EXHIBIT 10.9
MERGER AGREEMENT
THIS MERGER AGREEMENT is made this _______________________, at
Indianapolis, Indiana by and among Aye-Net, L.L.C., an Indiana limited liability
company, (hereinafter referred to as "Private Entity"), J. Xxxxx Xxxxxxx and
Xxxx X. Xxxx, individuals and controlling members of Private Entity (hereinafter
referred to as "Members"), and XxxXxxxxx.xxx, Inc., a Delaware corporation
(hereinafter referred to as "NetVision ").
RECITALS
A. Private Entity is an Indiana limited liability company, and
presently owns and operates an Internet Service Provider ("ISP")
business, operated from the locations, identified on SCHEDULE
3.3.5
B. Both NetVision, through it's Board of Directors, and Private
Entity, through its Members, J. Xxxxx Xxxxxxx and Xxxx X. Xxxx,
believe this Merger to be in the best interests of their
respective business entities.
C. The entities shall merge together, with the new entity,
(hereinafter "Merged Companies") and shall become known as
XxxXxxxxx.xxx, Inc. Private Entity shall cease to exist as a
separate legal entity, but shall continue to exist as a part of
the surviving entity.
D. The parties intend for the transactions contemplated by this
Agreement to be accounted for as a pooling of interests in
accordance with GAAP and that said transactions shall not be
deemed a taxable event as defined by the Internal Revenue
Service.
E. As promptly as practicable after the satisfaction or waiver of
the conditions set forth in Section 8 hereof and the consummation
of the Closing referred to in Section 9 hereof, the Parties shall
cause the Merger to be consummated by filing a Certificate of
Merger with the Secretary of State in accordance with, the
relevant provisions of Delaware Law (the time of such filing
being the "Effective Time").
F. Unless otherwise agreed by NetVision and Private Entity the
Certificate of Incorporation of NetVision as the Surviving
Corporation shall be the Certificate of Incorporation of
NetVision as in effect immediately prior to the Effective Time,
until thereafter amended as provided by law and such Certificate
of Incorporation.
G. Unless otherwise agreed by NetVision and Private Entity the
By-Laws of NetVision as the Surviving Corporation shall be the
By-Laws of NetVision immediately prior to the Effective Time,
until thereafter amended as provided by law and Certificate of
Incorporation and the By-Laws of Such Surviving Corporation.
H. Unless otherwise agreed by NetVision and Private Entity the
directors and officers of NetVision immediately prior to the
Effective Time shall continue to serve in their respective
offices of the Surviving Corporation from and after the Effective
Time, in each case until their resignation or removal. If, at the
Effective Time, a vacancy shall exist on the Board of Directors
or in any office of the Surviving Corporation, such vacancy may
thereafter be filled in the manner provided by law and the
By-Laws of the Surviving Corporation.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the terms identified below in this Section
will have the meanings indicated, unless a different and common meaning of the
term is clearly indicated by the context.
1.1 Agreement - means this Merger Agreement together with the
Attachments.
1.2 Attachments - means the Schedules and Exhibits referred to
herein and attached hereto.
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1.3 Authorization - means any Government consent, license, permit,
grant or other governmental authorization.
1.4 Balance Sheet - means the most recent Balance Sheet available
for Private Entity, a copy of which is attached hereto and
marked SCHEDULE 1.4.
1.5 Closing - means the Closing of the Transaction as described in
Section 9 of this Agreement.
1.6 Closing Date - means the date and time as set forth in Section
9, or such other date and time as subsequently may be agreed
upon by the parties, in writing. Any reference herein to the
Closing Date for the purpose of establishing a point in time,
or calculating a period of time, means 11:59 p.m., local time
on the Closing Date.
1.7 Contract - means any voluntarily entered written or oral
agreement or commitment that is legally binding on any person
or entity under applicable law.
1.8 Court Order - means any judgment, decree, injunction or order
of any federal, state, local or foreign court that is binding
on any person or entity or its property under applicable law.
1.9 Cumulative Diminutive Errors - Means the combined total of all
diminutive errors made within this agreement.
1.10 Diminutive Error - Means any mistake, misrepresentation,
failure to disclose, or other error, which has a net dollar
value of less than Five Hundred Dollars. ($500.00)
1.11 Effective Date - means the date first above written unless
otherwise agreed to in writing by the Parties.
1.12 Entity - means a corporation, partnership, sole
proprietorship, limited liability company, joint venture or
other form of organization whether formed for the conduct of a
business or profit seeking activity, active or passive, or not
for profit.
1.13 Financial Statements - means the Balance Sheet, as defined in
Section 1.4, the Statement of Income and Expenses, as defined
in Section 1.19, and Cash Flow Statements, when referred to
collectively.
1.14 Intellectual Property - means any trade names, trademarks,
service marks, copyrights and work of authorship, and all
registrations and applications for the foregoing, and all
licenses or license rights related to or based upon the
foregoing, software licenses and know-how licenses, trade
secrets, fictitious names, assumed names, all industrial
models and all United States and foreign patent rights covered
by, disclosed in or otherwise related thereto and all
registrations and applications therefor and all reissues,
divisions, continuations-in-part, re-examinations and
extensions thereof, together with the right to xxx for past
infringement and improper, unlawful or unfair use of any of
the foregoing.
1.15 Merged Assets - means the assets to be merged and transferred
by Private Entity to NetVision in accordance with this
Agreement as more specifically described in Section 3.3
1.16 Parties - means XxxXxxxxx.Xxx, Inc., Private Entity, and
Principal Members.
1.17 Private Entity - means Xxx.Xxx, L.L.C., an Indiana Limited
Liability Company.
