EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
This Agreement entered into this the 22nd day of April, 2003 by and
among Palladium Communications, Inc., a corporation organized under the laws of
the State of Kentucky (hereinafter "Seller"), and Palladium Consulting Group,
LLC, a Kentucky Limited Liability Company (hereinafter "Buyer").
WHEREAS, Seller operates a business primarily engaged as an agent of
telecommunications; and WHEREAS, Seller owns equipment, contract rights, and
miscellaneous assets used in connection with the operations of its business; and
WHEREAS, Buyer desires to acquire certain assets used or useful, or
intended to be used in the operation of Sellers business and Seller desires to
sell such assets to Buyer;
NOW, THEREFORE, in consideration of mutual covenants contained herein
and other good and valuable consideration the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
SECTION 1. ASSET PURCHASED; LIABILITIES ASSUMED
1.1 ASSETS PURCHASED. Seller agrees to sell to Buyer and Buyer agrees
to purchase from Seller, on the terms and conditions set forth in this Agreement
the follo wing carrier agreements and assets ("Agreement and Assets"):
1.1.1 All carrier agreements and equipment listed on Exhibit "A",
together with any replacements or additions to the equipment, etc. made prior to
the closing date.
1.1.2 Seller's goodwill.
1.2 NO ASSUMPTION OF LIABILITIES. Buyer shall NOT assume responsibility
of payment for any obligations of Seller except those listed in section 1.3.
1.3 ASSUMPTION OF LIABILITIES. Buyer shall assume responsibility of
payment for the following signed and executed original leases:
a. NEC phone systems
b. Lease agreement with TJ Associates, Inc. for
properties at 000 X. Xxxxxxxx Xxx Xxxx.,
Xxxxxxxxxx, Xxxxxxxx 00000
x. Xxxxx SF 2530 photocopier
SECTION 2. EXCLUDED ASSETS
Excluded from this sale and purchase are Seller's cash, notes
receivable, land and any and all other assets except those listed on Exhibit
"A".
SECTION 3. PURCHASE PRICE FOR ASSETS
The purchase price for the agreements and assets shall be $75,000.00,
allocated as follows:
1. Equipment, carrier agreements, and other personal property $75,000.00
TOTAL $75,000.00
SECTION 4. PAYMENT OF PURCHASE PRICE
The price for the Agreements and Assets shall be paid as follows:
4.1 At closing, Buyer shall cause to be delivered to Seller the sum of
$75,000.00
4.2 The parties agree that amounts due hereunder shall be net amounts
due to Seller without regard to any interest whatsoever, whether actual, imputed
or implied.
SECTION 5.
Seller represents warrant to Buyer as follows:
5.1 CORPORATE EXISTENCE. Seller is now and on the date of closing will
be a corporation duly organized and validly existing and in good standing under
the laws of the State of Kentucky. Seller has all requisite corporate power and
authority to own, operate and/or lease the assets, as the case may be, and to
carry on its business as now being conducted.
5.2 AUTHORIZATION. The execution, delivery and performance of this
Agreement have been duly authorized and approved by the Board of Directors of
Seller, and this Agreement constitutes a valid and binding agreement of Seller
in accordance with its terms.
5.3 TITLE TO ASSETS. Except as described in the Agreement, Seller holds
good and marketable title to the assets, free and clear of restrictions on or
conditions to transfer or assignment, and free and clear of liens, pledges,
charges or encumbrances.
5.4 BROKERS AND FINDERS. Seller has not employed any broker or finder
in connection with the transaction contemplated by this Agreement or taken
action that would give rise to valid claims against any party for a brokerage
commission, finder's fee or other like payment.
5.5 TRANSFER NOT SUBJECT TO ENCUMBRANCES OR THIRD PARTY APPROVAL.
The execution and delivery of this Agreement by Seller and the
consummation of the contemplated transactions, will not result in the creation
or imposition of any valid lien, charge or encumbrance on any of the carrier
agreements or assets, and will not require the authorization, consent, or
approval of any third party, including any governmental division or regulatory
agency.
5.6 LITIGATION. Seller has no knowledge of any claim, litigation,
proceeding, or investigation pending or threatened against Seller that might
result in any material adverse change in the business or condition of the
carrier agreements or assets being conveyed under this Agreement.
5.7 ACCURACY OF REPRESENTATIONS AND WARRANTEES.
None of the representations or warranties of Seller contain or will
contain any untrue statements of a material fact or omit or will omit or
misstate a material fact necessary in order to make statements in this Agreement
not misleading. Seller knows of no fact that has resulted, or that in the
reasonable judgment of Seller will result in material change in the business,
operations. or assets of Seller that has not been set forth in this Agreement or
otherwise disclosed to Buyer.
