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EXHIBIT 10.16
ASSET PURCHASE AGREEMENT
among:
EMERGENT INFORMATION TECHNOLOGIES, INC.,
a California corporation
and
XXXXX & COMPANY, INC.,
a Delaware corporation
DATED AS OF JANUARY 11, 2001
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of January 11, 2001, by
and between EMERGENT INFORMATION TECHNOLOGIES, INC., a California corporation
(the "SELLER") and XXXXX & COMPANY, INC., a Delaware corporation (the
"PURCHASER"). Certain capitalized terms used in this Agreement are defined in
Exhibit A.
RECITALS
A. The Purchaser and the Seller are parties to that certain Software
License Agreement, dated as of March 30, 2000 (the "LICENSE AGREEMENT") relating
to the license of the Seller's BillTamer and NetTamer software (the "SOFTWARE")
to Purchaser, which the parties desire to supercede in its entirety with the
terms provided herein.
B. The Purchaser and the Seller now wish to provide for the sale of the
Software and related assets of the Seller to the Purchaser on the terms set
forth in this Agreement.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
1. SALE OF ASSETS; RELATED TRANSACTIONS.
1.1 (a) SALE OF ASSETS. The Seller shall cause to be sold, assigned,
transferred, conveyed and delivered to the Purchaser, at the Closing (as defined
in Section 1.6 below), good and valid title to the Assets (as defined below),
free of any Encumbrances, on the terms and subject to the conditions set forth
in this Agreement. For purposes of this Agreement, "ASSETS" shall mean and
include the properties, rights, interests, intellectual property and other
tangible and intangible assets of the Seller relating to the ownership, license
or operation of the Software identified on Part 1.1 of the disclosure schedule
as attached to this Agreement (the "DISCLOSURE SCHEDULE"), including the
following related assets:
(1) all accounts receivable, notes receivable and other
receivables of the Seller relating to the NetTamer/BillTamer Software License
Agreement dated March 31, 2000 by and between the Seller and ALLTEL Corporation,
as such contract is anticipated to be amended as provided in Sections 4.8 and
5.5 (the "ALLTEL AGREEMENT");
(2) all inventories and work-in-progress of the Seller
in connection with the Software, and all rights to collect pursuant to the
ALLTEL Agreement (and to retain) all fees and other amounts payable, or that may
become payable, to the Seller pursuant to the ALLTEL Agreement;
(3) all advertising, promotional materials,
documentation, current and prospective client lists and information and other
written materials possessed by the Seller relating to the Software;
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(4) all Proprietary Assets and goodwill of the Seller
relating to the Software (including the right to use the names "BILLTAMER"
"NETTAMER" and variations thereof);
(5) all rights of the Seller under the ALLTEL Agreement;
(6) all claims (including claims for past infringement
of Proprietary Assets) and causes of action of the Seller against other Persons
(regardless of whether or not such claims and causes of action have been
asserted by the Seller), and all rights of indemnity, warranty rights, rights of
contribution, rights to refunds, rights of reimbursement and other rights of
recovery possessed by the Seller (regardless of whether such rights are
currently exercisable), in each case owned by Seller and relating to the
Software; and
(7) all books, records, files and data of the Seller
relating directly and exclusively to the Software, and copies of any other
books, records, files and data of Seller relating to the Software, redacted to
delete references to elements of the Seller's business not directly and
exclusively relating to the Software.
(b) EXCLUDED ASSETS. The Assets to be transferred to the
Purchaser by the Seller shall include only those set forth on Part 1.1 of the
Disclosure Schedule or contemplated by Section 1.1(a) above and no other assets
of the Seller shall be transferred to the Purchaser. Notwithstanding anything in
this Agreement to the contrary and without limiting the generality of the
preceding sentence, it is specifically understood and agreed that the following
assets shall not be included in part of the Assets:
(i) cash, cash equivalents or marketable securities; and
(ii) accounts receivables, unbilled revenues and
unbilled amounts incurred but not invoiced relating to the Software other than
those revenues and unbilled amounts relating to the ALLTEL Agreement.
1.2 PURCHASE PRICE.
(a) As consideration for the sale of the Assets to the
Purchaser, at the Closing, the Purchaser shall:
(i) pay to the Seller, in immediately available funds, a total
of $200,000 by wire transfer to Seller's account;
(ii) deliver to the Seller a secured promissory note in the
original principal amount of $565,000, bearing interest at a rate of 9.9% per
annum, in substantially the form of Exhibit B (the "NOTE"), providing that upon
a default of the Note, the Purchaser and the Seller will execute a new software
license agreement substantially in accordance with the terms set forth on
Exhibit C, and secured by the Assets as provided in the Security Agreement in
substantially the form of Exhibit D (the "SECURITY AGREEMENT"); and
(iii) assume the Assumed Liabilities (as defined below) by
delivering to the Seller an Assumption Agreement in substantially the form of
Exhibit E (the "ASSUMPTION AGREEMENT").
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(b) For purposes of this Agreement, "ASSUMED LIABILITIES" shall
mean only the obligations of the Seller under the ALLTEL Agreement, but shall
not include any liability for an Breach thereof by Seller, and the "ASSUMED
LIABILITIES" shall not include:
(1) any Liability of any other Person, except for the
Seller;
(2) any Liability of the Seller arising out of or
relating to the execution, delivery or performance of any of the Transactional
Agreements;
(3) any Liability of the Seller for any fees, costs or
expenses of the type referred to in Section 9.2 of Agreement;
(4) any Liability of the Seller arising from or relating
to any action taken by the Seller, or any failure on the part of the Seller to
take any action, at any time after the Closing Date;
(5) any Liability of the Seller arising from or relating
to (x) any services performed by the Seller for any customer other than ALLTEL,
or (y) any claim or Proceeding against the Seller;
(6) any Liability of the Seller for the payment of any
Tax;
(7) any Liability of the Seller to any employee or
former employee of the Seller under or with respect to any Employee Benefit
Plan, profit sharing plan or dental plan or for severance pay;
(8) any Liability under any Contract other than the
ALLTEL Agreement;
(9) any Liability that is inconsistent with or
constitutes an inaccuracy in, or that arises or exists by virtue of any Breach
of, (x) any representation or warranty made by the Seller in any of the
Transactional Agreements, or (y) any covenant or obligation of the Seller
contained in any of the Transactional Agreements; or
(10) any other Liability that is not referred to
specifically in this Section 1.2(b).
