ASSET PURCHASE AGREEMENT
Exhibit 10.1
THIS
ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of
February 1, 2019, is by and between Lingo Management, LLC, a
Georgia limited liability company (“Buyer”), and Fusion Cloud
Services, LLC (f/k/a Birch Communications, LLC), a Georgia limited
liability company (“Seller”). Capitalized
terms used herein have the meanings set forth in Section 1.1.
RECITALS
WHEREAS, Seller and
its Subsidiaries are engaged in the business of, providing, among
other things, telecommunications services, information services,
and interconnected Voice over Internet Protocol
(“VoIP”) services to end-user customers;
and
WHEREAS, Buyer
desires to purchase from Seller and the Applicable Seller
Subsidiary (as defined herein), and Seller and the Applicable
Seller Subsidiaries desire to sell, assign, transfer, convey and
deliver to Buyer or the Applicable Buyer Subsidiary, free and clear
of any Encumbrances, the Acquired Assets (each as defined
herein).
NOW,
THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations,
warranties and covenants herein contained, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. In addition to
terms that are used and otherwise defined in this Agreement, the
terms below shall have the following meanings:
“Acquired Assets” has the
meaning set forth in Section 2.1.
“Acquired Customers” means
the Active Customers together with the CABS Revenue associated with
those Active Customers.
“Active Customers” has the
meaning set forth in Section 2.1(a).
“Acquired Customer Historical Valuation
Report” means the report delivered by Seller’s
counsel to Buyer’s counsel via email in connection with the
execution of this Agreement containing customers of Seller and/or
the Applicable Seller Subsidiaries.
“Affiliate”
means, with respect to any Person, any other Person that directly
or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such Person. For
purposes of this definition, “control” (including, with
correlative meaning, the terms “controlled” and
“common
control”) means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through ownership
of voting securities, by contract or otherwise.
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“Agreement” has the
meaning set forth in the introductory paragraph.
“Applicable Buyer
Subsidiary” means any Subsidiary of the Buyer that
will provide Services to the Acquired Customers following their
date of transfer hereunder.
“Applicable Seller
Subsidiary” means any Subsidiary of the Seller that
provides Services to the Acquired Customers.
“Assumed Liabilities” has
the meaning set forth in Section 2.3.
“Xxxx of Sale” means a
xxxx of sale pursuant to which Seller shall sell, convey, transfer,
assign and deliver to Buyer (or a nominee of Buyer) the Acquired
Assets, in substantially the form attached hereto as Exhibit A.
“Books and Records” means
all files, documents, instruments, papers, books, reports, records,
correspondence, supplier lists, tapes, microfilms, photographs,
letters, ledgers, journals, technical documentation (design
specifications, functional requirements, operating instructions,
logic manuals, flow charts, etc.), user documentation (installation
guides, user manuals, training materials, release notes, working
papers, etc.), marketing and promotional materials, and other
similar materials in each case to the extent related to the
Acquired Customers or otherwise associated with the Acquired
Assets.
“BSS” has the meaning set
forth in Section
2.1(f).
“Business Day” means any
day on which national banking institutions in New York, New York
are open to the public for conducting business and are not required
or authorized to close.
“Buyer” has the meaning
set forth in the introductory paragraph.
“CABS” means carrier
access billing services.
“CABS Revenue” has the
meaning set forth in Section 2.1(b).
“Closing” has the meaning
set forth in Section
3.1(a).
“Closing Date” has the
meaning set forth in Section 3.1(a).
“Closing Statement” has
the meaning set forth in Section 2.6(a).
“Code” means the Internal
Revenue Code of 1986, as amended.
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“Customer Paperwork” means
all service order forms, master services agreements, terms and
conditions, letters of authorization, and any associated paperwork
signed by an Active Customer with the Seller and/or one of the
Applicable Seller Subsidiaries and associated with the provision of
the Services to the Active Customers.
“Customer Prepayments and
Deposits” means the sum of, without duplication, (a)
any customer payments received by Seller or any Applicable Seller
Subsidiary in respect of Services to be provided by Buyer or any
Applicable Buyer Subsidiary from and after the date hereof; (b)
customer deposits held by Seller or an Applicable Seller Subsidiary
in respect of Active Customers as of the date hereof; and (c)
credit balances of the Active Customers as of the date
hereof.
“Delayed Closing” has the
meaning set forth in Section 3.1(b).
“Elite Customer” means
customers of Seller and/or Applicable Seller Subsidiaries that
purchases Services and either (a) have multiple locations that
collectively were billed $5,000 or more in December 2018 or (b)
were originated as a customer of Seller by a master agent or other
agent where it was agreed between Seller or the Applicable Seller
Subsidiary and the agent to treat agent’s customers as
“Elite.”
“Excluded Customers” means
all customers of Seller and/or any Applicable Seller Subsidiary
that, as of the date hereof (a) are 60 days or more past due from
the invoice date or (b) have credit balances.
“Encumbrance” shall mean
any interest, pledge, lien, mortgage, security interest, lease,
sublease, hypothecation, deed of trust, right of use or possession,
right of first offer or first refusal, easement, servitude,
restrictive covenant, encroachment, encumbrances, restriction,
judgment, demand, successor liability claim, charge of any kind or
nature, claim, obligation, option or right, whether imposed by
agreement, understanding, law, equity or otherwise (whether legal
or equitable, secured or unsecured, matured or unmatured,
contingent or non-contingent, liquidated or unliquidated, senior or
subordinated).
“Excluded Assets” has the
meaning set forth in Section 2.2.
“Excluded Liabilities” has
the meaning set forth in Section 2.4.
“FCC” shall mean the
Federal Communications Commission.
“FCC Approval” has the
meaning set forth in Section 7.4.
“Final Order” means an
action taken or order issued by the applicable Governmental
Authority as to which: (a) no request for stay of the action or
order is pending, no such stay is in effect, and, if any deadline
for filing any such request is designated by statute or regulation,
it is passed, including any extensions thereof; (b) no petition for
rehearing or reconsideration of the action or order, or protest of
any kind, is pending before the Governmental Authority and the time
for filing any such petition or protest is passed; (c) the
Governmental Authority does not have the action or order under
reconsideration or review on its own motion and the time for such
reconsideration or review has passed; and (d) the action or order
is not then under judicial review, there is no notice of appeal or
other application for judicial review pending, and the deadline for
filing such notice of appeal or other application for judicial
review has passed, including any extensions thereof, or if an
appeal has been commenced, no stay is in effect.
“Governmental Authority”
means any government, quasi-governmental entity or other
governmental or regulatory body or agency, whether foreign,
federal, state or local, or any agency, instrumentality, court or
authority thereof.
“Law” means any federal,
state, provincial, territorial, local, municipal, foreign or other
law, statute, constitution, principle of common law, resolution,
ordinance, code, order, writ, edict, decree, rule, regulation,
judgment, ruling, policy, guideline or requirement issued, enacted,
adopted, promulgated, implemented or otherwise put into effect by
or under the authority of any Governmental Authority.
“Legal Requirements” means
any federal, state, local, municipal, foreign, international,
multinational, or other administrative Order, constitution, Law,
ordinance, principle of common law, regulation, statue or
treaty.
