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EXHIBIT 10.24
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BUSINESS PURCHASE AGREEMENT
BUSINESS PURCHASE AGREEMENT, dated as of July 14, 1999 (the 'Agreement"),
between USURF America, Inc., a Nevada corporation ("Purchaser"), and Xxxx
Xxxx ('Owner"), d/b/a xxxxx.xxx, a sole proprietorship (the "Proprietorship").
WHEREAS, the Proprietorship operates as an Internet web site facilitating
and conducting electronic commerce, or e-commerce, over the Internet; and
WHEREAS, Owner is the sole owner of the Proprietorship; and
WHEREAS, Purchaser desires to purchase all of the assets of the
Proprietorship, including the name, good will and contract rights, from
Owner, and Owner desires to sell all of the assets, including the name,
good will and contract rights, of the Proprietorship to Purchaser (the
"Purchase"); and
WHEREAS, each of the parties to this Agreement desires to make certain
representations, warranties and agreements in connection herewith and also
to prescribe various conditions thereto; and
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Purchaser and Owner hereby agree as follows:
ARTICLE I. THE PURCHASE
Section 1.1. Purchase and Sale. Owner hereby sells to Purchaser and
Purchaser hereby buys from Owner all of the assets of the Proprietorship (a
list of such assets being attached hereto as Exhibit "A" and incorporated
herein by this reference), including, but not limited to, (a) the name and
good will, (b) the following Internet domain names, and all of the rights
thereto and content contained therein, (i) xxx.xxxxx.xxx, (ii)
xxx.xxxxxxx.xxx and (iii) xxx.xxxxxxx.xxx, (c) all of the content of each
such Internet domain and (d) any and all rights arising out of
revenue-sharing arrangements and "click- through" relationships with
e-commerce companies, all at the price and subject to all of the terms and
conditions set forth herein.
Section 1 2. Liabilities. Purchaser does not assume, nor does Purchaser
agree to assume, pay, discharge or perform any obligations, liabilities,
including, without limitation, taxes of any nature and description owed or
accrued as of the date of this Agreement and as of Closing, or commitments
of Owner, including, but not limited to, any equipment or real estate
leases, obligations of any kind to present or former employees, sales
representatives and independent contractors. Further, Owner hereby
indemnifies and holds Purchaser harmless as to any and all liabilities,
claims, loss or damage arising out of the operations of the business
conducted under the name "xxxxx.xxx" carried on by Owner prior to the
Closing and, in the event of any suit or other proceeding related to any
such liability, claim, loss or damage, Owner shall provide, at his sole
expense, a defense thereto.
Section 1.3. Purchase Price; Payment. The purchase price for the
Proprietorship, including the assets described in Section 1.1, shall be
$600,000, payable by delivery, at the Closing hereunder, of 150,000 of
Purchaser s $0001 par value common stock (the "Acquisition Stock"), which
shares shall be valued at $4.00 per share.
Section 1.4. Delivery of Xxxx of Sale and Assignment. At the Closing, Owner
shall deliver to Purchaser a Xxxx of Sale and Assignment, substantially in
the form of Exhibit "B" attached hereto, relating to the assets of the
Proprietorship purchased and sold hereunder.
Section 1.5. Allocation of Purchase Price. The purchase price may be
allocated among the assets acquired hereunder by Purchaser, in its sole
discretion.
Section 1.6. Closing. The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place (a) at the offices of the
Proprietorship at 2:00 p.m., local time, on July 27,1999, or (b) at such
other time and place and on such other date as all of the parties shall
agree in writing (the "Closing Date").
ARTICLE II. FURTHER AGREEMENTS
Section 2.1. Registration Rights. Owner, as the recipient of the shares of
Acquisition Stock to be delivered by Purchaser hereunder, shall have the
registration rights with respect to his shares of the Acquisition Stock as
are set forth in the form of Registration Rights Letter Agreement (the
"Registration Agreement") attached hereto as Exhibit "C". Purchaser agrees
and undertakes that is shall, with all reasonable diligence, prepare, file
and pursue to effectiveness a registration statement which shall include,
in part, certain of the shares of the Acquisition Stock as required by the
Registration Agreement.
Section 2.2. Consulting. As further inducement for Purchaser to execute
this Agreement, Owner agrees that, for a period of two months following the
Closing hereunder, Owner shall provide consulting services to Purchaser
relating to the business and assets that are the subject of this Agreement.
