EXHIBIT 10.10
MERGER AGREEMENT
THIS MERGER AGREEMENT is made this ___ day of _________, 1999, at
Indianapolis, Indiana by and among Global Marketing Concepts, Inc., a Kentucky
corporation, (hereinafter referred to as "Private Entity"), Xxxxxx X. Xxxxxx, E.
Xxxxx Xxxxxxx, Xxxx Xxxxx, Xx., Xxxxx Xxxxxxx, Jr., Xxxx Xxxxxxx, Xxxxxxxx
Xxxxxxxxx, its shareholders, (hereinafter referred to as "Stockholders" or
"Shareholders"), and XxxXxxxxx.xxx, Inc., a Delaware corporation (hereinafter
referred to as "NetVision").
RECITALS
A. Private Entity is a Kentucky corporation, and presently owns and
operates an Internet Service Provider ("ISP") business, operated from
the locations, identified on SCHEDULE 3.3.5
B. Both NetVision, through its Board of Directors, and Private Entity,
through its Shareholders, Xxxxxx X. Xxxxxx, E. Xxxxx Xxxxxxx, Xxxx
Xxxxx, Xx., Xxxxx Xxxxxxx, Jr., Xxxx Xxxxxxx, Xxxxxxxx Xxxxxxxxx,
believe this Merger to be in the best interests of their respective
business entities.
C. The entities shall merge together, with NetVision surviving the Merger
as the new entity (hereinafter "Merged Companies") which shall be
known as XxxXxxxxx.xxx, Inc. Private Entity shall cease to exist as a
separate legal entity, but shall continue to exist as a part of the
surviving entity.
D. The parties intend for the transactions contemplated by this Agreement
to be accounted for as a tax-free "reorganization" within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code") for federal income tax purposes.
E. As promptly as practicable after the satisfaction or waiver of the
conditions set forth in Section 8 hereof and the consummation of the
Closing referred to in Section 9 hereof, the Parties shall cause the
Merger to be consummated by filing a Certificate of Merger with the
Delaware Secretary of State in accordance with the relevant provisions
of Delaware Law (the time of such filing being the "Effective Time")
and Articles of Merger with the Kentucky Secretary of State in
accordance with the relevant provisions of Kentucky law.
F. Unless otherwise agreed by NetVision and Private Entity the
Certificate of Incorporation of NetVision as the Surviving Corporation
shall be the Certificate of Incorporation of NetVision as in effect
immediately prior to the Effective Time, until thereafter amended as
provided by law and such Certificate of Incorporation.
G. Unless otherwise agreed by NetVision and Private Entity the By-Laws of
NetVision as the Surviving Corporation shall be the By-Laws of
NetVision immediately prior to the Effective Time, until thereafter
amended as provided by law and Certificate of Incorporation and the
By-Laws of Such Surviving Corporation.
H. Unless otherwise agreed by NetVision and Private Entity the directors
and officers of NetVision immediately prior to the Effective Time
shall continue to serve in their respective offices of the Surviving
Corporation from and after the Effective Time, in each case until
their resignation or removal. If, at the Effective Time, a vacancy
shall exist on the Board of Directors or in any office of the
Surviving Corporation, such vacancy may thereafter be filled in the
manner provided by law and the By-Laws of the Surviving Corporation.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the terms identified below in this Section
will have the meanings indicated,
unless a different and common meaning of the term is clearly indicated by the
context.
1.1 Agreement - means this Merger Agreement together with the
Attachments.
1.2 Attachments - means the Schedules and Exhibits referred to herein
and attached hereto.
1.3 Authorization - means any Government consent, license, permit,
grant or other governmental authorization.
1.4 Balance Sheet - means the most recent Balance Sheet available for
Private Entity, a copy of which is attached hereto and marked
SCHEDULE 1.4.
1.5 Closing - means the Closing of the Transaction as described in
Section 9 of this Agreement.
1.6 Closing Date - means the date and time as set forth in Section 9,
or such other date and time as subsequently may be agreed upon by
the parties, in writing. Any reference herein to the Closing Date
for the purpose of establishing a point in time, or calculating a
period of time, means 11:59 p.m., local time on the Closing Date.
1.7 Contract - means any voluntarily entered written or oral
agreement or commitment that is legally binding on any person or
entity under applicable law.
1.8 Court Order - means any judgment, decree, injunction or order of
any federal, state, local or foreign court that is binding on any
person or entity or its property under applicable law.
1.9 Intentionally left blank.
1.10 Diminutive Error - Means any mistake, misrepresentation, failure
to disclose, or other error, which has a net dollar value of less
than Two Thousand Dollars. ($2000.00)
1.11 Effective Date - means the date first above written unless
otherwise agreed to in writing by the Parties.
1.12 Entity - means a corporation, partnership, sole proprietorship,
limited liability company, joint venture or other form of
organization whether formed for the conduct of a business or
profit seeking activity, active or passive, or not for profit.
1.13 Financial Statements - means the Balance Sheet, as defined in
Section 1.4, the Statement of Income and Expenses, as defined in
Section 1.19, and Cash Flow Statements, when referred to
collectively.
1.14 Intellectual Property - means any trade names, trademarks,
service marks, copyrights and work of authorship, and all
registrations and applications for the foregoing, and all
licenses or license rights related to or based upon the
foregoing, software licenses and know-how licenses, trade
secrets, fictitious names, assumed names, all industrial models
and all United States and foreign patent rights covered by,
disclosed in or otherwise related thereto and all registrations
and applications therefor and all reissues, divisions,
continuations-in-part, re-examinations and extensions thereof,
together with the right to xxx for past infringement and
improper, unlawful or unfair use of any of the foregoing.
1.15 Merged Assets - means the assets to be merged and transferred by
Private Entity to NetVision in accordance with this Agreement as
more specifically described in Section 3.3
1.16 Parties - means XxxXxxxxx.Xxx, Inc., Private Entity, and
Stockholder.
1.17 Private Entity - means Global Marketing Concepts, Inc., a
Kentucky corporation.
