EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated as of February 28, 1996, is by and between Eagle
Telecom International, Inc., a Delaware corporation (the "Purchaser") and Eagle
Telecom International, Inc. a Texas corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Seller desires to sell, and Purchaser desires to purchase,
certain of Seller's assets;
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants herein contained, and on the terms and subject to the
conditions herein set forth, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 SALE AND PURCHASE OF ASSETS. Subject to and upon the terms and
conditions contained herein, at the Closing (as hereinafter defined), Seller
shall sell, transfer, assign, convey and deliver to Purchaser all of the Assets
(as defined in this section below) set forth in the location (or attributed to
the location) described in EXHIBIT 1.01(A), free and clear of all liens, claims
and encumbrances, except for the liabilities set forth in Section 1.04, and
Purchaser shall purchase, accept and acquire from Seller, the following:
(a) Fixed Assets. All of Seller's fixed assets, furniture,
equipment, leasehold improvements and supplies necessary and desirable for the
continued operation of Seller's business, as set forth in Exhibit 1.01(b)
("Fixed Assets").
(b) Inventory. All of Seller's inventory necessary and
desirable for the continued operation of Seller's business, as set forth in
EXHIBIT 1.01(C).
(c) Intellectual Property. All of Seller's intellectual
property necessary and desirable for the continued operation of Seller's
business ("Intellectual Property"), including, but not limited to, (i) patents,
patent applications, patent disclosures, and improvements thereto, (ii)
licenses, trademarks, service marks, trade dress, logos, trade names, and
corporate and company names and registrations and applications for registration
thereof, (iii) copyrights and registrations and applications for registration
thereof, (iv) computer software, data, and documentation, (v) trade secrets and
confidential business information (including ideas, formulas, compositions,
inventions [whether patentable or unpatentable and whether or not reduced to
practice], know-how, processes and techniques, plans, proposals, technical data,
copyrightable works, financial,
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marketing, and business data, pricing and cost information, business and
marketing plans, and customer and supplier lists and information), (vi) other
proprietary rights, and (vii) copies and tangible embodiments thereof (in
whatever form or medium) and (viii) licenses, permits and registrations issued
by the FCC.
(d) Contracts, Agreements, Instruments. All of Seller's
contracts, agreements and instruments necessary and desirable for the continued
operation of Seller's business, as set forth in Section 1.01(d) ("Properties and
Contracts").
(e) Prepayments. All of Seller's prepayments less actual
materials purchased and paid for. All deposits in place as listed in Section
1.01(e).
(f) Accounts. All of Seller's accounts receivable, subject to
Section 1.03(b), as set forth in Exhibit 1.01(f).
(g) Records. All of Seller's current and active records, files
and papers pertaining to the assets described in Subsections (a) through (f)
above, including customer files, customer credit histories and other data
necessary and desirable for the continued operation of Seller's business (the
"Records").
All of the assets described in Subsections (a) through (g) above are
hereinafter collectively referred to as the "Assets."
1.02 CLOSING. The closing of the transactions contemplated hereby (the
"Closing") shall only occur at such place and time as the parties agree, but no
later than 5 days after the signature of this agreement.
1.03 TERMS OF ACQUISITION. On the basis of the representations,
warranties, covenants, and agreements contained in this Agreement and subject to
the terms and conditions of this Agreement, the total purchase price for the
Assets ("Total Purchase Price") shall be:
a. Purchaser shall deliver at the Closing a cashiers check or
immediately available funds in the amount of $250,000 payable
to Seller, less all prepayments and adjustments as defined in
Section 1.01(e).
b. Purchaser shall utilize its best efforts to collect all
accounts receivable specified in Exhibit 1.01(f) outstanding
at Closing in full, without discount or offset of any kind or
character, and shall remit to Seller, within seven days of
receipt of good funds, sixty percent (60%) of same, net of 60%
of sales commission, if any, if, as and when received.
Purchaser shall provide Seller, at Seller's request, with a
monthly report of the status of such accounts receivable.
