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EXHIBIT 2.2
ASSET ACQUISITION AGREEMENT
THIS AGREEMENT is made and executed as of March 27, 1998, by and between
U.S. OnLine Communications, L.L.C., a Washington limited liability company
("Seller"), and U.S. OnLine Communications, Inc., a Delaware corporation
("Buyer").
RECITALS
A. Seller is engaged in the business of providing cable television and
telecommunications services to residential customers (the "Business").
B. Seller is willing and desires to sell substantially all of the assets of
the Business to Buyer.
C. Buyer desires to purchase substantially all of the assets and assume
certain of the liabilities of the Business, all on the terms and conditions as
set forth below.
In consideration of the representations, warranties, mutual covenants and
agreements of the parties contained herein, the parties agree as follows:
1. ACQUISITION OF CERTAIN ASSETS.
a. Purchase and Sale. Seller agrees to sell, convey, transfer and
assign to Buyer and Buyer agrees to purchase from Seller substantially all of
the "Assets" currently owned or being used in the Business (the "Assets"), and
any and all other tangible and intangible assets, including but not limited to
(a) trademarks, service marks, intellectual property, goodwill associated
therewith, licenses and sublicenses granted and obtained with respect thereto,
and rights thereunder, remedies against infringements thereof, and rights to
protection of interests therein under the laws of all jurisdictions, (b) leases,
subleases and rights thereunder, (c) agreements, contracts, insurance contracts,
indentures, mortgages, instruments, security interests, guaranties and other
similar arrangements, (d) accounts, notes, and other receivables, (e) claims,
deposits, prepayments, refunds, causes of action, rights of recovery, rights of
set off and rights of recoupment, (f) franchises, approvals, permits, licenses,
orders, registrations, certificates, variances, and similar rights obtained from
governments and governmental agencies, and (g) any and all goodwill, necessary
to operate the Business, (h) any and all financial or
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business records of Seller (but excluding Seller's limited liability company
records), and (i) all equipment and inventory.
b. Allocation. Buyer and Seller agree to allocate the Purchase Price
(and all other capitalizable costs) among the Assets for all purposes (including
financial accounting and tax purposes) in accordance with Internal Revenue Code
Section 1060 as such allocation shall be detailed, at Closing, on IRS Form 8594.
2. ASSUMED LIABILITIES. Buyer shall assume substantially all liabilities
and obligations of Seller (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due) (the
"Assumed Liabilities"), including but not limited to (a) all liabilities of
Seller for unpaid taxes with respect to periods prior to the Closing, (b) all
liabilities of Seller for income, transfer, sales, use, and other taxes arising
in connection with the consummation of the transactions contemplated hereby, (c)
all liabilities of Seller for the unpaid taxes of persons for which Seller may
be legally liable, (d) all liabilities of Seller for costs and expenses
(including legal fees and expenses) Seller and Seller's members and/or managers
have incurred in connection with this Agreement and the transactions
contemplated hereby, (e) all liabilities and obligations of Seller under any
employee benefit plans, (f) all liabilities and obligations of or relating to
Seller with respect to environmental matters, including without limitation those
arising under Environmental, Health, and Safety Requirements, (g) all
obligations of Seller to indemnify any person by reason of the fact that such
person was a member, manager, employee, or agent of Seller (whether such
indemnification is for judgments, damages, penalties, fines, costs, amounts paid
in settlement, losses, expenses, or otherwise and whether such indemnification
is pursuant to any statute, charter document, bylaw, agreement, or otherwise),
(h) all accrued vacation and sick leave, if any, owed to employees of Seller,
and (i) all other liabilities and/or obligations of Seller under this Agreement
(or under any agreement between Seller on the one hand and Buyer on the other
hand entered into on or after the date of this Agreement). Notwithstanding the
foregoing, Buyer will not assume any of the liabilities or obligations of Seller
which are listed on the attached Exhibit 2, which liabilities and obligations
will remain the sole responsibility of Seller (the "Seller Retained
Liabilities").