1.18 Private Entity 's Business - means the existing business
operations (including without limitation, the goodwill and going
concern value), labor relations, customer and supplier relations,
and products, if any, or services, if any, of Private Entity, and
the name Private Entity, or any derivative thereof.
1.19 Statement of Income and Expenses - means the most recent
Statement of Income and Expenses available for Private Entity, a
copy of which is attached hereto and marked SCHEDULE 1.19.
1.20 NetVision - means NetVision .com, Inc., a Delaware Corporation.
1.21 Transaction - means the transaction contemplated by the
Agreement, and the related Attachments.
1.22 Year-End Balance Sheets - means the Balance Sheet for the year
ended December 31, 1998.
1.23 Year-End Statements of Income and Expenses - means the Statements
of Income and Expenses of Private Entity for the year ended
December 31, 1998.
1.24 Year-End Financial Statements - means the Year-End Balance
Sheets, and the Year-End Statement of Income and Expenses.
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SECTION 2 - THE MERGER
2.1 Adoption of Plan of Merger. Both parties have taken all requisite
corporate action prior to the date hereof for the purposes of
adopting and approving this Agreement pursuant to Delaware and
Kentucky law. Upon the closing of the transactions contemplated
by this Agreement, NetVision shall cause a Certificate of Merger
pursuant to this Agreement to be filed with the Secretary of
State of Delaware and Articles of Merger to be filed with the
Secretary of State of Kentucky, and shall cause to be filed such
certificates, documents or instruments as are required to be
filed in such States, any other State required, in order to
effectuate the transactions contemplated by this Agreement.
2.2 General. Private Entity shall be merged with and into NetVision
effective as of the Effective Time and the separate corporate
existence of Private Entity shall thereupon cease. The
Certificate of Incorporation and Bylaws of NetVision as in effect
on the Closing Date shall remain in full force and effect. The
Merger Consideration shall be payable on the date of Closing as
set forth below in Section 3.
2.3 Conversion of Private Entity Shares. By operation of law and
without any further action on the part of NetVision, Private
Entity or the Stockholders, the Private Entity Shares shall be
converted into a number of NetVision Shares and an amount of cash
determined pursuant to Section 3.1 as a result of the Merger of
the two entities. NetVision shall deliver to each Stockholder at
the Closing and/or within a reasonable time thereafter, a share
certificate evidencing ownership of NetVision Shares, as set
forth in the table below, upon surrender to NetVision of the
share certificate or certificates representing such Stockholder's
ownership of Private Entity Shares duly endorsed for transfer or
accompanied by properly executed stock powers.
SECTION 3 - SPECIFIC TERMS OF MERGER
3.1 Merger Consideration by NetVision.
3.1.1 At the Effective Time, by virtue of the Merger and
without any action on the part of NetVision, Private
Entity or the Stockholders, the Private Entity Shares
shall be converted into an aggregate merger
consideration equal to six hundred fifty thousand
dollars ($650,000). Ten Percent (10%) of said merger
consideration, in an amount not less than sixty-five
thousand dollars ($65,000) shall be paid in cash at the
closing. Said amount shall be payable via certified
check(s), wire transfers or other means of immediately
available funds and tendered at the Closing, as set
forth in the Conditions Precedent set forth below in
Section 8. The remainder of the merger consideration
shall be paid in shares of NetVision common stock
pursuant to Section 3.1.2 herein.
3.1.2 The NetVision common stock shares are to be allocated to
the payment of the remainder of the merger consideration
at a rate of one (1) share of NetVision common stock per
Five Dollars ($5) of remaining purchase price (the
"Exchange Ratio"), for a total number of shares equal to
one hundred seventeen thousand (117,000) shares. The
shares of NetVision common stock are to be evidenced by
the issuance of stock certificates for said number of
shares. Said stock certificates shall be tendered at the
Closing, as set forth in the Conditions Precedent set
forth below in Section 8.
3.2 Transfer of Stock by Private Entity. To effectuate this Merger,
the Stockholders of Private Entity shall surrender all
outstanding Private Entity shares to NetVision. The Share
certificate or certificates representing such Stockholder's
ownership of Private Entity Shares shall be duly endorsed for
transfer or accompanied by properly executed stock powers.
3.3 Transfer of Assets by Private Entity. In connection with the
Merger and by operation of law, any and all assets currently held
by Private Entity shall be transferred, surrendered or otherwise
vested in NetVision. The following list of assets in no way
affects the validity of the Merger Agreement,
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nor does it limit the transfer of all assets of Private Entity in
any way, nor does it convert this Agreement to an Asset Purchase
Agreement. The items set forth below are for the mutual
protection of the parties, and are intended only as a guide to
the assets to be transferred. The Merger contemplates the
transfer of all assets of Private Entity, whether specifically
set forth below or not. This agreement does not contemplate the
transfer of any personal assets of the Stockholders, as set forth
on SCHEDULE 3.3. Any assets used in the business, not specified
on SCHEDULE 3.3, shall be transferred to NetVision herewith.
3.3.1 All of the Accounts Receivable of Private Entity , as of
the Closing Date;
3.3.2 All inventory of Private Entity;
3.3.3 All rights to prepaid expenses, as of the Closing Date;
3.3.4 The motor vehicles described in SCHEDULE 3.3.4;
3.3.5 The real property owned by Private Entity; all other fixed
assets owned by Private Entity and used in connection with
the conduct of Private Entity 's business; all right, title
and interest in and to all of Private Entity 's Contracts,
including but not limited to all Private Entity's rights to
any leasehold interest or improvements. SCHEDULE 3.3.5 sets
forth without limitation the real property owned by or used
in the course of Private Entity's business.
3.3.6 Any and all of the Customers and Subscribers of Private
Entity, as reflected by SCHEDULE 3.3.6. Said Schedule is
not intended to be an exhaustive list, rather a guide for
the benefit of the parties. Nothing in this Section, this
contract, nor any attachment, restricts the transfer of all
current, past and prospective customers or clients of
Private Entity.
