ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is effective August 15, 2002, by and between the
following parties:
1. Apple Networks Inc., a Nevada corporation ("Seller").
2. IPVoice Communications, Inc., a Nevada corporation ("Purchaser").
RECITALS
1. Seller is engaged in the development, of Sale opportunities for Unified
Communications and other related Communications service offerings in
the U.S.
2. Purchaser desires to purchase the assets of Seller and to assume
liabilities of Seller, and Seller desires to sell such assets to
Purchaser and to assign such liabilities to Purchaser, on the terms and
conditions set forth in this Agreement.
3. The Boards of Directors of Seller and Purchaser believe that this asset
purchase is in the best interests of their respective companies
and shareholders and in furtherance thereof have approved and
recommended this Asset Purchase Agreement.
AGREEMENTS
In consideration of the Recitals and the Agreements contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties intend to be legally bound hereby and agree as
follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale of Assets
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a. Purchased Assets. Pursuant to the terms and subject to the conditions of this
Agreement, on the Closing Date (as defined in Section 1.4 below), Seller will
sell, assign, convey, transfer and deliver to Purchaser, and Purchaser will
purchase and acquire from Seller, all of Seller's right, title and interest in,
to and under the following assets, properties and rights which are owned or
leased by Seller (collectively, the "Assets"):
i. All raw materials, work-in-progress, finished goods and inventory of Seller,
including, without limitation, all raw materials, work-in-process supplies and
inventory located in Seller's warehouses, distribution centers, in transit or
otherwise (the "Purchased Inventory");
ii. All accounts receivable (the "Purchased Receivables");
iii. All fixed assets, including, without limitation, machinery and equipment
and other attachments owned by Seller, spare parts, supplies, furniture and
fixtures, computer equipment and software and other personal property owned by
Seller;
iv. All rights of Seller under and in connection with the leases and subleases
of real property, together with Seller's interest in all buildings, facilities,
fixtures and other improvements thereon and all easements, rights-of-way,
transferable licenses and permits and other appurtenances thereto which are set
forth on Schedule 1.1(a)(iv) (collectively, the "Assigned
Leases");
v. All transferable rights of Seller under and in connection with the contracts,
commitments, purchase orders, agreements and unexpired leases (other than
Assigned Leases), which are set forth on Schedule 1.1(a)(v)
(collectively, the "Assigned Contracts");
vi. All rights to the trade secrets, processes and methods, whether or not
patentable, owned by Sellers (the "Purchased Intellectual Property");
vii. All transferable federal, state or local or other governmental and other
third party permits (including occupancy permits), certificates, licenses,
consents, authorizations, approvals, registrations or franchises necessary or
useful in the operation by Seller of its business (collectively, the "Assigned
Permits"); and
viii. All books and records maintained by Seller through the Closing Date,
including, without limitation, Bank Records, bank statements, financials,
product manuals, operating manuals, and records relating to customer and trade
accounts and lists and similar operating data, whether in electronic, computer,
paper or other form, other than books and records which Seller is required by
law to retain.
b. Excluded Assets. Notwithstanding anything contained in this Agreement
to the contrary, Purchaser and Seller acknowledge and agree that
Purchaser is not buying and Seller is not selling the following assets
(collectively, the "Excluded Assets"):
i. All rights under this Agreement and to the Purchase Price;
ii. Any shares of capital stock of, or other equity interests in, Seller or any
subsidiary of Seller;
iii. Seller's corporate seal, minute books, record books, and such other books
and records as pertaining to the organization, existence or ownership of Seller;
iv. Any financial or personnel records which are required by law to be retained
by Seller;
v. Any other assets specifically identified on Schedule 1.1(b)(v).
1.2 Purchase Price; Allocation.
---------------------------
a. Purchase Price. The consideration to be paid to Seller for the Assets
at the Closing shall be $ 1,000,000 (the "Purchase Price"), which
Purchaser shall pay to Seller in the form of a Promissory Note with
terms as follows:
i. The Promissory Note shall be secured by Seller's Assets that are transferred
at Closing.
ii. The Promissory Note shall be payable in cash and a number of shares of
Purchaser's common stock that would enable Seller to own as of its conversion
date up to 2% of Purchaser's issued and outstanding common stock.
iii. The Promissory Note shall be paid in full, according to the terms set forth
in the Promissory Note, following the passage of twenty four months after the
date of Closing or when the gross margin as defined in Promissory Note reaches a
cumulative $2,000,000, which ever occurs first.
b. The Promissory Note shall be in substantially the form set forth in
Exhibit 1.2a. hereof.
c. Purchaser shall be solely responsible for any sales, use and/or
realty transfer taxes owing from sale of the Assets hereunder.