3. PURCHASE PRICE.
a. Purchase Price. In consideration of Seller's transfer of the Assets
to Buyer, Buyer will deliver to Seller at Closing (i) its promissory note
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(the "Buyer Note") in the form of Exhibit 3.a attached hereto in the aggregate
principal amount of $3,000,000 and (ii) 800,000 shares of common stock of Buyer.
b. Transfer Taxes, Etc. To the extent applicable, any sales, use or
other transfer taxes due as a result of the purchase and sale of the Assets
contemplated hereby shall be paid by Buyer.
4. CLOSING.
a. Closing Date. Unless otherwise agreed to by the parties, closing of
the purchase of the Assets and the assumption of the Assumed Liabilities (the
"Closing") shall occur within one (1) business day following the satisfaction or
waiver of the conditions to Closing set forth in Section 6 ("Closing Date"), at
the offices of Buyer. If the Closing does not occur on or before March 31, 1999
(the "Termination Date") this Agreement will automatically terminate without any
further action by Buyer or Seller.
b. Seller's Obligations. At Closing, Seller shall deliver to Buyer the
following:
(i) A Xxxx of Sale in the form of Exhibit 4.b.(i) and all other
appropriate documents and instruments in customary form and substance
sufficient to transfer all of Seller's right, title and interest in and to
the Assets, subject to the liens, claims and encumbrances assumed by Buyer
hereunder.
(ii) An Assignment and Assumption Agreement in the form of
Exhibit 4.b.(ii) to assign all contracts and agreements relating to the
Business to Buyer.
(iii) All business records pertaining to any of the Assets.
(iv) All other instruments and documents as shall be reasonably
necessary to fulfill the obligations of Seller hereunder which are required
to be fulfilled on the Closing Date, and to evidence satisfaction of any
conditions to Closing referred to in Section 6 hereof.
c. Buyer's Obligations. At Closing, Buyer shall deliver the following:
(i) The Buyer Note as set forth in Section 3.a.
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(ii) The certificate for the 800,000 shares of Buyer's common
stock, duly issued to Seller.
(iii) All other instruments and documents as shall be reasonably
necessary to fulfill the obligations of Buyer hereunder which are
required to be fulfilled on or before the Closing Date.
d. Cancellation of "Pre-Acquisition Note". At Closing, that certain
fifteen percent (15%) Subordinated Convertible Promissory Note dated as of March
27, 1998, issued by Seller to Buyer in the original principal amount of up to
$7,200,000 shall be canceled, and Buyer shall deliver such promissory note to
Seller so marked.
5. REPRESENTATIONS AND WARRANTIES.
a. Seller's Representations. Seller represents and warrants to Buyer
that the following statements are materially true and correct on the date
hereof, and will be materially true and correct on the Closing Date as though
made on such date:
(i) Authority. Seller is a limited liability company duly organized
under the laws of the State of Washington and has authority to enter into
this Agreement and to carry out the transactions contemplated hereby. This
Agreement and the transactions contemplated hereby have been duly
authorized by the Members and Board of Managers of Seller, and no other
proceeding on the part of Seller is necessary to authorize Seller's members
and/or managers to perform this Agreement and the transactions contemplated
herein. The Agreement is enforceable against Seller in accordance with the
terms hereof.
(ii) Consents and Approvals. Except as described on Schedule
5.a.(ii) hereto, neither the execution of this Agreement nor the
consummation of the sale of the Assets hereunder requires the approval or
consent of any authority having jurisdiction over the business of Seller
nor of any party to any material agreement with Seller. Buyer, in its sole
discretion, shall have the ability to waive Seller's obligation to obtain
any third party consent described in Schedule 5.a.(ii).
(iii) Title. When executed and delivered by Seller, the Xxxx of
Sale in the form attached to this Agreement as Exhibit 4.b (i) will
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transfer good and marketable title to the Assets to Buyer, subject to the
Assumed Liabilities (including but not limited to liens asserted by Silicon
Valley Bank, T & W Funding Company V, L.L.C., and purchase options held by
property owners under right of entry agreements).