3.3.7 All manuals, charts, instruction of application, files and
records, signs, customer and marketing-data, engineering
data, plans and blueprints as are used in connection with
Private Entity 's Business, and all documents, papers and
records pertaining to employees, customers and vendors in
connection with Private Entity 's Business, including
accounts receivable and trade payable records; provided,
however, that Private Entity may retain all corporate
records and minute books, all original books of account and
accounting data maintained by Private Entity for financial
reporting and tax reporting purpose;
3.3.8 All Intellectual Property of Private Entity used in
connection with Private Entity's business, and including
all rights Private Entity has to its know-how, trade
secrets, processes, technology, discoveries, patented or
unpatented inventions and designs, formulae and procedures
and other intellectual property, including, but not limited
to, documentation relating to any of the foregoing, all
shop rights and the right to xxx for past infringement or
improper, unlawful or unfair use or disclosure thereof and
the right to apply for patent, design or similar protection
therefore any where in the world;
3.3.9 All assignable authorizations relating to or utilized in
connection with Private Entity's Business, including
without limitation, stationery and other office supplies;
3.3.10 Any and all Private Entity's interest in and to all
telephone, fax and telex numbers, post office box numbers
and all listings pertaining to Private Entity's Business in
all telephone books and directories, stationery, forms,
labels, shipping material, catalogs, brochures, art work,
photographs and advertising and promotional materials. The
telephone, fax, telex numbers and post office box numbers
being identified in attached SCHEDULE 3.3.10;
3.3.11 Rights in, to and under third-party manufacturers'
warranties;
3.3.12 Claims as to which Private Entity is a judgment creditor;
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3.3.13 The goodwill and going concern of value of Private
Entity's Business;
3.3.14 All cash, bank deposits, and marketable securities.
3.3.15 The names Global Marketing Concepts, Inc.;
"xxxxxxxxxxxxxxxxx.xxx"; The Legal Network, Inc.;
Xxxxxxxxxx.xxx, Inc.; Internet Partners, Inc.;
XxxxxxxxXxxx.xxx; or any derivative thereof.
3.3.16 Any and all Internet registered web sites, Internet
addresses, domain names, e-mail registrations, web-site
registrations, or any other internet related license,
registration or technological asset used in the business,
including but not limited to any such items registered with
Internic, or the American Registry for Internet Numbers, in
which Private Entity holds any proprietary or leasehold
interest, including but not limited to the domain names
xxxxxxxxxxxxxxxxx.xxx; The Legal Network, Inc.;
Xxxxxxxxxx.xxx, Inc.; Internet Partners, Inc.;
XxxxxxxxXxxx.xxx, any derivative thereof, or any other name
used in connection with the ISP business contemplated
hereby.
SECTION 4. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
4.1 Representations of Each Stockholder. Each Stockholder severally
and not jointly represents and warrants to NetVision as follows:
4.1.1 Title. Each Stockholder owns beneficially and of record,
and has full power and authority to vote and transfer,
free and clear of any claims, liens or encumbrances, the
Private Entity Shares indicated next to his name below.
Such shares constitute all of the Private Entity Shares
owned by such Stockholder.
NAME OUTSTANDING SHARES PERCENT OWNERSHIP
XXXXXX XXXXXX 221 46.23%
E. XXXXX XXXXXXX 221 46.23%
XXXX XXXXX, XX. 10 2.09%
XXXXX XXXXXXX, JR. 10 2.09%
XXXX XXXXXXX 10 2.09%
XXXXXXXX XXXXXXXXX 6 1.26%
478 100.00%
4.1.2 Authority. Such Stockholder has the full legal right,
power and authority to enter into, execute and deliver
this Agreement and to perform such Stockholder's
obligations hereunder.
4.1.3 This Agreement has been duly executed and delivered by
such Stockholder and is the valid and binding obligation
of such Stockholder enforceable in accordance with its
terms.
4.1.4 The execution and delivery of this Agreement and the
consummation by such Stockholder of the transactions
contemplated by this Agreement will not:
4.1.4.1 require the further approval or consent of any
federal, state, county or local court or other
governmental or regulatory body of the approval
or consent of any other person; or
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4.1.4.2 conflict with or result in a breach or violation
of any of the terms and conditions of, or
constitute (with notice, lapse of time or both)
a default under or a violation of, any statute,
regulation, order, judgment or decree applicable
to any such Stockholder or any instrument,
contract or other agreement, including, but not
limited to, Covenant not to Compete, Stock Lien,
mortgage lien, assignment contract, or any other
contract to which such Stockholder is a party.
4.2 Intentionally left blank (Moved to Section 5.27)
4.3 Intentionally left blank (Moved to Section 5.28)
4.4 Intentionally left blank (Moved to Section 5.29)
4.5 Intentionally left blank (Moved to Section 5.30)
4.6 Restricted Shares. Such Stockholder acknowledges, understands and
agrees
4.6.1 The NetVision Shares set forth as consideration in
Section 3 have not been registered with the Securities
and Exchange Commission (the "SEC") under the Securities
Act of 1933, as amended (the "Securities Act") and have
not been registered under any state securities law. The
NetVision Shares may not be resold or redistributed
without registration under the Securities Act and any
applicable state securities laws, unless an applicable
exemption from such registration is available.
4.6.2 The NetVision Shares being acquired by such Stockholder
under this Agreement, are being acquired for such
Stockholder's own account, for investment purposes, not
for the interest of any other person, firm or entity,
and not with a view to or present intention of reselling
or distributing all or any portion of, or interest in,
the NetVision Shares.
4.6.3 Such Stockholder does not have any right to compel
NetVision to register the NetVision Shares under the
Securities Act or any state securities law and such
Stockholder acknowledges that NetVision has no present
intention of registering the NetVision shares, unless as
specified in a Registration Rights Agreement, and then
only to the extent contained therein, and in the form
attached hereto.
4.6.4 Such Stockholder has such knowledge and experience in
financial and business matters that he is capable by
himself of evaluating the merits and risks of his
investment in the NetVision Shares and of making an
informed investment decision.
4.6.5 Such Stockholder has sought and received competent
professional accounting advice from a qualified
professional with regard to the tax consequences of
owning NetVision Shares and of this transaction in
general.