1.3 ONGOING ROYALTY PAYMENTS.
(a) For four years following the Closing the Purchaser will pay
to the Seller a royalty on sales and applications of the Software in accordance
with the following schedule: (i) for direct application of the Software in
Client Services (as such term is defined in Exhibit A attached hereto) for the
clients identified on Schedule 1, a royalty equal to 7.5% of Net Receipts for
the first, second and third years following Closing and 5% of Net Receipts for
the fourth year following Closing; and (ii) for direct sales of the Software by
the Purchaser and application of the Software in Client Services for clients not
identified on Schedule 1, 15% of Net Receipts in the first and second years
following Closing, 10% of Net Receipts in the third year following the Closing
and 5% of Net Receipts for the fourth year following the Closing. After the
fourth year
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following the Closing, the Purchaser will not accrue any additional royalty or
payment obligations to the Seller in connection with the Software. Royalty
payments pursuant to this Section 1.3 shall be payable within forty-five (45)
days after the end of the calendar quarter during which such payment obligations
accrue. Notwithstanding the foregoing, the Purchaser shall not be obligated to
make royalty payments in any amount in connection with sales and applications of
the Software to or for the benefit of ALLTEL Corporation or Level 3, Inc.
(b) The Purchaser shall maintain complete and accurate records
in connection with sales and applications of the Software for the five year
period following the Closing. The Seller shall have the right, at its own
expense, upon reasonable prior notice, to inspect and audit the records of the
Purchaser relating to sales and license of the Software and Client Services,
provided that the Seller shall not conduct such audit and inspection more than
twice during any calendar year. If such inspection and audit reveals that the
Purchaser has underpaid the Seller with respect to any amounts due and payable
during the period to which such inspection and audit relate exceeding 5% of the
total amounts due and payable by the Purchaser during such period, the Purchaser
shall pay the Seller all amounts which were underpaid, plus interest on such
amounts at a rate of 9.9% per annum and reimburse the Seller for the cost of
such inspection and audit. If the parties dispute such amounts, the chief
financial officer of Seller and the chief financial officer of Purchaser or
their respective designees shall meet and attempt to reconcile such differences
and make a final determination within thirty (30) days from the initial delivery
of the statement. If the officers do not reach agreement within such time, each
party may appoint an independent accountant at its own expense and such
appointed accountants shall review the records and make a joint determination as
to the amounts owed.
1.4 SALES TAXES. The Seller shall bear and pay, and shall reimburse the
Purchaser for, any sales taxes, use taxes, transfer taxes, documentary charges,
recording fees or similar taxes, charges, fees or expenses that may become
payable in connection with the sale of the Assets to the Purchaser pursuant
hereto.
1.5 ALLOCATION. At or prior to the Closing, the Purchaser shall deliver
to the Seller a statement setting forth the Purchaser's good faith determination
of the manner in which the consideration referred to in Section 1.2 is to be
allocated among the Assets. Notwithstanding the prior sentence, in no event
shall the allocated value attributed to the ALLTEL Agreement (as defined above)
be less than $700,000. The allocation prescribed by such statement shall be
subject to the approval by the Seller, such approval not to be unreasonably
withheld, and neither the Purchaser nor the Seller shall file any Tax Return or
other document with, or make any statement or declaration to, any Governmental
Body that is inconsistent with such allocation.
1.6 CLOSING.
(a) The closing of the sale of the Assets to the Purchaser (the
"CLOSING") shall take place at the offices of Xxxxxx Godward LLP in Reston,
Virginia, at 10:00 a.m. Eastern Standard Time on January 16, 2001, or such other
date which may be mutually agreed upon by the parties (the "CLOSING DATE").
(b) At the Closing:
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(i) the Seller shall execute and deliver to the
Purchaser such bills of sale, endorsements, assignments and other documents as
may (in the reasonable judgment of the Purchaser or its counsel) be necessary or
appropriate to assign, convey, transfer and deliver to the Purchaser good and
valid title to the Assets free of any Encumbrances;
(ii) the Purchaser shall pay to the Seller $200,000 in
immediately available funds as contemplated by Section 1.2(a)(i);
(iii) the Purchaser shall deliver to the Seller the
Note;
(iv) the Purchaser shall deliver to the Seller the
Security Agreement;
(v) the Seller and the Purchaser's lender shall enter
into an Intercreditor Agreement in substantially the form attached hereto as
Exhibit F; and
(vi) the Seller shall execute and deliver to the
Purchaser a Noncompetition Agreement in the form of Exhibit G; and
(vii) the Seller shall execute and deliver to the
Purchaser a certificate (the "SELLER CLOSING CERTIFICATE") setting forth the
representations and warranties of the Seller that (A) each of the
representations and warranties made by the Seller in this Agreement was accurate
in all respects as of the date of this Agreement, (B) except as expressly set
forth in the Closing Certificate, each of the representations and warranties
made by the Seller in this Agreement is accurate in all respects as of the
Closing Date as if made on the Closing Date, (C) each of the covenants and
obligations that the Seller is required to have complied with or performed
pursuant to this Agreement at or prior to the Closing has been duly complied
with and performed in all respects, and (D) except as expressly set forth in the
Closing Certificate, each of the conditions set forth in Section 4 has been
satisfied in all respects.
(viii) the Purchaser shall execute and deliver to the
Seller a certificate (the "PURCHASER CLOSING CERTIFICATE") setting forth the
representations and warranties of the Purchaser that (A) each of the
representations and warranties made by the Purchaser in this Agreement was
accurate in all respects as of the date of this Agreement, (B) except as
expressly set forth in the Closing Certificate, each of the representations and
warranties made by the Purchaser in this Agreement is accurate in all respects
as of the Closing Date as if made on the Closing Date, (C) each of the covenants
and obligations that the Purchaser are required to have complied with or
performed pursuant to this Agreement at or prior to the Closing has been duly
complied with and performed in all respects, and (D) except as expressly set
forth in the Closing Certificate, each of the conditions set forth in Section 5
have been satisfied in all respects.
