Exhibit 10.4
ASSET PURCHASE AGREEMENT
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THIS AGREEMENT is made as of July 1, 2000 by and between North American
Communications, Inc. (the "Buyer"), and DirectCom, Inc. (the "Seller").
RECITALS
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WHEREAS, the Buyer wishes to purchase from the Seller, and the Seller
wishes to sell to Buyer, certain of the assets of the Seller relating to or used
or employed in connection with the Directline division of the Seller (the
"Business"), upon the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Sale and Purchase of Assets.
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1.1 Assets to be Sold. On the Closing Date (as defined herein) the
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Seller shall sell, assign, transfer and deliver to the Buyer all of the assets
of the Business, including, without limitation, all existing contracts,
agreements, obligations, accounts receivable, intellectual property rights, the
Directline name, all of the personal property and supplies necessary to operate
the Business, and all permits and authorizations currently held by the Business
(collectively, the "Acquired Assets").
1.2 Contracts Assumed by Buyer. In partial payment of the Purchase
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Price (as defined in Section 2), Buyer shall assume, pay, fulfill, perform or
otherwise discharge when due in accordance with their respective terms, all
unperformed or unfulfilled liabilities and obligations arising after the Closing
under all of the Business's contracts, agreements and obligations (whether
written or oral) (the "Assumed Contracts").
1.3 Nonassignable Contracts and Authorizations
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(a) To the extent that any of the Assumed Contracts is not
capable of being assigned or transferred without the consent or waiver of the
other party thereto or any third party (including a government or governmental
unit), or if such assignment or transfer or attempted assignment or transfer
would constitute a breach thereof or a violation of any law, decree, order,
regulation or other governmental edict, this Agreement shall not constitute an
assignment or transfer thereof, or an attempted assignment or transfer of any
such Assumed Contract.
(b) Seller agrees that prior to, and for a reasonable period
of time after the Closing Date (as defined in Section 3.1) not to exceed ninety
(90) days, Seller shall cooperate with Buyer to assist Buyer in obtaining such
other licenses, permits, consents, waivers, approvals, and authorizations of
third parties and governmental bodies and agencies in
connection with: (i) the execution and delivery of this Agreement; (ii) the
consummation of the transactions contemplated hereby; and (iii) the ownership by
Buyer of the Acquired Assets (the "Material Consents").
(c) To the extent that any Material Consents or waivers are
not obtained by Seller, Seller and Buyer shall cooperate with each other to
establish, to the extent practicable, arrangements that are reasonable and
lawful as to both Seller and Buyer, and which result in the benefits and
obligations under such licenses, permits, consents, waivers, approvals, and
authorizations of third parties and governmental bodies and agencies being
apportioned in a manner that is in accordance with the purpose and intention of
this Agreement.
1.4 Employees.
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(a) As of the Closing Date, the Seller shall have paid all
wages, salaries and bonuses, and all amounts due in lieu of holiday pay or
otherwise, to all employees employed in connection with the Business (the
"Employees"). As of the Closing Date, the Seller shall terminate the employment
of the Employees.
(b) The Buyer agrees to employ the Employees from and after
the Closing Date.
2. Consideration and Payment. The purchase price to be paid for the
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Acquired Assets shall consist of (i) the payment of $50,000 by Buyer to Seller;
and (ii) the assumption of the Assumed Contracts pursuant to the terms of the
Assignment and Assumption Agreement in the form of Exhibit A hereof (the
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"Assignment and Assumption Agreement") (collectively (i) and (ii) are the
"Purchase Price").
3. Closing.
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3.1 Closing Date. Subject to the terms and conditions of this
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Agreement, the sale and purchase of the Acquired Assets contemplated hereby (the
"Closing"), shall take place on the date hereof (the "Closing Date").