1.18 Private Entity 's Business - means the existing business
operations (including without limitation, the goodwill and
going concern value), labor relations, customer and supplier
relations, and products, if any, or services, if any, of
Private Entity, and the name Private Entity, or any derivative
thereof.
1.19 Statement of Income and Expenses - means the most recent
Statement of Income and Expenses available for Private Entity,
a copy of which is attached hereto and marked SCHEDULE 1.19.
1.20 NetVision - means NetVision .com, Inc., a Delaware
Corporation.
1.21 Transaction - means the transaction contemplated by the
Agreement, and the related Attachments.
1.22 Year-End Balance Sheets - means the Balance Sheet for the year
ended December 31, 1998.
1.23 Year-End Statements of Income and Expenses - means the
Statements of Income and Expenses of Private Entity for the
year ended December 31, 1998.
1.24 Year-End Financial Statements - means the Year-End Balance
Sheets, and the Year-End Statement of Income and Expenses.
SECTION 2 - THE MERGER
2.1 Adoption of Plan of Merger. Both parties have taken all
requisite corporate action prior to the date hereof for the
purposes of adopting and approving this Agreement pursuant to
Delaware and
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Indiana law. Upon execution of this Agreement, NetVision and
Private Entity shall cause Articles of Merger pursuant to this
Agreement to be filed with the Secretary of State of Delaware
and Indiana, and shall cause to be filed such certificates,
documents or instruments as are required to be filed in such
States, any other State required, in order to effectuate the
transactions contemplated by this Agreement.
2.2 General. Private Entity shall be merged with and into
NetVision effective as of the date of closing as set forth
below and the separate corporate existence of Private Entity
shall thereupon cease. The Articles of Incorporation and Code
of Regulations of NetVision as in effect on the Closing Date
shall remain in full force and effect. The Merger
Consideration shall be payable on the date of Closing as set
forth below in Section 3.
2.3 Conversion of Private Entity Shares. The Private Entity Shares
shall be exchanged with NetVision Shares as a result of the
Merger of the two entities. NetVision shall deliver to each
Member at the Closing and/or within a reasonable time
thereafter, a share certificate evidencing ownership of
NetVision Shares, as set forth in the table below, upon
surrender to NetVision of the share certificate or
certificates representing such Member's ownership of Private
Entity Shares duly endorsed for transfer or accompanied by
properly executed stock powers.
2.4 Employee Stock Ownership Plans. For all purposes of this
Agreement, unless otherwise specified, all shares held by
employee stock ownership plans of Private Entity shall be
deemed to be issued and outstanding, shall not be deemed to be
held in the treasury of Private Entity and shall be converted
into shares of NetVision Common Stock in accordance with this
Agreement.
SECTION 3 - SPECIFIC TERMS OF MERGER
3.1 Merger Consideration by NetVision. To effectuate this Merger,
NetVision will transfer to the Members of Private Entity the
following Consideration, to be divided by and between the
Members of Private entity as they agree. The total Merger
consideration shall be paid in cash and stock, with ten
percent (10%) of the consideration transferred in cash, and
ninety percent (90%) in stock. The specific amounts are:
3.1.1 Two hundred twenty two thousand three hundred and
eighteen (222,318) shares of NetVision common stock
as evidenced by the issuance of a stock certificate
for said number of shares. Each share is valued at
$5.00 for the purpose of this valuation. Said stock
certificate shall be tendered at the Closing, as set
forth in the Conditions Precedent set forth below in
Section 8.
3.1.2 One hundred twenty three thousand five hundred and
ten dollars ($123,510). Said amount shall be
transferred via certified check and tendered at the
Closing, as set forth in the Conditions Precedent set
forth below in Section 8.
3.1.3 Assumption of Liabilities. The assumption of Private
Entity 's liabilities as described in SECTION 4, as
approved by NetVision and as set forth in SCHEDULE
4.2 AND 4.3. The liabilities as set forth in those
schedules (hereinafter "Liability Schedules") shall
be assumed by NetVision and paid in the normal course
of business.
3.1.4 True-up Amount. An additional amount paid in stock
and cash via certified check and stock certificate
tendered at the closing, in an amount equal to four
hundred dollars ($400) for each bona-fide Private
Entity internet subscriber in excess of the minimum
number of subscribers set forth in Section 8,
specifically 2,300, as verified by the auditors
during the due diligence process, and as measured on
a date no less than 30 days prior to close as
determined in Section 9. Said amount shall increase
the total Merger Consideration and shall be paid at
the rate ten percent (10%) cash and ninety percent
(90%) stock.
3.2 Transfer of Stock by Private Entity. To effectuate this
Merger, the Members of Private Entity
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shall cause the transfer of all Private Entity shares to
NetVision. The Share certificate or certificates representing
such Member's ownership of Private Entity Shares shall be duly
endorsed for transfer or accompanied by properly executed stock
powers.
3.3 Transfer of Assets by Private Entity. Included in the transfer of
all Shares of Stock to NetVision, Private Entity shall turn over,
surrender, and transfer, any and all assets currently held by
Private Entity. This specification of assets in no way affects
the validity of the Merger Agreement, nor does it limit the
transfer of all assets of Private Entity in any way, nor does it
convert this Agreement to an Asset Purchase Agreement. The items
set forth below are for the mutual protection of the parties, and
are intended only as a guide to the assets to be transferred.
This agreement contemplates the transfer of all assets of Private
Entity, whether specifically set forth below or not. This
agreement does not contemplate the transfer of any personal
assets of Member, as set forth on SCHEDULE 3.3. Any assets used
in the business, not specified on SCHEDULE 3.3, shall be
transferred to NetVision herewith.
