EXHIBIT 2.1
FINAL SIGNATURE COPY
PARTNERSHIP INTEREST PURCHASE AGREEMENT
BY AND AMONG
XXXXX COMMUNICATIONS, INC.,
XXXXX ACQUISITION SUB, INC.,
HOLD BILLING SERVICES, LTD.,
HOLD BILLING & COLLECTION, L.C.,
XXXXXX X. XXXX,
XXXXX X. XXXXX,
XXXXXX X. XXXX,
XXXXXX X. XXXX,
XXXXXX X. BOX,
AND
XXXXX X. XXXXXXX, XX.
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DATED AS OF MAY 3, 1996
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FINAL SIGNATURE COPY
TABLE OF CONTENTS
ARTICLE 1
PURCHASE AND SALE OF PARTNERSHIP INTERESTS
Section 1.1 Purchase and Sale of Partnership Interests...................... 2
Section 1.2 Purchase Price.................................................. 2
Section 1.3 Closing......................................................... 2
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Billing, General Partner and
Selling Partners........................................................ 2
2.1.1 Authorization.................................................. 2
2.1.2 Partnership Status............................................. 3
2.1.3 No Conflicts................................................... 3
2.1.4 Financial Statements........................................... 4
2.1.5 Absence of Undisclosed Liabilities............................. 4
2.1.6 Taxes.......................................................... 5
2.1.7 Absence of Changes............................................. 6
2.1.8 Litigation..................................................... 8
2.1.9 Compliance with Laws; Governmental Approvals and Consents;
Governmental Contracts......................................... 9
2.1.10 Operation of the Business...................................... 10
2.1.11 Assets......................................................... 10
2.1.12 Contracts...................................................... 10
2.1.13 Territorial Restrictions....................................... 13
2.1.14 Inventories.................................................... 13
2.1.15 Customers and Pricing.......................................... 13
2.1.16 Suppliers; Raw Materials....................................... 13
2.1.17 Product Warranties............................................. 14
2.1.18 Absence of Certain Business Practices.......................... 14
2.1.19 Intellectual Property.......................................... 15
(a) Title.................................................... 15
(b) Transfer................................................. 15
(c) No Infringement.......................................... 15
(d) Licensing Arrangements................................... 15
(e) No Intellectual Property Litigation...................... 16
(f) Due Registration......................................... 16
(g) Use of Name and Xxxx..................................... 16
2.1.20 Insurance...................................................... 16
2.1.21 Real Property.................................................. 17
(a) Owned Real Property................................... 17
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(b) Leases................................................... 17
(c) Fee and Leasehold Interests.............................. 17
(d) No Proceedings........................................... 17
(e) Current Use.............................................. 18
(f) Compliance with Real Property Laws....................... 18
2.1.22 Environmental Matters.......................................... 18
(a) Permits.................................................. 18
(b) No Violations............................................ 18
(c) No Actions............................................... 19
(d) Full Disclosure.......................................... 19
2.1.23 Employees and Labor Matters.................................... 19
2.1.24 Employee Benefit Plans and Related Matters..................... 20
(a) Employee Benefit Plans................................... 20
(b) Qualification............................................ 21
(c) Compliance; Liability.................................... 21
2.1.25 Confidentiality................................................ 22
2.1.26 No Guarantees.................................................. 22
2.1.27 Records........................................................ 22
2.1.28 Brokers and Finders............................................ 22
2.1.29 Business Description and Review................................ 23
2.1.30 Receivables.................................................... 23
2.1.31 Transactions with Affiliates................................... 23
2.1.32 Disclosure..................................................... 24
Section 2.2 Title to Partnership Interests.................................. 24
Section 2.3 Representations and Warranties of ACI and Merger Sub............ 24
2.3.1 Corporate Status and Authorization............................. 24
2.3.2 No Conflicts, Etc.............................................. 25
2.3.3 Litigation..................................................... 25
2.3.4 Brokers and Finders............................................ 26
2.3.5 Disclosure..................................................... 26
ARTICLE 3
COVENANTS
Section 3.1 Covenants of Billing, General Partner and Selling Partner....... 26
3.1.1 Conduct of Business............................................ 26
3.1.2 No Solicitation................................................ 27
3.1.3 Access and Information......................................... 28
3.1.4 Financial Statements........................................... 28
3.1.5 Public Announcements........................................... 29
3.1.6 Further Actions................................................ 29
3.1.7 Partner Consents............................................... 30
3.1.8 Further Assurances............................................. 30
3.1.9 Disclosure Memorandum.......................................... 30
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3.1.10 Conveyance of General Partner.................................. 32
Section 3.2 Covenants of ACI and Merger Sub................................. 32
3.2.1 Public Announcements........................................... 32
3.2.2 Further Actions................................................ 32
3.2.3 Further Assurances............................................. 33
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.1 Conditions to Obligations of Each Party......................... 33
4.1.1 HSR Act Notification........................................... 33
4.1.2 No Injunction, Etc............................................. 33
Section 4.2 Conditions to Obligations of ACI and Merger Sub................. 34
4.2.1 Representations, Performance................................... 34
4.2.2 Financing...................................................... 34
4.2.3 Consents....................................................... 34
4.2.4 No Material Adverse Effect..................................... 34
4.2.5 Collateral Agreements.......................................... 35
4.2.6 Subsequent Monthly Financial Statements........................ 35
4.2.7 Proceedings.................................................... 35
4.2.8 HOLD Closing................................................... 35
Section 4.3 Conditions to Obligations of Selling Partners................... 36
4.3.1 Representations, Performance................................... 36
4.3.2 Corporate Proceedings.......................................... 36
4.3.3 HOLD Closing................................................... 36
4.3.4 Consents and Approvals......................................... 37
ARTICLE 5
TERMINATION
Section 5.1 Termination..................................................... 37
Section 5.2 Effect of Termination........................................... 38
ARTICLE 6
INDEMNIFICATION
Section 6.1 By Billing and the Selling Partners............................. 38
Section 6.2 By Merger Sub and ACI........................................... 38
Section 6.3 Limitation on Indemnification................................... 39
Section 6.4 Maximum Liability of Young...................................... 39
Section 6.5 Adjustments to Indemnification Payments......................... 39
Section 6.6 Indemnification Procedures...................................... 39
Section 6.7 Time Limitation................................................. 40
Section 6.8 Indemnification Not Exclusive................................... 40
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ARTICLE 7
DEFINITIONS AND CONSTRUCTION
Section 7.1 Definition of Certain Terms..................................... 41
Section 7.2 Rules of Construction........................................... 48
ARTICLE 8
GENERAL PROVISIONS
Section 8.1 Survival of Representations and Warranties...................... 50
Section 8.2 Expenses........................................................ 50
Section 8.3 Severability.................................................... 50
Section 8.4 Notices......................................................... 50
Section 8.5 Headings........................................................ 51
Section 8.6 Entire Agreement................................................ 51
Section 8.7 Counterparts.................................................... 52
Section 8.8 Governing Law, Etc.............................................. 52
Section 8.9 Binding Effect.................................................. 52
Section 8.10 Assignment..................................................... 52
Section 8.11 No Third Party Beneficiaries................................... 52
Section 8.12 Amendment; Waivers, Etc........................................ 52
LIST OF EXHIBITS
Exhibit A - Form of Non-Competition Agreement
Exhibit B - Form of Xxxxxxx Employment Agreement
Exhibit C - Form of Box Employment Agreement
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INDEX OF DEFINED TERMS
ACI .........................................................1, 41
ACI Indemnitees ............................................................38
Affiliate ............................................................41
Agreement .........................................................1, 41
Applicable Law ............................................................41
Balance Sheet ............................................................41
Balance Sheet Date.........................................................4, 41
Benefit Liabilities...........................................................41
Billing .........................................................1, 41
Billing Business Plan.........................................................23
Billing Group ........................................................38, 42
Billing Indemnitees.......................................................39, 42
Box .........................................................1, 42
Box Employment Agreement......................................................35
Business Day ............................................................42
CERCLA ............................................................42
Closing .........................................................2, 42
Closing Date .........................................................2, 42
Code ............................................................42
Collateral Agreements.........................................................42
Consent ............................................................42
Contracts ........................................................10, 42
Control ............................................................41
Covered Returns .........................................................5, 42
Covered Taxes ............................................................42
Disclosure Memorandum.....................................................30, 42
Dollars ............................................................42
X. Xxxx .........................................................1, 42
employee benefit plan.....................................................20, 42
Employees ........................................................20, 43
Environmental Assessment......................................................43
Environmental Laws............................................................43
Environmental Liabilities and Costs...........................................43
Environmental Permits.........................................................43
ERISA ............................................................43
Financial Statements.......................................................4, 44
GAAP ............................................................44
General Partner .........................................................1, 44
Government Approval...........................................................44
Governmental Authority........................................................44
Hazardous Substances..........................................................44
HOLD Business Plan............................................................42
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HOLD Merger Agreement..........................................................1
HSR Act ............................................................44
Indemnified Party ........................................................39, 44
Indemnifying Party........................................................40, 44
Intellectual Property.........................................................44
Inventories ............................................................45
IRS ............................................................45
Leased Real Property..........................................................45
Leases ............................................................45
Lien ............................................................45
Losses ........................................................38, 45
Material Adverse Effect.......................................................45
Xxxxxxx .........................................................1, 45
Xxxxxxx Employment Agreement..................................................35
Merger Sub .........................................................1, 45
Merger Sub Indemnitees........................................................45
Monthly Unaudited Financial Statements.....................................4, 45
Multiemployer Plan........................................................21, 45
Multiple Employer Plan....................................................21, 46
Non-Competition Agreement.................................................35, 46
Owned Intellectual Property...............................................15, 46
Owned Real Property...........................................................46
X. Xxxx .........................................................1, 46
Partner .........................................................1, 46
Partners .........................................................1, 46
Partnership .........................................................1, 46
Partnership Interest..........................................................46
Permitted Liens ............................................................46
Person ............................................................46
Plans ........................................................20, 47
Purchase Price .............................................................2
Real Property ............................................................47
Real Property Laws........................................................18, 47
Reimbursable Expenses.........................................................47
Related Persons ........................................................20, 47
Release ............................................................47
Remedial Action ............................................................47
Review Termination Date.......................................................47
Rights ............................................................47
Securities Act ............................................................47
Security ........................................................23, 47
Selling Partner .........................................................1, 47
Selling Partners .........................................................1, 47
Subsequent Monthly Financial Statements...................................28, 48
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Subsidiaries ............................................................48
Supporting Documents......................................................31, 48
Tax ............................................................48
Tax Return ............................................................48
Termination Date ............................................................48
Treasury Regulations..........................................................48
TRLPA ............................................................48
Unaudited Financial Statements.............................................4, 48
Xxxx .........................................................1, 48
Withholding Taxes .........................................................5, 48
Young .........................................................1, 48
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LIST OF SCHEDULES
Schedule 2.1.2(b)............................................................ 3
Schedule 2.1.2(d)............................................................ 3
Schedule 2.1.3............................................................... 4
Schedule 2.1.5............................................................... 4
Schedule 2.1.6(a)............................................................ 5
Schedule 2.1.6(b)............................................................ 5
Schedule 2.1.6(c)............................................................ 5
Schedule 2.1.6(d)............................................................ 6
Schedule 2.1.7............................................................... 6
Schedule 2.1.8............................................................... 8
Schedule 2.1.9(a)............................................................ 9
Schedule 2.1.9(b)............................................................ 9
Schedule 2.1.9(c)............................................................ 9
Schedule 2.1.10.............................................................. 10
Schedule 2.1.11.............................................................. 10
Schedule 2.1.12(a)........................................................... 10
Schedule 2.1.12(c)........................................................... 13
Schedule 2.1.14.............................................................. 13
Schedule 2.1.16.............................................................. 13
Schedule 2.1.17.............................................................. 14
Schedule 2.1.19(a)........................................................... 15
Schedule 2.1.19(d)........................................................... 15
Schedule 2.1.19(g)........................................................... 16
Schedule 2.1.20.............................................................. 16
Schedule 2.1.22(a)........................................................... 18
Schedule 2.1.22(c)........................................................... 19
Schedule 2.1.23.............................................................. 19
Schedule 2.1.23.............................................................. 19
Schedule 2.1.24(a)........................................................... 20
Schedule 2.1.26.............................................................. 22
Schedule 2.1.29.............................................................. 23
Schedule 2.1.30.............................................................. 23
Schedule 2.1.31.............................................................. 23
Schedule 2.3.2............................................................... 25
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LIST OF EXHIBITS
Exhibit A.................................................................... 35
Exhibit B.................................................................... 35
Exhibit C.................................................................... 35
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PARTNERSHIP INTEREST PURCHASE AGREEMENT
This PARTNERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is
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dated as of May 3, 1996, and is being entered by and among XXXXX COMMUNICATIONS,
INC., a Delaware corporation ("ACI"), XXXXX ACQUISITION SUB, INC., a Texas
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corporation ("Merger Sub"), HOLD BILLING SERVICES, LTD., a Texas limited
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partnership ("Billing" or the "Partnership"), HOLD BILLING & COLLECTION, L.C., a
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Texas limited liability company and the General Partner (the "General Partner")
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of Billing, XXXXXX X. XXXX ("Xxxx"), XXXXX X. XXXXX ("Xxxxx"), XXXXXX X. XXXX
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("X. Xxxx"), XXXXXX X. XXXX ("X. Xxxx," and, collectively with Xxxx, Young and
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X. Xxxx, the "Selling Partners," or individually, a "Selling Partner"), XXXXXX
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D. BOX ("Box"), XXXXX X. XXXXXXX, XX. ("Xxxxxxx," and, collectively with the
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General Partner, Webb, Young, X. Xxxx, X. Xxxx and Box, the "Partners," or
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individually, a "Partner"), with reference to the following RECITALS:
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R E C I T A L S
A. Contemporaneously herewith, ACI, Merger Sub, Home Owners Long
Distance Incorporated, a Texas corporation, the Selling Partners and others are
entering into an Agreement and Plan of Merger (the "HOLD Merger Agreement")
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pursuant to which, subject to the terms and conditions set forth therein, Merger
Sub will merge with and into Home Owners Long Distance Incorporated and Home
Owners Long Distance Incorporated will become a wholly owned subsidiary of ACI.
B. The Selling Partners own an aggregate of 54% of the Partnership
Interests of the Partnership. Subject only to the limitations and exclusions
contained in this Agreement, and on the terms and conditions hereinafter set
forth, each of the Selling Partners desires to sell, and Merger Sub, as a
condition to its consummating the transactions contemplated by the HOLD Merger
Agreement, desires to purchase, the Partnership Interest of each of the Selling
Partners. Box and Xxxxxxx desire to join in this Agreement for the limited
purposes of facilitating certain acts required to be taken by the Partnership to
consummate the transactions contemplated hereby and to induce the Partnership to
enter the employment agreements with each of them for which provisions are made
herein.