During such two- month period, Owner shall provide to Purchaser up to 15
hours of consulting services per week, during normal business hours of
Owner; provided, however, that Purchaser shall pay Owner s reasonable out-
of-pocket expenses, including, without limitation, travel, lodging and per
diem expenses, associated with his performing the consulting services on
behalf of Purchaser.
Section 2.3. Further Action. Upon the terms and subject to the conditions
hereof, each of the parties hereto shall use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all other
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement.
Section 2.4. Public Announcements. Purchaser shall have the exclusive right
to issue a press release or otherwise make any public statements with
respect to the transactions contemplated by this Agreement.
Section 2.5. Access to Information: Confidentiality. (a) From the date
hereof to the Closing Date, Owner shall, and shall cause his affiliates,
managers, officers, employees, auditors and agents to, afford the officers,
employees and agents of Purchaser complete access at all reasonable times
to the Proprietorship s officers, employees, agents, properties, offices,
plants and other facilities and to all books and records, and shall furnish
Purchaser with all financial, operating and other data and information as
Purchaser, through its officers, employees or agents, may reasonably
request; provided, however, that Owner shall not be required to provide
access or furnish information which it is prohibited by law or contract to
provide or furnish.
(b) Each of Purchaser and Owner shall, and shall cause their respective
affiliates and their respective officers, directors, employees and agents,
to hold in strict confidence all data and information obtained by them from
one another or their respective subsidiaries, affiliates, directors,
officers, employees and agents (unless such information is or becomes
readily ascertainable from public or published information or trade sources
or public disclosure or such information is required by law) and shall
insure that such officers, directors, employees and agents do not disclose
such information to others without the prior written consent of Purchaser
and Owner, as the case may be.
(c) In the event of the termination of this Agreement, Purchaser shall, and
shall cause its affiliates, officers, directors, employees and agents to,
(i) return promptly every document furnished to it by Owner or any of Owner
s affiliates, managers, officers, employees and agents in connection with
the transactions contemplate hereby and any copies thereof, and (ii) cause
others to whom such documents may have been furnished promptly to return
such documents and any copies thereof Purchaser may have made.
(d) No investigation pursuant to this Article II shall affect any
representations or warranties of the parties herein or the conditions to
the obligations of the parties hereto.
Section 2.6. Notification of Certain Matters. Owner shall give prompt
notice to Purchaser of (a) the occurrence or non-occurrence of any event,
the occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate, and (b) any failure of Owner to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to
this Article II shall not limit or otherwise affect the remedies available
to Purchaser hereunder. Purchaser shall give prompt notice to Owner of (a)
the occurrence or non-occurrence of any event, the occurrence or
non-occurrence of which would be likely to cause a representation or
warranty contained in this Agreement to be untrue or inaccurate, and (b)
any failure of Purchaser to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this Article II shall
not limit or otherwise affect the remedies available to Owner hereunder.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Owner that:
Section 3.1. Organization and Corporate Authority. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada and is qualified to do business as a foreign
corporation in all jurisdictions where the ownership of property or
maintenance of an office would require qualification. Purchaser has all
requisite corporate power and authority, governmental permits, consents,
authorizations, registrations, licenses and memberships necessary to own
its property and to carry on its business in the places where such
properties are now owned and operated or such business is being conducted.
Section 3.2 Authority Relative to this Agreement. Purchaser has all
necessary corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement by Purchaser and the consummation by Purchaser if the
transactions contemplated hereby have been duly authorize by all necessary
corporate action on the part of Purchaser. This Agreement has been duly
executed and delivered by Purchaser and, assuming the due execution and
delivery by Owner, constitutes a legal, valid and binding obligation of
Purchaser.
Section 3.3. No Conflict: Required Filings and Consents. (a) The execution
and delivery of this Agreement by Purchaser do not, and the performance of
this Agreement by Purchaser shall not, (i) conflict with or violate either
the Articles of Incorporation or Bylaws of Purchaser, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Purchaser or by which it or its properties is bound or affected, or (iii)
result in any breach of or constitute a default ( or an event which with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or encumbrance on any of the
property or assets of Purchaser pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Purchaser is a party or by which
Purchaser or any of its properties is bound or affected, except for any
such breaches, defaults or other occurrences which would not, individually
or in the aggregate, have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by Purchaser do not, and
the performance of this Agreement by Purchaser shall not, require any
consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or
foreign, except for applicable requirements of the Securities Act of 1933,
as amended (the "'33 Act"), the Securities Exchange Act of 1934 (the "'34
Act") and State securities laws.
