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EXHIBIT 10.12
ASSET PURCHASE AGREEMENT
By and Between
Xxxxxxx Communications, Inc.,
an Indiana corporation,
Xxxxx X. Xxxxxxx, Xx.,
HC Acquisition Corp.,
a Colorado corporation,
and
Multi-Link Telecommunications, Inc.,
a Colorado corporation
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TABLE OF CONTENTS
ARTICLE I PURCHASE OF ASSETS...............................................................1
1.1 Acquired Assets..........................................................1
1.2 Excluded Assets..........................................................2
1.3 Disclaimer of Warranties.................................................3
1.4 Assumed Liabilities......................................................3
ARTICLE II PURCHASE PRICE..................................................................4
2.1 Purchase Price...........................................................4
2.2 Payment of Purchase Price................................................4
2.3 Allocation of Purchase Price.............................................4
2.4 Funding of Buyer.........................................................5
2.5 Licensing of Intellectual Property.......................................5
ARTICLE III CLOSING; CLOSING DELIVERIES....................................................5
3.1 Closing..................................................................5
3.2 Seller's Closing Deliveries..............................................5
3.3 Buyer's Closing Deliveries...............................................8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER........................................9
4.1 Organization of Seller...................................................9
4.2 Capital Structure of Seller.............................................10
4.3 Authorization...........................................................10
4.4 Validity; Binding Effect................................................10
4.5 Noncontravention........................................................10
4.6 Title to Acquired Assets................................................10
4.7 Real Estate.............................................................10
4.8 Disclosure..............................................................10
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER.........................................11
5.1 Organization of Buyer...................................................11
5.2 Authorization...........................................................11
5.3 Validity; Binding Effect................................................11
5.4 Noncontravention........................................................11
ARTICLE VI COVENANTS PENDING CLOSING......................................................11
6.1 Reasonable Efforts......................................................12
6.2 Notices and Consents....................................................12
6.3 Satisfaction of Conditions..............................................12
6.4 Full Access.............................................................12
6.5 Operation of Business...................................................12
6.6 Notices.................................................................12
6.7 Employees...............................................................12
ARTICLE VII SELLER'S CONDITIONS PRECEDENT.................................................12
7.1 Performance by Buyer....................................................13
7.2 Accuracy of Representations and Warranties..............................13
7.3 No Injunction...........................................................13
7.4 Closing Deliveries......................................................13
7.5 Purchase Price Allocation...............................................13
7.6 Grant of License........................................................13
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ARTICLE VIII BUYER'S CONDITIONS PRECEDENT.................................................13
8.1 Performance by Seller...................................................13
8.2 Accuracy of Representations and Warranties..............................13
8.3 No Injunction...........................................................13
8.4 Closing Deliveries......................................................14
8.5 Purchase Price Allocation...............................................14
8.6 Secured Party Approvals.................................................14
8.7 No Material Adverse Change..............................................14
8.8 Due Diligence...........................................................14
8.9 Agreements with Vendors.................................................14
8.10 Acceptance of Trade Creditors...........................................14
8.11 Grant of License........................................................14
ARTICLE IX INDEMNIFICATION................................................................14
9.1 Indemnification by Seller...............................................14
9.2 Indemnification by Buyer................................................15
9.3 Survival Period.........................................................15
ARTICLE X MISCELLANEOUS...................................................................15
10.1 Confidentiality; Press Release..........................................15
10.2 Notices.................................................................16
10.3 Expenses................................................................17
10.4 Governing Law...........................................................17
10.5 Partial Invalidity......................................................17
10.6 Assignment..............................................................17
10.7 Successors and Assigns..................................................17
10.8 Execution in Counterparts...............................................17
10.9 Titles and Headings; Rules of Construction..............................18
10.10 Entire Agreement; Amendments and Waivers................................18
10.11 Termination.............................................................18
10.12 No Negotiation..........................................................18
10.13 No Third Party Beneficiaries............................................18
10.14 Remedies................................................................18
10.15 Access..................................................................19
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EXHIBITS
Exhibit A Form of Non-Competition Agreement
Exhibit B Form of Consulting Agreement
SCHEDULES
Schedule 1.1 Assumed Contracts and Leases
Schedule 2.5 Intellectual Property
Schedule 3.3 Lease Terms
Schedule 4.5 Noncontravention
Schedule 8.10 Acceptance of Trade Creditors
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 17th day of September, 1999, by and between Xxxxxxx
Communications, Inc., an Indiana corporation ("Seller"), Xxxxx X. Xxxxxxx, Xx.,
a resident of the State of Indiana ("Shareholder"), Multi-Link
Telecommunications, Inc., a Colorado corporation ("Multi-Link") and HC
Acquisition Corp., a Colorado corporation and a wholly-owned subsidiary of
Multi-Link ("Buyer").
RECITALS:
A. Seller is engaged in the business of providing telecommunication
services to individuals and businesses (the "Business").
B. Buyer desires to acquire from Seller, and Seller desires to sell to
Buyer, all right, title and interest of Seller in and to substantially all of
the assets used or useful in the Business on the terms and subject to the
conditions set forth in this Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
PURCHASE OF ASSETS
1.1 Acquired Assets. Upon the terms and subject to the conditions
contained herein, Seller shall sell and transfer to Buyer, and Buyer shall
purchase and acquire from Seller, at the Closing (as hereinafter defined), all
of the properties and assets of Seller used in the operation of the Business as
of the Closing (the "Acquired Assets") other than the Excluded Assets (as
hereinafter defined), free and clear of all security interests, liens,
restrictions, claims, encumbrances or charges of any kind ("Encumbrances") other
than Permitted Encumbrances (as hereinafter defined), including without
limitation, the following:
(a) All tangible personal property (such as machinery, equipment,
inventories, furniture and motor vehicles) owned by Seller;
(b) All accounts, notes and other receivables owned by Seller
(other than those included in the definition of Excluded Assets);
(c) All claims, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off and rights of recoupment
owned by Seller (other than those included in the definition of Excluded
Assets);
(d) All rights of Seller in, to and under all leases of personal
property entered into by Seller in connection with the Business prior to the
date hereof as set forth in Schedule 1.1 hereto and any other leases which Buyer
shall have agreed in writing to assume as provided in Section 1.4 of this
Agreement (collectively, the "Leases");
(e) All of Seller's right, title and interest in and to the name
"Xxxxxxx Communications" and related logos, the trade names related to the
Business, and all customer lists and trade secrets related to the Business;
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(f) All rights of Seller in, to and under those contracts,
commitments, purchase and sale orders, work orders, agreements and arrangements
entered into by Seller in connection with the Business prior to the date hereof
as described in Schedule 1.1 hereto and any other contracts which Buyer shall
have agreed in writing to assume as provided in Section 1.4 of this Agreement
(collectively, the "Contracts");
(g) All franchises, approvals, permits, licenses, orders,
registrations, certificates, variances and similar rights obtained from
governments and governmental agencies in which Seller has any right, title or
interest;
(h) All books and records of Seller related specifically to the
Business, including without limitation, property records, current payroll
records, accounting records, supplier lists, parts lists, manuals, files, and
any similar items related to the Acquired Assets or the conduct of the Business;
(i) All of Seller's intellectual property, the goodwill associated
therewith, licenses and sublicenses granted and obtained with respect thereto,
and rights thereunder, remedies against infringements thereof, and rights to
protection of interests therein under the laws of all jurisdictions
(collectively, the "Proprietary Rights"); and
(j) Seller's cash and cash equivalents.