C. Each capitalized term used herein is defined in Section 7.1 hereof.
NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
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ARTICLE 1
PURCHASE AND SALE OF PARTNERSHIP INTERESTS
SECTION 1.1 PURCHASE AND SALE OF PARTNERSHIP INTERESTS. On the basis of
the representations, warranties and agreements contained in this Agreement, and
subject to the terms and conditions of this Agreement, each Selling Partner
shall sell, assign, transfer, and convey to Merger Sub at the Closing all of
Selling Partner's Rights in the Selling Partner's Partnership Interest, free and
clear of any and all Liens.
SECTION 1.2 PURCHASE PRICE. The aggregate purchase price for the
Partnership Interests of the Selling Partners shall be $2,970,000 (the "Purchase
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Price"). The Purchase Price shall be paid to the Selling Partners, pro rata in
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accordance with their respective Partnership Interests, at the Closing by wire
transfer of immediately available funds against delivery of the Partnership
Interests.
SECTION 1.3 CLOSING. Subject to the terms and conditions of this
Agreement, the closing (the "Closing") of this Agreement and the transactions
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contemplated hereby, shall take place at the offices of Xxxxxxxx Xxxxxxxx &
Xxxxxx P.C., 5400 Renaissance Tower, 0000 Xxx Xxxxxx, Xxxxxx, Xxxxx 00000, at
10:00 A.M., local time, on the later of (i) August 1, 1996, or (ii) the date
which is three Business Days after the satisfaction or waiver of all conditions
to the consummation of the transactions contemplated hereby, or at such other
time or place or on such other date, in each case as may be mutually agreed upon
in writing by ACI and the Selling Partners. The date of the Closing is sometimes
herein referred to as the "Closing Date."
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF BILLING, GENERAL PARTNER
AND SELLING PARTNERS. Billing and the General Partner, jointly and severally
with each other, and Selling Partners, jointly and severally with each other
Selling Partner and (except as to 2.1.1, 2.1.2(a), (c) and (d), 2.1.28 and
2.1.32 below) to the best of Selling Partners' knowledge, represent and warrant
to ACI and Merger Sub that, except as set forth in the Disclosure Memorandum
delivered to ACI and Merger Sub as provided in Section hereof, each of which
exceptions shall specifically identify the relevant subsection hereof to which
it relates and shall be deemed to be representations and warranties as if made
hereunder:
2.1.1 AUTHORIZATION. Billing and the Selling Partners have the
power and authority to execute and deliver this Agreement and each of
the Collateral Agreements, to perform fully their respective
obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby.
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The execution and delivery by Billing of this Agreement, and the
consummation of the transactions contemplated hereby, have been, and on
the Closing Date the execution and delivery by Billing of each of the
Collateral Agreements and the consummation of the transactions
contemplated thereby will have been, duly authorized by all requisite
action of Billing. Billing and the Selling Partners have duly executed
and delivered this Agreement and on the Closing Date Billing and the
Selling Partners will have duly executed and delivered each of the
Collateral Agreements. This Agreement is, and on the Closing Date each
of the Collateral Agreements will be, legal, valid and binding
obligations of Billing and the Selling Partners, enforceable against
them in accordance with their respective terms.
2.1.2 PARTNERSHIP STATUS.
(a) Billing is a limited partnership duly organized,
validly existing and in good standing under the laws of the
State of Texas, with full power and authority to carry on its
business and to own or lease and to operate its properties as
and in the places where such business is conducted and such
properties owned, leased or operated.
(b) Billing is duly qualified to do business as a
foreign limited partnership and is in good standing under the
laws of each state or other jurisdictions specified opposite
its name in Schedule 2.1.2(b), which are the only
jurisdictions in which the operation of its business or the
character of the properties owned, leased or operated by it in
connection with its business makes such qualification or
licensing necessary.
(c) Billing has delivered to Merger Sub complete and
correct copies of its agreement of limited partnership or
other organizational documents, in each case, as amended and
in effect on the date hereof. Billing is not in violation of
any of the provisions of its agreement of limited partnership
or other organizational documents.
(d) The Partners own beneficially and of record the
Partnership Interests set forth beside their respective names
on Schedule .
2.1.3 NO CONFLICTS. The execution, delivery and performance by
Billing and the Selling Partners of this Agreement and each of the
Collateral Agreements, and the consummation of the transactions
contemplated hereby and thereby, do not and will not conflict with or
result in a violation of or a default under (with or without the giving
of notice or the lapse of time or both) (i) any Applicable Law
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applicable to Billing or any Affiliate thereof or any of the properties
or assets of Billing, (ii) the agreement of limited partnership or
other organizational documents of Billing or (iii) except as set forth
in Schedule 2.1.3, any Contract or other contract, agreement or other
instrument to which Billing or any Affiliate thereof is a party or by
which Billing or any of their properties or assets may be bound or
affected. Except as specified in Schedule 2.1.3, no Governmental
Approval or other Consent is required to be obtained or made by Billing
in connection with the execution and delivery of this Agreement and the
Collateral Agreements or the consummation of the transactions
contemplated hereby or thereby.
2.1.4 FINANCIAL STATEMENTS. Billing has delivered to ACI (a)
unaudited consolidated financial statements of Billing as at and for
the 12-month period ended December 31, 1995 (the "Unaudited Financial
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Statements"), and (b) unaudited consolidated financial statements of
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Billing as at and for the monthly periods ended January 31, February
29, and March 31, 1996 (the "Monthly Unaudited Financial Statements"),
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and related statements of income for the periods then ended (the
Unaudited Financial Statements and the Monthly Unaudited Statements,
and, from and after the date of delivery thereof, the Subsequent
Monthly Financial Statements, being hereinafter referred to
collectively as the "Financial Statements"). The Unaudited Financial
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Statements and the Monthly Unaudited Financial Statements are complete
and correct in all material respects and have been prepared and, when
delivered, the Subsequent Monthly Financial Statements will have been
prepared, in accordance with GAAP, except that the Unaudited Financial
Statements, the Monthly Unaudited Financial Statements and the
Subsequent Monthly Financial Statements do not contain statements of
cash flows or changes in financial position or notes and may be subject
to normal audit adjustments and, in the case of the Monthly Unaudited
Financial Statements and the Subsequent Monthly Financial Statements,
normal annual adjustments, which audit and annual adjustments, will
not, individually or in the aggregate have or result in a Material
Adverse Effect. The balance sheets included in the Financial Statements
present fairly the financial condition of Billing as at their
respective dates. The statements of income and retained earnings and
statements of cash flows included in the Financial Statements present
fairly the results of operations and cash flows for the periods
indicated. As used herein, the term "Balance Sheet Date" means December
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31, 1995.
2.1.5 ABSENCE OF UNDISCLOSED LIABILITIES. Billing has no
liabilities or obligations of any nature, whether known or unknown,
absolute, accrued, contingent or otherwise and whether due or to become
due, except (a) as set forth in Schedule 2.1.5, (b) as and to the
extent disclosed or reserved against in the Balance Sheet (excluding
the notes thereto) and (c) for liabilities and obligations that (i)
were incurred after the date of the Balance Sheet in the ordinary
course of business consistent with prior practice and (ii) individually
and in the aggregate are not material and have not had or resulted in,
and will not have or result in, a
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Material Adverse Effect. None of Billing's employees is now or will by
the passage of time become entitled to receive any vacation time,
vacation pay or severance pay attributable to services rendered prior
to such date except as disclosed on the Balance Sheet (excluding the
notes thereto).
2.1.6 TAXES.
(a) Billing has (or by the Closing will have) duly
and timely filed all Tax Returns with respect to Covered Taxes
required to be filed on or before the Closing Date ("Covered
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Returns"). Except for Covered Taxes set forth on Schedule
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2.1.6(a), which are being contested in good faith and by
appropriate proceedings, the following Covered Taxes have (or
by the Closing Date will have) been duly and timely paid: (i)
all Covered Taxes shown to be due on the Covered Returns, (ii)
all deficiencies and assessments of Covered Taxes of which
notice has (or by the Closing Date will have) been received by
Billing that are or may become payable or chargeable as a lien
upon the business of Billing, and (iii) all other Covered
Taxes due and payable on or before the Closing Date for which
neither filing of Covered Returns nor notice of deficiency or
assessment is required, of which Billing or any Selling
Partner is or reasonably should be (or by the Closing Date
will be or reasonably should be) aware that are or may become
payable by Billing. All Taxes required to be withheld by or on
behalf of Billing in connection with amounts paid or owing to
any employee, independent contractor, creditor or other party
("Withholding Taxes") have been withheld, and such withheld
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Taxes have either been duly and timely paid to the proper
Governmental Authorities or set aside in accounts for such
purpose.
(b) Except as set forth on Schedule 2.1.6(b), no
agreement or other document extending, or having the effect of
extending, the period of assessment or collection of any
Covered Taxes or Withholding Taxes, and no power of attorney
with respect to any such Taxes, has been filed with the IRS or
any other Governmental Authority.
(c) Except as set forth on Schedule 2.1.6(c), (i)
there are no Covered Taxes or Withholding Taxes asserted in
writing by any Governmental Authority to be due and (ii) no
issue has been raised in writing by any Governmental Authority
in the course of any audit with respect to Covered Taxes or
Withholding Taxes. Except as set forth on Schedule 2.1.6(c) ,
no Covered Taxes and no Withholding Taxes are currently under
audit by any Governmental
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Authority. Except as set forth on Schedule 2.1.6(c), neither
the IRS nor any other Governmental Authority is now asserting
or, to the knowledge of any Selling Partner, threatening to
assert against Billing any deficiency or claim for additional
Covered Taxes or any adjustment of Covered Taxes that would
have a Material Adverse Effect, and there is no reasonable
basis for any such assertion of which Billing or any Selling
Partner is or reasonably should be aware.
(d) Except as set forth on Schedule 2.1.6(d), there
is no litigation or administrative appeal pending or, to the
knowledge of any Selling Partner, threatened against or
relating to Billing in connection with Covered Taxes.
2.1.7 ABSENCE OF CHANGES. Except as set forth on Schedule
2.1.6(d), since the Balance Sheet Date, Billing has conducted
its business only in the ordinary course consistent with prior
practice and has not:
(a) suffered any Material Adverse Effect;
(b) amended its agreement of limited partnership or
equivalent organizational documents;
(c) incurred any obligation or liability, absolute,
accrued, contingent or otherwise, whether due or to become
due, except current liabilities for trade or business
obligations incurred in connection with the purchase of goods
or services in the ordinary course of business consistent with
prior practice, none of which liabilities, in any case or in
the aggregate, could have a Material Adverse Effect;
(d) discharged or satisfied any Lien other than those
then required to be discharged or satisfied, or paid any
obligation or liability, absolute, accrued, contingent or
otherwise, whether due or to become due, other than current
liabilities shown on the Balance Sheet and current liabilities
incurred since the date thereof in the ordinary course of
business consistent with prior practice;
(e) mortgaged, pledged or subjected to any Lien, any
property, business or assets, tangible or intangible, held in
connection with its business;
(f) sold, transferred, leased to others or otherwise
disposed of any of its assets, except for inventory sold in
the
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ordinary course of business consistent with prior practice, or
cancelled or compromised any debt or claim, or waived or
released any right of substantial value;
(g) made, entered into or assumed, or suffered any
amendment or termination of, any agreement, contract,
commitment, lease or Plan to which it is a party or by which
it or any of its assets is bound, or received any notice of
termination of any contract, lease or other agreement or
suffered any damage, destruction or loss (whether or not
covered by insurance);
(h) transferred or granted any rights under, or
entered into any settlement regarding the breach or
infringement of, any Intellectual Property, or modified any
existing rights with respect thereto;
(i) made any change in the rate of compensation,
commission, bonus or other direct or indirect remuneration
payable, or paid or agreed or orally promised to pay,
conditionally or otherwise, any bonus, incentive, retention or
other compensation, retirement, welfare, fringe or severance
benefit or vacation pay, to or in respect of any Selling
Partner, director, officer, employee, salesman, distributor or
agent, or made any other changes to its personnel practices;
(j) encountered any labor union organizing activity,
had any actual or threatened employee strikes, work stoppages,
slowdowns or lockouts, or had any material change in its
relations with its employees, agents, customers or suppliers;
(k) failed to replenish its inventories and supplies
in a normal and customary manner consistent with its prior
practice and prudent business practices prevailing in the
industry, or made any purchase commitment in excess of the
normal, ordinary and usual requirements of its business or at
any price in excess of the then current market price or upon
terms and conditions more onerous than those usual and
customary in the industry;
(l) failed to maintain in full force and effect
substantially the same level and types of insurance coverage
as in effect on the Balance Sheet Date for destruction, damage
to, or loss of any of its assets;
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(m) suffered any material damage, destruction or
loss, whether or not covered by insurance, affecting its
business, as currently conducted or as proposed to be
conducted, or to its assets;
(n) made any change in its selling, pricing or
advertising practices;
(o) changed its accounting principles, methods or
practices or investment practices, including such changes as
were necessary to conform to GAAP, written up the value of any
of its assets on its books and records, or increased, reduced,
drawn down or reversed any of its reserves (other than in
accordance with GAAP);
(p) made any capital expenditures or capital
additions or improvements in excess of an aggregate of $5,000;
(q) instituted, settled or agreed to settle any
litigation, action or proceeding before any court or
governmental body other than in the ordinary course of
business consistent with past practices but not in any case
involving amounts in excess of $1,000;
(r) entered into any transaction, contract or
commitment other than in the ordinary course of business
consistent with prior practice, or paid or agreed to pay any
legal, accounting, brokerage, finder's fee, Taxes or other
expenses in connection with, or incurred any severance pay
obligations by reason of, this Agreement or the transactions
contemplated hereby; or
(s) taken any action or omitted to take any action
that would result in the occurrence of any of the foregoing.
2.1.8 LITIGATION. Except as set forth on Schedule 2.1.8, there
is no action, claim, demand, suit, proceeding, arbitration, grievance,
citation, summons, subpoena, inquiry or investigation of any nature,
civil, criminal, regulatory or otherwise, in law or in equity, pending
or threatened against or relating to Billing or against or relating to
the transactions contemplated by this Agreement, and no Selling Partner
knows or has reason to be aware of any basis for the same. Except as
set forth on Schedule 2.1.8, no citations, fines or penalties have been
asserted against Billing under any Environmental Law or any foreign,
federal, state or local law relating to occupational health or safety.
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2.1.9 COMPLIANCE WITH LAWS; GOVERNMENTAL APPROVALS AND
CONSENTS; GOVERNMENTAL CONTRACTS.
(a) Except as disclosed on Schedule 2.1.9(a), Billing
has complied in all material respects with all Applicable Laws
the violation of which has not had or resulted in, and will
not have or result in, a Material Adverse Effect, either
before or after Closing, and Billing has not received any
notice alleging any such conflict, violation, breach or
default.