d. Allocation of Purchase Price. Seller and Purchaser agree to
allocate the Purchase Price in accordance with Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code"). No later than
10 days following the Closing Date, Purchaser shall prepare and
provide to Seller a draft allocation of the aggregate purchase price
among the Assets (the "Allocation Statement"), such Allocation
Statement to be prepared in accordance with the methodology set forth
in the Code. Seller shall notify Purchaser within 20 days of receipt
of such draft Allocation Statement of any objections that Seller may
have thereto. Seller and Purchaser agree to resolve any disagreement
with respect to such Allocation Statement in good faith. In addition,
Seller and Purchaser hereby undertake and agree to file timely any
information that may be required to be filed pursuant to any treasury
regulations promulgated under Section 1060(b) of the Code, and shall
use the allocation determined pursuant to this Section 1.2(c) in
connection with the preparation of IRS Form 8594 (and any supplemental
filings required in connection therewith) as such form relates to the
transactions contemplated by this Agreement. Neither Seller nor
Purchaser shall file any tax return or other document or otherwise
take any position for tax purposes that is inconsistent with the
allocation determined pursuant to this Section 1.2(c) except as may be
adjusted by subsequent agreement following an audit by the Internal
Revenue Service or by court decision.
1.3 Assumption of Certain Liabilities.
---------------------------------
a. Assumed Liabilities. On the Closing Date, Purchaser shall assume
and agree to undertake to pay, perform and discharge as and when due,
and shall indemnify Seller for and hold Seller harmless from and
against each of the following obligations, responsibilities,
liabilities and debts (collectively, the "Assumed Liabilities"):
i. All obligations, responsibilities and liabilities incurred on and after the
Closing Date in connection with the performance by Purchaser of the Assigned
Leases and Assigned Contracts;
ii. All obligations, responsibilities and liabilities arising on and after the
Closing Date from Purchaser's use, ownership, possession, sale or operation of
the Assets; and
iii. All obligations, responsibilities and liabilities explicitly set forth on
Schedule 1.3(a)(iii).
b. Excluded Liabilities. Except for the Assumed Liabilities assumed by
Purchaser under Section 1.3A above, the purchase by Purchaser of the
Assets shall be free and clear of all liens, claims and encumbrances of
any kind and nature, and without any assumption by Purchaser of any
debts, taxes, obligations or liabilities whatsoever of Seller or any
other persons who at any time may have been in possession of the Assets,
whether such liabilities are actual or contingent, known or unknown,
liquidated or unliquidated, whether tax liabilities, liabilities to
creditors or otherwise (collectively, and together with all liabilities
or obligations with respect to the Excluded Assets, the "Unassumed Debts
and Liabilities").
1.4 Date, Time and Place of Closing.
-------------------------------
The transactions provided for by this Agreement shall be consummated (the
"Closing") by telephone, fax and email, on August 16, 2002, or such other date
and/or method as may be agreed upon by the parties hereto. The date and time of
Closing is hereinafter sometimes called the "Closing Date."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Purchaser to enter into this Agreement and purchase
the Assets, Seller hereby represents and warrants to Purchaser that:
2.1 Status.
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Seller is a corporation duly organized and subsisting under Nevada law and has
full power and authority to own its properties and to carry on the business as
presently conducted by it. Seller is duly qualified to do business and is in
good standing in all other jurisdictions where the conduct of its business so
requires, except where the failure to be so qualified and in good standing would
not be reasonably likely to have a Material Adverse Effect. Seller has the power
and authority to own the Assets and to carry on its business as now being
conducted.
2.2 Corporate Authority; Effective Agreement.
-----------------------------------------
Seller has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations under this Agreement and any and all other
agreements, documents or instruments to be executed and/or delivered in
connection herewith (collectively, the "Purchase Documents") and to consummate
the transactions contemplated herein and therein. This Agreement has been duly
executed and delivered by Seller and, assuming it constitutes a valid and
binding obligation of Purchaser, is a valid and binding obligation of Seller
enforceable against Seller in accordance with its terms. The Purchase Documents,
when executed by Seller, will, assuming they constitute a valid and binding
obligation of the other parties thereto, constitute the valid and binding
obligation of Seller, enforceable against each of them in accordance with their
respective terms.
2.3 Personal Property.
------------------
Seller has good and valid title to, and is the absolute owner of, all of the
personal property being sold to Purchaser hereunder, free and clear of all liens
and encumbrances, except for such personal property which Seller leases or
licenses or as described on Schedule 2.3. To Seller's knowledge, all such
personal property is in good operating condition and repair, normal wear and
tear excepted, and does not require any repairs other than normal routine
maintenance to maintain the personal property in good operating condition and
repair.
2.4 Intellectual Property.
----------------------
The Purchased Intellectual Property comprises all of the trade secrets,
processes and methods, whether or not patentable, owned by Seller. No claim has
been asserted against Seller that the Purchased Intellectual Property conflicts
with the proprietary rights of others, and Seller has no knowledge of any basis
for any such claim or conflict. To Sellers' knowledge, Seller is not engaged in
any activity which infringes upon any patent, patent application, trademark,
trade name, service xxxx, copyright or proprietary right of any other party.
