident, damage or loss was or is discovered or
is alleged to have been discovered); or
(J). which constitute consequential or incidental liability of any
kind or nature whatsoever.
Without limiting the generality of the foregoing, Seller acknowledges
and agrees that, notwithstanding any implication to the contrary, Buyer is not
assuming, and shall have no liability of any kind for, any obligations or
liabilities (except expressly Assumed Liabilities) of Seller of any nature
whatsoever, whether accrued, absolute, contingent or otherwise.
At the Closing, Buyer shall only assume and agree to pay, perform and
discharge the following effective after the Closing: all of the obligations,
liabilities and commitments of Seller arising from events occurring after the
Closing under or with respect to each WRMR Contract being sold and assigned to
Page -3-
Buyer in this Agreement.
1.4 Purchase Price. The aggregate purchase price for the Assets (the "Purchase
Price") shall be equal to the product of the Performing WRMR under the
Performing WRMR Contracts as of the Closing Date, multiplied times a factor of
twenty three (23), less any and all prepayments in regard to any WRMR Contracts,
subject to further adjustments as hereinafter provided, payable at Closing in
cash by certified bank or attorney trust account check or via wire transfer
("Closing Payment"). The estimated Purchase Price to be paid by Buyer to Seller
at the Closing shall be $5,260,514.00, subject to further adjustment as herein
provided. All Contracts which do not meet the complete definition of WRMR
Contracts shall he excluded from the calculation of WRMR for determination of
the Purchase Price herein, but shall also be sold and assigned to Buyer at
Closing without additional consideration.
1.5 Allocation of Purchase Price. The Purchase Price shall be allocated as
follows:
$500,000.00 Equipment, furniture and fixtures;
$(Balance of Purchase Price Customer accounts and contracts;
$10,000.00 Covenant not to compete and confidentiality
agreements;
$ Total
The parties agree to report the transaction for tax purposes based upon the
allocation of the purchase price as agreed to herein.
1.6 Closing. The Closing of the transactions contemplated by this Agreement (the
"Closing") shall be held at such place as the parties shall mutually agree on or
about December 21, 2001. At the Closing:
(A). Seller shall deliver to Buyer the Xxxx of Sale in the form of
Exhibit 1.6(A)(1) attached hereto effective to vest in Buyer title to the Assets
as warranted in Section 2.3 hereof, a corporate resolution authorizing the
transfers as contemplated herein, approved by Seller's directors, a bring down
certificate in the form of Exhibit 1.6(A)(2) attached hereto, and such other
documents as required by any other provision herein.
(B). Buyer shall deliver to Seller the Closing Payment, which shall be
certified, bank or attorney trust check or via wire transfer.
1.7 Conditions to Closing-Buyer. The following are conditions precedent to
Buyer's obligations to consummate the transactions on its part contemplated by
this Agreement and to close title to this transaction, any one or more of which
may be waived in whole or in part by Buyer if set forth in a writing exceeded by
both the President and one of the vice presidents of Buyer:
(A). Seller shall pay off and satisfy at or prior to Closing all
liabilities, loans, leases, Liens and claims against any of the Assets and shall
deliver to Buyer the Assets sold to Buyer free and clear of any and all liens
and encumbrances.
(B). Seller shall have lawfully assigned to Buyer all Contracts in a
form and subject to the terms
Page -4-
and conditions as are agreeable to Buyer and Seller for any and all Dealers and
Subscribers of Seller and the Business.
(C). Seller shall execute an Agreement of Restrictive Covenant in the
form attached hereto as Exhibit 1.7 (C). Seller's executive and sales personnel
(including SureWest's executives, Xxx Allegra, Xxxx Xxxxx and Xxxxxxx Xxxxx)
shall execute a confidentiality agreement in the form of Exhibit 1.7(C)(1)
hereto.
(D). Seller shall have in the Performing, WRMR Contracts being sold and
assigned to Buyer at Closing a minimum Recurring Monthly Revenue of Performing
WRMR at Closing of at least one hundred ninety thousand and no/100
($190,000.00) dollars.
(E). Seller shall have properly assigned to Buyer all Contracts for all
Dealers and Subscribers of Seller, which shall have been approved and verified
by Buyer prior to Closing.
(F). The representations and warranties of Seller set forth in Article
2 must be in all respects true and correct at and as of the Closing as though
then made and as though the Closing Date were substituted for the date of this
Agreement.
(G). Seller shall have performed all of the covenants and agreements
required to be performed by it under this Agreement prior to the Closing.
(H). As of the Closing Date, there shall not have been since January 1,
2001 (i) any material adverse change in the Business, the Assets or the
Contracts sold hereunder; or (ii) any material casualty loss or damage to the
Assets, whether or not covered by insurance.
(I). As of the Closing, no action or proceeding before any court or
governmental body or agency shall be pending or threatened wherein an
unfavorable judgment, decree or order would prevent the carrying out of this
Agreement or any of the transactions contemplated hereby, declare unlawful any
of such transactions, cause any of such transactions to be rescinded, or
adversely affect any of the Assets, the locations where the Business is
operated, any of the Contracts or Buyer's use or enjoyment thereof.
(J). At the Closing, Buyer shall have received a certificate in the
form of Exhibit 1.7(J) hereto, executed by the Seller confirming that the
conditions in paragraphs (F), (G), (H) and (I) have been met.
(K). At the Closing, Buyer shall have received from Seller a
certificate in the form of Exhibit 1.7(K) hereto, executed by Seller's
secretary, attaching a copy and certifying to the accuracy and completeness of
the attached copy of (i) Seller's articles of incorporation and amendments
thereto, (ii) Seller's By-laws and amendments thereto, and (iii) the resolutions
adopted by Seller's Board of Directors related to this Agreement and the
transactions contemplated hereby.
(L). At the Closing, Seller shall have delivered to Buyer:
(i) instruments of sale, transfer, assignment, conveyance and
delivery relating to the Assets, the Contracts and related property being sold
hereunder and the physical possession of the Assets (it being agreed that in the
event any of the Assets is in any location other than a location where Seller is
operating the Business sold hereunder, Seller shall so notify Buyer no later
than ten days prior to Closing and in that event, as long as such Assets are
located within the continental United States, Buyer will, at its expense, be
responsible for delivering physical possession thereof at a location designated
by Buyer for
Page -5-
such purpose. If any such Assets are not within the continental
United States, then it shall remain Seller's responsibility to deliver same to
Buyer at Seller's expense):
(ii) any third party consents required for the transfer to Buyer
of the Assets, the Contracts, and any other property contemplated hereby or
required for the consummation of the transactions on Seller's part contemplated
hereby, or required in order to prevent such transfer and transactions from
constituting a breach or default under or grounds for termination of any
agreement to which Seller is a party or by which Seller is bound or affected or
to which any of the property of Seller is subject;
(iii) the releases of all Liens held by any shareholder or any
third party on the Assets, the Contracts or any other property sold hereunder,
(iv) the release of all Liens on the Assets, the Contracts and
other property sold hereunder and evidence of the absence of any Liens on the
same;
(v) evidence of all proceedings taken by Seller, its directors and
shareholders, in connection with the consummation of the Closing;
(vi) a certificate executed by the Seller in the form of Exhibit
1.7(L)(vi) hereto confirming that no casualty, loss or damage has occurred to
any of the Assets since the date of this Agreement;
(vii) a certificate executed by the Seller in the form of Exhibit
1.7(L)(vii) hereto containing the information required to be set forth in any
section of the Disclosure Schedule as though the Closing Date were substituted
for the date of this Agreement;
(M). Buyer shall have received (i) the complete data transfer to its
computer system for proper monitoring of all Subscribers under all the WRMR
Contracts being sold and assigned hereunder, and (ii) the actual transfer of all
telephone numbers and telephone lines utilized by Seller to monitor and service
all the Subscribers under all the WRMR Contracts and the executed telephone
company forms for same in the form of Exhibit 1.7(M) hereto.
(N). At the Closing, Buyer shall have received an opinion of counsel to
Seller as to the matters set forth in Section 6.1, subject to customary
qualifications and in a form subject to the review and approval of counsel for
Buyer, addressed to the Buyer and dated as of the Closing.
(O). All proceedings taken by Seller in connection with the
consummation of the Closing and all certificates, instruments, documents and
evidence delivered to Buyer in such connection shall be satisfactory in form and
substance to Buyer acting in a commercially reasonable manner.
(P). Buyer shall have satisfactorily completed, within the period of
time beginning with the complete execution of this Agreement and ending before
the Closing (the "Due Diligence Period"). Buyer's due diligence review of the
Business, limited to Seller's WRMR Contracts and all addendums relating thereto,
and Buyer shall not have cancelled this Agreement as provided herein. Seller
shall provide to Buyer and its assigned agent, at Seller's expense, copies as
requested by Buyer or assigned agent, of all documents and instruments related
to the WRMR Contract and other Assets (redacted as necessary to preserve
confidentiality, but there shall be no such redactions for any items in any
Contracts and addendums relating thereto) and shall allow Buyer access during
normal business hours to review all of Seller's books, records and documentation
with respect thereto. If during the said Due Diligence Period, Buyer finds that
any WRMR Contracts on which Buyer relied in proceeding with entering into this
Agreement and concludes that there is not $190,000 of Performing WRMR
anticipated for Closing and in Buyer's sole discretion, Buyer may cancel this
Agreement. Under such cancellation, neither of the parties hereto shall have any
further liability to the other hereunder.
(Q). Buyer shall have received the transfer of Receiver Line for
monitoring communications by Seller moved to another means of critical
communications, such as audio or cellular monitoring
Page -6-
capability, which shall be subject to Buyer's prior satisfaction and approval.
Unless such transfer shall be successfully completed by Closing and the
applicable dealer(s) notified of and having approved of same, the WRMR in
regard to these accounts shall be excluded from the calculation of WRMR
utilized in calculating the Purchase Price in Section 1.4 above.
1.8 Conditions to Closing-Seller. The following are conditions precedent to
Seller's obligations to consummate the transactions on its part contemplated by
this Agreement and to close title to this transaction, any in one or more of
which may be waived in whole or in part by Seller if set forth writing executed
by any vice president of Seller:
(A). The representations and warranties of Buyer set forth in Article
3 must be true and correct at and as of the Closing as though then made and as
though the Closing Date were substituted for the date of this Agreement;
(B). Buyer shall have performed all of the covenants and agreements
required to be performed by it under this Agreement prior to the Closing;
(C). As of the Closing, no action or proceeding before any court or
government body or agency shall be pending or threatened wherein an unfavorable
judgment, decree or order would prevent the carrying out of this Agreement or
any of the transactions contemplated hereby, declare unlawful any of such
transactions, or cause any of such transactions to be rescinded;
(D). At the Closing, Seller shall have received from Buyer a
certificate in the form of Exhibit 1.8(D) hereto, executed by Buyer's President,
Vice President or Secretary confirming that the conditions in (A), (B), and (C)
above have been met;
(E). All proceedings taken by Buyer in connection with the consummation
of the Closing, and also all certificates, instruments, documents and evidence
delivered to Seller in such connection shall be satisfactory in form and
substance to Seller acting in a commercially reasonable manner.
1.9 Price Adiustment. The Purchase Price shall be adjusted based upon the
actual Performing WRMR at the Closing Date.