1.2 Excluded Assets. Notwithstanding anything contained in Section 1.1
to the contrary, Seller shall not sell and transfer to Buyer, and Buyer shall
not purchase or acquire from Seller, at the Closing, any of Seller's assets
other than the Acquired Assets, including the following properties and assets
(collectively, the "Excluded Assets"):
(a) Seller's corporate charter, qualifications to conduct business
as a foreign corporation, arrangements with registered agents relating to
foreign qualifications, taxpayer and other identification numbers, seals, minute
books, stock transfer books, blank stock certificates and other documents
relating to the organization, maintenance and existence of Seller as a
corporation;
(b) Any assets owned by Seller (or assets unrelated to the
provision of services by Seller to its customers incident to its operation of
the Business, which are leased by Seller under any capitalized lease) situated
at the Leased Real Estate (as hereinafter defined) that are affixed to, embedded
in or attached to the Leased Real Estate by means of cement, plaster, nails,
bolts, screws or adhesives, or any assets of Seller so situated and that
constitute fixtures or appliances of the Leased Real Estate;
(c) Subject to the provisions of Section 1.4 of this Agreement,
all rights in and with respect to the assets associated with the employee
benefit plans of the Business (including, without limitation, any (i)
nonqualified deferred compensation or retirement plan or arrangement of Seller,
(ii) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), (iii) qualified
defined benefit retirement plan or arrangement which is an Employee Pension
Benefit Plan, including any Multiemployer Plan (as defined in Section 3(37) of
ERISA), or (iv) Employee Welfare Benefit Plan (as defined in Section 3(1) of
ERISA) or material fringe benefit or other retirement, bonus or incentive plan
or program (collectively, the "Benefit Plans");
(d) Any of the rights of Seller under this Agreement (or under any
side agreement between Seller on the one hand and Buyer on the other hand
entered into on or after the date of this Agreement);
(e) All accounts, notes and other receivables owed to Seller by
any Affiliate of Seller (as hereinafter defined); and
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(f) All claims, causes of action, choses in action and rights of
recovery relating to any claims Seller has or may have against Ameritech (or any
of its Affiliates) or any of Seller's former or current employees.
For purposes of this Agreement, "Affiliate" means, with respect to any person or
entity, any person or entity that controls, is controlled by or is under common
control with such person or entity, together with its and their respective
members, managers, partners, venturers, directors, officers, shareholders,
agents, employees, spouses and legal representatives. A person or entity shall
be presumed to have control when it possesses the power, directly or indirectly,
to direct, or cause the direction of, the management or policies of another
person or entity, whether through ownership of voting securities, by contract,
or otherwise.
1.3 Disclaimer of Warranties. Buyer acknowledges and agrees that the
personal property included within the Acquired Assets is being sold and
transferred to Buyer "AS IS, WHERE IS," with all faults and with no warranties
whatsoever, whether express or implied (including, without limitation,
warranties relating to the condition, merchantability, fitness or freedom from
defects or defaults of such personal property, all of which Seller hereby
expressly disclaims).
1.4 Assumed Liabilities. On the terms and subject to the conditions set
forth in this Agreement, upon the Closing, Buyer agrees to assume and discharge
(a) the liabilities of Seller related to the Contracts and the Leases, (b) such
other liabilities of Seller (including, but not limited to, liabilities
resulting from the Benefit Plans) as Buyer shall have agreed in writing to
assume, (c) the obligations of Seller relating to customer prepayments or
deposits, and (d) any and all accrued vacation pay of Seller's employees,
through the Closing Date (collectively, the "Assumed Liabilities"); provided,
however, that Buyer shall not be obligated to assume and discharge Assumed
Liabilities attributable to subsections (a) and (b) of this Section 1.4 (the
"Primary Assumed Liabilities") in the aggregate exceeding $1,105,000; and,
provided further, that Buyer shall not be obligated to assume and discharge
Assumed Liabilities attributable to subsections (c) and (d) of this Section 1.4
(collectively, the "Secondary Assumed Liabilities") in the aggregate exceeding
$500,000. Except for the Assumed Liabilities described in this Section 1.4,
Buyer shall not assume, and Seller shall pay, compromise or otherwise provide
for all debts, obligations and liabilities of Seller (whether absolute,
contingent, fixed or otherwise), including, without limitation, all tax
liabilities occurring prior to the Closing Date (collectively "Seller Retained
Liabilities"). Any Encumbrance which relates to an Assumed Liability shall be a
"Permitted Encumbrance" for purposes of this Agreement.
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. In consideration for the Acquired Assets to be sold
and transferred to Buyer and upon the terms and conditions contained herein,
Buyer shall pay or cause to be paid to or for the account of Seller (as set
forth in Section 2.2 below), Two Million One Hundred Five Thousand Dollars
($2,105,000.00), plus the amount of Secondary Assumed Liabilities assumed by
Purchaser pursuant to Section 1.4 of this Agreement (subject to the limitations
set forth therein) (the "Purchase Price").
2.2 Payment of Purchase Price. Buyer shall pay the Purchase Price to
Seller as follows:
(a) Buyer shall pay the sum of One Million Dollars ($1,000,000.00)
to Seller at Closing by wire transfer to an account or accounts designated by
Seller at least forty-eight hours prior to Closing;
(b) Buyer shall assume Seller's obligations under the Primary
Assumed Liabilities in an amount not to exceed One Million One Hundred Five
Thousand Dollars ($1,105,000.00) at Closing; and
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(c) Buyer shall assume Seller's obligations under the Secondary
Assumed Liabilities in an amount not to exceed Five Hundred Thousand Dollars
($500,000.00).
2.3 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Acquired Assets in accordance with the agreement of Seller and Buyer
to be entered into at or prior to Closing. Neither Seller nor Buyer shall take a
position on any tax return (including, without limitation, any Form 8594, and
any amendments thereto), before any governmental agency charged with the
collection of any tax, or in any proceeding that is inconsistent with such
allocation (taking into account any subsequent amendments required by law) or
otherwise inconsistent with such agreement without the prior written consent of
the other party hereto. Seller and Buyer shall make their respective Forms 8594
(and any amendments thereof) available for inspection by the other party for the
purpose of verifying compliance with this Section 2.3.
2.4 Funding of Buyer. Subject to satisfaction of Buyer's conditions
precedent to Closing, on or prior to the Closing Date, Multi-Link shall
contribute to the capital of Buyer $1,500,000 and 150,000 shares of its common
stock.
2.5 Licensing of Intellectual Property. Subject to satisfaction of
Buyer's conditions precedent to Closing, at the Closing, Buyer shall grant
Seller (or its assigns), on terms and conditions satisfactory to Buyer and
Seller, an exclusive, perpetual license to use the name "Xxxxxxx Excavation" and
the related logos and trade dress described on Schedule 2.5 hereto in
furtherance of the business of construction and/or excavation at any location
within the world (the "License").
ARTICLE III
CLOSING; CLOSING DELIVERIES
3.1 Closing. The "Closing" means the time at which Seller consummates
the sale and transfer of the Acquired Assets to Buyer, against payment by Buyer
of the Purchase Price, after the satisfaction (or receipt of a duly executed
waiver) of each of the conditions precedent to Closing as hereinafter described.
The Closing shall take place at the offices of Seller's counsel, Xxxxxx &
Xxxxxxx, PC, 4000 Bank One Tower, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx at
10:00 a.m., local time, on November 1, 1999 (the "Closing Date"), or at such
other place and time as the parties may mutually agree.