4.6.6 The certificates evidencing the NetVision Shares shall
bear the following legend:
THE SHARES REPRESENTED BY THIS STOCK CERTIFIED HAVE NOT
BEEN REGISTERED UNDER ANY STATE SECURITIES ACT (THE
"STATE ACTS") OR THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"). THE SHARES CANNOT BE SOLD OR
OTHERWISE DISPOSED OF WITHOUT EITHER REGISTRATION OR AN
EXEMPTION FROM REGISTRATION.
SECTION 5 - JOINT AND SEVERAL REPRESENTATIONS OF XXXXXX, XXXXXXX
AND PRIVATE ENTITY
Xxxxxx, Xxxxxxx and Private Entity, jointly and
severally, represent and warrant to NetVision as follows:
5.1 Organization and Qualification; Capitalization. Private Entity is
a Kentucky corporation duly organized and validly existing under
the laws of the Commonwealth of Kentucky. Private Entity has
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the full corporate power to carry on its business as is now being
conducted.
5.2 The authorized capital stock and the number of shares of capital
stock issued and outstanding for Private Entity is as follows:
AUTHORIZED CAPITAL STOCK: 1,000
ISSUED SHARES: 478
OUTSTANDING SHARES: 478
TREASURY SHARES: 0
5.3 Authority. Private Entity has the full legal right, power, and
authority to enter into, execute and deliver this Agreement and
to perform fully its obligations hereunder.
5.4 This Agreement has been duly executed and delivered by Private
Entity and is the valid and binding obligation of Private Entity
enforceable against Private Entity in accordance with its terms.
5.5 The Board of Directors of Private Entity and the Stockholders
have approved, and no other corporate proceedings are necessary
to authorize, this Agreement and the consummation of the
transactions contemplated by this Agreement.
5.6 The execution and delivery of this Agreement and the consummation
by Private Entity of the transactions contemplated hereby will
not:
5.6.1 conflict with, result in a breach of, or constitute or
result in a default under any of the terms, conditions
or provisions of the Articles of Incorporation or
by-laws or other governing instruments of Private Entity;
5.6.2 require the further approval or consent of any federal,
state, county or local court or other governmental or
regulatory body, or the approval or consent of any other
person; or
5.6.3 conflict with or result in any breach or violation of
any of the terms and conditions of, or constitute a
default (with notice, lapse of time or both) under, or a
violation of, any statute, regulation, order, judgment
or decree applicable to Private Entity or any
instrument, contract or other agreement to which Private
Entity is a party or to which Private Entity is bound or
subject, including without limitation the contracts
identified in Sections 5.10 and 5.26 below.
5.7 Financial Statements/Dividends/Distributions. The balance sheets
of Private Entity as defined in SECTION 1.4, and evidenced by
SCHEDULE 1.4, and the related statements of income and expenses
as defined by Section 1.19, and evidenced by SCHEDULE 1.19
(Collectively the "Financial Statements") fairly, accurately and
completely represent the financial position of Private Entity on
the date of execution of this document in all material aspects,
and the results of operations and cash flows for Private Entity
for the years then ended.
5.8 No dividends or other distributions have been made by Private
Entity to the Stockholders since January 1, 1999 except for
salaries and commissions in the ordinary course of business, or
as set forth in SCHEDULE 5.8.
5.9 Ownership of Operating Assets. Private Entity has good and
marketable title to, or holds a valid lease to, (the "Operating
Leases"), all of its office equipment, furniture, motor vehicles
and other tangible personal property (collectively, the
"Operating Assets") owned or used by it in its business, free and
clear of all restrictions, liens, claims and other encumbrances
except as set forth in SCHEDULE 5.9
5.10 Contracts and Leases. SCHEDULE 5.10 sets forth the contracts and
leases (including office lease) material to the operation of
Private Entity and which have been previously delivered to
NetVision, are valid, binding upon the parties thereto, in full
force and effect and, except as indicated below, have not been
amended or modified. Private Entity will cooperate in having the
contracts and leases set forth
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on SCHEDULE 5.10 assigned to NetVision if requested by NetVision.
Private Entity and NetVision acknowledge that a separate
Agreement reflecting the assignment of the Contracts and Leases
is not required as a result of the merger of Private Entity into
NetVision.
5.11 Intellectual Property Rights. To the best of Xxxxxx'x and
Xxxxxxx'x knowledge Private Entity owns, or holds adequate
licenses to, the intellectual property used in its business,
including, without limitation, trademarks, service marks,
copyrights, patents, and computer software and data bases, free
and clear of all restrictions, liens, claims and other
encumbrances, and such use does not and will not conflict with,
infringe on, or otherwise violate any rights of others.
5.12 Stockholders: Stockholder Benefits. The Stockholder benefits
programs set forth in SCHEDULE 5.12 constitute the only
Stockholder benefit programs in effect for Private Entity prior
to the date of this Agreement.
5.13 Employee Benefit Programs. The Employee Benefit programs set
forth in SCHEDULE 5.13 constitute the only Employee benefit
programs in effect for Private Entity prior to the date of the
Agreement.
5.14 Insurance. Private Entity has in place and in full force and
effect, hazard and liability insurance policies with coverage
amounts and deductibles as set forth in SCHEDULE 5.14.
5.15 Insurance Coverage. The Stockholders and Private Entity shall
take all action reasonably necessary to maintain, in the name and
for the benefit of NetVision, all insurance policies of Private
Entity, until the Closing.
5.16 Bank Accounts. Xxxxxx, Xxxxxxx and Private Entity shall take all
action reasonably necessary to maintain the current bank
accounts, lock boxes and other depositories of Private Entity,
until the Closing Date.
5.17 Permits, Licenses and Compliance with Laws. For this Section,
Xxxxxx, Xxxxxxx and Private Entity represent and warrant that
they have no actual knowledge, nor any reason to know of any
violations, and to the best of their knowledge:
5.17.1 Private Entity maintains in full force and effect, all
permits, licenses and approvals from federal, state,
local and foreign governmental and regulatory bodies
required in order to carry on its business.
5.17.2 Private Entity is in compliance in all material
respects with all federal, state and local laws,
ordinances, codes, regulations, orders, requirements,
standards and procedures which are applicable to its
business.