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“Management Services
Agreement” means a management services agreement
substantially in the form of Exhibit B attached hereto
pursuant to which Buyer would provide management services to Seller
and the Applicable Seller Subsidiaries with respect to the Acquired
Customers prior to the Closing or the Delayed Closing, as
applicable.
“Non-Active Customers”
means a customer listed on the Non-Active Customers
List.
“Non-Active Customers
List” has the meaning set forth in Section 2.1(c).
“Order” means any award,
writ, injunction, judgment, order or decree issued, made or
rendered by any Governmental Authority.
“OSS” has the meaning set
forth in Section
2.1(f).
“Parties” and
“Party”
means Buyer and Seller.
“Pass-Through Charges”
means all charges collected for the purposes of being remitted to a
Governmental Authority, including federal universal service fund
charges remitted to USAC and state universal service fund charges
remitted to state authorities.
“Person”
means any individual, corporation, partnership, limited liability
company, trust, association, joint venture or other entity of any
kind whatsoever.
“Post-Closing Period”
means, with respect to the applicable Acquired Assets sold as of a
certain date, any taxable period beginning on such date or, in the
case of any tax period which includes, but does not begin on or
after such date, the portion of such period beginning on such
date.
“Pre-Closing Period”
means, with respect to the applicable Acquired Assets sold as of a
certain date, any taxable period ending on or before the day
immediately preceding such date, or in the case of any taxable
period which includes, but does not end on or before such date, the
portion of such period up to and including the day immediately
preceding such date.
“Proceedings” means any
action, arbitration, audit, hearing, investigation, litigation, or
suit (whether civil, criminal, administrative or investigative, and
whether one or more) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Authority or
arbitral body.
“Purchase Price” has the
meaning set forth in Section 2.5.
“Redesignation Vendors”
has the meaning set forth in Section 6.13.
“Regulatory Approval”
means any consent, waiver, approval, order, communications license,
or authorization of the FCC, any State PUCs or any other
Governmental Authority required in connection with the execution of
this Agreement or the consummation of the transactions contemplated
hereby.
“Regulatory Payments”
shall mean the amounts necessary to satisfy any asserted regulatory
fees, assessments, fines, penalties or other payments assessed by
the FCC, any State PUC, USAC, or any similar state universal
service fund administrator, based upon Seller’s revenues or
Seller providing Services to Acquired Customers prior to the
Closing Date.
“Representative”
means, with respect to a particular Person, any director, officer,
employee, agent, consultant, advisor or other representative of
such Person, including legal counsel, accountants and financial
advisors.
“Revenue” means the actual
revenue derived from the Acquired Customers, but excluding any
Pass-Through Charges.
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“Seller” has the meaning
set forth in the introductory paragraph.
“Services” means
telecommunications services, information services, and
interconnected VoIP services as defined in 47 U.S.C. §§
153(24), (25), (53).
“State PUC” shall mean the
agencies or commissions or other Governmental Authorities with
jurisdiction over Seller, including, but not limited to, any public
utility commission, state regulatory agency or
municipality.
“Subsidiary” means, with
respect to any Person, any entity in which such Person (a) owns,
directly or indirectly, at least a majority of the outstanding
voting securities, equity interests, profits interest or capital
interest, (b) is entitled to elect at least one-half of the board
of directors or similar governing body or (c) in the case of a
limited partnership or limited liability company, is a general
partner or managing member and has the power to direct the
policies, management and affairs of such entity.
“Tax” or
“Taxes”
(and with correlative meaning, “Taxable” and
“Taxing”) means (a) any
federal, state, provincial, local, foreign or other income,
alternative, minimum, add-on minimum, accumulated earnings,
personal holding company, franchise, capital stock, net worth,
capital, profits, intangibles, windfall profits, gross receipts,
value added, sales, use, goods and services, excise, escheat,
customs duties, transfer, conveyance, mortgage, registration,
stamp, documentary, recording, premium, severance, environmental,
natural resources, real property, personal property, ad valorem,
intangibles, rent, occupancy, license, occupational, employment,
unemployment insurance, social security, disability, workers’
compensation, payroll, health care, withholding, estimated or other
similar tax, duty, levy or other governmental charge or assessment
or deficiency thereof (including all interest and penalties thereon
and additions thereto whether disputed or not) and (b) any
transferee liability in respect of any items described in clause
(a) above.
“Transaction Documents”
means this Agreement, each Xxxx of Sale, the Management Services
Agreement and any other agreements, instruments or documents
entered into pursuant to this Agreement.
“Transfer Taxes” has the
meaning set forth in Section 6.12.
“USAC” means the Universal
Service Administrative Company.
1.2 Other Definitions and Interpretive
Matter. Unless otherwise expressly provided, for purposes of
this Agreement the following rules of interpretation shall
apply:
(a) Calculation of Time Period.
When calculating the period of time before which, within which, or
following which any act is to be done or step taken pursuant to
this Agreement, the date that is the reference date in calculating
such period shall be excluded. If the last day of such period is a
day other than a Business Day, the period in question shall end on
the next succeeding Business Day.
(b) Dollars. Any reference in this
Agreement to $ means U.S. dollars.
(c) Exhibits and Schedules. All
Exhibits and Schedules attached or annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein. Any capitalized terms used in any
Exhibit or Schedule but not otherwise defined therein shall be
defined as set forth in this Agreement.
(d) Gender and Number. Any
reference in this Agreement to gender includes all genders, and
words imparting only the singular number include the plural and
vice versa.
(e) Headings. The division of this
Agreement into Articles, Sections and other subdivisions and the
insertion of headings are for convenience of reference only and
shall not affect or be utilized in the construction or
interpretation of this Agreement. All references in this Agreement
to any “Section” or “Article” are to the
corresponding Section or Article of this Agreement unless otherwise
specified.
(f) Herein. Words such as
“herein,” “hereof” and
“hereunder” refer to this Agreement as a whole and not
merely to a subdivision in which such words appear, unless the
context otherwise requires.
(g) Including. The word
“including” or any variation thereof means
“including, without limitation,” and shall not be
construed to limit any general statement that it follows to the
specific or similar items or matters immediately following
it.