5.8 NON-COMPETITION The Seller agrees not to compete with Buyer
whatsoever, as it pertains to any and all Carrier/Provider and Independent Sales
Agent Agreement being sold to Buyer by Seller.
SECTION 6. REPRESENTATIONS OF BUYER Buyer represents and warrants as follows:
6.1 CORPORATE EXISTENCE. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Kentucky. Buyer
has all requisite corporate power and authority to enter into this Agreement and
perform its obligations hereunder.
6.2 AUTHORIZATION. The execution, delivery and performance of this
Agreement have been duly authorized and approved by the Board of Directors of
Buyer, and this Agreement constitutes a valid and binding agreement of Buyer in
accordance with its terms.
6.3 BROKIERS AND FINDERS. Buyer has not employed any broker or finder
in connection with the transactions contemplated by this Agreement and has taken
no action that would give rise to a valid claim against any party for a
brokerage commission, fmder's fee or other like payment.
6.4 ACCURACY OF REPRESENTATIONS AND WARRANTIES. None of the
representations or warranties of Buyer contain or will contain any untrue
statement of a material fact or omit or will omit or misstate a material fact
necessary in order to make the misstatements contained herein not misleading.
SECTION 7. COVENANTS OF SELLER
7.1 SELLER'S OPERATION OF BUSINESS PRIOR TO CLOSING.
Seller agrees that between the date of this Agreement and the date of
CLOSING, Seller will:
7.1.1 Use its best efforts to preserve its business organization and
preserve the continued operation of its business with its customers, suppliers,
and others having business relations with Seller.
7.1.2 Not assign, sell, lease or otherwise transfer or dispose of any
of the carrier agreements or assets listed on Exhibit "A", except to Buyer.
7.1.3 Maintain all of its assets in their present conditions,
reasonable wear and tear and ordinary usage accepted.
7.2 ACCESS TO PREMISES AND XXXXXXXXXXX.Xx reasonable times prior to the
closing date, Seller will provide Buyer and its representatives with reasonable
access during business hours to the assets, titles, contracts and records of
Seller and furnish such additional information concerning Seller's businesses
Buyer may from time to time reasonably request.
7.3 CONDITIONS AND BEST EFFORTS. Seller will use its best efforts to
effectuate the transactions contemplated by this Agreement and to fulfill all
the conditions of the obligations of Seller under this Agreement, and will do
all acts and things as may be required to carry out their respective obligations
under this Agreement and to consummate and complete this agreement.
SECTION 8. COVENANTS OF BUYER
8.1 CONDITIONS AND BEST EFFORTS. Buyer will use its best efforts to
effectuate the transaction contemplated by this Agreement and to fulfill all the
conditions of Buyer's obligations under this Agreement, and shall do all acts
and things as may be required to carry out Buyer's obligations and to consummate
this Agreement.
8.2 CONFIDENTIAL INFORMATION. If for any reason the sale of Agreements
and Assets is not closed, Buyer will not disclose to third parties any
confidential information received from Seller in the course of investigating,
negotiating, and performing the transactions contemplated by this Agreement.
SECTION 9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligation of Buyer to purchase the Assets is subject to the
fulfillment, prior to or at the closing date, of each of the following
conditions, any one or portion of which may be waived in writing by Buyer:
9.1 REPRESENTATIONS, WARRANTIES AND COVENANTS AND SELLING SHAREHOLDER.
All representations and warranties made in this Agreement by Seller shall be
true as of the closing date as fully as those such representations and
warranties had been made on or as of the closing date, and, as of the closing
date, Seller shall not have violated or shall have failed to perform in
accordance with any covenant contained in this Agreement.
9.2 LICENSES AND PERMITS. Buyer shall have obtained all licenses and
permits from public authorities necessary to authorize the ownership and
operation of the business of Seller.
9.3 CONDITIONS OF THE BUSINESS. There shall have been no material
adverse change in the manner in of operation of Seller's business prior to the
closing date.
9.4 NO SUITS OR ACTIONS. At the closing date, no suit, action or other
proceeding shall have been threatened or instituted to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the contemplated
transactions.
SECTION 10. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller to consulate the transactions contemplated by
this Agreement are subject to the fulfillment, prior to or at the closing date,
of the following condition, which may be waived in writing by Seller:
All representations and warranties made in this Agreement by Buyer
shall be true as of the closing date as fully as though such representations and
warranties have been made on and as of the closing date, and Buyer shall not
have violated or shall not have failed to perform in accordance with any
covenant contained in this Agreement.
SECTION 11. BUYER'S ACCEPTANCE
Buyer represents and acknowledges that it has entered into this
Agreement on the basis of its own examination, personal knowledge, and opinion
of the value of the business. Buyer has not relied on any representations made
by Seller other than those specified in this Agreement. Buyer further
acknowledges that Seller has made no agreement or promise to repair or improve
any equipment or other personal property being sold to Buyer under this
Agreement, and that Buyer takes all such property in the condition existing on
the date of this Agreement, except as otherwise provided in this Agreement.