Section 3.4. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
and on behalf of Purchaser.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF OWNER
Owner hereby represents and warrants to Purchaser that, except as set forth
in the Disclosure Schedule delivered prior to the date which is three days
prior to the Closing Date by Owner to Purchaser (the "Owner Disclosure
Schedule"):
Section 4.1. Status. The Proprietorship is the sole proprietorship of Owner
doing business under the fictitious name "xxxxx.xxx" in the City of
Burbank, County of Los Angeles, California, and has the requisite power and
authority and is in possession of all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates, approvals and orders
to own, operate or lease the properties that it purports to own, operate or
lease and to carryon its business as it is now being conducted, and is duly
qualified as a foreign entity to do business, and is in good standing, in
each jurisdiction where the character of its properties owned, operated or
leased or the nature of its activities makes such qualification necessary,
except for such failures which, when taken together with all other such
failures, would not have a Material Adverse Effect. The Proprietorship has
not received any notice of proceedings relating to the revocation or
modification of any such franchises, grants, authorizations, licenses,
permits, easements, consents, certificates, approvals or orders. The term
"Material Adverse Effect" as used in this Article IV, means any change in
or effect on the business of the Proprietorship that is or is reasonably
likely to be materially adverse to the business, operations, properties
(including intangible properties), prospects, condition (financial or
otherwise), assets or liabilities of the Proprietorship taken as a whole.
Section 4.2. Options. Except as set forth in the Owner Disclosure Schedule,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the purchase of any such interest
in the Proprietorship or obligating Owner to sell any interest in the
Proprietorship.
Section 4.3. No Conflict: Required Filings and Consents. (a) The execution
and delivery of this Agreement by Owner does not, and the performance of
this Agreement by Owner shall not, (i) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Owner or the
Proprietorship or by which its properties are bound or affected, or (ii)
result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or encumbrance on any of the
properties or assets of the Proprietorship pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which the Proprietorship is a party or
by which the Proprietorship or its properties are bound or affected, except
for such breaches, defaults or other occurrences which would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by Owner does not, and the
performance of this Agreement shall not, require any consent, approval,
authorization or permit of, or filing with or notification of, any
governmental or regulatory authority, domestic or foreign.
Section 4.4. Compliance. The Proprietorship is not in conflict with, or in
default or violation of, (a) any law, rule, regulation, order, judgment or
decree applicable to the Proprietorship or by which its properties are
bound or affected, including, without limitation, health and safety,
environmental and civil rights laws and regulations and zoning ordinances
and building codes, or (b) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise, easement, consent, order or
other instrument or obligation to which the Proprietorship is a party or by
which the Proprietorship or its properties are bound or affected, except
for any such conflicts, defaults or violations which would not have,
individually or in the aggregate, a Material Adverse Effect.
Section 4.5. Financial Statements. Owner has delivered, as part of the
Owner Disclosure Schedule, to Purchaser copies of the unaudited financial
statements of the Proprietorship since inception through June 30, 1999,
which financial statements are accurate to the best knowledge of Owner.
Section 4.6. Absence of Certain Changes or Events. Since June 30, 1999,
except as contemplated by this Agreement or disclosed in the Owner
Disclosure Schedule, the Proprietorship has conducted its business only in
the ordinary course and in a manner consistent with past practice and,
since such date, there has not been (a) any change in the financial
condition, results of operations, business or prospects of the
Proprietorship having a Material Adverse Effect, (b) any damage,
destruction or loss (whether or not covered by insurance) with respect to
any assets of the Proprietorship having a Material Adverse Effect, (c) any
material change by the Proprietorship in its accounting methods, principles
or practices, or (d) any revaluation by the Proprietorship of any of its
assets, including, without limitation, writing down the value of inventory
or any notes, accounts receivable or other investments which would,
individually or in the aggregate, exceed five percent of the total assets
of the Proprietorship as reflected on the financial statements of the
Proprietorship delivered to Purchaser hereunder.