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ARTICLE
II
PURCHASE AND SALE; PURCHASE PRICE
2.1 Purchase and Sale of Assets.
Upon the terms and subject to the conditions and provisions
contained herein, on the Closing Date or Delayed Closing, as
applicable, the Seller (or, if applicable, the Applicable Seller
Subsidiary) will sell, convey, transfer, assign and deliver to
Buyer or an Applicable Buyer Subsidiary, and Buyer or an Applicable
Buyer Subsidiary shall purchase from Seller (or, if applicable, an
Applicable Seller Subsidiary), free and clear of any and all
Encumbrances, all right, title and interest in and to the following
assets of Seller or the Applicable Seller Subsidiary (collectively
the “Acquired
Assets”):
(a) the customers
specifically identified in the Acquired Customer Historical
Valuation Report (which does not include any Excluded Customers)
that currently purchase one or more Services from Seller and/or an
Applicable Seller Subsidiary that collectively have monthly
recurring billed revenue (excluding any Pass-Through Charges) for
the month of January 2019 of $520,843 (resulting in annualized
billed revenue of $6,250,116) (the “Active
Customers”);
(b) all CABS revenue
associated with the Active Customers as of the Closing
(“CABS
Revenue”);
(c) a list of all
cancelled and non-active customers of Seller and the Applicable
Seller Subsidiaries that had, at any point during 12 months prior
to the date hereof, monthly recurring revenue (excluding any former
Elite Customers) of less than or equal to $190 (the
“Non-Active
Customers List”);
(d) all Customer
Paperwork associated with the Active Customers;
(e) customer service
telephone numbers (toll free and local numbers) and blocks of
telephone numbers assigned to Seller or any Applicable Seller
Subsidiary, that are solely used or maintained to support the
Active Customers;
(f) all historical
billing records, trouble ticket information and similar information
relating to the Acquired Customers contained in billing support
systems (“BSS”) or operations
support systems (“OSS”) used by Seller
and/or any Applicable Seller Subsidiary, along with associated data
definition and migration assistance, including digital copies of
invoices for each Acquired Customer for up to six months prior to
the date hereof, which shall be provided to Buyer within 30 days
following the execution date of this Agreement;
(g) any customer
deposits and credit balances related solely to the Acquired
Customers; and
(h) all Books and
Records related to the Acquired Customers.
2.2 Excluded Assets.
Notwithstanding anything to the contrary contained in this
Agreement, neither Buyer nor any Applicable Buyer Subsidiary shall
acquire any assets of Seller or any Applicable Seller Subsidiary,
other than the Acquired Assets (the “Excluded
Assets”).
2.3 Assumption of Liabilities. Upon
the terms and subject to the conditions and provisions contained
herein, at the Closing, or, if applicable, the Delayed Closing,
Buyer shall assume all of the liabilities and obligations of Seller
and/or the Applicable Seller Subsidiary, as the case may be, under
the Customer Paperwork relating to the Active Customers arising
from and after the date of this Agreement, other than any such
liabilities and obligations arising out of or related to a breach
or default thereunder by Seller or the Applicable Seller Subsidiary
(the “Assumed
Liabilities”).
2.4 Liabilities Not Assumed. Except
for the Assumed Liabilities, neither Buyer nor any Applicable Buyer
Subsidiary will assume any liability or obligation of Seller or any
Applicable Seller Subsidiary whatsoever, whether known or unknown,
disclosed or undisclosed, accrued or hereafter arising, absolute or
contingent, and Seller and the Applicable Seller Subsidiary will
retain responsibility for, and will timely discharge and satisfy,
all such liabilities and obligations (collectively the
“Excluded
Liabilities”).
2.5 Purchase Price.
(a) Subject to
adjustment pursuant to Section 2.6, the aggregate cash
amount to be paid by Buyer to Seller for the Acquired Assets is
$10,000,000 (the “Purchase
Price”).
(b) The Purchase Price
shall be paid as follows:
(i) no later than one
business day following the date of this Agreement, Buyer will pay
or cause to be paid to Seller by wire transfer of immediately
available funds $9,250,000 (the “Initial Payment”);
and
(ii) on
the Closing Date, Buyer will pay or cause to be paid to Seller by
wire transfer of immediately available funds an amount equal to the
Purchase Price (as adjusted pursuant to Section 2.6) minus the Initial Payment (such
amount, the “Closing
Payment”).
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2.6 Closing Statement.
(a) No later than five
(5) Business Days prior to the Closing Date, Seller shall deliver
to Buyer a written statement (the “Closing Statement”)
setting forth Seller’s good faith estimate of the Customer
Prepayments and Deposits. Should Buyer object to any of the amounts
or calculations in the Closing Statement, Buyer and Seller shall
cooperate in a diligent and good faith manner to resolve such
objections prior to the Closing, and the Closing Statement shall be
adjusted prior to the Closing to reflect any changes agreed to by
Buyer and Seller prior to the Closing.
(b) The Closing Payment
shall be decreased by the Customer Prepayments and Deposits set
forth in the Closing Statement.
2.7 Failure to Fund the Full Amount of the
Closing Payment. In the event that Buyer fails to fund the
full amount of the Closing Payment on the Closing Date, (a) the
Closing shall never the less proceed, but the value of the Acquired
Assets sold on such date and at any Delayed Closing, if applicable,
shall be adjusted pro rata to give effect to the Purchase Price
being reduced by the amount of the Closing Payment that is not paid
by Buyer at the Closing, (b) the value of the Acquired Assets
transferred shall be further adjusted downward by a factor of
fifteen percent (15%) to take into account Buyer’s failure to
meet its obligations under this Agreement, and (c) Buyer shall
refund to Seller an amount equal to (i) the Net Amount (as defined
in the Management Services Agreement) actually received by Buyer
under the Management Services Agreement from the date hereof until
the Closing multiplied by (ii) the quotient obtained by dividing
(A) the amount of the Closing Payment that is not paid by Buyer at
the Closing by (B) the Purchase Price.
ARTICLE
III
THE CLOSING
3.1 Closing.
(a) The consummation of
the transactions contemplated in this Agreement (the
“Closing”) shall take
place at the offices of Xxxxx Day, 0000 Xxxxxxxxx Xxxxxx, XX, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000, or at another location mutually agreed
to by the Parties, on the earlier of (i) subject to Section 3.1(b), April 1, 2019
(provided that all the conditions to Closing set forth in
Article VII and
Article VIII ,
other than the conditions set forth in Section 7.5 and Section 8.5, have been
satisfied or waived) and (ii) such time as all of the conditions to
Closing set forth in Article VII and Article VIII have been
satisfied or waived. The date on which the Closing occurs is
referred to herein as the “Closing
Date”.
(b) If the Closing
occurs pursuant to clause (i) of Section 3.1(a), Acquired Assets
subject to any Regulatory Approvals that have not been obtained at
such time will not be transferred to Buyer at such Closing and will
remain subject to the terms of the Management Services Agreement
until such time as they are conveyed to Buyer. Upon the receipt of
any such Regulatory Approvals, the Acquired Assets subject thereto
will be transferred to Buyer within five (5) Business Days of
receipt of the associated Regulatory Approvals(s) (each such
transfer, a “Delayed
Closing”).
3.2 Closing Deliveries. At the
Closing, and, as applicable, at each Delayed Closing:
(a) Seller shall sell,
and Buyer shall purchase, the portion of the Acquired Assets sold
on such date, free and clear of all Encumbrances;
(b) Buyer shall assume
the Assumed Liabilities associated with the Acquired Assets sold on
such date;
(c) at the Closing,
Buyer shall fund the Closing Payment in accordance with
Section 2.5(b)(ii)
and/or, only in the event of any short-fall in the amount of such
required payment, an adjustment in the value of the Acquire Assets
shall be made in accordance with Section 2.7 above and Buyer
shall pay the amount contemplated by clause (c) of Section 2.7.
(d) Seller shall
deliver an executed Xxxx of Sale with respect to the portion of the
Acquired Assets sold on such date;
(e) Seller shall
deliver such other instruments as shall be reasonably requested by
Buyer to vest in Buyer title in and to the Acquired Assets sold on
such date; and
(f) Seller shall
deliver payoff letters and releases of all Encumbrances on the
Acquired Assets sold on such date, in form and substance reasonably
satisfactory to Buyer.