Seller, at its sole cost and expense, shall have the right to
audit the books and records of Purchaser to determine the
status of such accounts
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receivable until all have been paid. Purchaser's obligation
shall be secured by a properly executed and recorded financing
statement.
c. Seller will bring all accounts payable (materials as well as
other normal accounts payable) specified in Exhibit 1.03(c),
to a net-30 basis as of February 29, 1996.
d. Purchaser shall pay to Seller three percent (3%) of all gross
sales actually collected by Purchaser (including any affiliate
of Purchaser, as such term is defined in the Securities Act of
1933) to Lucent Technology, its predecessor, successors and
assigns, in connection with business currently conducted by
Seller, or contemplated to be conducted by Purchaser, and
Lucent Technology, within thirty days of receipt of good funds
from any such sale and continuing for a period of two years
from the date of the first such collection. Purchaser shall
provide Seller with a quarterly report of the status of such
sales, upon Seller's request. Seller, at its sole cost and
expense, shall have the right to audit the books and records
of Purchaser to determine the status of such sales until all
have been paid. This purchaser's obligation shall be secured
by a properly executed and recorded financing statement.
e. At closing, Eagle Aerospace, Inc. will assign to Purchaser the
UBEL contract for no cash consideration other than the
assumption of all obligations under such contract.
1.04 ASSUMPTION OF LIABILITIES. Purchaser shall assume and timely
perform those liabilities and obligations which are not disputed in good faith
that are listed in EXHIBIT 1.04 hereto, and Seller shall assign its rights
associated therewith ("Assumed Liabilities").
1.05 INSTRUMENTS OF TRANSFER; FURTHER ASSURANCES. In order to consummate
the transactions contemplated hereby, the following documents shall be
delivered:
(a) At the Closing, Seller shall deliver to Purchaser a Xxxx of
Sale in the form attached as EXHIBIT 1.05(A) hereto.
(b) At the Closing, Purchaser shall deliver to Seller appropriate
documentation to reflect the security interests described in
Section 1.03(b) and (d), attached as EXHIBIT 1.05(B) hereto.
(c) At the Closing, all officers and directors of Seller, except
for H. Xxxx Xxxxxx, shall enter into a non-competition
agreement in the form attached hereto as EXHIBIT 1.05(C).
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(d) At Closing, Seller shall file an amendment to its Articles of
Incorporation with the State of Texas changing its name to
exclude the phrase "Eagle Telecom International."
1.06 SELLER'S INDEMNITY AGAINST LIABILITIES.
a. Seller agrees to indemnify and hold harmless the
Purchaser and its respective officers, directors,
,employees, counsel, agents, and , in each case past,
present, or as they may exist at any time after the
date of this Agreement ("Purchaser Indemnitees")
against and in respect of any and all claims, suits,
actions, proceedings (formal or informal),
investigations, judgments, deficiencies (including
federal, state and local tax liabilities, penalties and
interest), damages, settlements, liabilities,
negligence and reasonably incurred legal and other
expenses (including legal fees and expenses of counsel
chosen by any Purchaser Indemnitee) as and when
incurred arising out of or based upon any material
breach of any representation, warranty, condition,
covenant, or agreement of Seller contained in this
Agreement.
b. The Purchaser Indemnitee shall give Seller prompt
notice of any claim asserted or threatened against any
Purchaser Indemnitee on the basis of which such
Purchaser Indemnitee intends to seek indemnification
from Seller as herein provided.
1.07 PURCHASER INDEMNITY AGAINST LIABILITIES.
a. Purchaser agrees to indemnify and hold harmless the
Seller and its officers, directors, employees, counsel,
agents, stockholders, in any case past, present, or as
they may exist any time after the date of this
Agreement ("Seller's 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 counsel chosen by Seller) as
and when incurred arising out of or based upon any
material breach of any representation, warranty,
condition, covenant, or agreement of Purchaser.
b. The Seller shall give Purchaser prompt notice of any
claim asserted or threatened against Seller on the
basis of which such Seller intends to seek
indemnification from Purchaser as herein provided.