1.7 PRE-CLOSING MATTERS. From the date of this Agreement through the
Closing Date, the Seller agrees to permit the Purchaser and its employees to
have access to its premises and the source code of the Software, and grants to
the Purchaser a limited license to modify the Software in accordance with the
terms of the License Agreement and to make such changes and modifications to the
Software, including the source code, as it may deem necessary or appropriate.
The Purchaser shall retain any such modifications as its property regardless of
whether the Closing occurs. The Seller agrees to indemnify and hold harmless the
Purchaser, its officers, employees and directors from and against, and shall
compensate and reimburse the
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Purchaser for any damages or claims relating to or arising from the presence of
the Purchaser's employees at the Seller's premises or the modifications to the
source code or the Software made by the Purchaser's employees pursuant to this
Section 1.7, other than damages and claims arising from any willful misconduct
or fraud. The Seller agrees to pay to the Purchaser a fee for any services
performed by the Purchaser on behalf of the Seller or any client of the Seller
prior to the Closing at the rates the Seller identified for similar services in
the License Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants, to and for the benefit of the
Purchaser, as follows:
2.1 DUE ORGANIZATION. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of California.
The Seller is not required to be qualified, authorized, registered or licensed
to do business as a foreign corporation in any jurisdiction other than the
jurisdictions listed in Part 2.1 of the Disclosure Schedule. The Seller is in
good standing as a foreign corporation in each of the jurisdictions listed in
Part 2.1 of the Disclosure Schedule.
2.2 ARTICLES OF INCORPORATION AND BYLAWS; RECORDS. The Seller has
delivered to (or made available for inspection by) the Purchaser accurate and
complete copies of: (i) the articles of incorporation and bylaws of the Seller,
including all amendments thereto; and (ii) the minutes and other records of the
meetings and other proceedings (including any actions taken by written consent
or otherwise without a meeting) of the shareholders of the Seller, the board of
directors of the Seller and all committees of the board of directors of the
Seller relating to the transactions contemplated herein.
2.3 TITLE TO ASSETS. The Seller owns, and has good and valid title to,
all of the Assets. All of the Assets are owned by the Seller free and clear of
any Encumbrances. The Seller has never pledged any of the Assets to secure the
performance or payment of any obligation or other Liability of any other Person.
2.4 TANGIBLE ASSETS. Except as set forth in the Disclosure Schedule, the
tangible assets included in the Assets constitute all equipment, hardware,
modules, documentation and other tangible assets necessary for ownership,
operation, modification, resale, sub-license, incorporation into other media and
use of the Software.
2.5 PROPRIETARY ASSETS.
(a) Part 2.5 of the Disclosure Schedule identifies and provides
a brief description of all Proprietary Assets owned or licensed by the Seller
(except for any Proprietary Asset that is licensed to the Seller under any third
party software license that (1) is generally available to the public, and (2)
imposes no future monetary obligation on the Seller). The Seller has good and
valid title to all of the Proprietary Assets identified in Part 2.5 of the
Disclosure Schedule, free of any Encumbrances, or has a valid right to use and
otherwise exploit, and to license others to use and otherwise exploit, all
Proprietary Assets identified in Part 2.5 of the Disclosure Schedule. The Seller
is free to use, modify, copy, distribute, sell, license or otherwise exploit
each of the Proprietary Assets on an exclusive basis without the payment of
additional fees (other than Proprietary Assets consisting of software licensed
to the Seller under third party
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licenses generally available to the public, with respect to which the Seller's
rights are not exclusive). The Proprietary Assets included in the Assets
constitute all Proprietary Assets necessary for the ownership, operation,
modification, resale, sub-license, incorporation into other media and use of the
Software, including, without limitation, all licenses and/or source code of any
software or intellectual property components of the Software and all modules and
developmental components in existence based upon the Software. Part 2.5 of the
Disclosure Schedule identifies any Proprietary Assets which are licensed from a
third party and indicates whether such license may be freely assigned to the
Purchaser pursuant to this Agreement.
(b) The Seller has not disclosed or delivered the source code
relating to the Software (the "SOURCE CODE"), or permitted to be disclosed or
delivered the Source Code to any Person who can be reasonably expected to use or
release the Source Code in a manner that would materially reduce the commercial
value thereof to the Purchaser, and the Seller is not a party to any agreement
which would require the Seller to disclose or release the Source Code to any
party in the event of any breach.
(c) Except as provided in the License Agreement, the Seller has
not licensed any of the Proprietary Assets to any Person other than to customers
through the sale of the BillTamer and NetTamer products, and the Seller has not
entered into any covenant not to compete or contract limiting its ability to
exploit fully any of the Proprietary Assets or to transact business in any
market or geographical area or with any Person. The Seller has, and the
Purchaser will acquire at the Closing, the right to use the names "BILLTAMER"
and "NETTAMER" and variations thereof.
2.6 THE ALLTEL AGREEMENT.
(a) The Seller has delivered to the Purchaser an accurate and
complete copy of the ALLTEL Agreement, including all amendments thereto. The
ALLTEL Agreement is valid and in full force and effect.
(b) The performance of the ALLTEL Agreement will not result in
any violation of or failure to comply with any Legal Requirement.
(c) To the best of the Seller's knowledge, ALLTEL Corporation
will be willing to enter into negotiations consistent with the provisions of
Sections 4.8 and 5.5.
(d) Schedule 2.5 is an accurate description of the status of the
ALLTEL Agreement.
2.7 COMPLIANCE WITH LEGAL REQUIREMENTS. (a) The Seller is in full
compliance with each Legal Requirement that is applicable to the sale or license
of the Software; (b) the Seller has at all times been in full compliance with
each Legal Requirement that is or was applicable to the conduct of its business
relating to the Software or the ownership or use of any of the Assets; and (c)
the Seller has not received, at any time, any notice or other communication (in
writing or otherwise) from any Governmental Body or any other Person regarding
(i) any actual, alleged, possible or potential violation of, or failure to
comply with, any Legal Requirement, or (ii) any actual, alleged, possible or
potential obligation on the part of the Seller to undertake, or to bear all or
any portion of the cost of, any cleanup or any remedial, corrective
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or response action of any nature. The Seller has delivered to the Purchaser an
accurate and complete copy of each report, study, survey or other document to
which the Seller has access that addresses or otherwise relates to the
compliance of the Seller with, or the applicability to the Seller of, any Legal
Requirement. To the best of the knowledge of the Seller, no Governmental Body
has proposed or is considering any Legal Requirement that, if adopted or
otherwise put into effect, (i) may have an adverse effect on the business,
condition, assets, liabilities, operations, financial performance, net income or
prospects of the Seller relating to the Assets or on the ability of the Seller
to comply with or perform any covenant or obligation under this Agreement, or
(ii) may have the effect of preventing, delaying, making illegal or otherwise
interfering with any of the Transactions.