3.3.1 All of the Accounts Receivable of Private Entity , as
of the Closing Date;
3.3.2 All inventory of Private Entity;
3.3.3 All rights to prepaid expenses, as of the Closing
Date;
3.3.4 The motor vehicles described in SCHEDULE 3.3.4;
3.3.5 The real property owned by Private Entity; all other
fixed assets owned by Private Entity and used in
connection with the conduct of Private Entity 's
business; all right, title and interest in and to all
of Private Entity 's Contracts, including but not
limited to all Private Entity's rights to any
leasehold interest or improvements. SCHEDULE 3.3.5
sets forth without limitation the real property owned
by or used in the course of Private Entity's
business.
3.3.6 Any and all of the Customers of Private Entity, as
reflected by SCHEDULE 3.3.6. Said Schedule is not
intended to be an exhaustive list, rather a guide for
the benefit of the parties. Nothing in this Section,
this contract, nor any attachment, restricts the
transfer of all current, past and prospective
customers or clients of Private Entity.
3.3.7 All manuals, charts, instruction of application,
files and records, signs, customer and
marketing-data, engineering data, plans and
blueprints as are used in connection with Private
Entity 's Business, and all documents, papers and
records pertaining to employees, customers and
vendors in connection with Private Entity 's
Business, including accounts receivable and trade
payable records; provided, however, that Private
Entity may retain all corporate records and minute
books, all original books of account and accounting
data maintained by Private Entity for financial
reporting and tax reporting purpose;
3.3.8 All Intellectual Property of Private Entity used in
connection with Private Entity's business, and
including all rights Private Entity has to its
know-how, trade secrets, processes, technology,
discoveries, patented or unpatented inventions and
designs, formulae and procedures and other
intellectual property, including, but not limited to,
documentation relating to any of the foregoing, all
shop rights and the right to xxx for past
infringement or improper, unlawful or unfair use or
disclosure thereof and the right to apply for patent,
design or similar protection therefore any where in
the world;
3.3.9 All assignable authorizations relating to or utilized
in connection with Private Entity's Business,
including without limitation, stationery and other
office supplies;
3.3.10 All Private Entity's interest in and to all
telephone, fax and telex numbers, post office
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box numbers and all listings pertaining to Private
Entity's Business in all telephone books and
directories, stationery, forms, labels, shipping
material, catalogs, brochures, art work, photographs
and advertising and promotional materials. The
telephone, fax, telex numbers and post office box
numbers being identified in attached SCHEDULE 3.3.10;
3.3.11 Rights in, to and under third-party manufacturers'
warranties;
3.3.12 Claims as to which Private Entity is a judgment
creditor;
3.3.13 The goodwill and going concern of value of Private
Entity's Business;
3.3.14 All cash, bank deposits, and marketable securities.
3.3.15 The name "Aye-Net, L.L.C.", or any derivative
thereof, including but not limited to Aye-Net or
Xxx.Xxx.
3.3.16 Any and all Internet registered web sites, Internet
addresses, domain names, e-mail registrations,
web-site registrations, or any other internet related
registration or technology asset used in the
business, including but not limited to any such items
registered with Internic, in which Private Entity
holds any proprietary or leasehold interest.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
4.1 Representations of Each Member. Each Member represents and
warrants to NetVision as follows:
4.1.1 Title. Each Member owns beneficially and of record,
and has full power and authority to vote and
transfer, free and clear of any claims, liens or
encumbrances, the Private Entity Shares shown below.
The Private Entity Shares are owned in the following
numbers and percentages by the below listed Members,
and collectively constitute all of the Private Entity
Shares owned by such Member.
Member Number of Shares Owned Percent of Ownership
J. Xxxxx Xxxxxxx
Xxxx Xxxx
4.1.2 Authority. Such Member has the full legal right,
power and authority to enter into, execute and
deliver this Agreement and to perform such Member's
obligations hereunder.
4.1.3 This Agreement has been duly executed and delivered
by such Member and is the valid and binding
obligation of such Member enforceable in accordance
with its terms.
4.1.4 The execution and delivery of this Agreement and the
consummation by such Member of the transactions
contemplated by this Agreement will not:
4.1.4.1 require the further approval or consent of
any federal, state, county or local court or
other governmental or regulatory body of the
approval or consent of any other person; or
4.1.4.2 conflict with or result in a breach or
violation of any of the terms and conditions
of, or constitute (with notice, lapse of
time or both) a default under or a violation
of, any statute, regulation, order, judgment
or decree applicable to any such Member or
any instrument, contract or other agreement,
including, but not limited to, Covenant not
to Compete, Stock Lien, mortgage lien,
assignment contract, or any other contract
to which such Member is a party.
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4.2 Private Entity Liabilities. SCHEDULE 4.2 sets forth those
certain liabilities, which NetVision has agreed to assume.
These liabilities are categorized as liabilities not incurred
in the normal course of business and include, but are not
limited by, all obligations due from Private Entity to its
past and present Members, any debt incurred to raise capital
financing, current and past litigation claims, and any other
debt not incurred in the Ordinary Course of Business. There
are no additional debts of Private Entity not incurred in the
Normal Course of Business. The payment of the SCHEDULE 4.2
liabilities will become the obligation of NetVision from and
after the Merger Date and shall be paid in the ordinary course
of business.
4.3 Private Entity Liabilities incurred in the normal course of
business. SCHEDULE 4.3 will set forth as of the Merger Date
those other obligations of Private Entity incurred in the
ordinary course of business and which remain due and owing as
of the Merger Date. Where exact amounts of these liabilities
cannot be determined on the Merger Date, Private Entity shall
indicate the estimated amount due and owing. The payment of
the SCHEDULE 4.3 liabilities will become the obligation of
NetVision from and after the Merger Date and shall be paid in
the ordinary course of business.