3.2 Seller's Closing Deliveries. At the Closing, in addition to any
other documents specifically required to be delivered pursuant to this
Agreement, Seller shall, in form and substance reasonably satisfactory to Buyer
and its counsel (except as otherwise specifically set forth herein), deliver to
Buyer the following:
(a) A Xxxx of Sale and Assignment, duly executed by Seller,
conveying all of Seller's right, title and interest in and to the Acquired
Assets to Buyer;
(b) A counterpart to an Assignment and Assumption Agreement, duly
executed by Seller, in which Seller assigns its rights in the Contracts and the
Leases to Buyer and in which Buyer assumes Seller's obligations under the same
(the "Assignment and Assumption Agreement");
(c) An agreement, duly executed by Seller and Xxxxxxx Real Estate,
LLC, an Indiana limited liability company ("Landlord") terminating Seller's
leasehold interest in the Leased Real Estate (as hereinafter defined);
(d) A counterpart to a Non-Competition Agreement, duly executed by
Shareholder, substantially in the form attached hereto as Exhibit A (the
"Non-Competition Agreement");
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(e) A counterpart to a Consulting Agreement, duly executed by
Shareholder, substantially in the form attached hereto as Exhibit B (the
"Consulting Agreement");
(f) A counterpart to the License, duly executed by Seller;
(g) Consents of third parties to the assignment of the Contracts
and the Leases, to the extent such consents are required to effect the
assignment thereof as contemplated by this Agreement;
(h) Amended Articles of Incorporation of Seller, amending Seller's
existing Articles of Incorporation to effect a change of Seller's name (the
"Amendment"), along with such other consents or instruments as are necessary for
Seller to deliver in support of an application of Buyer to qualify to do
business as a foreign corporation and under the name "Xxxxxxx Communications"
(or any similar name currently used by Seller in the operation of the Business)
in each jurisdiction in which Seller is so qualified to do business (including
assignments of assumed business names, as appropriate);
(i) A certificate, duly executed by Seller, certifying that Seller
has performed and complied with all of the terms, provisions and conditions of
this Agreement to be performed and complied with by it at or prior to Closing
and that its representations and warranties are true in all material respects as
of the date of this Agreement and as of the Closing (except as expressly
contemplated or permitted by this Agreement);
(j) A certificate of the Secretary or Assistant Secretary of
Seller, dated the Closing Date, certifying (i) the resolutions duly adopted by
the Shareholder and the Board of Directors of Seller authorizing and approving
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby and the Amendment, and (ii) that such resolutions have not
been rescinded or modified and remain in full force and effect as of the Closing
Date;
(k) A certificate of existence of Seller, dated no more than ten
days prior to the Closing Date, issued by the Secretary of State of the State of
Indiana;
(l) A copy of the Articles of Incorporation of Seller, duly
certified by the Secretary of State of the State of Indiana, no more than ten
days prior to the Closing Date;
(m) Evidence of the release of all Encumbrances affecting the
Acquired Assets, other than Permitted Encumbrances;
(n) Evidence of Seller's receipt of the Secured Party Approvals
(as hereinafter defined);
(o) An opinion of Xxxxxx & Xxxxxxx, PC, counsel for Seller and
Shareholder, dated the Closing Date, addressed to Buyer and Multi-Link to the
effect that:
(i) Seller is a corporation duly organized and validly
existing under the laws of the State of Indiana.
(ii) Seller has full corporate power and authority to (A)
execute and deliver this Agreement and to perform its obligations hereunder and,
(B) own and operate its assets, properties and business and carry on its
business as presently conducted (as described to Xxxxxx & Xxxxxxx, PC by Seller
in a certificate or certificates to be relied upon by Xxxxxx & Xxxxxxx, PC in
rendering such opinion).
(iii) This Agreement has been duly and validly executed and
delivered by Seller and Shareholder and constitutes a valid and legally binding
obligation of Seller and Shareholder, enforceable against Seller and Shareholder
in accordance with its terms.
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(iv) The execution, delivery and performance of this
Agreement by Seller has been duly authorized by all necessary corporate action
on the part of Seller, including director and shareholder authorization.
(v) The execution, delivery and performance of this Agreement
by Seller, the consummation of the transactions contemplated hereby and the
compliance with or fulfillment of the terms and provisions hereof or of any
other agreement or instrument to be delivered at the Closing (the "Closing
Instruments"), do not and will not conflict with, or result in a breach of any
of the provisions of the Articles of Incorporation or Bylaws of Seller.
(vi) The Closing Instruments are sufficient as a matter of
law to convey to Buyer all of the right, title and interest of Seller in and to
the Specified Acquired Assets (as hereinafter defined) which are purported to be
conveyed thereby.
The opinion may be governed by the Legal Opinion Accord (the "Accord") of the
ABA Section of Business Law (1991) and if so governed, the General
Qualifications (as defined in the Accord) shall apply to the opinions expressed
in subsection (iii) and (vi). For purposes of such opinion, the term "Specified
Acquired Assets" shall mean those Acquired Assets which are described in
subsections (a), (b), (c), (e), (h) and (j) of Section 1.1 of this Agreement;
(p) Such other instruments of sale, transfer, conveyance and
assignment as Buyer and its counsel may reasonably request to effect the
transfer of the Acquired Assets contemplated hereby; and
(q) All other previously undelivered items required to be
delivered by Seller at or prior to Closing pursuant to this Agreement or
otherwise required in connection herewith unless waived in writing by Buyer.
3.3 Buyer's Closing Deliveries. At the Closing, in addition to any
other documents specifically required to be delivered pursuant to this
Agreement, Buyer shall, in form and substance reasonably satisfactory to Seller
and its counsel (except as otherwise specifically set forth herein), deliver to
Seller the following:
(a) A Lease Agreement, duly executed by Buyer and Landlord, for
the letting of the Leased Real Estate to Buyer (as lessee) on terms and
conditions described in Schedule 3.3 hereto;
(b) A counterpart to the Assignment and Assumption Agreement duly
executed by Buyer;
(c) A counterpart to the Non-Competition Agreement duly executed
by Buyer;
(d) A counterpart to the Consulting Agreement, duly executed by
Buyer;
(e) A counterpart to the License, duly executed by Buyer;
(f) The cash portion of the Purchase Price to be paid at the
Closing pursuant to Section 2.2(a) of this Agreement;
(g) A certificate, duly executed by Buyer, certifying that Buyer
has performed and complied with all of the terms, provisions and conditions of
this Agreement to be performed and complied with by it at or prior to Closing
and that its representations and warranties are true in all material respects as
of the date of this Agreement and as of the Closing (except as expressly
contemplated or permitted by this Agreement);
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(h) A certificate of the Secretary or Assistant Secretary of
Buyer, dated the Closing Date, certifying (i) the resolutions duly adopted by
the Board of Directors of Buyer authorizing and approving the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby (including the Non-Competition Agreement and the Consulting Agreement),
and (ii) that such resolutions have not been rescinded or modified and remain in
full force and effect as of the Closing Date;
(i) A certificate of good standing of Buyer, dated no more than
ten days prior to the Closing Date, issued by the Secretary of State of the
State of Colorado;
(j) A copy of the Articles of Incorporation of Buyer, duly
certified by the Secretary of State of the State of Colorado, no more than ten
days prior to the Closing Date;
(k) An opinion of Xxxxx, Johnson, Robinson, Xxxx & Xxxxxxxxx,
P.C., counsel for Buyer and Multi-Link, dated the Closing Date, addressed to
Seller and Shareholder, to the effect that:
(i) Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado.
(ii) Buyer has full corporate power and authority to (A)
execute and deliver this Agreement and to perform its obligations hereunder, and
(B) own and operate its assets, properties and business and carry on its
business as presently conducted.
(iii) This Agreement has been duly and validly executed and
delivered by Buyer and constitutes a valid and legally binding obligation of
Buyer, enforceable against Buyer in accordance with its terms.
(iv) The execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate action on the part
of Buyer, including director authorization.
(v) The execution, delivery and performance of this Agreement
by Buyer, the consummation of the transactions contemplated hereby and the
compliance with or fulfillment of the terms and provisions hereof or of any
other agreement or instrument contemplated hereby, do not and will not conflict
with or result in a breach of any of the provisions of the Articles of
Incorporation or Bylaws of Buyer.