1.10 Sellers' Accounts Receivable. The parties agree that Seller shall sell and
transfer to Buyer at Closing and Buyer shall purchase from Seller all of
Seller's Accounts Receivable relating to the Performing WRMR Contracts being
sold and transferred herein. The consideration to be paid by Buyer for these
Accounts Receivable shall be 100% of the amounts owed under such Accounts
Receivable transferred herein. That amount shall be paid by Buyer to Seller in
three equal consecutive monthly installments due and payable beginning on the
first monthly anniversary of the Closing herein. Seller shall provide such
documentation at Closing and thereafter upon request and shall assist Buyer as
may be reasonably necessary to collect the Accounts Receivable. Buyer shall have
the sole and exclusive right to contact all customers of the WRMR Contracts and
the sole and exclusive right to collect on any and all of the Accounts
Receivable on and after the Closing Date. Seller shall take no actions to
contact or collect on any Contracts or Accounts Receivable after Closing. Seller
shall provide Buyer with written authorization for Buyer to deposit any payments
received by Buyer on the Accounts Receivable which are made payable to Seller.
Seller shall not deposit but shall promptly deliver to Buyer any and all
payments received by Seller on the Accounts Receivable. Buyer agrees that after
the Closing Date it will use efforts to collect the Accounts Receivable
comparable to those efforts Buyer uses to collect trade accounts receivable
arising out of its security monitoring business which are similar in amounts
and ages; provided
Page -7-
that Buyer will not be required to retain or use legal counsel or any collection
service, or to institute legal proceedings, as a part of its collection efforts.
Seller guarantees the collection of the Accounts Receivable by Buyer, but
Seller's liability for collection of the Accounts Receivable under this guaranty
shall in no events exceed the sum of Ten Thousand ($10,000.00) dollars. As of
the end of the third monthly anniversary from the Closing herein, Buyer shall
notify Seller as to the status of Buyer's collections of the Accounts Receivable
and, if the collections thereof shall be less than 100% at that time Buyer
shall deduct that shortfall from the third monthly payment due Seller for the
purchase of the Accounts Receivable, but in no event shall Buyer deduct greater
than $10,000.00 as set forth herein.
1.12 Prorations. Income from the operation of the Business through the Closing
shall be for the account of Seller and after the Closing shall be for the
account of Buyer. Any income under any Contract, to the extent not expressly
referred to in this Agreement, shall be prorated on a basis reasonably related
to the basis upon which such income or expense is determined. Expenses for any
operation of the Business which continues beyond the Closing shall be in
accordance with the closing agreement referred to in section 8.3 hereafter.
1.13 Purchase Price Adjustments. If and to the extent that prorations and
adjustments cannot be made at Closing, a determination of the remaining
prorations and adjustments to Purchase Price hereunder shell be made by Seller
in a final settlement statement (the "Final Settlement Statement") delivered to
Buyer not later than twenty-one (2l) days after the Closing, which Final
Settlement Statement shall contain all information necessary to determine
prorations and adjustments, and shall be certified by an officer of Seller.
Buyer shall review the Final Settlement Statement and, if Buyer disapproves of
any determination contained in such statement it shall give Seller written
notice stating its objections thereto and identifying the reasons therefore
within twenty-one (21) days after receipt of such statement and access to such
additional records as Buyer may reasonably request in order to respond. Seller
and Buyer shall agree on the amount of each determination to which Buyer objects
within fourteen (14) days after Seller's receipt of Buyer's objections thereto.
The payment required under the Final Settlement Statement, as adjusted
hereunder, shall be made by the party responsible therefor to the other party by
certified or bank cashier's check or by wire transfer within five (5) days of
final resolution.
1.14 Definitions.
(A). Certain Defined Terms. Defined terms used in this Agreement shall
have the meanings set forth or described on Exhibit 1.11 hereto (such meanings
to be equally applicable to both the singular and plural forms of such terms).
(B). Accounting Terms. All accounting terms not specifically defined
in this Agreement shall be construed in accordance with generally accepted
accounting principles in the United States ("GAAP"), consistently applied by
the Seller in accordance with its past practices.
2. Representations and Warranties by Seller. As an inducement to Buyer to enter
into this Agreement and to consummate the transactions on its part contemplated
hereby. Seller hereby represents and warrants to Buyer, which representations
and warranties shall survive the Closing, as follows, with the only exceptions
thereto being the items set forth on Exhibit 2 Disclosure Schedule attached
hereto and initialed by all parties:
2.1 Corporate Matters. Seller is a corporation of the State of
California duly organized, validly existing and in good standing under the laws
of California. Seller has taken all corporate action necessary to consummate the
transactions contemplated by this Agreement. Other than the Business, Seller
does not own any direct or indirect interest in any corporation, joint venture,
limited liability company,
Page -8-
partnership, association or other entity in a business similar to that of the
Buyer. Seller is authorized to do business in all states where the failure to be
so qualified would be a violation of law or would have a material adverse
effect on Seller's Business. Seller's Business is conducted only by Seller.
2.2 Validity and Enforceability. The execution, delivery and
performance of this Agreement and all other agreements to which Seller is a
party contemplated hereby and the consummation of the transactions on Seller's
part contemplated hereby have been duly and unanimously authorized by the Board
of Directors of Seller and, if required by the Shareholders; and no other
corporate or other proceeding on the part of Seller, its Board of Directors or
its Shareholders is necessary to authorize this Agreement, any such other
agreement or the transactions contemplated hereby. Each of this Agreement and
all other agreements to which Seller is a party contemplated hereby constitutes,
or upon its execution and delivery will constitute a valid and binding
obligation of Seller enforceable against Seller in accordance with its terms.
Neither the execution or deliver of this Agreement and all such other agreements
contemplated hereby, the consummation of the transactions contemplated hereby,
nor the performance and fulfillment of this Agreement and all such other
agreements contemplated hereby by Seller will (a) conflict with or result in any
breach of any other provisions of, (b) constitute, with or without the giving of
notice, the passage of time, or both, a breach or a default under or result in a
loss of rights under, (c) result in a violation of, (d) result in the creation
of any lien on any of the Assets, the Contracts or any other property to be sold
and transferred hereunder, (e) give any third party the right to accelerate any
obligation under, or (f) require any authorization, consents, approval,
exemption or other action of any body or notice to any court, other governmental
entity, or other third party under the provisions of: the articles of
incorporation or bylaws or any shareholder agreement of Seller or any indenture,
mortgage, lease, loan agreement, or other agreement or instrument, or any
judgment, decree, order, or award of any court, governmental body or arbitrator,
to which Seller is a party or by which Seller is bound or affected or to which
any of Seller's properties is subject. or any law, statute, rule, regulation,
judgment or decree to which Seller is subject, Seller has full power and
authority, corporate and otherwise, to carry, out its obligations hereunder and
under the other agreements to which Seller is a party contemplated hereby.
2.3 Title to Assets. Seller owns as of the date hereof and has
authority to convey and transfer to Buyer at the Closing and shall convey at the
Closing good and marketable fee title to all of the Assets subject to no
mortgage, pledge, Lien, charge, assignment, restriction, claim, conditional or
other sale agreement, option, encumbrance or security interest. Each of the
Assets are used solely in connection with the Seller's operation of the
Business. The execution of this Agreement and the performance of the covenants
herein contemplated will not result in the creation of any Lien, charge or
encumbrance upon any of the Assets or the Business pursuant to any indenture,
agreement or other instrument to which Seller is a party or by which Seller is
bound or by which the Business or the Assets may be affected. The Assets are
owned by Seller and are transferred and sold to Buyer at the Closing, free and
clear, and exclusive of any and all liabilities and obligations. Liens, claims
or encumbrances, whether absolute, accrued, contingent or otherwise, all of
which shall have been discharged in full on or before the Closing. No other
entity or individual has any right, title or interest in or to the Assets.
Except for the Contracts. Seller has no lease, contract or commitment of any
kind affecting or relating to the Assets. Neither the execution of this
Agreement, nor the consummation of the transaction contemplated hereby, will
violate or result in a breach of, or constitute a default under, any instrument
to which Seller or its Shareholders is bound.
2.4 Legal Compliance. Seller has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings and charges thereunder) of all governmental entities relating
to the Business. No investigation, review, inquiry or proceeding by any
governmental
Page -9-
entity with respect to Seller is pending or, to the knowledge of the Seller,
threatened. Seller is not subject to any agreement, contract or decree with any
governmental entity arising out of any current or previously existing violations
or alleged violations of applicable laws except where any of the foregoing would
not be binding on Buyer or prevent Buyer from conducting Seller's Business as
Seller had heretofore conducted it in the absence of any such agreement,
contract or decree.
2.5 Litigation. There is no action, suit, proceeding, order. claim or
investigation pending, or to the knowledge of Seller threatened, against or
affecting Seller at law or in equity, or before or by any federal provincial,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which might adversely affect Seller's
performance under this Agreement, the consummation of the transactions on any
of their parts contemplated hereby, or any of the Assets, the Contracts, or
other property to be transferred or sold hereunder or Buyer's use or enjoyment
thereof.
2.6 Ordinary Course/Contracts with Affiliates. Seller's Business has
been conducted by Seller only in the ordinary course. There are no agreements or
understandings relating to the Business between Seller and any of its
Shareholders or any other Affiliate of Seller or any of the Shareholders or any
member of the family of any Shareholder.
2.7 Brokers. Seller has not made any agreement or taken any action that
may cause anyone to become entitled to a commission, fee or other compensation
in connection with this transaction except as to Rooney Associates. Seller
shall satisfy any and all such claims for commission at Closing. Seller shall
hold Buyer harmless from and against any and all such commissions, fees or
compensation, whether or not such claims are disclosed in this Agreement.
2.8 Contracts. Each of the Contracts is in full force and effect.
Seller is not in default in any respect under any of the Contracts. There are no
facts, conditions or circumstances which, with the passage of time or the giving
of notice, will or could constitute a default with respect to any of the
Contracts.
2.9 Government Consent. No permit, consent, approval or authorization
of, or declaration to or filing with, any governmental or regulatory authority
is required to be obtained or made by Seller in connection with the execution,
delivery and performance of this Agreement by Seller or the consummation of the
transactions on their parts contemplated hereby.
2.10 Tax Matters.
(A). Seller has timely filed, or caused to be filed, all requisite
federal, state and local income, personal, property, estimated tax reports or
returns and all other applicable tax reports and returns required to be filed
with respect to Business and the Assets and has timely paid all taxes, interest
and penalties shown due thereon and waivers or consents to extend periods during
which additional tax assessments may be made.
(B). Seller has not with respect to the Business entered into any
closing agreement or similar binding agreement with any taxing authority that
would affect its tax liability for any taxable period.
(C). Seller shall, with respect to the Business, indemnify and hold
Buyer free and harmless from and reimburse Buyer for and in respect of any
tax interest or penalty due or arising from any event or action of Seller.
Page -10-
2.11 Absence of Default. Seller is not, with respect to the Business,
in default of any terms or conditions of any indebtedness or liability,
including any trade payable.
2.12 No Competition Limitation. Seller is not a party to any written or
oral contract which limits its right to freely engage in any line of business or
to freely compete with any person anywhere in the world, by which Buyer would
become bound as a result of the transactions on its part contemplated hereby.