Section 4.7. Absence of Litigation. Except as disclosed in the Owner
Disclosure Schedule, there are no claims, actions, proceedings or
investigations pending or, to the best knowledge of Owner, threatened
against the Proprietorship, or any properties or rights of the
Proprietorship, before any court, arbitrator, or administrative,
governmental or regulatory authority or body, that, individually or in the
aggregate, would have a Material Adverse Effect. As of the date hereof,
neither Owner, the Proprietorship nor its properties is subject to any
order, writ, judgment, injunction, decree, determination or award having a
Material Adverse Effect.
Section 4.8. Labor Matters. Except as set forth in the Owner Disclosure
Schedule, (a) there are no controversies pending or, to the knowledge of
Owner, threatened, between the Proprietorship and any of its employees,
which controversies have a Material Adverse Effect; and (b) the
Proprietorship is not a party to any collective bargaining agreement or
other labor union contract.
Section 4.9. Contracts. The Owner Disclosure Schedule lists or describes
all contracts authorizations, approvals or arrangements to which Owner
and/or the Proprietorship is a party, or by which it is bound, as of the
date hereof, and which (a) obligates or may obligate Owner and/or the
Proprietorship to pay more than $500; or (b) are financing documents, loan
agreements or agreements providing for the guarantee of the obligations of
any party in each case involving an obligation in excess of $1,000.
Section 4.10. Title to Property and Leases. (a) Each asset owned or leased
by Owner and/or the Proprietorship is owned or leased free and clear of any
mortgages, pledges, liens, security interests, conditional and installment
sale agreements, encumbrances, charges or other claims of third parties of
any kind.
(b) All leases of real property leased for the use or benefit of the
Proprietorship to which Owner and/or the Proprietorship is a party, and all
amendments and modifications thereof are in full force and effect and have
not been modified or amended and there exists no material default under the
leases by Owner and/or the Proprietorship, nor any event which, with the
giving of notice or lapse of time, or both, would constitute a material
default thereunder by Owner and/or the Proprietorship.
(c) A statement describing all assets and liabilities, absolute and
contingent, of the Proprietorship is included in the Owner Disclosure
Schedule.
Section 4.11. Insurance. All material properties of the Proprietorship are
covered by valid and currently effective insurance policies issued in favor
of Owner and/or the Proprietorship, in such amounts and against such risks
and losses as are customary in their locales of operation for companies
operating similar businesses and operations, and Owner and/or the
Proprietorship is included as an insured party under such policies, with
full rights as a loss payee. Copies of all such insurance policies shall be
included in the Owner Disclosure Schedule.
Section 4.12. Taxes. Owner has filed all federal and state tax returns and
reports and, to the best of Owner s knowledge, all state, local and foreign
tax returns and reports required to be filed have been filed and Owner has
paid and discharged all taxes, including sales and use taxes, shown as due
thereon and has paid all applicable state and local ad valorem taxes as are
due, except such as are being contested in good faith by appropriate
proceedings and except for such filings, payments or other occurrences
which would not have a Material Adverse Effect. Neither the IRS nor any
other taxing authority or agency is now asserting or, to the best of Owner
s knowledge, threatening to assert against Owner any deficiency or claim
for additional taxes or interest thereon or penalties in connection
therewith. Owner has not granted any waiver of any statute of limitations
with respect to, or any extension of a period for the assessment of, any
federal, state, county, municipal or foreign income tax.
Section 4.13. No Legal Disability. Owner represents and warrants to
Purchaser that he is under no legal disability with respect to entering
into this Agreement.
Section 4.14. Ownership of the Proprietorship. Owner represents and
warrants that he is the sole owner of the Proprietorship free and clear of
any encumbrances and liens, except as disclosed in the Owner Disclosure
Schedule.
Section 4.15. Cooperation of Owner. Owner represents and warrants that he
will assist and cooperate with Purchaser s attorneys and accountants as is
necessary for Purchaser to comply with applicable provisions of the '33 Act
and the '34 Act, including the rules and regulations promulgated thereunder.
Section 4.16. Receipt of Disclosure. Owner hereby represents and warrants
that he has received and reviewed all of the following documents: (a)
Annual Report on Form 1 O-KSB for the year ended December 31, 1998, (b)
Quarterly Report on Form 10-QSB for the period ended March 31, 1999, (c)
Current Report on Form 8-K/A, date of event reported: January 29, 1999, and
( d) Current Report on Form 8-K, date of event reported: July 6, 1999. With
respect to such information, Owner further represents and warrants that he
has had an opportunity to ask questions of, and to receive answers from,
the officers of Purchaser.