4.4 NetVision Review and Acceptance. The closing of this
transaction is contingent upon NetVision's review and
acceptance of the liabilities set forth in SCHEDULES 4.2 and
4.3, (collectively "the Liability Schedules") provided
however, that NetVision's acceptance of said Schedules shall
not in any manner modify, limit, or invalidate the
representations and warranties of Private Entity and the
Member as contained in the Agreement, including but not
limited to the representations, warranties and indemnification
specifically pertaining to the accuracy of the liabilities
listed in the Liability Schedules. No action, or inaction by
NetVision, or any other party, including, but not limited to,
Private Entity or Member, nor any provision in this contract,
or any other contract, writing, agreement, oral or otherwise,
shall in any manner modify, limit, or invalidate the
representations, warranties and indemnification by Private
Entity and the Member with respect to the Liability Schedules.
4.5 Tax Payments and Returns. Such Member and Private Entity has
filed all tax reports and returns required to be filed through
the date of this Agreement and has paid all taxes and other
related charges (including interest and penalties) due or
claimed to be due from such Member or Private Entity, by
federal, state, local or foreign taxing authorities, except as
where indicated on SCHEDULE 4.5. Said Member has no actual
knowledge, nor any reason to know, that any taxing authority
has audited any portion of such Member or Private Entity 's
tax return, and has no actual knowledge, nor any reason to
know, that there are any notices of audit, pending questions
relating to, or claims asserted for, taxes or assessment
received by or made against such Members.
4.6 Restricted Shares. Such Member acknowledges, understands and
agrees
4.6.3 The NetVision Shares set forth as consideration in
Section 3 have not been registered with the
Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933, as amended (the
"Securities Act") and have not been registered under
any state securities law. The NetVision Shares may
not be resold or redistributed without registration
under the Securities Act and any applicable state
securities laws, unless an applicable exemption from
such registration is available.
4.6.4 The NetVision Shares being acquired by such Member
under this Agreement, are being acquired for such
Member's own account, for investment purposes, not
for the interest of any other person, firm or entity,
and not with a view to or present intention of
reselling or distributing all or any portion of, or
interest in, the NetVision Shares.
4.6.5 Such Member does not have any right to compel
NetVision to register the NetVision Shares under the
Securities Act or any state securities law and such
Member acknowledges that NetVision has no present
intention of registering the NetVision shares, unless
as specified in a Registration Rights Agreement, and
then only to the extent contained therein, and in the
form attached hereto.
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4.6.6 Such Member has such knowledge and experience in
financial and business matters that he is capable by
himself of evaluating the merits and risks of his
investment in the NetVision Shares and of making an
informed investment decision.
4.6.7 Such Member is aware of the tax consequences of
owning NetVision Shares and of this transaction in
general.
4.6.8 The certificates evidencing the NetVision Shares
shall bear the following legend:
THE SHARES REPRESENTED BY THIS STOCK CERTIFIED HAVE
NOT BEEN REGISTERED UNDER ANY STATE SECURITIES ACT
(THE "STATE ACTS") OR THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE SHARES CANNOT BE
SOLD OR OTHERWISE DISPOSED OF WITHOUT EITHER
REGISTRATION OR AN EXEMPTION FROM REGISTRATION. THESE
SHARES ARE RESTRICTED PURSUANT TO A MERGER AGREEMENT
EXECUTED ON OR ABOUT OCTOBER 25TH, 1999. FURTHER, THE
CORPORATION IS UNDER NO OBLIGATION TO REGISTER THE
SHARES UNDER THE STATE ACTS OR THE SECURITIES ACT.
SECTION 5 - JOINT AND SEVERAL REPRESENTATIONS OF THE MEMBER AND PRIVATE ENTITY
Each Member and Private Entity, jointly and severally,
represents and warrants to NetVision as follows:
5.1 Organization and Qualification; Capitalization. Private Entity
is an Indiana corporation duly organized, validly existing and
in good standing under the laws of the State of Indiana.
Private Entity has the full corporate power to carry on its
business as is now being conducted.
5.2 The authorized capital stock and the number of shares of
capital stock issued and outstanding for Private Entity is as
follows:
Authorized Capital Stock ______________.
Issued Shares __________________.
Outstanding Shares _________________.
5.3 Authority. Private Entity has the full legal right, power, and
authority to enter into, execute and deliver this Agreement
and to perform fully its obligations hereunder.
5.4 This Agreement has been duly executed and delivered by Private
Entity and is the valid and binding obligation of Private
Entity enforceable against Private Entity in accordance with
its terms.
5.5 The Board of Directors of Private Entity and the Members have
approved, and no other corporate proceedings are necessary to
authorize, this Agreement and the consummation of the
transactions contemplated by this Agreement.
5.6 The execution and delivery of this Agreement and the
consummation by Private Entity of the transactions
contemplated hereby will not:
5.6.1 conflict with, result in a breach of, or constitute
or result in a default under any of the terms,
conditions or provisions of the Articles of
Incorporation (or Certificate of Incorporation), Code
of Regulations (or by-laws) or other governing
instruments of Private Entity;
5.6.2 require the further approval or consent of any
federal, state, county or local court or other
governmental or regulatory body, or the approval or
consent of any other person; or
5.6.3 conflict with or result in any breach or violation of
any of the terms and conditions of, or constitute a
default (with notice, lapse of time or both) under,
or a violation of, any
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statute, regulation, order, judgment or decree
applicable to Private Entity or any instrument,
contract or other agreement to which Private Entity
is a party or to which Private Entity is bound or
subject, including without limitation the contracts
identified in Sections 5.10 and 5.26 below.