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ARTICLE
IV
REPRESENTATIONS AND WARRANTIES OF SELLER
As an
inducement to Buyer to enter into this Agreement, Seller hereby
makes the following representations and warranties to Buyer as of
the date hereof and as of the Closing Date (and, if applicable, on
the date of each Delayed Closing with respect to the Acquired
Assets sold on such date):
4.1 Organization and Good Standing.
Seller is a limited liability company validly existing and in good
standing under the Laws of the state of Georgia.
4.2 Authority; Validity. Seller has
the requisite power and authority necessary to enter into and
perform its obligations under this Agreement and the other
Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement by Seller and the
consummation by Seller and the Applicable Seller Subsidiaries of
the transactions contemplated herein have been duly and validly
authorized by all necessary limited liability, corporate,
partnership or similar action on the part of Seller and each
Applicable Seller Subsidiary and no further action is required on
the part of Seller or Applicable Seller Subsidiary to authorize
this Agreement or any Transaction Document to which it is a party
or the performance of its obligations hereunder or thereunder. This
Agreement has been duly and validly executed and delivered by
Seller and each other Transaction Document to which Seller or any
Applicable Seller Subsidiary is a party will be duly and validly
executed and delivered by Seller or the Applicable Seller
Subsidiary at the Closing. This Agreement and the other Transaction
Documents to which Seller or an Applicable Seller Subsidiary is a
party constitutes the legal, valid and binding obligation of Seller
or such Applicable Seller Subsidiary enforceable against Seller or
such Applicable Seller Subsidiary in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar Laws
now or hereafter in effect relating to creditors’ rights
generally or general principles of equity.
4.3 Litigation. There are no
Proceedings pending or, to the knowledge of Seller, threatened
against Seller or any Applicable Seller Subsidiary with respect to
the Acquired Assets or that would adversely affect Seller’s
or any Applicable Seller Subsidiary’s ability to perform its
obligations under this Agreement or any other Transaction Documents
to which it is a party or to consummate the transactions
contemplated hereby or thereby. There is no Order to which any of
the Acquired Assets is subject that would prevent the transfer of
such Acquired Assets according to the terms and conditions of this
Agreement.
4.4 Compliance with Legal
Requirements. Since May 4, 2018 neither Seller nor any
Applicable Seller Subsidiary has received any written notice of or
been charged with any violation of any Legal
Requirements.
4.5 Consents and Approvals. Except
as set forth on Schedule
4.5:
(a) No notices, reports
or other filings are required to be made by Seller or any
Applicable Seller Subsidiary with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by the Seller and/or any of the Applicable Seller
Subsidiaries from, any Governmental Authority in connection with
the execution, delivery and performance of this Agreement by Seller
and/or any Applicable Seller Subsidiary and the consummation of the
transactions contemplated hereby.
(b) Neither the
execution, delivery or performance by Seller of this Agreement or
any of the Transaction Documents, nor the consummation of the
transactions contemplated by this Agreement or any of the
Transaction Documents, will directly or indirectly (with or without
the giving of notice or the lapse of time or both): (i) conflict
with or result in a violation of any provision of the certificate
of formation or operating agreement (or similar governing
documents) of Seller or any Applicable Seller Subsidiary; (ii)
assuming that all filings, permits, authorizations, consents and
approvals in Schedule
4.5 are made and obtained, conflict with or result in a
violation of any Legal Requirements to which the Seller or any
Applicable Seller Subsidiary or any of the Acquired Assets is
subject; (iii) contravene, conflict with or result in a violation
or breach of, or result in a default under, any provision of any
contract to which the Seller or any Applicable Seller Subsidiary is
a party, or give any Person the right to (x) declare a default
or exercise any remedy under any such contract or (y) modify,
terminate, or accelerate any right, liability or obligation of the
Seller or any Applicable Seller Subsidiary under any such contract,
or charge any fee, penalty or similar payment to the Seller or any
Applicable Seller Subsidiary under any such contract; or (v) result
in the imposition or creation of any Encumbrance upon or with
respect to any Acquired Asset.
4.6 Revenue. The total monthly
recurring billed revenue from the Acquired Customers for January
2019 was $520,843, as validated by the Acquired Customer Historical
Valuation Report. The Acquired Customer Historical Valuation Report
does not include any Excluded Customers.
4.7 Brokers or Finders. Neither
Seller, nor any Person acting on behalf of Seller or any Applicable
Seller Subsidiary, has paid or become obligated to pay, or will
become obligated to pay upon the Closing, any fee or commission to
any broker, finder, investment banker, agent or intermediary for or
on account of the transactions contemplated by this Agreement, and
Seller shall hold harmless and indemnify Buyer from any claims with
respect to any such fees or commissions.
4.8 No other Representations or
Warranties. Except for the representations and warranties
expressly made by Seller in this Article IV, Seller makes no
representation or warranty, express or implied, at Law or in
equity, with respect to Seller, any Applicable Seller Subsidiary,
or the Acquired Assets. Buyer hereby acknowledges and agrees that,
except to the extent specifically set forth in this Agreement,
Buyer and or the Applicable Buyer Subsidiary is purchasing the
Acquired Assets on an “as-is, where is”
basis.
8
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
As an
inducement to Seller to enter into this Agreement, Buyer hereby
makes the following representations and warranties to Seller as of
the date hereof and as of the Closing Date (and, if applicable, on
the date of each Delayed Closing):
5.1 Organization and Good Standing.
Buyer is a limited liability company validly existing and in good
standing under the Laws of the State of Georgia. Buyer is not in
violation of its governing documents in any material
respect.
5.2 Authority; Validity. Buyer has
the requisite limited liability company power and authority
necessary to enter into and perform its obligations under this
Agreement and the other Transaction Documents to which it is a
party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement
by Buyer and the consummation by Buyer and/or the Applicable Buyer
Subsidiaries of the transactions contemplated herein have been duly
and validly authorized by all requisite limited liability company
or corporate authority on the part of Buyer and each Applicable
Buyer Subsidiary in respect thereof. This Agreement has been duly
and validly executed and delivered by Buyer and each other
Transaction Document to which Buyer or any Applicable Buyer
Subsidiary is a party will be duly and validly executed and
delivered by Buyer or the Applicable Buyer Subsidiary, as
applicable, at the Closing. This Agreement and the other
Transaction Documents to which Buyer or such Applicable Buyer
Subsidiary is a party constitute the legal, valid and binding
obligation of Buyer or such Applicable Buyer Subsidiary,
enforceable against Buyer or such Applicable Buyer Subsidiary in
accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws now or hereafter in
effect relating to creditors’ rights generally or general
principles of equity.
5.3 Litigation. There are no
Proceedings pending or, to the knowledge of Buyer, threatened
against Buyer or any Applicable Buyer Subsidiary, that would
adversely affect Buyer’s or any Applicable Buyer
Subsidiary’s ability to perform its obligations under this
Agreement or any other Transaction Documents to which it is a party
or to consummate the transactions contemplated hereby or
thereby.
5.4 Consents and Approvals. Except
as set forth on Schedule
5.4:
(a) No notices, reports
or other filings are required to be made by Buyer or any Applicable
Buyer Subsidiary with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by
Buyer and/or any Applicable Buyer Subsidiary from, any Governmental
Authority in connection with the execution, delivery and
performance of this Agreement by Buyer and/or any Applicable Buyer
Subsidiary and the consummation of the transactions contemplated
hereby.