Section 4.17. Representations Relating to Acquisition Stock. Owner
represents and warrants to Purchaser that the shares of Acquisition Stock
being acquired pursuant to this Agreement are being acquired for his
account and for investment and not with a view to the public resale or
distribution of such shares and further acknowledges that the shares of
Acquisition Stock being issued have not been registered under the '33 Act
or any state securities law and are "restricted securities, as that term is
defined in Rule 144 promulgated by the Securities and Exchange Commission,
and must be held indefinitely, unless they are subsequently registered or
an exemption from such registration is available.
Section 4.18. Consent to Legend. Owner consents to the placement of a
legend restricting future transfer on the share certificates representing
the Acquisition Stock delivered hereunder, which legend shall be in the
following, or similar, form:
"THE STOCK REPRESENTED BY THIS CERTIFICATE HAS BEEN ISSUED IN RELIANCE UPON
THE EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(2) OF THE SECURITIES
ACT OF 1933, AS AMENDED. THE STOCK MAY NOT BE TRANSFERRED WITHOUT
REGISTRATION EXCEPT IN TRANSACTIONS EXEMPT FROM SUCH REGISTRATION."
ARTICLE V. CONDUCT OF BUSINESS PRIOR TO THE CLOSING
Section 5.1. Conduct of Business by the Proprietorship Prior to the
Closing. Owner covenants and agrees that, between the date of this
Agreement and the Closing Date, unless Purchaser shall otherwise agree in
writing, the business of the Proprietorship shall be conducted only in, and
the Proprietorship shall not take any action except in, the ordinary course
of business and in a manner consistent with past practice; and Owner shall
use its best efforts to preserve substantially intact the business
organization of the Proprietorship, to keep available the services of the
present officers, managers, employees and consultants of the Proprietorship
and to preserve the present relationships of the Proprietorship with
customers, suppliers and other persons with which the Proprietorship has
significant business relations. By way of amplification and not limitation,
except as contemplated by this Agreement, Owner shall not cause the
Proprietorship to do, or propose to do, any of the following without the
prior written consent of Purchaser, which consent shall not be unreasonably
withheld: (a) issue, sell, pledge, dispose of, encumber or authorize the
issuance, sale, pledge, disposition or encumbrance of (i) any interest of
any class, or any options, warrants, convertible securities or other rights
of any kind to acquire any ownership interest, in the Proprietorship or
(ii) any assets of the Proprietorship or any other material assets of the
Proprietorship other than in the ordinary course of business consistent
with past practices;
(b) (i) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof; (ii) incur any indebtedness for borrowed money or issue
any debt securities or assume, guaranty or endorse or otherwise as an
accommodation become responsible for, the obligations of any person, or
make any loans or advances, except in the ordinary course of business and
consistent with past practice; (iii) authorize any single capital
expenditure which is in excess of $1,000 or capital expenditures which are,
in the aggregate, in excess of $3,000 for the Proprietorship, or (iv) enter
into or amend any contract, agreement, commitment or arrangement to any of
the effects set forth in this paragraph (b) of Section 5.1 ;
(c) increase the compensation payable or to become payable to its managers,
officers or employees, except for increases in salary or wages of employees
of the Proprietorship who are not managers or officers of the
Proprietorship in accordance with past practices, or grant any severance or
termination pay to, or enter into any employment or severance agreement
with, any manager, officer or employee of the Proprietorship, or establish,
adopt, enter into or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any managers, officers or employees;
(d) take any action other than in the ordinary course of business and in a
manner consistent with past practice with respect to accounting policies or
procedures (including, without limitation, procedures with respect to the
payments of accounts payable and collection of accounts receivable);
(e) settle or compromise any material federal, state, local or foreign
income tax liability; or
(f) pay, discharge, compromise or consent to any arrangements concerning or
satisfy any claims, liabilities or obligations (absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the payment, discharge,
compromise, settlement, arrangement or satisfaction in the ordinary course
of business and consistent with past practice of liabilities reflected or
reserved against in the financial statements of the Proprietorship or
incurred in the ordinary course of business and consistent with past practice.
