ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement (this “Agreement”) is entered into this 19th
day of
April 2004 by and between Snap2 Corporation, a Nevada Corporation (“Purchaser”),
and Call Now America Prepaid, LLC a Florida Limited Liability Company
(“Seller”).
BACKGROUND
WHEREAS,
Seller
is engaged in the business, among others, of the distribution and sales of
prepaid phone cards (the “The Business”);
WHEREAS,
based
upon the representations, covenants, agreements and warranties herein made
by
Seller and subject to the terms and conditions contained in this Agreement,
Purchaser wishes to purchase and acquire substantially all of the assets and
business, but none of the liabilities, of Seller’s Business and to continue to
operate the The Business;
WHEREAS,
based
upon the representations, covenants, agreements and warranties herein made
by
Purchaser, and subject to the terms and conditions contained in this Agreement,
Seller wishes to sell, transfer, convey, assign and deliver to Purchaser the
The
Business and substantially all of Seller’s assets, but none of the liabilities,
connected solely to the The Business, and
WHEREAS,
Seller
and Purchaser wish to provide for the foregoing transactions.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual promises and covenants set forth
below, the parties hereto hereby agree as follows:
1.
Assets
1.1
Assets
to be Sold.
Subject
to the terms and conditions set forth in this Agreement, at the Closing (as
defined in Section 6.1 hereof) Seller shall sell, transfer, convey, assign
and
deliver to Purchaser, and Purchaser shall purchase and acquire from Seller,
all
of Seller’s right, title and interest in and to Seller’s assets (wherever
located, tangible and intangible, real, personal or mixed, whether known or
unknown and whether or not carried on the books and records of Seller) that
are
used in the The Business, and The Business (and the goodwill associated
therewith) as a going concern (the “Assets”), including, but not limited to, the
following, and excluding any liabilities associated with the Assets, including,
without limitation, any employment or severance contracts/arrangements, buy
and
sell agreements, real estate or equipment finance leases, mortgages, secured
or
unsecured indebtedness, all tax liabilities, ongoing utility and maintenance
expenses, vacation liabilities and any other amounts accrued to the benefit
of
Seller’s employees (hereinafter, the “Liabilities”), for all of which
Liabilities Seller shall remain solely and exclusively responsible:
(a)
all
of Seller's rights under all contracts, agreements, arrangements, commitments,
instruments and understandings ("Contracts") to which Seller is a party which
relate solely to the The Business;
(b)
all
of Seller's records, files, books, documents as they pertain to the The
Business. To the extent legally possible, all related manufacturer/vendor
certifications and authorizations and other data relating solely to the The
Business;
(c)
all
of Seller's confidential data as it relates solely to the The
Business;
(d)
all
municipal, state and federal franchises, permits, licenses and authorizations
held or used by Seller as they relate solely to the The Business;
(e)
all
of Seller's copyrights, trademarks, service marks, trade names, domain names
and
URLS related to the The Business, it being understood and agreed that Seller
shall, at Seller’s sole expense, execute all such documents and take all such
actions as are necessary or appropriate to effectuate the assignment to
Purchaser of all of Seller’s rights, title and interests (hereinafter,
“Intellectual Property Rights”) in and to the aforementioned.
(f)
the
Sellers established distribution channel which amasses in excess of 300,000
retail locations throughout the United States.
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2.
Consideration.
2.1
Closing
Payment.
As the
total consideration for the Assets to be sold by Seller to Purchaser pursuant
hereto at the Closing, Purchaser shall convey to Seller 3,000,000 shares of
Snap2 Corporations Rule 000 Xxxxxxxxxx Xxxxxx stock (the “Purchase Price”).
2.2
Post
Closing Payment.
Seller
shall have the right to purchase 1,000,000 shares of Snap2 Corporations
restricted common stock at $0.25 per share upon the Purchaser successfully
acquiring 25,000 sales locations utilizing the assets purchased in this
agreement. Additionally, Seller shall have the right to purchase and additional
1,000,000 shares of Snap2 Corporations restricted common stock at $0.25 per
share upon the Purchaser successfully acquiring and additional 25,000 sales
locations (total of 50,000) utilizing the assets purchased in this
agreement.
2.3
Employment
Agreement.
Purchaser will be employed by the Purchaser as per the employment agreement
in
addendum 1
3.
Representations
and Warranties of Seller.
Seller
represents and warrants to Purchaser as follows:
3.1.
Corporate
Organization.