3.2 Seller's Obligations at Closing. At the Closing, Seller shall
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deliver to Buyer:
(a) a duly executed Assignment and Assumption Agreement in
substantially the form attached hereto as Exhibit A; and
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(b) a duly executed Xxxx of Sale covering the Acquired Assets
in substantially the form attached hereto as Exhibit B.
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3.3 Buyer's Obligations at Closing. At the Closing, Buyer shall
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deliver to Seller:
(a) the Purchase Price referred to in Section 2 (in
immediately available funds); and
(b) duly executed counterparts of the Assignment and
Assumption Agreement as provided in Section 3.2 (a) hereof.
4. Representations and Warranties of the Seller. The Seller represents
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and warrants to the Buyer as follows:
4.1 Authority to Execute and Perform Agreements. The Seller has
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the full legal right and power and all authority and approval required to enter
into, execute and deliver this Agreement and to perform fully the Seller's
obligations hereunder. This Agreement has been duly executed and delivered and
constitutes the valid and binding obligations of the Seller enforceable in
accordance with its terms, except as may be limited by bankruptcy, moratorium,
insolvency or other similar laws now or hereafter in effect generally affecting
the enforcement of creditors' rights. No approval or consent of any foreign,
federal, state, county, local or other governmental or regulatory body, and
(except as otherwise specified in this Agreement or any Schedule hereto) no
approval or consent of any other person is required in connection with the
execution and delivery by the Seller of this Agreement and the consummation and
performance by the Seller of the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not violate, conflict with or
otherwise result in the breach or violation of any of the terms and conditions
of, result in a modification of the effect of or constitute (or with notice or
lapse of time or both would constitute) a default under (i) the Certificate of
Incorporation or By-laws of the Seller, (ii) any instrument, contract or other
agreement to which the Seller is a party or by or to which it or any of its
assets or properties is bound or subject; or (iii) any statute or any
regulation, order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against or binding upon or
applicable to the Seller.
4.2 Liens. The Seller owns outright and has good and marketable
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title to the Acquired Assets, free and clear of any lien or other encumbrance,
and the Acquired Assets will be transferred to the Buyer at the Closing Date
free and clear of any and all liens and encumbrances of any nature, including
for taxes.
4.3 Tax Matters. The Buyer will not assume or otherwise become
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liable for any income, excise, sales, use, gross receipts, franchise,
employment, payroll related, property or any other tax of any sort relating to
the Acquired Assets or arising out of the transactions contemplated hereby.
There are no pending or, to the best of Seller's knowledge, threatened (in
writing) actions or proceedings, assessments or collections of income or taxes
of any kind whatsoever, imposed by any governmental authority responsible for
the imposition of such tax (domestic or foreign), with respect to the Acquired
Assets that could subject Buyer to any liability for such taxes for the period
prior to the Closing Date or could impair any of the Acquired Assets
(collectively, "Tax Actions or Proceedings"), nor is there a basis for any Tax
Actions or Proceedings.
4.4 Assets of the Seller. All of the Acquired Assets are in good
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working order, ordinary wear and tear excepted. The Acquired Assets have been
used only in the ordinary course of business.
4.5 Brokers and Finders. Seller has not employed any broker or
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finder or incurred any liability for any brokerage fees, commissions or finders'
fees in connection with the transactions contemplated by this Agreement.
5. Representations and Warranties of the Buyer. The Buyer represents and
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warrants to the Seller as follows:
5.1 Organization and Good Standing. The Buyer is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Pennsylvania. The Buyer has full corporate power and authority to own its
properties and carry on its business.