Section 5.2. Third Party Consents. Each party to this Agreement shall use
its best efforts to obtain, as soon as reasonably practicable, all permits,
authorizations, consents, waivers and approvals from third parties or
governmental authorities necessary to consummate this Agreement and the
transactions contemplated hereby.
ARTICLE VI. CONDITIONS OF THE PURCHASE
Section 6.1. Conditions to Obligation of Each Party to Effect the Purchase.
The respective obligations of each party to effect the Purchase shall be
subject to the fulfillment of all of the following conditions precedent at
or prior to the Closing Date:
(a) No Order. No United States or state governmental authority or other
agency or commission or United States or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any statute, rule, regulation, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and has the effect
of making the purchase and sale of the Interests contemplated hereunder
illegal or otherwise prohibiting consummation of the transactions
contemplated by this Agreement.
(b) No Challenge. There shall not be pending or threatened any action,
proceeding or investigation before any court or administrative agency by
any government agency or any other person challenging, or seeking material
damages in connection with the purchase and sale of the assets of the
Proprietorship contemplated hereunder or otherwise materially adversely
affecting the business, assets, prospects, financial condition or results
of operations of the Proprietorship.
Section 6.2. Additional Conditions to Obligations of Purchaser. The
obligations of Purchaser to effect the Purchase are also subject to the
fulfillment of all of the following conditions precedent at or prior to the
Closing Date:
(a) Due Diligence Investigation. Purchaser s obligations hereunder shall be
subject to its due diligence investigation of the Proprietorship whereby
Purchaser shall not find any unacceptable (as determined by Purchaser in
its sole discretion) item, condition or liability (an "Unacceptable Item").
Should Purchaser find an Unacceptable Item with respect to the
Proprietorship, Purchaser shall notify Owner in writing of such finding and
this Agreement shall become null and void, with no party having liability
hereunder. Purchaser s written notice pursuant to this Section 6.2(a) shall
be delivered to Owner prior to the close of business on the date that is 14
days from the date of the mutual execution of this Agreement. Should no
written notice be delivered by Purchaser under this Section 6.2(a) prior to
such date, Purchaser will be deemed to have not found an Unacceptable Item
with respect to the Proprietorship.
(b) Representations and Warranties. The representations and warranties of
Owner contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date, except for changes contemplated by
this Agreement and except for those representations and warranties which
address matters only as of a particular date (which shall remain true and
correct as of such date), with the same force and effect as if made on and
as of the Closing Date, and Purchaser shall have received a Certificate of
the Owner of the Proprietorship which is to that effect, which certificate
shall be in the form attached hereto as Exhibit "D".
(c) Consents Obtained. All consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by
Owner for the authorization, execution and delivery of this Agreement and
the consummation by her of the transactions contemplated hereby shall have
been obtained and made by Owner.
(d) No Material Adverse Change. There shall have been no material adverse
change in the condition, fina.ncial or otherwise, of the Proprietorship.
(e) Deliveries at Closing. At or prior to the Closing, Owner shall have
delivered to Purchaser the following:
(1) A Xxxx of Sale and Assignment, in the form of Exhibit 'B" attached
hereto, duly executed;
(2) One or more duly executed Assignments of the Proprietorship s rights
under thee-commerce agreements listed in Exhibit "A" attached hereto, which
Assignments shall be in a form acceptable to Purchaser; and
(3) A Certificate of the Owner, in the form of Exhibit "D" attached hereto,
duly executed.
Section 6.3. Additional Conditions to Obligation of Owner. The obligation
of Owner to effect the Purchase is also subject to fulfillment of all of
the following conditions precedent, at or prior to the Closing Date:
(a) Representations and Warranties. The representations and warranties of
Purchaser contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date, except for changes
contemplated by this Agreement and except for those representations and
warranties which address matters only as of a particular date (which shall
remain true and correct as of such date), with the same force and effect as
if made on and as of the Closing Date, and the Company shall have received
a Certificate of the President of Purchaser which is to that effect, which
certificate shall be in the form attached hereto as Exhibit "E".
(b) Consents Obtained. All consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by
Purchaser for the authorization, execution and delivery of this Agreement
and the consummation by them of the transactions contemplated hereby shall
have been obtained and made by Purchaser.