5.17.3 Neither Private Entity nor any officer, director or
agent of Private Entity has been convicted of, charged
with, or to the knowledge of Private Entity, Xxxxxx, or
Xxxxxxx investigated for a violation of federal or
state law related to fraud, theft, embezzlement, breach
of fiduciary responsibility, or financial misconduct,
including but not limited any violation of the
Securities Act, or State Securities Law; or has been
subject to any order or consent decree of, or criminal
or civil fine or penalty imposed by, any court of
governmental agency.
5.18 Litigation. Except as set forth in SCHEDULE 5.18, (the
"Litigation Schedule") there are no claims, complaints, suits,
actions and judicial, regulatory, arbitration or governmental
actions, proceedings or investigations pending, or to the
knowledge of Xxxxxx, Xxxxxxx or Private Entity threatened, or
anticipated, including actions known, or actions that Xxxxxx,
Xxxxxxx or Private Entity have reason to know, against Private
Entity, or any of their respective officers, directors or agents.
5.19 Tax Payments and Returns. Private Entity has delivered to
NetVision true and complete copies of its federal, state and
local income tax returns for its tax year ended December 31,
1998. Except as set forth on Schedule 5.19, Private Entity has
filed all tax reports and returns required to be filed by it
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through the date of this Agreement and has paid all taxes and
other related charges (including interest and penalties) due or
claimed to be due from it by foreign, federal, state or local
taxing authorities. To the best of Xxxxxx'x and Xxxxxxx'x
knowledge, no taxing authority has audited any portion or a tax
return relating to Xxxxxx, Xxxxxxx or Private Entity, and there
are no notices of audit, pending questions relating to, or claims
asserted for, taxes or assessments received by or made against
any Private Entity.
5.20 Corporate Documents and Minute Books; Officers and Directors. The
minutes of corporate proceedings, stock transfer records,
Articles of Incorporation (or Certificate of Incorporation) and
Code of Regulations (or by-laws) of Private Entity have been
delivered to NetVision and are correct and complete, accurately
reflect all actions and proceedings of the Stockholders and Board
of Directors of Private Entity to date.
5.21 Brokers/Fees. Negotiations related to this Agreement and the
transactions contemplated hereby have been carried on by the
Stockholders and Private Entity, and no brokerage or finders'
fees are payable by any Stockholder or Private Entity to any
other party in connection with this Agreement or the transactions
contemplated hereby.
5.22 Adverse Changes. Since, November 30, 1999, Private Entity has not
suffered any material adverse changes in its financial condition,
assets, liabilities or business or any material damage,
destruction or loss to its assets, whether or not covered by
insurance.
5.23 Operations in the Ordinary Course. Except as set forth on
Schedule 5.23, since November 30, 1999, Private Entity has been
operated only in the normal and ordinary course, and has not:
5.23.1 Issued or committed to issue any capital stock or other
ownership interest therein; 5.23.2 granted or committed
to grant any options, warrants, convertible securities
or other rights to subscribe for, purchase or otherwise
acquire any shares of its capital stock or other
ownership interest therein;
5.23.3 entered into any material agreement to make capital
expenditures;
5.23.4 entered into any agreement relating to the borrowing of
money or other contract for indebtedness, or the
guarantee of any obligation for the borrowing of money;
5.23.5 entered into any material real or personal property
lease; or
5.23.6 entered into, modified, or canceled any other
agreement, contract or commitment which is not
terminable at will.
5.24 Third Party Consents. The Stockholders and Private Entity have
obtained and delivered, or will obtain and deliver by the Closing
Date, to NetVision the consent or approval of each third party
whose consent or approval is required or deemed necessary by
NetVision for the consummation of the transactions contemplated
by this Agreement.
5.25 Transactions with Related Parties. Except for the employment of
the Stockholders and as set forth on Schedule 5.25, there are no
contracts, leases, loans, commitments, transactions, arrangements
or other understandings, oral or written, between Private Entity
and any Related Party. For purposes of this Section, the term
"Related Party" means (a) any Stockholder, (b) the spouse, lineal
descendant or other family member of a Stockholder, (c) any
corporation, partnership, trust, limited liability company, or
other entity controlled by, or under common control with a
Stockholder, (d) any officer, director or Stockholder of Private
Entity, and (e) any person who is a member, partner or
Stockholder in any relationship or similar form of business
association with any person or entity referred to above.
5.26 Disclosure. To the best knowledge of Xxxxxx and Xxxxxxx and to
the best knowledge of Private Entity, no representation or
warranty by Xxxxxx, Xxxxxxx or Private Entity, or any document,
written statement or certificate furnished to NetVision pursuant
to this Agreement, contains any untrue statement of material fact
or omits to state a fact necessary in order to make the
statements contained herein or therein not misleading.
5.27 Private Entity Liabilities. SCHEDULE 5.27 sets forth those
certain liabilities of Private Entity, which NetVision shall
assume pursuant to the terms of the Merger. These liabilities are
categorized as
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liabilities not incurred in the normal course of business and
include, but are not limited by, all obligations due from Private
Entity to its past and present Stockholders, any debt incurred to
raise capital financing, current and past litigation claims, and
any other debt not incurred in the Ordinary Course of Business.
There are no additional debts of Private Entity not incurred in
the Normal Course of Business. The payment of the SCHEDULE 5.27
liabilities will become the obligation of NetVision from and
after the Effective Time and shall be paid in the ordinary course
of business.
5.28 Private Entity Liabilities incurred in the normal course of
business. SCHEDULE 5.28 sets forth as of the date hereof those
other obligations of Private Entity incurred in the ordinary
course of business and which remain due and owing as of the date
hereof. Where exact amounts of these liabilities cannot be
determined on the Closing Date, Private Entity shall indicate the
estimated amount due and owing. The payment of the SCHEDULE 5.28
liabilities will become the obligation of NetVision from and
after the Effective Time and shall be paid in the ordinary course
of business.