Seller
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Florida, and has the requisite corporate power and
authority to own, lease or otherwise hold the assets owned, leased and held
by
it and to carry on the Business as currently conducted by it. Seller is duly
qualified to conduct business as a foreign corporation in the states listed
on
Schedule 3.1 hereto.
3.2
Subsidiaries.
Except
as set forth on Schedule 3.2 hereto, Seller does not directly or indirectly
own
any capital stock or other interest in any entity.
3.3
Authorization
and Effect of Agreement.
Seller
has the requisite corporate power to execute and deliver this Agreement and
to
perform the transactions contemplated hereby to be performed by Seller. The
execution and delivery by Seller of this Agreement and the performance by Seller
of the transactions contemplated hereby to be performed by Seller have been
duly
authorized by all necessary corporate action on the part of the Seller. This
Agreement has been duly executed and delivered by Seller and, assuming the
due
execution and delivery of this Agreement by Purchaser, constitutes a valid
and
binding obligation of Seller, enforceable in accordance with its terms.
3.4
Absence
of Conflicts.
The
execution and delivery of this Agreement by Seller does not, and the performance
by Seller of the transactions contemplated hereby to be performed by it will
not, conflict with, or result in any violation of, or constitute a default
(with
or without notice or lapse of time, or both) under, or give rise to a right
of
termination, cancellation or acceleration of any obligation or loss of a
material benefit under, (i) any provision of the Certificate of Incorporation
or
Bylaws of Seller or any Contract set forth on Schedule 3.12 hereto,(ii) any
license, permit or approval (“Permit”) of any domestic or foreign court,
government, governmental agency, authority or instrumentality (“Governmental
Authority”), (iii) any domestic or foreign statute, law, ordinance, rule,
regulation, order or common law obligation (“Law”) of any Governmental Authority
issued or applicable to Seller or to any of its properties or assets, other
than
any such conflicts, violations or defaults which would not have a material
adverse effect upon the business, financial condition or results of operations
of Seller or the Business ( a “Material Adverse Effect”). No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Authority is required to be obtained or made by or with respect
to
Seller in connection with the execution and delivery of this Agreement by Seller
or the performance by Seller of the transactions contemplated hereby to be
performed by it.
3.5
Statement
of Profit and Loss and Related Matters.
(a) Set
forth on Schedule 3.5(a) hereto is a statement of Profit and Loss pertaining
to
the The Business as of March 31, 2004 (the “P&L”). The P&L was prepared
in accordance with generally accepted accounting principles and presents fairly,
in all material respects, the results of operations of the The Business as
of
such date.
(b)
Except as set forth on Schedule 3.5(b) hereto, and except for such transactions
as are provided for in this Agreement, since March 31, 2004, Seller has
conducted its business in the ordinary course and there has been no material
adverse change in the business, financial position or results of operations
of
Seller.
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3.6
Compliance
With Laws.
The
Business is not being operated in violation of any applicable Law of any
Governmental Authority or in violation of any Permit or other specific
authorization issued by a Governmental Authority to Seller.
3.7
Legal
Proceedings.
Except
as set forth on Schedule 3.7 hereto, there are no lawsuits or other legal
proceedings pending against Seller or otherwise relating to the conduct of
the
Business or, to the knowledge of Seller, threatened in writing against Seller.
3.8
Assets.
(a)
Seller owns all assets being sold in this transaction free and clear of all
liens, claims or encumbrances of any nature whatsoever.
(b)
Seller has good and marketable title to or, in the case of leases and licenses,
valid and subsisting leasehold interests or licenses in, all of its material
properties and assets, including without limitation all property reflected
on
the Balance Sheet.
3.9
Intellectual
Property.
Except
as set forth on Schedule 3.9 hereto, Seller owns or possesses the right to
use
all trademarks, trade names, service marks, registered copyrights and
applications therefor (collectively, “Intellectual Property Rights”) used in the
Business. Except as set forth on Schedule 3.9 hereto, there has been no claim
against Seller asserting a material conflict with the Intellectual Property
Rights of others in connection with the conduct of the Business. Seller hereby
agrees to defend, indemnify and hold harmless Purchaser from and against any
claims of infringement disclosed on the said Schedule 3.9.
3.10
Material
Contracts.