(c) Deliveries at Closing. At or prior to the Closing, Purchaser shall have
delivered to Owner the following:
(1) A certificate representing 150,000 shares (the Acquisition Stock) of
the $0001 par value common stock of Purchaser;
(2) The Registration Agreement, in the form of Exhibit "C" attached hereto,
duly executed; and
(3) A Certificate of the President of Purchaser, in the form of Exhibit "E"
attached hereto, duly executed.
ARTICLE VII. INDEMNIFICATION
Section 7.1. General Indemnification Covenants -Owner. Owner shall
indemnify, save and keep Purchaser and its affiliates, agents, attorneys,
successors and permitted assigns (the "Purchaser Indemnitees"), harmless
against and from all liability , demands, claims, actions or causes of
action, assessments, losses, fines, penalties, costs, damages and expenses,
including reasonable attorneys fees, disbursements and expenses
(collectively, the "Damages"), sustained or incurred by any of the
Purchaser Indemnitees as a result of, arising out of or by virtue of any
misrepresentation, breach of any warranty or representation or
non-fulfillment of any agreement or covenant on the part of Owner, whether
contained in this Agreement or any exhibit or schedule hereto or any
written statement or certificate furnished or to be furnished to Purchaser
pursuant hereto or in any closing document delivered by Owner in connection
herewith.
Section 7.2. General Indemnification Covenants -Purchaser. Purchaser shall
indemnify, save and keep Owner and his affiliates, agents, attorneys,
successors and permitted assigns (the "Owner Indemnitees"), harmless
against and from all liability, demands, claims, actions or causes of
action, assessments, losses, fines, penalties, costs, damages and expenses,
including reasonable attorneys fees, disbursements and expenses
(collectively, the "Damages"), sustained or incurred by any of the Owner
Indemnitees as a result of, arising out of or by virtue of any
misrepresentation, breach of any warranty or representation or
non-fulfillment of any agreement or covenant on the part of Purchaser,
whether contained in this Agreement or any exhibit or schedule hereto or
any written statement or certificate furnished or to be furnished to Owner
pursuant hereto or in any closing document delivered by Purchaser in
connection herewith.
Section 7.3. Tax Indemnity. (a) Owner hereby agrees to pay, indemnify,
defend and hold Purchaser harmless from and against any and all taxes
associated with the operations of the Proprietorship with respect to any
period (or any portion thereof) up to and including the Closing Date,
except for taxes associated with the operations of the Proprietorship which
are reflected as current liabilities for taxes that exist as of the Closing
Date ("Current Tax Liabilities") on the financial statements delivered to
Purchaser hereunder, together with all reasonable legal fees, disbursements
and expenses incurred by Purchaser in connection therewith.
(b) Owner shall prepare and file any tax return with respect to the
operations of the Proprietorship which is required to be filed after the
Closing Date and which relates to any period (or portion thereof) up to and
including the Closing Date.
(c) The indemnity provided for in this Section 7.3 shall be independent of
any other indemnity provision hereof and, anything in this Agreement to the
contrary notwithstanding, shall survive until the expiration of the
applicable statutes of limitation for the taxes referred to herein, and any
taxes subject to the indemnification for taxes set forth in this Section
7.3 shall not be subject to the provisions of Sections 8.1 or 8.4 hereof.
Section 7.4. Release by Owner. Owner hereby releases and discharges
Purchaser and each of its officers, directors, agents and attorneys from,
and agrees and covenants that, in no event, will Owner commence any
litigation or other legal or administrative proceeding against, Purchaser
or any of its officers, directors, agents or attorneys, whether in law or
equity, relating to any and all claims and demands, known and unknown,
suspected and unsuspected, disclosed and undisclosed, for damages, actual
or consequential, past, present and future, arising out of or in any way
connected with her ownership or alleged ownership of the Proprietorship
prior to the Closing Date, other than claims or demands arising out of the
transactions contemplated by this Agreement.
Section 7.5. Release by Purchaser. Purchaser hereby releases and discharges
Owner and each of his affiliates, agents and attorneys from, and agrees and
covenants that, in no event, will Purchaser commence any litigation or
other legal or administrative proceeding against, Owner or any of his
affiliates agents or attorneys, whether in law or equity, relating to any
and all claims and demands, known and unknown, suspected and unsuspected,
disclosed and undisclosed, for damages, actual or consequential, past,
present and future, other than claims or demands arising out of the
transactions contemplated by this Agreement.