5.29 NetVision Review and Acceptance. The closing of this transaction
is contingent upon NetVision's review of the revised Schedules
5.27 and 5.28 (collectively "the Liability Schedules")which the
Private Entity shall deliver on the Closing Date. NetVision's
acceptance of said liabilities shall not in any manner modify,
limit, or invalidate the representations and warranties of
Private Entity and the Stockholder as contained in the Agreement,
including but not limited to the representations, warranties and
indemnification specifically pertaining to the accuracy of the
liabilities listed in the Liability Schedules. No action, or
inaction by NetVision, or any other party, including, but not
limited to, Private Entity or Stockholder, nor any provision in
this contract, or any other contract, writing, agreement, oral or
otherwise, shall in any manner modify, limit, or invalidate the
representations, warranties and indemnification by Private Entity
and the Stockholder with respect to the Liability Schedules.
5.30 Tax Payments and Returns. Private Entity has filed all tax
reports and returns required to be filed through the date of this
Agreement and has paid all taxes and other related charges
(including interest and penalties) due or claimed to be due from
Private Entity, by federal, state, local or foreign taxing
authorities, except as where indicated on SCHEDULE 5.5 and
SCHEDULE 5.19. Xxxxxx or Xxxxxxx has no actual knowledge, nor any
reason to know, that any taxing authority has audited any portion
of Private Entity 's tax return, and has no actual knowledge, nor
any reason to know, that there are any notices of audit, pending
questions relating to, or claims asserted for, taxes or
assessment received by or made against Private Entity.
5.31 Indemnification. For a period commencing on the Closing Date and
continuing for twenty-four months thereafter, Xxxxxx and Xxxxxxx,
jointly and severally, agree to defend, hold harmless and
indemnify NetVision or any affiliate thereof from any and all
liabilities or claims attributable to or arising out of a breach
of a Shareholder's or Private Entity's representations and
warranties, including without limitation the representations and
warranties in connection with the Liability Schedules, that in
the aggregate exceed the Diminutive Error, made by or on behalf
of any person, corporation, estate or other legal entity;
provided, however, that in no event shall Xxxxxx and Xxxxxxx be
liable for any liabilities or claims in excess of $650,000 and
Xxxxxx and Xxxxxxx may satisfy any claim in excess of $65,000 by
tendering cash or NetVision Shares which shall be valued at $5.00
per share or a combination thereof. The parties hereby agree that
the indemnification provisions contained in this Section 5.31
shall be NetVision's sole remedy at law or in equity in
connection with a breach of the representations and warranties
contained in Sections 4 and 5 of this Agreement. Notwithstanding
the language contained herein, nothing limits or restricts
Xxxxxx'x liability or Xxxxxxx'x liability for acts of fraud.
5.32 Articles of Merger. After the Closing, Xxxxxx, Xxxxxxxx and
Private Entity shall cooperate with NetVision in full and it
shall not take any action to hinder, delay, or prevent, the
filing of the Certificate of Merger and Articles of Merger with
the respective Secretary of State of Delaware and Commonwealth of
Kentucky.
SECTION 6 - REPRESENTATIONS AND WARRANTIES OF NETVISION
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6.1 Organization and Good Standing. NetVision is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware, registered to conduct business in every
jurisdiction where the failure to qualify would have an adverse
impact on its ability to perform its obligations hereunder,
including, the State of Indiana and the Commonwealth of Kentucky.
NetVision has full corporate power to carry on its business as it
is now being conducted.
6.2 Authority. NetVision has the full legal right, power and
authority to enter into, execute and deliver this agreement, and
to perform its obligations under this agreement. This agreement
has been duly executed and delivered by authorized officers of
NetVision and is the valid and binding obligation of NetVision,
enforceable in accordance with its terms. The execution and
delivery of this agreement and the consummation by NetVision of
the transactions contemplated will not:
6.2.1 Conflict with, result in a breach of, or constitute or
result in a default under any of the terms, conditions
or provisions of the Certificate of Incorporation,
Articles of Incorporation, By-laws, or other governing
documents of NetVision.
6.2.2 Require the further approval or consent of any federal,
state, county or local court, or other Government or
regulatory body or the approval or consent of any other
person.
6.2.3 Conflict with or result in a breach or violation of any
of the terms and conditions of, or constitute (with
notice, lapse of time, or both) a default under or a
violation of, any statute, regulation, order, judgment
or decree applicable to NetVision, or any instrument,
contract or other agreement to which NetVision is a
party.
6.3 The authorized capital stock and the number of shares of capital
stock issued and outstanding for NetVision is as follows:
AUTHORIZED SHARES ISSUED SHARES PERCENT
TELECOMM 2,000,100 89.997%
XXX.XXX OWNERS 222,318 10.003%
TOTAL 3,000,000 2,222,418 100.000%
6.4 Brokers / Fees. Negotiations related to this agreement and the
transactions contemplated hereby have been carried on by
NetVision and no brokerage or finders' fees are payable by
NetVision to any other party in connection with this agreement or
the Transactions contemplated hereby.
6.5 Payment of Liability Schedule Indebtedness. By operation of law
without further action by the parties, NetVision shall assume any
and all liabilities listed on the LIABILITY SCHEDULES after the
Effective Time of the Merger. With regard to any liability listed
on said LIABILITY SCHEDULES, where Stockholder has personally
guaranteed the same, NetVision agrees to indemnify and hold
harmless the Stockholder to the extent such Stockholder is
obligated to perform pursuant to such guaranty.
6.6 Articles of Merger. The preparation and acceptance of a
Certificate of Merger and Articles of Merger shall not be a
Condition Precedent to the Closing of this Agreement. Both
parties represent and warrant that they will cooperate with the
other party in full and that they will not take any action to
hinder, delay, or prevent, the filing of the Certificate of
Merger or Articles of Merger with the respective Secretary of
State of Delaware and Kentucky.
6.8 Acquisition of Stock for Investment. NetVision is acquiring the
Private Entity shares for investment and not with a view toward,
or for sale in connection with, any distribution thereof, nor
with any present intention of distributing or selling such shares
of Private Entity. NetVision agrees that such shares of Private
Entity may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of without registration under
the 1933 Act, as amended, except pursuant to an
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exemption from registration available under such Act. NetVision
will not sell, offer to sell or solicit offers to buy any of the
shares of Private Entity in violation of the 1933 Act or the
securities law of any state.