Except
as set forth on Schedule 3.10 hereto, Seller is not a party to any written
(i)
contract of employment, (ii) contract with any labor union, (iii) single
contract for the purchase by Seller of goods or services in excess of $50,000
(iv) lease as lessee of, or other contract for the use of any real or personal
property having in any individual case annual rental or payment obligations
of
Seller in excess of $50,000, (v) conditional sale agreement, chattel mortgage
or
other security agreement in excess of $50,000 in any one case, (vi) contract
for
the production, supply or servicing by Seller of any type of goods, parts or
components, or for the provision by Seller of services of any type, involving
more than $50,000 in any one case, (vii) lease of any real or personal property
as lessor, or (viii) agreement or indenture relating to the borrowing of money,
or material licenses, whether as licensee or licensor. Except as set forth
on
Schedule 3.10(a) hereto (i) Seller has (and to the knowledge of Seller, the
other parties thereto have) complied in all material respects with the
contracts, leases, agreements, mortgages and the like listed on Schedule 3.10(a)
hereto (the “Scheduled Contracts”) all of which, to the knowledge of Seller, are
valid and enforceable and (ii) the Scheduled Contracts are in full force and
effect and there exists no event or condition known to Seller which with or
without notice or lapse of time would be a material default thereunder, give
rise to a right to accelerate or terminate any provision thereof or give rise
to
any Lien on any material Assets, it being acknowledged by the parties hereto
that contracts with the U.S. government may be terminated by it for its
convenience.
3.11
Employee
Relations.
Except
as set forth on Schedule 3.11 hereto, there are no material organized labor
controversies pending or, to the knowledge of Seller, threatened against
Seller.
3.12
Employee
Plans.
(a) For
purposes of this Agreement, the term “Employee Plan” means such employee benefit
plans as defined in Section 3(3) of the Employee Retirement Income Security
Act
of 1974, as amended (“ERISA”), maintained by Seller or to which Seller is a
participating employer or is otherwise obligated to contribute and under which
any person employed by Seller (an “Employee”) or formerly employed by Seller or
predecessors (a “Former Employee”) participates or has accrued any rights or
under which Seller is liable in respect of an Employee or Former Employee.
Set
forth on Schedule 3.12 hereto are lists of all Employee Plans and other employee
benefit plans.
(b)
Each
Employee Plan has been maintained in all material respects in accordance with
its terms and with applicable Law.
3.13
Taxes.
Except
as set forth on Schedule 3.13(a) hereto, all tax returns and reports which
are
required to be filed (subject to any extensions appropriately obtained) by
or on
behalf of Seller have been duly filed or caused to be filed with the appropriate
Governmental Authorities. Except as set forth on Schedule 3.13(b) hereto,
payment has been made or provided for as to all federal, state and local taxes,
interest, penalties, assessments or deficiencies of Seller shown to be due
on
such tax returns and reports or proposed or assessed as due by any such
Governmental Authority. Except as set forth on Schedule 3.13(a) hereto, there
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are
no
outstanding waivers or extensions of time with respect to the assessment or
audit of any tax or tax return of Seller, or claims now pending or matters
under
discussion with any taxing authority in respect of any tax of Seller. Seller
shall assume full and sole responsibility for all tax audits concerning
transactions occurring prior to the Closing Date.
3.14
Customer
Contracts.
Seller
has provided and assigned to Purchaser all contracts and purchase orders entered
into by Seller with The Business customers as of the date hereof and will
provide and assign to Purchaser any additional contracts and purchase orders
entered into by Seller with The Business customers on or prior to the Closing
Date.
4.
Representations
and Warranties of Purchaser.
Purchaser represents and warrants to Seller as follows:
4.1
Corporate
Organization.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada and has the requisite corporate power
and
authority to own, lease or otherwise hold the assets owned, leased or held
by it
and to carry on its business as currently conducted.
4.2
Authorization
and Effect of Agreement.
Purchaser has the requisite corporate power and authority to execute and deliver
this Agreement and to perform the transactions contemplated hereby to be
performed by it. The execution and delivery by Purchaser of this Agreement
and
the performance by it of the transactions contemplated hereby to be performed
by
it have been duly authorized by all necessary corporate action on the part
of
Purchaser. This Agreement and each of the other documents and instruments
contemplated hereby have been duly executed and delivered by Purchaser and,
assuming the due execution and delivery of this Agreement by Seller, constitutes
a valid and binding obligation of Purchaser, enforceable in accordance with
its
terms.
4.3
No
Restrictions Against Purchase of the Assets.