5.7 Financial Statements/Dividends/Distributions. The balance
sheets of Private Entity as defined in Section 1.4, and
evidenced by SCHEDULE 1.4, and the related statements of
income and expenses as defined by Section 1.19, and evidenced
by SCHEDULE 1.19, previously delivered to NetVision
(Collectively the "Financial Statements") fairly, accurately
and completely represent the financial position of Private
Entity on the date of execution of this document, and the
results of operations and cash flows for Private Entity for
the years then ended.
5.8 No dividends or other distributions have been made by Private
Entity to their respective Members since January 1, 1999,
except for salaries and commissions in the ordinary course of
business, or as set forth in SCHEDULE 5.8.
5.9 Ownership of Operating Assets. Private Entity has good and
marketable title to, or holds a valid lease to, (the
"Operating Leases"), all of its office equipment, furniture,
motor vehicles and other tangible personal property
(collectively, the "Operating Assets") owned or used by it in
its business, free and clear of all restrictions, liens,
claims and other encumbrances except as set forth in SCHEDULE
5.9
5.10 Contracts and Leases. SCHEDULE 5.10 sets forth the contracts
and leases (including office lease) material to the operation
of Private Entity and which have been previously delivered to
NetVision, are valid, binding upon the parties thereto, in
full force and effect and, except as indicated below, have not
been amended or modified. Private Entity and Members will
cooperate in having the contracts and leases set forth on
SCHEDULE 5.10 assigned to NetVision if requested by NetVision.
Private Entity and NetVision acknowledge that a separate
Agreement reflecting the assignment of the Contracts and
Leases is not required as a result of the merger of Private
Entity into NetVision.
5.11 Intellectual Property Rights. To the best of the Member's
knowledge Private Entity owns, or holds adequate licenses to,
the intellectual property used in its business, including,
without limitation, trademarks, service marks, copyrights,
patents, and computer software and data bases, free and clear
of all restrictions, liens, claims and other encumbrances, and
such use does not and will not conflict with, infringe on, or
otherwise violate any rights of others.
5.12 Member Benefits. The Member benefits programs set forth in
SCHEDULE 5.12 constitute the only Member benefit programs in
effect for Private Entity prior to the date of this Agreement.
5.13 Employee Benefit Programs. The Employee Benefit programs set
forth in SCHEDULE 5.13 constitute the only Employee benefit
programs in effect for Private Entity prior to the date of the
Agreement.
5.14 Insurance. Private Entity has in place and in full force and
effect, hazard and liability insurance policies with coverage
amounts and deductibles as set forth in SCHEDULE 5.14.
5.15 Insurance Coverage. The Member and Private Entity shall take
all action necessary to maintain, in the name and for the
benefit of NetVision, all insurance policies of Private
Entity.
5.16 Bank Accounts. The Members and Private Entity shall take all
action necessary to maintain the bank accounts, lock boxes and
other depositories of Private Entity, and shall cause them to
be identified under NetVision's Federal Tax Identification
Number.
5.17 Permits, Licenses and Compliance with Laws. For this Section,
Member and Private Entity represent and warrant that they have
no actual knowledge, nor any reason to know of any violations,
and to the best of their knowledge:
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5.17.1 Private Entity maintains in full force and effect,
all permits, licenses and approvals from federal,
state, local and foreign governmental and regulatory
bodies required in order to carry on its business.
5.17.2 Private Entity is in compliance in all material
respects with all federal, state and local laws,
ordinances, codes, regulations, orders, requirements,
standards and procedures which are applicable to its
business.
5.17.3 Neither Private Entity nor any officer, director or
agent of Private Entity has been convicted of,
charged with, or to the knowledge of Private Entity
or the Members, investigated for a violation of
federal or state law related to fraud, theft,
embezzlement, breach of fiduciary responsibility, or
financial misconduct, including but not limited any
violation of the Securities Act, or State Securities
Law; or has been subject to any order or consent
decree of, or criminal or civil fine or penalty
imposed by, any court of governmental agency.
5.18 Litigation. Except as set forth in SCHEDULE 5.18, (the
"Litigation Schedule") there are no claims, complaints, suits,
actions and judicial, regulatory, arbitration or governmental
actions, proceedings or investigations pending, or to the
knowledge of the Members or Private Entity threatened, or
anticipated, including actions known, or actions that Member
or Private Entity have reason to know, against Private Entity,
or any of their respective officers, directors or agents.
5.19 Tax Payments and Returns. Private Entity has delivered to
NetVision true and complete copies of its federal, state and
local income tax returns for its tax year ended December 31,
1998. Private Entity has filed all tax reports and returns
required to be filed by it through the date of this Agreement
and has paid all taxes and other related charges (including
interest and penalties) due or claimed to be due from it by
foreign, federal, state or local taxing authorities. To the
best of Member's knowledge, no taxing authority has audited
any portion or a tax return relating to any Member or Private
Entity, and there are no notices of audit, pending questions
relating to, or claims asserted for, taxes or assessments
received by or made against any Private Entity.
5.20 Company Documents and Minute Books; Officers and Directors.
The minutes of company proceedings, stock transfer records,
Articles of Organization (or Certificate of Organization) and
Code of Regulations (or by-laws) of Private Entity have been
delivered to NetVision and are correct and complete,
accurately reflect all actions and proceedings of the Members
and Board of Directors of Private Entity to date.
5.21 Brokers/Fees. Negotiations related to this Agreement and the
transactions contemplated hereby have been carried on by the
Members and Private Entity, and no brokerage or finders' fees
are payable by any Member or Private Entity to any other party
in connection with this Agreement or the transactions
contemplated hereby.