2.5 Taxes.
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Except as set forth on Schedule 3.5, Seller has filed
or will file all federal, state and local tax returns required by law to be
filed by Seller and has paid or made adequate provision for the payment of all
taxes (and related interest and penalties) shown to be due on such returns for
all taxable periods up to and including the day before the Closing Date,
including, but not limited to real estate, sales, use, social security, payroll,
unemployment compensation and personal property taxes. Seller will have paid or
made adequate provision for the payment of all federal and state income and any
other taxes payable by Seller with respect to the transactions covered by this
Agreement.
2.6 Legal Matters.
--------------
Except as set forth on Schedule 2.6, Seller is
not a party to or, to Seller's knowledge, threatened with, any suit, action,
arbitration or other legal or administrative proceeding or governmental inquiry
or investigation by which Seller or the Assets would be adversely affected.
2.7 Corporation Agreements.
-----------------------
Seller has made available to Purchaser copies of all its agreements, contracts,
licenses or leases, including all amendments or supplements thereto, to which
Seller is a party, or ownership status in other corporate entities that would
have, either direct or indirect conflict with purchaser, other than contracts or
commitments entered into in the ordinary course of business and consistent with
past practices (a) having a term of less than 12 months and involving a total
expenditure of less than $50,000 individually and $200,000 in the aggregate, or
(b) requiring the performance of services having a cost of less than $50,000
individually and $200,000 in the aggregate (collectively, the "Corporation
Agreements"). A list of the Corporation Agreements is set forth on Schedule
2.7. All of the Corporation Agreements are valid, binding and enforceable
against Seller. Except as shown on Schedule 2.7, to Seller's knowledge,
Seller and the other parties to the Corporation Agreements have, in all material
respects, performed their respective obligations under the Corporation
Agreements. The consummation of the transactions provided for in this Agreement
will not result in an impairment or termination of any of Seller's rights under
any Corporation Agreement and does not require the consent of or notice to any
party other than Seller, except as set forth on Schedule 2.7.
2.8 Employee Matters.
----------------
a. Schedule 2.8a is a complete and accurate list as of August 16,
2002 of all Seller's employees and their respective positions and
salaries. Seller shall deliver at the Closing Schedule 2.8a
revised to reflect changes therein up to the date of the Closing.
b. Seller is not a party to any union agreement or collective bargaining
agreement and is in compliance in all material respects with all laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours. Seller has no knowledge of any union
organizing activity involving its employees at the Purchased Facility.
There is no complaint filed or, to the knowledge of Seller, threatened to
be filed against Seller before any federal, state or local governmental
or quasi-governmental agency or authority alleging violation of any law
(federal, state or local) relating to employment practices or
discrimination in employment.
c. Except as set forth on Schedule 2.8c, no present or former
employee of Seller is entitled to any retirement pay or retirement
benefits of any kind from Seller. Seller does not now maintain or make
contributions to and has not, at any time in the past, maintained or
made contributions to (i) any employee benefit plan which is subject
to the minimum funding requirements of the Employee Retirement Income
Security Act of 1974, or (ii) any multi-employer plan subject to the
terms of the Multi-Employer Pension Amendment Act of 1980.
2.9 Consents.
--------
Except as set forth on Schedule 2.9, no notices, consents, approvals,
licenses, permits or waivers are required to execute and deliver this Agreement
and to consummate the transactions provided for herein, including the transfer
of the Assets to Purchaser hereby.
2.10 Permits and Licenses.
--------------------
Seller holds all franchises, licenses, permits, consents, approvals, waivers and
other authorizations (collectively, the "Permits") that are necessary for the
operation of its business, including without limitation all Permits issued by
federal, state or local governments and governmental agencies. Schedule
2.10 sets forth a complete list of all material Permits held by Seller. To
Seller's knowledge, Seller is not in default, nor has Seller received any notice
of any claim of default, with respect to any of the Permits or of any notice of
any other claim or proceeding or threatened proceeding relating to any of the
Permits, any of which would be reasonably expected to have a Material Adverse
Effect.
2.11 Compliance with Laws.
----------------------
To Seller's knowledge, Seller is in compliance in all material respects with all
requirements of law, federal, state and local, and all requirements of all
governmental bodies or agencies having jurisdiction over it. Seller has not
received any notice from any federal, state or municipal authority or any
insurance or inspection body, that any of its properties, facilities, equipment
or business procedures or practices fails to comply with any applicable law,
ordinance, regulation, building or zoning law, or requirement of any public
authority or body.