(b) Neither
the execution, delivery or performance by Buyer of this Agreement
or any of the Transaction Documents to which it is a party, nor the
consummation of the transactions contemplated by this Agreement or
any of the Transaction Documents to which it is a party, will
directly or indirectly (with or without the giving of notice or the
lapse of time or both): (i) conflict with or result in a violation
of any provision of the certificate of formation or operating
agreement (or similar governing documents) of Buyer or any
Applicable Buyer Subsidiary; (ii) assuming that all filings,
permits, authorizations, consents and approvals in Schedule 5.4 are made and
obtained, conflict with or result in a violation of any Legal
Requirements to which the Buyer or any Applicable Buyer Subsidiary
or any of the Acquired Assets is subject; (iii) contravene,
conflict with or result in a violation or breach of, or result in a
default under, any provision of any contract to which the Buyer or
any Applicable Buyer Subsidiary is a party, or give any Person the
right to (x) declare a default or exercise any remedy under
any such contract or (y) modify, terminate, or accelerate any
right, liability or obligation of the Buyer or any Applicable Buyer
Subsidiary under any such contract, or charge any fee, penalty or
similar payment to the Buyer or any Applicable Buyer Subsidiary
under any such contract; or (iv) result in the imposition or
creation of any Encumbrance upon or with respect to any Acquired
Asset.
5.5 Brokers or Finders. Except for
payments that may be payable to Macquarie Capital (USA) Inc. by
Buyer or its direct or indirect equityholders, neither Buyer or any
Applicable Buyer Subsidiary, nor any Person acting on behalf of
Buyer or any Applicable Buyer Subsidiary, has paid or become
obligated to pay, or will become obligated to pay upon the Closing,
any fee or commission to any broker, finder, investment banker,
agent or intermediary for or on account of the transactions
contemplated by this Agreement, and Buyer and the Applicable Buyer
Subsidiaries shall hold harmless and indemnify Seller and each
Applicable Seller Subsidiary from any claims with respect to any
such fees or commissions.
5.6 Financial Capability. At the
Closing, Buyer will have sufficient unrestricted funds on hand
(through existing credit facilities or otherwise) to pay the
Closing Payment.
5.7 No other Representations or
Warranties. Except for the representations and warranties
expressly made by Buyer in this Article V, Buyer makes no
representation or warranty, express or implied, at Law or in
equity, with respect to Buyer, any Applicable Buyer Subsidiary, or
the transactions contemplated hereby.
9
ARTICLE VI
COVENANTS
6.1 Reasonable Efforts. Subject to
the terms and conditions set forth in this Agreement, each Party
will cooperate with the other and use commercially reasonable
efforts to take or cause to be taken all actions, and to do or
cause to be done all things, reasonably necessary, proper or
advisable under this Agreement and applicable Legal Requirements to
consummate and make effective, as soon as reasonably practicable,
the transactions contemplated by this Agreement, including
preparing and filing, as soon as reasonably practicable, all
documentation to effect notices, reports and other filings
necessary, proper or advisable to be filed with, and obtaining, as
soon as reasonably practicable, all consents, registrations,
approvals, permits and authorizations necessary, proper or
advisable to be obtained from, any third party or Governmental
Authority.
6.2 Further Assurances. In addition
to the provisions of this Agreement, from time to time after the
Closing Date, Seller and Buyer will use all commercially reasonable
efforts to execute and deliver such other instruments of
conveyance, transfer or assumption, as the case may be, and take
such other actions as may be reasonably requested to implement more
effectively the transactions contemplated hereby, and the
conveyance and transfer of the Acquired Assets. In connection
therewith, Seller shall promptly forward to Buyer (a) all mail that
it receives after the Closing Date relating to the Acquired Assets,
and (b) all payments that it receives after the Closing Date
relating to Services performed by Buyer from and after such date
(properly endorsed for the benefit of Buyer if
necessary).
6.3 Conduct of Seller’s
Business. Prior to the Closing Date, Seller will carry on
its business with respect to the Acquired Assets in the usual and
ordinary course and in substantially the same manner as conducted
on the date of this Agreement. Without limiting the generality of
the foregoing, Seller shall use all commercially reasonable efforts
to maintain in accordance with good business practice existing
relationships with its vendors and customers necessary to preserve
Acquired Customer relationships for Buyer. Seller shall not change
recurring or non-recurring rates, credit policies or collections
procedures for the Acquired Customers without the prior written
consent of Buyer, which consent shall not be unreasonably withheld,
conditioned or delayed, or sell, transfer, swap any of the Acquired
Assets.
6.4 Access. From the date hereof
until the Closing Date, or the last Delayed Closing if applicable,
Seller shall make available to Buyer during normal business hours
Seller’s personnel and any and all Books and Records and
other data that is reasonably related to the Acquired Assets,
including billing data, pricing data, product descriptions, payment
data, customer service data, regulatory data, network data and
repair records data.
6.5 Migration of Data. Seller shall
cooperate with Buyer to migrate all data related to the Acquired
Assets from the BSS and the OSS into Buyer’s (or its
designees) systems. The migration with respect to the Acquired
Assets shall be completed with respect to the Acquired Assets
within thirty (30) days following the date of this Agreement. Prior
to Closing, Buyer will handle any data classified as Customer
Proprietary Network Information, pursuant to FCC rules, in
accordance with the provisions of the Management Services
Agreement.
6.6 Regulatory Authorizations. The
Parties will use their respective reasonable best efforts to (i)
take, or cause to be taken, all appropriate action and do, or cause
to be done, all things necessary, proper or advisable under
applicable Law, to consummate and make effective the transactions
contemplated by this Agreement as promptly as practicable following
receipt of applicable Regulatory Approvals, (ii) jointly obtain
from all Regulatory Approvals, required to be obtained by a Party,
or any of their respective Subsidiaries, or to avoid any Order by
any Governmental Authority, in connection with the authorization,
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, (iii) (A) as promptly as
reasonably practicable, and in any event within five (5) Business
Days after the date hereof, make all necessary filings, and
thereafter make any other required submissions, with respect to
this Agreement required in order to obtain FCC Approval, (B) as
promptly as reasonably practicable, and in any event within ten
(10) Business Days after the date hereof, make all necessary
filings, and thereafter make any other required submissions, with
respect to this Agreement required in order to obtain all other
Regulatory Approvals, and (C) as promptly as reasonably practicable
after the date hereof, make all necessary filings, and thereafter
make any other required submissions, with respect to this Agreement
required under any other applicable Law. Seller and Buyer will
furnish to each other all information required for any application
or other filing under the rules and regulations of any applicable
Law in connection with the transactions contemplated by this
Agreement. Nothing in this Agreement will be deemed to require the
Seller, Buyer or any of their respective Subsidiaries (i) to divest
or hold separate any assets or agree to limit its future
activities, method or place of doing business, (ii) to commence any
litigation against any Person in order to facilitate the
consummation of the transactions contemplated by this Agreement, or
(iii) to defend against any litigation filed with or brought by any
Governmental Authority seeking to prevent the consummation of, or
impose limitations on, any of the transactions contemplated
hereby.