2.8 GOVERNMENTAL AUTHORIZATIONS. No Governmental Authorizations are used
in connection with the ownership, sale or license of the Software.
2.9 AUTHORITY; BINDING NATURE OF AGREEMENTS. The Seller has the absolute
and unrestricted right, power and authority to enter into and to perform its
obligations under each of the Transactional Agreements to which it is a party;
and the execution, delivery and performance by the Seller of the Transactional
Agreements to which it is a party have been duly authorized by all necessary
action on the part of the Seller and its shareholders, board of directors and
officers. This Agreement constitutes the legal, valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its terms. Upon
the execution of each of the other Transactional Agreements at the Closing, each
of such other Transactional Agreements to which the Seller is a party will
constitute the legal, valid and binding obligation of the Seller and will be
enforceable against the Seller in accordance with its terms.
2.10 NON-CONTRAVENTION; CONSENTS. Except as set forth in Part 2.9 of the
Disclosure Schedule or as contemplated by Sections 4.8 and 5.5, neither the
execution and delivery of any of the Transactional Agreements, nor the
consummation or performance of any of the Transactions, will directly or
indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of, or
give any Governmental Body or other Person the right to challenge any of the
Transactions or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which the Seller, or any of the Assets, is subject;
(b) result in the imposition or creation of any Encumbrance upon
or with respect to any of the Assets; or
(c) required any filing with or any notice to, or obtain any
Consent from, any person in connection with the execution and delivery of any of
the Transactional Agreements or the consummation or performance of any of the
Transactions.
2.11 BROKERS. Except as set forth in Part 2.10 of the Disclosure
Schedule, the Seller has not agreed or become obligated to pay, or has taken any
action that will result in any Person claiming to be entitled to receive, any
brokerage commission, finder's fee or similar commission or fee in connection
with any of the Transactions.
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3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser represents and warrants, to and for the benefit of the
Seller, as follows:
3.1 DUE ORGANIZATION. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Purchaser is not required to be qualified, authorized, registered or
licensed to do business as a foreign corporation in any jurisdiction other than
the jurisdictions listed in Part 3.1 of the Disclosure Schedule. The Purchaser
is in good standing as a foreign corporation in each of the jurisdictions listed
in Part 3.1 of the Disclosure Schedule.
3.2 AUTHORITY; BINDING NATURE OF AGREEMENTS. The Purchaser has the
absolute and unrestricted right, power and authority to enter into and perform
its obligations under each of the Transactional Agreements to which it is a
party, and the execution and delivery by the Purchaser of each of the
Transactional Agreements to which it is a party have been duly authorized by all
necessary action on the part of the Purchaser and shareholders, its board of
directors and its officers. This Agreement constitutes the legal, valid and
binding obligation of the Purchaser, enforceable against it in accordance with
its terms. Upon the execution of each of the other Transactional Agreements at
the Closing, each of such other Transactional Agreements to which the Seller is
a party will constitute the legal, valid and binding obligation of the Seller
and will be enforceable against the Seller in accordance with its terms.
3.3 NON-CONTRAVENTION; CONSENTS. Neither the execution and delivery of
any of the Transactional Agreements, nor the consummation or performance of any
of the Transactions, will directly or indirectly (with or without notice or
lapse of time) contravene, conflict with or result in a violation of, or give
any Governmental Body or other Person the right to challenge any of the
Transactions or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which the Purchaser is subject.
3.4 BROKERS. The Purchaser has not become obligated to pay, and has not
taken any action that will result in any Person claiming to be entitled to
receive, any brokerage commission, finder's fee or similar commission or fee in
connection with any of the Transactions.
4. CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATION TO CLOSE.
The Purchaser's obligation to purchase the Assets and to take the other
actions required to be taken by the Purchaser at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by the Purchaser, in whole or in part, in writing):
4.1 ACCURACY OF REPRESENTATIONS. All of the representations and
warranties made by the Seller in this Agreement (considered collectively), and
each of said representations and warranties (considered individually), shall
have been accurate in all material respects as of the date of this Agreement,
and shall be accurate in all material respects as of the Closing as if made at
the Closing.
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4.2 PERFORMANCE OF OBLIGATIONS.
(a) Each of the documents referred to in Section 1.6(b) to be
executed by Seller and delivered to the Purchaser shall have been delivered to
the Purchaser.
(b) All of the covenants and obligations that the Seller is
required to comply with or to perform pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of said covenants and
obligations (considered individually), shall have been duly complied with and
performed in all material respects.
4.3 CONSENTS. Each of the Consents required for transfer or assignment
of the Assets shall have been obtained and shall be in full force and effect.
4.4 ADDITIONAL DOCUMENTS. Purchaser shall have received such other
documents as the Purchaser may request in good faith for the purpose of (i)
evidencing the accuracy of any representation or warranty made by the Seller,
(ii) evidencing the compliance by the Seller with, or the performance by the
Seller of, any covenant or obligation set forth in this Agreement, (iii)
evidencing the satisfaction of any condition set forth in this Section 4, or
(iv) otherwise facilitating the consummation or performance of any of the
Transactions.
4.5 NO PROCEEDINGS. Since the date of this Agreement, there shall not
have been commenced or threatened against the Purchaser, or against any Person
affiliated with the Purchaser, any Proceeding (a) involving any material
challenge to, or seeking material damages or other material relief in connection
with, any of the Transactions, or (b) that may have the effect of preventing,
delaying, making illegal or otherwise interfering with any of the Transactions.
