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Exhibit 10.5
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
GOLDEN SKY SYSTEMS, INC.
AND
VOLCANO VISION, INC.
DATED AS OF
JULY 10, 1998
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Table of Contents
Page
I. Sale and Transfer of Assets....................................
A. Subject Assets............................................
B. Purchase Price............................................
II. Closing Procedures and Exchange of Considerations..............
A. Closing ..................................................
B. Buyer's consideration.....................................
1. Buyer Deposit....................................
2. Base Purchase Price..............................
3. Adjustments to Base Purchase Price...............
4 Determination of Adjustments.....................
5. Allocation of Consideration......................
6 Assumed Liabilities..............................
C. Seller's Consideration....................................
1. Conveyance of Title; Liens and Encumbrances......
2. Excluded Assets..................................
III. Representations and Warranties of Seller.......................
A. Organization..............................................
B. Qualification.............................................
C. Authority and Validity....................................
D. No Breach or Violation....................................
E. Assets....................................................
F. Compliance with Laws......................................
G. Patents, Trademarks and Copyrights........................
H. Financial Data............................................
1. Legal Proceedings.........................................
J. Tax Liens and Obligations.................................
K. Employment Matters........................................
L. Subscribers...............................................
M. System Data...............................................
N. Finders and Brokers.......................................
O. Disclosure................................................
P. Seller Contracts..........................................
IV. Representations and Warranties of Buyer........................
A. Organization and Qualification ...........................
B. Authority and Validity....................................
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Table of Contents
Page
C. No Breach or Violation....................................
D. Disclosure................................................
E. Finders and Brokers.......................................
V. Additional Covenants...........................................
A. Access to Premises and Records............................
B. Continuity and Maintenance of Operations; Current
Financial Information..................................
C. Required Consents.........................................
D. No Shopping...............................................
E. Notification of Certain Matters...........................
F. Risk of Loss..............................................
G. Transfer Taxes............................................
H. Non-Competition Agreements................................
1. Updated Schedules.........................................
J. Use of Seller's Name......................................
K. Satisfaction of Conditions................................
L. Confidentiality...........................................
M. Transition................................................
VI. Conditions to Closing..........................................
A. Conditions to the Obligations of Buyer and Seller.........
B. Conditions to the Obligations of Buyer....................
C. Conditions to Obligations of Seller.......................
D. Waiver of Conditions......................................
VII. Termination....................................................
A. Events of Termination.....................................
B. Liabilities in Event of Termination.......................
C. Procedure Upon Termination................................
VIII. Survival of Representations and Warranties; Indemnification....
A. Survival of Representations and Warranties................
B. Indemnification by Seller.................................
C. Indemnification by Buyer..................................
D. Third Party Claims........................................
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Table of Contents
Page
IX. Miscellaneous..................................................
A. Parties Obligated and Benefited...........................
B. Notices ................................................
C. Legal Remedies and Attorneys' Fees........................
D. Right to Specific Performance.............................
E. Waiver....................................................
F. Captions..................................................
G. Choice of Law.............................................
H. Rights Cumulative.........................................
I. Further Actions...........................................
J. Time......................................................
K. Counterparts..............................................
L. Entire Agreement..........................................
M. Severability..............................................
N. Construction..............................................
0. Late Payments.............................................
P. Expenses..................................................
List of Schedules..............................................
Schedule II.B.5 Allocation of Consideration..........
Schedule II.C. I Schedule of Assets..................
Schedule III.H Financial Data.......................
Schedule III.K Employee Listing.....................
Schedule III.M Schedule of Rates and Product
Description........................................
Schedule III.P Seller Contracts......................
Schedule V.C Required Consents.......................
Exhibit List...................................................
Exhibit A Xxxxxxx Money Escrow Agreement.............
Exhibit B Indemnity Escrow Agreement.................
Exhibit C Xxxx of Sale...............................
Exhibit D Assignment and Assumption of Contracts
Agreement..................................
Exhibit E Assignment and Assumption of Equipment
Financing Agreements and Customer
Equipment Lease Agreements.................
Exhibit F Seller Non-Competition Agreement...........
Exhibit G Opinion Letter of Seller's Counsel.........