The opinion may be governed by the Accord and if so governed, the General
Qualifications (as defined in the Accord) shall apply to the opinions expressed
in subsection (iii);
(l) All other previously undelivered items required to be
delivered by Buyer at or prior to Closing pursuant to this Agreement or
otherwise required in connection herewith unless waived in writing by Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller represents and warrants
to Buyer, and Buyer in agreeing to pay the Purchase Price and to otherwise
consummate the transactions contemplated by this Agreement has relied upon such
representations and warranties, that, except for certain "Schedules" which are
referred to herein and which have previously been delivered by Seller to Buyer:
4.1 Organization of Seller. Seller is a corporation duly organized and
validly existing under the laws of the State of Indiana and as of the Closing
Date will be qualified to do business as a foreign
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corporation in good standing in each other state wherein the nature of its
business or activities requires such qualification.
4.2 Capital Structure of Seller. The authorized capital stock of Seller
consists of 1,000 shares of common stock, no par value, of which 200 shares are
issued and outstanding as of the date of this Agreement and are owned, of record
and beneficially, by Shareholder.
4.3 Authorization. Seller has full corporate power and authority to (a)
execute and deliver this Agreement and to perform its obligations hereunder, and
(b) own and operate its assets, properties and business and carry on its
business as presently conducted. The execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate action on the part
of Seller, including director and shareholder authorization.
4.4 Validity; Binding Effect. This Agreement has been duly and validly
executed and delivered by Seller and Shareholder and constitutes a valid and
legally binding obligation of Seller and Shareholder, enforceable against Seller
and Shareholder in accordance with its terms.
4.5 Noncontravention. The execution, delivery and performance of this
Agreement by Seller, the consummation of the transactions contemplated hereby
and the compliance with or fulfillment of the terms and provisions hereof or of
any other agreement or instrument contemplated hereby, do not and will not (a)
conflict with or result in a breach of any of the provisions of the Articles of
Incorporation or Bylaws of Seller, (b) contravene any law which affects or binds
Seller or any of its properties, (c) except as set forth in Schedule 4.5,
conflict with, result in a breach of, constitute a default under, or give rise
to a right of termination or acceleration under any of the Contracts or Leases,
or (d) except as set forth in Schedule 4.5, require Seller to obtain the
approval, consent or authorization of, or to make any declaration, filing or
registration with, any third party or any governmental authority which has not
been obtained in writing prior to the date of this Agreement.
4.6 Title to Acquired Assets. Seller has, or will have at Closing, good
and marketable title to all of the Acquired Assets, free and clear of any and
all Encumbrances, other than Permitted Encumbrances.
4.7 Real Estate. Seller owns no real estate. Except for its leasehold
interest in the real estate situated in Xxxxxx County, Indiana, and commonly
known as 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx (the "Leased Real
Estate"), Seller has no leasehold interest in any real estate.
4.8 Disclosure. None of the representations or warranties of Seller
contained in this Article IV, none of the information contained in the Schedules
referred to in this Article IV, and none of the other documents or information
furnished to Buyer or any of its representatives in connection with this
Agreement and the transactions contemplated hereby, is false or misleading in
any material respect or omits to state a fact herein or therein necessary to
make the statements made herein or therein not misleading in any material
respect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer represents and warrants
to Seller, and Seller in agreeing to consummate the transactions contemplated by
this Agreement has relied upon such representations and warranties, that:
5.1 Organization of Buyer. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado
and is qualified to do business as a foreign corporation in good standing in
each other state wherein the nature of its business or activities requires such
qualification.
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5.2 Authorization. Buyer has full corporate power and authority to (a)
execute and deliver this Agreement and to perform its obligations hereunder, and
(b) own and operate its assets, properties and business and carry on its
business as presently conducted. The execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate action on the part
of Buyer, including director authorization.
5.3 Validity; Binding Effect. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes a valid and legally binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
5.4 Noncontravention. The execution, delivery and performance of this
Agreement by Buyer, the consummation of the transactions contemplated hereby and
the compliance with or fulfillment of the terms and provisions hereof or of any
other agreement or instrument contemplated hereby, do not and will not (a)
conflict with or result in a breach of any of the provisions of the Articles of
Incorporation or Bylaws of Buyer, (b) contravene any law which affects or binds
Buyer or any of its properties, (c) conflict with, result in a breach of,
constitute a default under, or give rise to a right of termination or
acceleration under any contract, agreement, note, deed of trust, mortgage,
trust, lease, governmental or other license, permit or other authorization, or
any other instrument or restriction to which Buyer is a party or by which any of
its properties may be affected or bound, or (d) require Buyer to obtain the
approval, consent or authorization of, or to make any declaration, filing or
registration with, any third party or any governmental authority which has not
been obtained in writing prior to the date of this Agreement.
ARTICLE VI
COVENANTS PENDING CLOSING
The parties agree as follows with respect to the period between the
date of the execution of this Agreement and the Closing:
6.1 Reasonable Efforts. Buyer and Seller shall take all action and do
all things necessary, proper or advisable in order to consummate the
transactions contemplated by this Agreement, including satisfaction, but not
waiver, of the conditions to Closing set forth below.
6.2 Notices and Consents. Buyer and Seller shall notify all lessors
under the Leases and all third parties to the Contracts of the assignment
thereof from Seller to Buyer and will use reasonable efforts to obtain any and
all consents of such lessors and third parties as are necessary to consummate
the transactions contemplated hereby.
6.3 Satisfaction of Conditions. Seller and Buyer shall make reasonable
efforts to satisfy the conditions precedent of each other's obligation to close
(as described in Article VII and Article VIII of this Agreement, as appropriate)
on or prior to the Closing Date.
6.4 Full Access. Seller shall permit the representatives of Buyer to
have full access at all reasonable times, and in a manner so as not to interfere
with the normal business operations of Seller, to all premises, properties,
personnel, books, records (including tax records), contracts and documents of or
pertaining to Seller and the Acquired Assets.
6.5 Operation of Business. From and after the date hereof until the
Closing, Seller will: (a) operate its business in the ordinary course,
consistent with past practice; (b) use its best efforts to preserve its
operations so that Buyer will obtain the benefits intended to be afforded by
this Agreement; (c) not take or permit any action which would result in any
representation or warranty of Seller becoming incorrect or untrue in any
material respect or result in the failure of Seller to comply with its covenants
and agreements herein in any material respect; (d) obtain the prior written
approval of Buyer in connection with all material decisions affecting the
business, operations, assets and liabilities of Seller; and (e) notify
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Buyer in writing promptly after Seller becomes aware of the occurrence of any
event that might have a material adverse effect on the business, operations or
financial condition of Seller.
6.6 Notices. Buyer and Seller will promptly notify the other in writing
if it receives any notice, or otherwise becomes aware, of any action or
proceeding instituted or threatened before any court or governmental agency or
by any third party to restrain or prohibit, or obtain substantial damages in
respect of this Agreement or the consummation of the transactions contemplated
hereby.
6.7 Employees. Buyer may, in its sole discretion, offer employment to
certain employees of Seller and all such persons so employed by Buyer will be
considered "new hires" by Buyer.
ARTICLE VII
SELLER'S CONDITIONS PRECEDENT
The obligation of Seller to effect the transactions contemplated by
this Agreement is subject to the fulfillment at or prior to the Closing of each
of the following conditions, except to the extent any such condition is waived
in writing by Seller:
7.1 Performance by Buyer. Buyer shall have performed and complied with
all of the terms, provisions and conditions of this Agreement to be performed
and complied with by Buyer at or prior to the Closing.
7.2 Accuracy of Representations and Warranties. All of the
representations and warranties made by Buyer in this Agreement shall be true in
all material respects as of the date of this Agreement and as of the Closing
(except as expressly contemplated or permitted by this Agreement).
7.3 No Injunction. No injunction, restraining order, judgment or decree
of any court or governmental authority shall be existing against any of the
parties to this Agreement or any of their officers, directors or
representatives, which restrains, prevents or materially alters the transactions
contemplated hereby.
7.4 Closing Deliveries. Buyer shall have delivered to Seller each of
the documents required of Buyer under Section 3.3 of this Agreement.
7.5 Purchase Price Allocation. Buyer and Seller shall have entered into
an agreement regarding the allocation of the Purchase Price as provided in
Section 2.3 of this Agreement.