4.6 NO PROHIBITION. Neither the consummation nor the performance of any
the Transactions will, directly or indirectly (with or without notice or lapse
of time), contravene or conflict with or result in a violation of, or cause the
Purchaser or any Person affiliated with the Purchaser to suffer any adverse
consequence under, any applicable Legal Requirement or Order.
4.7 INVESTIGATION. The Purchaser shall have completed an investigation
and review of the Assets and the Seller's business relating to the Software and
shall be reasonably satisfied with the results of such investigation.
4.8 AMENDMENT OF ALLTEL AGREEMENT. The Purchaser, the Seller and ALLTEL
Corporation shall have entered into an amendment of the ALLTEL Agreement in form
and substance reasonably satisfactory to the Purchaser and the Seller and
providing for (i) the assumption by the Purchaser of the obligation to continue
performance under the ALLTEL Agreement as provided therein and (ii) a release by
ALLTEL Corporation of the Purchaser from any liabilities arising from or
relating to any breach or failure by the Seller under any agreements by and
between ALLTEL Corporation and the Seller.
4.9 BTE EQUIPMENT, LLC. The Purchaser, the Seller and BTE Equipment,
LLC, a subsidiary of Level 3 Communications, shall have entered into a mutually
agreeable amendment and/or termination of the agreement by and between BTE
Equipment and the Seller.
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4.10 RELEASE FROM LIENS. The Seller shall have obtained and delivered to
the Purchaser a release of the Assets from any liens or encumbrances reasonably
satisfactory to the Purchaser in form and substance.
5. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATION TO CLOSE.
The Seller's obligation to sell the Assets and to take the other actions
required to be taken by the Seller at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by the Seller, in whole or in part, in writing):
5.1 ACCURACY OF REPRESENTATIONS. All of the representations and
warranties made by the Purchaser in this Agreement (considered collectively),
and each of said representations and warranties (considered individually), shall
have been accurate in all material respects as of the date of this Agreement and
shall be accurate in all material respects as of the Closing as if made at the
Closing.
5.2 PERFORMANCE OF OBLIGATIONS.
(a) Each of the documents referred to in Section 1.6(b) to be
executed by the Purchaser and delivered to the Seller shall have been delivered
to the Seller and the Purchaser shall have tendered the payment contemplated by
Section 1.6(b).
(b) All of the other covenants and obligations that the
Purchaser is required to comply with or to perform pursuant to this Agreement at
or prior to the Closing (considered collectively), and each of said covenants
and obligations (considered individually), shall have been complied with and
performed in all material respects.
5.3 NO PROCEEDINGS. Since the date of this Agreement, there shall not
have been commenced or threatened against the Seller, or against any Person
affiliated with the Seller, any Proceeding (a) involving any material challenge
to, or seeking material damages or other material relief in connection with, any
of the Transactions, or (b) that may have the effect of preventing, delaying,
making illegal or otherwise interfering with any of the Transactions.
5.4 NO PROHIBITION. Neither the consummation nor the performance of any
the Transactions will, directly or indirectly (with or without notice or lapse
of time), contravene or conflict with or result in a violation of, or cause the
Seller or any Person affiliated with the Seller to suffer any adverse
consequence under, any applicable Legal Requirement or Order.
5.5 AMENDMENT OF ALLTEL AGREEMENT. The Purchaser, the Seller and ALLTEL
Corporation shall have entered into an amendment of the ALLTEL Agreement in form
and substance reasonably satisfactory to the Purchaser and the Seller and
providing for (i) the assumption by the Purchaser of the obligation to continue
performance under the ALLTEL Agreement as provided therein and (ii) a release by
ALLTEL Corporation of the Seller of any further liabilities under the ALLTEL
Agreement.
5.6 BTE EQUIPMENT, LLC. The Purchaser, the Seller and BTE Equipment,
LLC, a subsidiary of Level 3 Communications, shall have entered into a mutually
agreeable amendment and/or termination of the agreement by and between BTE
Equipment and the Seller.
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5.7 INTERCREDITOR AGREEMENT. The Seller shall have received from the
Purchaser's lender evidence of such lender's agreement to subordinate any
interest in the Assets by such lender to the Note and such lender's further
agreement to delay any action against the Assets as collateral for any debt
until such time as the Seller's lien on the Assets has been released,
substantially in the form of the Intercreditor Agreement attached hereto as
Exhibit F.
6. INDEMNIFICATION, ETC.
6.1 SURVIVAL OF REPRESENTATIONS AND COVENANTS.
(a) The representations, warranties, covenants and obligations
of each party to this Agreement shall survive (without limitation): (i) the
Closing and the sale of the Assets to the Purchaser; (ii) any sale or other
disposition of any or all of the Assets by the Purchaser; and (iii) the
dissolution of any party to this Agreement. All of said representations,
warranties, covenants and obligations shall remain in full force and effect and
shall survive for a period of two years from the date of Closing, with the
exception of those representations and warranties of the Seller under Section
2.4, which shall remain in full force and effect and shall survive for a period
of four years from the date of Closing.
(b) The representations, warranties, covenants and obligations
of the Seller, and the rights and remedies that may be exercised by the
Purchaser, shall not be limited or otherwise affected by or as a result of any
information furnished to, or any investigation made by or any knowledge of, the
Purchaser.
(c) For purposes of this Agreement, a "CLAIM NOTICE" relating to
a particular representation or warranty shall be deemed to have been given if
the Purchaser, acting in good faith, delivers to the Seller a written notice
stating that the Purchaser believes that there is or has been a possible Breach
of such representation or warranty and containing (i) a brief description of the
circumstances supporting the Purchaser's belief that there is or has been such a
possible Breach, and (ii) a non-binding, preliminary estimate of the aggregate
dollar amount of the actual and potential Damages that have arisen and may arise
as a direct or indirect result of such possible Breach.
6.2 INDEMNIFICATION BY THE SELLER.
(a) The Seller shall hold harmless and indemnify the Purchaser
from and against, and shall compensate and reimburse the Purchaser for, any
Damages that are directly or indirectly suffered or incurred by the Purchaser or
to which the Purchaser may otherwise become subject at any time (regardless of
whether or not such Damages relate to any third-party claim) and that arise
directly or indirectly from or as a direct or indirect result of, or are
directly or indirectly connected with:
(i) any Breach of any of the representations or
warranties made by the Seller in this Agreement or in the Seller Closing
Certificate or any of the other Transactional Agreements;
(ii) any claim arising or relating to actions or failure
to act by the Seller prior to the date of this Agreement; or
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(iii) any Breach of any covenant or obligation of the
Seller contained in any of the Transactional Agreements.