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER
Section 8.1. Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) By mutual written consent of the parties hereto; or
(b) By either Purchaser or Owner, if (i) any governmental or regulatory
body, the consent of which is a condition to the obligations of Purchaser
and Owner to consummate the transactions contemplated hereby, shall not
have been secured, or (ii) any court of competent jurisdiction in the
United States or any state shall have issued an order, judgment or decree
(other than a temporary restraining order) restraining, enjoining or
otherwise prohibiting the purchase and sale of the Interests contemplated
hereunder and such order, judgment or decree shall have become final and
non-appealable.
Section 8.2. Effect of Termination. In the event of termination of this
Agreement as provided in Section 8.1, this Agreement shall forthwith become
void and there shall be no liability on the part of either Purchaser or its
officers or directors, or Owner, except that nothing in this Section 8.2
shall relieve any party from liability for any breach of this Agreement.
Section 8.3. Expenses. Unless otherwise provided herein, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses,
whether or not the Purchase is consummated.
Section 8.4. Amendment. This Agreement may be amended by the parties hereto
at any time prior to the Closing Date. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
Section 8.5. Waiver. At any time prior to the Closing Date, any party
hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto and (C) waive compliance with any of
the agreements or conditions contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the party
or parties to be bound thereby.
ARTICLE IX. GENERAL PROVISIONS
Section 9.1. Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement shall survive
the Closing Date indefinitely.
Section 9.2. Publicity. (a) The right to publicize the execution of this
Agreement and the Closing hereunder shall be that of Purchaser.
(b) The existence of this Agreement and the knowledge of the future
consummation or termination of this Agreement constitutes privileged and
"insider" information as that term is used in the securities markets. Owner
and each of the employees of the Proprietorship each agree that they will
refrain from purchasing or selling any of the stock of Purchaser at any
time when a material fact relating to this Agreement, its existence or
performance, breach or termination are not made publicly announced by
Purchaser.
Section 9.3. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered or mailed if delivered personally or
mailed by registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice, except that
notices of changes of address shall be effective upon receipt):
(a) If to Purchaser: USURF America, Inc.
0000 Xxxxxxxx Xxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
with copies to: Xxxxxx & Xxxxxx, Attorneys at Law
000 Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx 00000
(b) if to Owner: Xxxx Xxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
with copies to: Xxxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Section 9.4. Non-Waiver. The failure in anyone or more instances of a party
to insist upon performance of any of the terms, covenants or conditions of
this Agreement, to exercise any right or privilege conferred in this
Agreement, or the waiver by said party of any breach of any of the terms,
covenants or conditions of this Agreement, shall not be construed as a
subsequent waiver of any such terms, covenants, conditions, rights or
privileges, but the same shall continue and remain in full force and effect
as if no such forbearance or waiver had occurred. No waiver shall be
effective unless it is in writing and signed by an authorized
representative of the waiving party.
Section 9.5. Arbitration. Any dispute arising under this Agreement, as well
as any of the transactions contemplated hereby, shall be resolved by
arbitration in Dallas, Texas, under the Rules of the American Arbitration
Association, as then in effect. The determination and award of the
arbitrator, which award may include punitive damages, shall be final and
binding on the parties and may be entered as a judgment in any court of
competent jurisdiction. It is expressly agreed that the arbitrators, as
part of their award, can award attorneys fees to the prevailing party.
Section 9.6. Binding Effect: Benefit. This Agreement shall inure to the
benefit of and be binding upon the
parties hereto and their successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer on any person other
than the parties hereto and their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, including, without limitation, third party
beneficiary rights.
Section 9.7. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any manner adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
Section 9.8. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and undertakings, both oral
and written, among the parties, or any of them, with respect to the subject
matter hereof and, except as otherwise expressly provided herein, are not
intended to confer upon any other person any rights or remedies hereunder.
Section 9.9. Assignability. This Agreement shall not be assignable by
either party or by operation of law, except with the express written
consent of each other party.
Section 9.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas applicable to
contracts executed in and to be performed in such State.
Section 9.11. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.12. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Purchaser and Owner have caused this Agreement to be
executed as of the date first written above.
PURCHASER:
USURF AMERICA, INC.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, President
OWNER:
/s/ Xxxx Xxxx
Xxxx Xxxx