5.22 Adverse Changes. Since January 1, 1999, Private Entity has not
suffered any adverse changes in its financial condition,
assets, liabilities or business or any damage, destruction or
loss to its assets, whether or not covered by insurance.
5.23 Operations in the Ordinary Course. Since January 1, 1999,
Private Entity has been operated only in the normal and
ordinary course, and has not:
5.23.1 Issued or committed to issue any capital stock or
other ownership interest therein, other than shown on
SCHEDULE 5.24.1.
5.23.2 granted or committed to grant any options, warrants,
convertible securities or other rights to subscribe
for, purchase or otherwise acquire any shares of its
capital stock or other ownership interest therein;
5.23.3 entered into any material agreement to make capital
expenditures, except as noted on SCHEDULE 5.24.3;
5.23.4 entered into any agreement relating to the borrowing
of money or other contract for
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indebtedness, or the guarantee of any obligation for
the borrowing of money;
5.23.5 entered into any material real or personal property
lease except as noted on SCHEDULE 5.24.5; or
5.23.6 entered into, modified, or canceled any other
agreement, contract or commitment which is not
terminable at will.
5.24 Third Party Consents. The Members and Private Entity have
obtained and delivered to NetVision the consent or approval of
each third party whose consent or approval is required or
deemed necessary by NetVision for the consummation of the
transactions contemplated by this Agreement.
5.25 Transactions with Related Parties. Except for the employment
of the Members, and the proposed real estate lease with
Windsor Corporation, the summary terms of which is set forth
in EXHIBIT D, there are no contracts, leases, loans,
commitments, transactions, arrangements or other
understandings, oral or written, between Private Entity and
any Related Party. For purposes of this Section, the term
"Related Party" means (a) any Member, (b) the spouse, lineal
descendant or other family member of a Member, (c) any
corporation, partnership, trust, limited liability company, or
other entity controlled by, or under common control with a
Member, (d) any officer, director or Member of Private Entity,
and (e) any person who is a member, partner or Member in any
relationship or similar form of business association with any
person or entity referred to above.
5.26 Disclosure. To the best knowledge of the Members and to the
best knowledge of Private Entity, no representation or
warranty by the Members or Private Entity, or any document,
written statement or certificate furnished to NetVision
pursuant to this Agreement, contains any untrue statement of
material fact or omits to state a fact necessary in order to
make the statements contained herein or therein not
misleading.
5.27 Accuracy of Liability Schedules. The LIABILITY SCHEDULES
accurately reflect all obligations of Private Entity, which
were not incurred in the "ordinary course of business." For
purpose of this representation obligations owed by Private
Entity whether contingent, fixed, liquidated or unliquidated,
including but not limited to obligations owed to Member or
Member loans; pending or threatened litigation claims;
obligation to repurchase shares of stock form former Members
shall be considered obligations of Private Entity not incurred
in the "Ordinary course of business". The obligations and
amounts set forth on THE LIABILITY SCHEDULES are true and
correct.
5.28 Payment of Liability SCHEDULE Indebtedness. NetVision agrees
to assume any and all liabilities as listed on THE LIABILITY
SCHEDULES . Any liabilities not listed on said SCHEDULES shall
remain the sole and absolute responsibility of the Member, and
shall be paid by the Member within thirty (30) days after
NetVision is notified, or otherwise becomes aware, of any such
liability or claim
5.29 Diminutive Errors. Notwithstanding the above Representations
and Warranties, Private Entity and the Member shall bear no
liability for Diminutive errors, as defined in Section 1.22,
so long as the Cumulative Diminutive Errors shall not exceed
Two Thousand Dollars ($2,000).
5.30 Articles of Merger. The preparation and acceptance of Articles
of Merger is a Condition Precedent to the Closing of this
Agreement. Both parties represent and warrant that they will
cooperate with the other party in full and that they will not
take any action to hinder, delay, or prevent, the filing of
the Articles of Merger with the Secretary of State in both the
States of Delaware and Indiana.
SECTION 6 - REPRESENTATIONS AND WARRANTIES OF NETVISION
6.1 Organization and Good Standing. NetVision is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Delaware, registered to conduct
business in, among other States, the State of Indiana.
NetVision has full corporate power to carry on its business as
it is now being conducted.
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6.2 Authority. NetVision has the full legal right, power and
authority to enter into, execute and deliver this agreement,
and to perform its obligations under this agreement. This
agreement has been duly executed and delivered by authorized
officers of NetVision and is the valid and binding obligation
of NetVision, enforceable in accordance with its terms. The
execution and delivery of this agreement and the consummation
by NetVision of the transactions contemplated will not:
6.2.1 Conflict with, result in a breach of, or constitute
or result in a default under any of the terms,
conditions or provisions of the Certificate of
Incorporation, Articles of Incorporation, By-laws or
Code of Regulations, or other governing documents of
NetVision.
6.2.2 Require the further approval or consent of any
federal, state, county or local court, or other
Government or regulatory body or the approval or
consent of any other person.
6.2.3 Conflict with or result in a breach or violation of
any of the terms and conditions of, or constitute
(with notice, lapse of time, or both) a default under
or a violation of, any statute, regulation, order,
judgment or decree applicable to NetVision, or any
instrument, contract or other agreement to which
NetVision is a party.
6.3 Brokers / Fees. Negotiations related to this agreement and the
transactions contemplated hereby have been carried on by
NetVision and no brokerage or finders' fees are payable by
NetVision to any other party in connection with this agreement
or the Transactions contemplated hereby.