The
execution and delivery of this Agreement by Purchaser does not, and the
performance by Purchaser of the transactions contemplated hereby to be performed
by it will not, conflict with, or result in any violation of, or constitute
a
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
to
loss of a material benefit under, (i) any provision of the Certificate of
Incorporation or Bylaws of Purchaser, or (ii) any contract, Permit or Law issued
or applicable to Purchaser. No material consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Authority is required to be obtained or made by or with respect to Purchaser
in
connection with the execution and delivery of this Agreement by it or the
performance by it of the transactions contemplated hereby to be performed by
it.
4.4
Financial
Resources.
Purchaser has the cash on hand and/or available credit with which to pay the
Purchase Price.
5.
Closing.
5.1
Date
of Closing.
(a) The
closing of the transactions contemplated hereby (the “Closing”) shall take place
at 10:00 a.m. local time at the offices of Purchaser on the first business
day
following the fulfillment or waiver of the conditions precedent set forth in
Sections 7 and 8 hereof or at such other time and place as the parties hereto
may mutually agree, but in no event shall the Closing be later than April 19,
2004. The date on which the Closing occurs is hereinafter referred to as the
“Closing Date.” The following transactions shall take place at the Closing, all
of which shall be deemed to have occurred simultaneously and none of which
shall
be deemed completed unless and until all of them shall have been completed
(or
waived in writing by the parties entitled to performance):
(b)
At
the Closing, Seller shall deliver to Purchaser the following:
(i)
such
assignments or other instruments of transfer and assignment, in form and
substance reasonably satisfactory to Purchaser, as are effective to vest in
Purchaser title to the Assets (including the Intellectual Property Rights);
and
(ii)
a
certificate of the chief executive officer of Seller, in form and substance
reasonably satisfactory to Purchaser, certifying Seller’s Certificate of
Incorporation and By-laws, its valid existence and good standing in Florida,
the
incumbency of officers or others acting in a representative capacity, and the
due authorization of the transactions contemplated hereby.
(c)
At
the Closing, Purchaser shall deliver to Seller the following:
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(i)
the
Purchase Price provided for in Section 3.1(a) hereof.
6.0
Conditions
to Obligations of Purchaser.
The
obligations of Purchaser to consummate the transactions contemplated by this
Agreement are subject to the following conditions, except to the extent waived
by Purchaser in writing at the Closing:
6.1
Accuracy
of Representations and Compliance with Conditions.
All
representations and warranties of Seller contained in this Agreement shall
be
accurate in all material respects as of the Closing with the same effect as
if
made on and as of such date. As of the Closing, Seller shall have performed
and
complied in all material respects with all covenants and agreements and
satisfied all conditions required to be performed and complied with by it at
or
before such time.
6.2
Seller's
Deliveries.
Seller
shall have delivered to Purchaser the documents set forth in Section 5.1(b)
hereof.
6.3
Legal
Action.
There
shall not have been instituted or threatened any legal proceeding (a) relating
to, or seeking to prohibit or otherwise challenge this Agreement or the
consummation of the transactions contemplated by this Agreement, or seeking
to
obtain substantial damages with respect thereto, or (b) which Purchaser shall
reasonably determine could have a material adverse effect on Purchaser’s
business or the The Business.
6.4
No
Governmental Action.
There
shall not have been any action taken, or any law, rule, regulation, order,
judgment, or decree proposed, promulgated, enacted, entered, enforced, or deemed
applicable to the transactions contemplated by this Agreement, by any federal,
state, local, or other governmental authority or by any court or other tribunal,
including the entry of a preliminary or permanent injunction, which, in the
reasonable judgment of Purchaser: (a) makes any of the transactions contemplated
by this Agreement illegal or (b) imposes material limitations on the ability
of
Purchaser to operate the Business or to exercise full rights of ownership of
the
Assets.
6.5
Execution
of Employment and Related Agreements.
Xxxxx
Xxxxxx shall have entered into employment, confidentiality, non-compete and
non-solicitation agreements with Purchaser in form and substance satisfactory
to
Purchaser.
6.6
Other
Closing Documents.
Seller
shall have delivered to Purchaser, at or prior to the Closing, such other
documents as Purchaser may reasonably request to carry out the provisions of
and
the transactions contemplated by this Agreement in form and substance reasonably
satisfactory to Purchaser.
7.0
Conditions
to the Obligations of Seller.
The
obligations of Seller under this Agreement are subject to the following
conditions (unless waived by Seller in writing at the Closing):
7.1
Accuracy
of Representations and Compliance with Conditions.