7.6 Grant of License. Buyer and Seller shall have entered into the
License on mutually agreeable terms.
ARTICLE VIII
BUYER'S CONDITIONS PRECEDENT
The obligation of Buyer to effect the transactions contemplated by this
Agreement is subject to the fulfillment at or prior to the Closing of each of
the following conditions, except to the extent any such condition is waived in
writing by Buyer:
8.1 Performance by Seller. Seller shall have performed and complied
with all of the terms, provisions and conditions of this Agreement to be
performed and complied with by Seller at or prior to the Closing.
8.2 Accuracy of Representations and Warranties. All of the
representations and warranties made by Seller in this Agreement shall be true in
all material respects as of the date of this Agreement and as of the Closing
(except as expressly contemplated or permitted by this Agreement).
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8.3 No Injunction. No injunction, restraining order, judgment or decree
of any court or governmental authority shall be existing against any of the
parties to this Agreement or any of their officers, directors or
representatives, which restrains, prevents or materially alters the transactions
contemplated hereby.
8.4 Closing Deliveries. Seller shall have delivered to Buyer each of
the documents required of Seller under Section 3.2 of this Agreement.
8.5 Purchase Price Allocation. Buyer and Seller shall have entered into
an agreement regarding the allocation of the Purchase Price as provided in
Section 2.3 of this Agreement.
8.6 Secured Party Approvals. This Agreement and the transactions
contemplated hereby shall have been approved by (or consented to, as
appropriate) by Xxxxxx Financial, Inc. (or Xxxxxx Financial Leasing, Inc., as
appropriate), Tokai Financial Services, Inc., Peoples Bank & Trust Company and
Fifth Third Bank of Central Indiana (such approvals, collectively, the "Secured
Party Approvals").
8.7 No Material Adverse Change. There will not have occurred (i) any
material adverse change in the financial condition, business or prospects for
future business of Seller, or in the condition of the Acquired Assets, or any
event which may, in the future, cause such a change, or (ii) any pending or
threatened material litigation or other proceeding against Seller or the
Acquired Assets or with respect to the transaction contemplated by this
Agreement.
8.8 Due Diligence. Buyer will have been satisfied with the results of
its due diligence investigation of Seller, the Acquired Assets and the Business.
8.9 Agreements with Vendors. Buyer shall have entered into agreements
with such vendors of Seller as are necessary to maintain essential services
related to the Business after the Closing on terms and conditions satisfactory
to Buyer.
8.10 Acceptance of Trade Creditors. This Agreement and the transaction
contemplated hereby shall have been consented to by seventy percent (70%) of the
aggregate dollar amount of Seller's trade creditors listed in Schedule 8.10 of
this Agreement.
8.11 Grant of License. Buyer and Seller shall have entered into the
License on mutually agreeable terms.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by Seller. Seller shall indemnify and hold Buyer
harmless from and against all damages, claims, causes of action, losses and
expenses, including reasonable attorneys' fees and expenses (collectively,
"Indemnifiable Losses"), incurred in connection with or arising from (a) any
nonfulfillment or breach by Seller of any of its agreements or covenants
contained in this Agreement, (b) any breach of any warranty or the inaccuracy of
any representation or warranty of Seller contained in this Agreement or any
certificate, Schedule or other information delivered by or on behalf of Seller
in furthering the transactions contemplated hereby, (c) any Seller Retained
Liabilities, and (d) the operation of the Business prior to the Closing;
provided, however, that Buyer shall not be entitled to make a claim for
indemnification under this Section 9.1 until Buyer's Indemnifiable Losses in the
aggregate equal or exceed Twenty-five Thousand Dollars ($25,000.00) (the
"Threshold Level").
9.2 Indemnification by Buyer. Buyer shall indemnify and hold Seller
harmless from and against all Indemnifiable Losses incurred in connection with
or arising from (a) any nonfulfillment or breach by Buyer of any of its
agreements or covenants contained in this Agreement, (b) any breach of any
warranty or the inaccuracy of any representation or warranty of Buyer contained
in this Agreement or
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any certificate, Schedule or other information delivered by or on behalf of
Buyer in furthering the transactions contemplated hereby, (c) any Assumed
Liability, and (d) the operation of the Business after the Closing; provided,
however, that Seller shall not be entitled to make a claim for indemnification
under this Section 9.2 until Seller's Indemnifiable Losses in the aggregate
equal or exceed the Threshold Level.
9.3 Survival Period. The representations, warranties, covenants and
indemnifications contained in this Agreement or in any Schedule or certificate
delivered pursuant to this Agreement shall survive the Closing and shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any party hereto, and shall continue for a period of one year after the
Closing Date, at which time all of such representations, warranties, covenants
and indemnification obligations shall terminate. Notwithstanding anything
contained in this Section 9.3 to the contrary, any claim for indemnification
made by any party hereto in writing to the other party hereto prior to the
expiration of the survival period set forth above shall survive until such claim
has been resolved.
ARTICLE X
MISCELLANEOUS
10.1 Confidentiality; Press Release.
(a) Prior to Closing, each party hereto shall treat in confidence,
and not disclose without the prior consent of the other party hereto, all
documents, materials and other information which it shall have obtained
regarding the other party during the course of the negotiations leading to the
consummation of the transactions contemplated hereby (whether obtained before or
after the date of this Agreement), the investigation provided for herein and the
preparation of this Agreement and other related documents, except for disclosure
required by law, relating to arrangements with creditors of Seller or in
connection with any lawsuit between or involving the parties or any party
hereto. The obligation of each party to treat such documents, materials and
other information in confidence shall not apply to any information which (a)
such party can demonstrate was already lawfully in its possession prior to the
disclosure thereof by the other party, (b) is known to the public and did not
become so known through any violation of a legal obligation, or (c) became known
to the public through no fault of such party. Upon termination of this Agreement
in accordance with Section 10.11 hereof, each party shall promptly return to the
other party hereto all of the confidential documents, materials and other
information it has obtained from such other party. The obligations imposed by
the immediately preceding sentence shall survive any termination of this
Agreement pursuant to Section 10.11.
(b) No party to this Agreement shall issue any press release or
make any public announcement relating to the subject matter of this Agreement
prior to the Closing without the prior written approval of all of the parties
hereto, except for such press releases or public announcements as Buyer's
counsel reasonably determines are required by law to be made by Buyer or any of
its Affiliates.
10.2 Notices. All notices, requests, consents and other communications
hereunder ("Notice") shall be in writing and shall be deemed to have been given
(a) if mailed, the date of receipt of such Notice when sent via first class
United States registered mail, return receipt requested, postage prepaid to the
address listed below for the party to whom the Notice is being sent ("Notice
Party"); (b) if hand delivered or delivered by courier, upon actual delivery of
such Notice to the Notice Party at the address listed below for such Notice
Party; or (c) if sent by facsimile, on the first business day after the date of
the sender's receipt of a confirmed transmission of such Notice to the Notice
Party at the facsimile number, if any, listed below for such Notice Party
provided the party giving such Notice mails a copy of such Notice within two
days after the transmission of such Notice by facsimile to the Notice Party. The
addresses and facsimile numbers for each party to this Agreement, as of the date
hereof, are:
If to Seller: Xxxxx X. Xxxxxxx, Xx.
00000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
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With a copy to: Xxxxxx & Xxxxxxx, PC
Attn: Xxxxxx X. Xxxxx
4000 Bank One Tower
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: 317/236-9802
If to Buyer: HC Acquisition Corp.
c/o Multi-Link Telecommunications, Inc.
Attn: Xxxxx Xxxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile No.: 303/313-2001
With a copy to: Xxxxx, Johnson, Robinson, Xxxx &
Ragonetti, PC
Attn: Xxxxx X. Xxxxxxxx
000 Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile No.: 303/825-6525
Any party may change its address or facsimile number by providing written
notice, in accordance with the foregoing provisions of this Section 10.2, to
each other party of such change.