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made and entered into
as of this 10th day of July, 1998, by and between Golden Sky Systems, Inc., a
Delaware corporation, its successors or assigns (collectively, "Buyer"), and
Volcano Vision, Inc., a California corporation ("Seller"), hereinafter.
Recitals
Seller is engaged in the business of providing DIRECTV(R) programming
services to subscribers within the counties of Alpine, Xxxxxx, Calaveras, El
Dorado, and Tuolumne in the State of California and the counties of Xxxxxx City,
Xxxxxxx, Xxxx and Xxxxxx in the State of Nevada (the "Service Area"). Seller
conducts such business in accordance with the terms of its NRTC/Member Agreement
for Marketing and Distribution of DBS Services (the "Member Agreement" in the
National Rural Telephone Cooperative ["NRTC"]). Buyer desires to purchase and
Seller desires to sell all of Seller's assets used or held for use in Seller's
DIRECTV(R) business as conducted within the Service Area.
Agreement
In consideration of the above recitals and the mutual agreements
stated in this Agreement, the parties intending to be legally bound, agree as
follows:
I. Sale and Transfer of Assets.
A. Subject Assets. Upon the terms and subject to the conditions set
forth in this Agreement, Seller will sell to Buyer, and Buyer will purchase from
Seller, all of Seller's rights, title, and interest in and to the assets which
comprise Seller's Direct Broadcast Satellite ("DBS") Business (the "Business").
Such assets (the "Assets") are described with particularity in Schedule II.C.1
to this Agreement.
B. Purchase Price. As consideration for purchase of the Assets, Buyer
will pay to Seller the sum of Thirty Million Dollars ($30,000,000), at the times
and in the manner hereinafter provided in this Agreement, and subject to
adjustments as also hereinafter provided.
II. Closing Procedures and Exchange of Considerations.
A. Closing. The Closing of this transaction shall occur on a date (the
"Closing Date") to be designated mutually by Buyer and Seller which will
coincide with the ending date of the NRTC billing cycle first occurring more
than 10 days following receipt of all the Required Consents hereinafter defined
in this Agreement, but in no event later than February 27, 1999, unless mutually
extended by the parties. The Closing will be held at the offices of Polsinelli,
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White, Xxxxxxxx & Xxxxxxx, P.C., 000 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx,
Xxxxxxxx, or at such other place as Buyer and Seller may agree.
B. Buyer's Consideration.
1. Buyer Deposit. Prior to or within 10 business days after
execution of this Agreement and subject to the terms of the
"Xxxxxxx Money Escrow Agreement," attached hereto as Exhibit A,
Buyer will deliver to Commerce Bank, N.A. (the "Escrow Agent")
the sum of Nine Hundred Thousand Dollars ($900,000) which,
together with all interest earned thereon, shall be referred to
herein as the "Buyer Deposit". The Buyer Deposit shall be held by
the Escrow Agent pursuant to the Xxxxxxx Money Escrow Agreement.
Following the Closing, the Buyer Deposit shall be returned to the
Buyer. In the event the transaction does not close for reasons
not related to fault of the Buyer, the Buyer Deposit shall be
returned to the Buyer.
2. Base Purchase Price. Buyer will pay to Seller the total
consideration of Thirty Million Dollars ($30,000,000) (the "Base
Purchase Price"), to be paid at the Closing as set forth below,
subject to adjustment as hereinafter provided, and Buyer will
assume certain obligations of Seller as further provided
hereinafter. At the Closing, Twenty-Nine Million One Hundred
Thousand Dollars ($29,100,000) of such amount (as adjusted
pursuant to the terms contained herein) will be paid to Seller
(or to such payees as Seller may designate) by one or more wire
transfers of immediately available funds, in such amounts and to
such Seller or payee accounts as shall be designated by Seller.
Buyer shall further deposit Nine Hundred Thousand Dollars
($900,000) into a new escrow account with the Escrow Agent in
accordance with the "Indemnity Escrow Agreement" attached hereto
as Exhibit B, to be entered into on the Closing Date by Seller,
Buyer and the Escrow Agent.