All
representations and warranties of Purchaser contained in this Agreement shall
be
accurate in all material respects as of the Closing Date with the same effect
as
if made on and as of such date. As of the Closing, Purchaser shall have
performed and complied in all material respects with all covenants and
agreements and satisfied all conditions required to be performed and complied
with by Purchaser at or before such time.
7.2
Purchaser's
Deliveries.
Purchaser shall have delivered to Seller the funds referenced in Section 5.1(c)
hereof.
7.3
Legal
Action.
There
shall not have been instituted or threatened any legal proceeding (a) relating
to, or seeking to prohibit or otherwise challenge this Agreement or the
consummation of the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto, or (b) which Seller shall reasonably
determine could have a material adverse effect on the business, assets,
liabilities, condition (financial or otherwise) or prospects of Purchaser
(without giving effect to the transactions contemplated hereby).
7.4
No
Governmental or Legal Action.
There
shall not have been any action taken, or any law, rule, regulation, order,
judgment, or decree proposed, promulgated, enacted, entered, enforced, or deemed
applicable to the transactions contemplated by this Agreement, by any federal,
state, local, or other governmental authority or by any court or other tribunal,
including the entry of a preliminary or permanent injunction, which, in the
reasonable judgment of Seller: (a) makes any of the transactions
5
contemplated
by this Agreement illegal or (b) otherwise prohibits, restricts, or delays
consummation of the transactions contemplated by this Agreement or impairs
the
contemplated benefits to Seller of any of the transactions contemplated by
this
Agreement.
8.0
Further
Agreements of the Parties.
8.1
General.
(a)
Seller will use all reasonable efforts and take all reasonable steps, and will
cooperate with Purchaser to cause to be fulfilled, those of the conditions
set
forth in this Agreement to the parties’ respective obligations to consummate the
transactions contemplated by this Agreement that are dependent upon the actions
or inactions of Seller, and to execute and deliver such instruments and take
such other reasonable actions as may be necessary or appropriate in order to
carry out the intent of this Agreement and consummate the transactions
contemplated hereby.
(b)
Purchaser will use all reasonable efforts and take all reasonable steps, and
will cooperate with Seller to cause to be fulfilled, those of the conditions
set
forth in this Agreement to the parties’ respective obligations to consummate the
transactions contemplated by this Agreement that are dependent upon the actions
or inactions of Purchaser, and to execute and deliver such instruments and
take
such other reasonable actions as may be necessary or appropriate in order to
carry out the intent of this Agreement and consummate the transactions
contemplated hereby.
8.2
Other
Agreements.
Until
the Closing Date, Seller will:
(a)
cause
all representations and warranties made by Seller hereunder to be true and
correct in all material respects as of the Closing Date as if made on the
Closing Date; and
(b)
preserve and maintain Seller's assets, conduct Seller's business only in the
normal and ordinary course of business, preserve intact Seller’s business
organization and operations, keep available the services of its present officers
and employees, preserve in full force and effect Seller’s Contracts and preserve
the present business relationships and goodwill of Seller’s suppliers,
customers, and others having business relations with Seller.
8.3
Access
Prior to Closing.
Between
the date of this Agreement and the Closing and upon Purchaser’s request
following the Closing Date if required to enable Purchaser to fulfill its
reporting and other regulatory obligations, Seller shall (i) give Purchaser
and
its authorized representatives full access to all offices and other facilities
and properties of Seller and to the books and records of Seller (and permit
Purchaser to make copies thereof), (ii) permit Purchaser to make inspections
thereof, and (iii) cause its officers and advisers (including, without
limitation, their auditors, attorneys, financial advisors and other consultants,
agents and advisors) to furnish Purchaser with such financial and operating
data
and other information with respect to the business and properties of Seller,
and
to discuss with Purchaser and its authorized representatives the affairs of
Seller, all as Purchaser may from time to time reasonably request.
8.4
Ordinary
Course.
From the
date hereof until the Closing, Seller shall operate the The Business only in
the
ordinary course consistent with past practice.
8.5
Liens.
Prior to
the Closing, Seller shall not create, incur, assume or suffer to exist any
Lien
upon or with respect to any property or assets (real or personal, tangible
or
intangible) of Seller, whether now owned or hereafter acquired, or sell any
such
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable with recourse to Seller), or assign any right to receive income
or
permit the filing of any financing statement under the New Jersey Uniform
Commercial Code or any other similar notice of Lien under any similar recording
or notice statute, or grant rights with respect to, or otherwise encumber or
create a security interest in, such property or assets or any portion thereof
or
any other revenues therefrom or the proceeds payable upon the sale, transfer
or
other disposition of such property or assets or any portion thereof, or permit
or suffer any such action to be taken.