5.2 Power of the Buyer. The Buyer has the full legal right and power
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and all authority and approval required to enter into, execute and deliver this
Agreement, and to perform fully its obligations under this Agreement. This
Agreement has been duly executed and delivered and is the valid and binding
obligation of the Buyer enforceable in accordance with its terms, except as may
be limited by bankruptcy, moratorium, reorganization, insolvency or other
similar laws now or hereafter in effect generally affecting the enforcement of
creditors' rights. No approval or consent of any foreign, federal, state,
county, local or other governmental or regulatory body, and (except as otherwise
specified in this Agreement or any Schedule hereto) no approval or consent of
any other person is required in connection with the execution and delivery by
the Buyer of this Agreement and the consummation and performance by the Buyer of
the transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby will
not violate, conflict with or otherwise result in the breach or violation of any
of the terms and conditions of, result in a modification of the effect of or
constitute (or with notice or lapse of time or both would constitute) a default
under (i) the Certificate of Incorporation or By-laws of the Buyer; (ii) any
instrument, contract or other agreement to which the Buyer is a party or by or
to which it or any of its assets or properties is bound or subject; or (iii) any
statute or any regulation, order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against or binding upon or
applicable to the Buyer or upon the securities, properties or business of the
Buyer.
5.3 Brokers and Finders. Neither Buyer nor any of its members or
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employees have employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
6. Indemnification.
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6.1 Obligation of the Seller to Indemnify. The Seller shall
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indemnify, defend and hold harmless the Buyer and its directors, officers,
employees, affiliates and assigns from and against any losses, liabilities,
damages, deficiencies, costs or expenses (including interest, penalties and
reasonable attorneys' fees and disbursements) ("Losses") based upon, arising out
of or otherwise due to any inaccuracy in or breach of any representation,
warranty, covenant or agreement of the Seller contained in this Agreement or in
any document or other writing delivered pursuant hereto.
6.2 Obligation of the Buyer to Indemnify. The Buyer shall indemnify,
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defend and hold harmless the Seller and its directors, officers, employees,
affiliates and assigns from and against any Losses based upon, arising out of or
otherwise due to any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of the Buyer contained in this Agreement or in
any document or other writing delivered pursuant hereto.
7. Miscellaneous.
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7.1 Confidentiality. The Seller and the Buyer agree to keep the
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terms and conditions of this Agreement confidential except insofar as disclosure
may be required by law or regulation or legal process and in such event the
party so required to disclose shall provide the other party with prompt notice
to enable it to seek a protective order or other appropriate remedy preventing
disclosure.
7.2 Governing Law. The parties hereto hereby agree that this
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Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Delaware without reference to its of conflict of
laws principles.
7.3 Notices. Any notice or other communication required or which may
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be given hereunder shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by certified, registered or express mail,
postage prepaid, and shall be deemed given when so delivered personally, or sent
by facsimile transmission or if mailed, five days after the date of mailing, to
the recipients principal place of business. Any party may, by notice given in
accordance with this Section to the other party, designate another address or
person for receipt of notices hereunder.
7.4 Entire Agreement. This Agreement, and the Exhibits and Schedules
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attached hereto, contain the entire agreement among the parties with respect to
the purchase of the Acquired Assets and related transactions and supersedes all
prior agreements, written or oral, with respect thereto.
7.5 Waivers and Amendments. This Agreement may be amended, modified,
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superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties hereto or, in
the case of a waiver, by the party waiving compliance. No delay on the part of
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which any party may otherwise have at law or in equity.
7.6 Exhibits and Schedules. The Exhibits and Schedules to this
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Agreement are a part of this Agreement as if set forth in full herein.
7.7 Headings. The headings in this Agreement are for reference
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purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
7.8 Counterparts; Facsimile Signatures. This Agreement may be
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executed in one or more counterparts, all of which together shall constitute a
single document. Facsimile signature pages shall have the same binding effect as
original signature pages.
7.9 Bulk Sales. Buyer hereby waives compliance by Seller with any
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applicable laws relating to bulk transfers in connection with the sale of the
Acquired Assets. Seller agrees to indemnify Buyer with respect to any failure to
comply with such bulk transfer laws in accordance with the provisions of Section
6.1.
7.10 Transfer Taxes. All excise, sales, value added, use,
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registration, stamp, transfer and similar taxes, levies, charges and fees
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by Buyer. Buyer and Seller shall cooperate in providing
each other appropriate resale exemption certificates and other appropriate tax
documentation.