6.9 Disclosure. No representation or warranty by NetVision, or any
document, written statement or certificate furnished to Private
Entity or the Stockholders in connection with this Agreement,
contains any untrue statement of material fact or omits to state
a fact necessary in order to make the statements contained herein
or therein not misleading.
6.10 Indemnification. For a period commencing on the Closing Date and
continuing for twenty-four months thereafter, NetVision agrees to
defend, hold harmless and indemnify each of the Shareholders and
their respective personal representatives, heirs and assigns from
any and all liabilities or claims attributable to or arising out
of a breach of NetVision's warranties that in the aggregate
exceed the Diminutive Error, made by or on behalf of any person,
corporation, estate or other legal entity; provided, however,
that in no event shall NetVision be liable for any liabilities or
claims in excess of $650,000, except in the event of fraud.
SECTION 7- MISCELLANEOUS
7.1 Further Acts. The parties agree to perform any further acts and
to execute and deliver any other documents, which may be
reasonably necessary to carry out the intent and provisions of
this Agreement.
7.2 Assignment. None of the parties may assign any part of this
Agreement without the prior written consent of the other parties,
except that NetVision may assign its rights or obligations hereto
to Telecomm Industries, so long as NetVision remains a controlled
subsidiary thereof.
7.3 Headings. The clause headings appearing in this Agreement have
been inserted for the purpose of convenience and reference. They
do not purport to, and will not be deemed to, define, limit or
extend the scope or intent of the clauses to which they apply,
and they will not be considered in construing the terms of this
Agreement.
7.4 Investigation Will Not Constitute A Waiver. No investigation, or
lack thereof, by NetVision, or any of its agents, will be deemed
to constitute or imply a waiver of any rights of NetVision may
have, including any right to indemnification as the result of any
material misrepresentation, or breach of warranty, or covenant in
favor of NetVision as otherwise provided in this Agreement.
7.5 Counterparts. This Agreement may be executed in several
counterparts, each of which when so executed will be deemed to be
an original for all purposes.
7.6 Partial Invalidity. If any provision of this Agreement is invalid
or is held illegal or unenforceable, then notwithstanding any
such invalidity, illegality, or unenforceablility of such
provision, the remainder of this Agreement will subsist and will
be in full force and effect as though such invalid, illegal or
unenforceable provision had been omitted form this Agreement.
7.7 Entire Agreement. This Agreement embodies the entire agreement of
the parties as to the subject matter herein contained. There are
no promises, terms, conditions or obligations other than those
contained herein; and this Agreement will supersede all previous
communications, representations, or agreements, either verbal or
written, between the parties hereto. Without limiting the
foregoing, no letter, telegram, or other communication passing
between the parties hereto, concerning any matter during the
negotiation of this Agreement, will be deemed a part of this
Agreement, nor will it have the effect of modifying or adding to
this Agreement. The foregoing notwithstanding, the parties hereby
acknowledge and agree that Private Entity and the Shareholders
have not delivered the disclosure schedules referenced in this
Agreement and that until the Closing of this transaction, the
failure to disclose any information on such schedules which could
make the representations and warranties contained herein true,
accurate or not misleading shall not constitute a breach of this
Agreement. Notwithstanding any other language
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to the contrary, for the purpose of this paragraph, the filing of
Articles of Merger with the Kentucky Secretary of State and a
Certificate of merger with the Delaware Secretary of State shall
be sufficient evidence of said Closing.
7.8 Additional Documents. Each party will execute and deliver, to
either party, subsequent to the Closing, such other documents or
instruments as may be reasonably necessary to effectuate the
provisions and purpose of this Agreement. Without limitation of
the generality of the foregoing, Private Entity will perform all
reasonable acts to cause any licenses or permits issued to
Private Entity to be assigned or transferred to NetVision in
order that NetVision may conduct Private Entity 's Business
subsequent to the Closing as herein contemplated.
7.9 No Amendment. No amendment, modification, change or discharge of
any term or provision of this Agreement will be valid or binding
unless the same is in writing and signed by all the parties
hereto. No waiver of any of the terms of this Agreement will be
valid unless signed by the parties against whom such waiver is
asserted.
7.10 Gender. All terms and words used in this Agreement, regardless of
the number and gender in which they are used, will be deemed and
construed to include any other number, singular or plural, and
any other gender, masculine, feminine, or neuter, as the context
or sense of this Agreement, or any other section or clause
herein, may require, the same as if such words had been fully and
properly written in the required number and gender.
7.11 Time Periods. Any action required hereunder to be taken within a
certain number of days will be taken within that number of
calendar days; provided, however, that if the last day for taking
such action falls on a weekend or a holiday, the period during
which such action may be taken will be automatically extended to
the next business day.
7.12 Construction. This Agreement has been prepared by the joint
efforts of the respective attorneys for each of the parties. This
Agreement should be interpreted fairly, and not strictly
construed against either party.
7.13 No Third Party Beneficiaries. The parties affirmatively state
that they do not intend to confer any legal or contractual rights
or benefits upon any third persons or Entities, either directly
or incidentally, and all legal rights, duties and obligation set
forth in this Agreement will bind and benefit only the parties
hereto.
7.14 Notices. Any notice or demand required or permitted to be given
hereunder, will be in writing, signed by the party giving or
making the same, and will be delivered by certified mail, return
receipt requested, or by personal hand delivery, to all parties
hereto at their respective addresses hereinafter set forth. In
the event that delivery of any such notice or demand cannot be
effected as aforesaid, the same may be served by any method
authorized for the service of legal process as set forth in the
Kentucky Rules of Civil Procedure. Any party hereto will have the
right to change the place to which any such notice or demand, or
other written instrument will be sent to him by similar notice
sent in a like manner to all parties hereto. The date of mailing
of any such offer or demand, if applicable, will be deemed to be
the date of such offer or demand and will be effective form that
date. The addresses of the parties to this Agreement are as shown
herein below.
To Shareholder(s) Set Forth on SCHEDULE 7.14
To the Company: XxxXxxxxx.xxx, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 000.