8.6
New
Lines of Business.
Prior to
the Closing, as it relates solely to the The Business, Seller shall not enter
into any line of business other than the The Business, or make any material
change in the scope or nature of its The Business, purposes or operations,
or
undertake or participate in activities other than the continuance of the The
Business.
8.7
Forgiveness
of Debt.
Prior
to the Closing, Seller shall not cancel or otherwise forgive, release or waive
any claim or indebtedness owed to it by any person or rights of substantial
value, except in the case of any
6
claim
or
indebtedness not material individually or in the aggregate, for adequate
consideration and in the ordinary course of business consistent with past
practice. Seller shall not forgive, release or waive any prepayments by clients
in respect of the The Business without Purchaser’s express prior written
consent.
8.8
Affiliate
Transactions.
Prior to
the Closing, solely as it relates to its the Business, Seller shall not enter
into, be a party to, or perform any transaction or arrangement with any
Affiliate related solely to the The Business.
8.9
Assets.
Prior to
the Closing, solely as it relates to its The Business, Seller shall not acquire
or dispose of any property or assets other than in the ordinary course of
business.
8.10
No
Contrary Agreements.
Solely
as it relates to its The Business Seller shall not agree or otherwise commit,
whether or not in writing, to do anything which would not be permitted to be
done under this Agreement.
8.11
Expenses.
Purchaser and Seller shall bear their own respective expenses incurred by them
in respect of the transactions contemplated hereby.
8.12
Sales
Taxes.
Purchaser shall pay any state or local sales, transfer or usage taxes payable
in
connection with the sale of the Assets to Purchaser pursuant to this
Agreement.
8.13
Further
Assurances.
At any
time and from time to time after the date hereof, each party hereto shall,
without further consideration, execute and deliver to the other such instruments
of transfer , and shall take such other action, as the other may reasonably
request to carry out the transfer of assets contemplated by this Agreement.
8.14
Change
of Name.
After
the Closing, upon the request of Purchaser, Seller shall change its name to
a
name entirely dissimilar to its present name.
8.15
Seller’s
Access After tbe Closing.
At any
time, and from time to time, after the Closing, Seller shall have the right
to
review and obtain copies of any records, files, books, documents and other
data
relating to the Assets and the The Business with respect to any period prior
to
the Closing that Seller may reasonably require for any lawful purpose,
including, without limitation, Seller’s preparation of tax returns. Purchaser
shall retain such records, files, books, documents and other data for a period
of at least six years after the Closing and, thereafter, shall give Seller
at
least 60 days’ prior notice of its intention to discard or destroy any such
records, files, books, documents or other data.
8.16
Seller's
Indemnification of Purchaser for Liabilities
Seller
shall defend (with counsel reasonably satisfactory to Purchaser), indemnify
and
hold harmless Purchaser, its shareholders, directors, officers, employees,
agents and assigns promptly upon demand at any time and from time to time,
from
and against any Liabilities (as defined in paragraph 1.1 hereof) or any other
liabilities associated with the The Business.
9.0
Survival
of Representations; Indemnities.
9.1
Survival.
The
representations and warranties of Seller on the one hand, and of Purchaser,
on
the other, contained in this Agreement shall survive the consummation of the
transactions contemplated hereby for a period ending on the first anniversary
of
the Closing Date, except that Seller’s representations, warranties and covenants
contained in paragraphs 6.6 and 8.15 hereof shall survive the consummation
of
the transactions contemplated hereby for a period ending on the fifth
anniversary of the Closing Date.
9.2
Indemnification
by Seller.
Seller
shall indemnify and hold harmless Purchaser, and its Affiliates and the
successors, assigns, officers, directors, employees, partners and agents of
any
of them (the “Purchaser Indemnified Parties”), promptly upon demand at any time
and from time to time, from and against any and all actions, proceedings,
demands and claims asserted against any Purchaser Indemnified Party, and shall
reimburse Purchaser Indemnified Parties for any and all losses, liabilities
(of
every kind or nature, whether accrued, absolute, contingent or otherwise and
whether asserted or unasserted, known or unknown and whether due or to become
due), damages, charges, liens, deficiencies or expenses of any nature,
including, without limitation, reasonable attorneys’ fees and expenses
(collectively, “Damages”) incurred by or assessed against any Purchaser
Indemnified Party, and arising out of or resulting from:
(a)
the
inaccuracy of any representation or warranty made by Seller in this Agreement
or
pursuant hereto;
(b)
the
failure by Seller to perform or observe any term or provision of this Agreement
or of any other document, schedule or instrument delivered in connection
herewith; or
7
(c)
any
other liability or obligation of Seller.