10.3 Expenses.
(a) Each party hereto will pay all costs, fees and expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements contained herein on its part to
be performed, including the fees, expenses and disbursements of its respective
counsel and accountants; provided, however, that brokers' fees to Xxxxxx and
Associates, Inc. shall be paid by Seller.
(b) In any legal action between the parties arising out of or
related to this Agreement, the prevailing party shall be entitled to recover its
costs and expenses, including reasonable accounting and legal fees.
10.4 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Indiana, without regard to such
jurisdiction's conflict of laws principles.
10.5 Partial Invalidity. In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but this Agreement
shall be construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein.
10.6 Assignment. Neither Seller nor Buyer may assign this Agreement, or
any rights hereunder, to any other party without the prior written consent of
the other party.
10.7 Successors and Assigns. Subject to the provisions of Section 10.6
above, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
10.8 Execution in Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be considered an original counterpart,
and all of which shall be
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considered to be but one agreement and shall become a binding agreement when
each party shall have executed one counterpart and delivered it to the other
party hereto.
10.9 Titles and Headings; Rules of Construction. Titles and headings to
sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement. Whenever the context so requires the use of or reference to any
gender includes the masculine, feminine and neuter genders; and all terms used
in the singular shall have comparable meanings when used in the plural and vice
versa.
10.10 Entire Agreement; Amendments and Waivers. This Agreement contains
the entire understanding of the parties hereto with regard to the subject matter
contained in this Agreement and supersedes all prior agreements or
understandings of the parties. The parties, by mutual agreement in writing, may
amend, modify and supplement this Agreement. The failure of any party to this
Agreement to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of such party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
10.11 Termination. This Agreement shall terminate and shall be of no
further force or effect (a) upon mutual written agreement of the parties hereto,
or (b) upon notice given by any party to the other party hereto in the event the
Closing has not occurred on or before November 30, 1999, (c) after November 1,
1999, upon notice by Buyer to Seller if Seller has failed to satisfy Buyer's
conditions precedent to Closing as provided in Article VIII of this Agreement by
such date, or (d) after November 1, 1999, upon notice by Seller to Buyer if
Buyer has failed to satisfy Seller's conditions precedent to Closing as provided
in Article VII of this Agreement by such date. Except for the provisions of
Section 10.1 of this Agreement, upon termination of this Agreement, this
Agreement shall be of no further force or effect. No termination of this
Agreement shall release, or be construed as releasing, any party from any
liability to any other party which may have arisen for any reason. A party's
right to terminate this Agreement is in addition to, and not in lieu of, any
other rights or remedies which such party may have.
10.12 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 10.11 above, Seller and Shareholder will not
directly or indirectly solicit, initiate or encourage any inquiries or proposals
from, discuss or negotiate with, provide any non-public information to, or
consider the merits of any unsolicited inquiries or proposals from, any person
or entity (other than Buyer) relating to any transaction involving the sale of
the Business, the Acquired Assets (other than in the ordinary course of
business), or any of the capital stock of Seller, or any merger, consolidation,
business combination or similar transaction involving Seller.
10.13 No Third Party Beneficiaries. This Agreement will not confer any
rights or remedies upon any person other than the parties and their respective
heirs, successors and assigns, as applicable.
10.14 Remedies. The rights and remedies of the parties hereunder are
cumulative and are not in lieu of, but are in addition to, any other rights or
remedies which the parties may have at law or in equity.
10.15 Access. From and after the Closing Date for a period of five
years, Buyer shall maintain all of the books and records of the Business sold
pursuant to this Agreement and shall permit Seller and Shareholder access to
view and copy such books and records at all reasonable times during such period
for purposes of (a) pursuing the claims described in Section 1.2 (f) of this
Agreement, (b) completing any and all tax returns required of Seller or
Shareholder, and (c) complying with all other obligations of Seller or
Shareholder contemplated by this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
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"SELLER" "BUYER"
Xxxxxxx Communications, Inc. HC Acquisition Corp.
By:___________________________ By:___________________________
Printed: _______________________ Printed: _______________________
Title: _________________________ Title: _________________________
"SHAREHOLDER" "MULTI-LINK"
Multi-Link Telecommunications, Inc.
------------------------------
Xxxxx X. Xxxxxxx, Xx. By:____________________________
Printed: ________________________
Title: __________________________
20
EXHIBIT A
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "Agreement") is made and entered
into on this ____ day of November, 1999, by and between, HC Acquisition Corp., a
Colorado corporation (the "Company"), Multi-Link Telecommunications, Inc., a
Colorado corporation ("Multi-Link") and Xxxxx X. Xxxxxxx, Xx., a resident of the
State of Indiana ("Xxxxxxx").
RECITALS
A. On the date hereof and contemporaneously with the execution and
delivery of this Agreement, pursuant to an Asset Purchase Agreement dated
September ___, 1999, by and between Xxxxxxx Communications, Inc., an Indiana
corporation ("Seller") and the Company, the Company has purchased substantially
all of the assets of Seller (including, without limitation, the goodwill
associated with its business) and Seller's business of providing voice mail
telecommunications services to individuals and businesses (the "Business").
X. Xxxxxxx is the sole shareholder, and was President and Chief
Executive Officer, of Seller and in such capacities directed the management of
Seller, had valuable relationships with customers and vendors of Seller, and had
expertise in the operation of the Business.
C. The Company intends to carry on, develop and expand the Business and
desires to obtain assurances that Xxxxxxx will not enter into competition with
the Business or otherwise destroy the goodwill associated therewith, and Xxxxxxx
desires to give the Company such assurances, all upon the terms and conditions
hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, terms defined in the
preamble and recitals of this Agreement shall have the meanings set forth
therein and the following terms shall have the meanings set forth below:
(a) "Competitive Business" shall mean any business which directly or
indirectly competes with the Business, as it exists on the date of this
Agreement and as it is developed, expanded and enhanced during the Restricted
Period.
(b) "Restricted Period" shall mean the period commencing on the date of
this Agreement and continuing for five years thereafter.
(c) "Territory" shall mean the states of Indiana, Illinois, Michigan
and Colorado.
2. Agreement Not-to-Compete. Xxxxxxx hereby agrees that during the
Restricted Period he will not directly or indirectly own, manage, operate,
control, invest in, lend to, become employed by or acquire an interest in, or
otherwise engage or participate in (whether as a partner, stockholder, joint
venturer, investor, advisor, consultant, employee or other participant in), or
use or permit his name to be used in, any Competitive Business in the Territory;
provided, however, that the ownership by Xxxxxxx of the equity securities of any
corporation traded on any national securities exchange or market representing
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not more than five percent (5%) of the issued and outstanding amount of such
securities shall not constitute a breach of this Section 2.
3. Agreement Not-to-Interfere.
(a) Xxxxxxx hereby agrees that he will not at any time during the
Restricted Period, directly or indirectly solicit, induce or influence any
customer, supplier, lessor or any other person which has a business relationship
with the Company relating to the Business in the Territory, or which had on the
date of this Agreement or during the Restricted Period a business relationship
with the Company relating to the Business in the Territory, to discontinue or
reduce the extent of such relationship with the Company in the Territory or
otherwise modify such relationship with the Company in any manner adverse to the
interests of the Company.
(b) Xxxxxxx hereby agrees that he will not at any time during the
Restricted Period, (i) directly or indirectly recruit, solicit or otherwise
induce or influence any employee or sales agent of the Company to discontinue
such employment, agency or other relationship with the Company, or (ii) employ
or seek to employ, or cause any Competitive Business to employ or retain or seek
to employ or retain as an employee or sales agent for any Competitive Business
in the Territory, any person who is then (or was at any time within six months
prior to the date Xxxxxxx or the Competitive Business employs or seeks to employ
such person) employed by the Company as an employee or sales agent.