6.4 Payment of Liability Schedule Indebtedness. NetVision agrees
to assume any and all liabilities as listed on the Liability
Schedules, or more specifically, SCHEDULES 4.2 AND 4.3. Any
liabilities not listed on said Schedules shall remain the sole
and absolute responsibility of the Member, and shall be paid
by the Member within thirty (30) days after NetVision is
notified, or otherwise becomes aware, of any such liability or
claim. With regard to any liability listed on said LIABILITY
SCHEDULES, where Member has personally guaranteed the same,
NetVision agrees to indemnify and hold harmless the Member to
the extent of the corporate debt.
6.5 Articles of Merger. The preparation and acceptance of Articles
of Merger is a Condition Precedent to the Closing of this
Agreement. Both parties represent and warrant that they will
cooperate with the other party in full and that they will not
take any action to hinder, delay, or prevent, the filing of
the Articles of Merger with the Secretary of State in both the
States of Delaware and Indiana.
SECTION 7- MISCELLANEOUS
7.1 Further Acts. The parties agree to perform any further acts
and to execute and deliver any other documents, which may be
reasonably necessary to carry out the intent and provisions of
this Agreement.
7.2 Assignment. Without the consent of Private Entity, NetVision
may assign all or any part of this Agreement and all or any
part of its rights and obligations hereunder to an affiliate
of NetVision.
7.3 Headings. The clause headings appearing in this Agreement have
been inserted for the purpose of convenience and reference.
They do not purport to, and will not be deemed to, define,
limit or extend the scope or intent of the clauses to which
they apply, and they will not be considered in construing the
terms of this Agreement.
7.4 Investigation Will Not Constitute A Waiver. No investigation,
or lack thereof, by NetVision, or any of its agents, will be
deemed to constitute or imply a waiver of any rights of
NetVision may have, including any right to indemnification as
the result of any material misrepresentation, or breach of
warranty, or covenant in favor of NetVision as otherwise
provided in this Agreement.
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7.5 Counterparts. This Agreement may be executed in several
counterparts, each of which when so executed will be deemed to
be an original for all purposes.
7.6 Partial Invalidity. If any provision of this Agreement is
invalid or is held illegal or unenforceable, then
notwithstanding any such invalidity, illegality, or
unenforceablility of such provision, the remainder of this
Agreement will subsist and will be in full force and effect as
though such invalid, illegal or unenforceable provision had
been omitted form this Agreement.
7.7 Entire Agreement. This Agreement embodies the entire agreement
of the parties as to the subject matter herein contained.
There are no promises, terms, conditions or obligations other
than those contained herein; and this Agreement will supersede
all previous communications, representations, or agreements,
either verbal or written, between the parties hereto. Without
limiting the foregoing, no letter, telegram, or other
communication passing between the parties hereto, concerning
any matter during the negotiation of this Agreement, will be
deemed a part of this Agreement, nor will it have the effect
of modifying or adding to this Agreement.
7.8 Additional Documents. Each party will execute and deliver, to
either party, subsequent to the Closing, such other documents
or instruments as may be reasonably necessary to effectuate
the provisions and purpose of this Agreement. Without
limitation of the generality of the foregoing, Private Entity
will perform all reasonable acts to cause any licenses or
permits issued to Private Entity to be assigned or transferred
to NetVision in order that NetVision may conduct Private
Entity 's Business subsequent to the Closing as herein
contemplated.
7.9 No Amendment. No amendment, modification, change or discharge
of any term or provision of this Agreement will be valid or
binding unless the same is in writing and signed by all the
parties hereto. No waiver of any of the terms of this
Agreement will be valid unless signed by the parties against
whom such waiver is asserted.
7.10 Gender. All terms and words used in this Agreement, regardless
of the number and gender in which they are used, will be
deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine, or neuter,
as the context or sense of this Agreement, or any other
section or clause herein, may require, the same as if such
words had been fully and properly written in the required
number and gender.
7.11 Time Periods. Any action required hereunder to be taken within
a certain number of days will be taken within that number of
calendar days; provided, however, that if the last day for
taking such action falls on a weekend or a holiday, the period
during which such action may be taken will be automatically
extended to the next business day.
7.12 Construction. This Agreement has been prepared by the joint
efforts of the respective attorneys for each of the parties.
This Agreement should be interpreted fairly, and not strictly
construed against either party.
7.13 No Third Party Beneficiaries. The parties affirmatively state
that they do not intend to confer any legal or contractual
rights or benefits upon any third persons or Entities, either
directly or incidentally, and all legal rights, duties and
obligation set forth in this Agreement will bind and benefit
only the parties hereto.
7.14 Notices. Any notice or demand required or permitted to be
given hereunder, will be in writing, signed by the party
giving or making the same, and will be delivered by certified
mail, return receipt requested, or by personal hand delivery,
to all parties hereto at their respective addresses
hereinafter set forth. In the event that delivery of any such
notice or demand cannot be effected as aforesaid, the same may
be served by any method authorized for the service of legal
process as set forth in the Indiana Rules of Civil Procedure.
Any party hereto will have the right to change the place to
which any such notice or demand, or other written instrument
will be sent to him by similar notice sent in a like manner to
all parties hereto. The date of mailing of any such offer or
demand, if applicable, will be deemed to be the date of such
offer or demand and will be effective
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form that date. The addresses of the parties to this Agreement
are as shown herein below.
To Shareholder(s) See Schedule 7.14
To the Company: XxxXxxxxx.xxx, Inc.
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attn.: Xx. Xxxx Xxxxxxxxxxxxx, CEO and
Chairman of the Board
Attn: Xx. Xxxxxxxx Xxxxx, General Counsel
7.15 Binding. This Agreement will bind and inure to the benefit of
the parties hereto, their respective assigns, and personal
representatives and successors.
7.16 Incorporation by Reference. All Exhibits Schedules and
documents attached hereto will be deemed to be incorporated
herein by reference as though fully set forth.