6.7 Regulatory Payments. With
effect from the date of this Agreement, Buyer shall be responsible
for managing the payment of any Regulatory Payments with respect to
the Acquired Assets, as provided in the Management Services
Agreement.
10
6.8 Notification of Customers.
Buyer shall prepare a required joint letter to the Active Customers
in form and substance reasonably satisfactory to both Parties.
Seller shall provide Buyer with the necessary contact information
for the Active Customers as part of the Acquired Customer
Historical Valuation Report or in a separate file provide within
five (5) Business Days from the date of this Agreement. Buyer shall
issue the joint notice to the Active Customers as soon as
reasonably practicable following the date of this Agreement, and
shall bear the costs and expenses of preparing the joint notice and
mailing.
6.9 Access to Information; Maintenance of
Records.
(a) For a period of
three years after the Closing Date each Party and its
Representatives shall have reasonable access to all of the Books
and Records compiled with respect to the period prior to the
Closing Date, in the possession of the other Party to the extent
that such access may reasonably be required by such Party, or other
matters relating to or affected by the operation of the Acquired
Assets.
(b) Such access shall
be afforded by the Party in possession of such Books and Records
upon receipt of reasonable advance notice and during normal
business hours; provided, however, that: (i) any such access shall
be conducted in such a manner as not to interfere unreasonably with
the operation of the business of that Party; (ii) no Party shall be
required to take any action which would constitute a waiver of the
attorney-client privilege or contravene any fiduciary duty or
binding agreement entered into prior to the date of this Agreement;
(iii) no Party shall be required to take any action which would
reveal confidential or proprietary information or trade secrets;
(iv) no Party shall be required to supply the other Party with any
information which such Party is under a legal obligation not to
supply; and (v) no Party shall be required to take any action that
would contravene any applicable Law. The applicable Party
exercising this right of access shall be solely responsible for any
costs or expenses incurred by it hereunder.
(c) If the Party in
possession of such Books and Records shall desire to dispose of any
such Books and Records prior to the expiration of such period, such
Party shall, prior to such disposition, give the other Party a
reasonable opportunity at such other Party’s expense, to
segregate and remove such Books and Records as such other Party may
select.
6.10 Solicitation.
Seller hereby agrees that for a period of one year from and after
the Closing Date, it shall not, and shall cause its Representatives
not to, directly or indirectly, solicit the Active Customers for
the purpose of providing the form of Services provided to the
Active Customers on the Closing Date. Seller agrees and
acknowledges that in order to assure Buyer that the Acquired Assets
will retain their value, the foregoing restrictions on Seller are
necessary.
6.11 Taxes.
Any sales Tax, use Tax, personal property Tax or similar Tax
attributable to the sale or transfer of the Acquired Assets
(“Transfer
Taxes”) shall be borne by Seller. Seller shall be
responsible for and shall pay any Taxes arising or resulting from
or in connection with the ownership of the Acquired Assets
attributable to the Pre-Closing Period. Buyer shall be responsible
for and shall pay any Taxes arising or resulting from or in
connection with the ownership of the Acquired Assets attributable
to the Post-Closing Period. All Taxes (not including income Taxes)
levied with respect to the Acquired Assets for a Taxable period
which includes (but does not end on) the day immediately preceding
the date on which such Acquired Assets were sold by Seller
hereunder shall be apportioned between Buyer and Seller based on
the number of days included in such period through and including
the day immediately preceding the date on which such Acquired
Assets were sold by Seller hereunder and the number of days
included in such period from and after the such date.
6.12 Redesignation
Charges. Seller or the Applicable Seller Subsidiary, shall
execute any transfer agreements or other documentation in the form
required by all incumbent local exchange carriers and any other
vendors to enable the expedited transfer of the Acquired Customers
and any underlying services to Buyer (“Redesignation Vendors”).
Seller and the Applicable Seller Subsidiary, as applicable, shall
take all such other actions (but Buyer shall pay all costs, fees
and expenses imposed by any Redesignation Vendor) required to cause
any Redesignation Vendor to redesignate the Acquired Customers and
the underlying services to Buyer or any Applicable Buyer Subsidiary
under the applicable contracts between Buyer or any Applicable
Buyer Subsidiary and such Redesignation Vendors.
ARTICLE
VII
CONDITIONS
PRECEDENT TO OBLIGATIONS OF BUYER TO CLOSE
The
obligations of Buyer to consummate the transactions contemplated by
this Agreement are subject to the satisfaction or waiver, at or
prior to the Closing (and any Delayed Closing, if applicable), of
each of the following conditions:
7.1 Accuracy of Representations.
The representations and warranties of Seller set forth in this
Agreement shall be true and correct in all material respects
(except that those representations and warranties that are
qualified as to materiality shall be true and correct in all
respects) as of the Closing Date (or the date of a Delayed Closing,
as applicable) with the same effect as though such representations
and warranties had been made on and as of the Closing Date (or the
date of a Delayed Closing, as applicable) (provided that
representations and warranties that are confined to a specified
date shall speak only as of such date). Buyer shall have received a
certificate signed by Seller to such effect.
11
7.2 Seller’s Performance.
Each covenant and agreement that Seller is required to perform or
to comply with pursuant to this Agreement at or prior to the
Closing Date (or the date of a Delayed Closing, as applicable)
shall have been duly performed and complied with in all material
respects and Buyer shall have received a certificate signed by
Seller to such effect.
7.3 No Order. No Governmental
Authority shall have enacted, issued, promulgated or entered any
Order that is in effect and has the effect of making illegal or
otherwise prohibiting the consummation of the transactions
contemplated by this Agreement or could cause any of such
transactions to be rescinded following the Closing Date (or the
date of a Delayed Closing, as applicable).
7.4 FCC Approval. Buyer or the
Applicable Buyer Subsidiary shall have received all approvals
required from the FCC (the “FCC Approval”) to acquire
the Acquired Assets.
7.5 Other Regulatory Approvals.
Buyer or the Applicable Buyer Subsidiary shall have received all
Regulatory Approvals, other than the FCC Approval, required or
necessary to acquire the Acquired Assets.
7.6 Seller’s Deliveries. Each
of the deliveries required to be made to Buyer pursuant to
Section 3.2 shall
have been so delivered.
7.7 Migration of Data. Seller shall
have provided Buyer with a copy of the information contained in its
BSS and the OSS relating to the Acquired Customers sufficient for
input into Buyer’s BSS and OSS within 30 days from the date
of this Agreement.
7.8 Closing Statement. Buyer shall
have agreed to the Closing Statement, or Seller shall have agreed
to any adjustments thereto requested by Buyer.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO
CLOSE
Seller’s
obligation to consummate the transactions contemplated by this
Agreement is subject to the satisfaction or waiver, at or prior to
the Closing, of each of the following conditions:
8.1 Accuracy of Representations.
The representations and warranties of Buyer set forth in this
Agreement shall be true and correct in all material respects
(except that those representations and warranties that are
qualified as to materiality or similar expressions shall be true
and correct in all respects) as of the Closing Date (or the date of
a Delayed Closing, as applicable) with the same effect as though
such representations and warranties had been made on and as of the
Closing Date (or the date of a Delayed Closing, as applicable)
(provided that representations and warranties that are confined to
a specified date shall speak only as of such date). Seller shall
have received a certificate of Buyer to such effect.