4. Compensation. In consideration of Xxxxxxx'x execution and delivery
of this Agreement and performance of his covenants hereunder, the Company shall
and hereby does deliver to Xxxxxxx 107,143 shares of the common capital stock of
Multi-Link (the "Shares").
5. Representations and Warranties.
(a) Xxxxxxx represents and warrants to the Company and Multi-Link
as follows:
(i) Xxxxxxx has sufficient knowledge and experience in
business and financial matters to evaluate the merits and risks of an investment
in Multi-Link;
(ii) Xxxxxxx understands that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Act") or any state
securities law in reliance on an exemption therefrom for non-public offerings
and further understands that the Shares have not been approved or disapproved by
the United States Securities and Exchange Commission (the "SEC"), or any other
federal or state agency;
(iii) Xxxxxxx is acquiring the Shares for his own account,
for investment purposes only, and not with a view to the sale or other
distribution thereof, in whole or in part, and is aware that there are
substantial restrictions on the transferability of the Shares; Xxxxxxx must bear
the economic risk of an investment in the Shares for an indefinite period of
time because the Shares have not been registered under the Act and, therefore,
cannot be sold unless they are subsequently registered under the Act or an
exemption from such registration has been established to the satisfaction of the
Company or Multi-Link, as appropriate (which may require an opinion of counsel
acceptable to the Company or Multi-Link); Xxxxxxx has no right to compel
registration under the Act and Multi-Link has no present intention to register
the Shares under the Act or to take the action required to make Rule 144 under
the Act available for resale of the Shares; and
(iv) Xxxxxxx is an "accredited investor," as defined in the
Act, for the purposes hereof in that he falls within one or more categories
indicated below:
(A) Individual $1,000,000 Net Worth Test. Any natural
person whose net worth, or joint net worth with that person's spouse, at the
time of his purchase exceeds $1,000,000; or
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(B) Individual $200,000 Income Test. Any natural person
who had an individual income in excess of $200,000 in each of the two most
recent years or a joint income with that person's spouse in excess of $300,000
in each of those years and who has a reasonable expectation of reaching the same
income level in the current year.
(b) The Company and Multi-Link, jointly and severally, represent
and warrant to Xxxxxxx as follows:
(i) Multi-Link has filed all reports required under the Act
and the Securities and Exchange Act of 1934, as amended (the "Exchange Act") in
connection with the registration of its common stock (the "SEC Reports"). As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Act or the Exchange Act, as the case may be, and, at the
respective times they were filed, none of the SEC Reports contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(ii) The consolidated financial statements (including, in
each case, any notes thereto) of Multi-Link included in the SEC Reports complied
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, were
prepared in accordance with generally accepted accounting principles ("GAAP")
(except, in the case of unaudited statements, as permitted by Form 10-QSB of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and fairly present (in all material
respects) in accordance with GAAP the consolidated financial position of
Multi-Link and its consolidated subsidiaries as at the respective dates thereof
and the consolidated results of their operations and their consolidated cash
flows for the periods then ended (subject, in the case of unaudited statements,
to any other adjustments described therein and normal year-end audit adjustments
and to any other adjustments described therein).
6. Remedies. It is agreed that there will be irreparable damage if this
Agreement is not specifically enforced or if a breach of this Agreement by
Xxxxxxx is not enjoined. If Xxxxxxx violates any terms or provisions of this
Agreement or refuses to perform any act required of him under this Agreement,
the Company may institute and maintain proceedings against Xxxxxxx to compel the
specific performance of this Agreement by Xxxxxxx. Such remedies are in addition
to all other remedies available to the Company at law, in equity, or otherwise.
7. Attorneys' Fees. In the event that either party breaches any of the
terms of this Agreement, the non-defaulting party shall be reimbursed by such
defaulting party for all costs and expenses, including reasonable attorneys'
fees, incurred by the non-defaulting party in enforcing the terms of this
Agreement and/or recovering damages or equitable relief as a result of any such
breach.
8. Notices. All notices, requests, consents and other communications
hereunder ("Notice") shall be in writing and shall be deemed to have been given
(a) if mailed, the date of receipt of such Notice when sent via first class
United States registered mail, return receipt requested, postage prepaid to the
address listed below for the party to whom the Notice is being sent ("Notice
Party"); (b) if hand delivered or delivered by courier, upon actual delivery of
such Notice to the Notice Party at the address listed below for such Notice
Party; or (c) if sent by facsimile, on the first business day after the date of
the sender's receipt of a confirmed transmission of such Notice to the Notice
Party at the facsimile number, if any, listed below for such Notice Party
provided the party giving such Notice mails a copy of such Notice within two
days after the transmission of such Notice by facsimile to the Notice Party. The
addresses and facsimile numbers for each party to this Agreement, as of the date
hereof, are:
If to Xxxxxxx: Xxxxx X. Xxxxxxx, Xx.
00000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
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With a copy to: Xxxxxx & Xxxxxxx, PC
Attn: Xxxxxx X. Xxxxx
4000 Bank One Tower
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: 317/236-9802
If to the Company: HC Acquisition Corp.
c/o Multi-Link Telecommunications, Inc.
Attn: Xxxxx Xxxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile No.: 303/313-2001
With a copy to: Xxxxx, Johnson, Robinson, Xxxx &
Ragonetti, PC
Attn: Xxxxx X. Xxxxxxxx
000 Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile No.: 303/825-6525
Any party may change its address or facsimile number by providing written
notice, in accordance with the foregoing provisions of this Section 8, to each
other party of such change.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana, without regard to such
jurisdiction's conflict of laws principles.
10. Partial Invalidity. In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but such provisions
shall be modified to the maximum extent necessary to make such provisions valid,
legal and enforceable and to retain to the maximum extent possible the benefits
of this Agreement to the Company and the Agreement as so modified shall be
enforced to the maximum extent permitted by law.
11. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
12. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be considered an original counterpart,
and all of which shall be considered to be but one agreement and shall become a
binding agreement when each party shall have executed one counterpart and
delivered it to the other party hereto.
13. Titles and Headings; Rules of Construction. Titles and headings to
sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement. Whenever the context so requires the use of or reference to any
gender includes the masculine, feminine and neuter genders; and all terms used
in the singular shall have comparable meanings when used in the plural and vice
versa.
14. Entire Agreement; Amendments and Waivers. This Agreement contains
the entire understanding of the parties hereto with regard to the subject matter
contained in this Agreement and supersedes all prior agreements or
understandings of the parties. The parties, by mutual agreement in writing, may
amend, modify and supplement this Agreement. The failure of any party to this
Agreement to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of such
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party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"XXXXXXX" "COMPANY"
HC Acquisition Corp.
_________________________________ By: __________________________________
Xxxxx X. Xxxxxxx, Xx. Printed: _____________________________
Title: _______________________________
"MULTI-LINK"
Multi-Link Telecommunications, Inc.
By: __________________________________
Printed: _____________________________
Title: _______________________________
X-0
00
XXXXXXX X
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into
on this ___ day of November, 1999, by and between HC Acquisition Corp., a
Colorado corporation (the "Company"), Multi-Link Telecommunications, Inc., a
Colorado corporation ("Multi-Link") and Xxxxx X. Xxxxxxx, Xx., a resident of the
State of Indiana ("Consultant").
RECITALS
A. On the date hereof and contemporaneously with the execution and
delivery of this Agreement, pursuant to an Asset Purchase Agreement dated
September ___, 1999, by and between the Company and Xxxxxxx Communications,
Inc., an Indiana corporation ("Seller"), the Company has purchased substantially
all of the assets of Seller (including, without limitation, the goodwill
associated with its business) and Seller's business of providing voice mail
telecommunications services to individuals and businesses (the "Business").
B. On the date hereof and contemporaneously with the execution and
delivery of this Agreement, the Company and Consultant also entered into a
Non-Competition Agreement pursuant to which Consultant agreed to refrain from
activities in competition with the Company (the "Non-Competition Agreement").