2.13 Books and Records. Seller maintains, and will deliver to the Buyer
intact at the Closing or at such later time at which Seller has completed the
services requested by Buyer in connection with the Assets as set forth in
Section 8.3 hereinafter, accurate and complete records, books, files, computer
data, properly organized, for the efficient operation of Seller's Business as
relating to the Assets, and the maintenance, control and handling of its
equipment, assets and inventories, concerning its relationship with customers,
suppliers and others with whom Seller conducts business, its purchases, sales,
xxxxxxxx, receivables and other related business activities as relating to the
Assets sold herein. The books and records of account of Seller relating to
Seller's Business have been maintained in accordance with generally accepted
accounting principles, consistently applied.
2.14 Licenses and Permits. Seller has maintained in full force and
effect all licenses, permits and other governmental (federal, state and local)
authorizations that are required in connection with the Business of Seller. Such
licenses, permits, and authorizations are valid and sufficient for all business
activities presently conducted by Seller.
2.15 Casualty Damage. As of the Closing, there will not have been with
respect to the Business or the Assets (a) any destruction, damage by fire,
accident or other casualty or act of God of or to any of the Assets, WRMR
Contracts or other property being sold to Buyer hereunder exceeding $10,000.00
in value or affecting in a material and adverse way the operation of its
business as it is now conducted which was or is not fully covered by insurance;
or (b) any damage to, loss or destruction of Seller's computer data or other
vital business records.
2.16 Prohibited Events. As of the Closing, Seller shall not leave (a)
failed to fully and completely disclose and secure the required or necessary
consents of all shareholders, directors, and others as necessary, or Seller, to
all of the terms and conditions set forth herein; (b) waived or compromised any
rights in favor of its Business as carried on at and prior to the Closing; (c)
failed to pay and fully satisfy any assessments, penalties or interest for
federal, state or local income tax, sales or other tax relating to income sales
for prior fiscal years.
2.17 Insurance. Seller presently has in effect valid, outstanding and
enforceable insurance polices to which premiums have been currently paid to
insure against all risks and liabilities to an extent and in a manner reasonably
appropriate and sufficient under sound business practices. Seller will maintain,
insurance coverage of similar kinds and amounts and will continue to pay the
premiums for such coverage, up to the Closing and for such additional time until
Seller has completed the services requested by Buyer in connection with the
Assets as set forth in Section 8.3 hereinafter.
2.18 Key Employees. The employees identified in section 1.7(C) are
bound or shall be at closing bound by a confidentiality agreement, in the form
of Exhibit 1.7(C)(1) hereto.
2.19 Sales Taxes. Seller has fully paid, and at closing will have fully
paid, all sales taxes in every jurisdiction in which sales taxes are required to
be paid by Seller. Seller shall satisfy any and all taxes
Page -11-
due from Seller in regard to this transaction.
2.20 Environmental Matters. Seller has not caused or permitted any
hazardous wastes or hazardous substances, as defined in any applicable federal,
state or local environmental law or regulation to enter into, contaminate or
pollute the soil within or ground waters beneath any property occupied by
Seller. Seller is unaware of the presence of any such hazardous wastes or
substances in the said soil or ground waters, and Seller shall take all actions
necessary to remedy any such environmental condition occurring during the term
of its possession.
2.21 Business Names. Seller has provided to Buyer a list annexed hereto
as Exhibit 2.21 which sets forth a true and accurate list of all names
(including all trade names and fictitious names) and business addresses used by
Seller in connection with the Business within five years last past the date
hereof. Seller has not conducted any part of the Business (regardless of the
size or geographical scope of such other business) under any other name. Seller
has no interest in any other business or entity engaged in any business similar
to that of the Business, in whole or in part.
2.22 Insolvency. No proceedings have been taken or authorized by Seller
or any third party with respect to bankruptcy, insolvency, liquidation,
dissolution or winding up of the affairs of Seller. The fair value of the
property of Seller is greater than the total amount of liabilities including
contingent liabilities, of Seller. The present fair salable value of the assets
of Seller is not less than the amount that will be required to pay all probable
liabilities of Seller on its debts as they become absolute and matured. Seller
does not intend to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay such debts and liabilities as they mature,
and Seller is not engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which its property would constitute
unreasonably small capital.
2.23 Minimum RMR. The Monthly Recurring Revenue on the Performing WRMR
Contracts of Seller for each of the months of September, October, and November
2001 was at least $190,000.
2.24 Awareness of Adverse Facts. Neither Seller nor any of its officers
or directors are aware of the existence of any pending or threatened
litigation or proceeding or any pending or threatened development or other
state of facts which would render any of the warranties, representations or
disclosures made herein either untrue, incomplete or misleading, or whose
failure to disclose would render any of the warranties, representations or
disclosures made herein or in any of the exhibits or schedules hereof either
untrue, incomplete or misleading, or which would have a materially adverse
effect upon the Business of Seller, or upon the relations of the Buyer with any
of the Business' suppliers or customers.
2.25 Truth of Representations as of Closing Date. Each and every
warranty and representation set forth herein, and in the exhibits and schedules
hereto, shall be true, accurate and complete in every material respect with the
same force and effect as if each had been made at and as of the Closing Date.
3. Representations and Warranties by Buyer. As an inducement to Seller to enter
into this Agreement and to consummate the transactions on its part contemplated
hereby. Buyer represents and warrants to Seller, which representations and
warranties shall survive the Closing, as follows:
3.1 Corporate Matters. Buyer is a corporation of the State of New
Jersey duly organized, validly existing and in good standing under the laws of
New Jersey. Buyer has taken all corporation action
Page -12-
necessary to consummate the transactions contemplated by this Agreement. Buyer
is authorized to do business in all states where the failure to be so qualified
would be a violation of law or would have a material adverse effect on its
business. Buyer's corporate structure is set forth on Schedule 3.1 hereto.
3.2 Validity and Enforceability. The execution, delivery and
performance of this Agreement and all other agreements to which Buyer is a party
contemplated hereby and the consummation of the transactions on Buyer's part
contemplated hereby have been duly and unanimously authorized by the Board of
Directors of Buyer and unanimously by the shareholders; and no other corporate
or other proceeding on the part of Buyer, its Board of Directors or its
shareholders is necessary to authorize this Agreement; any such other agreement
or the transactions contemplated hereby. Each of this Agreement and all other
agreements to which Buyer is a party contemplated hereby constitutes; or upon
its execution and delivery will constitute, a valid and binding obligation of
Buyer enforceable against it in accordance with its terms. Neither the execution
or delivery of this Agreement and all such other agreements contemplated hereby,
the consummation of the transactions contemplated hereby, nor the performance
and fulfillment of this Agreement and all such other agreements contemplated
hereby by Buyer will (a) conflict with or result in any breach of any other
provisions of, (b) constitute with or without the giving of notice, the passage
of time, or both, a breach or a default under or result in a loss of rights
under, (c) result in a violation of, (d) result in the creation of any Lien on
any of the Assets, the Contracts or any other property to be sold and
transferred hereunder, (e) give any third party the right to accelerate any
obligation under, or (f) require any authorization, consents, approval,
exemption or other action of any body or notice to any court, other governmental
entity, or other third party under the provisions of: the articles of
incorporation or bylaws or any shareholder agreement of Buyer or any indenture,
mortgage, lease, loan agreement, or other agreement or instrument, or any
judgment, decree, order, or award of any court, governmental body or arbitrator,
to which Buyer is a party or by which Buyer is bound or affected or to which any
of Buyer's properties is subject, or any law, statute, rule, regulation,
judgment or decree to which Buyer is subject. Buyer has full power and
authority, corporate and otherwise, to carry out its obligations hereunder and
under the other agreements to which Buyer is a party contemplated hereby.
3.3 Brokers. Buyer has not made any agreement or taken any action that
may cause anyone to become entitled to a commission in connection with this
transaction except for Rooney Associates, which claim shall be satisfied by
Seller.
3.4 Tax Consequences. Buyer makes no representation or warranty as to
the treatment which may be given to the transactions contemplated by this
Agreement or the consummation thereof under the tax laws of the United States or
any state or locality. Both parties will abide by the tax treatment reflected in
this Agreement as such treatment is related to the allocation of the Purchase
Price. Buyer shall satisfy any and all taxes due from Buyer in regard to this
transaction.
3.5 Insolvency. No proceedings have been taken or authorized by Buyer
or any third party with respect to bankruptcy, insolvency, liquidation,
dissolution or winding up of the affairs of Buyer.
3.6 Awareness of Adverse Facts. Neither Buyer nor any of its officers
or directors are aware of the existence of any pending or threatened litigation
or proceeding or any pending or threatened development or other state of facts
which would render any of the warranties, representations or disclosures made
herein by Buyer either untrue, incomplete or misleading, or whose failure to
disclose would render any of the warranties, representations or disclosures made
herein or in any of the exhibits or schedules hereof either untrue, incomplete
or misleading, or which would have a materially adverse effect upon the business
of Buyer.
Page -13-
3.7 Truth of Representations as of Closing Date. Each and every
warranty and representation set forth herein, and in the exhibits and schedules
hereto, shall be true, accurate and complete in every material respect with the
same force and effect as if each had been made at and as of the Closing Date.
4. Obligations of Seller. Seller agrees as follows, all of which covenants and
agreements shall survive the Closing:
4.1 Further Assurance. At Sellers expense, at or after Closing, Seller
shall execute and deliver such further instruments of transfer and take such
other action (but not including any obligation to ship to Buyer any equipment
located within the continental United States) as Buyer may reasonably request in
order to legally transfer the Assets, the Contracts and other property sold to
Buyer hereunder and for Buyer to fully receive all benefits of all transactions
contemplated herein.
4.2 Compliance with Statutes. Seller shall duly comply with all
applicable laws with which it is required to comply in order to validly complete
the transactions provided for in this Agreement and all such other laws as
might, on failure of compliance therewith, impose any liability upon the Buyer.
Seller shall indemnify and hold Buyer harmless from and against any loss,
liability or expense incurred because of Seller's failure to comply with any
such laws.
4.3 Operation in Ordinary Course. Seller shall conduct its Business
only in the ordinary course of business as heretofore conducted and keep and
maintain Seller's books related to the Business (including insofar as such books
relate to depreciation, costing of inventory and equipment and the establishment
of reserves for bad debt) in accordance with past practice. Until Closing,
Seller shall retain its employees engaged in the Business and preserve Seller's
present business relationships. Until closing, Seller shall maintain all
Assets, Contracts and other property in customary state of repair, order and
condition.
4.4 Access. Seller shall permit Buyer and its employees, agents,
accountants and legal representatives to have access to Seller's personnel,
agents, accounting and legal representatives, and to Seller's books, records,
invoices, agreements, premises, assets and other things related to Seller's
Business relative to the Assets.
4.5 Offices, Records and Books of Account. Seller shall keep its
principal place of business and chief executive office and the office where they
keep their records concerning the Contracts and all accounts at the address set
forth in the head of this Agreement or, upon 30 days, prior written notice to
Buyer, at any other locations in the continental United States. Seller shall
also maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Accounts
Receivable and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records and
other information reasonably necessary or advisable for the collection of all
Accounts Receivable (including, without limitation, records adequate to permit
the daily identification of each Receivable and all Collections of and
adjustments to each existing Receivable.
4.6 Consents. Seller shall use its best efforts to obtain any consents
and or agreements necessary for Seller to utilize the Seller's software and
licenses for software and shall use its best efforts to cause each of the
conditions to Buyer's obligations set forth above to be met.