1.08 RIGHT OF PURCHASER TO SET-OFF. Without limiting such other rights
as the Purchaser may have, if, prior to the time all consideration is delivered
pursuant to Section 1.03,
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the Purchaser has learned of a material and indemnifiable breach of any
representation, warranty, condition, covenant, or agreement of Seller contained
in this Agreement or exhibit hereto, the Purchaser in its discretion can by
written notice to Seller deduct from the amount of the consideration set forth
in 1.03 at such time an amount the value of which is equal to the aggregate of
the amount of losses, deficiencies, damages, and legal and other expenses
(including legal fees and expenses of counsel chosen by any Purchaser)
reasonably incurred by Purchaser in connection with claims, suits, actions,
proceedings (formal or informal), investigations, judgments, or settlements as a
result of, or to remedy a situation or circumstance caused by, such breach.
Purchaser shall make no such settlement without seller's written approval, which
approval may not be unreasonably witheld.
ARTICLE II
PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser represents and warrants to Seller and Stockholder that the
following are true and correct as of this date and will be true and correct
through the Closing Date as if made on that date:
2.01 PURCHASER'S ORGANIZATION AND QUALIFICATION. Purchaser is a Delaware
Corporation duly organized, validly existing, with all requisite power and
authority to conduct its business and is not in breach of, or in default with
respect to, any term of its Delaware company organizational documents, except
where such breach would not have a material adverse effect. As identified in
exhibit 2.01 purchaser has obtained 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, except where the
failure to do so would not have a material adverse effect. Purchaser is duly
qualified to transact the business in which it is engaged in every jurisdiction
in which its ownership, leasing, licensing, or use of property or assets or the
conduct of its business makes such qualification necessary, except where the
failure to do so would not have a material adverse effect.
2.02 AUTHORITY. Purchaser has all requisite corporate power and
authority to execute, deliver, and perform this Agreement. All necessary
corporate proceedings of Purchaser have been duly taken to authorize the
execution, delivery, and performance of this Agreement by Purchaser. This
Agreement and all exhibits hereto have been duly authorized, executed, and
delivered by Purchaser, constitutes the legal, valid, and binding obligation of
Purchaser and is enforceable as to it in accordance with its terms. 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 Purchaser for the
execution, delivery, or performance of this Agreement and exhibits by Purchaser.
No consent of any party to any contract, agreement, instrument, lease, license,
arrangement, or understanding to
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which Purchaser is a party, or to which it or any of its properties or assets
are subject, is required for the execution, delivery or performance of this
Agreement and exhibits; and, except where such breach would not have a material
adverse effect, the execution, delivery, and performance of this Agreement and
exhibits 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 bylaws of Purchaser, or violate, result in a breach of, or conflict
with any law, rule, regulation, order, judgment, or decree binding on Purchaser
or to which any of its operations, business, properties, or assets are subject.
2.03 DUE DILLIGENCE
Purchaser has conducted due dilligence on the affairs, books, and records
requested of seller and is not aware of any mistatement, misrepresentation or
default of seller relevent to the subject matter of this agreement.
2.04 FINANCIAL CONDITION
2.05 ARTICLES OF INCORPORATION AND BYLAWS
The articles of incorporation and by-laws of Purchaser and all
amendments thereto; (See Exhibit 2.05)
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants that the following are true and correct
as of this date and will be true and correct through the Closing Date as if made
on that date:
3.01 ORGANIZATION AND QUALIFICATION. Seller does not own any interest in
any other business enterprise or legal entity, except as disclosed in Exhibit
3.01. Exhibit 3.01 also correctly sets forth as to Seller its place of
formation, principal place of business, and jurisdictions in which it is
qualified to do business. Seller is a Texas company duly organized, validly
existing, with all requisite power and authority to conduct its business and is
not in breach of, or in default with respect to, any term of its Texas company
organizational documents, except where such breach would not have a material
adverse effect. Seller has obtained 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
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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, except where the
failure to do so would not have a material adverse effect. Seller is duly
qualified to transact the business in which it is engaged in every jurisdiction
in which its ownership, leasing, licensing, or use of property or assets or the
conduct of its business makes such qualification necessary, except where the
failure to do so would not have a material adverse effect.