(b) Schedule 2.1.9(b) sets forth all Governmental
Approvals and other Consents necessary for, or otherwise
material to, the conduct of its business or the ownership and
use of its assets, including all licenses, permits or similar
authorizations required or necessary for the billing and
collection for long distance services. Except as set forth on
Schedule 2.1.9(b), all such Governmental Approvals and
Consents have been duly obtained and are in full force and
effect, and Billing is in compliance with each of such
Governmental Approvals and Consents held by it. Billing owns,
holds, possesses or lawfully uses in the operation of its
business all the Governmental Approvals set forth on Schedule
2.1.9(b), free and clear of all Liens and in compliance with
all Applicable Laws. Billing is not in default, nor has it
received any notice of any claim of default, with respect to
any such Governmental Approvals. All such Governmental
Approvals are renewable by their terms or in the ordinary
course of business without the need to comply with any special
qualification procedures or to pay any amounts other than
routine filing fees. None of such Governmental Approvals will
be adversely affected by consummation of the transactions
contemplated hereby. No Selling Partner, director, officer,
employee or former employee of Billing or any Affiliates of
Billing, or any other Person owns or has any proprietary,
financial or other interest (direct or indirect) in any
Governmental Approvals which Billing owns, possesses or uses
in the operation of its business as now or previously
conducted.
(c) Schedule 2.1.9(c) sets forth all Contracts with
any Governmental Authority.
(d) There are no proposed laws, rules, regulations,
ordinances, orders, judgments, decrees, governmental takings,
condemnations or other proceedings which would be applicable
to
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Billing and which might have a Material Adverse Effect, either
before or after the Closing Date.
2.1.10 OPERATION OF THE BUSINESS. Except as set forth in
Schedule 2.1.10, (a) Billing has not conducted its business through any
divisions or any direct or indirect Subsidiary or Affiliate of Billing
and (b) no part of the business is operated by Billing through any
entity other than Billing.
2.1.11 ASSETS. Except as disclosed in Schedule 2.1.11, Billing
has good title to all its assets, free and clear of any and all Liens
other than Permitted Liens. The assets reflected on the Balance Sheet,
taken as a whole, constitute all the properties and assets relating to
or used or held for use in connection with the business of Billing
during the past twelve months (except Inventory sold, cash disposed of,
accounts receivable collected, prepaid expenses realized, Contracts
fully performed, and properties or assets replaced by equivalent or
superior properties or assets, in each case in the ordinary course of
business consistent with prior practice. There are no assets or
properties used in the operation of the business of Billing and owned
by any Person other than Billing that will not on the Closing Date be
leased or licensed to Billing under valid, current leases or license
arrangements. The assets reflected on the Balance Sheet are in all
material respects adequate for the purposes for which such assets are
currently used or are held for use, and are in reasonably good repair
and operating condition (subject to normal wear and tear) and, to the
knowledge of Billing and the Selling Partners, there are no facts or
conditions affecting the assets which could, individually or in the
aggregate, interfere in any material respect with the use, occupancy or
operation thereof as currently used, occupied or operated, or their
adequacy for such use.
2.1.12 CONTRACTS.
(a) Schedule 2.1.12(a) contains a complete and
correct list of all agreements, contracts, commitments and
other instruments and arrangements (whether written or oral)
of the types described below (x) by which any of the assets of
Billing are bound or affected or (y) to which Billing is a
party or by which it is bound (the "Contracts"):
---------
(i) agreements, contracts, commitments, and
other instruments and arrangements pursuant to which
Billing serves as a billing and collection service
for long distance carriers and resellers;
(ii) agreements, contracts, commitments,
and other instruments and arrangements relating to
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the solicitation of new customers or additional
business for or on behalf of Billing;
(iii) leases, licenses, permits, franchises,
insurance policies, Governmental Approvals and other
contracts concerning or relating to the Real
Property;
(iv) employment, consulting, agency,
collective bargaining or other similar contracts,
agreements, and other instruments and arrangements
relating to or for the benefit of current, future or
former employees, officers, directors, sales
representatives, distributors, dealers, agents,
independent contractors or consultants;
(v) loan agreements, indentures, letters of
credit, mortgages, security agreements, pledge
agreements, deeds of trust, bonds, notes, guarantees,
and other agreements and instruments relating to the
borrowing of money or obtaining of or extension of
credit;
(vi) licenses, licensing arrangements and
other contracts providing in whole or in part for the
use of, or limiting the use of, any Intellectual
Property;
(vii) brokerage or finder's agreements;
(viii) joint venture, partnership and
similar contracts involving a sharing of profits or
expenses (including joint research and development
and joint marketing contracts);
(ix) asset purchase agreements and other
acquisition or divestiture agreements, including any
agreements relating to the sale, lease or disposal of
any assets (other than sales of inventory in the
ordinary course of business) or involving continuing
indemnity or other obligations;
(x) orders and other contracts for the
purchase or sale of materials, supplies, products or
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services, each of which involves aggregate payments
in excess of $5,000 in the case of purchases or
$5,000 in the case of sales;
(xi) contracts with respect to which the
aggregate amount that could reasonably be expected to
be paid or received thereunder in the future exceeds
$10,000 per annum or $10,000 in the aggregate;
(xii) sales agency, manufacturer's
representative, marketing or distributorship
agreements;
(xiii) contracts, agreements or arrangements
with respect to the representation of Billing or its
business in states other than Texas and foreign
countries;
(xiv) master lease agreements providing for
the leasing of both (A) personal property primarily
used in, or held for use primarily in connection
with, the business of Billing and (B) other personal
property;
(xv) contracts, agreements or commitments
with any employee, director, officer, Selling Partner
or Affiliate of Billing; and
(xvi) any other contracts, agreements or
commitments that are material to Billing or its
business.
(b) Billing has delivered to ACI complete and correct
copies of all written Contracts, together with all amendments
thereto, and accurate descriptions of all material terms of
all oral Contracts, set forth or required to be set forth in
Schedule 2.1.12(a).
(c) All Contracts are in full force and effect and
enforceable against each party thereto. There does not exist
under any Contract any event of default or event or condition
that, after notice or lapse of time or both, would constitute
a violation, breach or event of default thereunder on the part
of Billing or, to the
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knowledge of Billing or any Selling Partner, any other party
thereto except as set forth in Schedule 2.1.12(c) and except
for such events or conditions that, individually and in the
aggregate, (i) has not had or resulted in, and will not have
or result in, a Material Adverse Effect, and (ii) has not and
will not materially impair the ability of Billing or any
Selling Partner to perform their respective obligations under
this Agreement and under the Collateral Agreements. Except as
set forth in Schedule 2.1.12(c), no consent of any third party
is required under any Contract as a result of or in connection
with, and the enforceability of any Contract will not be
affected in any manner by, the execution, delivery and
performance of this Agreement or any of the Collateral
Agreements or the consummation of the transactions
contemplated hereby or thereby.
(d) Billing does not have outstanding any power of attorney.
2.1.13 TERRITORIAL RESTRICTIONS. Billing is not restricted by
any written agreement or understanding with any other Person from
carrying on its business anywhere in the world. Merger Sub, solely as a
result of the Merger, will not thereby become restricted in carrying on
any business anywhere in the world.
2.1.14 INVENTORIES. All Inventories are of good, usable and
merchantable quality in all material respects and, except as set forth
on Schedule 2.1.14, do not include obsolete or discontinued items.
Except as set forth on Schedule 2.1.14, (a) all Inventories are of such
quality as to meet the quality control standards of Billing and any
applicable governmental quality control standards, (b) all Inventories
that are finished goods are saleable as current inventories at the
current prices thereof in the ordinary course of business, (c) all
Inventories are recorded on the books of Billing at the lower of cost
or market value determined in accordance with GAAP and (d) no
write-down in inventory has been made or should have been made pursuant
to GAAP during the past two years. Schedule 2.1.14 lists the locations
of all Inventories.
2.1.15 CUSTOMERS AND PRICING. Billing has previously delivered
to ACI a true, complete and correct copy of its customer database. Such
database completely and accurately sets forth the prices charged by
Billing to its customers (and any applicable discounts by customer
name) for its services.
2.1.16 SUPPLIERS; RAW MATERIALS. Schedule 2.1.16 sets forth
(a) the names and addresses of all suppliers from which Billing ordered
supplies, merchandise and other goods and services with an aggregate
purchase price for each such supplier of $10,000 or more during the
twelve-month period ended January 00,
-00-
XXXXX XXXXXXXXX XXXX
0000, (x) the amount for which each such supplier invoiced Billing
during such period, and (c) a list of each Contract that is a
"requirements contract," "take or pay contract," or similar Contract
pursuant to which Billing is or may be required to purchase any minimum
amount of supplies, merchandise or other goods and services during any
applicable period of time, or pay for such supplies, merchandise or
other goods and services even though not actually used by, received by
or delivered to Billing, and a complete description of the terms
thereof. Billing has not received any notice and has no reason to
believe that there has been any material adverse change in the price of
such supplies, merchandise or other goods or services, or that any such
supplier will not sell supplies, merchandise and other goods to Merger
Sub at any time after the Closing Date on terms and conditions similar
to those used in its current sales to Billing, subject to general and
customary price increases. To the best knowledge of Billing and the
Selling Partners, no supplier of Billing described in clause (a) of the
first sentence of this section has otherwise threatened to take any
action described in the preceding sentence as a result of the
consummation of the transactions contemplated by this Agreement and the
Collateral Agreements.
2.1.17 PRODUCT WARRANTIES. Except as set forth in Schedule
2.1.17 and for warranties under Applicable Law, (a) there are no
warranties express or implied, written or oral, with respect to the
products and services of Billing and (b) there are no pending or
threatened claims with respect to any such warranty, and Billing has no
liability with respect to any such warranty, whether known or unknown,
absolute, accrued, contingent or otherwise and whether due or to become
due.
2.1.18 ABSENCE OF CERTAIN BUSINESS PRACTICES. Billing has not,
nor has any officer, employee or agent of Billing, or any other Person
acting on behalf of Billing or any officer, employee or agent of
Billing, directly or indirectly, within the past five years given or
agreed to give any gift or similar benefit to any customer, supplier,
governmental employee or other Person who is or may be in a position to
help or hinder the business of Billing (or assist Billing in connection
with any actual or proposed transaction relating to the business of
Billing) (i) which subjected or might have subjected Billing to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, (ii) which if not given in the past, might have had a
Material Adverse Effect, (iii) which if not continued in the future,
might have a Material Adverse Effect or subject Billing, Merger Sub or
ACI to suit or penalty in any private or governmental litigation or
proceeding, (iv) for any of the purposes described in Section 162(c) of
the Code or (v) for the purpose of establishing or maintaining any
concealed fund or concealed bank account.
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2.1.19 INTELLECTUAL PROPERTY.
(A) TITLE. Schedule 2.1.19(a) contains a complete and
correct list of all Intellectual Property that is owned by
Billing and primarily related to, used in, held for use in
connection with, or necessary for the conduct of, or otherwise
material to the business of Billing (the "Owned Intellectual
-------------------
Property"). Billing owns or has the exclusive right to use
--------
pursuant to license, sublicense, agreement or permission all
Intellectual Property Assets, free from any Liens (other than
Permitted Liens) and free from any requirement of any past,
present or future royalty payments, license fees, charges or
other payments, or conditions or restrictions whatsoever. The
Intellectual Property Assets comprise all of the Intellectual
Property necessary for the Partnership to conduct and operate
the business of Billing as now being conducted by Billing.
(B) TRANSFER. Immediately after the Closing, the
Partnership will own all of the Owned Intellectual Property
and will have a right to use all other Intellectual Property
Assets, free from any Liens (other than Permitted Liens) and
on the same terms and conditions as in effect prior to the
Closing.
(C) NO INFRINGEMENT. The conduct of the business of
Billing does not infringe or otherwise conflict with any
rights of any Person in respect of any Intellectual Property.
To the knowledge of the Selling Partners, none of the
Intellectual Property Assets is being infringed or otherwise
used or available for use, by any other Person.
(D) LICENSING ARRANGEMENTS. Schedule 2.1.19(d) sets
forth all agreements, arrangements or laws (i) pursuant to
which Billing has licensed Intellectual Property Assets to, or
the use of Intellectual Property Assets is otherwise permitted
(through non-assertion, settlement or similar agreements or
otherwise) by, any other Person and (ii) pursuant to which
Billing has had Intellectual Property licensed to it, or has
otherwise been permitted to use Intellectual Property (through
non-assertion, settlement or similar agreements or otherwise).
All of the agreements or arrangements set forth on Schedule
2.1.19(d) (x) are in full force and effect in accordance with
their terms and no default exists thereunder by Billing, or to
the knowledge of the Selling Partners, by any other party
thereto, (y) are free and clear of all Liens, and (z) do not
contain any change in control or other terms or conditions
that will become applicable or inapplicable as a result
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of the consummation of the transactions contemplated by this
Agreement. Billing has delivered to ACI true and complete
copies of all licenses and arrangements (including amendments)
set forth on Schedule 2.1.19(d). All royalties, license fees,
charges and other amounts payable by, on behalf of, to, or for
the account of, Billing in respect of any Intellectual
Property are disclosed in the Financial Statements.
(E) NO INTELLECTUAL PROPERTY LITIGATION. No claim or
demand of any Person has been made nor is there any proceeding
that is pending, or to the knowledge of the Selling Partners,
threatened, nor is there a reasonable basis therefor, which
(i) challenges the rights of Billing in respect of any
Intellectual Property Assets, (ii) asserts that Billing is
infringing or otherwise in conflict with, or is, except as set
forth in Schedule 2.1.19(d), required to pay any royalty,
license fee, charge or other amount with regard to, any
Intellectual Property, or (iii) claims that any default exists
under any agreement or arrangement listed on Schedule
2.1.19(d). None of the Intellectual Property Assets is subject
to any outstanding order, ruling, decree, judgment or
stipulation by or with any court, arbitrator, or
administrative agency, or has been the subject of any
litigation within the last five years, whether or not resolved
in favor of Billing.
(F) DUE REGISTRATION. The Owned Intellectual Property
has been duly registered with, filed in or issued by, as the
case may be, the United States Patent and Trademark Office,
United States Copyright Office or such other filing offices,
domestic or foreign, and Billing has taken such other actions,
to ensure full protection under any applicable laws or
regulations, and such registrations, filings, issuances and
other actions remain in full force and effect, in each case to
the extent material to the business of Billing.
(G) USE OF NAME AND XXXX. Except as set forth in
Schedule 2.1.19(g), there are, and immediately after the
Closing will be, no contractual restrictions or limitations
pursuant to any orders, decisions, injunctions, judgments,
awards or decrees of any Governmental Authority on the
Partnership's right to use the name "Hold Billing Service" and
the name and xxxx "HOLD" in the conduct of its business.
2.1.20 INSURANCE. Schedule 2.1.20 contains a complete and
correct list and summary description of all insurance policies
maintained by Billing. Billing
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has delivered to ACI complete and correct copies of all such policies,
together with all riders and amendments thereto. Such policies are in
full force and effect, and all premiums due thereon have been paid.
Billing has complied in all material respects with the terms and
provisions of such policies. The insurance coverage provided by such
policies is adequate and customary for the business conducted by
Billing. Schedule 2.1.20 sets out all claims made by Billing under any
policy of insurance during the past two years, and there is no basis on
which a claim should or could be made under any such policy. There are
no pending or asserted claims outstanding under any such policies as to
which any insurer has denied liability, and there are no pending or
asserted claims outstanding under any insurance policy or binder that
have been disallowed or improperly filed.