9.3
Indemnification
by Purchaser.
Purchaser shall indemnify and hold harmless Seller and Seller’s successors,
assigns, stockholders, officers, directors, employees, partners and agents
of
any of them (the “Seller Indemnified Parties”), promptly upon demand at any time
and from time to time, from and against any and all actions, proceedings,
demands and claims asserted against any Seller Indemnified Party, and shall
reimburse the Seller Indemnified Parties for any and all Damages incurred by
or
assessed against any Seller Indemnified Party, and arising out of or resulting
from:
(a)
the
inaccuracy of any representation or warranty made by Purchaser herein;
or
(b)
the
failure by Purchaser to perform or observe any term or provision of this
Agreement or of any other document, schedule or instrument delivered in
connection herewith.
9.3
Notice
of Claim.
If any
legal proceedings, claims or demands are instituted or asserted in respect
of
which any of Purchaser Indemnified Parties or Seller Indemnified Parties may
seek indemnification from another party hereto pursuant to the provisions hereof
(such legal proceedings, claims or demands being referred to individually as
a
“Claim” and collectively as the “Claims”), the indemnified party (after receipt
by it of written notice of the commencement or assertion of such Claim) shall
promptly cause a written notice of such Claim to be made to the indemnifying
party (but the failure to give such notice shall not relieve the indemnifying
party of its indemnification obligation hereunder, except to the extent of
losses actually caused by such failure).
9.4
Election
to Defend Claim.
Subject
to the next sentence hereof, the indemnifying party shall have the right, at
its
option and expense, to assume the defense, settlement or other disposition
(collectively “Defense”) of any Claim, provided that within ten (10) days of
receiving the notice with respect to such Claim (or within such shorter period
of time as an answer or other responsive motion may be required), the
indemnifying party, by notice delivered to the indemnified party, elects to
assume such Defense and each indemnifying party acknowledges its obligation
hereunder to indemnify the indemnified party with respect to such Claim.
Notwithstanding the foregoing, the indemnifying party shall not have the right
to assume the Defense of any Claim if (a) representation of both the indemnified
and indemnifying parties by the same counsel would be inappropriate due to
actual or potential differing interests between them or (b) the indemnified
party determines in good faith that there is a significant possibility that
such
Claim may materially and adversely affect it or its Affiliates other than as
a
result of monetary damages.
9.6
Procedure for Defense by Indemnifying Party. If the indemnifying party has
assumed the Defense of a Claim , then the following shall apply:
(a)
the
indemnified party shall have the right to participate and assist in the Defense
of such Claim and to employ its own counsel in connection
therewith;
(b)
the
indemnifying party shall not be liable to the indemnified party for the fees
or
expenses of the indemnified party’s counsel or other expenses incurred by the
indemnified party in connection with participating in the Defense of such Claim,
except that the indemnifying party shall be liable for (i) any such fees and
expenses incurred prior to the time the indemnifying party assumed such Defense
and (ii) the reasonable costs of investigation and preparation incurred by
the
indemnified party;
(c)
counsel used by the indemnifying party in connection with the Defense of such
Claim shall be reasonably satisfactory to the indemnified party;
(d)
the
indemnified party shall not effect any compromise or settlement of such Claim
without the consent of the indemnifying party, which consent shall not be
unreasonably withheld; and
(e)
the
indemnifying party shall not effect any compromise or settlement of such Claim
without the consent of the indemnified party, which consent shall not be
unreasonably withheld.
9.7
Defense
by Indemnified Party.
If the
indemnifying party does not assume the Defense of a Claim as required by this
Agreement, the indemnifying party shall have the right, at the sole cost and
expense of the indemnifying party, to defend and settle such Claim and to employ
its own counsel in connection therewith. In this event, the indemnified party
may effect any compromise or settlement of such Claim without the consent of
the
indemnifying party.
8
9.8
Cooperation.
The
parties hereto shall cooperate to the fullest extent possible in connection
with
any Claim in respect of which indemnification is sought under this Agreement.
10.0
Termination.
10.1
Bases
for Termination.