(b) The Seller shall not be required to make any indemnification
payment pursuant to Section 6.2(a)(i) for any Breach of the representations and
warranties made by it in this Agreement or in the Closing Certificate until such
time as the total amount of all Damages (including the Damages arising from such
Breach and all other Damages arising from any other Breaches of any
representations or warranties) that have been directly or indirectly suffered or
incurred by the Purchaser, or to which the Purchaser has otherwise become
subject, exceeds $25,000. (If the total amount of such Damages exceeds $25,000,
the Purchaser shall be entitled to be indemnified against and compensated and
reimbursed for the entire amount of such Damages, and not merely the portion of
such Damages in excess of $25,000.) Notwithstanding the foregoing, in no event
shall the Seller be liable to the Purchaser for any obligations pursuant to this
Section 6.2 in an amount greater than the aggregate amount of the purchase price
and royalty payments payable by the Purchaser pursuant to the terms of this
Agreement.
6.3 INDEMNIFICATION BY PURCHASER.
(a) The Purchaser shall hold harmless and indemnify the Seller
from and against, and shall compensate and reimburse the Seller for, any Damages
that are directly or indirectly suffered or incurred by the Seller or to which
the Seller may otherwise become subject at any time (regardless of whether or
not such Damages relate to any third-party claim) and that arise directly or
indirectly from or as a direct or indirect result of, or are directly or
indirectly connected with any:
(i) any Breach of any representation or warranty made by
the Purchaser in this Agreement or in the Purchaser Closing Certificate or any
of the other Transactional Agreements;
(ii) any Breach of any covenant or obligation of the
Purchaser contained in any of the Transactional Agreements; or
(iii) any failure on the part of the Purchaser to
perform and discharge its obligations under Section 1.3 on a timely basis.
(b) The Purchaser shall not be required to make any
indemnification payment pursuant to Section 6.3(a)(i) for any Breach of the
representations and warranties made by it in this Agreement or in the Closing
Certificate until such time as the total amount of all Damages (including the
Damages arising from such Breach and all other Damages arising from any other
Breaches of any representations or warranties) that have been directly or
indirectly suffered or incurred by the Seller, or to which the Seller has
otherwise become subject, exceeds $25,000. (If the total amount of such Damages
exceeds $25,000, the Seller shall be entitled to be indemnified against and
compensated and reimbursed for the entire amount of such Damages, and not merely
the portion of such Damages in excess of $25,000.) Notwithstanding the
foregoing, in no event shall the Purchaser be liable to the Seller for any
obligations pursuant to this Section 6.3 in an amount greater than the aggregate
amount of the purchase price and royalty payments payable by the Purchaser
pursuant to the terms of this Agreement.
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6.4 SETOFF. In addition to any rights of setoff or other rights that the
Purchaser may have at common law or otherwise, the Purchaser shall have the
right to withhold, recoup and deduct any sum that may be owed to the Purchaser
under this Section 6 only from amounts due as ongoing royalty payments under
Section 1.3 of this Agreement. The Purchaser shall not exercise any right of
setoff without providing 30 days prior written notice to the Seller of the
dispute and the intent to exercise such right. During the 30-day period
following the Purchaser's due notification of a dispute and intent to exercise a
right of setoff, the Seller and the Purchaser shall each exercise their best
efforts, including mediation if necessary, to settle and compromise the same,
including any matters concerning the validity of claims made by the Purchaser,
the potential damages, if any, such claims would result in for the Purchaser,
the amount of any such damages the Seller would pay under this Section 6, and
the form any such payment would take.
6.5 NONEXCLUSIVITY OF INDEMNIFICATION REMEDIES. The indemnification
remedies and other remedies provided in this Section 6 shall not be deemed to be
exclusive. Accordingly, the exercise by any Person of any of its rights under
this Section 6 shall not be deemed to be an election of remedies and shall not
be deemed to prejudice, or to constitute or operate as a waiver of, any other
right or remedy that such Person may be entitled to exercise (whether under this
Agreement, under any other Contract, under any statute, rule or other Legal
Requirement, at common law, in equity or otherwise).
7. CERTAIN POST-CLOSING COVENANTS.
7.1 FURTHER ASSURANCES. Each party hereto shall execute and/or cause to
be delivered to each other party hereto such instruments and other documents,
and shall take such other actions, as such other party may reasonably request
(prior to, at or after the Closing) for the purpose of carrying out or
evidencing any of the Transactions.
7.2 PUBLICITY. The Seller shall ensure that, on and at all times after
the Closing Date except to the extent required by law: (a) no press release or
other publicity concerning any of the Transactions is issued or otherwise
disseminated by or on behalf of the Seller without the Purchaser's prior written
consent; (b) the Seller continues to keep the terms of this Agreement and the
other Transactional Agreements strictly confidential; and (c) the Seller keeps
strictly confidential, and does not use or disclose to any other Person, any
non-public document or other information that relates directly or indirectly to
the Purchaser or any affiliate of the Purchaser.
8. TERMINATION OF THE LICENSE AGREEMENT; MUTUAL RELEASE.
8.1 TERMINATION. Each of the parties hereby agrees that, effective upon
the Closing, this Agreement supercedes the License Agreement in all respects,
and that, upon consummation of the Closing, the License Agreement will be hereby
terminated, and shall be of no further force or effect.
8.2 MUTUAL RELEASE. Effective upon consummation of the Closing, each of
the parties agrees to the following mutual release:
(a) RELEASE OF THE CLAIMS. Each party, for itself and for and on
behalf of each of its predecessors and successors in interest, principals and
assigns, does hereby remise, release and discharge, absolutely and forever, the
other party and each of its predecessors and
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successors in interest, principals, agents, employees, subsidiaries,
stockholders, affiliates and other entities and persons whether in control of,
controlled by, under common control with or related to such party of and from
any and all claims, causes of action, damages, judgments, losses or liabilities,
whether known or unknown, suspected or unsuspected, of every kind and nature
which now exist and/or heretofore have existed and/or hereafter may exist in the
releasing Party's favor against any such person arising out of or relating or
attributable to the License Agreement.