4.7 Sales, Liens Etc. Seller shall not sell, assign (by operation of
law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, its interest in any Receivable, Related
Security, related Contract or any Collections, any Collateral or any account to
which
Page -14-
any Collections are sent, or assign any right to receive income in respect
thereof.
4.8 Extension or Amendment of Receivables. Seller shall not extend,
amend or otherwise modify the terms of any Receivable, or amend, modify or waive
any term or condition of any Contact related thereto.
4.9 Change in Business or Credit and Collection Policy. Seller shall
not make any change in the character of its business or in the Credit and
Collection Policy that would, in either case, materially adversely affect the
collectibility of the Receivables or its ability to perform its obligations
under this Agreement.
4.10 January 2002 Billing of Contracts. Due to the timing of the
planned Closing herein, Seller shall produce and send out all invoices for all
accounts billed under any and all Contracts being sold and assigned herein for
the month of January 2002, which receipts shall be for the benefit of the Buyer.
Seller shall provide Buyer with a listing of all such accounts receivable billed
by Seller in this manner on Buyer's behalf so that Buyer can collect upon those
accounts and invoices after Closing.
4.11 Audits. Seller shall from time to time during regular business
hours as reasonably requested by the Buyer, permit Buyer, or its agents or
representatives, (i) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, any computer data storage
devices) in the possession or under the control of Seller relating to
Receivables, Collections, and the Related Security, including, without
limitation, the related Contracts and (ii) to visit the offices and properties
of Seller for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to Receivables, Collections, and the
Related Security or the performance of Seller hereunder or under the Contracts
with any of the officers or employees of Seller having knowledge of such
matters.
4.12 Furnishing Information. To the extent that Seller has not already
furnished the following items directly to Buyer, Seller shall immediately
furnish to Buyer complete and accurate copies of each of the Contracts, all
documents relating to the Assets and properties to be transferred hereunder, and
all liabilities.
4.13 Representations and Warranties. Seller shall not take or omit any
action which would result in the inaccuracy at Closing of any of the
representations and warranties contained in Section 2 of this Agreement.
5. Obligations of Buyer. Buyer agrees as follows:
5.1 Further Assurance. At Buyer's expense, at or after Closing, Buyer
shall execute and deliver such further instruments of transfer and take such
other action as Seller may reasonably request in regard to the completion of the
transactions contemplated hereunder.
5.2 Compliance with Statutes. Buyer shall duly comply in all material
respects with all applicable laws with which it is required to comply in order
to validly complete the transaction provided for in this Agreement and all such
other laws as might, on failure of compliance therewith, impose any liability
on Seller.
5.3 Representations and Warranties. Buyer shall not take or omit or
omit to take any action which would result in the inaccuracy, at Closing of any
of the representations and warranties contained in
Page -15-
Section 3 of this Agreement.
6. Conditions of Closing as to Buyer. The obligations of Buyer under this
Agreement are subject to the fulfillment before or at Closing by Seller of the
following conditions:
6.1 Opinion of Counsel. Seller shall have delivered to Buyer the
favorable opinion of Seller's counsel, dated the Closing Date and approved as to
scope and substance by Buyer's counsel, whose approval shall not be unreasonably
withheld, to the following effects:
(A). To the same effect as Sections 2.1, 2.2. and 2.9. and to the best
of such counsel's knowledge and belief, Sections 2.4 and 2.5.
(B). That the instruments of sale, assignment, transfer or conveyance
delivered by Seller at the Closing Date are sufficient to convey and vest in
Buyer Seller's title to the respective assets and property described therein,
subject to no Lien, encumbrance or prior right.
(C). That all acts have been duly and properly taken so that Buyer
shall leave no liability in respect of Seller's unpaid sales or other taxes for
reporting periods prior to the current period in which the closing date takes
place.
6.2 Absence of Proceedings. No action of proceedings shall be pending
or, to the knowledge of Seller, or Buyer, threatened before any Court or
governmental body to restrain or prohibit or to obtain substantial damages in
respect of this Agreement, or the consummation of the transactions contemplated
hereby, and there shall be no actions or proceedings of the nature described in
Section 2.5, which are not set forth in an affidavit provided by Seller at
Closing, pending or threatened that, either separately or in the aggregate,
could materially and adversely affect the business, operations or conditions
(financial or otherwise) of Seller.
6.3 No Labor Disputes. There shall not be in progress any strike,
lockout, or other work stoppage relating to any labor dispute event.
6.4 Other Instruments. Buyer shall have received certified copies of
Seller's charter and of resolutions duly approved and adopted unanimously, as
applicable and required, by the Shareholders and Board of Directors of Seller,
all other certifications, documents, agreements and other instruments referred
to herein or as may be reasonably requested by Buyer's counsel.
6.5 Properties and Assets Intact. At the time of Closing, Seller shall
deliver possession of all of the Assets and Contracts, books, records, computer
data, and all other assets being transferred hereunder in a form acceptable to
Buyer, and all documents referred to as required herein, to the Buyer intact,
undamaged by fire or other casualty, in good operating condition and state of
repair, all as required by the terms of this Agreement; and title to all of the
purchased property of Seller will be conveyed to Buyer free and clear of all
claims, security interests, liens and encumbrances of any and every nature
whatsoever.
6.6 Tax Clearance. [intentionally omitted].
6.7 Accuracy of Representations and Warranties. The representations and
warranties contained in Section 2 of this Agreement shall be true at Closing
with the same effect as though made on that date.
Page -16-
6.8 Performance by Seller. Seller shall have in all material respects
performed all obligations and complied with all conditions required to be
performed or complied with by Seller prior to or at Closing.
6.9 Conditions Unfulfilled. If any of the foregoing conditions set
forth in this Section 6 or in Section 1.7 above are not fulfilled in a material
respect at Closing, Buyer may, at its sole option, terminate this Agreement or
allow Seller additional time to fulfill such item(s). In the event that Buyer
exercises such option to terminate the Agreement due to the failure to fulfill a
material condition, neither Seller nor Buyer shall have any further obligation
under this Agreement.
7. Conditions of Closing as to Seller. The obligations of Seller under this
Agreement are subject to the fulfillment before or at Closing by Buyer of the
following conditions:
7.1 Accuracy of Representations and Warranties. The representations and
warranties contained in Section 3 of this Agreement shall be true at Closing
with the same effect as though made on that date.
7.2 Performance by Buyer. Buyer shall in all material respects have
performed all obligations and complied with all conditions required to be
performed or complied with by Buyer prior to or at Closing.
7.3 Conditions Unfulfilled. If any of the conditions set forth in this
Section 7 or in Section 1.8 above are not fulfilled in a material respect at
Closing, Seller may, at its sole option, terminate this Agreement or allow Buyer
additional time to fulfill such item(s). In the event that Seller exercises such
option to terminate the Agreement, neither Seller nor Buyer shall have any
further obligation under this Agreement.
7.4 Opinion of Counsel. Buyer shall have delivered to Seller the
favorable opinion of Buy er's counsel, dated the Closing Date and approved as
to scope and substance by Seller's counsel, whose approval shall not be
unreasonably withheld, to the following effects: To the same effect as Sections
3.1 and 3.2.
8. Other Rights and Obligations.
8.l Conduct Pending Closing. Seller shall preserve the Assets in their
present condition and repair, except for normal wear and tear. Seller shall not
enter into any contract or commitment affecting the Assets nor otherwise
dispose of the Assets in whole or in part, without prior written approval of
Buyer.
8.2 Right to Inspect. Prior to Closing, Buyer shall have the right to
conduct an audit, inspection and inventory with mutual agreement as to the time
of such audit, inspection and inventory.
8.3 Business Continuation. During the period following Closing, Seller
shall continue its Business and shall assist the Buyer to perform such duties as
determined by Buyer to continue Seller's Business as related to the use and
benefit of the Assets. In connection therewith, the parties shall at Closing
enter into the Agreement in the form of Exhibit 8.3 hereto. Seller shall
continue to provide Buyer with access to its locations for a period of not less
than forty-five (45) days from Closing in order for Buyer to use and to remove
any Assets which are not physically delivered at Closing.
8.4 Taxes. Seller will pay all transfer, documentary, sales and similar
taxes and all registration and recording fees and costs payable in connection
with its compliance and performance under
Page -17-
this Agreement and the consummation of the sale of the Assets to Buyer.
8.5 Expenses. Each party will pay all of its own legal, accounting and
other fees, costs and expenses in connection with its compliance and performance
under this Agreement and the consummation of the transaction contemplated
hereunder.
8.6 (A). Indemnification by Seller: Seller agrees to indemnify and hold
harmless the Buyer from and against: (a) any and all liability for any claims
based upon any state of facts in respect to Seller, its business, properties,
assets, or upon any acts or omissions of its employees, officers, directors,
stockholders, agents or others acting on its behalf; (b) any and all
liabilities, damages and expenses resulting from any regulatory or legal actions
or claims by any federal, state or local governmental agency or any suits,
claims, actions of proceedings by others, if such regulatory or legal actions,
suits, claims or proceedings are founded upon or arise by reason of events or
operations of Seller occurring or any state of facts in respect of Seller's
Business on or before the Closing; (c) any and all damage or deficiency
resulting from any misrepresentation, breach of warranty or nonfulfillment of
any condition or failure to perform any covenant or agreement on the part of
Seller contained in this Agreement or any other agreement or document to which
Seller or a Shareholder is a party contemplated hereby, or from any
misrepresentation or omission from any exhibit, certificate or other instrument
or copy thereof required to be furnished or furnished to the Buyer by the terms
of this Agreement or any other agreement or document to which Seller or a
Shareholder is a party contemplated hereby, or any claim which, if true, would
constitute such a breach or misrepresentation; (d) taxes, assessments, interest
or penalties resulting from adjustments to any tax liability of Seller or from
Seller's failure to pay in full its tax liability, for any period on or before
the Closing or in regard to the Closing, in respect to federal, state or local
income, sales or other taxes, as well as withholding taxes and penalties for
underpayment of withholding taxes and estimated taxes for any period on or
before the Closing; (e) any liability of Seller other than an Assumed Liability;
and (f) the costs of investigation, defense, legal fees, disbursements, costs of
settling and discharging any and all judgments and/or claims alleging or
incident to the foregoing, regardless of the ultimate responsibility of Seller
for any such liability to any claimant. Buyer shall have the right to offset any
claims hereunder against any sums due from the Buyer to any party hereto.
(B). Investigation By Buyer. Any investigation by the Buyer or
knowledge possessed by the Buyer shall not be deemed a waiver of Buyer's rights
nor defense to any claim by Buyer for indemnification hereunder.
(C). Third Party Claims. In each instance where a claim or potential
claim for which Buyer is entitled to seeks indemnification under this Agreement
is asserted against Buyer by a third xxxxx (i.e. a claimant is not a party to
this Agreement), Buyer shall notify Seller in writing of such claim, and shall
promptly forward to Seller copies of all notices, process, pleadings and
pertinent written communications from the third party. Seller shall promptly
defend, pay, discharge, compromise or settle such third party claim at their
expense, in such manner that neither Buyer nor its business, equipment, property
??? other assets shall suffer or be affected by an hindrance, interference,
jeopardy, lien, judgment, attachment, notice of violation, injunction, judicial
or other order. Unless Seller shall promptly and in a timely manner provide a
full and vigorous defense to Buyer. Buyer shall have the right to assume control
of the claim its defense, compromise or settlement at the expense of Seller,
including reasonable attorney's fees and other costs, all of which shall be paid
or reimbursed by Seller upon Buyer's demand. In such case Buyer shall not settle
or compromise any such claim without the consent of Seller. If Buyer does not
receive such consent in a timely manner, Seller shall provide Buyer with a
surety bond in the full amount of the claim and assume the defense of the
action. In any event, Buyer shall have the right to be represented by counsel of
its choice, at its own expense, in any proceeding controlled by
Page -18-
Seller.