2.12 Environmental Matters.
---------------------
a. Except as set forth on Schedule 2.12a, Hazardous Substances (as
hereinafter defined) have not been used by Seller at any facilities owned or
used by Seller (collectively, "Seller's Facilities") during Seller's occupancy
thereof and Seller has no knowledge of such use by another person or entity
during or prior to Seller's occupancy thereof in any manner that: (i) violates
in any material respect any federal, state or local laws, ordinances or
regulations governing the use, storage, treatment, disposal of any element,
compound, mixture, solution or substance, defined as a hazardous substance in
the Comprehensive Environmental Response Compensation and Liability Act, 42
U.S.C. Section 9601, et seq. ("CERCLA"), or other applicable federal,
state or local law, ordinance or regulation (collectively, "Hazardous
Substances"); (ii) requires "removal" or "remediation" as those terms are
defined in CERCLA; or (iii) if found on any of Seller's Facilities would subject
the owner or occupant of such facility to damages, penalties, liability or an
obligation to perform any work, clean-up, removal, or remediation at such
facility in order to comply with any federal, state or local law, regulation,
ordinance or order concerning the environmental state, condition or quality of
such facility applicable to owners, operators or developers of real property
("Environmental Cleanup Work").
b. Except as set forth on Schedule 2.12b, to Seller's knowledge, Seller
is in compliance in all material respects with all applicable federal, state and
local environmental laws and regulations. No written notice from any
governmental body has ever been served upon Seller, and Seller has no knowledge
of any notice served upon any occupant, owner or prior owner of any of Seller's
facilities claiming any violation of any of the aforesaid environmental laws on
or in connection with any of Seller's facilities or with respect to its
business.
2.13 Brokers or Finders.
--------------------
No agent, broker, person or firm acting on behalf of Seller or any of its
affiliates is, or will be, entitled to any commission, broker's or finder's fees
from any party, or from any affiliate of any party, in connection with any of
the transactions contemplated by this Agreement.
2.14 Survival of Representations and Warranties.
----------------------------------------------
The representations, warranties and agreements of Seller set forth in this
Agreement or in any Exhibit or Schedule attached hereto shall be true, correct,
complete and accurate on and as of the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller that:
3.1 Corporate Status.
------------------
Purchaser is a corporation duly organized and subsisting under Nevada law and
has full power and authority to own its properties and to carry on the business
presently conducted by it.
3.2 Corporate Authority.
--------------------
The Board of Directors of Purchaser has duly authorized and approved the
execution and delivery of this Agreement and the performance of the transactions
provided for herein. No other corporate action is required in connection
herewith. This Agreement constitutes a legal, valid and binding obligation of
Purchaser and is enforceable against Purchaser in accordance with its terms.
3.3 Brokers or Finders.
--------------------
No agent, broker, person or firm action on behalf of Purchaser or any of its
affiliates is, or will be, entitled to any commission, broker's or finder's fees
from any party, or from any affiliate of any party, in connection with any of
the transactions contemplated by this Agreement.
3.4 Survival of Representations and Warranties.
------------------------------------------
The representations, warranties and agreements of Purchaser as set forth in this
Agreement or in any Exhibit attached hereto are made as of the date of this
Agreement and shall be true, correct and accurate on and as of the Closing Date.
ARTICLE IV
CONDUCT OF BUSINESS PENDING CLOSING
4.1 Conduct of Business Pending Closing.
-------------------------------------
Seller agrees that between the date hereof and the Closing Date, Seller shall:
a. Conduct its business in a good and diligent manner in the ordinary and usual
course of its business;
b. Not enter into any contract, agreement, commitment or other arrangement with
any party, other than contracts in the ordinary course of its business, and not
amend or modify, in any material respect, or terminate any Assigned Lease or
Assigned Contract, without the prior written consent of Purchaser, which consent
will not be unreasonably delayed or withheld;
c. Use reasonable efforts to preserve its business organization intact, to keep
available the service of its employees and to preserve its relationships with
customers, suppliers and others with whom it deals;
d. Not reveal to any person any of the business procedures and practices
followed by it in the conduct of its business other than to Purchaser or its
authorized representatives ("Agents");
e. Use reasonable efforts to maintain in full force and effect all insurance
currently maintained by Seller;
f. Keep all of its equipment and tangible personal property in good operating
repair, normal wear and tear excepted;
g. Comply in all material respects with all provisions of applicable laws, rules
and regulations; and
h. Not dispose of any Assets except in the ordinary course of business.
I. Not Operate, engage as a director, officer, or consultant in a new
Corporation that offers competitive services to Purchaser.
ARTICLE V
FURTHER COVENANTS AND AGREEMENTS
5.1 Access to Information.
----------------------
Subject to existing confidentiality obligations of and between Purchaser and
Seller, Seller shall give to Purchaser and its Agents reasonable access to its
facilities, the Assets and all of Seller's documents, books and records relating
to its current and past operations of its business, and shall permit Purchaser
and its Agents to make copies thereof, and Seller shall permit Purchaser to
interview Seller's employees during reasonable business hours and upon
reasonable prior written notice.
5.2 Cooperation.
-----------
a. Purchaser and Seller agree to execute and deliver all other instruments and
take all such other actions as either party may reasonably request from time to
time, before or after Closing and without payment of further consideration, to
effectuate the transactions provided herein and to confer to the parties hereto
the benefits intended by such transactions. The parties shall cooperate fully
with each other and with their respective counsel and accountants in connection
with any steps required to be taken as part of their respective obligations
under this Agreement.
b. Purchaser agrees that following Closing, it shall provide to Seller
information relating to the Assets and/or Seller's business which Seller
reasonably requires to prepare any tax returns, information returns or reports
required to be filed by Seller with governmental agencies.
5.3 Employment of Employees.
-----------------------
Purchaser currently expects to employ, at its option, certain of the employees
of Seller. Seller agrees to take no action which would interfere with such
employment by Purchaser, and shall take all action required by law or otherwise
to release them from agreements with Seller that may prohibit their employment
with Purchaser and to cause the valid termination of employment at the Closing
Date of such employees by Seller who are to be employed by Purchaser following
the Closing Date. Seller further agrees that Purchaser shall not assume any
responsibility for, and Seller shall indemnify Purchaser from and against, any
liability arising from any termination of employment of those employees of
Seller whom Purchaser does not employ after the Closing Date, or as to whom
Purchaser gives Seller notice that Purchaser will not continue their employment,
such notice to be given on or prior to the Closing Date. Seller further agree
that Purchaser shall not be liable for, and Seller shall indemnify Purchaser
from and against any liability in respect of any employees of Seller for any
acts or omissions relating to the employment of such employees or to the
business of Seller arising on or prior to the Closing Date, regardless of
whether the employees of Seller are subsequently employed by Purchaser. Nothing
in this Agreement is intended to confer upon any employee of Seller any rights
or remedies, including, without limitation, any rights of employment of any
nature or kind whatsoever.
5.4 Employee Benefit Plans.
----------------------
Seller shall remain responsible for, and shall indemnify Purchaser from and
against, any liability in respect of, any bonus, deferred compensation, profit
sharing, pension, retirement, severance pay, stock option, employee stock
purchase or any other similar plan, arrangement or program ("Employee Benefit
Plans") established by Seller for the benefit of its employees. Notwithstanding
any provision contained in this Agreement to the contrary, Purchaser shall not
assume or be responsible in any manner for any liabilities or obligations
arising under or as a result of any Employee Benefit Plans sponsored by Seller
or in which Seller or its employees participate.
5.5 Consents.
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Purchaser and Seller will use reasonable efforts to obtain all necessary third
party or governmental consents necessary to consummate the transactions provided
for in this Agreement.
5.6 Press Releases.
---------------
Except as required by any applicable laws, neither party shall issue any press
release or public statement regarding the transactions contemplated by this
Agreement without the prior written consent of party, which consent will not be
unreasonably delayed or withheld.
5.7 Competing Proposals.
--------------------
Seller shall promptly notify Purchaser of any expression of interest or offers
received by Seller from any person relating to the purchase or acquisition of
any of its stock or assets.
5.8 Collection of Accounts Receivables.
-------------------------------------
If, after the Closing Date, Seller receives any payments from any account
debtors with respect to any Purchased Accounts Receivables, Seller shall endorse
such payments to the order of Purchaser and forward such payments to Purchaser
promptly upon receipt thereof.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser to consummate the transactions contemplated by this
Agreement are subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions, any or all of which Purchaser may waive in
writing:
6.1 Representations and Warranties.
--------------------------------
The representations and warranties of Seller set forth in this Agreement and any
Exhibit or Schedule hereto shall be true and correct in all material respects on
and as of the Closing Date.
6.2 Performance of Agreements.
---------------------------
Seller shall have performed and complied in all material respects with all of
their covenants and agreements contained in this Agreement which are required to
be performed or complied with on or prior to the Closing Date.
6.3 No Actions.
----------
No action, suit, proceeding or investigation by or before any court,
administrative agency or other governmental authority shall have been instituted
or threatened, the effect of which would restrain, prohibit or invalidate the
transactions contemplated by this Agreement or affect the right of Purchaser to
own or control, after the Closing, the Assets or to operate Seller's business.
6.4 Consents.
--------
The parties have received all consents of all third parties required to
consummate the transactions provided for in this Agreement
6.5 Due Diligence Audit.
--------------------
Purchaser shall have completed its due diligence investigation of the Assets and
Seller's business and the results of such investigation shall be reasonably
satisfactory to Purchaser.
6.6 Deliveries.
----------
All documents required to be delivered by Seller at or prior to Closing shall
have been delivered to Purchaser at Closing.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions, any or all of which Seller may waive in
writing:
7.1 Representations and Warranties.
-------------------------------
Each of the representations and warranties of Purchaser set forth in this
Agreement and any Exhibit hereto shall be true and correct in all material
respects on and as of the Closing Date.
7.2 Performance of Agreements.
--------------------------
Purchaser shall have performed and complied in all material respects with all of
its covenants and agreements contained in this Agreement which are required to
be performed or complied with on or prior to the Closing Date.
7.3 No Actions, Etc.
-----------------
No action, suit, proceeding or investigation by or before any court,
administrative agency or other governmental authority shall have been instituted
or threatened, the effect of which would restrain, prohibit or invalidate the
transactions contemplated by this Agreement.
7.4 Deliveries.
----------
All documents required to be delivered by Purchaser at or prior to Closing shall
have been delivered to Seller at Closing.
ARTICLE VIII
CLOSING
8.1 Seller's Deliveries.
-------------------
At the Closing, Seller shall deliver to Purchaser:
a. In a form reasonably satisfactory to Purchaser's and Seller's counsel, such
bills of sale, certificates of title for vehicles, endorsements of transfer,
conveyances, assignments and subleases and other documents and agreements as
shall vest in Purchaser title to the Assets in accordance with the terms hereof;
b. In a form reasonably satisfactory to Purchaser's and Seller's counsel, one or
more duly executed general assignment and assumption agreements with respect to
the Assigned Leases, Assigned Contracts and Assumed Liabilities which are
included in the Assets (the "Assumption Agreement");
c. Certificates signed by a duly authorized officer of Seller, dated the Closing
Date, confirming: (i) the truth and correctness in all material respects of all
of the representations and warranties of Seller contained in this Agreement as
of the Closing Date; (ii) that all agreements and covenants of Seller required
to have been performed or complied with have been performed or complied with in
all material respects; and (iii) that all necessary approval by Seller has been
taken to authorize the consummation of the transactions contemplated by the
Agreement;
d. Resolutions, certified by Seller's secretary, evidencing Seller's authority
to (i) execute and deliver this Agreement and the Purchase Documents, and (ii)
consummate the transactions contemplated herein and therein;
e. An incumbency certificate of Seller, certified by Seller's secretary,
certifying the accuracy of the specimen signature of the authorized
representative of such entity executing this Agreement and the Purchase
Documents;
f. Such other documents or instruments as Purchaser shall reasonably request to
further evidence consummation of the transactions contemplated by this
Agreement.
8.2 Purchaser's Deliveries.
----------------------
At the Closing, Purchaser shall deliver or cause to be delivered to Seller:
a. The Purchase Price in the form and manner provided for in Section 1.2(a)
hereof;
b. The Assumption Agreement duly executed by Purchaser;
c. A certificate signed by a duly authorized officer of Purchaser, dated the
Closing Date, confirming: (i) the truth and correctness in all material respects
of all of the representations and warranties of Purchaser contained in this
Agreement as of the Closing Date; (ii) that all agreements and covenants of
Purchaser required to have been performed or complied with have been performed
or complied with in all material respects; and (iii) that all necessary
corporate action by Purchaser has been taken to authorize the consummation of
the transactions contemplated by the Agreement;
d. Resolutions, certified by Purchaser's secretary, evidencing Purchaser's
authority to (i) execute and deliver this Agreement and the Purchase Documents,
and (ii) consummate the transactions contemplated herein and therein;
e. An incumbency certificate of Purchaser, certified by such Purchaser's
secretary, certifying the accuracy of the specimen signature of the authorized
representative of such entity executing this Agreement and the Purchase
Documents; and
f. Such other documents or instruments as Seller shall reasonably request to
further evidence consummation of the transactions contemplated by this
Agreement.
8.3 Parties to Bear Own Expenses.
----------------------------
Whether or not the transactions contemplated by this Agreement are consummated
and except as otherwise provided for herein, Purchaser and Seller shall each
bear their respective expenses relating to or arising out of this Agreement,
including, but not limited to, fees for attorneys, accountants and other
advisors.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by Seller.
-------------------------
Seller hereby agrees to indemnify, defend and
hold harmless Purchaser and its directors, officers, agents and employees from
and against any and all losses, damages, liabilities and expenses, including,
without limitation, reasonable legal fees and court costs, to which any of them
may become subject as the result of:
a. Any misrepresentation, breach of warranty, or any non-fulfillment of any
warranty, representation, covenant or agreement on the part of Seller;
b. Any and all loss or damage resulting to Purchaser by reason of any claim,
debt, liability or obligation not expressly assumed by Purchaser hereunder,
arising from Seller's business or the ownership, use or operation of the Assets
on or prior to the Closing Date and which did not constitute the breach of a
representation or warranty of Seller; and
c. Any and all acts, suits, proceedings, demands, assessments, judgments,
reasonably attorneys' fees, costs and expenses incident to any of the foregoing.
9.2 Indemnification by Purchaser.
------------------------------
Purchaser hereby agrees to indemnify, defend and hold harmless Seller and its
officers, directors, agents, advisors and employees, from and against any and
all losses, damages, liabilities and expenses, including, without limitation,
legal fees and court costs, which any of them may become subject to as the
result of:
a. Any and all loss or damage resulting from any misrepresentation, breach of
warranty, or any non-fulfillment of any warranty, representation, covenant or
agreement on the part of Purchaser contained in this Agreement;
b. Any and all loss or damage resulting to Seller by reason of any claim, debt,
liability or obligation expressly assumed by Purchaser hereunder; and
c. Any and all acts, suits, proceedings, demands, assessments, judgments,
reasonably attorneys' fees, costs and expenses incident to any of the foregoing.
9.3 Procedures for Establishment of Indemnification.
-----------------------------------------------
a. In the event that any claim shall be asserted by any party which, if
sustained, would result in a right of a party to indemnification hereunder (a
"Loss"), the person entitled to indemnification hereunder (the "Indemnitee"),
within a reasonable time after learning of such claim, shall notify the person
obligated to provide indemnification hereunder with respect to such claim
(the "Indemnitor"), and shall extend to the Indemnitor a reasonable opportunity
to defend against such claim, at the Indemnitor's sole expense and through legal
counsel reasonably acceptable to the Indemnitee, provided that the Indemnitor
proceeds in good faith, expeditiously and diligently; and provided, further,
that any failure to give such notice shall not relieve the Indemnitee of its
indemnification obligations hereunder except to the extent it was prejudiced by
the failure to give notice. No determination shall be made pursuant to
subparagraph (b) below while such defense is still being made until the earlier
of (i) the resolution of said claim by the Indemnitor with the claimant, or (ii)
the termination of the defense by the Indemnitor against such claim or the
failure of the Indemnitor to prosecute such defense in good faith and in an
expeditious and diligent manner. The Indemnitee shall be entitled to rely upon
the opinion of its counsel as to the occurrence of either of said events. The
Indemnitee shall, at its option and expense, have the right to participate in
any defense undertaken by the Indemnitor with legal counsel of its own
selection. No settlement or compromise of any claim which may result in a Loss
may be made by the Indemnitor without the prior written consent of the
Indemnitee unless (i) prior to such settlement or compromise the Indemnitor
acknowledges in writing its obligation to pay in full the amount of the
settlement or compromise and all associated expenses and (ii) the Indemnitee is
furnished with security reasonably satisfactory to the Indemnitee that the
Indemnitor will in fact pay such amount and expenses.
b. In the event that an Indemnitee asserts the existence of any Loss, the
Indemnitee shall give written notice to the Indemnitor of the nature and amount
of the Loss asserted. If the Indemnitor, within a period of 15 days after the
giving of the Indemnitee's notice, does not give written notice to the
Indemnitee announcing its intention to contest such assertion of the Indemnitee
(such notice by the Indemnitor being hereinafter called the "Contest Notice"),
such assertion of the Indemnitee shall be deemed accepted and the amount of the
Loss shall be deemed established. In the event, however, that a Contest Notice
is given to the Indemnitee within said 15-day period, then the contested
assertion of a Loss shall be settled by binding arbitration. Notwithstanding
anything herein contained to the contrary, each party shall pay its own
attorney's fees, costs and expenses incident to any arbitration proceeding
brought under this Section 10.3(b).
c. The Indemnitee and the Indemnitor may agree in writing, at any time, as to
the existence and amount of a Loss, and, upon the execution of such agreement,
such Loss shall be deemed established.
d. Payments of any Loss shall be paid to the person entitled thereto within ten
business days following the establishment of the Loss.
9.4 Limitations on Indemnity.
------------------------
Anything in this Agreement and the Purchase Documents to the contrary
notwithstanding:
a. No claim for indemnity on the basis of a breach of a representation or
warranty may be after the termination of such representation or warranty.
b. All claims for Losses shall be limited to the Purchase Price, and there shall
be no liability except to the extent that the aggregate Losses exceeds $100,000,
and then only to the extent of such excess.
c. For purposes of determining the amount of any Losses, such amount shall be
reduced by the amount of any insurance benefits and proceeds to be received by
the Indemnitee in respect of the Losses (net of any deductible amounts).
d. If an indemnification obligation arises in respect of any Losses that results
in any tax benefit to the Indemnitee or any affiliate thereof (the "Benefited
Party") that would not, but for such Losses, be available, the Benefited Party
shall pay or cause to be paid to the Indemnifying Party an amount equal to the
actual tax savings produced by such tax benefit at the time such tax saving is
realized by the Benefited Party and after the Indemnifying Party has paid the
amount of the Losses to the Indemnified Party. The amount of any such tax saving
for any taxable period shall be the amount of the reduction of taxes payable to
the taxing authority by the Benefited Party with respect to such tax period as
compared to the taxes that would have been payable to taxing authority by the
Benefited Party with respect to such tax period in the absence of tax benefit.
e. In no event shall any party hereunder have any liability for Losses
consisting of or in the nature of punitive, consequential, indirect or special
damages.
ARTICLE X
TERMINATION OF AGREEMENT
10.1 Termination.
-----------
This Agreement may be terminated, and the transaction contemplated hereby may be
abandoned, by written notice promptly given to the other parties hereto, at any
time prior to the Closing Date:
a. By mutual written consent of Purchaser and Seller; or
b. By either Purchaser or Seller if there shall have been a material breach of
any representation, warranty, covenant or agreement on the part of the other set
forth in this Agreement; or
c. By either Purchaser or Seller if any permanent injunction or other order of a
court or competent authority or government agency which prevents the
consummation of the transaction shall have become final and not appealable; or
d. By Seller if any of the conditions specified in Article VII has not been met
or waived by Seller at any such time as such conditions can no longer be
satisfied; or
e. By Purchaser if any of the conditions specified in Article VI has not been
met or waived by Purchaser at any such time as such conditions can no longer be
satisfied.
10.2 Status of Agreement after Termination.
-------------------------------------
Upon any termination of this Agreement pursuant to Section 10.1, this Agreement
shall be void and have no effect, without any liability on the part of any party
hereto or any shareholders, directors or officers thereof; provided, however,
such termination shall not affect the liability of any party for the breach of
any provision of this Agreement.
ARTICLE XI
GENERAL
11.1 Notices. All notices and other communications hereunder shall be in writing
and shall be sent by certified mail, postage prepaid, return receipt requested;
by an overnight express courier service that provides written confirmation of
delivery; or by facsimile with confirmation, addressed as follows:
If to Seller: Apple Networks inc.
0000 Xxxx Xxxxxxxx Xx, Xxxxx 000
Xxx Xxxxx, XX 00000
Fax (000) 000-0000
If to Purchaser: IPVoice Communications, Inc.
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax (000) 000-0000
___________________________
___________________________
Any party may change its address for receiving notice by giving notice of a new
address in the manner provided herein. Any notice so given shall be deemed to be
delivered on the second business day after the same is deposited in the United
States Mail, on the next business day if sent by overnight courier, or on the
same business day if sent by facsimile before the close of business, or the next
business day, if sent by facsimile after the close of business.
11.2 Schedules.
---------
Each matter set forth in any of the Schedules attached to this Agreement (or any
agreement, instrument or other documents specifically referenced in such
Schedule to the extent a copy of the same has been delivered to Purchaser prior
to the execution of this Agreement) shall be deemed to be disclosed for purposes
of every other Schedule. The Schedules shall in all respects constitute a part
of the representations and warranties of Seller herein, and are expressly made a
part of this Agreement. The inclusion of any information in any of the Schedules
shall not be deemed to be an admission or acknowledgement, in and of itself,
that such information is material for purposes of this Agreement or for any
other purpose.
11.3 Broker's Commission.
--------------------
Each party agrees to indemnify and hold harmless the other party from and
against any and all liability, loss, damage, cost or expense (including court
costs and attorney fees) arising out of or relating to any claim that such party
entered into any brokerage agreement or similar arrangement, whether oral or
written.
11.4 Headings.
--------
The descriptive article, section and paragraph headings set forth herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement and shall not control or affect the meaning or construction of any
provision of the within Agreement.
11.5 Entire Agreement.
-----------------
This Agreement, the Purchase Documents and the Exhibits and Schedules attached
to this Agreement constitute the entire agreement between the parties pertaining
to this subject matter and supersede all prior or contemporaneous agreements and
understandings of the parties relating to the same. This Agreement may be
amended only in writing signed by the parties hereto.
11.6 Severability.
------------
If any term or provision of this Agreement or any application thereof shall be
invalid or unenforceable, the remainder of this Agreement and any other
application of such term or provision shall not be affected thereby.
11.7 Nevada law governs this Agreement without regard to principles of conflicts
of laws.
11.8 Arbitration.
-----------
The parties shall resolve any dispute relating to this Agreement by negotiation
and, failing that, by binding arbitration in Dallas, TX under the rules of the
American Arbitration Association. An arbitration proceeding must be brought
within one year of the onset of the dispute or it is barred. The party bringing
the arbitration must advance the costs of arbitration and the prevailing party
may seek reimbursement of its costs, fees and expenses in the arbitration.
Arbitration awards may not include punitive and similar damages and may be
enforced in any court of competent jurisdiction.
11.9 Waiver.
------
Any of the terms or conditions of this Agreement may be waived at any time by
the party entitled to the benefit thereof, but only by written notice specifying
the item waived and signed by the party waiving such terms or conditions.
11.10 Further Assurances.
-------------------
Both parties will take such reasonable steps as are necessary to consummate the
transactions contemplated herein.
11.11 Assignability; Binding Effect.
-------------------------------
Either party may not assign this Agreement without the prior written consent of
the other party. This Agreement shall be binding upon the parties hereto and
their successors and permitted assigns.
11.12 Counterpart Execution.
----------------------
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Any counterpart signature page delivered by facsimile
transmission shall be deemed to be and have the same force and effect as an
originally executed signature page. This Agreement shall become binding when one
or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement.
APPLE NETWORKS INC. IPVOICE COMMUNICATIONS, INC.
By: Xxxx Xxxxxxxx, CEO By: /s/ Xxxxxx Xxxxxx, CEO
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