3.02 FINANCIAL CONDITION. Seller has delivered to Purchaser true and
correct copies of the following: the unaudited balance sheet, statement of
income, and statement of cash flows of Seller for the fiscal years ended
December 31, 1995 and 1994; and an unaudited balance sheet ("Seller Last Balance
Sheet"), statement of income for the one month ended January 31, 1996 ("Seller
Last Balance Sheet Date"). Each such balance sheet presents fairly the financial
condition, assets and liabilities of Seller as of its date; each such statement
of income presents fairly the results of operations of Seller for the period
indicated and each statement of cash flows represents fairly the information
purported to be shown therein. The financial statements referred to in this
Section 3.02 have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved,and except as
specified in Exhibit 3.02, and, except for statement of cashflows which is
omitted in the one month ending January 31,1996 time periods, and to the
Seller's knowledge are correct and complete in all material respects, and are in
accordance with the books and records of Seller. Since January 31, 1996:
(a) There has been no material adverse change in the financial
condition, results of operations, business, properties,
assets, accounts receivable, accounts payable, liabilities, or
future prospects of Seller;
(b) Seller has not authorized, declared, paid or effected any
dividend or liquidation or other distribution in respect of
its capital stock or other equity interest or any direct or
indirect redemption, purchase or other acquisition of any
equity interest of Seller, out of the ordinary course of
business;
(c) The operations of Seller have been conducted in all respects
only in the ordinary course of business;
(d) Seller has not suffered an extraordinary loss (whether or not
covered by insurance) or waived any right of substantial
value; and
(e) There has been no accepted purchase order or quotation,
arrangement or understanding for future sale of the products
or services of Seller out of the ordinary course of business.
Except as identified herein and in the attached Exhibits, there is no fact,
circumstance or event known to Seller which could have a material adverse
effect, or in the future may have a material
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adverse effect on the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of Seller; provided,
however, that Seller express no opinion as to political, business or economic
matters of general applicability.
3.03 TAX AND OTHER LIABILITIES. Seller does not have any present
liability of any nature, accrued or contingent, including, without limitation,
liabilities for federal, state, local, or foreign taxes , which could have a
material adverse effect upon Seller, other than the following:
(a) Liabilities for which full provision has been made on the
Seller Last Balance Sheet as of the Seller Last Balance Sheet
Date; and
(b) Other liabilities arising since the Seller Last Balance Sheet
Date and prior to the Closing in the ordinary course of
business which are not inconsistent with the representations
and warranties of Seller or any other provision of this
Agreement.
(c) Liabilities to customers and suppliers identified herein.
Without limiting the generality of the foregoing, the amounts set forth as
provisions for taxes on the Seller Last Balance Sheet are sufficient for all
accrued and unpaid taxes of Seller, whether or not due and payable and whether
or not disputed, under tax laws, as in effect on the Seller Last Balance Sheet
Date or now in effect, for the period ended on such date and for all fiscal
years prior thereto. Seller has filed all applicable tax returns required to be
filed by it or has obtained applicable extensions and are not delinquent with
respect to such extensions; have paid (or have established on the Seller Last
Balance Sheet a reserve for) all taxes, assessments, and other governmental
charges payable or remittable by it or levied upon it or its properties, assets,
income, or franchises, which are due and payable and have delivered to Seller a
true and correct copy of any report as to adjustments received by Seller from
any taxing authority during the past five years and a statement as to any
litigation, governmental or other proceeding (formal or informal), or
investigation pending.