8.7 Indemnification by Buyer. Buyer shall indemnify, defend and hold
harmless Seller against any damage or deficiency resulting from any
misrepresentation, omission, breach of warranty or nonfulfillment of any
agreement on the part of Buyer contained in this Agreement or in any statement
or certificate furnished or to be furnished to Seller pursuant hereto or in
connection with the transactions contemplated hereby, or from the ownership or
operation of the Assets by Buyer after the Closing, except to the extent caused
by any action or inaction by Seller or any of its officers, employees, agents,
or representatives, and any actions, judgments, costs and expenses incident to
the foregoing.
In each instance where a claim or potential claim for which Seller is
entitled to or seeks indemnification under this Agreement is asserted against
Seller by a third party (.i.e. a claimant who is not a party to this Agreement),
Seller shall notify Buyer in writing of such claim, and shall promptly forward
to Buyer copies of all notices, process, pleadings and pertinent written
communications from the third party. Buyer shall promptly defend, pay,
discharge, compromise or settle such third party claim at its expense in such
manner that neither Seller nor its Business, equipment, property or other assets
shall suffer or be affected by an hindrance, interference, jeopardy, lien,
judgment, attachment, notice of violation, injunction, judicial or other order.
Unless Buyer shall promptly and in a timely manner provide a full and vigorous
defense to Seller, Seller shall have the right to assume control of the claim,
its defense, compromise or settlement, at the expense of Buyer, including
reasonable attorney's fees and other costs, all of which shall be paid or
reimbursed by Buyer upon Seller's demand. In such event, Seller shall not settle
or compromise any such claim without the consent of Buyer. If Seller does not
receive such consent in a timely manner, Buyer shall provide Seller with a
surety bond in the full amount of the claim and assume the defense of the
action. In any event, Seller shall have the right to be represented by counsel
of its choice, at its own expense, in any proceeding controlled by Buyer.
8.8 Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof. Any
previous agreements or understandings between the parties regarding the subject
matter hereof are merged into and superseded by this Agreement. Nothing
expressed or implied in this Agreement is intended to confer upon any person,
other than the parties hereto, or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
8.9 Nature and Survival of Representations. All statements contained in
any Exhibit, certificate or other instrument delivered by or on behalf of Seller
pursuant to this Agreement or in connection with the transaction contemplated
hereby shall be deemed representations and warranties by Seller hereunder, and
all statements contained in any certificate or other instrument delivered by or
on behalf of Buyer pursuant to this Agreement shall be deemed representations
and warranties by Buyer. All representations, warranties and agreements made by
Seller or Buyer shall survive the Closing hereunder; provided however, that
each party's indemnity obligation with respect to a breach of a representation
or warranty shall be extinguished after the two year anniversary of the Closing
other than as relating to taxes or environmental claims (which shall survive for
the applicable statute of limitations), litigations and liens.
8.10 Notices. If there are any notices to be given in connection with
this Agreement, they must be sent in writing by certified mail, return receipt
requested with full postage prepaid or via reputable overnight delivery service
such as Federal Express or similar. Notices must be addressed to the Buyer or
Seller at the addresses appearing at the beginning of this Agreement. However,
either party may change its address for notices by sending a notice to that
effect to the other party in the above manner. In addition, in order for any
notice to become legally effective, a copy of the notice must be sent at the
same time and in the same manner to that party's attorney. All notices required
under this Agreement must be
Page -19-
given in writing to:
If to Buyer: KC Acquisition Corp. If to Seller: Roseville Telephone Company
000 Xxxxx Xxxxx Xxxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxxxx. X.X. 00000 Xxxxxxxxx, XX 00000
With a copy to: Attorney for Buyer: ATTN: President
Xxxxx X. Xxxxxxxx, Esq. With a copy to: Attorney for Seller:
Xxxxxxx and Xxxxxxx, Esqs. Xxx X. Xxxxxxx, Esq.
Continental Plaza II Xxxxxx, White & Xxxxxx, LLP
000 Xxxxxxxxxx Xxx., Sixth Floor 201 California Street, 17th Floor
Hackensack, N.J. 07601 Xxx Xxxxxxxxx, XX 00000
8.11 Assignment. This Agreement may not be assigned by any party
without the prior written consent of the other party; provided however, that
Buyer may assign all or any other part of its rights or responsibilities
hereunder to a corporation controlled by, in control of or under common control
with, Buyer, in which event Buyer hereunder shall remain liable for all
obligations of the Buyer. Otherwise, this Agreement shall bind and inure to the
benefit of the parties hereto and their respective heirs, successors and
assigns.
8.12 Governing Law/Counterparts. This Agreement shall be governed by
and construed in accordance with California law. All disputes shall be
exclusively resolved in the Superior Court of California in Los Angeles County.
Buyer and Seller each hereby consent (i) to the exercise of personal
jurisdiction over them by, and venue in the state courts located in the state of
California; and (ii) to the service of process for any of the court paper by any
form of mail requiring a signed receipt. The foregoing consent is not intended
to preclude service upon any person or entity by any other means authorized by
the courts of the state of California. This Agreement may be executed in
counterparts, with each such counterpart being deemed to constitute an original
document and with all such counterparts together being deemed to constitute one
and the same instrument.
8.13 Further Documents and Cooperation. Subsequent to the Closing,
Seller and Buyer without the necessity of any further consideration whatsoever.
shall each execute and deliver such further instruments of conveyance and
transfer and take such additional actions as the other party may reasonably
request or require to confirm or further evidence the transfer to Buyer of the
Assets, the Contracts, and other property to be conveyed hereunder and the
assumption by Buyer of the Assumed Liabilities. In the event of the dissolution.
liquidation or winding out of the affairs of Seller, Seller shall take all
actions (including those reasonably requested by Buyer) necessary to ensure that
the shareholders of Seller shall jointly and severally assume all of the
liabilities and obligations of Seller resulting from or relating to the
transactions contemplated by this Agreement, including providing for the
payment, discharge or performance of Seller's liabilities and the performance of
the indemnification provisions of Seller contained herein; provided however,
that such assumption shall not operate to modify or discharge any of the
obligations of Seller under this Agreement. Prior to any such dissolution,
liquidation or winding up of Seller, Seller shall furnish at least sixty (60)
day's prior notice thereof to Buyer. At all times after the Closing, Seller
shall cooperate with Buyer and support Buyer in its retention of all former
employees of Seller which Buyer has sought to retain. Seller shall do everything
necessary to insure that, except to the extent of the Assumed Liabilities, the
sale and transfer to Buyer of the Assets the Contracts and the other properties
conveyed hereunder will not subject Buyer or the Assets, the Contracts and the
other property conveyed hereunder to any liability or claim now pending or
hereafter brought or claimed against Seller or any of Seller's assets, whether
by operation of law (including any bulk ??? transfer law), by contract or
otherwise, including any claim or liability
Page -20-
resulting from any tax ???, rule or regulation or, resulting from any employee
benefit, profit-sharing or pension plan or labor agreement to which Seller is a
party or by which it or any of its assets is bound or affected or resulting from
any third party claim based on interference with contractual advantage,
prospective business relations or similar causes of action.
8.14 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement. `
8.15 No Strict Construction. The language used in this Agreement will
be deemed to be the line which chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
party.
8.16 Captions, Gender and Number. The captions used in this Agreement
are for convenience of reference only, do not constitute a part of this
Agreement, and wi11 not be deemed to limit, characterize or in any way affect
any provision of this Agreement, and all provisions of this Agreement will be
enforced and construed as if no caption had been used in this Agreement. As used
in this Agreement (including any exhibits, schedules, and amendments), the
masculine, feminine, and neuter gender and the singular or plural number shall
be deemed to include the others whenever the context may so require. References
to "Sections" and "Exhibits" are to sections of or exhibits to this Agreement
unless otherwise stated.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
SELLER
Roseville Telephone Company, for itself and its division
RTC Alarm Monitoring Services
By: /s/ illegilbe
-------------------------------------
Title: Exec. V.P. - CFO
----------------------------------
BUYER
KC Acquisition Corp.
By: /s/ illegilbe
-------------------------------------
Title: President
----------------------------------
Page -21-
Exhibit 1.1(a)
Assets Schedule
All dealer and subscriber contracts associated with Assets being sold.
All Retail Contracts.
All Dealer Contracts.
Leases and other contracts which are necessary to the use and enjoyment
of the Assets.
All telephone lines in connection with the monitoring of any and all
Subscribers under any Contracts.
All telephone numbers utilized in connection with the monitoring of any
and all Subscribers under any Contracts.
All of Seller's records in regard to these Assets.
All of the Seller's rights to and goodwill in connection with the
Assets.
Seller's rights under all of its Contracts listed on Exhibit 1.1(D)
Closing Contracts Schedule attached hereto (including any and all security
deposits).
All of Seller's claims, causes of action and rights of recovery
(including warranty and indemnity claims and the like) against manufacturers
and/or suppliers of any assets included in the Assets, and against any other
party relating to the Assets.
The non-exclusive right to use its name "RTC Alarm Monitoring
Services" or any other name including the words "RTC" and "Alarm" or otherwise
in connection with the Buyer securing the full use and benefit of the Assets for
the License Period.
All advertising materials and all other printed or written materials
relating to the Assets.
The right to receive and open mail, notes and accounts receivable
remittances and payments and other communications addressed to Seller as
relating to the ownership or use of the Assets.
All rights of Seller arising out of expenses that Seller has prepaid in
connection with any of the Assets and are necessary for Buyer to conduct
business at any location as Seller has heretofore conducted business there.
All documents, data and information relating to any and all Dealers or
Subscribers under any Contracts.
All Accounts Receivable.
All equipment on the attached Equipment Listing.