8.2 Buyer’s Performance. The
covenants and agreements that Buyer is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing
(or the date of a Delayed Closing, as applicable) shall have been
performed and complied with in all material respects (except that
those covenants and agreements that are qualified as to materiality
or similar expressions shall have been duly performed and complied
with in all respects) and Seller shall have received a certificate
of Buyer to such effect.
8.3 No Order. No Governmental
Authority shall have enacted, issued, promulgated or entered any
Order that is in effect and that has the effect of making illegal
or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement or could cause any of such
transactions to be rescinded following the Closing Date(or the date
of a Delayed Closing, as applicable).
8.4 FCC Approval. Buyer or the
Applicable Buyer Subsidiary shall have received the FCC
Approval.
8.5 Other Regulatory Approvals.
Buyer or the Applicable Buyer Subsidiary shall have received all
Regulatory Approvals, other than the FCC Approval, required or
necessary to acquire the Acquired Assets.
8.6 Buyer’s Deliveries. Each
of the deliveries required to be made to Seller pursuant to
Section 3.2 shall
have been so delivered.
ARTICLE
IX
TERMINATION
9.1 Termination Events.
Notwithstanding anything contained in this Agreement to the
contrary, this Agreement may only be terminated by either Seller or
Buyer if a Governmental Authority issues a Final Order prohibiting
the transactions contemplated hereby and, in any such case, such
termination shall only be effective with respect to any Acquired
Assets the subject of such Final Order. For avoidance of doubt, in
no event shall Buyer have a right to terminate this Agreement if it
fails to secure the funds necessary to fund the Closing
Payment.
12
9.2 Effect of Termination. In the
event of termination of this Agreement pursuant to Section 9.1, all rights and
obligations of the Parties under this Agreement shall terminate
without any liability of any Party to any other Party; provided
that, (a) nothing herein shall relieve any Party from any liability
for (i) breach of any provision of this Agreement or (ii) fraud or
willful misconduct and (b) Buyer shall remain obligated to make the
Closing Payment and the Acquired Assets subject to any Final Order
shall remain subject to the terms and conditions of the Management
Services Agreement. The provisions of this Section 9.2 (and, to the extent
applicable to the interpretation or enforcement of such provisions,
Article XI), shall
expressly survive the termination of this Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1 Confidentiality.
For a period of two years after the Closing Date, none of Seller
nor any of its Representatives, shall, directly or indirectly,
without the prior written consent of Buyer, disclose to any Person
(other than each other and their respective Representatives) any
confidential or proprietary information included in the Acquired
Assets; provided that the foregoing restriction shall not (a) apply
to any information generally available to, or known by, the public
(other than as a result of disclosure in violation of this
Section 10.1),
or (b) prohibit any disclosure (i) required by applicable Legal
Requirements so long as, to the extent legally permissible and
feasible, Seller provides Buyer with reasonable prior notice of
such disclosure and a reasonable opportunity to contest such
disclosure or (ii) made in connection with the enforcement of any
right or remedy relating to any of the Transaction Documents or the
transactions contemplated thereby.
10.2 Transaction
Expenses. Except as expressly provided in this Agreement,
each Party shall bear its own costs and expenses, including
attorney, accountant and other consultant fees, in connection with
the execution and negotiation of this Agreement and the
consummation of the transactions contemplated hereby, including in
connection with obtaining the Regulatory Approvals.
10.3 Public
Announcements. Unless otherwise required by applicable Legal
Requirement, Buyer, on the one hand, and Seller, on the other hand,
shall consult with each other before issuing any press release or
otherwise making any public statement with respect to the execution
of this Agreement, the terms and conditions hereof, the
consummation transactions contemplated hereby, or the activities
and operations of the other and shall not issue any such release or
make any such statement without the prior written consent of the
other (such consent not to be unreasonably withheld, conditioned or
delayed).
10.4 Notices.
All notices, consents, waivers and other communications under this
Agreement must be in writing and shall be deemed to have been duly
given when (a) delivered by hand (with written confirmation of
delivery), (b) delivered to the addressee, if sent by an overnight
delivery service (prepaid, receipt requested), or (c) received or
rejected by the addressee, if sent by registered or certified mail
(postage prepaid, return receipt requested), in each case to the
appropriate addresses and representatives (if applicable) set forth
below (or to such other addresses and representatives as a Party
may designate by notice to the other Parties):
(i)
If to Seller, then
to:
Fusion
Cloud Services, LLC
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
General Counsel
With a
copies (which shall not constitute notice) to:
Xxxxxx
Xxxx & Xxxxxx LLP
000
Xxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxx Xxxxx, Esq.
(ii)
If to
Buyer:
Lingo
Management, LLC
0000
Xxxxxxxxx Xxxx XX, Xxxxx 0000
Xxxxxxx, XX
00000
Attn:
Xxxxxxxx Xxxxxx, President
With a
copy (which shall not constitute notice) to:
Xxxxx
Day
0000
Xxxxxxxxx Xxxxxx, X.X.
Xxxxx
000
Xxxxxxx, Xxxxxxx
00000-0000
Attention: Xxxxxxx
X. Xxxxxxx
13
10.5 Waiver.
Neither the failure nor any delay by any Party in exercising any
right, power, or privilege under this Agreement or the documents
referred to in this Agreement shall operate as a waiver of such
right, power or privilege, and no single or partial exercise of any
such right, power, or privilege shall preclude any other or further
exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted
by applicable Law, (a) no waiver that may be given by a Party shall
be applicable except in the specific instance for which it is
given, and (b) no notice to or demand on one Party shall be deemed
to be a waiver of any right of the Party giving such notice or
demand to take further action without notice or
demand.
10.6 No
Survival of Representations and Warranties. The
representations and warranties of the Parties contained herein and
in any certificate or other writing delivered pursuant hereto shall
not survive the Closing Date; provided, that if there are one or
more Delayed Closings, the representations and warranties shall
survive until the last Delayed Closing.
10.7 Entire
Agreement; Amendment. This Agreement (including the
Exhibits) and the other Transaction Documents supersede all prior
agreements between Buyer and any Applicable Buyer Subsidiary, on
the one hand, and Seller and/or the Applicable Seller Subsidiaries,
on the other hand, with respect to its subject matter and
constitute a complete and exclusive statement of the terms of the
agreements between Buyer and the Applicable Buyer Subsidiary, on
the one hand, and Seller and each of the Applicable Seller
Subsidiaries, on the other hand, with respect to their subject
matter. For the avoidance of doubt, this Section 10.7 does not supersede
(i) the Agreement and Plan of Merger by and among Fusion
Telecommunications International, Inc., Fusion BCHI Acquisition
LLC, and Birch Communications Holdings, Inc. dated August 26, 2017,
as amended, (ii) the Transition Services Agreement by and among
Fusion Connect, Inc. and Lingo Management, LLC, dated May 4, 2018
or (iii) the Carrier Solutions Wholesale Master Services Agreement
by and between Fusion Connect, Inc. and Lingo Management, LLC,
dated May 4, 2018. This Agreement may not be amended except by a
written agreement executed by all of the Parties.