3.04 LITIGATION AND CLAIMS. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending,
or to Seller's knowledge, threatened (or any basis therefor known to Seller )
with respect to Seller, (as it relates to the business of Seller), or any of its
business, properties, or assets, except as set forth on Exhibit 3.04. Seller is
not affected by any present or threatened strike or other labor disturbance nor
to the knowledge of Seller, is any union attempting to represent any employee of
Seller as collective bargaining agent. To the knowledge of Seller, Seller is not
in material violation of, or in material default with respect to, any law, rule,
regulation, order, judgment, or decree, nor is Seller, , required to take any
action in order to avoid such violation or default.
3.05 PROPERTIES. Seller has good and marketable title to all properties
and assets used in its business or owned by it (except such real and other
property and assets as are held
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pursuant to leases or licenses described in Exhibit 3.05), free and clear of all
liens, mortgages, security interests, pledges, charges, and encumbrances (except
such as are disclosed in Exhibit 3.05 or disclosed on the Seller Last Balance
Sheet).
(a) Attached as Exhibits 3.05, and 1.01(b). 1.01(c), 1.01(d),
1.01(e), 1.01(f), ) is a true and complete list of all
properties and assets owned, leased, or licensed by Seller
having an individual or aggregate value of $10,000 or more,
including with respect to such properties and assets leased or
licensed by Seller, a description of such lease or license.
All such properties and assets owned by Seller are reflected
on the Seller Last Balance Sheet. All properties and assets
owned, leased, or licensed by Seller are in good and usable
condition (reasonable wear and tear, which is not such as to
have a material adverse effect on the operation of the
business of Seller, excepted);
(b) The properties and assets owned, leased, or licensed by Seller
constitute all such properties and assets currently used to
conduct the business of Seller; and
(c) Except as identified in exhibit 3.05 item 1, no real property
owned, leased or licensed by Seller lies in an area which is,
to the knowledge of Seller or will be subjected to zoning, use
or building code restrictions which would prohibit, and no
stated facts relating to the actions or inaction of another
person or entity of his or its ownership, licensing, leasing,
or use of any real or personal property exists or will exist
which would prevent, the continued effective ownership,
leasing, licensing or use of such real property in the
business in which Seller is now engaged or the business in
which it contemplates engaging.
3.06 CONTRACTS, AGREEMENTS AND INSTRUMENTS. Exhibit 1.01(d) accurately
and completely sets forth the information required to be contained therein.
Seller has furnished to Purchaser:
(a) The articles of incorporation and by-laws of Seller and all
amendments thereto; (See Exhibit 3.01)
(b) True and correct copies of all material contracts (Exhibit
1.01(d)), firm customer purchase orders (Exhibit 3.06),
quotations (Exhibit 3.08), breakdown of accounts receivable
(Exhibit 1.01(f)), accounts payable (Exhibit 1.03(c)),
agreements and other instruments referred to in Exhibit
1.01(d);
(c) True and correct copies of all material leases (Exhibit 3.05)
and licenses referred to in Exhibits 3.12; and
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(d) True and correct written descriptions of all service, material
supply, distribution, agency, financing, or other arrangements
or understandings referred to in Exhibit 1.01(d).
Except for matters which, in the aggregate, would not have a material adverse
effect or are otherwise disclosed in this Agreement, to the knowledge of Seller,
, no other party to any such contract, agreement, instrument, lease, or license
is now in violation or breach of, or in default with respect to complying with,
any material provision thereof, and each such contract, agreement, instrument,
lease, or license contained in exhibits hereto is in full force and effect and
is the legal, valid, and binding obligation of the parties thereto and is
enforceable as to them in accordance with its terms. Each such service, supply,
distribution, agency, financing, or other arrangement or understanding contained
in the exhibits hereto is a valid and continuing arrangement or understanding,
except for matters which, in the aggregate, would not have a material adverse
effect; neither Seller, nor any other party to any such arrangement or
understanding has given notice of termination or taken any action inconsistent
with the continuance of such arrangement or understanding; and the execution,
delivery, and performance of this Agreement will not prejudice any such
arrangement or understanding in any way contained in the exhibits hereto, except
for matters which, in the aggregate, would not have a material adverse effect.