Page -22-
-------------------------------------------------------------------------------
Quantity Equipment Listing
-------------------------------------------------------------------------------
2 1400 APC UPS unit Bay Mounted
-------------------------------------------------------------------------------
8 TTY Cluster (RS232)
-------------------------------------------------------------------------------
3 15 Port A/B Black Box Switches
-------------------------------------------------------------------------------
1 SMC 10 Base T Concentrator 10 ports
-------------------------------------------------------------------------------
1 Windows MASlink Comserver w/ monitor Keyboard & Mouse
-------------------------------------------------------------------------------
1 8 port Digi DB25
-------------------------------------------------------------------------------
26 A/B switch for receivers
-------------------------------------------------------------------------------
2 Bytelink A/B switch for receivers
-------------------------------------------------------------------------------
1 Watch dog switch
-------------------------------------------------------------------------------
10 Buffer Screens
-------------------------------------------------------------------------------
2 Main Buffer Screen Computer w/Monitor, Keyboard & Mouse
-------------------------------------------------------------------------------
1 Prolog Dictaphone 33251-032, Dual DDS3 (1920hr) Drive, 1280
hour instant Playback Module
-------------------------------------------------------------------------------
1 Dictaphone Management Workstation
-------------------------------------------------------------------------------
1 Dictaphone Cassette Re-recorder
-------------------------------------------------------------------------------
3 Epson DFX-8500 w/Ethernet
-------------------------------------------------------------------------------
6 Multi-tech Modems (MASlink)
-------------------------------------------------------------------------------
1 Paging Modem
-------------------------------------------------------------------------------
1 Faxing Modem
-------------------------------------------------------------------------------
1 SOS Modem
-------------------------------------------------------------------------------
1 DOS MASlink Back-Up Computer Set
-------------------------------------------------------------------------------
13 5-High Meridian File Cabinets
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Test Units
-------------------------------------------------------------------------------
1 DSC Test Panel 832
-------------------------------------------------------------------------------
1 Radionics Test Panel 4112
-------------------------------------------------------------------------------
1 DMP Test Panel 1912XR
-------------------------------------------------------------------------------
1 ITI Test Panel SX-V
-------------------------------------------------------------------------------
10 Auto Dialer Test
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Receivers
-------------------------------------------------------------------------------
10 Ademco 685-Loaded
-------------------------------------------------------------------------------
6 Radionics 6500-Loaded
-------------------------------------------------------------------------------
2 ITI CS4000 Loaded
-------------------------------------------------------------------------------
2 Radionics 6600-Loaded
-------------------------------------------------------------------------------
2 Radionics 6600-4 Line cards
-------------------------------------------------------------------------------
4 Surgard and MLR 2 w/14 Lines
-------------------------------------------------------------------------------
3 Dealer Care Workstations & Desks
-------------------------------------------------------------------------------
3 Dealer Care PC Computer Sets
-------------------------------------------------------------------------------
1 MASlink Documentation
-------------------------------------------------------------------------------
6 UL Receiver Racks
-------------------------------------------------------------------------------
Page -23-
-------------------------------------------------------------------------------
Spare Units
-------------------------------------------------------------------------------
1 Surgard Shelf w/ SG-CPM2
-------------------------------------------------------------------------------
2 Radionics D6615
-------------------------------------------------------------------------------
6 Radionics Line Cards
-------------------------------------------------------------------------------
3 Radionics D6545
-------------------------------------------------------------------------------
1 Radionics D6515
-------------------------------------------------------------------------------
1 Radionics D6535
-------------------------------------------------------------------------------
1 Radionics 6555
-------------------------------------------------------------------------------
1 Ademco SA 685-5
-------------------------------------------------------------------------------
1 Ademco SA 685-7
-------------------------------------------------------------------------------
1 Ademco SA 685-1
-------------------------------------------------------------------------------
3 Ademco SA 685-8
-------------------------------------------------------------------------------
1 Ademco SA 685-1O
-------------------------------------------------------------------------------
1 Ademcc SA 685-29
-------------------------------------------------------------------------------
1 Ademco 2810 Memory Card
-------------------------------------------------------------------------------
1 Ademco CPU
-------------------------------------------------------------------------------
1 Ademco Display Card
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Aviion System:
-------------------------------------------------------------------------------
HARDWARE
-------------------------------------------------------------------------------
2 DATA GENERAL AViiON 3650-200
-------------------------------------------------------------------------------
DUAL 200mHZ PENTIUM PROCESSORS
-------------------------------------------------------------------------------
1 mb INTEGRATED L-2 CACHE
-------------------------------------------------------------------------------
FOUR SCSI CLUSTERS FOR 64 PORTS
-------------------------------------------------------------------------------
TWO 4.OGb Disk Drives
-------------------------------------------------------------------------------
CDROM DRIVE
-------------------------------------------------------------------------------
4/8 Xx 0xx TAPE DRIVE
-------------------------------------------------------------------------------
DUAL PCI LAN CONTROLLERS
-------------------------------------------------------------------------------
THREE PCI SCSI ADAPTERS
-------------------------------------------------------------------------------
REMOTE DIAGNOSTIC MODEM
-------------------------------------------------------------------------------
15 SVGA MONITOR
-------------------------------------------------------------------------------
2 MONITORS AND KEYBOARDS
-------------------------------------------------------------------------------
2 RACK MOUNT CHASSIS
-------------------------------------------------------------------------------
1 60" DEEPRACK CABINET
-------------------------------------------------------------------------------
1 2.5/5Gb QIC TAPE DRIVE
-------------------------------------------------------------------------------
SUPPORT SERVICES
-------------------------------------------------------------------------------
1 FM LISTING
-------------------------------------------------------------------------------
1 UL LISTING
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
SOFTWARE LICENSES
-------------------------------------------------------------------------------
2 B32 BUSINESS BASIC Sublicenses FOR 64 PROCESSES (RTU FEES)
-------------------------------------------------------------------------------
2 MAS AUTOMATION LICENSES (57,000 Accounts)
-------------------------------------------------------------------------------
-24-
Exhibit l.l(d)
Contracts Schedule
All of Seller's Retail Contracts (listing to be attached).
All of Seller's Dealer Contracts (listing to be attached).
All software licenses and agreements for use and maintenance of software and
hardware (listing to be attached).
Leases and other contracts which are necessary to the use and enjoyment of
the Assets (listing to be attached).
-25-
Exhibit 1.3(A)
Assumed Liabilities
NONE, except that Buyer shall assume and agree to pay, perform and
discharge only the following effective after the Closing: all of the
obligations, liabilities and commitments of Seller arising from events occurring
after the Closing under or with respect to each WRMR Contract being sold and
assigned to Buyer in this Agreement.
-26-
Exhibit 1.6(A)(1)
Xxxx of Sale
KNOW ALL MEN BY THESE PRESENT that Roseville Telephone Company, for
itself and its division RTC Alarm Monitoring Services ("Seller"), a California
having offices at , Roseville, California, for and
in consideration of the sum of and no/100 Dollars ($ .00)
and other good and valuable consideration paid to it by KC Acquisition Corp.
("Buyer") a New Jersey corporation, having offices at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxx, X.X. 00000, the receipt of which is hereby acknowledged by Seller,
hereby grants, bargains, sells, conveys, transfers and sets over unto Buyer, its
successors and assigns, all of Seller's rights, title and interests in and to
the fixed, intangible and other assets described on Schedule A attached hereto
and made a part hereof (the "Assets").
Seller hereby warrants and represents to Buyer and its successors and
assions that Seller has good legal title to, and good and lawful right to sell
the Assets, that the Assets are free and clear of any and all claims, liens,
security interests and other encumbrances of any kind or nature whatsoever, and
that upon the delivery of this Xxxx of Sale to Buyer, Buyer has and will have
good and marketable title to the Assets, free and clear of any and all claims,
liens, security interests and other encumbrances of any kind or nature
whatsoever. Seller covenants that it will defend Buyer's title to the Assets
against the demands of all persons.
All the terms, covenants and conditions herein contained shall be for
and shall inure to the benefit of and shall bind the respective parties hereto.
and their legal representatives, successors, and assigns, respectively.
In all references herein to any parties, persons, entities or
corporation the use of any particular gender or the plural or singular number is
intended to include the appropriate gender or number as the text of the within
instrument may require.
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale to be duly
executed in its name by its duly authorized officers this 27th day of December,
2001.
Roseville Telephone Company, for itself and its division
RTC Alarm Monitoring Services ("Seller")
By:
------------------------------------ --------------------------------
Secretary Vice President
-00-
XXXXX XX XXXXXXXXXX
XXXXXX XX XXXXXX SS:
I CERTIFY that on December , 2001,
, as , an officer of
Roseville Telephone Company, for itself and its division RTC Alarm Monitoring
Services, the "Seller" in the foregoing Xxxx of Sale (hereinafter the
"Corporation") personally came before me and acknowledged under oath, to my
satisfaction, that this person (or if more than one, each person):
(a) is named in and personally signed this document on behalf of the
Corporation in his or her official capacity;
(b) has full authority to act on behalf of the Corporation; and
(c) signed, sealed and delivered this document as the voluntary act and
deed of the Corporation intending for the Corporation to be fully bound thereby.
-28-
Exhibit 1.6(A)(2)
Bring Down Certificate
The undersigned hereby certifies that each and every representation and
warranty set forth in any documents relating to the sale and assignment of
property and assets to KC Acquisition Corp. of the undersigneds' equipment and
other assets utilized in connection with the operation of its business known as
RTC Alarm Monitoring Services, together with the non-exclusive rights for the
License Period to the name RTC Alarm in connection with the operation of the
monitoring of fire and security and the transfer of ownership and use of
telephone lines and telephone numbers being transferred to Buyer are true and
correct today the same as if restated at length herein.
Roseville Telephone Company, for itself and its division
RTC Alarm Monitoring Services ("Seller")
By:
------------------------------------- -------------------------------
Secretary Vice President
Dated: December 27, 2001
-29-
Exhibit 1.7(C)
Restrictive Covenant
This Agreement is entered into this 21st day of December, 2001, by and
between KC Acquisition Corp., having offices at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxx, X.X. 00000 (hereinafter the "Company"), and Roseville Telephone
Company, for itself and its division RTC Alarm Monitoring Services, a California
corporation and its officers and employees for so long as such officers and
employees are within its employ (hereinafter collectively the "Seller"), having
offices at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX. Together, the Company and Seller
are collectively the "parties" and each individually a "party" hereto.
WHEREAS, the Company and Seller have agreed to set forth in this
Agreement the relationship of Seller to the Company as to the matters addressed
herein in connection with the sale of certain assets by Seller to the Company
and as a condition to the sale.
NOW, Therefore, for and in consideration of one dollar and other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Seller agrees as follows:
l. CONFIDENTIALITY AND TRADE SECRETS AGREEMENT: Seller individually, jointly and
severally covenants and agrees that it will not at any time during the period of
six (6) years from the date hereof, utilize personally or reveal or disclose to
any other firm, person, or entity, nor permit to be revealed or disclosed any
confidential, proprietary, or secret information concerning any of the Company's
Contracts, Dealers or Subscribers, including but not limited to such
"confidential information" as trade secrets, financial data, customer lists,
pricing, discount and sales information, xxxxxxxx and collections, marketing
plans, contracts, assets, vendor agreements, any advertising materials
(regardless whether such materials are copyrighted), or anything else relating
to the Company's Contracts, Dealers or Subscribers made known to Seller or
Officer.
2. NON-COMPETITION AGREEMENT: In consideration for entering into this Agreement
and for the sale of specified contract assets to the Company, Seller
acknowledges and agrees that Seller has necessarily had access to the identity
of the Dealers and Subscribers of the Seller and the Company, the requirements
of those Dealers and Subscribers for the services as are provided by the
Company, financial data, customer lists, pricing, special pricing, discount and
sales information, marketing, purchasing habits, or anything else relating to
the Company's xxxxxxxx and collections, sales or methods of operations made
known to Seller. From and after the date hereof and for a period of six (6)
years herefrom, Seller individually, jointly and severally agrees that it shall
NOT, without the prior written consent of the Company, which may be unreasonably
withheld, on its own behalf, on behalf of any other person, or on behalf of or
as a partner, shareholder, officer, director, employee, agent, consultant or
trustee of any entity, or otherwise, directly or indirectly, (a) contact any
Dealer or Subscriber who the Seller did business with during the eighteen month
period preceding the date hereof, or (b) sell to any Dealer or Subscriber of a
WRMR Contract any product or service which the Company then sells, produces, or
has sold or produced for that Dealer or Subscriber.