2.1.21 REAL PROPERTY.
(A) OWNED REAL PROPERTY. Billing has no Owned Real
Property.
(B) LEASES. Schedule 2.1.21(b) contains a complete
and correct list of all Leases setting forth the address,
landlord and tenant for each Lease. Billing has delivered to
ACI correct and complete copies of the Leases. Each Lease is
legal, valid, binding, enforceable, and in full force and
effect, except as may be limited by bankruptcy, insolvency,
reorganization and similar Applicable Laws affecting creditors
generally and by the availability of equitable remedies.
Neither Billing nor any other party is in default, violation
or breach in any respect under any Lease, and no event has
occurred and is continuing that constitutes or, with notice or
the passage of time or both, would constitute a default,
violation or breach in any respect under any Lease. Each Lease
grants the tenant under the Lease the exclusive right to use
and occupy the demised premises thereunder. Billing has good
and valid title to the leasehold estate under each Lease free
and clear of all Liens other than Permitted Liens. Billing
enjoys peaceful and undisturbed possession under its
respective Leases for the Leased Real Property.
(C) FEE AND LEASEHOLD INTERESTS. The Real Property
constitutes all the fee and leasehold interests in real
property held for use in connection with, necessary for the
conduct of, or otherwise material to, the business of Billing.
(D) NO PROCEEDINGS. There are no eminent domain or
other similar proceedings pending or threatened affecting any
portion of the Real Property. There is no writ, injunction,
decree,
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order or judgment outstanding, nor any action, claim, suit or
proceeding, pending or threatened, relating to the ownership,
lease, use, occupancy or operation by any Person of any Real
Property.
(E) CURRENT USE. The use and operation of the Real
Property in the conduct of the business of Billing does not
violate in any material respect any instrument of record or
agreement affecting the Real Property. There is no violation
of any covenant, condition, restriction, easement or order of
any Governmental Authority having jurisdiction over such
property or of any other Person entitled to enforce the same
affecting the Real Property or the use or occupancy thereof.
No damage or destruction has occurred with respect to any of
the Real Property since the Balance Sheet Date that would,
individually or in the aggregate, have a Material Adverse
Effect.
(F) COMPLIANCE WITH REAL PROPERTY LAWS. The Real
Property is in full compliance with all applicable building,
zoning, subdivision and other land use and similar Applicable
Laws affecting the Real Property (collectively, the "Real
----
Property Laws"), and Billing has not received any notice of
--------------
violation or claimed violation of any Real Property Law. There
is no pending or, or to the knowledge of the Selling Partners,
anticipated change in any Real Property Law that will have or
result in a material adverse effect upon the ownership,
alteration, use, occupancy or operation of the Real Property
or any portion thereof. No current use by Billing of the Real
Property is dependent on a nonconforming use or other
Governmental Approval the absence of which would materially
limit the use of such properties or assets held for use in
connection with, necessary for the conduct of, or otherwise
material to, the business of Billing.
2.1.22 ENVIRONMENTAL MATTERS.
(A) PERMITS. All Environmental Permits are identified
in Schedule 2.1.22(a), and Billing currently holds, and at all
times has held, all such Environmental Permits necessary to
the business of Billing. Billing has not been notified by any
relevant Governmental Authority that any Environmental Permit
will be modified, suspended, cancelled or revoked, or cannot
be renewed in the ordinary course of business.
(B) NO VIOLATIONS. Billing and its Affiliates have
complied and are in compliance in all material respects with
all
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Environmental Permits and all applicable Environmental Laws
pertaining to the Real Property (and the use, ownership or
transferability thereof) and the business of Billing. No
Person has alleged any violation by Billing or its Affiliates
of any Environmental Permits or any applicable Environmental
Law relating to the conduct of the business of Billing or the
use, ownership or transferability of the Real Property.
(C) NO ACTIONS. Except as set forth in Schedule
2.1.22(c), neither Billing nor any of its Affiliates has
caused or taken any action that has resulted or may result in,
or has been or is subject to, any liability or obligation on
the part of Billing relating to (i) the environmental
conditions on, under, or about any Real Property, the
properties or assets owned, leased or used by Billing held for
use in connection with, necessary for the conduct of, or
otherwise material to, the business of Billing, or (ii) the
past or present use, management, handling, transport,
treatment, generation, storage or Release of any Hazardous
Substances.
(D) FULL DISCLOSURE. Billing has disclosed and made
available to ACI all information, including all studies,
analyses and test results, in the possession, custody or
control of Billing or any of its Affiliates relating to (i)
the environmental conditions on, under or about the Real
Property, and (ii) Hazardous Substances used, managed,
handled, transported, treated, generated, stored or Released
by Billing or any other Person at any time on any Real
Property, or otherwise in connection with the use or operation
of the properties or assets used in or held for use in
connection with the business of Billing.
2.1.23 EMPLOYEES AND LABOR MATTERS. Schedule 2.1.23 sets forth
the name, title and salary of each employer of Billing as of the date
of this Agreement. Except as set forth in Schedule 2.1.23, Billing is
not a party to or bound by any collective bargaining agreement and
there are no labor unions or other organizations representing,
purporting to represent or attempting to represent any employees
employed in the operation of the business of Billing. Since January 1,
1991, there has not occurred or, to the best knowledge of any Selling
Partner, been threatened any material strike, slowdown, picketing, work
stoppage, concerted refusal to work overtime or other similar labor
activity with respect to any employees employed in the operation of the
business of Billing. There are no labor disputes currently subject to
any grievance procedure, arbitration or litigation and there is no
representation petition pending or, to the best knowledge of Billing or
any Selling Partner, threatened with respect to any employee employed
in the operation of the business of Billing. Billing has complied in
all
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material respects with all provisions of Applicable Law pertaining to
the employment of employees, including all such Laws relating to labor
relations, equal employment, fair employment practices, entitlements,
prohibited discrimination or other similar employment practices or
acts, except for any failure so to comply that, individually or
together with all such other failures, has not and will not result in a
material liability or obligation on the part of Billing, and has not
had or resulted in, and will not have or result in, a Material Adverse
Effect.
2.1.24 EMPLOYEE BENEFIT PLANS AND RELATED MATTERS.
(A) EMPLOYEE BENEFIT PLANS. Schedule 2.1.24(a) sets
forth a true and complete list of each "employee benefit
plan," as such term is defined in section 3(3) of the ERISA,
whether or not subject to ERISA, and each bonus, incentive or
deferred compensation, severance, termination, retention,
change of control, stock option, stock appreciation, stock
purchase, phantom stock or other equity-based, performance or
other employee or retiree benefit or compensation plan,
program, arrangement, agreement, policy or understanding,
whether written or unwritten, that provides or may provide
benefits or compensation in respect of any employee or former
employee employed or formerly employed by Billing or the
beneficiaries or dependents of any such employee or former
employee (such employees, former employees, beneficiaries and
dependents collectively, the "Employees") or under which any
---------
Employee is or may become eligible to participate or derive a
benefit and that is or has been maintained or established by
Billing or any other trade or business, whether or not
incorporated, which, together with Billing is or would have
been at any date of determination occurring within the
preceding six years treated as a single employer under section
414 of the Code (such other trades and businesses
collectively, the "Related Persons"), or to which Billing or
---------------
any Related Person contributes or is or has been obligated or
required to contribute or with respect to which Billing may
have any liability or obligation (collectively, the "Plans").
-----
With respect to each such Plan, Billing has, if applicable,
provided ACI complete and correct copies of: all written
Plans; descriptions of all unwritten Plans; all trust
agreements, insurance contracts or other funding arrangements;
the two most recent actuarial and trust reports; the two most
recent Forms 5500 and all schedules thereto; the most recent
IRS determination letter; current summary plan descriptions;
all material communications received from or sent to the IRS,
the Pension Benefit Guaranty Corporation or the Department of
Labor (including a written description of any oral
communication); an actuarial study of any post-employment life
or
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medical benefits provided under any such Plan, if any;
statements or other communications regarding withdrawal or
other multiemployer plan liabilities, if any; and all
amendments and modifications to any such document. Billing has
not communicated to any Employee any intention or commitment
to modify any Plan or to establish or implement any other
employee or retiree benefit or compensation arrangement.
(B) QUALIFICATION. Each Plan intended to be qualified
under section 401(a) of the Code, and the trust (if any)
forming a part thereof, has received a favorable determination
letter from the IRS as to its qualification under the Code and
to the effect that each such trust is exempt from taxation
under section 501(a) of the Code, and nothing has occurred
since the date of such determination letter that could
adversely affect such qualification or tax-exempt status.
(C) COMPLIANCE; LIABILITY. No Plan is subject to
section 412 of the Code or section 302 or Title IV of ERISA.
No liability has been or is expected to be incurred by
Billing, any Related Person (either directly or indirectly,
including as a result of an indemnification obligation) under
or pursuant to Title I or IV of ERISA or the penalty, excise
tax or joint and several liability provisions of the Code
relating to employee benefit plans, and, to the knowledge of
the Selling Partners, no event, transaction or condition has
occurred or exists that could result in any such liability to
the business of Billing. Each of the Plans has been operated
and administered in all respects in compliance with all
Applicable Laws, except for any failure so to comply that,
individually or together with all other such failures, has not
and will not result in a material liability or obligation on
the part of the business of Billing, and has not had or
resulted in, and will not have or result in, a Material
Adverse Effect. There are no material pending or, to the best
knowledge of Billing and the Selling Partners, threatened
claims by or on behalf of any of the Plans, by any Employee or
otherwise, involving any such Plan or the assets of any Plan
(other than routine claims for benefits). No Plan is a
"multiemployer plan" within the meaning of Section 4001(a)(3)
-------------------
of ERISA or is a "multiple employer plan" within the meaning
------------------------
of section 4063 or 4064 of ERISA. All contributions required
to have been made by Billing and each Related Person to any
Plan under the terms of any such Plan or pursuant to any
applicable collective bargaining agreement or Applicable Law
have been made within the earliest time prescribed by any such
Plan, agreement or
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Applicable Law. No Employee is or may become entitled to
post-employment benefits of any kind by reason of such
employment, including death or medical benefits (whether or
not insured), other than (a) coverage provided pursuant to the
terms of any Plan specifically identified as providing such
coverage in Schedule 2.1.24(a) or mandated by section 4980B of
the Code, (b) retirement benefits payable under any Plan
qualified under section 401(a) of the Code or (c) deferred
compensation accrued as a liability on the Balance Sheet, or
incurred after the Balance Sheet Date in the ordinary course
of business consistent with the prior practice of Billing,
pursuant to the terms of a Plan. The consummation of the
transactions contemplated by this Agreement or the Collateral
Agreements will not result in an increase in the amount of
compensation or benefits or the acceleration of the vesting or
timing of payment of any compensation or benefits payable to
or in respect of any such Employee.
2.1.25 CONFIDENTIALITY. Billing has taken all steps necessary
to preserve the confidential nature of all material confidential
information (including any proprietary information) with respect to
Billing and the business of Billing.
2.1.26 NO GUARANTEES. None of the obligations or liabilities
of Billing is guaranteed by or subject to a similar contingent
obligation of any other Person. Billing has not guaranteed or become
subject to a similar contingent obligation in respect of the
obligations or liabilities of any other Person. Except as disclosed in
Schedule 2.1.26, There are no outstanding letters of credit, surety
bonds or similar instruments of Billing or any of its Affiliates.
2.1.27 RECORDS. The books of account of Billing are sufficient
to prepare the Financial Statements in accordance with GAAP and to
prepare audited financial statements for the two years ended December
31, 1995, in accordance with the rules and regulations of the
Securities and Exchange Commission applicable to any registration
statements, reports or other documents required to be filed therewith.
Such financial statements of Billing can be audited and such audited
financial statements prepared within 90 days following the Closing
Date.
2.1.28 BROKERS AND FINDERS. All negotiations relating to this
Agreement, the Collateral Agreements, and the transactions contemplated
hereby and thereby, have been carried on without the participation of
any Person acting on behalf of Billing or its Affiliates or any Selling
Partner in such manner as to give rise to any valid claim against the
Partnership, ACI, or any of the Subsidiaries or Affiliates of ACI for
any brokerage or finder's commission, fee or similar compensation.
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2.1.29 BUSINESS DESCRIPTION AND REVIEW. Schedule 2.1.29
attached hereto contains an accurate and substantially complete summary
description of the business of Billing and the general development of
the business of Billing during the past five years. Billing has
previously presented and delivered to ACI Billing's Financial Plan
entitled "Budget," dated March 15, 1996 (the "Billing Business Plan").
---------------------
The pro forma income statements, pro forma balance sheets, and pro
forma statement of cash flows attached as Annex I to Schedule and the
other estimates contained in the Billing Business Plan are based upon
factual assumptions that were reasonably made by Billing and the
Selling Partners and were made in good faith at the time such
projections and estimates were made, and such factual assumptions
remain reasonable and good faith assumptions. There has been no
material change in the business prospects of Billing or in any other
fact or circumstance, known to any Selling Partner, which would or
could reasonably be expected to render any such projections or
estimates, or the assumptions upon which they were based, unreasonable
or not made in good faith in any material respect.
2.1.30 RECEIVABLES. All of Billing's receivables (including
accounts receivable, loans receivable and advances) and which are
reflected on the Balance Sheet, and all such receivables which will
have arisen since the Balance Sheet Date, are valid and genuine and
have arisen solely from bona fide transactions in the ordinary course
of business consistent with past practices. All such receivables are
collectible within 90 days of billing, and none of such receivables is
subject to valid defenses, set-offs or counterclaims. Schedule 2.1.30
hereto accurately lists as of February 29, 1996, all receivables, the
amount owing and the aging of such receivable, the name and last known
address of the party from whom such receivable is owing, and any
security in favor of Billing for the repayment of such receivable which
such Billing purports to have. Billing has delivered to ACI complete
and correct copies of all instruments, documents and agreements
evidencing such receivables and of all instruments, documents or
agreements creating security therefor ("Security"). Billing has valid
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and perfected security interests in such Security (to the extent such
priority may be obtained under applicable law by possession of such
Security or the filing of financing statements or similar documents
with respect thereto).
2.1.31 TRANSACTIONS WITH AFFILIATES. Except for the ownership
of Home Owners Long Distance Incorporated by X. Xxxx, X. Xxxx, Xxxx and
Young, and except as described on Schedule 2.1.31, no partner or
employee of Billing, or any member of such Person's immediate family or
any other of such Person's Affiliates, owns or has a 5% or more
ownership interest in any corporation or other entity that is or was
during the last three years a party to, or in any property which is or
was during the last three years the subject of, any material contract,
agreement or understanding, business arrangement or relationship with
Billing.
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2.1.32 DISCLOSURE. No representation or warranty by any
Selling Partner contained in this Agreement or any statement or
certificate furnished or to be furnished by or on behalf of Billing or
any Selling Partner to ACI or Merger Sub or their representatives in
connection herewith or pursuant hereto contains or will contain any
untrue statement of a material fact, or omits or will omit to state any
material fact required to make the statements contained herein or
therein not misleading. There is no fact (other than matters of a
general economic or political nature which do not affect the business
of Billing uniquely) known to any Selling Partner that has not been
disclosed by Selling Partner to ACI that might reasonably be expected
to have or result in a Material Adverse Effect. The representations and
warranties of the Selling Partners in this Section 2.1.32 are several
and not joint.