Except as disclosed in appropriate exhibits attached hereto, Seller has not
engaged since its formation in, is engaging in, or intends to engage in any
transaction with, or has had since its formation, now has, or intends to have
any contract, agreement, lease, license, arrangement, or understanding with, any
Stockholder or employee of Seller (except for employment agreements listed in
Exhibit 1.01(d) in each case with such Stockholder and employees who are not
relatives or affiliates described in the next clause), any relative or affiliate
of any Stockholder or of any employee of Seller, or any other partnership or
enterprise in which any Stockholder or employee of Seller, or any such relative
or affiliate then had or now has a 5% or greater interest or other substantial
interest, other than contracts and agreements listed and so specified in Exhibit
1.01(d). Seller is not a member of a customer or user organization or of a trade
association which relationship would be materially affected by the execution and
Closing of this Agreement.
3.07 INTELLECTUAL PROPERTY. Seller does not own or have pending, or is
licensed under, any patent, patent application, trademark, trademark
application, trade name, service xxxx, copyright, franchise, license, permit,
Intellectual Property or operating licenses, intangible property or asset, other
than as described in Exhibit 3.07, all of which are in good standing and
uncontested. Neither any Stockholder, any employee of Seller, any relative or
affiliate of any Stockholder or of any such employee, nor any other partnership
or enterprise in which any Stockholder, any such employee, or any such relative
or affiliate had or now has a five percent or greater Stockholder Interest or
other substantial interest, possesses any Intellectual Property, Operating
License, licenses, permits, intangible property or asset which relates to the
business of Seller. There is no right under any Intellectual Property, Operating
License, licenses, permits, intangible property or assets reasonably necessary
to the business of Seller as presently conducted or as it contemplates
conducting, except such as are so designated in Exhibit 3.07. To
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the knowledge of Seller , Seller has not infringed, is not infringing, or has
not received notice of infringement on the Intellectual Property of others. To
the knowledge of Seller, there is no infringement by others of the Intellectual
Property of Seller.
3.08 QUESTIONABLE PAYMENTS. To the knowledge of Seller, neither Seller,
its agents, employees, or any other persons associated with or acting on behalf
of Seller has, directly or indirectly:
(a) Used any Seller funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to
political activity;
(b) Made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political
parties or campaigns from corporate funds;
(c) Violated any provision of the Foreign Corrupt Practices Act of
1977;
(d) Established or maintained any unlawful or unrecorded fund of
corporate monies or other assets;
(e) Made any false or fictitious entry on the books or records of
Seller;
(f) Made any bribe, rebate, payoff, influence payment, kickback,
or other unlawful payment; or
(g) Made any bribe, kickback, or other payment of a similar or
comparable nature, whether lawful or not, to any person or
entity, private or public, regardless of form, whether in
money, property, or services, to obtain favorable treatment in
securing business or to obtain special concessions, or to pay
for favorable treatment for business secured or for special
concessions already obtained.
3.09 AUTHORITY. Seller has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of
Seller have been duly taken to authorize the execution, delivery, and
performance of this Agreement by Seller. This Agreement and all exhibits hereto
have been duly authorized, executed, and delivered by Seller, have been duly
executed and delivered, and constitutes the legal, valid, and binding obligation
of Seller , and is enforceable as to them in accordance with its terms. 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 Seller, for
the execution, delivery, or performance of this Agreement and exhibits by Seller
. No consent of any party to any contract, agreement, instrument, lease,
license, arrangement, or understanding to which Seller is a party, or to which
it or they or any of its or their properties or assets are subject, is required
for the execution, delivery, or performance of this Agreement and exhibits
(except (i)
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such consents referred to in Exhibit 1.01(d) as having been obtained at or prior
to the date of this Agreement, true and correct copies of which have been
delivered to Purchaser or (ii) where the failure to obtain such consents would
not have a material adverse effect); and, except where such breach would not
have a material adverse effect, the execution, delivery, and performance of this
Agreement and exhibits 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 articles of incorporation or by-laws,
as amended, of Seller or violate, result in a breach of, or conflict with any
law, rule, regulation, order, judgment, or decree binding on Seller. Upon the
Closing, Purchaser will have good title, free and clear of all liens,
encumbrances and charges, to all of the Assets except as identified herein.