3. Adjustments to Base Purchase Price. The Base Purchase Price
will be adjusted on a pro rata basis as of the Closing Date for
all prepaid expenses (to the extent that such prepaid expenses
accrue to Buyer's benefit), prepaid revenues, accounts receivable
of active subscribers that are 60 days or less past due and tax
prorations, to reflect the principle that all expenses and income
attributable to the Business for the period through the Closing
Date are for the account of Seller and all expenses and income
attributable to the Business for the period after the Closing
Date are for the account of Buyer, all in accordance with
generally accepted accounting principles. Seller agrees to offer
advertising promotions and discounts to customers only if they
are economically feasible and commercially reasonable given the
nature of the Business (unless approved in writing by Buyer). For
purposes of calculating adjustments, the parties agree to utilize
the most current accounts receivable reporting information
available from the NRTC at the effective date of Closing. Buyer
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will assume responsibility for honoring all advance payments and
customer deposits as of the Closing Date. Buyer will receive,
credit therefor against the Base Purchase Price.
4. Determination of Adjustments. Preliminary and final
adjustments to the Base Purchase Price will be determined as
follows:
a. At least five (5) business days prior to the Closing
Date, Seller will deliver to Buyer a report (the
"Preliminary Adjustments Report") showing in detail the
preliminary determination of the above-enumerated
adjustments to the Base Purchase Price, calculated as of the
Closing Date. The Preliminary Adjustments Report will
include a schedule setting forth advance payments and
deposits made to or by Seller, as well as accounts
receivable information relating to the Business (showing
sums due and their respective aging as of the Closing Date).
Seller also will furnish to Buyer its billing report for the
most current NRTC billing cycle preceding the Closing Date.
The adjustments shown in the Preliminary Adjustments Report
will be reconciled either forward or backward, as the case
may be, from the most recent NRTC billing cycle.
b. Within 60 days after the Closing, Seller will deliver to
Buyer a report (the "Final Adjustments Report"), certified
by Seller, showing in detail the final determination of all
adjustments which were not calculated as of the Closing Date
and containing any corrections to the Preliminary
Adjustments Report, together with any documents
substantiating the adjustments proposed in the Final
Adjustments Report. Upon not less than 48 hours' notice,
Buyer will give Seller and its representatives full access
at reasonable times to all the premises and books and
records of the Business and to all the Assets which are
under the control of Buyer and which are necessary for
Seller to prepare the Final Adjustments Report or as
necessary to comply with any law, regulation, other
governmental requirement or any other reasonable business
purpose. Buyer agrees it, its officers and employees will
cooperate with and assist Seller in its reasonable requests
for information.
c. Within 30 days after receipt of the Final Adjustment
Report, Buyer will give Seller written notice of Buyer's
objections, if any, to the Final Adjustments Report. If
Buyer makes any such objections, the parties will agree on
the amount, if any, which is not in dispute within 30 days
after Seller's receipt of Buyer's notice of objections to
the Final Adjustments Report. Any undisputed amount will be
paid by Buyer to Seller, or paid by Seller to Buyer,
whichever the case may be, within 120 days after the Closing
Date or within three (3) business days after agreement on
the undisputed portion of the Final Adjustments Report, if
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later. Any disputed amounts will be determined in accordance
with this Agreement within 180 days after the Closing Date
by the accounting firm of Price Waterhouse, Kansas City,
Missouri, (or any other accounting firm acceptable to both
Buyer and Seller), whose determination (the "Final
Determination") will be conclusive. Seller and Buyer will
bear the fees and expenses payable to such firm in
connection with such determination in reverse proportion to
the manner in which the disputed amounts are allocated by
the accountants. The payment required by the Final
Determination will be made by the responsible party to the
other party within three (3) business days after the date on
which the Final Determination is issued.
5. Allocation of Consideration . The consideration payable by
Buyer under this Agreement will be allocated among the Assets as
set forth in Schedule II.B.5 hereto. Buyer and Seller agree to be
bound by the allocation and will not take any position
inconsistent with such allocations and will file all returns and
reports with respect to the transactions contemplated by this
Agreement, including all federal, state and local tax returns, on
the basis of such allocations, including, without limitation, IRS
Form 8594. The parties agree that Schedule II.B.5 shall be
negotiated and finalized on or prior to the Closing Date, unless
otherwise mutually agreed.