3. REMEDIES: The parties acknowledge that remedies at law for breach of this
Agreement will not adequately protect the Company's rights and, therefore, that
the Company shall be entitled to a preliminary and/or permanent injunction to
enforce the provisions of this Agreement in addition to and not to the exclusion
of all other remedies available to the Company.
-30-
4. NON-WAIVER: The waiver by the Company or Seller of a breach of any provision
of this Agreement by the other shall not operate or be construed as a waiver of
any subsequent breach. No course of dealing or any delay on the part of either
party in exercising or enforcing their rights under this Agreement shall operate
as a waiver of such rights.
5. GOVERNING LAW: This Agreement shall be made and delivered in California and
shall be governed by and construed in accordance with the laws of the State of
California applicable to Agreements made and to be performed entirely within the
State of California, excluding any rule or principle of the conflict of laws
that might otherwise refer the interpretation of construction of this Agreement
to the laws of any other jurisdiction. Seller consents to jurisdiction in the
Superior Court of California in Los Angeles County.
6. SEVERABILITY: If any of the provisions of this Agreement, or the application
of any term or provision to any persons or circumstances is invalid or
unenforceable to any extent, then the remainder of this Agreement or the
application of the terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall not be affected
thereby and each term or provision of this Agreement shall be valid and
enforceable to the extent permitted by law.
7. ASSIGNMENT: This Agreement shall not be assigned without the written consent
of the other party hereto.
8. CONSTRUCTION: Headings in this Agreement are for reference purposes only and
shall not be deemed to have any substantive effect. Defined terms shall have the
meanings as set forth in the Asset Purchase Agreement between the parties hereto
of this same date, which definitions are incorporated herein by reference.
9. NOTICES: Any notice to be given under this Agreement shall be sufficient if
it is in writing and delivered in person or sent by certified mail, return
receipt requested, postage pre-paid, to Officer at the residence on the books
and records of the Company, or to the President of the Company at the firm's
principal office as set forth above or as may hereafter be changed.
10. ENTIRE AGREEIMENT: This Agreement contains the entire Agreement of the
parties as to the subject matter hereof and supersedes all prior agreements and
understandings pertaining to the subject matter hereof whether written or oral.
No modification or amendment of this Agreement shall be effective unless in a
written instrument, executed by both of the parties hereto. The Parties hereto
agree to a standard of reasonableness in interpretation of this Agreement.
WITNESS: KC Acquisition Corp.
(the "Company")
By:
----------------------------- -------------------------------------
Title
Roseville Telephone Company,
for itself and its division
RTC Alarm Monitoring
Services ("Seller")
By:
----------------------------- -------------------------------------
Secretary Vice President
-31-
Exhibit l.7(C)(1)
Confidentiality Agreement
This Agreement is entered into this 21st day of December, 2001, by and
between KC Acquisition Corp., having offices at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxx, X.X. 00000 (hereinafter "the Company"). and (hereinafter the
"Employee"), having offices at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX. Together, the
Company and Employee are collectively the "parties" and each individually a
"party" hereto.
WHEREAS, the Company and the Employer of Employee, Roseville Telephone
Company have agreed to a certain sale of assets in which the agreement of the
employees of the Employer to this Confidentiality Agreement is an essential
part.
NOW, Therefore, for and in consideration of one dollar and other good
and valuable consideration, the receipt of which is hereby acknowledged, the
undersigned Employee agrees as follows:
1. CONFIDENTIALITY AND TRADE SECRETS AGREEMENT: Employee covenants and agrees
that he or she will not at any time during the period of six (6) years from the
date hereof, utilize personally or reveal or disclose to any other firm, person,
or entity, nor permit to be revealed or disclosed any confidential,
proprietary, or secret information concerning any of the Company's Contracts.
Dealers or Subscribers, including but not limited to such "confidential
information" as trade secrets, financial data, customer lists, pricing, discount
and sales information, xxxxxxxx and collections, marketing plans, contracts,
assets, vendor agreements, any advertising materials (regardless whether such
materials are copyrighted), or anything else relating to the Company's
Contracts. Dealers or Subscribers made known to Employee, nor contact or
solicit business from any person or entity who was a Dealer or Subscriber of
Roseville Telephone Company as of December 2001.
2. REMEDIES: The parties acknowledge that remedies at law for breach of this
Agreement will not adequately protect the Company's rights and, therefore, that
the Company shall be entitled to a preliminary and/or permanent injunction to
enforce the provisions of this Agreement in addition to and not to the exclusion
of all other remedies available to the Company.
3. NON-WAIVER: The waiver by the Company or Employee of a breach of any
provision of this Agreement by the other shall not operate or be construed as a
waiver of any subsequent breach. No course of dealing or any delay on the part
of either party in exercising or enforcing their rights under this Agreement
shall operate as a waiver of such rights.
4. GOVERNING LAW: This Agreement shall be made and delivered in California
and shall be governed by and construed in accordance with the laws of the State
of California applicable to Agreements made and to be performed entirely within
the State of California, excluding any rule or principle of the conflict of laws
that might otherwise refer the interpretation of construction of this
Agreement to the laws of any other jurisdiction. Employee consents to
jurisdiction in the Superior Court of California in Los Angeles County.
5. SEVERABILITY: If any of the provisions of this Agreement, or the application
of any term or provision to any persons or circumstances is invalid or
unenforceable to any extent, then the remainder of this Agreement or the
application of the terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall not be affected
thereby and each term or provision of
Page -33-
this Agreement shall be valid and enforceable to the extent permitted by law.
6. ASSIGNMENT: This Agreement shall not be assigned without the written consent
of the other party hereto.
7. CONSTRUCTION: Headings in this Agreement are for reference purposes only and
shall not be deemed to have any substantive effect. Defined terms shall have the
meanings as set forth in the Asset Purchase Agreement between the parties hereto
of this same date, which definitions are incorporated herein by reference.
8. NOTICES: Any notice to be given under this Agreement shall be sufficient if
it is in writing and delivered in person or sent by certified mail, return
receipt requested, postage pre-paid, to Employee at the residence on the books
and records of Roseville Telephone Company, or to the President of the Company
at the firm's principal office as set forth above or as may hereafter be
changed.
9. ENTIRE AGREEMENT: This Agreement contains the entire Agreement of the parties
as to the subject matter hereof and supersedes all prior agreements and
understandings pertaining to the subject matter hereof whether written or oral.
No modification or amendment of this Agreement shall be effective unless in a
written instrument, executed by both of the parties hereto. The Parties hereto
agree to a standard of reasonableness in interpretation of this Agreement.
WITNESS: KC Acquisition Corp.
(the "Company")
By:
----------------------------- --------------------------
Title
----------------------------- -----------------------------
("Employee")
Page -34-
Exhibit 1.7(J)
Seller Certificate under Section 1.7(J)
CLOSING CERTIFICATE
(Pursuant to Section 1.7(J) of the Agreement)
Pursuant to Section 1.7(J) of the Asset Purchase Agreement dated
December 10, 2001 (the "Agreement") by and among KC Acquisition Corporation
(the "Buyer") and RTC Alarm Monitoring Services, a division of Roseville
Telephone Company (the "Seller"), the Seller does hereby certify as follows:
It has reviewed the conditions specified for Closing in Sections
1.7(F), 1.7(G), 1.7(H) and 1.7(I) of the Agreement (copies of which Sections
are attached hereto as Schedule A), and the undersigned does hereby certify
that the conditions for Closing set forth in such Sections have been fulfilled
as of the date hereof.
IN WITNESS WHEREOF, the undersigned have executed this Certificate as
of this 27th day of December, 2001.
Roseville Telephone Company, for itself and its division
RTC Alarm Monitoring Services
BY:
-------------------------------------
Page -35-
SCHEDULE A
to Seller Certificate under Article 1.7(J)
(F). The representations and warranties of Seller set forth in Article
2 must be in all respects true and correct at and as of the Closing as though
then made and as though the Closing Date or substituted for the date of this
Agreement.
(G). Seller shall have performed all of the covenants and agreements
required to be performed by it under this Agreement prior to the Closing.
(H). As of the Closing Date, there shall not have been since January 1,
2001 (i) any material adverse change in the Business, the Assets or the
Contracts sold hereunder; or (ii) any material casualty loss or damage to
Seller's assets, whether or not covered by insurance.
(I). As of the Closing, no action or proceeding before any court or
governmental body or agency shall be pending or threatened wherein an
unfavorable judgment, decree or order would prevent the carrying out of this
Agreement or any of the transactions contemplated hereby, declare unlawful any
of such transactions, cause any of such transactions to be rescinded, or
adversely affect any of the Assets, the locations where the Business is
operated, any of the Contracts or Buyer's use or enjoyment thereof.
Page -36-
Exhibit 1.7(K)
Seller Secretary Certificate under Section 1.7(K)
SECRETARY'S CERTIFICATE
(Pursuant to Section 1.7(K) of the Agreement)
I, ____________________, the duly appointed Secretary of RTC Alarm
Monitoring Services, a division of Roseville Telephone Company, a California
corporation (the "Corporation"), do hereby certify to KC Acquisition Corp.
("KC"), in connection with that certain Asset Purchase Agreement dated December
10, 2001, by and among the Corporation and KC, as follows:
1. Attached hereto as Exhibit A are true, correct and complete copies
of the Articles of Incorporation of the Corporation and all amendments thereto,
and same remain in full force and effect as of the date hereof.
2. Attached hereto as Exhibit B are true, correct and complete copies
of the By-Laws of the Corporation and all amendments thereto, and same remain
in full force and effect as of the date hereof.
3. Attached hereto as Exhibit C are true, correct and complete copies
of certain resolutions duly adopted by the unanimous consent of the Board of
Directors and to the extent required of the Shareholders of the Corporation.
Such resolutions have not been revoked, rescinded, modified or amended and are
still in full force and effect on the date hereof and are the only resolutions
adopted by the Board of Directors and Shareholders relating to the subject
matter thereof.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of this 27th day of December, 2001.
---------------------------------
Secretary
Page -37-
EXHIBIT A
Articles of Incorporation
Page -38-
EXHIBIT B
By-Laws
Page -39-
EXHIBIT C
Resolutions
Page -40-
Exhibit 1.7(L)(vi)
Seller Certificate under Section 1.7(L)(vi)
CLOSING CERTIFICATE
(Pursuant to Section 1.7(L)(vi) of the Agreement)
Pursuant to Section 1.7(L)(vi) of the Asset Purchase Agreement dated
December 10, 2001 (the "Agreement") by and among KC Acquisition Corporation (the
"Buyer") and RTC Alarm Monitoring Services, a division of Roseville Telephone
Company, a California corporation (the "Seller"), the Seller, together with its
directors, do hereby certify as follows:
No casualty, loss or damage has occurred to any of the Assets (as such
term is defined in the Agreement) since the date of the Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Certificate as
of this 27th day of December, 2001.