3.10 ENVIRONMENT, HEALTH, AND SAFETY.
(a) To the knowledge of the Seller, Seller has complied with all
environmental, health and safety laws, except where such
non-compliance would not have a material adverse effect, and
no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or
commenced against any of them alleging any failure so to
comply. Without limiting the generality of the preceding
sentence, Seller has obtained and been in compliance with all
of the terms and conditions of all permits, licenses, and
other authorizations which are required under, and has
complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules,
and timetables which are contained in, all environmental,
health and safety laws, except where such non-compliance would
not have a material adverse effect; and
(b) To the knowledge of the Seller, Seller does not have any
material liability for damage to any site, location or body of
water (surface or subsurface), for any illness of or personal
injury to any employee or other individual, or for any reason
under any environmental, health and safety law, except such
damage that would not have a material adverse effect.
3.11 COMPLETENESS OF DISCLOSURE. To the best knowledge of the Seller, no
representation or warranty by Seller in this Agreement contains or on the date
of the Closing will contain any untrue statement of a material fact or omits or
on the Closing Date will omit to state a material fact necessary to make the
statements made not misleading, except for changes beyond the control of Seller
or unless disclosed by Seller prior to Closing.
3.12 OPERATING LICENSES. Set forth on Exhibit 3.12 hereto is a
description of each Operating License or permit required for the conduct of the
business of Seller, together with the name of the government agency or entity
issuing such license or permit. Such licenses and
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permits are valid and in full force and effect, and will not be terminated or
otherwise adversely affected by the consummation of the transactions
contemplated hereby. Set forth on Exhibit 3.12 is a description of work in
progress for which FCC licenses must be obtained.
ARTICLE IV
PURCHASER'S CONDITIONS PRECEDENT
Except as may be waived in writing by Purchaser, the obligations of
Purchaser hereunder are subject to the fulfillment at or prior to the Closing of
each of the following conditions:
4.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Seller contained herein shall be true and correct in all material respects as
of the Closing, and Purchaser shall not have discovered any material error,
misstatement or omission therein.
4.02 COVENANTS. Seller shall have performed and complied with all
covenants or conditions required by this Agreement to be performed and complied
with by them prior to the Closing.
4.03 PROCEEDINGS. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement.
ARTICLE V
SELLER'S CONDITIONS PRECEDENT
Except as may be waived in writing by Seller the obligations of Seller
hereunder are subject to fulfillment at or prior to the Closing of each of the
following conditions:
5.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Purchaser contained herein shall be true and correct in all material respects
as of the Closing, subject to any changes contemplated by this Agreement, and
Seller shall not have discovered any material error, misstatement or omission
therein.
5.02 COVENANTS. Purchaser shall have performed and complied in all
material respects with all covenants or conditions required by this Agreement to
be performed and complied with by it prior to the Closing.
5.03 PROCEEDINGS. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement.
ARTICLE VI
MISCELLANEOUS
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6.01 AMENDMENT. This Agreement may be amended, modified or supplemented
only by an instrument in writing executed by the party against which enforcement
of the amendment, modification or supplement is sought.
6.02 ASSIGNMENT. This Agreement and any right created hereby shall be
assignable by Purchaser and Seller.
6.03 NOTICE. Any notice or communication must be in writing and given by
depositing the same in the United States mail, addressed to the party to be
notified, postage prepaid and registered or certified with return receipt
requested, or by delivering the same in person. Such notice shall be deemed
received on the date on which it is hand-delivered or on the third business day
following the date on which it is so mailed.