SECTION 2.2 TITLE TO PARTNERSHIP INTERESTS. Each Selling Partner
represents and warrants, severally and not jointly, and solely on behalf of such
Person individually, to ACI and Merger Sub that: (i) Selling Partner owns the
Partnership Interest set forth on Schedule 2.1.2(d) beneficially and of record,
free and clear of any and all Liens, and has full power and authority to convey
the Partnership Interest, free and clear of any and all Liens, and, upon
delivery of the Assignment by Partner conveying its Partnership Interest and
payment for such Partnership Interest as herein provided, Merger Sub (or its
designee) will acquire good and marketable title thereto, free and clear of any
and all Liens; (ii) when this Agreement has been executed as contemplated by
Section 3.1.7 hereof, the Partners will have given their unconditional consent
to the sale of Selling Partner's Partnership Interest to Merger Sub in
accordance with the terms of this Agreement as required by Section 10 of the
Partnership Agreement; (iii) when this Agreement has been executed as
contemplated by Section 3.1.7 hereof, the Partners will have given their
unconditional consent to admit Merger Sub to the Partnership as a Limited
Partner (as defined in the Partnership Agreement) pursuant to the Partnership
Agreement; (iv) when this Agreement has been executed as contemplated by Section
3.1.7 hereof, the Partners will have waived compliance with each of the
requirements of Section 10 of the Partnership Agreement, including each of those
provisions requiring any action on the part of Merger Sub prior to the sale of
Selling Partner's Partnership Interest to Merger Sub in accordance with the
terms hereof; (v) when this Agreement has been executed as contemplated by
Section 3.1.7 hereof, the Partners will have duly elected Merger Sub as the
General Partner of the Partnership in compliance with each of the requirements
of Section 14 of the Partnership Agreement; and (vi) Selling Partner's
Partnership Interest has been duly and validly issued and Partner has funded (or
will fund before the same is past due) all capital contributions and advances to
the Partnership that are required by the Partnership Agreement to be funded or
advanced prior to the date hereof and the Closing Date.
SECTION 2.3 REPRESENTATIONS AND WARRANTIES OF ACI AND MERGER SUB. ACI
and Merger Sub, jointly and severally, represent and warrant to the Selling
Partners that:
2.3.1 CORPORATE STATUS AND AUTHORIZATION. Merger Sub is a
corporation duly organized, validly existing and in good standing,
under the laws of the State
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of Texas, the jurisdiction of its incorporation, with full corporate
power and authority to execute and deliver this Agreement and the
Collateral Agreements, to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and
thereby. ACI is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with full
corporate power and authority to execute and deliver this Agreement and
the Collateral Agreements, to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by Merger Sub and ACI of this
Agreement, and the consummation of the transactions contemplated
hereby, have been, and on the Closing Date, the execution and delivery
by the Merger Sub and ACI of the Collateral Agreements will have been,
duly authorized by all requisite corporate action. Merger Sub and ACI
have duly executed and delivered this Agreement and on the Closing Date
will have duly executed and delivered the Collateral Agreements. This
Agreement is, and on the Closing Date each of the Collateral Agreements
will be, valid and legally binding obligations of Merger Sub and ACI,
enforceable against Merger Sub and ACI in accordance with their
respective terms.
2.3.2 NO CONFLICTS, ETC. The execution, delivery and
performance by Merger Sub of this Agreement and each of the Collateral
Agreements, and the consummation of the transactions contemplated
hereby and thereby, do not and will not conflict with or result in a
violation of or under (with or without the giving of notice or the
lapse of time, or both) (i) the articles of incorporation or bylaws or
other organizational documents of Merger Sub or ACI, (ii) any
Applicable Law applicable to Merger Sub, ACI or any of their Affiliates
or any of their properties or assets or (iii) any contract, agreement
or other instrument applicable to the Merger Sub, ACI or any of their
Affiliates or any of their properties or assets, except, in the case of
clause (iii), for violations and defaults that, individually and in the
aggregate, have not and will not materially impair the ability of the
Merger Sub to perform its obligations under this Agreement or under any
of the Collateral Agreements or to consummate the transactions
contemplated hereby or thereby. Except as specified in Schedule 2.3.2,
no Governmental Approval or other Consent is required to be obtained or
made by Merger Sub or ACI in connection with the execution and delivery
of this Agreement or the Collateral Agreements or the consummation of
the transactions contemplated hereby and thereby.
2.3.3 LITIGATION. There is no action, claim, suit or
proceeding pending, or to Merger Sub's or ACI's knowledge threatened,
by or against or affecting Merger Sub or ACI in connection with or
relating to the transactions contemplated by this Agreement or of any
action taken or to be taken in connection herewith or the consummation
of the transactions contemplated hereby.
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2.3.4 BROKERS AND FINDERS. All negotiations relating to this
Agreement and the transactions contemplated hereby have been carried on
without the participation of any Person acting on behalf of Merger Sub,
ACI or any of their Affiliates in such manner as to give rise to any
valid claim against any Selling Partner or the Partnership for any
brokerage or finder's commission, fee or similar compensation.
2.3.5 DISCLOSURE. No representation or warranty by ACI or
Merger Sub contained in this Agreement or any statement or certificate
furnished or to be furnished by or on behalf of ACI or Merger Sub to
the Selling Partners or their representatives in connection herewith or
pursuant hereto contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact
required to make the statements contained herein or therein not
misleading. There is no fact (other than matters of a general economic
or political nature which do not affect its business uniquely) known to
ACI or Merger Sub that has not been disclosed by ACI and Merger Sub to
the Selling Partners that might reasonably be expected to have or
result in a Material Adverse Effect.
ARTICLE 3
COVENANTS
SECTION 3.1 COVENANTS OF BILLING, GENERAL PARTNER AND SELLING PARTNER.
Billing, the General Partner and the Selling Partners, to the extent, if any,
indicated below, shall do each of the following:
3.1.1 CONDUCT OF BUSINESS. From the date hereof to the Closing
Date, except as expressly permitted or required by this Agreement or as
otherwise consented to by ACI in writing, Billing will:
(a) carry on the business of Billing in, and only in,
the ordinary course, in substantially the same manner as
heretofore conducted, and use all reasonable efforts to
preserve intact its present business organization, maintain
its properties in good operating condition and repair, keep
available the services of its present officers and significant
employees, and preserve its relationship with customers,
suppliers and others having business dealings with it, to the
end that its goodwill and going business shall be in all
material respects unimpaired following the Closing;
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(b) pay accounts payable and other obligations of the
business of Billing when they become due and payable in the
ordinary course of business consistent with prior practice;
(c) perform in all material respects all of its
obligations under all Contracts and other agreements and
instruments, and comply in all material respects with all
Applicable Laws applicable to it;
(d) not enter into or assume any material agreement,
contract or instrument, or enter into or permit any material
amendment, supplement, waiver or other modification in respect
thereof;
(e) not grant (or commit to grant) any increase in
the compensation (including incentive or bonus compensation)
of any employee, or institute, adopt or amend (or commit to
institute, adopt or amend) any compensation or benefit plan,
policy, program or arrangement or collective bargaining
agreement applicable to any such employee; and
(f) not take any action or omit to take any action,
which action or omission would cause to be inaccurate or
result in a breach of any of the representations and
warranties set forth in Section 2.1.7.
3.1.2 NO SOLICITATION. During the term of this Agreement,
neither Billing, the General Partner, any Selling Partner, any of their
respective Affiliates nor any Person acting on their behalf shall (i)
solicit or encourage any inquiries or proposals for, or enter into any
discussions with respect to, the acquisition of any properties and
assets held for use in connection with, necessary for the conduct of,
or otherwise material to, the business of Billing or (ii) furnish or
cause to be furnished any non-public information concerning the
business of Billing to any Person (other than ACI, Merger Sub and their
respective agents and representatives), other than in the ordinary
course of business or pursuant to Applicable Law and after prior
written notice to ACI. Billing shall not sell, transfer or otherwise
dispose of, grant any option or proxy to any Person with respect to,
create any Lien upon, or transfer any interest in, any of its assets,
other than in the ordinary course of business consistent with prior
practice and in accordance with each and every term of this Agreement.
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3.1.3 ACCESS AND INFORMATION.
(a) So long as this Agreement remains in effect,
Billing and the General Partner will (and will cause each of
their Affiliates and their Affiliates' respective accountants,
counsel, consultants, employees and agents) give ACI, ACI's
prospective lenders and investors, and their respective
accountants, counsel, consultants, employees and agents, full
access during normal business hours to, and furnish them with
all documents, records, work papers and information with
respect to, all of such Person's properties, assets, books,
contracts, commitments, reports and records relating to the
business and the assets of Billing, as ACI shall from time to
time reasonably request. In addition, Billing will permit ACI,
ACI's prospective lenders and investors, and their respective
accountants, counsel, consultants, employees and agents,
reasonable access to such personnel of Billing during normal
business hours as may be necessary or useful to ACI in its
review of the properties, assets and business affairs of
Billing and the above-mentioned documents, records and
information. Billing will keep ACI generally informed as to
the affairs of the business of Billing.
(b) Billing will retain all books and records
relating to the business of Billing in accordance with
Billing's record retention policies as presently in effect.
During the seven-year period beginning on the Closing Date,
the Selling Partners shall not dispose of or permit the
disposal of any such books and records not required to be
retained under such policies without first giving 60 days'
prior written notice to ACI offering to surrender the same to
ACI at ACI's expense.
(c) From and after the Closing Date, Billing and the
Selling Partners will cooperate with Merger Sub and ACI in the
preparation of audited financial statements for Billing for
the three years ended December 31, 1995, and shall make
available to ACI and its auditors all information necessary
for the preparation thereof.
3.1.4 FINANCIAL STATEMENTS. Until the Closing, on or before
the 21st day of each month, Billing shall deliver to ACI unaudited
consolidated financial statements of Billing as at and for the monthly
period ending the last day of the preceding month (the "Subsequent
----------
Monthly Financial Statements"), which shall include a balance sheet and
----------------------------
statement of income. At the time that the Subsequent Monthly Financial
Statements are delivered to ACI, Billing and the Selling Partners shall
by such delivery be deemed to have made the representations and
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warranties to ACI and Merger Sub with respect to such Subsequent
Monthly Financial Statements set forth in Section 2.1.4.
3.1.5 PUBLIC ANNOUNCEMENTS. Except as required by Applicable
Law, Billing shall not, and shall not permit any Affiliate to, make any
public announcement in respect of this Agreement or the transactions
contemplated hereby without the prior written consent of ACI.
3.1.6 FURTHER ACTIONS.
(a) Billing and the Selling Partners shall use all
reasonable good faith efforts to take all actions and to do
all things necessary, proper or advisable to consummate the
transactions contemplated hereby by the expected Closing Date.
(b) Billing and the Selling Partners will, as
promptly as practicable, file or supply, or cause to be filed
or supplied, all applications, notifications and information
required to be filed or supplied by any of them pursuant to
Applicable Law in connection with this Agreement, the
Collateral Agreements, the consummation of the Merger and the
other transactions contemplated hereby and thereby, including
filings pursuant to the HSR Act, if any.
(c) Billing and the Selling Partners, as promptly as
practicable, will use all reasonable efforts to obtain, or
cause to be obtained, all Consents (including all Governmental
Approvals and any Consents required under any Contract)
necessary to be obtained in order to consummate the Merger and
the other transactions contemplated hereby.
(d) Billing and the Selling Partners will, and will
cause each of their Affiliates to, coordinate and cooperate
with ACI and Merger Sub in exchanging such information and
supplying such assistance as may be reasonably requested by
ACI or Merger Sub in connection with the filings and other
actions contemplated by Section 3.2.2.
(e) At all times prior to the Closing, Billing and
the Selling Partners shall promptly notify ACI in writing of
any fact, condition, event or occurrence that will or may
result in the failure of any of the conditions contained in
Sections 4.1 and 4.2 to be satisfied, promptly upon any of
them becoming aware of the same.
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3.1.7 PARTNER CONSENTS. Pursuant to Section 10 of the
Partnership Agreement, each Partner unconditionally consents to the
sale and transfer of the Partnership Interests of the Selling Partners
to Merger Sub as contemplated by this Agreement. Each Partner
unconditionally consents to the admission of Merger Sub as a Limited
Partner of the Partnership. Effective on and as of the Closing Date,
the General Partner resigns as the General Partner of the Partnership,
and each Partner of the Partnership consents to the General Partner's
Partnership Interest thereafter becoming a Limited Partnership Interest
for all purposes. Pursuant to Section 14 of the Partnership Agreement,
each Partner consents to the election of Merger Sub as the General
Partner of the Partnership, such election to be effective on and as of
the Closing Date and contemporaneously with the resignation of the
General Partner contemplated hereby. Each Partner consents to Merger
Sub's making after the Closing, for and in the name and on behalf of
the Partnership, in its capacity as the General Partner of the
Partnership, the election permitted by section 754 of the Code.
3.1.8 FURTHER ASSURANCES. Following the Closing, Billing and
the Selling Partners shall, and shall cause each of their Affiliates
to, from time to time, execute and deliver such additional instruments,
documents, conveyances or assurances and take such other actions as
shall be necessary, or otherwise reasonably requested by ACI or Merger
Sub, to confirm and assure the rights and obligations provided for in
this Agreement and in the Collateral Agreements and render effective
the consummation of the transactions contemplated hereby and thereby.
3.1.9 DISCLOSURE MEMORANDUM. Billing, the General Partner and
the Selling Partners shall prepare a Disclosure Memorandum (the
"Disclosure Memorandum") (i) in which Billing, the General Partner and
----------------------
the Selling Partners, as the case may be, shall list or describe, by
means of Schedules attached to the Disclosure Memorandum and numbered
to correspond to the particular Section of this Agreement to which it
relates, each of the Contracts, Financial Statements, Tax Returns,
documents, instruments, or other writings of any nature whatsoever, and
each of the events or other occurrences of any nature whatsoever,
required by the provisions of this Agreement to be listed or described,
and (ii) in which Billing, the General Partner and Selling Partners, as
the case may be, may disclose, by means of Schedules attached to the
Disclosure Memorandum and numbered to correspond to the particular
Section of this Agreement to which it relates, exceptions to the
representations, warranties, covenants and agreements of Billing, the
General Partner and the Selling Partners, as the case may be, set forth
in this Agreement. The Disclosure Memorandum shall (i) state that it is
being delivered pursuant to the provisions of this Section 3.1.9 of
this Agreement; (ii) contain a representation and warranty of Billing,
the General Partner and each Selling Partner to the effect that (A) the
Table of Contents attached as Annex I to the Disclosure Memorandum
lists each and every Schedule to the Disclosure
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Memorandum delivered pursuant to this Agreement, and (B) true,
complete, correct and legible copies of each of the Contracts,
Financial Statements, Tax Returns, documents, instruments and writings,
including all amendments, supplements or modifications thereof and all
consents and waivers currently in effect thereunder (collectively, the
"Supporting Documents") have been furnished to ACI with, and as part
---------------------
of, the Disclosure Memorandum; and (iii) be executed for Billing by the
General Partner, for the General Partner by a duly authorized officer,
and for the Selling Partners by either Xxxx or X. Xxxx. The Disclosure
Memorandum, the Schedules to the Disclosure Memorandum, and the
Supporting Documents shall be bound together (on the left side or
stitching margin in such manner as to leave the reading matter
legible), in one or more parts, to form one complete document, and each
page of the complete document shall be numbered sequentially (in
addition to any numbering which otherwise may be present) by any
legible form of notation from the first page of the Disclosure
Memorandum through the last page of any Schedule forming a part
thereof, or otherwise identified with such other notation format or
tabbing as will permit indexing and locating as hereinafter provided.