[Signatures are on the following page]
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
BUYER:
NORTH AMERICAN COMMUNICATIONS, INC.
By
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Xxxxxx X. Xxxxxxx
Chief Executive Officer
SELLER:
DIRECTCOM, INC.
By
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Xxxxxxxx Xxxxxxxx
President and Chief Executive Officer
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
{Begins on following page}
ASSIGNMENT AND ASSUMPTION AGREEMENT
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This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") is made as
of July 1, 2000 by and between DirectCom, Inc. ("Assignor") and North American
Communications, Inc. ("Assignee").
RECITALS
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WHEREAS, Assignor wishes to effect the sale and transfer of certain of
his assets to Assignee pursuant to the terms of that certain Asset Purchase
Agreement dated as of the date hereof by and between Assignor and Assignee (the
"Asset Purchase Agreement"); and
WHEREAS, Assignor is a party to certain Assumed Contracts (as defined
in Section 1.2 of the Asset Purchase Agreement); and
WHEREAS, in order to effect the sale of assets, Assignor has agreed to
transfer its rights and interests in the Assumed Contracts (the "Assigned
Rights") and Assignee has agreed to assume the liabilities and obligations of
Assignor arising from the Assigned Rights.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor and Assignee hereby agree
as follows:
1. Assignor does hereby grant, assign, convey, transfer and set over
unto Assignee all of the Assigned Rights.
2. Assignee hereby agrees to assume and perform all of the covenants
and obligations that arise after the date hereof under each of the Assigned
Rights.
3. Assignor hereby represents and warrants to Assignee that Assignor
is the sole record and beneficial owner of the Assigned Rights and upon the
execution of this Agreement Assignee shall be vested with good and valid title
to the Assigned Rights free and clear of any liens, claims, charges, security
interests or other encumbrances of any kind.
4. This Agreement shall bind and inure to the benefit of Assignor
and Assignee and their respective successors and assigns.
5. This Agreement shall be governed by the laws of the State of
Delaware without regard to its choice of law provisions.
6. To facilitate execution, this Agreement may be executed in as
many counterparts as may be required. Facsimile signatures will have the same
binding effect as original signatures.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed as of the date first above written.
ASSIGNOR:
DIRECTCOM, INC.
By
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Xxxxxxxx Xxxxxxxx
President and Chief Executive Officer
ASSIGNEE:
NORTH AMERICAN COMMUNICATIONS, INC.
By
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Xxxxxx X. Xxxxxxx
Chief Executive Officer
EXHIBIT B
XXXX OF SALE AND ASSIGNMENT OF ASSETS
{Begins on following page}
XXXX OF SALE
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THIS XXXX OF SALE is executed and delivered as of July 1, 2000, by and
between DirectCom, Inc. ("Seller") and North American Communications, Inc.
("Buyer").
RECITALS
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WHEREAS, Seller and Buyer are parties to that certain Asset Purchase
Agreement dated the date hereof (the "Asset Purchase Agreement"); and
WHEREAS, the Asset Purchase Agreement provides that Buyer will acquire
certain assets from the Seller and Seller will sell certain assets to Buyer.
NOW, THEREFORE, as contemplated by the Asset Purchase Agreement, and
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged:
1. Seller does hereby sell, transfer and assign unto Buyer, its
successors and assigns forever, all of Seller's right, title and interest in and
to the Acquired Assets (as defined in Section 1.1 of the Asset Purchase
Agreement).
2. This Xxxx of Sale and the covenants and agreements contained herein
shall be binding upon Seller and its successors and assigns, and shall inure to
the benefit of Buyer and its successors and assigns.
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale as of the
date first above written.
SELLER:
DIRECTCOM, INC.
By
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Xxxxxxxx Xxxxxxxx
President and Chief Executive Officer