6.04 CONFIDENTIALITY. The parties shall keep this Agreement and its
terms confidential, but any party may make such disclosure after the Closing as
it reasonably considers prudent, but each party will notify the other parties in
advance of any such disclosure. In the event that the transactions contemplated
by this Agreement are not consummated for any reason whatsoever, the parties
hereto agree not to disclose or use any confidential information they may have
concerning the affairs of the other parties, except for information which is
required by law to be disclosed.
6.05 ENTIRE AGREEMENT. This Agreement and the exhibits hereto supersede
all prior agreements and understandings relating to the subject matter hereof,
except that the obligations of any party under any agreement executed pursuant
to this Agreement shall not be affected by this Section.
6.06 COSTS, EXPENSES AND LEGAL FEES. Whether or not the transactions
contemplated hereby are consummated, each party hereto shall bear its own costs
and expenses (including attorney fees).
6.07 SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom, provided the
same can be done without materially altering the purposes and intent of the
parties. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement, a
provision as similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable, provided this
does not materially alter the purposes and intent of the parties
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6.08 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants contained herein shall survive the
Closing and all statements contained in any certificate, exhibit or other
instrument delivered by or on behalf of Seller or Purchaser pursuant to this
Agreement shall be deemed to have been representations and warranties by Seller
or Purchaser, as the case may be, and shall survive the Closing and any
investigation made by any party hereto or on its behalf.
6.09 GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereto shall be governed, construed and enforced in accordance with the
laws of the State of Texas.
6.10 BULK TRANSFER LAWS. The parties hereto waive compliance in all
respects with any applicable bulk transfer laws.
6.11 TERMINATION. Prior to closing, this Agreement may be terminated on
the earlier to occur of: (i) mutual agreement of the Board of Directors of
Seller and Purchaser; (ii) the unilateral decision of the Board of Directors of
Seller and Purchaser; or (iii) 5 days after the signing of the agreement. Any
such termination will be without fault, damage or penalty, monetarily or
otherwise, to any Party to this Agreement.
6.12 LIMITATIONS OF PRESENTATIONS AND WARRANTIES
Not Withstanding anything expressed or implied in or by this
agreement to the contrary, all representations and warranties of the parties
contained herein are limited to "the best of the parties respective knowledge
and belief, after having made a reasonable review of relevant matters.
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SELLER:
EAGLE TELECOM INTERNATIONAL, INC.
a Texas corporation
By: /s/ J. XXXXXX XXXXXX
Name: J. Xxxxxx Xxxxxx
Title: President
PURCHASER:
EAGLE TELECOM INTERNATIONAL, INC.,
a Delaware Company
By: /s/ H. XXXX XXXXXX
Name: H. Xxxx Xxxxxx
Title: Preisdent/CEO
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LIST OF EXHIBITS
Exhibit
NO.
-------
List of Locations......................................................1.01(a)
List of Fixed Assets...................................................1.01(b)
List of Inventory......................................................1.01(c)
List of Contracts, Agreements, Instruments.............................1.01(d)
Employee Contracts.....................................................1.01(da)
List of Prepayments and Adjustments.....................................1.01(e)
List of Accounts Receivable.............................................1.01(f)
List of Accounts Payable................................................1.03(c)
Assumed Liabilities.....................................................1.04
Xxxx of Sale............................................................1.05(a)
UCC Documentation.......................................................1.05(b)
Non-Competition Agreement...............................................1.05(c)
Organization and Qualification - Purchaser..............................2.01
Financial Condition-Purchaser...........................................2.04
Articles of Incorporation and Bylaws....................................2.05
Organization and Qualification - Seller.................................3.01
Financial Condition - Seller............................................3.02
Litigation and Claims...................................................3.04
Potentially Adverse Matters.............................................3.04 (a)
Properties and Leases (held by lease or license)........................3.05
Firm Customer Purchase Orders...........................................3.06
Intellectual Property...................................................3.07
Quotations..............................................................3.08
Operating Licenses......................................................3.12