Xxxxxxxxxxxx, XX 00000
Attn.: Xx. Xxxx Xxxxxxxxxxxxx, CEO and Chairman of the Board
Attn: Xx. Xxxxxxxx Xxxxx, General Counsel
7.15 Binding. This Agreement will bind and inure to the benefit of the
parties hereto, their respective assigns, and personal
representatives and successors.
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7.16 Incorporation by Reference. All Exhibits Schedules and documents
attached hereto will be deemed to be incorporated herein by
reference as though fully set forth.
7.17 Competent Professional Advice. All parties to this agreement have
reviewed this agreement with competent legal counsel. Both
parties have sought and obtained legal counsel and certified
public accountants with respect to this agreement and the
transactions contemplated therein. Both parties, therefore, enter
this agreement, knowingly, intentionally, and intelligently.
7.18 Professional Fees. Each Party shall bear the expense of any
Professional Fees, including, but not limited to, Attorney fees,
Accountant fees, or Investigative fees. However, notwithstanding
this paragraph, in the event of a Breach of this Agreement, the
breaching party shall be responsible for Attorney fees and costs
of collection.
7.19 Choice of Law. The Parties all consent to the non-exclusive
subject matter and personal jurisdiction of the State of Indiana
and State of Kentucky. Non-exclusive preferred venue lies in the
Xxxxxxxx Xxxxx, Xxxxxx xx Xxxxxx, Xxxxx of Indiana.
7.20 Post Closing Covenants of NetVision.
7.20.1 NetVision shall not require the business of Private
Entity to relocate to the Offices of Winnet
Communications, Inc., a Kentucky corporation
("Winnet"), until such time as Winnet has been finally
acquired by NetVision.
7.20.2 Within 30 days following closing, NetVision shall use
its best efforts to cause each creditor or other
obligee of Private Entity to release any personal
guaranty of the Shareholders securing any debt or other
obligation of Private Entity as set forth on the
LIABILITY SCHEDULES.
7.20.3 So long as a Shareholder or his/her spouse remains a
shareholder of NetVision, NetVision shall provide or
cause to be provided to such Shareholder or such
Shareholder's spouse free of any charge, two internet
access accounts. So long as Xxxxxxx or his spouse
remains a shareholder of NetVision, NetVision shall
provide or cause to be provided to Xxxxxxx or Xxxxxxx'x
spouse free of any charge, eight additional internet
access accounts. These access accounts shall be at the
fastest access speeds then utilized by at least 33% of
the residential consumers in the Shareholder's local
market or such lesser speed as the Shareholder may
choose and shall include the most common and widely
used services.
SECTION 8 - CONDITIONS PRECEDENT
8.1 Termination at will until Closing. Either Party may terminate
this Agreement without liability until the transaction set forth
herein becomes effective, as defined by satisfactory Closing set
forth in Section 9.
8.2 Good Faith Progress. All parties intend to Close this transaction
as set forth below in Section 9, and will take any and all
reasonable action to do the same. Failure or refusal to Close as
a result of the failure to satisfy any of the following shall be
deemed a good faith failure and as such allows a termination
without liability.
8.2.1 Completion and delivery of all Schedules and Exhibits as
referenced in this agreement by both parties, and
acceptance of the same by both parties.
8.2.2 Successful completion of due diligence as performed by
auditors, attorneys or agents of NetVision.
8.2.3 Execution of the mutually acceptable Non-Competition
Agreement by NetVision and
14
Xxxxxxx, in substantially the same form as attached as
Exhibit A.
8.2.4 Execution of the mutually acceptable Employment
Agreement by Netvision and Xxxxxx, , in substantially
the same form as attached as Exhibit B.
8.2.5 Execution of a mutually acceptable Registration Rights
Agreement by all parties, in substantially the same form
as attached as Exhibit C.
8.2.6 Execution of the Document titled Checklist of Merger,
attached as Exhibit D. Said document has no binding
effect other than to reflect the parties understanding
regarding the necessary documentation to effectuate this
Merger.
8.2.7 Execution and Delivery of Certified Corporate
Resolutions authorizing this Merger transaction by both
parties.
SECTION 9 - CLOSING
9.1 Upon the Closing as set forth below, this Agreement shall become
a legally binding, valid and enforceable Agreement, and shall
supersede any previous Agreement executed by and between the
Parties on the same subject matter, including but not limited to
the Letter of Intent and any previously executed Merger
Agreement.
9.2 The Closing of this transaction shall be deemed an express
representation that there have been no material changes by,
between or among, any of the parties hereto, since the execution
of this Merger Agreement.
9.3 Closing Date and Time. The Closing shall take place on the 11th
day of January, 2000 at 9:00am, or such other date and time as
subsequently may be agreed upon by the parties, in writing. Any
reference herein to the Closing Date for the purpose of
establishing a point in time, or calculating a period of time,
means 11:59 p.m., local time on the Closing Date.
9.4 Transfer of Business. Upon the successful Closing of this
transaction, NetVision and Private Entity shall become one
entity, and Private Entity shall cease to exist as a valid and
legally existing entity. Any and all business transactions, or
activities, as contemplated by this agreement, shall be
transferred to NetVision. In no event shall this clause, or any
other clause in this contract, be construed to effect the
Representations, Warranties or Indemnification as set forth by
both parties in this agreement.
15
IN WITNESS WHEREOF, the parties have signed this Agreement, consisting
of 16 pages. The intent of the Parties is to be legally bound thereby.
Signed in the Presence of the following, and on the date first indicated on this
agreement:
GLOBAL MARKETING CONCEPTS, INC.
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
NETVISION .COM, INC. (NetVision)
By:
------------------------------------
Xxxx X. Xxxxxxxxxxxxx, CEO and
Chairman of the Board
STOCKHOLDERS
-------------------------
Xxxxxxx X. Xxxxxx, Individually
-------------------------
E. Xxxxx Xxxxxxx, Individually
-----------------------------
Xxxx Xxxxx, Xx., Individually
-----------------------------
Xxxxx Xxxxxxx, Jr., Individually
-----------------------------
Xxxx Xxxxxxx, Individually
-----------------------------
Xxxxxxxx Xxxxxxxxx, Individually
16