6. Assumed Liabilities. Seller will assign, and Buyer will assume
and perform only the Assumed Liabilities, which are defined as:
(a) Seller's Obligations to subscribers for refundable subscriber
deposits and subscriber advance payments credited as adjustments
to the Base Purchase Price and (b) Seller's obligations accruing
and relating to periods after the Closing Date under the Seller
Contracts set forth in Schedule III.P hereto. Buyer will not
assume, or have any responsibility for any liabilities or
obligations of Seller other than the Assumed Liabilities. Buyer
does not, pursuant to this Agreement or otherwise, agree to
perform, pay, discharge or indemnify Seller against, or otherwise
have any responsibility for, any liabilities or obligations of
Seller, fixed, contingent or otherwise, relating to or arising
out of the Seller's operation of the Business, except as
expressly set forth in this paragraph as an Assumed Liability. It
is expressly understood that the parties intend that the Buyer
shall not be considered a successor to Seller by reason of any
theory of law or equity or otherwise.
C. Seller's Consideration.
1. Conveyance of Title; Liens and Encumbrances. At the Closing,
Seller shall deliver to Buyer a Xxxx of Sale in the form set
forth in Exhibit C to this Agreement, together with such other
documents and instruments of conveyance as are necessary or
convenient to effectuate the transfer and conveyance of good and
marketable title to all of the Assets to Buyer. The Assets are
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described with particularity in Schedule II.C.1 to this
Agreement. Seller warrants that the assets set forth on such
schedule comprise all of the assets that Seller uses to conduct
its DBS business with the exception of (a) the real property
where the DBS business office is located and (b) assets used by
Seller jointly to conduct its DBS business and other businesses
that Seller is engaged in (e.g., vehicles use jointly for DBS
and cable TV service calls). Title to the Assets shall be
transferred free and clear of any and all mortgages, liens,
encumbrances, security interests or defects in title.
2. Excluded Assets. Seller will retain all right, title and
interest in and to the following assets (the "Excluded Assets")
associated with the Business: (a) all insurance policies and
rights and claims thereunder; (b) all bonds, letters of credit,
surety instruments and other similar items; (c) all cash and cash
equivalents; (d) all of Seller's rights under any agreement
governing or evidencing an obligation of Seller for borrowed
money; (e) all of Seller's rights under any contract, license,
authorization, agreement or commitment other than those listed as
Seller Contracts in Schedule III.P hereto or those creating or
evidencing Assumed Liabilities; (f) qualified patronage capital
certificates and any patronage dividends which may be due at
Closing; (g) the trade names "Volcano Vision" and "Volcano
Satellite"; (h) any assets used in the Business that are also
used in common by other business enterprises of Seller; and (i)
any fee interests in real property.
III. Representations and Warranties of Seller.
To induce Buyer to enter into this Agreement, Seller makes the
following representations and warranties to Buyer, as of the date of this
Agreement and as of the Closing:
A. Organization. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of California, and is
authorized to do business and is in good standing in the State of Nevada.
B. Qualification. Seller has all requisite power and authority to own,
lease and use the Assets as they are currently owned, leased and used and to
conduct the Business as it is currently conducted.
C. Authority and Validity. Seller has all requisite corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement.
Seller's execution, delivery, performance and consummation of this Agreement
have been duly authorized by all requisite corporate action of Seller. This
Agreement is the valid and binding obligation of Seller, enforceable in
accordance with its terms.
D. No Breach or Violation. Subject to obtaining the Required Consents,
all of which are listed on Schedule VC hereto, the execution, delivery and
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performance of this Agreement by Seller will not (1) violate any provision of
its organization documents; (2) violate any requirement of law; (3) require any
consent, approval or authorization of, or any filing with or notice to, any
Person which has not been obtained; or (4) violate, conflict with or constitute
a breach of or default under any Seller Contract or any other instrument
evidencing any of the Assets or any instrument or other agreement to which
Seller is a party or by which Seller or any of its assets is bound or affected.
E. Assets. Seller has exclusive, good and marketable title to the
Assets. The Assets are all of the assets of Seller used or held for use in the
Business, other than the Excluded Assets, and are free and clear of all
encumbrances of any kind or nature. The tangible assets are in good and operable
condition and repair, ordinary wear and tear excepted, and are suitable and
adequate for continued use in the manner they are presently used. The Assets are
all the assets necessary to permit Buyer to conduct the Business substantially
as it is currently being conducted on the date of this Agreement.
F. