AGREEMENT AND PLAN OF REORGANIZATION
by and between
SUPERIOR WIRELESS COMMUNICATIONS, INC.;
MEDIA RAGE OF UTAH, INC.;
and
The Shareholders of
MEDIA RAGE OF UTAH, INC.
JUNE 1, 1999
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated
effective the 1st day of August, 1999, is made and entered into by and among
Superior Wireless Communications, Inc. , a Nevada corporation ("SWC"); Media
Rage of Utah, Inc., a Utah corporation ("MEDIA"); and the Shareholders of MEDIA
whose names are set forth on Exhibit "A" attached hereto and as signatories to
the signature page hereof (the "SHAREHOLDERS")
INTRODUCTION
The SHAREHOLDERS own all of the issued and outstanding shares of common
stock of MEDIA. SWC desires to acquire all of the issued and outstanding common
stock of MEDIA and the SHAREHOLDERS desire to transfer their stock to SWC in
exchange for certain shares of stock of SWC, all as set forth below, pursuant to
a tax-free reorganization.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and provisions contained herein, the parties hereto agree as follows:
ARTICLE I
PLAN OF REORGANIZATION
ss.1.01 PLAN ADOPTED
A Plan of Reorganization of SWC and MEDIA, pursuant to the provisions
of ss.368(a)(1)(B) of the Internal Revenue Code of 1986 is adopted as follows:
(a) The SHAREHOLDERS will transfer to SWC Three Hundred Twenty Five
Thousand (325,000) shares of the capital stock of MEDIA which constitutes all of
the issued and outstanding shares of stock of MEDIA.
(b) At the Closing, the SHAREHOLDERS will provide the original stock
certificate representing their shares of stock in MEDIA to be transferred
hereunder in form for transfer accompanied by properly executed Stock Powers of
Assignment. The SHAREHOLDERS agree that the shares to be transferred by them
represented by such certificates are subject to the interests of SWC hereunder
and that, except as otherwise provided herein their obligations hereunder, shall
not be terminated by operation of law or the occurrence of any event, including
death, and that if any such event shall occur before the delivery of the shares
to be exchanged hereunder, a certificate for such shares shall be delivered in
accordance with the terms and conditions of this Agreement as if such event had
not occurred, whether or not SWC shall receive notice of such event.
(c) In exchange for the shares of MEDIA transferred by the
SHAREHOLDERS, SWC will cause to be delivered to the SHAREHOLDERS Three Hundred
Twenty Five Thousand (325,000) shares of the common stock of SWC (the "Exchange
Shares"). The Exchange Shares shall be free and clear of all mortgages, pledges,
claims, liens and other rights and encumbrances whatsoever, except as disclosed
in this Agreement. SWC shall cause the Exchange Shares to be issued and
delivered to the SHAREHOLDERS at the Closing herein on the basis of one (1)
Exchange Share for every one (1) share of MEDIA transferred by each of the
respective Shareholders.
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ss.1.02 CLOSING DATE
Subject to the conditions precedent set forth herein to the obligations
of the parties to consummate the transaction, the Plan of Reorganization shall
be consummated on August 1, 1999. The date of such consummation is the "Closing
Date" or "Closing" referred to herein.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF MEDIA AND THE SHAREHOLDERS
MEDIA and the SHAREHOLDERS represent and warrant to SWC as follows:
ss.2.01 ORGANIZATION AND QUALIFICATION
MEDIA has no subsidiary or affiliate corporation and owns no interest
in any other enterprise (whether or not such enterprise is a corporation).
Exhibit B correctly sets forth as to MEDIA its place of organization, principal
place of business, jurisdictions in which it is qualified to do business, and
the business which it presently conducts and which it contemplates conducting.
MEDIA is duly organized, validly existing, and in good standing under the laws
of Utah, with all requisite power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits of and
from, and declarations and filings with, all federal, state, local, and other
governmental authorities and all courts and other tribunals, to own, lease,
license, and use its properties and assets and to carry on the business in which
it is now engaged and the business in which it contemplates engaging.
ss.2.02 CAPITALIZATION
MEDIA is authorized to issue only one class of stock and the number of
shares of stock MEDIA is authorized to issue is Five Hundred Thousand (500,000)
shares of no par value common stock.
Three Hundred Twenty Five Thousand (325,000) shares of the common stock
of MEDIA are issued and outstanding (the "MEDIA Outstanding Stock"). The MEDIA
Outstanding Stock is validly authorized, validly issued, fully paid, and non
assessable, has not been issued and is not owned or held in violation of any
preemptive right of any shareholder, and is owned of record and beneficially
exclusively by the SHAREHOLDERS and free and clear of all liens, security
interests, pledges, charges, encumbrances, capital stockholder's agreements, and
voting trusts. There is no commitment, plan, or arrangement to issue, and no
outstanding option, warrant, or other right calling for the issuance of, any
capital stock of MEDIA or any security or other instrument convertible into,
exercisable for, or exchangeable for capital stock in MEDIA. There is
outstanding no security or other instrument convertible into or exchangeable for
capital stock in MEDIA.
ss.2.03 FINANCIAL CONDITION
MEDIA has been operating a business at 000 Xxxxx 000 Xxxx, Xxxxxxxx
Xxxxx, Xxxx (the "BUSINESS"). Effective April 22, 1999, the SHAREHOLDERS
contributed all of the assets of the BUSINESS to MEDIA in exchange for Three
Hundred Twenty Five Thousand (325,000) of MEDIA's stock. The assets and
liabilities of the BUSINESS were contributed by the SHAREHOLDERS at the net book
value as of April 30, 1999. The SHAREHOLDERS have delivered to SWC, a closing
balance sheet and related statement of income for the period commencing January
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1, 1999 and ending April 30, 1999 for the BUSINESS and the opening balance sheet
dated April 30, 1999 of MEDIA (collectively herein sometimes referred to as the
"FINANCIAL STATEMENTS"). The FINANCIAL STATEMENTS present fairly the results of
operations of for the period indicated and each such statement presents fairly
the information purported to be shown therein. The FINANCIAL STATEMENTS are
correct and complete and are in accordance with the books and records of the
SHAREHOLDERS and MEDIA and are attached hereto as Exhibit C. The liabilities of
MEDIA as of the Closing shall not exceed Fifty Two Thousand Dollars
($52,000.00).
(a) There has at no time been a material adverse change in the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of the BUSINESS other than as shown on the
FINANCIAL STATEMENTS.
(b) The operations and activities of the BUSINESS have been conducted
in all respects only in the ordinary course.
(c) There has been no accepted purchase order or quotation,
arrangement, or understanding for future sale of the products or services of the
BUSINESS which MEDIA or the SHAREHOLDERS expects will not be profitable.
(d) The BUSINESS has not suffered an extraordinary loss (whether or not
covered by insurance) or waived any right of substantial value.
(e) There is no fact known to MEDIA or the SHAREHOLDERS which
materially adversely affects or in the future (as far as MEDIA, or the
SHAREHOLDERS can foresee) may materially adversely affect the financial
condition, results of operations, business, properties, assets, liabilities, or
future prospects of MEDIA; PROVIDED, HOWEVER, that MEDIA and the SHAREHOLDERS
express no opinion as to political or economic matters of general applicability.
ss.2.04 TAX AND OTHER LIABILITIES
Neither MEDIA nor the BUSINESS has any liability of any nature, accrued
or contingent, including without limitation liabilities for federal, state,
local, or foreign taxes and liabilities to customers or suppliers.
ss.2.05 LITIGATION AND CLAIMS
There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, threatened, or in
prospect (or any basis therefor known to MEDIA or the SHAREHOLDERS) with respect
to MEDIA and the BUSINESS or any of MEDIA's business, properties, or assets.
MEDIA is not affected by any present or threatened strike or other labor
disturbance nor to the knowledge of MEDIA or the SHAREHOLDERS is any union
attempting to represent any employee of MEDIA as collective bargaining agent.
MEDIA is not in violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree; nor is MEDIA required to take any action
in order to avoid such violation or default.
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ss.2.06 PROPERTIES
MEDIA has good title to all properties and assets used in its business
or owned by it free and clear of all liens, mortgages, security interests,
pledges, charges, and encumbrances.
(a) Attached as Exhibit D is a true and complete list of all properties
and assets owned, leased, or licensed by MEDIA (including inventory but not
including Intangibles, as defined in Section 2.09). All properties and assets
owned, leased, or licensed by MEDIA are in good and usable condition (reasonable
wear and tear which is not such as to affect adversely the operation of the
business of MEDIA excepted).
(b) The properties and assets (including intangibles) owned, leased, or
licensed by MEDIA constitute all such properties and assets which are necessary
to the business of MEDIA as presently conducted or as it contemplates
conducting.
ss.2.07 CONTRACTS AND OTHER INSTRUMENTS
MEDIA has furnished to SWC its Articles of Incorporation and By Laws
and all amendments thereto as presently in effect. Exhibit E, attached hereto,
contains a true and complete list of all contracts, leases, liabilities,
obligations and debts of MEDIA.
ss.2.08 EMPLOYEES
MEDIA has no, or does not contribute to, any pension, profit-sharing
plan or other employee benefit plan or incentive plan.
ss.2.09 PATENTS, TRADEMARKS, BUSINESS NAME
MEDIA does not own or have pending, or is licensed under, any patent,
patent application, trademark, trademark application, trade name, service xxxx,
copyright, franchise, or other intangible property or asset (all of the
foregoing, together with the right to use the name MEDIA, being herein called
"Intangibles"), other than as described in Exhibit F, all of which are in good
standing and uncontested. Exhibit F accurately sets forth with respect to
Intangibles owned by MEDIA or by, where appropriate, a statement of cost, book
value, and reserve for depreciation of each item for tax purposes, and net book
value of each item for financial reporting purposes, and with respect to
Intangibles licensed by MEDIA from or to a third party, a description of such
license. Neither the SHAREHOLDERS, any director, officer, or employee of MEDIA
or of any relative or affiliate of the SHAREHOLDERS or of any such officer,
director or employee, nor any other corporation or enterprise in which the
SHAREHOLDERS, any such director, officer, or employee, or any such relative or
affiliate had or now has a 5 percent or greater equity or voting or other
substantial interest, possesses any Intangible which relates to the business of
MEDIA. There is no right under any Intangible necessary to the business of MEDIA
as presently conducted or as it contemplates conducting. MEDIA has not
infringed, is infringing, or has received notice of infringement with asserted
Intangibles of others. There is no infringement by others of Intangibles of
MEDIA. There is no Intangible of others which may materially adversely affect
the financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of MEDIA or of SWC. Exhibit F shall also
includes a complete listing of all of MEDIA's customers.
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ss.2.10 AUTHORITY TO SELL
MEDIA and the SHAREHOLDERS have all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of MEDIA have been duly taken to authorize the execution, delivery,
and performance of this Agreement by MEDIA and (including, without limitation,
action by the SHAREHOLDERS). This Agreement has been duly authorized, executed,
and delivered by MEDIA, has been duly executed and delivered by the
SHAREHOLDERS, constitutes the legal, valid, and binding obligation of MEDIA and
the SHAREHOLDERS, and is enforceable as to them in accordance with its terms. To
the best of MEDIA's and the SHAREHOLDERS' knowledge, no consent, authorization,
approval, order, license, certificate, or permit of or from, or declaration or
filing with, any federal, state, local, or other governmental authority or any
court or other tribunal is required by MEDIA or the SHAREHOLDERS for the
execution, delivery, or performance of this Agreement by MEDIA or the
SHAREHOLDERS. No consent of any party to any contract, agreement, instrument,
lease, license, arrangement, or understanding to which MEDIA or the SHAREHOLDERS
is a party, or to which it or he or any of its or their properties or assets are
subject, is required for the execution, delivery, or performance of this
Agreement (except such consents referred to in Exhibit E as having been obtained
at or prior to the date of this Agreement, true and correct copies of which,
initialed by the chief executive officer of MEDIA, have been delivered to SWC);
and the execution, delivery, and performance of this Agreement will not violate,
result in a breach of, conflict with, or (with or without the giving of notice
or the passage of time or both) entitle any party to terminate or call a default
under any term of any such contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or result in a breach of any term of
the certificate of incorporation (or other charter document) or by-laws of
MEDIA, or violate, result in a breach of, or conflict with any law, rule,
regulation, order, judgment, or decree binding on MEDIA or the SHAREHOLDERS or
to which any of their or their operations, business, properties, or assets are
subject. Upon the Closing, MEDIA will have good title to all other properties
and assets used in the business of MEDIA or owned by MEDIA (except such
properties and assets as are held pursuant to leases or licenses described in
Exhibit E), described in Exhibit D free and clear of all liens, mortgages,
security interests, pledges, charges, and encumbrances (except such as are
listed in Exhibit E).
The references in this Section 2.10 to this Agreement include any other
document executed by MEDIA or the SHAREHOLDERS relating hereto or delivered to
SWC in connection with the transactions contemplated hereby.
ss.2.11 COMPLETENESS OF DISCLOSURE
No representation or warranty by MEDIA or the SHAREHOLDERS in this
Agreement contains or on the date of the Closing will contain any untrue
statement of material fact or omits or on the date of the Closing will omit to
state a material fact necessary to make the statements made not misleading,
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SWC
SWC represents and warrants to MEDIA as follows:
ss.3.01 ORGANIZATION
SWC is a Nevada corporation duly organized, validly existing, and in
good standing under the laws of its jurisdiction of incorporation, with all
requisite power and authority to own, lease, license, and use its properties and
assets and to carry on the business in which it is now engaged and the business
in which it contemplates engaging.
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ss.3.02 AUTHORITY TO BUY
SWC has all requisite power and authority to execute, deliver, and
perform this Agreement. All necessary corporate proceedings of SWC have been
duly taken to authorize the execution, delivery, and performance of this
Agreement by SWC. This Agreement has been duly authorized, executed, and
delivered by SWC, is the legal, valid, and binding obligation of SWC, and is
enforceable as to it in accordance with its terms.
ARTICLE IV
INDEMNITY
ss.4.01 INDEMNITY OF MEDIA AND THE SHAREHOLDERS
MEDIA and the SHAREHOLDERS agree to jointly and severally indemnify and hold
harmless SWC, its officers, directors and employees against and in respect of
any and all:
(a) Claims, suits, actions, proceedings (formal or informal),
investigations, judgments, deficiencies, damages, settlements, liabilities, and
legal and other expenses (including legal fees and expenses of counsel chosen by
any Indemnitee) as and when incurred arising out of or based upon (i) any breach
of any representation, warranty, covenant, or agreement of MEDIA or the
SHAREHOLDERS contained in this Agreement, (ii) any obligation of liability of
any nature, accrued or contingent, of MEDIA not specifically disclosed to SWC in
accordance with this Agreement.
(b) Claims, suits, actions, and proceedings (formal or informal) of
persons or entities other than SWC and related judgments, deficiencies, damages,
settlements, liabilities, and legal and other expenses (including legal fees and
expenses of counsel) as and when incurred arising out of or based upon the
conduct of the business of MEDIA prior to the Closing.
ss.4.02 INDEMNITY OF SWC
SWC agrees to indemnify and hold harmless the SHAREHOLDERS against and in
respect of any and all:
(a) Claims, suits, actions, proceedings (formal or informal),
investigations, judgments, deficiencies, damages, settlements, liabilities, and
legal and other expenses (including legal fees and expenses of counsel) as and
when incurred arising out of or based upon any breach of any representation,
warranty, covenant, or agreement of SWC contained in this Agreement.
(b) Claims, suits, actions, and proceedings (formal or informal) of
persons or entities other than the SHAREHOLDERS and related judgments,
deficiencies, damages, settlements, liabilities, and legal and other expenses
(including legal fees and expenses of counsel) as and when incurred arising out
of or based upon the conduct of the business of MEDIA and/or SWC after the
Closing.
ss.4.03 NOTICE
SWC, its officers, directors and employees on the one hand, and the
SHAREHOLDERS on the other hand, shall give prompt notice to the other of any
claim asserted or threatened on the basis of which indemnification may be sought
as herein provided but the obligations contained in this Article IV shall not be
conditioned upon receipt of such notice.
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ARTICLE V
CONDITIONS TO OBLIGATIONS OF SWC
The obligations of SWC under this Agreement are subject, at the option
of SWC, to the following conditions:
ss.5.01 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS
All representations and warranties of MEDIA and/or the SHAREHOLDERS
contained in this Agreement shall be accurate when made and, in addition, shall
be accurate as of the Closing as though such representations and warranties were
then made in exactly the same language by MEDIA and/or the SHAREHOLDERS and
regardless of knowledge or lack thereof on the part of MEDIA or the SHAREHOLDERS
or changes beyond their or its control; only as of the Closing, MEDIA and the
SHAREHOLDERS shall have performed and complied with all covenants and agreements
and satisfied all conditions required to be performed and complied with by any
of them at or before such time by this Agreement.
ss.5.02 OTHER CLOSING DOCUMENTS
MEDIA shall have delivered to SWC at or prior to the Closing such other
documents (including certificates of officers of MEDIA) as SWC may reasonably
request in order to enable SWC to determine whether the conditions to their
obligations under this Agreement have been met and otherwise to carry out the
provisions of this Agreement.
ss.5.03 REVIEW OF PROCEEDINGS
All actions, proceedings, instruments, and documents required to carry
out this Agreement or incidental thereto and all other related legal matters
shall be subject to the reasonable approval of Xxxxxxx X. Xxxxxx & Associates,
counsel to SWC, and MEDIA and the SHAREHOLDERS shall have furnished such counsel
such documents as such counsel may have reasonably requested for the purpose of
enabling them to pass upon such matters.
The references in this Section 5.03 to this Agreement include any other
document executed by MEDIA or the SHAREHOLDERS relating hereto or delivered to
SWC in connection with the transactions contemplated hereby.
ss.5.04 LEGAL ACTION
There shall not have been instituted or threatened any legal proceeding
relating to, or seeking to prohibit or otherwise challenge the consummation of,
the transactions contemplated by this Agreement, or to obtain substantial
damages with respect thereto.
The references in this Section 5.04 to this Agreement include any other
document executed by MEDIA or the SHAREHOLDERS relating hereto or delivered to
SWC in connection with the transactions contemplated hereby.
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ss.5.05 NO GOVERNMENTAL ACTION
There shall not have been any action taken, or any law, rule,
regulation, order, or decree proposed, promulgated, enacted, entered, enforced,
or deemed applicable to the transactions contemplated by this Agreement by any
federal, state, local, or other governmental authority or any court or other
tribunal, including the entry of a preliminary or permanent injunction, which,
in the sole judgment of SWC, (a) makes any of the transactions contemplated by
this Agreement illegal, (b) results in a delay in the ability of SWC to
consummate any of the transactions contemplated by this Agreement, (c) requires
the divestiture by SWC of a material portion of the business of either SWC and
its subsidiaries taken as a whole, or of MEDIA taken as a whole, (d) imposes
material limitations on the ability of SWC effectively to exercise full rights
of ownership with respect to the properties and assets purported to be sold
pursuant to this Agreement, or (e) otherwise prohibits, restricts, or delays
consummation of any of the transactions contemplated by this Agreement or
impairs the contemplated benefits to SWC of the transactions contemplated by
this Agreement.
The references in this Section 5.05 to this Agreement include any other
document executed by MEDIA or the SHAREHOLDERS relating hereto or delivered to
SWC in connection with the transactions contemplated hereby.
ss.5.06 INVENTORY
An itemized inventory shall have been prepared on the day of Closing
based upon physical observation by a representative of SWC and a representative
of MEDIA.
ss.5.07 CONTRACTUAL CONSENTS NEEDED
The parties to this Agreement shall have obtained at or prior to the
Closing all consents required for the consummation of the transactions
contemplated by this Agreement from any party to any contract, agreement,
instrument, lease, license, arrangement, or understanding to which any of them
is a party, or to which any of their respective businesses, properties, or
assets are subject.
ss.5.08 OTHER AGREEMENTS
Any and all agreements to be signed after this Agreement is executed
but before the Closing shall have been duly authorized, executed, and delivered
by the parties thereto at or prior to the Closing, shall be in full force, valid
and binding upon the parties thereto, and enforceable by them in accordance with
their terms at the Closing, and no party thereto at any time from the execution
thereof until immediately after the Closing shall have been in violation of or
in default in complying with any material provision thereof.
ss.5.09 THE SHAREHOLDERS'S CONFIDENTIALITY AGREEMENT
SWC shall have received at or prior to the Closing from the
SHAREHOLDERS an agreement to keep confidential certain data, substantially in
the form of Exhibit G.
ss.5.10
SWC shall have received at the Closing an executed Employment Agreement
from Shareholder XXXXX XXXXXXX in the form of Exhibit H attached hereto and an
executed Employment Agreement form Shareholder XXX XXXXXXX in the form of
Exhibit I attached hereto. SWC shall agree to continue the employment of any
other current employees of MEDIA.
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ss.5.11 CORPORATE MATTERS
SWC shall have received at or prior to the Closing the original
Corporate Minute Book, Stock Ledger, Stock Certificate Book, Corporate seal and
other related Corporate documents of MEDIA, along with the signed resignation of
the officers and directors of MEDIA.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF MEDIA AND THE SHAREHOLDERS
The obligations of MEDIA and the SHAREHOLDERS under this Agreement are
subject, at the option of MEDIA and the SHAREHOLDERS, to the following
conditions:
ss.6.01 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS
All representations and warranties of SWC contained in this Agreement
shall be accurate when made and, in addition, shall be accurate as of the
Closing as though such representations and warranties were then made in exactly
the same language by SWC and regardless of knowledge or lack thereof on the part
of SWC or changes beyond its or their control; as of the Closing SWC shall have
performed and complied with all covenants and agreements and satisfied all
conditions required to be performed and complied with by any of them at or
before such time by this Agreement.
ss.6.02 OTHER CLOSING DOCUMENTS
SWC shall have delivered to the SHAREHOLDERS at or prior to the Closing
such other documents as MEDIA or the SHAREHOLDERS may reasonably request in
order to enable the SHAREHOLDERS to determine whether the conditions to their
obligations under this Agreement have been met and otherwise to carry out the
provisions of this Agreement.
ss.6.03 REVIEW OF PROCEEDINGS
All actions, proceedings, instruments, and documents required to carry
out this Agreement or incidental thereto and all other related legal matters
shall be subject to the reasonable approval of counsel to MEDIA and the
SHAREHOLDERS, and SWC shall have furnished such counsel such documents as such
counsel may have reasonably requested for the purpose of enabling them to pass
upon such matters.
The references in this Section 6.03 to this Agreement include any other
document executed by MEDIA or the SHAREHOLDERS relating hereto or delivered to
SWC in connection with the transactions contemplated hereby.
ss.6.04 LEGAL ACTION
There shall not have been instituted or threatened any legal proceeding
relating to, or seeking to prohibit or otherwise challenge the consummation of,
the transactions contemplated by this Agreement, or to obtain substantial
damages with respect thereto.
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The references in this Section 6.04 to this Agreement include any other
document executed by MEDIA or the SHAREHOLDERS relating hereto or delivered to
SWC in connection with the transactions contemplated hereby.
ss.6.05 ADMINISTRATIVE EXPENSES
SWC has already paid to the SHAREHOLDERS of MEDIA the sum of Five
Thousand Dollars ($5,000) to cover administrative expenses with respect to the
reorganization. In this regard, SWC shall pay to the SHAREHOLDERS of MEDIA an
additional Five Thousand Dollars ($5,000) at the Closing.
ss.6.06 EMPLOYMENT AGREEMENT
SWC shall have delivered an executed original of the Employment
Agreement with XXXXX XXXXXXX in the form of Exhibit H attached hereto and an
executed original of the Employment Agreement with XXX XXXXXXX in the form of
Exhibit I attached hereto.
ss.6.07 OTHER AGREEMENTS
Any and all agreements to be signed after this Agreement is executed
but before the Closing shall have been duly authorized, executed, and delivered
by the parties thereto at or prior to the Closing, shall be in full force, valid
and binding upon the parties thereto, and enforceable by them in accordance with
their terms at the Closing, and no party thereto at any time from the execution
thereof until immediately after the Closing shall have been in violation of or
in default in complying with any material provision thereof.
VII
COVENANTS AND AGREEMENTS OF MEDIA AND THE SHAREHOLDERS
MEDIA and the SHAREHOLDERS covenant and agree as follows:
ss.7.01 ACCESS
MEDIA will afford, and the SHAREHOLDERS will cause MEDIA to afford, the
officers, employees, counsel, agents, accountants, and other representatives of
SWC and lenders, investors, and prospective lenders and investors free and full
access to the plants, properties, books, and records of MEDIA, will permit them
to make extracts from and copies of such books and records, and will from time
to time furnish SWC with such additional financial and operating data and other
information as to the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of MEDIA as SWC from time
to time may request.
ss.7.02 CONDUCT OF BUSINESS
MEDIA will, and the SHAREHOLDERS will cause MEDIA to conduct its
affairs so that at the Closing no representation or warranty of MEDIA or the
SHAREHOLDERS will be inaccurate, no covenant or agreement of MEDIA or the
SHAREHOLDERS will be breached, and no condition in this Agreement will remain
unfulfilled by reason of the actions or omissions of MEDIA or the SHAREHOLDERS.
Except as otherwise requested by SWC in writing, until the Closing or the
earlier rightful termination of this Agreement, MEDIA will, and the SHAREHOLDERS
will cause MEDIA, to use their best efforts to preserve the business operations
of MEDIA intact, to keep available the services of their present personnel, to
preserve in full force and effect the contracts, agreements, instruments,
leases, licenses, arrangements, and understandings of MEDIA, and to preserve the
goodwill of their suppliers, customers, and others having business relations
with any of them. Until the Closing or earlier rightful termination of this
Agreement, MEDIA will, and the SHAREHOLDERS will cause MEDIA, to conduct their
business and operations in all respects only in the ordinary course.
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ss.7.03 ADVICE OF CHANGES
Until the Closing or the earlier rightful termination of this
Agreement, MEDIA and the SHAREHOLDERS will immediately advise SWC in a detailed
written notice of any fact or occurrence or any pending or threatened occurrence
of which any of them obtains knowledge and which (if existing and known at the
date of the execution of this Agreement) would have been required to be set
forth or disclosed in or pursuant to this Agreement or an Exhibit hereto, which
(if existing and known at any time prior to or at the Closing) would make the
performance by any party of a covenant contained in this Agreement impossible or
make such performance materially more difficult than in the absence of such fact
or occurrence, or which (if existing and known at the time of the Closing) would
cause a condition to any party's obligations under this Agreement not to be
fully satisfied.
The references in this Section 7.03 to this Agreement include any other
document executed by MEDIA or the SHAREHOLDERS relating hereto or delivered to
SWC in connection with the transactions contemplated hereby.
ss.7.04 OTHER PROPOSALS
Until the Closing or earlier rightful termination of this Agreement,
MEDIA and the SHAREHOLDERS shall not, and shall neither authorize nor permit any
employee, counsel, agent, investment banker, accountants, or other
representative of any of them or any officer or director of MEDIA or directly or
indirectly, to: (a) initiate contact with any person or entity in an effort to
solicit any Purchase Proposal (as such term is defined in this Section 7.04);
(b) cooperate with, or furnish or cause to be furnished any non-public
information concerning the business, properties, or assets of MEDIA to, any
person or entity in connection with any Purchase Proposal; (c) negotiate with
any person or entity with respect to any Purchase Proposal; or (d) enter into
any agreement or understanding with the intent to effect a Purchase Proposal.
MEDIA and the SHAREHOLDERS will immediately give written notice to SWC of the
details of any Purchase Proposal of which any of them becomes aware, As used in
this Section 7.04, "Purchase Proposal" shall mean any proposal, other than as
contemplated by this Agreement, (e) for a merger, consolidation, reorganization,
or other business combination involving MEDIA, for the acquisition of any
interest in the equity of MEDIA, for the acquisition of the right to cast any
votes on any matter with respect to MEDIA, or for the acquisition of a
substantial portion of any of their respective assets other than in the ordinary
course of their respective businesses or (f) the effect of which may be to
prohibit, restrict, or delay the consummation of any of the transactions
contemplated by this Agreement or impair the contemplated benefits to SWC of the
transactions contemplated by this Agreement.
The references in this Section 7.04 to this Agreement include any other
document executed by MEDIA or the SHAREHOLDERS relating hereto or delivered to
SWC in connection with the transactions contemplated hereby.
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ss.7.05 RELEASE BY THE SHAREHOLDERS
If the Closing takes place, effective immediately after the Closing,
the SHAREHOLDERS jointly and severally, fully and unconditionally release and
discharge all claims and causes of action which they or their heirs, personal
representatives, successors or assigns ever had, now have, or hereafter may have
against MEDIA or its properties and assets.
ss.7.06 NON-COMPETITION
If the Closing takes place, the SHAREHOLDERS each agree, in
consideration of the obligations of SWC hereunder:
(a) After the date of the Closing, each Shareholder will not
(i) Compete with or be engaged in the same business as, or
Participate In (as hereinafter defined in this Section 7.06) any other business
or organization which at any time during the two-year period after the date of
the Closing competes with or is engaged in the same business as MEDIA, with
respect to any product or service sold or activity engaged in up to the time of
the Closing in Salt Lake County or Utah County, in the State of Utah or any
geographical area in which at the time of the Closing such product or service is
sold or activity engaged in by MEDIA or
(ii) Participate in any other business or organization which
at any time during the five-year period after the date of the Closing uses a
name containing either the word or words similar to or susceptible of confusion
with the words "MEDIA" or any combination or abbreviation thereof,
(b) He will not directly or indirectly solicit or interfere with, or
endeavor to entice away from MEDIA any of its suppliers, customers, or
employees; and
(c) He will not directly or indirectly seek out and employ in Salt Lake
County, or Utah County, State of Utah, any person who, at any time up to the
date of the Closing, was an employee of MEDIA, or SWC within a period of five
years after such person leaves the employ of such corporation.
As used in this Section 7.06, "Participate In" shall mean "directly or
indirectly, for its or their own benefit or for, with, or through any other
person or entity, own, manage, operate, control, loan money to, or participate
in the ownership, management, operation, or control of, or be connected as a
director, officer, employee, consultant, agent, independent contractor, or
otherwise with, or acquiesce in the use of its or their name in." MEDIA and the
SHAREHOLDERS agree that the provisions of this Section 7.06 are necessary and
reasonable to protect that entity which operates the business acquired under
this Agreement and SWC in the conduct of their businesses. If any restriction
contained in this Section 7.06 shall be deemed to be invalid, illegal, or
unenforceable by reason of the extent, duration, or geographical scope thereof,
or otherwise, then the court making such determination shall have the right to
reduce such extent, duration, geographical scope, or other provisions hereof,
and in its reduced form such restriction shall then be enforceable in the manner
contemplated hereby.
ss.7.07 VOTING BY CORPORATION
The SHAREHOLDERS agree that until the Closing or earlier rightful
termination of this Agreement, they will vote all their stock in MEDIA against
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(a) Any merger, consolidation, reorganization, or other business
combination involving MEDIA;
(b) Any sale of assets of MEDIA, except as contemplated by this
Agreement;
(c) Any issuance of any corporate interests of MEDIA, any option,
warrant, or other right calling for the issuance of any such interest, or any
security convertible into or exchangeable for any such interest;
(d) Any authorization of any other class of capital stock of MEDIA;
(e) The amendment of the corporate agreement (or other organizational
document) of MEDIA; or
(f) Any proposition the effect of which may be to inhibit, restrict, or
delay the consummation of any of the transactions contemplated by this Agreement
or impair the contemplated benefits to SWC of the transactions contemplated by
this Agreement.
The references in this Section 7.07 to this Agreement include any other
document executed by MEDIA, or relating hereto or delivered to SWC in connection
with the transactions contemplated hereby.
ARTICLE VIII
MISCELLANEOUS
ss.8.01 BROKERAGE FEES
If any person shall assert a claim to a fee, commission, or other
compensation or account of alleged employment as a broker or finder, or alleged
performance of services as a broker or finder, in connection with or as a result
of any of the transactions contemplated by this Agreement, MEDIA and the
SHAREHOLDERS shall (subject to the next sentence) indemnity and hold harmless
the Indemnitees against and in respect of any and all claims, suits, actions,
proceedings (formal or informal), investigations, judgments, deficiencies,
damages, settlements, liabilities, and legal and other expenses (including legal
fees and expenses of attorneys chosen by any Indemnitee) as and when incurred
arising out of or based upon such claim by such person, and MEDIA and the
SHAREHOLDERS shall at their sole expense defend any and all suits, actions,
proceedings (formal or informal), or investigations involving such claim that
may at any time be brought against any Indemnitee and satisfy promptly any
settlement or judgment arising therefrom; but if MEDIA and the SHAREHOLDERS fail
to defend such suit, action, proceeding, or investigation in a timely manner,
SWC or any Indemnitee made a defendant therein or a party thereto shall have the
right to defend and settle the same and pay any judgment or settlement
pertaining thereto as it or he may reasonably deem appropriate at the cost and
expense of MEDIA and the SHAREHOLDERS. If, however, it is ultimately determined
in any such suit, action, or proceeding (in which SWC and all Indemnitees made a
defendant therein or a party thereto were afforded the opportunity to have their
counsel participate in the defense) that SWC or any Indemnitee made a defendant
therein or a party thereto was the sole employer of such broker or finder or
services were performed solely for SWC or any Indemnitee made a defendant
therein or a party thereto, then MEDIA and the SHAREHOLDERS shall not be
responsible under this Section 8.01 and amounts theretofor paid by them by
reason of this Section 8.01 shall be reimbursed by SWC or the Indemnitee, as the
case may be, who was the sole employer.
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SS.8.02 FURTHER ACTIONS
At any time and from time to time, each party agrees, at its or their
expense, to take such actions and to execute and deliver such documents as may
be reasonably necessary to effectuate the purposes of this Agreement.
ss.8.03 AVAILABILITY OF EQUITABLE REMEDIES
Since a breach of the provisions of this Agreement could not adequately
be compensated by money damages, any party shall be entitled, either before or
after the Closing, in addition to any other right or remedy available to it, to
an injunction restraining such breach or a threatened breach and to specific
performance of any such provision of this Agreement, and in either case no bond
or other security shall be required in connection therewith, and the parties
hereby consent to the issuance of such an injunction and to the ordering of
specific performance.
ss.8.04 SURVIVAL
The covenants, agreements, representations, and warranties contained in
or made pursuant to this Agreement shall survive the Closing for a period of two
(2) years and any delivery of the purchase price by SWC, irrespective of any
investigation made by or on behalf of any party. The statements contained in any
other document executed by MEDIA, the SHAREHOLDERS or the SHAREHOLDERS relating
hereto or thereto or delivered to SWC in connection with the transactions
contemplated hereby or thereby, or in any statement, certificate, or other
instrument delivered by or on behalf of MEDIA, the SHAREHOLDERS or the
SHAREHOLDERS pursuant hereto or thereto or delivered to SWC in connection with
the transactions contemplated hereby or thereby shall be deemed representations
and warranties, covenants and agreements, or conditions, as the case may be, of
MEDIA, the SHAREHOLDERS and the SHAREHOLDERS hereunder for all purposes of this
Agreement (including all statements, certificates, or other instruments
delivered pursuant hereto or thereto or delivered in connection with the
transactions contemplated hereby or thereby).
ss.8.05 MODIFICATION
This Agreement and the Exhibits hereto set forth the entire
understanding of the parties with respect to the subject matter hereof (except
as provided in Section 8.04), supersede all existing agreements among them
concerning such subject matter, and may be modified only by a written instrument
duly executed by each party (except as provided in Section 8.05).
ss.8.06 NOTICES
Subject to Section 8.05, all notices, requests and other communications
hereunder shall be in writing and shall be deemed to have been given only if
mailed, certified return receipt requested, or if sent by Federal Express or
other well recognized private courier ("Courier") or if personally delivered to,
or if sent by fax with the original thereof sent by Courier to:
If to SWC: Superior Wireless Communications, Inc.
0 Xxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxx X. Xxxxxx
Fax (000) 000-0000
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with a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx X. Xxxxxx & Associates
0000 Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Fax (000) 000-0000
If to MEDIA or the SHAREHOLDERS: Xxxxx Xxxxxxx
000 Xxxxx 000 Xxxx, Xxxxx 00
Xxxxxxxx Xxxxx, Xxxx 00000
Fax (000) 000-0000
All notices, requests and other communications shall be deemed received
on the date of acknowledgment or other evidence of actual receipt in
the case of certified mail, Courier delivery or personal delivery or,
in the case of fax delivery, upon the date of fax receipt provided that
the original is delivered within two (2) business days. Any party
hereto may designate different or additional parties for the receipt of
notice, pursuant to notice given in accordance with the foregoing.
ss.8.07 WAIVER
Any waiver by any party of a breach of any provision of this Agreement
shall not operate as or be construed to be a waiver of any other breach of that
provision or of any breach of any other provision of this Agreement. The failure
of a party to insist upon strict adherence to any term of this Agreement on one
or more occasions will not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. Any waiver must be in writing and signed by or on behalf of
the waiving party.
ss.8.08 JOINT AND SEVERAL OBLIGATIONS
The representations, warranties, covenants, and agreements of MEDIA and
the SHAREHOLDERS in this Agreement are joint and several.
ss.8.09 BINDING EFFECT
The provisions of this Agreement shall be binding upon and inure to the
benefit of MEDIA and SWC and their respective successors and assigns and the
SHAREHOLDERS and their assigns, heirs, and personal representatives, and shall
inure to the benefit of the Indemnitees and their respective successors,
assigns, heirs, and personal representatives.
ss.8.10 NO THIRD-PARTY BENEFICIARIES
This Agreement does not create, and shall not be construed as creating,
any rights enforceable by any person not a party to this Agreement (except as
provided in Section 8.10).
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ss.8.11 SEPARABILITY
If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
ss.8.12 HEADINGS
The headings in this Agreement are solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.
ss.8.13 COUNTERPARTS; GOVERNING LAW
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. It shall be governed by and construed in accordance
with the laws of Utah, without giving effect to conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement effective as
of the date first written above.
"SWC" "MEDIA"
SUPERIOR WIRELESS COMMUNICATION, INC. MEDIA RAGE OF UTAH, INC.
By:__________________________________ By:_______________________________
XXX X. XXXXXX, President XXXXX XXXXXXX, President
By:_______________________________
XXX XXXXXXX, Secretary
THE SHAREHOLDERS
_____________________________________ __________________________________
XXXXX XXXXXXX XXX XXXXXXX
_____________________________________
XXXXX XXXXX
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