This
Agreement and the transactions contemplated hereby may be terminated at any
time
on or prior to the Closing Date:
(a)
by
the mutual written consent of the parties hereto;
(b)
by
Purchaser:
(i)
if
any representation or warranty of Seller made in this Agreement was untrue
in
any material respect when made or is untrue in any material respect on the
Closing Date;
(ii)
if
Seller shall have defaulted in any material respect in the performance of any
covenant, agreement or obligation under this Agreement, and such default is
not
cured within ten days after Seller’s receipt of written notice from Purchaser
that such default exists or has occurred; or
(iii)
if
the conditions to Purchaser's obligations to consummate the transaction
contemplated hereby are not or cannot be satisfied on or before August 31,
2001
for any reason other than a breach by Purchaser.
(c)
by
Seller:
(i)
if
any representation or warranty of Purchaser made in this Agreement was untrue
in
any material respect when made or is untrue in any material respect on the
Closing Date;
(ii)
if
Purchaser shall have defaulted in any material respect in the performance of
any
covenant, agreement or obligation under this Agreement, and such default is
not
cured within ten days after Purchaser’s receipt of written notice from Seller
that such default exists or has occurred; or
10.2
Manner
of Exercise.
In the
event of the termination of this Agreement prior to the Closing pursuant to
Section 10.1, written notice thereof shall forthwith be given to the
non-terminating party, and this Agreement shall terminate and the transactions
contemplated hereunder shall be abandoned without further action by any party
hereto.
10.3
Effect
of Termination.
In the
event of the termination of this Agreement prior to the Closing pursuant to
Section 10.1, all rights and obligations of the parties hereunder shall
terminate, except for the rights and obligations of the parties under Section
8.11 hereof and the right of the non-breaching party to seek damages from a
breaching party.
11.0
Miscellaneous.
11.1
Finders.
Each
party hereto represents and warrants that it has not employed or utilized the
services of any broker or finder in connection with this Agreement or the
transactions contemplated hereby.
11.2
Entire
Agreement.
This
Agreement (together with the Schedules and Exhibits hereto) contains, and is
intended as, a complete statement of all of the terms of the arrangements
between the parties hereto with respect to the matters provided for herein,
and
supersedes any previous agreements and understandings between the parties hereto
with respect to those matters.
11.3
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New Jersey without regard to the conflicts of laws provisions
thereof.
11.4
Headings.
The
section headings of this Agreement are for reference purposes only and are
to be
given no effect in the construction or interpretation of this
Agreement.
11.5
Notices.
All
notices and other communications under this Agreement shall be in writing and
shall be deemed given when delivered personally or mailed by registered mail,
return receipt requested, to the parties at the following addresses (or to
such
other address as a party may have specified by notice given to the other party
pursuant to this provision):
9
If
to
Seller to it or them at:
Xxxxx
Xxxxxx
0000
Xxxx
Xxxxxxxxxx Xxxx
Xxxx
Xxxxxxxxxx, XX 00000
If
to
Purchaser, to it at:
Xxxxx
Xxxxxxx
Snap2
Corporation
0000
Xxxx
Xxxxxxxxxx Xxxx
Xxxx
Xxxxxxxxxx, XX 00000
11.6
Severability.
If any
provision of this Agreement is invalid or unenforceable, the balance of this
Agreement shall remain in effect.
11.7
Waivers
and Amendments.
No
waiver of any provision hereof shall be construed as a waiver of any other
provision. Any waiver or amendment of this Agreement must be in writing and
signed by the party to be charged therewith.
11.8
Successors
and Assigns.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Neither this Agreement
nor
any right or obligation hereunder may be assigned or transferred by Seller
without Purchaser’s written consent or by Purchaser without Seller’s written
consent; provided, however, that Purchaser may assign, without being required
to
obtain Seller’s consent thereto, any and all of Purchaser’s rights and
obligations hereunder to any wholly-owned subsidiary of Purchaser; and, provided
further, that Seller may assign, without being required to obtain Purchaser’s
consent thereto, any and all of Seller’s rights to receive, or to designate the
recipients of, all or any portion of the Escrow Shares.
11.9
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original, but all of which shall be considered one and the
same
instrument.
This
Agreement has been duly executed on the date hereinabove set forth.
Call
Now
America Prepaid, LLC
By: /s/Xxxxx Xxxxxx
Xxxxx Xxxxxx, Managing Member
Snap2 Corporation
By: /s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Chief Executive Officer
By: /s/Xxxxx Xxxxxx
Xxxxx Xxxxxx, Managing Member
Snap2 Corporation
By: /s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Chief Executive Officer
10