The Table of Contents attached as Annex I to the Disclosure Memorandum
shall indicate, by any legible form of notation, the page number in the
sequential numbering system, or otherwise identified with such other
notation form or tabbing, where each Schedule thereto and Supporting
Document delivered therewith is located in the bound Disclosure
Memorandum. If any Schedule to the Disclosure Memorandum lists
documents that are required to be disclosed on any other Schedule to
the Disclosure Memorandum, the Disclosure Memorandum may
cross-reference to such other Schedule if the sequential page numbers,
or other notation format or tabbing, of the listed documents are
reflected on such Schedule. Billing, the General Partner and the
Selling Partners shall prepare and deliver three copies of the
Disclosure Memorandum to ACI or its counsel on or before 5:00 p.m.,
Central Standard or Daylight Savings Time, as the case may be, on the
twentieth calendar day following the date of this Agreement, but, in
any event, at least one copy of the Disclosure Memorandum shall be
delivered to counsel for ACI in Dallas, Texas. The statements of the
Selling Partners contained in the Disclosure Memorandum and each
Schedule to the Disclosure Memorandum shall be deemed to constitute
representations and warranties made by the Selling Partners in this
Agreement as fully and completely and to the same extent as if the
contents of each were set forth in full in Section 2.1 of this
Agreement.
ACI shall have through 5:00 p.m., Central Standard or Daylight
Savings Time, as the case may be, on the tenth Business Day following
the date on which the Disclosure Memorandum is delivered to ACI and its
counsel as herein provided (such day being referred to herein as the
"Review Termination Date") to review the contents of and disclosures in
-----------------------
the Disclosure Memorandum and to complete its review of the books,
records and operations of Billing. At any time through and including
the Review Termination Date, ACI shall have the right to
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terminate this Agreement. In the event ACI elects to terminate this
Agreement, the provisions of Article 5 hereof shall govern and apply
for all purposes, and, in addition, in the event the Selling Partners
shall fail to deliver the Disclosure Memorandum as herein provided, or
in the event that ACI terminates this Agreement pursuant to this
Section 3.1.9 because the Disclosure Memorandum sets forth information
not previously disclosed to ACI which has resulted in or could
reasonably be expected to result in a Material Adverse Effect on the
Partnership, the Selling Partners shall pay all Reimbursable Expenses.
3.1.10 CONVEYANCE OF GENERAL PARTNER. Contemporaneously with
the Closing, the Selling Partners shall jointly purchase, on a pro rata
basis, and Xxxxxxx and Box shall sell, the General Partner, in
consideration of the transfer by the Selling Partners collectively and
in pro rata shares of one percent (1%) of the total outstanding
Partnership Interests of the Partnership owned by the Selling Partners
on the Closing Date. If these transactions be consummated as herein
contemplated, then, in such event, the General Partner shall be deemed
to be a Selling Partner hereunder for all purposes, and shall sell its
one percent general Partnership Interest to Merger Sub at the Closing
in accordance with the terms and provisions of this Agreement. There
shall be no adjustment to the Purchase Price as a result of the
transactions contemplated in this Section, and the Purchase Price shall
be paid to the Selling Partners, including the General Partner, pro
rata in accordance with their respective Partnership Interests, as
herein provided.
SECTION 3.2 COVENANTS OF ACI AND MERGER SUB. ACI and Merger Sub, to the
extent, if any, indicated below, shall do each of the following:
3.2.1 PUBLIC ANNOUNCEMENTS. Prior to the Closing, except as
required by Applicable Law, ACI and Merger Sub shall not, and shall not
permit its Affiliates to, make any public announcement in respect of
this Agreement or the transactions contemplated hereby without the
prior written consent of Billing.
3.2.2 FURTHER ACTIONS.
(a) ACI and Merger Sub agree to use all reasonable
good faith efforts to take all actions and to do all things
necessary, proper or advisable to consummate the transactions
contemplated hereby by the expected Closing Date.
(b) ACI and Merger Sub will, as promptly as
practicable, file or supply, or cause to be filed or supplied,
all applications, notifications and information required to be
filed or supplied by Merger Sub or ACI, or both, pursuant to
Applicable Law in connection with this Agreement, the
Collateral Agreements, the Merger pursuant to this Agreement,
and the consummation of
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the other transactions contemplated hereby and thereby,
including filings pursuant to the HSR Act, if any.
(c) ACI and Merger Sub will coordinate and cooperate
with Billing and the Selling Partners in exchanging such
information and supplying such reasonable assistance as may be
reasonably requested by Billing and the Selling Partners in
connection with the filings and other actions contemplated by
Section .
(d) At all times prior to the Closing, ACI and Merger
Sub shall promptly notify Billing and the Selling Partners in
writing of any fact, condition, event or occurrence that will
or may result in the failure of any of the conditions
contained in Sections and to be satisfied, promptly upon
becoming aware of the same.
3.2.3 FURTHER ASSURANCES. Following the Closing, ACI shall,
and shall cause Merger Sub and its Affiliates to, from time to time,
execute and deliver such additional instruments, documents, conveyances
or assurances and take such other actions as shall be necessary, or
otherwise reasonably requested by the Selling Partners, to confirm and
assure the rights and obligations provided for in this Agreement and in
the Collateral Agreements and render effective the consummation of the
transactions contemplated hereby and thereby.
ARTICLE 4
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The obligations of
the parties to consummate the transactions contemplated hereby shall be subject
to the fulfillment on or prior to the Closing Date of the following conditions:
4.1.1 HSR ACT NOTIFICATION. In respect of the notifications
pursuant to the HSR Act, if any, the applicable waiting period and any
extensions thereof shall have expired or been terminated.
4.1.2 NO INJUNCTION, ETC. Consummation of the transactions
contemplated hereby shall not have been restrained, enjoined or
otherwise prohibited by any Applicable Law, including any order,
injunction, decree or judgment of any court or other Governmental
Authority. No court or other Governmental Authority shall have
determined any Applicable Law to make
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illegal the consummation of the transactions contemplated hereby or by
the Collateral Agreements, and no proceeding with respect to the
application of any such Applicable Law to such effect shall be pending.
SECTION 4.2 CONDITIONS TO OBLIGATIONS OF ACI AND MERGER SUB. The
obligations of ACI and Merger Sub to consummate the transactions contemplated
hereby shall be subject to the fulfillment (or waiver by ACI) on or prior to the
Closing Date of the following additional conditions, which Billing and the
Selling Partners agree to use reasonable good faith efforts to cause to be
fulfilled:
4.2.1 REPRESENTATIONS, PERFORMANCE. The representations and
warranties of the Selling Partners contained in this Agreement and in
the Collateral Agreements shall be true and correct in all respects (in
the case of any representation or warranty containing any materiality
qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) at
and as of the date hereof, and (ii) shall be repeated and shall be true
and correct in all respects (in the case of any representation or
warranty containing any materiality qualification) or in all material
respects (in the case of any representation or warranty without any
materiality qualification) on and as of the Closing Date with the same
effect as though made on and as of the Closing Date. Billing and each
of the Selling Partners shall have duly performed and complied in all
material respects with all agreements and conditions required by this
Agreement and each of the Collateral Agreements to be performed or
complied with by them prior to or on the Closing Date. The Selling
Partners shall have delivered to ACI a certificate, dated the Closing
Date and signed by each of the Selling Partners, to the foregoing
effect.
4.2.2 FINANCING. ACI shall have obtained funds sufficient to
enable ACI to consummate the transactions contemplated by this
Agreement on such terms as are satisfactory to ACI in its reasonable
judgment.
4.2.3 CONSENTS. Billing and the Selling Partners shall have
obtained and shall have delivered to ACI copies of (i) all Governmental
Approvals required to be obtained by Billing in connection with the
execution and delivery of this Agreement and the Collateral Agreements
and the consummation of the transactions contemplated hereby or thereby
and (ii) all Consents (including all Consents required under any
Contract) necessary to be obtained in order to consummate the
transactions contemplated by this Agreement and by the Collateral
Agreements.
4.2.4 NO MATERIAL ADVERSE EFFECT. No event, occurrence, fact,
condition, change, development or effect shall have occurred, exist or
come to exist that, individually or in the aggregate, has constituted
or resulted in, or could reasonably be expected to constitute or result
in, a Material Adverse Effect on Billing.
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4.2.5 COLLATERAL AGREEMENTS. ACI and Merger Sub shall have
received each of the following agreements, in each case duly executed
by the other parties thereto:
(a) a Non-Competition Agreement a "Non-Competition
---------------
Agreement"), in the form attached hereto as Exhibit A,
--------- ----------
pursuant to which each Selling Partner who will not enter into
an Employment Agreement with the Partnership agrees not,
directly or indirectly, to engage, either directly or
indirectly, in any business competitive with Billing or its
business anywhere in the world for a period of five years;
(b) an Employment Agreement (the "Xxxxxxx Employment
------------------
Agreement"), in the form attached hereto as Exhibit B,
--------- ----------
pursuant to which Xxxxxxx shall be employed by the
Partnership;
(c) an Employment Agreement (the "Box Employment
---------------
Agreement"), in the form attached hereto as Exhibit C,
--------- ----------
pursuant to which Box shall be employed by the Partnership;
and
(d) Releases, in the form attached as Exhibit G to
---------
the HOLD Merger Agreement, executed by each Selling Partner.
4.2.6 SUBSEQUENT MONTHLY FINANCIAL STATEMENTS. ACI shall have
received Subsequent Monthly Financial Statements. The Subsequent
Monthly Financial Statements shall (a) contain no liabilities different
in kind or in scope from the liabilities set forth in the Balance
Sheet, (b) confirm and be consistent with the information concerning
Billing (including the projected results of operations) previously
provided to ACI by Billing and the Selling Partners in the Billing
Business Plan prior to the date hereof and otherwise be satisfactory to
ACI.
4.2.7 PROCEEDINGS. All partnership and other proceedings of
Billing and the Selling Partners in connection with this Agreement and
the Collateral Agreements and the transactions contemplated hereby and
thereby, and all documents and instruments incident hereto and thereto,
shall be reasonably satisfactory in substance and form to ACI and its
counsel, and ACI and its counsel shall have received all such documents
and instruments, or copies thereof, certified if requested, as may be
reasonably requested.
4.2.8 HOLD CLOSING. The conditions to the obligations of ACI
and Merger Sub under the HOLD Merger Agreement to consummate the
transactions contemplated by the HOLD Merger Agreement shall have been
fulfilled (or
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waived by ACI and Merger Sub) and, concurrently with the Closing, the
transactions contemplated by the HOLD Merger Agreement shall have been
consummated.
SECTION 4.3 CONDITIONS TO OBLIGATIONS OF SELLING PARTNERS. The
obligation of the Selling Partners to consummate the transactions contemplated
hereby shall be subject to the fulfillment (or waiver by the Selling Partners),
on or prior to the Closing Date, of the following additional conditions, which
ACI and Merger Sub agree to use reasonable good faith efforts to cause to be
fulfilled.
4.3.1 REPRESENTATIONS, PERFORMANCE. The representations and
warranties of Merger Sub and ACI contained in this Agreement and the
Collateral Agreements shall be true and correct in all respects (in the
case of any representation or warranty containing any materiality
qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) at
and as of the date hereof and (ii) shall be repeated and shall be true
and correct in all respects (in the case of any representation or
warranty containing any materiality qualification) or in all material
respects (in the case of any representation or warranty without any
materiality qualification) on and as of the Closing Date with the same
effect as though made at and as of such time. Merger Sub and ACI shall
have duly performed and complied in all material respects with all
agreements and conditions required by this Agreement and the Collateral
Agreements to be performed or complied with by them prior to or on the
Closing Date. Merger Sub and ACI shall have delivered to Billing and
the Selling Partners a certificate, dated the Closing Date and signed
by the duly authorized officers of Merger Sub and ACI, to the foregoing
effect.
4.3.2 CORPORATE PROCEEDINGS. All corporate proceedings of
Merger Sub and ACI in connection with this Agreement, the Collateral
Agreements and the transactions contemplated hereby and thereby, and
all documents and instruments incident hereto and thereto, shall be
reasonably satisfactory in substance and form to Billing and the
Selling Partners, and their counsel, and Billing and the Selling
Partners and their counsel shall have received all such documents and
instruments, or copies thereof, certified if requested, as may be
reasonably requested.
4.3.3 HOLD CLOSING. The conditions to the obligations of the
Stockholders (as defined in the HOLD Merger Agreement) under the HOLD
Merger Agreement to consummate the transactions contemplated by the
HOLD Merger Agreement shall have been fulfilled (or waived by the
Stockholders thereunder), and, concurrently with the Closing, the
transactions contemplated by the HOLD Merger Agreement shall have been
consummated.
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4.3.4 CONSENTS AND APPROVALS. Billing and the Selling Partners
shall have obtained all Governmental Approvals necessary to consummate
the transactions contemplated hereby.
ARTICLE 5
TERMINATION
SECTION 5.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by ACI pursuant to Section hereof;
(b) by the written agreement of ACI, Merger Sub and the
Selling Partners;
(c) by either the Selling Partners, on the one hand, or ACI,
on the other hand, by written notice to the other party if, without
fault of the terminating party, the Effective Time shall not have
occurred by 5:00 p.m. Central Standard or Daylight Savings Time, as the
case may be, on or before September 30, 1996, unless such date shall be
extended by the mutual written consent of ACI and the Selling Partners;
(d) by ACI by written notice to the Selling Partners if (i)
the representations and warranties of Billing and the Selling Partners
shall not have been true and correct in all respects (in the case of
any representation or warranty containing any materiality
qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) as of
the date when made or (ii) if any of the conditions set forth in
Section 4.1 or 4.2 shall not have been, or if it becomes apparent that
any of such conditions will not be, fulfilled by 5:00 p.m. Central
Standard or Daylight Savings Time, as the case may be, on September 30,
1996, unless such failure shall be due to the failure of either ACI or
Merger Sub to perform or comply with any of the covenants, agreements
or conditions hereof to be performed or complied with by either of them
prior to the Closing; or
(e) by the Selling Partners by written notice to ACI if (i)
the representations and warranties of ACI and Merger Sub shall not have
been true and correct in all respects (in the case of any
representation or warranty containing any materiality qualification) or
in all material respects (in the case of any representation or warranty
without any materiality qualification) as of the date when made or (ii)
if any of the conditions set forth in Section 4.1 or 4.3 shall not
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have been, or if it becomes apparent that any of such conditions will
not be, fulfilled by 5:00 p.m. Central Standard or Daylight Savings
Time on September 30, 1996, unless such failure shall be due to the
failure of Billing or any Selling Partner to perform or comply with any
of the covenants, agreements or conditions hereof to be performed or
complied with by any of them prior to the Closing.