Roseville Telephone Company, for itself and its division
RTC Alarm Monitoring Services
By:
------------------------------------
Page -41-
Exhibit 1.7(L)(vii)
Seller Certificate under Section 1.7(L)(vii)
CLOSING CERTIFICATE
(Pursuant to Section 1.7(L)(vi) of the Agreement)
Pursuant to Section 1.7(L)(vi) of the Asset Purchase Agreement dated
December 10, 2001 (the "Agreement") by and among KC Acquisition Corporation (the
"Buyer") and RTC Alarm Monitoring Services, a division of Roseville Telephone
Company, a California corporation (the "Seller"), the Seller, together with its
directors, do hereby certify as follows:
All of the information required to be set forth in any section of the
Disclosure Schedule of the Agreement has been provided to Buyer and is attached
hereto in order to complete the Disclosure Schedule to the Agreement, as though
the Closing Date were substituted for the date of the Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
as of this 27th day of December, 2001.
Roseville Telephone Company, for itself and its division
RTC Alarm Monitoring Services
BY:
----------------------------------
----------------------------------
Director
----------------------------------
Director
Page -42-
Exhibit 1.7(M)
Transfer Forms for Telephone Lines and Numbers under Section 1.7(M)
Page -43-
Exhibit 1.8(D)
Buyer Certificate under Section 1.8(D)
CLOSING CERTIFICATE
(Pursuant to Section 1.8(D) of the Agreement)
Pursuant to Section 1.8(D) of the Asset Purchase Agreement dated
December 10, 2001 (the "Agreement") by and among KC Acquisition Corporation
(the "Buyer") and RTC Alarm Monitoring Services, a division of Roseville
Telephone Company (the "Seller"), the Buyer does hereby certify as follows:
It has reviewed the conditions specified for Closing in Sections
1.8(A), 1.8(B), and 1.8(C) of the Agreement (copies of which Sections are
attached hereto as Schedule A), and the undersigned does hereby certify that
the conditions for Closing set forth in such Sections have been fulfilled as
of the date hereof.
IN WITNESS WHEREOF, the undersigned have executed this Certificate as
of this 27th day of December, 2001.
KC Acquisition Corp.
BY:
-------------------------------
Page -44-
SCHEDULE A
to Seller Certificate under Article 1.8(D)
(A). The representations and warranties of Buyer set forth in Article
3 must be true and correct at and as of the Closing as though then made and as
though the Closing Date were substituted for the date of this Agreement.
(B). Buyer shall have performed all of the covenants and agreements
required to be performed by it under this Agreement prior to the Closing.
(C). As of the Closing, no action or proceeding before any court or
government body or agency shall be pending or threatened wherein an unfavorable
judgment, decree or order would prevent the carrying out of this Agreement or
any of the transactions contemplated hereby, declare unlawful any of such
transactions, or cause any of such transactions to be rescinded.
Page -45-
Exhibit 1.11
Definitions
"Accounts Receivable" means all trade accounts receivable owned by Seller which
have arisen in the normal course of Seller's Business relating to Performing
WRMR Contracts, except a trade account receivable being pursued by a collection
agency, attorney or other outside agency as of the date of execution of this
agreement or thereafter.
"Adverse Claim" means a lien, security interest or other charge or encumbrance,
or any other type of preferential arrangement.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director, officer, or 10% or more shareholder of such
Person.
"Agreement" has the meaning ascribed to it in the preface.
"Assigned Contracts" means those contracts which the Buyer and Seller have
agreed to set forth on the Closing Contracts Schedule.
"Business" means the security alarm monitoring business operations of Seller.
"Business Day" means any day on which banks are not authorized or required to
close in New York City, New York.
"Buyer" has the meaning ascribed to it in the preface.
"Closing" means the closing of the purchase and sale of assets contemplated
under this Agreement.
"Closing Date" means the date and time of the Closing.
"Collections" means all cash collections and other cash proceeds of any
Receivable, including, without limitation, all cash proceeds of Related Security
with respect to such Receivable.
"Contracts" means all WRMR Contracts set forth on Exhibit 1.1(D).
"Damages" means all liabilities, demands, claims, legal actions or causes of
action, regulatory, legislative or judicial proceedings or investigations,
assessments, levies, losses, fines, penalties, damages, costs and expenses,
including reasonable fees and expenses of attorneys, accounts and other
professionals sustained or incurred in connection with the corporation in or
with the defense, investigation or cure of any claim.
"Dealer Contract" means dealer agreement(s) for central station monitoring of
all customers of the dealer which Buyer has accepted for purchase and which
fulfill its criteria of a WRMR Contract.
"Debt" means (a) indebtedness for borrow money, (b) obligations evidenced by
bonds, debentures, notes or other similar instruments obligations to pay the
deferred purchase price of property or services, (d) obligations as lessee under
leases which shall have been or should be, in accordance with generally accepted
accounting principles recorded as capital leases, (e) obligations under direct
or
Page -46-
indirect guaranties in respect of, and obligations (contingent or otherwise)
to purchase or otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness or obligations of others of the kinds referred to in
clauses (a) through (d) above, and (f) liabilities in respect of unfunded
vested benefits under plans covered by Title IV of ERISA.
"Disclosure Schedule" means the schedule entitled "Disclosure Schedule"
delivered by the Seller and the Shareholders and initialed by the Shareholders,
Seller and Buyer for identification, which schedule is arranged in sections
corresponding to the letter and numbered subsections contained in Article 2 of
the Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"Event of Default" means (a) Seller (i) shall fail to perform or observe any
term, covenant or agreement under this or any other agreement or (ii) shall fail
to make when due any payment or deposit to be made by it under this Agreement;
or (b) any representation or warranty made or deemed made by Seller or any of
its officers under or in connection with this Agreement or any other Transaction
Document or any information or report delivered by Seller pursuant to this
Agreement or any other Transaction Document shall prove to have been incorrect
or untrue in any material respect when made or deemed made or delivered; or (c)
Seller shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement on its part to be performed or observed and any such
failure shall remain unremedied for 10 Business Days after written notice
thereof shall have been given to Seller; or (d) Seller shall fail to pay any
principal of or premium or interest on any of its Debt which is outstanding in a
principal amount of at least $50,000 in the aggregate when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Debt;
or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or (e) the liens granted by Seller to Buyer
pursuant to this Agreement shall for any reason cease to be valid and perfected
first priority liens in the collateral referred to herein; or (f) Seller shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against Seller seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property) shall occur; or
Seller shall take any corporate action to authorize any of the actions set forth
above in this subsection (f); or (g) there shall have occurred any event which
may materially adversely affect the collectibility of the Receivables or the
ability of Seller to collect the Receivables or otherwise perform its
obligations under this Agreement.
Page -47-
"Excluded Liabilities" has the meaning ascribed to it in section 1.3 of the
Agreement.
"Incipient Event of Default" means an event that but for notice or lapse of
time or both would constitute an Event of Default.
"Including" or any form of it means including without limitation.
"Knowledge" (or any variation thereof), when referring to any Person, means the
actual knowledge of such Person after due inquiry.
"Lease" means a lease related to Seller's Business to which Seller is a party
and which appears on the Closing Contracts Schedule to the Agreement.
"Lien" means any mortgage, pledge, lien, encumbrance, claim, charge, security
interest or other right to claim possession or ownership.
"Location" means the premises which are the subject of a Lease.
"Obligor" means a Person obligated to make payments pursuant to a WRMR Contract.
"Performing WRMR" means the RMR on all Performing WRMR Contracts.
"Performing WRMR Contract" means the WRMR Contracts as herein defined and which
Buyer has accepted for purchase and have no arrearage of sixty (60) days or
more.
"Person" means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or agency thereof.
"Purchased Assets" means all properties, assets and rights which Seller conveys,
or purports to convey, to Buyer at the Closing.
"Receivable" means the Accounts Receivable relating to the indebtedness of an
Obligor under a WRMR Contract, and includes any other obligations of such
Obligor with respect thereto. Each scheduled monthly payment under a WRMR
Contract shall constitute a separate Receivable.
"Recurring Monthly Revenue" or "RMR" means the monthly recurring income
which a Dealer or Subscriber has contracted to pay for the monitoring services
to be provided to that customer for the customer or for his, her or its own
customers under his, her or its contract for monitoring services, less
prepayments in connection with any such accounts and excluding all other
non-standard charges such as, but not limited to, radio backup monitoring.
"Related Security" means with respect to any Receivable (a) all of Seller's
interest in any merchandise (including returned merchandise) relating to any
sale giving rise to such Receivable; (b) all security interests or liens and
property subject thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the WRMR Contract related to such Receivable
or otherwise, together with all financing statements signed by an Obligor
describing any collateral securing such Receivable all guaranties, insurance
and other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable, whether pursuant to the
WRMR Contract related to
Page -48-
such Receivable or otherwise; and (d) the WRMR Contract and all other books,
records and other information (including, without limitation, computer programs,
tapes, discs, punch cards, data processing, software and related property and
rights) relating to such Receivable and the related Obligor.
"Retail Contract" means the retail subscriber monitoring agreement(s) which
Buyer has accepted for purchase which fulfill its criteria of a WRMR Contract.
"Seller" has the meaning ascribed to it in the preface.
"Shareholders" means and includes all individuals and entities having any
ownership interest, directly or indirectly, in RTC Alarm Monitoring Services or
its parent company and all officers and directors of Seller.
"Subscriber" means the end user of monitoring services pursuant to a WRMR
Contract. This person is the owner of the home where monitoring services are
rendered. A person who rents a home does not qualify as a Subscriber.
"Subscriber Contract" means agreement(s) with a Subscriber for central station
monitoring of the Subscriber's residence pursuant to a WRMR Contract.
"Transaction Document" means any of this Agreement, the Xxxx of Sale,
Restrictive Covenant Agreement relating hereto and all other agreements and
documents delivered and/or related hereto or thereto.
"UCC" means the Uniform Commercial Code as from time to time in effect in the
specified jurisdiction.
"WRMR Contract" means the wholesale and retail Dealer Contracts and Subscriber
Contracts for security system monitoring which Buyer has accepted for
purchase which fulfill its criteria of (a) 1, 12, 24, 36, 48 or 60 months
contracts, none of which have been cancelled, non-renewed, or threatened to be
cancelled or non-renewed, in default or breach of any kind; (b) generate
between $2.00 and $25.00 per month in recurring revenue; (c) are substantially
in the form of one of the written contracts approved by Buyer; and (d) meet the
criteria of a Performing WRMR Contract.
Page -49-
Exhibit 2
Disclosure Schedule
Page -50-
Exhibit 2.21
Listing of Names
RTC Alarm Monitoring Services
Page -51-
Exhibit 3.1
Buyer Corporate Structure
I. KC Acquisition Corp., a New Jersey corporation owned by Xxxxxx Few
(80%), Xxxxxxx XxXxxx (10%) and Xxxxx X. Xxxxx (10%).
1. KC Funding Corporation, a Delaware corporation - 100% subsidiary
of KC Acquisition Corp.
2. King Central Funding Corporation, a New Jersey corporation - 100%
subsidiary of KC Acquisition Corp.
3. Monital Signal Corporation, a New Jersey Corporation, successor to
Griptight Holdings, Inc., Monital Signal Corporation and Monitoring
Acquisition Corporation - 99.2% subsidiary of KC Acquisition Corp.,
.8% owned by LWG Holdings Limited, an English limited company.
(A.) Monital Funding Corporation, a Delaware corporation - 100%
subsidiary of Monital Signal Corporation.
Page -52-
Exhibit 8.3
Seller Business Continuation Agreement under Section 8.3
Page -53-