SECTION 12. INDEMNIFICATION AND SURVIVAL
12.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. ALL representations
and warranties made in this Agreement shall survive the closing of this
Agreement, except that any party to whom a represenation of warranty has been in
this Agreement shall be deemed to have waived any misrepresentation or breach of
representation or warranty which such party had knowledge prior to closing. Any
party learning of a misrepresentation or breach of representation or warranty
under this Agreement shall immediately give notice thereof to all other parties
to this Agreement. The representations and warranties in this Agreement shall
terminate three (3) years from the closing date, and such representations or
warranties shall thereafter be without force or effect, except any claim with
respect to which notice has been given to the party to be charged prior to such
expiration date.
12.2 SELLERS INDEMNIFICATION.
12.2.1 Seller hereby agrees to indemnify and hold buyer, its successors
and assigns harmless from and against:
(1) Any and all claims, liabilities and obligations of every kind and
description, contingent or otherwise, arising out of or related to the operation
of Seller's business prior to the close of business on the day before the
closing date, except for claims, liabilities and obligations of seller expressly
assumed by buyer under this agreement or paid by insurance maintained by Seller
or Buyer.
(2) Any and all damage or deficiency resulting from any material
misrepresentation or breach of warranty or covenant, or nonfulfillment of any
agreement on the part of Seller under this agreement.
12.3 BUYERS INDEMNIFICATION. Buyer agrees to defend, indemnify and hold
harmless Seller from and against:
12.3.1 Any all claims, liabilities and obligations of every kind and
description arising out of or related to the operation of the business following
closing or arising out of buyers faith to perform obligations of Seller assumed
by buyer pursuant to this agreement.
12.3.2 Any all damage or deficiency resulting from any material
misrepresentation, breech of warranty or covenant, or nonfulfillment of any
agreement on the part of Buyer under this agreement.
SECTION 13. CLOSING
13.1 TIME AND PLACE. This agreement shall be closed at the offices of
Palladium Cormnunications, 000 X Xxxxxxxxx Xxx Xxxx, Xxxxxxxxxx, XX 00000 on the
22nd day of April, 2003, or such other time as the parties may agree in writing.
If the closing has not occurred on or before April 25th, 2003, then either party
may elect to terminate this agreement. If, however, the closing has not occurred
because of a breech of contract by one or more of the parties, the breaching
party or parties shall remain liable for breach of contract.
13.2 OBLIGATIONS OF SELLER AT CLOSING. At the closing, Seller shall
deliver to buyer the following:
13.2.1 Bills of Sale, Assignments, properly endorsed Certificate of
Titles, and other instruments of transfer, and form and substance reasonably
satisfactory to counsel for Buyer, necessary to transfer and convey all of the
assets to Buyer.
13.2.2 Non-competition Agreements referenced in Section 5.
13.2.3 Such other certificates and documents as may be called for by
the provisions of this Agreement.
13.3 OBLIGATIONS OF BUYER AT CLOSING. At the closing Buyer shall
delivery to Seller the following:
13.3.1 A check in the amount specified in Section 4. 1.
13.3.2 Such other certificates and documents as may be called for by
the provisions of this Agreement.
SECTION 14. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
14.1 BOOKS AND RECORDS. This sale does not include the books of account
and records of Seller's business. However, possession and custody of such books
and records, except for Seller's general ledger, may be retained by Buyer for a
period of six (6) months. During this period, Seller or its agents shall have
access to such books and records and may make copies thereof, Buyer will
exercise reasonable care in the safekeeping of such records. Seller shall retain
its general ledger but shall make it available for inspection by Buyer from time
to time upon reasonable request.
SECTION 15. TERMINATION OF AGREEMENT
15.1 BY MUTUAL CONSENT. This Agreement may be terminated by mutual
written consent of Buyer and Seller.
15.2 BREACH OF REPRESENTATIONS AND WARRANTIES; FAILURE OF CONDITIONS.
Buyer may elect by notice to Seller, and Seller may elect by notice to Buyer, to
terminate this Agreement if,
15.2.1 The terminating party shall have discovered a material error,
misstatement, or omission in the representations and warranties made in this
Agreement by the other party which shall not have been cured by such other party
within fifteen (I 5) days after written notice to such other party specifying in
detail such asserted error, misstatement, or ommission, or by the closing date,
whichever first occurs.
15.2.2 All of the conditions precedent of the terminating party's
obligations under this Agreement as set forth in either Section 11 or 12, as the
case may be, have not occurred and have not been waived by the terminating party
on or prior to the closing date.