C. The Company wishes to enter into an independent contractor agreement
with Consultant pursuant to which Consultant will perform various consulting
services for the Company on the terms and conditions set forth in this
Agreement, which services Consultant desires to perform.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Engagement. From the date of this Agreement and for a period of two
years thereafter, the Company hereby retains Consultant, and Consultant agrees
to be retained by the Company, as an independent contractor to perform the
Consulting Services (as hereinafter defined). Consultant shall not be considered
an employee of the Company for any purpose and shall not be entitled to any
salary, bonus, commission or other remuneration for services rendered to the
Company, except as otherwise specifically provided for in this Agreement.
Consultant shall be responsible for the payment of all federal and state income
and employment taxes, workers' compensation insurance and any similar taxes or
assessments to which he may be subject. Notwithstanding anything to the contrary
herein contained, Consultant shall not be considered the agent of the Company
and shall have no authority to bind the Company to any commitments, agreements
or obligations, whether oral, written or otherwise at any time during the term
of this Agreement.
2. Consulting Services. Consultant shall perform such consulting
services for the Company as may be reasonably requested by the Board of
Directors of the Company, from time to time, relating to the following services
(collectively, the "Consulting Services"):
(a) spending time and effort to promote the Business;
(b) rendering assistance and recommendations to the Company to
preserve on its behalf the present relationships with suppliers, customers and
others with whom there have been beneficial relationships; and
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(c) assisting in the smooth transition of duties and
responsibilities from Consultant in his capacity as a former owner and manager
of Seller to the new President and management team operating the Business.
3. Compensation.
(a) For all services to be rendered by Consultant under this
Consulting Agreement, the Company shall pay Consultant, upon the execution of
this Agreement, 42,857 shares of the common capital stock of Multi-Link (the
"Shares").
(b) The Company shall reimburse Consultant for all ordinary and
necessary business expenses incurred by Consultant in discharging his duties
hereunder; provided, however, that Consultant shall obtain the prior written
approval of the Company before incurring any such expenses. Consultant shall
keep reasonably accurate records of all expenses claimed to be reimbursable
under this Agreement and shall keep a detailed account of any expenses that may
be incurred, which records shall be suitable in form and content both for the
Company's records and for Internal Revenue Service purposes.
4. Representations and Warranties.
(a) Consultant represents and warrants to the Company and
Multi-Link as follows:
(i) Consultant has sufficient knowledge and experience in
business and financial matters to evaluate the merits and risks of an investment
in Multi-Link;
(ii) Consultant understands that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Act") or any state
securities law in reliance on an exemption therefrom for non-public offerings
and further understands that the Shares have not been approved or disapproved by
the United States Securities and Exchange Commission (the "SEC"), or any other
federal or state agency;
(iii) Consultant is acquiring the Shares for his own account,
for investment purposes only, and not with a view to the sale or other
distribution thereof, in whole or in part, and is aware that there are
substantial restrictions on the transferability of the Shares; Consultant must
bear the economic risk of an investment in the Shares for an indefinite period
of time because the Shares have not been registered under the Act and,
therefore, cannot be sold unless they are subsequently registered under the Act
or an exemption from such registration has been established to the satisfaction
of the Company or Multi-Link, as appropriate (which may require an opinion of
counsel acceptable to the Company; or Multi-Link); Consultant has no right to
compel registration under the Act and Multi-Link has no present intention to
register the Shares under the Act or to take the action required to make Rule
144 under the Act available for resale of the Shares; and
(iv) Consultant is an "accredited investor" as defined in the
Act for the purposes hereof in that he falls within one or more categories
indicated below:
(A) Individual $1,000,000 Net Worth Test. Any natural
person whose net worth, or joint net worth with that person's spouse, at the
time of his purchase exceeds $1,000,000; or
(B) Individual $200,000 Income Test. Any natural person
who had an individual income in excess of $200,000 in each of the two most
recent years or a joint income with that person's spouse in excess of $300,000
in each of those years and who has a reasonable expectation of reaching the same
income level in the current year.
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(b) The Company and Multi-Link, jointly and severally, represent
and warrant to Consultant as follows:
(i) Multi-Link has filed all reports required under the Act
and the Securities and Exchange Act of 1934, as amended (the "Exchange Act") in
connection with the registration of its common stock (the "SEC Reports"). As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Act or the Exchange Act, as the case may be, and, at the
respective times they were filed, none of the SEC Reports contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(ii)The consolidated financial statements (including, in each
case, any notes thereto) of Multi-Link included in the SEC Reports complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with generally accepted accounting principles ("GAAP") (except, in
the case of unaudited statements, as permitted by Form 10-QSB of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and fairly present (in all material
respects) in accordance with GAAP the consolidated financial position of
Multi-Link and its consolidated subsidiaries as at the respective dates thereof
and the consolidated results of their operations and their consolidated cash
flows for the periods then ended (subject, in the case of unaudited statements,
to any other adjustments described therein and normal year-end audit adjustments
and to any other adjustments described therein).
5. Notices. All notices, requests, consents and other communications
hereunder ("Notice") shall be in writing and shall be deemed to have been given
(a) if mailed, the date of receipt of such Notice when sent via first class
United States registered mail, return receipt requested, postage prepaid to the
address listed below for the party to whom the Notice is being sent ("Notice
Party"); (b) if hand delivered or delivered by courier, upon actual delivery of
such Notice to the Notice Party at the address listed below for such Notice
Party; or (c) if sent by facsimile, on the first business day after the date of
the sender's receipt of a confirmed transmission of such Notice to the Notice
Party at the facsimile number, if any, listed below for such Notice Party
provided the party giving such Notice mails a copy of such Notice within two
days after the transmission of such Notice by facsimile to the Notice Party. The
addresses and facsimile numbers for each party to this Agreement, as of the date
hereof, are:
If to Consultant: Xxxxx X. Xxxxxxx, Xx.
00000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxxx & Xxxxxxx, PC
Attn: Xxxxxx X. Xxxxx
4000 Bank One Tower
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: 317/236-9802
If to the Company: HC Acquisition Corp.
c/o Multi-Link Telecommunications, Inc.
Attn: Xxxxx Xxxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile No.: 303/313-2001
B-3
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With a copy to: Xxxxx, Johnson, Robinson, Xxxx &
Ragonetti, PC
Attn: Xxxxx X. Xxxxxxxx
000 Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile No.: 303/825-6525
Any party may change its address or facsimile number by providing written
notice, in accordance with the foregoing provisions of this Section 5, to each
other party of such change.
6. Governing Law; Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana, without regard to
such jurisdiction's conflict of laws principles.
7. Partial Invalidity. In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but this Agreement
shall be construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein.
8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
9. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be considered an original counterpart,
and all of which shall be considered to be but one agreement and shall become a
binding agreement when each party shall have executed one counterpart and
delivered it to the other party hereto.
10. Titles and Headings; Rules of Construction. Titles and headings to
sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement. Whenever the context so requires the use of or reference to any
gender includes the masculine, feminine and neuter genders; and all terms used
in the singular shall have comparable meanings when used in the plural and vice
versa.
11. Entire Agreement; Amendments and Waivers. This Agreement contains
the entire understanding of the parties hereto with regard to the subject matter
contained in this Agreement and supersedes all prior agreements or
understandings of the parties. The parties, by mutual agreement in writing, may
amend, modify and supplement this Agreement. The failure of any party to this
Agreement to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of such party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
12. Default. Any default by Consultant under the Non-Competition
Agreement shall constitute a default of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"CONSULTANT" "COMPANY"
HC Acquisition Corp.
_________________________________ By: __________________________________
Xxxxx X. Xxxxxxx, Xx. Printed: _____________________________
Title: _______________________________
"MULTI-LINK"
Multi-Link Telecommunications, Inc.
By: __________________________________
Printed: _____________________________
Title: _______________________________
B-5