SECTION 5.2 EFFECT OF TERMINATION. In the event of the termination of
this Agreement pursuant to the provisions of Section 5.1, this Agreement shall
become void and have no effect, without any liability to any Person in respect
hereof or of the transactions contemplated hereby on the part of any party
hereto, or any of its directors, officers, employees, agents, consultants,
representatives, advisers, stockholders or Affiliates, except as specified in
Sections 8.2 and 3.1.9, and except for any liability resulting from such party's
breach of this Agreement.
ARTICLE 6
INDEMNIFICATION
SECTION 6.1 BY BILLING AND THE SELLING PARTNERS. Billing and the
General Partner (the "Billing Group"), jointly and severally, as to each
--------------
representation, warranty and covenant made by the Billing Group herein, and the
Selling Partners, jointly and severally as to each representation, warranty and
covenant made by the Selling Partners herein, shall defend, indemnify and hold
harmless ACI, Merger Sub, the Partnership, and their respective officers,
directors, partners, employees, agents, advisers, representatives and Affiliates
(collectively, the "ACI Indemnitees") from and against, and pay or reimburse the
---------------
ACI Indemnitees for, any and all claims, liabilities, obligations, losses,
fines, costs, royalties, proceedings, deficiencies or damages (whether absolute,
accrued, conditional or otherwise and whether or not resulting from third party
claims), including out-of-pocket expenses and reasonable attorneys' and
accountants' fees incurred in the investigation or defense of any of the same or
in asserting any of their respective rights hereunder (collectively, "Losses"),
------
resulting from or arising out of:
(i) any inaccuracy of any representation or warranty
made by the Billing, the General Partner or any of the Selling
Partners herein or under any Collateral Agreement or in
connection herewith or therewith; or
(ii) any failure of the Billing, the General Partner
or any of the Selling Partners to perform any covenant or
agreement hereunder or under any Collateral Agreement or
fulfill any other obligation in respect hereof or of any
Collateral Agreement.
SECTION 6.2 BY MERGER SUB AND ACI. Merger Sub and ACI, jointly and
severally, shall defend, indemnify and hold harmless Billing and the Selling
Partners and their respective officers,
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directors, partners, employees, agents, advisers, representatives and Affiliates
(collectively, the "Billing Indemnitees") from and against any and all Losses
--------------------
resulting from or arising out of:
(i) any inaccuracy in any representation or warranty
by any Merger Sub or ACI made or contained in any Acquisition
Agreement or any Collateral Agreement or in connection
herewith or therewith; or
(ii) any failure of Merger Sub or ACI to perform any
covenant or agreement hereunder or under any Collateral
Agreement or fulfill any other obligation in respect hereof or
of any Collateral Agreement.
SECTION 6.3 LIMITATION ON INDEMNIFICATION. The ACI Indemnitees shall be
entitled to indemnification hereunder only when, and only with respect to
amounts by which, the aggregate of all Losses incurred by the ACI Indemnitees
hereunder and under the HOLD Merger Agreement exceeds $40,000. The Billing
Indemnitees shall be entitled to indemnification hereunder only when, and only
with respect to amounts by which, the aggregate of all Losses incurred by the
Billing Indemnitees hereunder and under the HOLD Merger Agreement exceeds
$40,000.
SECTION 6.4 MAXIMUM LIABILITY OF YOUNG. Young shall have no liability
hereunder for any amount in excess of Young's pro rata amount of the Purchase
Price received by Young pursuant to this Agreement.
SECTION 6.5 ADJUSTMENTS TO INDEMNIFICATION PAYMENTS. Any payment made
by Billing and the Selling Partners, or any of them to ACI Indemnities, on the
one hand, or by ACI and Merger Sub, or either of them, to the Billing
Indemnities, on the other hand, pursuant to this Article in respect of any claim
(i) shall be net of any insurance proceeds realized by and paid to the
Indemnified Party in respect of such claim and (ii) shall be (A) reduced by an
amount equal to any Tax benefits attributable to such claim and (B) increased by
an amount equal to any Taxes attributable to the receipt of such payment, but
only to the extent that such Tax benefits are actually realized, or such Taxes
are actually paid, as the case may be, by Billing or by any consolidated,
combined or unitary group of which Billing is a member. The Indemnified Party
shall use its reasonable efforts to make insurance claims relating to any claim
for which it is seeking indemnification pursuant to this Article 6; provided
--------
that the Indemnified Party shall not be obligated to make such an insurance
claim if the Indemnified Party in its reasonable judgment believes that the cost
of pursuing such an insurance claim together with any corresponding increase in
insurance premiums or other chargebacks to the Indemnified Party, as the case
may be, would exceed the value of the claim for which the Indemnified Party is
seeking indemnification.
SECTION 6.6 INDEMNIFICATION PROCEDURES. In the case of any claim
asserted by a third party against a party entitled to indemnification under this
Agreement (the "Indemnified Party"),
-----------------
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notice shall be given by the Indemnified Party to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
------------------
has actual knowledge of any claim as to which indemnity may be sought, and the
Indemnified Party shall permit the Indemnifying Party (at the expense of such
Indemnifying Party) to assume the defense of any claim or any litigation
resulting therefrom, provided that (i) the counsel for the Indemnifying Party
--------
who shall conduct the defense of such claim or litigation shall be reasonably
satisfactory to the Indemnified Party, (ii) the Indemnified Party may
participate in such defense at such Indemnified Party's expense, and (iii) the
omission by any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its indemnification obligation under this
Agreement except to the extent that such omission results in a failure of actual
notice to the Indemnifying Party and such indemnifying Party is materially
damaged as a result of such failure to give notice. Except with the prior
written consent of the Indemnified Party, no Indemnifying Party, in the defense
of any such claim or litigation, shall consent to entry of any judgment or enter
into any settlement that provides for injunctive or other nonmonetary relief
affecting the Indemnified Party or that does not include as an unconditional
term thereof the giving by each claimant or plaintiff to such Indemnified Party
of a release from all liability with respect to such claim or litigation. In the
event that the Indemnified Party shall in good faith determine that the conduct
of the defense of any claim subject to indemnification hereunder or any proposed
settlement of any such claim by the Indemnifying Party might be expected to
affect adversely the Indemnified Party's Tax liability or the ability of ACI or
the Partnership to conduct its business, or that the Indemnified Party may have
available to it one or more defenses or counterclaims that are inconsistent with
one or more of those that may be available to the Indemnifying Party in respect
of such claim or any litigation relating thereto, the Indemnified Party shall
have the right at all times to take over and assume control over the defense,
settlement, negotiations or litigation relating to any such claim at the sole
cost of the Indemnifying Party, provided that if the Indemnified Party does so
--------
take over and assume control, the Indemnified Party shall not settle such claim
or litigation without the written consent of the Indemnifying Party, such
consent not to be unreasonably withheld. In the event that the Indemnifying
Party does not accept the defense of any matter as above provided, the
Indemnified Party shall have the full right to defend against any such claim or
demand and shall be entitled to settle or agree to pay in full such claim or
demand. In any event, the Indemnifying Party and the Indemnified Party shall
cooperate in the defense of any claim or litigation subject to this Section and
the records of each shall be available to the other with respect to such
defense.
SECTION 6.7 TIME LIMITATION. All claims for indemnification under
clause (i) of the first sentence of Section 8.3(a) or clause (i) of the first
sentence of Section 8.3(b) must be asserted within 30 days of the termination of
the respective survival periods set forth in Section 8.1.
SECTION 6.8 INDEMNIFICATION NOT EXCLUSIVE. The foregoing
indemnification provisions are in addition to, and not in derogation or
limitation of, any statutory, equitable or common-law remedy any party may have
for breach of representation, warranty, covenant or agreement or any other
remedy for which provision is made in this Agreement.
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ARTICLE 7
DEFINITIONS AND CONSTRUCTION
SECTION 7.1 DEFINITION OF CERTAIN TERMS. Except as otherwise expressly
provided or unless the context otherwise requires, the terms defined in this
Section 7.1, whenever used in this Agreement (including in the Schedules), shall
have the respective meanings assigned to them in this Section for all purposes
of this Agreement, and include the plural as well as the singular.
ACI: as defined in the first paragraph of this Agreement.
ACI INDEMNITEES: as defined in Section 6.2.
AFFILIATE: of a Person means a Person that directly or
indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with, the first Person. "Control"
-------
(including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management policies of a person, whether
through the ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.
AGREEMENT: this instrument as originally executed, including
the Schedules hereto, or as it may be from time to time supplemented or
amended by one or more supplements or amendments hereto entered
pursuant to the applicable provisions hereof.
APPLICABLE LAW: all applicable provisions of all (i)
constitutions, treaties, statutes, laws (including the common law),
rules, regulations, ordinances, codes or orders of any Governmental
Authority, (ii) Governmental Approvals and (iii) orders, decisions,
injunctions, judgments, awards and decrees of or agreements with any
Governmental Authority.
BALANCE SHEET: the balance sheet contained in the Unaudited
Financial Statements.
BALANCE SHEET DATE: as defined in Section 2.1.4.
BENEFIT LIABILITIES: liabilities, obligations, commitments,
costs and expenses, including reasonable fees and disbursements of
attorneys and other advisors, including any such expenses incurred in
connection with the enforcement of any applicable provision of this
Agreement.
BILLING: as defined in the Recitals to this Agreement.
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BILLING BUSINESS PLAN: as defined in Section 2.1.29.
BILLING GROUP: collectively, Billing and the General Partner.
BILLING INDEMNITEES: as defined in Section ?.
BOX: as defined in the first paragraph of this Agreement.
BOX EMPLOYMENT AGREEMENT: as defined in Section 4.2.5(c).
BUSINESS DAY: shall mean a day other than a Saturday, Sunday
or other day on which commercial banks in New York City or the State of
Texas are authorized or required to close.
CERCLA: the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. ss. 9601 et seq.
-- ---
CLOSING: as defined in Section 1.3.
CLOSING DATE: as defined in Section 2.1.
CODE: the Internal Revenue Code of 1986.
COLLATERAL AGREEMENTS: the agreements and other documents and
instruments described in Sections 4.2.5.
CONSENT: any consent, approval, authorization, waiver, permit,
grant, franchise, concession, agreement, license, exemption or order
of, registration, certificate, declaration or filing with, or report or
notice to, any Person, including any Governmental Authority.
CONTRACTS: as defined in Section 2.1.12(a).
COVERED RETURNS: as defined in Section 2.1.6(a).
COVERED TAXES: all Taxes.
DISCLOSURE MEMORANDUM: as defined in Section 3.1.9.
DOLLARS OR $: lawful money of the United States.
X. XXXX: as defined in the first paragraph of this Agreement.
EMPLOYEE BENEFIT PLAN: as defined in Section 2.1.24(a).
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EMPLOYEES: as defined in Section 2.1.24(a).
ENVIRONMENTAL ASSESSMENT: any environmental assessment of the
Real Property and the other assets, equipment and facilities owned,
leased, operated or used by Billing.
ENVIRONMENTAL LAWS: all Applicable Laws relating to the
protection of the environment, to human health and safety, or to any
emission, discharge, generation, processing, storage, holding,
abatement, existence, Release, threatened Release or transportation of
any Hazardous Substances, including (i) CERCLA, the Resource
Conservation and Recovery Act, and the Occupational Safety and Health
Act, (ii) all other requirements pertaining to reporting, licensing,
permitting, investigation or remediation of emissions, discharges,
releases or threatened releases of Hazardous Materials into the air,
surface water, groundwater or land, or relating to the manufacture,
processing, distribution, use, sale, treatment, receipt, storage,
disposal, transport or handling of Hazardous Substances, and (iii) all
other requirements pertaining to the protection of the health and
safety of employees or the public.
ENVIRONMENTAL LIABILITIES AND COSTS: all Losses, whether
direct or indirect, known or unknown, current or potential, past,
present or future, imposed by, under or pursuant to Environmental Laws,
including all Losses related to Remedial Actions, and all fees,
disbursements and expenses of counsel, experts, personnel and
consultants based on, arising out of or otherwise in respect of: (i)
the ownership or operation of the business, Real Property or any other
real properties, assets, equipment or facilities, by Billing, or any of
their predecessors or Affiliates; (ii) the environmental conditions
existing on the Closing Date on, under, above, or about any Real
Property or any other real properties, assets, equipment or facilities
currently or previously owned, leased or operated by the Billing, or
any of their predecessors or Affiliates; and (iii) expenditures
necessary to cause any Real Property or any aspect of the business to
be in compliance with any and all requirements of Environmental Laws as
of the Closing Date, including all Environmental Permits issued under
or pursuant to such Environmental Laws, and reasonably necessary to
make full economic use of any Real Property.
ENVIRONMENTAL PERMITS: any federal, state and local permit,
license, registration, consent, order, administrative consent order,
certificate, approval or other authorization with respect to the
Billing necessary for the conduct of the business as currently
conducted or previously conducted under any Environmental Law.
ERISA: the Employee Retirement Income Security Act of 1974.
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FINANCIAL STATEMENTS: each of the financial statements
required to be provided by Section 2.1.4.
GAAP: generally accepted accounting principles as in effect in
the United States.
GENERAL PARTNER: Hold Billing & Collection, L.C., a Texas
limited liability company.
GOVERNMENT APPROVAL: any Consent of, with or to any
Governmental Authority.
GOVERNMENTAL AUTHORITY: any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, including any government authority, agency,
department, board, commission or instrumentality of the United States,
any State of the United States or any political subdivision thereof,
and any tribunal or arbitrator(s) of competent jurisdiction, and any
self-regulatory organization.
HAZARDOUS SUBSTANCES: any substance that: (i) is or contains
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum or petroleum-derived substances or wastes, radon gas or
related materials, (ii) requires investigation, removal or remediation
under any Environmental Law, or is defined, listed or identified as a
"hazardous waste" or "hazardous substance" thereunder, or (iii) is
toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous and is regulated by any
Governmental Authority or Environmental Law.
HOLD MERGER AGREEMENT: as defined in Paragraph A of the
Recitals.
HSR ACT: the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of
1976.
INDEMNIFIED PARTY: as defined in Section 6.6.
INDEMNIFYING PARTY: as defined in Section 6.6.
INTELLECTUAL PROPERTY: any and all United States and foreign:
(a) patents (including design patents, industrial designs and utility
models) and patent applications (including docketed patent disclosures
awaiting filing, reissues, divisions, continuations-in-part and
extensions), patent disclosures awaiting filing determination,
inventions and improvements thereto; (b) trademarks, service marks,
trade names, trade dress, logos, business and product names, slogans,
and registrations and applications for registration thereof; (c)
copyrights (including
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software) and registrations thereof; (d) inventions, processes,
designs, formulae, trade secrets, know-how, industrial models,
confidential and technical information, manufacturing, engineering and
technical drawings, product specifications and confidential business
information; (e) mask work and other semiconductor chip rights and
registrations thereof; (f) intellectual property rights similar to any
of the foregoing; (g) copies and tangible embodiments thereof (in
whatever form or medium, including electronic media).