(b) GENERAL RELEASE. Each party acknowledges that it is aware of
and familiar with the provisions of Section 1542 of the Civil Code of
California, which provides as follows:
"1542. (General Release - Claims Extinguished) A general release
does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
Each party acknowledges that it may hereafter discover facts in addition to or
different from those which it knows or believes to be true with respect to the
subject matter of the release set forth in Section 8.2(a) above, but that it is
its intention to, and it does hereby, fully, finally and forever waive any and
all rights and defenses as set forth in Section 8.2(a) above. In furtherance of
such intention, each party WAIVES any and all rights it may have under Section
1542 of the Civil Code of California as well as the provisions of all
comparable, equivalent or similar statutes and principles of common law of
California or any other State or the United States, and acknowledges that this
waiver is an essential and material term of the release herein and that the
release herein given shall be and remain in effect as a full and complete
general release, notwithstanding the subsequent discovery or existence of any
such additional or different facts. Each party acknowledges and agrees that it
has been fully advised by legal counsel of its choice and that it fully
understands the nature and scope of the releases set forth in this Section 8.2.
(c) NO ADMISSION OF LIABILITY. The releases contained herein do
not constitute an admission of liability on the part of either party as to any
matters whatsoever. The payment of any sums or the execution of this Agreement
shall not be construed as an admission on the part of either party of any
liability or wrongdoing whatsoever.
Notwithstanding the foregoing, neither party releases the other from any
claims pursuant to this Agreement or the transactions contemplated hereby.
9. MISCELLANEOUS PROVISIONS.
9.1 FEES AND EXPENSES. Except as provided in Section 9.2, each party
shall bear its own fees and expenses.
9.2 ATTORNEYS' FEES. Except as otherwise provided in Section 1.3, if any
legal action or other legal proceeding relating to any of the Transactional
Agreements or the enforcement of any provision of any of the Transactional
Agreements is brought against any party to this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs and disbursements
(in addition to any other relief to which the prevailing party may be entitled).
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9.3 NOTICES. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):
if to the Purchaser:
Xxxxx & Company, Inc.
0000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Chief Financial Officer
Facsimile: 000-000-0000
if to the Seller:
Emergent Information Technologies, Inc.
0000 XxxXxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Chief Operating Officer
Facsimile: (000) 000-0000
9.4 TERMINATION. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, at any time prior to the Closing (i) by
mutual written agreement of the Purchaser and the Seller, (ii) by the Purchaser
or the Seller upon written notice to the non-terminating party by the
terminating party at any time after February 15, 2001 if the transactions
contemplated hereby have not been consummated on or prior to such date due to a
failure to satisfy any conditions precedent to Closing and such failure is not
caused by a breach of this Agreement by the terminating party, or (iii) by the
Purchaser or the Seller upon written notice to the non-terminating party by the
terminating party at any time if the non-terminating party reasonably determines
that the conditions precedent to Closing as set forth in Sections 4.8, 4.9, 5.5
and 5.6 cannot be satisfied. Upon termination pursuant hereto, this Agreement
shall become void and of no further force or effect, and neither party shall
have any liability to the other in connection therewith, except that the
foregoing shall not relieve either party of any liability for breach of this
Agreement.
9.5 HEADINGS. The underlined headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
9.6 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
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9.7 GOVERNING LAW; VENUE.
(a) This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of California
(without giving effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating to this
Agreement or the enforcement of any provision of this Agreement may be brought
or otherwise commenced in any state or federal court located in the County of
Fairfax, Virginia or the City of Alexandria, Virginia.
9.8 SUCCESSORS AND ASSIGNS; PARTIES IN INTEREST. This Agreement shall be
binding upon: the Seller and its successors and assigns (if any); and the
Purchaser and its successors and assigns (if any). This Agreement shall inure to
the benefit of: the Seller, the Purchaser, and the respective successors and
assigns (if any) of the foregoing. This Agreement may not be assigned by either
party without the prior written consent of the other.
9.9 WAIVER.
(a) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
(b) No Person shall be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
9.10 AMENDMENTS. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of the Purchaser and the Seller.
9.11 SEVERABILITY. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
9.12 ENTIRE AGREEMENT. The Transactional Agreements set forth the entire
understanding of the parties relating to the subject matter thereof and
supersede all prior agreements and understandings among or between any of the
parties relating to the subject matter thereof, including without limitation any
agreements, whether written or verbal, in connection with the Software.
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9.13 KNOWLEDGE. For purposes of this Agreement, a Person shall be deemed
to have "knowledge" of a particular fact or other matter if any Representative
of such Person has knowledge of such fact or other matter or if a similarly
situated Person would be expected to have acting reasonably in the performance
of his, her or its duties.
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The parties to this Agreement have caused this Agreement to be executed
and delivered as of January 11, 2001.
EMERGENT INFORMATION TECHNOLOGIES, INC.,
a California corporation
By:
-------------------------------------
, President
---------------------
XXXXX & COMPANY, INC.,
a Delaware corporation
By:
-------------------------------------
, President
---------------------
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
AGREEMENT. "AGREEMENT" shall mean the Asset Purchase Agreement to which
this Exhibit A is attached, as it may be amended from time to time.
BREACH. There shall be deemed to be a "BREACH" of a representation,
warranty, covenant, obligation or other provision if there is or has been (a)
any inaccuracy in or breach (including any inadvertent or innocent breach) of,
or any failure (including any inadvertent failure) to comply with or perform,
such representation, warranty, covenant, obligation or other provision, or (b)
any claim (by any Person) or other circumstance that is inconsistent with such
representation, warranty, covenant, obligation or other provision; and the term
"BREACH" shall be deemed to refer to any such inaccuracy, breach, failure, claim
or circumstance.
CLIENT SERVICES. "CLIENT SERVICES" shall mean those services utilizing
the direct application of the Software that were contemplated by the License
Agreement and provided by the Purchaser to its customers via consulting,
outsourcing, service bureau and/or application usage arrangements.