15.3 CLOSING NOTWITHSTANDING THE RIGHT TO TERMINATE. The party with a
right to terminate this Agreement pursuant to Section 18.2.1 or 18.2.2 shall not
be bound to exercise such right, and its failure to exercise such right shall
not constitute a waiver of any other right it may have under this Agreement,
including but not limited to remedies for breach of a representation, warranty,
or covenant.
SECTION 16. MISCELLANEOUS
16.1 The provisions of this Agreement shall be binding upon and inure
to the benefit of the heirs, personal representatives, successors, and assigns
of the parties.
16.2 Any notice or other communication required or permitted to be
given under this Agreement shall be in writing and shall be mailed by certified
mail, return receipt requested, postage prepaid, addressed to the parties as
follows:
SELLER: /s/ Xxxxxxx Xxxxxxxxxx BUYER: /s/ Xxxx Xxxxxxxx
---------------------- --------------------
Xxxxxxx Xxxxxxxxxx Xxxx Xxxxxxxx
All notices and other communications shall be deemed to be given at the
expiration of three (3) days after the date of mailing. The addresses to which
notices or other communications shall be mailed may be changed from time to time
by giving written notice to the other parties as provided above.
16.3 In the event of a default under this Agreement, the defaulting
party shall reimburse the non-defaulting party or parties for all costs and
expenses reasonably incurred by the non-defaulting party or parties in
connection with the default, including without limitation attorney fees.
Additionally, in the event a suit or action is filed to enforce this Agreement
or with respect to this Agreement, the prevailing party or parties shall be
reimbursed by the other party for all costs and expenses incurred in connection
with the suit or action, including without limitation reasonable attorney fees
at the trial level and on appeal.
16.4 No waiver of any provision of this Agreement shall be deemed, or
shall constitute, a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
16.5 This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of Kentucky.
16.6 This Agreement constitutes the entire agreement between the
parties pertaining to its subject matter and it supersedes all prior
contemporaneous agreements, representations, and understandings of the parties.
No supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by all parties.
Witness the signatures of the parties this the 22nd day of April, 2003
SELLER: BUYER:
BY: /s/ Xxxxxxx Xxxxxxxxxx BY: /s/Xxxx Xxxxxxxx
----------------------- ----------------------
STATE OF KENTUCKY
COUNTY OF JEFFERSON
PERSONALLY appeared before me, the undersigned authority in and for the
county and state aforesaid, the within named Xxxxxxx X. Xxxxxxxxxx who
acknowledged to me that he is CEO of Palladium Communications and who
acknowledged that he signed, delivered and executed the above and foregoing
instrument on the date and year therein mentioned, for and on behalf of said
corporation after first having been duly authorized so to do.
GIVEN under my hand and official seal, this the 22 day of April, 2003.
/s/
---------------------------
NOTARY PUBLIC
MY COMMISSION EXPIRES:
8-27-04
----------------------
STATE OF KENTUCKY
COUNTY OF JEFFERSON
SCHEDULE "A"
Carriers/Providers and Independent Sales Agent agreements [$51,150.00]
o Sales Representafive Agreement between US LEC Corporation and
Palladium Communications
o Agent Agreement between NewSouth Communications and Palladium
Communications
o Master Agent Sales Agreement between AccessPoint, Inc. and Palladium
Communications
o Master Representabve Agreement between NuVox Communications, Inc.
and Palladium Communications
o Independent Contractor Markerting Agreement between Cinergy
Communications Company and Palladium Communications
o Independent Contractor Agreement between Talk America, Inc. and
Palladium Communications
o Agent Agreement between OPEX Communications, Inc. and Palladium
Communications
o Sales Representative Agreement between TBI, Inc and Palladium
Communications
o Agent Agreement between Cellular Connection Plus and Palladium
Communications
o Sales Representative Agreement between CMS, Inc and Palladium
Communications
o Agent Agreement between Telcom Decision Makers and Palladium
Communications
o Agent Agreement between AMI, Inc and Palladium Communications
o All agent agreement between Palladium Communications and Palladium
Independent Sales Agents
Equipment / Office Furniture / Misc [$18,850.00]
o 3,750.00 5 Dell computer setups and monitors
o 2,700.00 3 custom computer setups and monitors
o 2,950.00 1 server
o 250.00 1 HP printer-fax-copier
o 500.00 2 HP laser printer
o 250.00 1 Brother laser printer
o 450.00 1 HP inkjet color printer
o 2,000.00 9 file cabinets
o 250.00 2 large storage cabinets
o 250.00 7 dry erase boards
o 750.00 6 computer chairs
o 350.00 1 wood cabinet
o 4,150.00 3 wood desks and credenzas
o 250.00 2 book shelves
o All customer and carrier records/files
o All agent commissions reports
Notes/Claims and/or Judgements held by or owed to Palladium Communications
[$5,000.00] o EZ Talk 100k note o Adelphia 700k claim
o Priority Communications 5k claim