INVENTORIES: all inventories of raw materials, work in
process, finished products, goods, spare parts, replacement and
component parts, and office and other supplies, including Inventories
held at any location controlled by Billing and Inventories previously
purchased and in transit to Billing at such locations.
IRS: the Internal Revenue Service.
LEASED REAL PROPERTY: means all interests leased pursuant to
the Leases.
LEASES: means the real property leases, subleases, licenses
and occupancy agreements pursuant to which Billing is the lessee,
sublessee, licensee or occupant.
LIEN: any mortgage, pledge, hypothecation, right of others,
claim, security interest, encumbrance, lease, sublease, license,
occupancy agreement, adverse claim or interest, easement, covenant,
encroachment, burden, title defect, title retention agreement, voting
trust agreement, interest, equity, option, lien, right of first
refusal, charge or other restrictions or limitations of any nature
whatsoever, including such as may arise under any Contracts.
LOSSES: as defined in Section 6.1.
MATERIAL ADVERSE EFFECT: any event, occurrence, fact,
condition, change or effect that is materially adverse to the business,
operations, results of operations, condition (financial or otherwise),
properties (including intangible properties), assets (including
intangible assets) or liabilities of Billing, or of ACI and its
Subsidiaries, taken as a whole, as the case may be.
XXXXXXX: as defined in the first paragraph of this Agreement.
MERGER SUB: as defined in the first paragraph of this
Agreement.
MERGER SUB INDEMNITEES: as defined in Section 6.1.
MONTHLY UNAUDITED FINANCIAL STATEMENTS: as defined in Section
2.1.4.
MULTIEMPLOYER PLAN: as defined in Section 2.1.24(c).
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MULTIPLE EMPLOYER PLAN: as defined in Section 2.1.24(c).
NON-COMPETITION AGREEMENT: as defined in Section 4.2.5(a).
OWNED INTELLECTUAL PROPERTY: as defined in Section 2.1.19(a).
OWNED REAL PROPERTY: the real property owned by Billing,
together with all other structures, facilities, improvements, fixtures,
systems, equipment and items of property presently or hereafter located
thereon, attached or appurtenant thereto, or owned by the Billing and
located on Leased Real Property, and all easements, licenses, rights
and appurtenances relating to the foregoing.
X. XXXX: as defined in the first paragraph of this Agreement.
PARTNER: as defined in the first paragraph of this Agreement.
PARTNERS: as defined in the first paragraph of this Agreement.
PARTNERSHIP: as defined in the first paragraph of this
Agreement.
PARTNERSHIP AGREEMENT: the Limited Partnership Agreement of
Hold Billing Services, Ltd., effective as May 13, 1994.
PARTNERSHIP INTEREST: all of a Partner's interest in the
Partnership, including (a) the right to receive distributions of the
assets of the Partnership, (b) the right to receive allocations of
income, gain, loss, deduction, or credit of the Partnership, (c) the
right, if any, to participate in the affairs of the Partnership
pursuant to the Partnership Agreement or the TRLPA, (d) the right to
any and all benefits to which a Partner is entitled under the
Partnership Agreement or the TRLPA, and (e) the obligation to comply
with the terms and provisions of the Partnership Agreement.
PERMITTED LIENS: (i) Liens reserved against in the Balance
Sheet, to the extent so reserved, (ii) Liens for Taxes not yet due and
payable or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on
Billing's books in accordance with GAAP, or (iii) Liens that,
individually and in the aggregate, do not and would not materially
detract from the value of any of the property or assets of Billing or
materially interfere with the use thereof as currently used or
contemplated to be used or otherwise.
PERSON: any natural person, firm, partnership, association,
corporation, company, trust, business trust, Governmental Authority or
other entity.
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PLANS: as defined in Section 2.1.24(a).
PURCHASE PRICE: as defined in Section 1.2.
REAL PROPERTY: the Owned Real Property and the Leased Peal
Property.
REAL PROPERTY LAWS: as defined in Section 2.1.21(f).
REIMBURSABLE EXPENSES: all out-of-pocket expenses and fees,
including legal and accounting fees and fees payable to banks and other
financial institutions and advisors, incurred by ACI or Merger Sub, or
both, or on their behalf in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, or the
financing of such transactions, or incurred by banks, financial
institutions or advisors and assumed by ACI or Merger Sub, or both, in
connection with the negotiation, preparation, execution, delivery and
performance of this Agreement or any related financing.
RELATED PERSONS: as defined in Section 2.1.24(a).
RELEASE: any releasing, disposing, discharging, injecting,
spilling, leaking, leaching, pumping, dumping, emitting, escaping,
emptying, seeping, dispersal, migration, transporting, placing and the
like, including the moving of any materials through, into or upon, any
land, soil, surface water, ground water or air, or otherwise entering
into the environment.
REMEDIAL ACTION: all actions required to (i) clean up, remove,
treat or in any other way remediate any Hazardous Substances; (ii)
prevent the release of Hazardous Substances so that they do not migrate
or endanger or threaten to endanger public health or welfare or the
environment; or (iii) perform studies, investigations and care related
to any such Hazardous Substances.
REVIEW TERMINATION DATE: as defined in Section 3.1.9.
RIGHTS: when used with respect to a Partner's Partnership
Interest, all of a Partner's right, title, and interest in, to, and
under the Partnership Interest.
SECURITIES ACT: the Securities Act of 1933.
SECURITY: as defined in Section 2.1.30.
SELLING PARTNER: as defined in the first paragraph of this
Agreement.
SELLING PARTNERS: as defined in the first paragraph of this
Agreement.
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SUBSEQUENT MONTHLY FINANCIAL STATEMENTS: as defined in Section
3.1.4.
SUBSIDIARIES: each corporation or other Person in which a
Person owns or controls, directly or indirectly, capital stock or other
equity interests representing at least 50% of the outstanding voting
stock or other equity interests.
SUPPORTING DOCUMENTS: as defined in Section 3.1.9.
TAX: any federal, state, provincial, local, foreign or other
income, alternative, minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits,
windfall profits, gross receipts, value added, sales, use, goods and
services, excise, customs duties, transfer, conveyance, mortgage,
registration, stamp, documentary, recording, premium, severance,
environmental (including taxes under Section 59A of the Code), 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 or other governmental
charge or assessment or deficiencies thereof (including all interest
and penalties thereon and additions thereto whether disputed or not).
TAX RETURN: any return, report, declaration, form, claim for
refund or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment
thereof.
TERMINATION DATE: the date on which this Agreement is
terminated pursuant to Section 7.1.
TREASURY REGULATIONS: the regulations prescribed pursuant to
the Code.
TRLPA: the Texas Revised Limited Partnership Act.
UNAUDITED FINANCIAL STATEMENTS: as defined in Section 2.1.4.
XXXX: as defined in the first paragraph of this Agreement.
WITHHOLDING TAXES: as defined in Section 2.1.6(a).
YOUNG: as defined in the first paragraph of this Agreement.
SECTION 7.2 RULES OF CONSTRUCTION.
(a) "This Agreement" means this instrument as originally
executed, including the Exhibits and Schedules hereto, or as it may be
from time to time supplemented or
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amended by one or more supplements or amendments hereto entered
pursuant to the applicable provisions hereof;
(b) "includes" and "including" are not limiting, and, in each
case, shall be construed as if followed by the words "without
limitation," "but not limited to" or words of similar import;
(c) "may not" is prohibitive, and not permissive;
(d) "shall" is mandatory, and not permissive;
(e) "or" is not exclusive [i.e., if a party "may do (a), (b)
or (c)," then the party may do all of, any one of, or any combination
of, (a), (b) or (c)] unless the context expressly provides otherwise;
(f) all references in this instrument to designated Articles,
Sections, Exhibits, and Schedules are to the designated Articles,
Sections, Exhibits, and Schedules of this instrument as originally
executed;
(g) all references herein to constitutions, treaties,
statutes, laws, rules, regulations, ordinances, codes or orders include
any successor thereto or replacement thereof, include all amendments,
modifications or supplements thereof or thereto from time to time, and
unless the context otherwise requires, include all rules and
regulations promulgated thereunder or pursuant thereto;
(h) the words "herein," "hereof," "hereto" and "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision;
(i) all terms used herein which are defined in the Securities
Act, or the rules and regulations promulgated, thereunder have the
meanings assigned to them therein unless otherwise defined herein; and
(j) all accounting terms not otherwise defined herein have the
meaning assigned to them in accordance with GAAP.
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ARTICLE 8
GENERAL PROVISIONS
SECTION 8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in this Agreement shall survive the
execution and delivery of this Agreement, any examination by or on behalf of the
parties hereto and the completion of the transactions contemplated herein, but
only to the extent specified below:
(a) except as set forth in clauses (b) and (c) below, the
representations and warranties contained in Section 2.1 and Section 2.3
shall survive for a period of one year following the Closing Date;
(b) the representations and warranties contained in Sections
2.1.1, 2.1.2, 2.1.3, 2.1.22, 2.1.24 and 2.3.1 shall survive without
limitation; and
(c) the representations and warranties contained in Section
2.1.6 shall survive as to any Tax covered by such representations and
warranties for so long as any statute of limitations for such Tax
remains open, in whole or in part, including by reason of waiver of
such statute of limitations.
SECTION 8.2 EXPENSES. Except as provided in Section 3.1.9, the Selling
Partners, on the one hand, and ACI and Merger Sub, on the other hand, shall bear
their respective expenses, costs and fees (including attorneys', auditors' and
financing commitment fees) in connection with the transactions contemplated
hereby, including the preparation, execution and delivery of this Agreement and
compliance herewith, whether or not the transactions contemplated hereby shall
be consummated.
SECTION 8.3 SEVERABILITY. If any provision of this Agreement, including
any phrase, sentence, clause, Section or subsection is inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
SECTION 8.4 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or (c) sent by next-day or overnight mail or
delivery or (d) sent by telecopy or telegram,
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(i) if to Merger Sub or ACI, to
Xxxxx Communications, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, III
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
(ii) if to Billing or the Selling Partners, to
Hold Billing Services, Ltd.
000 Xxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
with a copy to:
Xxxxx X. XxXxxxx, Xx., Esq.
Gresham, Davis, Xxxxxxx, Worthy & Xxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000-0000
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
business day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
SECTION 8.5 HEADINGS. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
SECTION 8.6 ENTIRE AGREEMENT. This Agreement (including the Schedules
hereto) and the Collateral Agreements (when executed and delivered) constitute
the entire agreement and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
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SECTION 8.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
SECTION 8.8 GOVERNING LAW, ETC. This Agreement shall be governed in all
respects, including as to validity, interpretation and effect, by the internal
laws of the State of Texas, without giving effect to the conflict of laws rules
thereof. ACI, Merger Sub, Billing and each Selling Partner hereby irrevocably
submit to the jurisdiction of the courts of the State of Texas and the Federal
courts of the United States of America located in the State of Texas, City and
County of Dallas, solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such document,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in said courts or that the venue thereof may
not be appropriate or that this Agreement or any of such document may not be
enforced in or by said courts, and the parties hereto irrevocably agree that all
claims with respect to such action or proceeding shall be heard and determined
in such a Texas State or Federal court. ACI, Merger Sub, Billing and each
Selling Partner hereby consent to and grant any such court jurisdiction over the
person of such parties and over the subject matter of any such dispute and agree
that mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 8.4, or in such other manner as may
be permitted by law, shall be valid and sufficient service thereof.
SECTION 8.9 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns.
SECTION 8.10 ASSIGNMENT. This Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
the other parties hereto; provided, however, that ACI and Merger Sub may assign
-------- -------
this Agreement to any Subsidiary of ACI, and ACI and Merger Sub may assign this
Agreement to any lender to ACI or any Subsidiary or Affiliate thereof as
security for obligations to such lender in respect of the financing arrangements
entered into in connection with the transactions contemplated hereby and any
refinancings, extensions, refundings or renewals thereof; and, provided,
--------
further, that no assignment to any such lender shall in any way affect ACI's or
-------
Merger Sub's obligations or liabilities under this Agreement.
SECTION 8.11 NO THIRD PARTY BENEFICIARIES. Except as provided in
Section with respect to indemnification of Indemnified Parties hereunder,
nothing in this Agreement shall confer any rights upon any person or entity
other than the parties hereto and their respective heirs, successors and
permitted assigns.
SECTION 8.12 AMENDMENT; WAIVERS, ETC. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, discharge
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or waiver is sought. Any such waiver shall constitute a waiver only with respect
to the specific matter described in such writing and shall in no way impair the
rights of the party granting such waiver in any other respect or at any other
time. Neither the waiver by any of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure by any of
the parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder, shall be construed as
a waiver of any other breach or default of a similar nature, or as a waiver of
any of such provisions, rights or privileges hereunder. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any party may otherwise have at law or in equity. The rights and remedies
of any party based upon, arising out of or otherwise in respect of any
inaccuracy or breach of any representation, warranty, covenant or agreement or
failure to fulfill any condition shall in no way be limited by the fact that the
act, omission, occurrence or other state of facts upon which any claim of any
such inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement as to which there is no
inaccuracy or breach. The representations and warranties of Billing and the
Selling Partners shall not be affected or deemed waived by reason of any
investigation made by or on behalf of Merger Sub or ACI (including by any of
their respective advisors, consultants or representatives) or by reason of the
fact that Merger Sub or ACI or any of such advisors, consultants or
representatives knew or should have known that any such representation or
warranty is or might be inaccurate. The representations and warranties of Merger
Sub and ACI shall not be affected or deemed waived by reason of any
investigation made by or on behalf of Billing or the Selling Partners (including
by any of their respective advisors, consultants or representatives) or by
reason of the fact that Billing or the Selling Partners or any of such advisors,
consultants or representatives knew or should have known that any such
representation or warranty is or might be inaccurate.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
XXXXX COMMUNICATIONS, INC.
By:________________________________
Xxxxxxx X. Xxxxxx, III
Chairman of the Board
XXXXX ACQUISITION SUB, INC.
By:________________________________
Xxxxxxx X. Xxxxxx, III
Chairman of the Board
HOLD BILLING SERVICES, LTD.
By: HOLD BILLING & COLLECTION, L.C.
By:___________________________
Xxxxxx X. Box
Managing Member
By:___________________________
Xxxxx X. Xxxxxxx
Managing Member
HOLD BILLING & COLLECTION, L.C.
By:________________________________
Xxxxxx X. Box
Managing Member
By:________________________________
Xxxxx X. Xxxxxxx, Xx.
Managing Member
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SELLING PARTNERS
___________________________________
Xxxxxx X. Xxxx
___________________________________
Xxxxx X. Xxxxx
___________________________________
Xxxxxx X. Xxxx
___________________________________
Xxxxxx X. Xxxx
PARTNERS
___________________________________
Xxxxxx X. Box
___________________________________
Xxxxx X. Xxxxxxx, Xx.