10.8 Assignment.
This Agreement, and the rights, interests and obligations
hereunder, shall not be assigned by either Party by operation of
Law or otherwise without the express written consent of the other
Party (which consent may be granted or withheld in the sole
discretion of such other Party); provided, however, that Buyer shall be
permitted, upon prior notice to Seller, to assign all or part of
its rights or obligations hereunder, including the rights to
acquire some or all of the Acquired Assets, to the Applicable Buyer
Subsidiaries.
10.9 Severability.
The provisions of this Agreement shall be deemed severable, and the
invalidity or unenforceability of any provision shall not affect
the validity or enforceability of the other provisions hereof. If
any provision of this Agreement, or the application thereof to any
Person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in
order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and
(b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected
by such invalidity or unenforceability.
10.10 Governing
Law; Consent to Jurisdiction and Venue; Jury Trial
Waiver.
(a) This Agreement
shall be governed by, and construed in accordance with, the Laws of
the State of Delaware applicable to contracts made to be performed
entirely in such state without regard to principles of conflicts or
choice of laws or any other Law that would make the Laws of any
other jurisdiction other than the State of Delaware applicable
hereto.
(b) The Parties consent
to service of process by mail (in accordance with Section 10.4) or any other
manner permitted by Law.
(c) TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY
HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN
ANY FORUM IN RESPECT OF ANY ISSUE, ACTION, CLAIM, CAUSE OF ACTION,
SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR
INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY ACKNOWLEDGES
THAT IT HAS BEEN INFORMED BY THE OTHER PARTY THAT THIS SECTION 10.10(c) CONSTITUTES A
MATERIAL INDUCEMENT UPON WHICH THE PARTIES ARE RELYING AND WILL
RELY ON IN ENTERING INTO THIS AGREEMENT AND ANY OTHER AGREEMENTS
RELATING HERETO OR CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.10(c) WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER
OF ITS RIGHT TO TRIAL BY JURY.
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10.11 Counterparts.
This Agreement and any amendment hereto may be executed in one or
more counterparts, each of which shall be deemed to be an original
of this Agreement or such amendment and all of which, when taken
together, shall be deemed to constitute one and the same
instrument. Notwithstanding anything to the contrary in
Section 10.4,
delivery of an executed counterpart of a signature page to this
Agreement or any amendment hereto by email attachment shall be
effective as delivery of a manually executed counterpart of this
Agreement or such amendment, as applicable.
10.12 Parties
in Interest; No Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the Parties and
their respective successors and permitted assigns. This Agreement
is for the sole benefit of the Parties and their permitted assigns,
and nothing herein, express or implied, is intended to or shall
confer upon any other Person any legal or equitable benefit, claim,
cause of action, remedy or right of any kind.
10.13 Cumulative
Remedies. All rights and remedies of either Party are
cumulative of each other and of every other right or remedy such
Party may otherwise have at Law or in equity, and the exercise of
one or more rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of other rights or remedies,
including the right to specific performance of the terms
hereof
10.14 Non-Recourse.
Any claim or cause of action based upon, arising out of, or related
to this Agreement may only be brought against Persons that are
expressly named as Parties, and then only with respect to the
specific obligations set forth herein. No former, current or future
direct or indirect equityholders, controlling Persons,
stockholders, directors, officers, employees, members, managers,
agents, trustees, Affiliates, general or limited partners or
assignees of the Parties or of any former, current or future direct
or indirect equityholder, controlling Person, stockholder,
director, officer, employee, member, manager, agent, trustee,
Affiliate, general or limited partner or assignee of any of the
foregoing (collectively, but for the avoidance of doubt excluding
the Parties) will have any liability or obligation for any of the
representations, warranties, covenants, agreements, obligations or
liabilities of any Party under this Agreement or for any action
based on, in respect of, or by reason of, the transactions
contemplated hereby (including the breach, termination or failure
to consummate any of the transactions), in each case whether based
on contract, tort or strict liability, by the enforcement of any
assessment, by any legal or equitable action, by virtue of any
statute, regulation or applicable Law or otherwise and whether by
or through attempted piercing of the corporate, limited liability
company or partnership veil, by or through a claim by or on behalf
of a Party hereto or another Person or otherwise.
10.15 Effective
Time. The transactions contemplated by this Agreement shall
be deemed to be effective as of 12:01 a.m. (Eastern Time) on the
date hereof.
[Signature page follows.]
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IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the day and year first above written.
FUSION
CLOUD SERVICES, LLC
By:
/s/ Xxxxx X. Xxxxxxxx,
Xx.
Name:
Xxxxx X. Xxxxxxxx, Xx.
Title:
Executive Vice President and General Counsel
LINGO
MANAGEMENT, LLC
By:
/s/ Xxxxxxxx
Xxxxxx
Name: Xxxxxxxx Xxxxxx
Title:
President
Exhibit A – Xxxx of Sale
XXXX OF SALE
Pursuant to the
Asset Purchase Agreement (the “Agreement”), dated as the
1ST day of
February 2019, by and between Fusion Cloud Services, LLC (f/k/a
Birch Communications, LLC), a limited liability company formed
under the laws of the State of Georgia (“Seller”), and Lingo
Management, LLC, a limited liability company formed under the laws
of the State of Georgia (“Buyer”), and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller on behalf of itself and the Applicable
Seller Subsidiaries, does hereby unconditionally and irrevocably
sell, assign, transfer, convey and deliver unto Buyer and the
Applicable Buyer Subsidiaries, and their successors and assigns,
the Acquired Assets (as defined in the Agreement) identified in
Annex
A hereto, intending hereby to convey good, valid and
marketable title to all of the Acquired Assets listed in
Annex
A to Buyer free and clear of all Encumbrances (as defined in
the Agreement) to have and to hold those Acquired Assets from and
after the date hereof.
Seller
hereby covenants to and agrees with Buyer, its successors and
assigns, to execute, acknowledge and deliver to, or to cause to be
executed, acknowledged and delivered to Buyer, its successors and
assigns, all such further deeds, assignments, transfers,
conveyances, powers of attorney and assurances that may be
reasonably requested by Buyer for the selling, assigning,
transferring, conveying, delivering, assuring and confirming to
Buyer, its successors or assigns, or for aiding and assisting in
collecting or reducing to Buyer’s possession, the Acquired
Assets listed in Annex
A.
To the
extent of any conflict between the terms of this Xxxx of Sale and
the Agreement, the terms of the Agreement shall govern and
control.
This
Xxxx of Sale shall be binding upon the successors and assigns of
Seller and the Applicable Seller Subsidiaries and shall inure to
the benefit of the successors and assigns of Buyer and the
Applicable Buyer Subsidiaries.
The
provisions of Sections 10.2 (Transaction Expenses), 10.4 (Notices)
and 10.10 (Governing Law; Consent to Jurisdiction and Venue; Jury
Trial Waiver) of the Agreement shall apply to this Xxxx of Sale and
are hereby incorporated herein by this reference.
IN WITNESS WHEREOF, Seller has caused
this Xxxx of Sale to be duly executed and delivered as of this day
of , 2019.
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FUSION CLOUD SERVICES, LLC
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By:
__________________________
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Name:
Xxxxx X. Xxxxxxxx, Xx.
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Title:
EVP and General Counsel
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