CONSENT. "CONSENT" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
DAMAGES. "DAMAGES" shall include any loss, damage, injury, decline in
value, Liability, claim, demand, settlement, judgment, award, fine, penalty,
Tax, fee (including any legal fee, expert fee, accounting fee or advisory fee),
charge, cost (including any cost of investigation) or expense of any nature.
ENCUMBRANCE. "ENCUMBRANCE" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, equity, trust, equitable
interest, claim, preference, right of possession, lease, tenancy, license,
encroachment, covenant, infringement, interference, Order, proxy, option, right
of first refusal, preemptive right, community property interest, legend, defect,
impediment, exception, reservation, limitation, impairment, imperfection of
title, condition or restriction of any nature (including any restriction on the
transfer of any asset, any restriction on the receipt of any income derived from
any asset, any restriction on the use of any asset and any restriction on the
possession, exercise or transfer of any other attribute of ownership of any
asset).
ENTITY. "ENTITY" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, cooperative, foundation, society,
political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.
GOVERNMENTAL AUTHORIZATION. "GOVERNMENTAL AUTHORIZATION" shall mean any:
(a) permit, license, certificate, franchise, concession, approval, consent,
ratification, permission, clearance, confirmation, endorsement, waiver,
certification, designation, rating, registration,
A-1
22
qualification or authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement; or (b) right under any Contract with any Governmental Body,
in each case relating to the Assets and the Software.
GOVERNMENTAL BODY. "GOVERNMENTAL BODY" shall mean any: (a) nation,
principality, state, commonwealth, province, territory, county, municipality,
district or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign or other government; (c) governmental or quasi-governmental
authority of any nature (including any governmental division, subdivision,
department, agency, bureau, branch, office, commission, council, board,
instrumentality, officer, official, representative, organization, unit, body or
Entity and any court or other tribunal); (d) multi-national organization or
body; or (e) individual, Entity or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military
or taxing authority or power of any nature.
LEGAL REQUIREMENT. "LEGAL REQUIREMENT" shall mean any federal, state,
local, municipal, foreign or other law, statute, legislation, constitution,
principle of common law, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, ruling, directive,
pronouncement, requirement, specification, determination, decision, opinion or
interpretation issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any
Governmental Body, in each case relating to the Assets including without
limitation the Software.
LIABILITY. "LIABILITY" shall mean any debt, obligation, duty or
liability of any nature (including any unknown, undisclosed, unmatured,
unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious,
derivative, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a
balance sheet prepared in accordance with generally accepted accounting
principles and regardless of whether such debt, obligation, duty or liability is
immediately due and payable.
NET RECEIPTS. "NET RECEIPTS" shall mean amounts actually received by the
Purchaser, less discounts, credits and returns, or a reasonable reserve for
returns.
ORDER. "ORDER" shall mean any: (a) order, judgment, injunction, edict,
decree, ruling, pronouncement, determination, decision, opinion, verdict,
sentence, subpoena, writ or award issued, made, entered, rendered or otherwise
put into effect by or under the authority of any court, administrative agency or
other Governmental Body or any arbitrator or arbitration panel; or (b) Contract
with any Governmental Body entered into in connection with any Proceeding.
PERSON. "PERSON" shall mean any individual, Entity or Governmental Body.
PROCEEDING. "PROCEEDING" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding and any informal proceeding), prosecution,
contest, hearing, inquiry, inquest, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental Body or any arbitrator or arbitration panel.
PROPRIETARY ASSET. "PROPRIETARY ASSET" shall mean any patent, patent
application, trademark (whether registered or unregistered and whether or not
relating to a published work),
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trademark application, trade name, copyright (whether registered or
unregistered), copyright application, trade secret, know how, invention, design,
drawing, technology, proprietary right or computer software, in each case owned
by Seller and relating directly to the Software and the Assets.
REPRESENTATIVES. "REPRESENTATIVES" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
TAX. "TAX" shall mean any tax (including any income tax, franchise tax,
capital gains tax, estimated tax, gross receipts tax, value-added tax, surtax,
excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, occupation tax, inventory tax, occupancy tax,
withholding tax or payroll tax), levy, assessment, tariff, impost, imposition,
toll, duty (including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest), that is, has been or
may in the future be (a) imposed, assessed or collected by or under the
authority of any Governmental Body, or (b) payable pursuant to any tax-sharing
agreement or similar Contract.
TAX RETURN. "TAX RETURN" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information that
is, has been or may in the future be filed with or submitted to, or required to
be filed with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.
TRANSACTIONAL AGREEMENTS. "TRANSACTIONAL AGREEMENTS" shall mean: (a) the
Agreement; (b) the Noncompetition Agreement referred to in Section 1.6; (c) the
Note; and (d) the Closing Certificate.
TRANSACTIONS. "TRANSACTIONS" shall mean (a) the execution and delivery
of the respective Transactional Agreements, and (b) all of the transactions
contemplated by the respective Transactional Agreements, including: (i) the sale
of the Assets by the Seller to the Purchaser in accordance with the Agreement;
and (ii) the performance by the Seller and the Purchaser of their respective
obligations under the Transactional Agreements, and the exercise by the Seller
and the Purchaser of their respective rights under the Transactional Agreements.
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EXHIBIT B
FORM OF PROMISSORY NOTE
B-1
25
EXHIBIT C
LICENSE AGREEMENT LOI
C-1
26
EXHIBIT D
SECURITY AGREEMENT
D-1
27
EXHIBIT E
ASSUMPTION AGREEMENT
X-0
00
XXXXXXX X
INTERCREDITOR AGREEMENT
F-1
29
EXHIBIT G
NONCOMPETITION AGREEMENT
G-1
30
SCHEDULE 1
EXISTING PURCHASER CLIENTS
@Link Network, Inc.
BellSouth Long Distance, Inc.
CapRock Communications, Inc. (acquired by McLeodUSA Inc.)
Choice One Communications, Inc.
Excel Communications, Inc.
Focal Communications Corp.
Xxxxxxx Communications, Inc.
Ionex Telecommunications, Inc.
LDMi Telecommunications, Inc.
Net2000 Communications Services, Inc.
PathNet Communications, Inc.
PSINET Inc.
Rhythms NetConnections, Inc.
Rivien Communications, Inc.
SITA/EQUANT
Schedule 1