7.17 Competent Professional Advice. All parties to this agreement
have reviewed this agreement with competent legal counsel.
Both parties have sought and obtained legal counsel and
certified public accountants with respect to this agreement
and the transactions contemplated therein. Both parties,
therefore, enter this agreement, knowingly, intentionally, and
intelligently.
7.18 Professional Fees. Each Party shall bear the expense of any
Professional Fees, including, but not limited to, Attorney
fees, Accountant fees, or Investigative fees. However,
notwithstanding this paragraph, in the event of a Breach of
this Agreement, the Non-breaching party shall be responsible
for Attorney fees and costs of collection.
7.19 Non Competition Agreement. Attached hereto as EXHIBITs C, is
the Non-Competition and Confidentiality Agreement entered into
by the Parties contemporaneously with this Merger Agreement.
Said agreement is incorporated by reference into this document
and made a part hereof. The consideration for this Merger
Agreement is sufficient and adequate consideration for the
Merger Agreement, and the Non-Compete and Confidentiality
Agreement.
7.20 Revocation of Previous Definitive Agreement. The Parties have
previously entered into a valid and enforceable form of this
Agreement. It is the intent of the Parties to execute an
original Merger Agreement at the Closing of this transaction,
as set forth in Section 8. Upon it's execution, said original
shall supersede, revoke, and make null and void any and all
Merger Agreements, executed previously by and among the
parties.
SECTION 8 - CONDITIONS PRECEDENT
8.1 Non-Binding until Satisfaction of Conditions. This transaction
is Non-Binding upon either Party until and upon the
Satisfaction of the Conditions Precedent and Closing as set
forth Below, except where specifically indicated. It is the
Parties intention that this document will become a binding,
valid, and enforceable Agreement following the Closing of this
Transaction.
8.2 Conditions Precedent. The intention of the Parties is to
become legally bound to this agreement following the closing
of this transaction. Said Closing shall not take place until
the following Conditions Precedent are satisfied, or waived in
writing by both Parties:
8.2.1 Exchange of Tangible Consideration as set forth in
this Agreement, including, but not limited to,
exchange of cash, promissory notes, certificates of
stock, or other consideration as set forth in Section
3.1
8.2.2 Transfer of Stock as set forth in Section 3.2
8.2.3 Transfer of Assets as set forth in Section 3.3 et
seq.
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8.2.4 Completion and delivery of all Schedules and Exhibits
as referenced in this agreement by both parties, and
acceptance of the same by both parties.
8.2.5 Successful completion of due diligence as performed
by auditors, attorneys or agents of NetVision,
including but not limited to verification by the
auditors that Private Entity has at least 2300
bona-fide subscribers.
8.2.6 Execution of the mutually acceptable Non-Competition
Agreement by both Parties.
8.2.7 Successful assignment of any and all material
contracts to which Private Entity is a party.
8.2.8 Closing shall be scheduled for a date prior, and
completed no later than, October 25th, 1999, unless
mutually agreed to, or waived, by both parties.
8.2.9 Should the Conditions Precedent not be satisfied as
set forth in this section 8, and should the Closing
not occur as set forth below, neither party shall be
bound, nor bear any liability from this agreement,
unless any of said provisions are mutually modified
or waived by the parties in writing.
8.2.10 Preparation of appropriate Articles of Merger to be
filed with the Secretary of State in the States of
Delaware and Indiana, and good faith acceptance
thereof by and among all parties.
8.2.11 Execution of the Document titled Checklist of Merger,
attached as EXHIBIT E. Said document has no binding
effect other than to reflect the parties
understanding regarding the necessary documentation
to effectuate this Merger.
8.2.12 Execution and Delivery of Certified Corporate
Resolutions authorizing this Merger transaction by
both parties.
8.2.13 Execution and Delivery of a Registration Rights
Agreement, or such other instrument as may be agreed
to by the Parties in lieu thereof, attached as
EXHIBIT F.
SECTION 9 - CLOSING
9.1 Upon Completion of the Conditions Precedent set forth above,
and the completion of Closing as set forth below, this
Agreement shall become a legally binding, valid and
enforceable Agreement.
9.2 The Closing of this transaction shall be deemed an express
representation that there have been no material changes by,
between or among, any of the parties hereto, since the
execution of this Merger Agreement.
9.3 Closing Date and Time. The Closing shall take place on the
_______________________ at _________, or such other date and
time as subsequently may be agreed upon by the parties, in
writing. Any reference herein to the Closing Date for the
purpose of establishing a point in time, or calculating a
period of time, means 11:59 p.m., local time on the Closing
Date.
9.4 Transfer of Business. Upon the successful Closing of this
transaction, NetVision and Private Entity shall become one
entity, and Private Entity shall cease to exist as a valid and
legally existing entity. Any and all business transactions, or
activities, as contemplated by this agreement, shall be
transferred to NetVision. In no event shall this clause, or
any other clause in this contract, be construed to effect the
Representations, Warranties or Indemnification as set forth by
both parties in this agreement.
IN WITNESS WHEREOF, the parties have signed this Agreement, consisting
of 15 pages. The intent of
14
the Parties is to be legally bound thereby.
Signed in the Presence of the following, and on the date first indicated on this
agreement:
XXX.XXX, INC (Private Entity)
By: _________________________
J. Xxxxx Xxxxxxx, as President
_________________________
J. Xxxxx Xxxxxxx, Individually
_________________________
Xxxx X. Xxxx, Individually
NETVISION .COM, INC. (NetVision)
By: _____________________________
Xxxx X. Xxxxxxxxxxxxx, CEO and
Chairman of the Board
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