(b) Buyer's Representations. Buyer represents and warrants to Seller
that the following statements are materially true and correct as of the date
hereof, and will be true and correct on the Closing Date as though made on such
date: Buyer is a corporation duly organized and in good standing under the laws
of the State of Delaware and has authority to enter into this Agreement and to
carry out the transactions contemplated hereby. This Agreement and the
transactions contemplated hereby have been duly authorized by Buyer, AND no
other corporate proceeding on the part of Buyer is necessary to authorize
Buyer's officers to perform this Agreement and the transactions contemplated
herein. The Agreement is enforceable against Buyer in accordance with the terms
hereof.
6. CONDITIONS TO CLOSING.
(a) To Seller's Performance. The obligation of Seller to close
hereunder on the Closing Date is subject to the fulfillment at or prior to the
Closing Date of the following conditions (any one or more of which may be waived
in whole or in part by Seller in writing):
All material governmental and other consents and approvals, if
any, necessary to permit the consummation of the transactions
contemplated by this Agreement shall have been received, except such
third party consents as may be waived by Buyer in its sole discretion.
Buyer and Seller agree to cooperate and take all reasonably necessary
actions to obtain receipt of such approvals.
(b) To Buyer's Performance. The obligations of Buyer to close
hereunder on the Closing Date are subject to the fulfillment at or prior to the
Closing Date of the following conditions (ANY ONE OR MORE OF WHICH MAY BE WAIVED
IN WHOLE OR IN PART BY BUYER IN WRITING):
All material governmental and other consents and approvals, if
any, necessary to permit the consummation of the transactions
contemplated by this Agreement shall have been received, except such
third party consents as may be waived by Buyer in its sole discretion.
Buyer and Seller agree to cooperate and take all reasonably
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necessary actions to obtain receipt of such approvals.
7. COVENANTS.
(a) Conduct of the Business of Seller. From the date of this Agreement
until the Closing Date, Seller will conduct its Business in the ordinary and
usual course, consistent with Seller's past practices, except as Buyer may
otherwise consent.
(b) Publicity. All notices to third parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and coordinated by and between Buyer and Seller.
(c) Access to Records. After Closing, Buyer shall permit Seller to
have reasonable access during regular business hours to business records of
Seller acquired pursuant to this Agreement for legitimate business or legal
purposes.
(d) Name Change. Seller agrees to change its name, within fifteen (15)
days following Closing, to a name that will permit Buyer to use the name "U.S.
OnLine Communications, Inc." in all states in which Seller is currently doing
business.
(e) Indemnification. Seller will defend, indemnify and hold Buyer
harmless from any claims or liability asserted by Seller's members against Buyer
which challenge the validity or fairness of the sale of the Assets under this
Agreement.
8. NOTICES.
Notices contemplated or required by this Agreement shall be deemed given
when served personally on an officer of Seller or Buyer, two (2) days after
deposited in the United States mail, postage prepaid, registered or certified
mail, and addressed to the party entitled to notice, or when received if
delivered by overnight courier, at the following addresses (or such other
address as designated by either party hereafter by notice):
Seller: U.S. OnLine Communications, L.L.C.
Xxxxx 0000
0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
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Buyer: U.S. OnLine Communications, Inc.
0000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
9. SUCCESSORS; GOVERNING LAW.
This Agreement shall be binding on and enforceable by the heirs, successors
and assigns of the parties hereto. The entire Agreement shall be construed and
enforced in accordance with the laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
10. COMPLETE AGREEMENT.
This Agreement and the exhibits and other instruments attached set forth
the entire agreement of the parties with respect to the transactions
contemplated herein, and cannot be amended or changed except by written
instrument signed by the party to be bound. This Agreement is the complete and
integrated expression of the dealings between the parties.
11. FURTHER ASSURANCES
The parties hereto agree to take all reasonable actions, including
executing certificates of title and other documents, to effect the transactions
contemplated hereby.
12. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"SELLER":
U.S. ONLINE COMMUNICATIONS, L.L.C.,
a Washington limited liability company
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By
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Its
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"BUYER":
U.S. ONLINE COMMUNICATIONS, INC., a
Delaware corporation
By
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Its
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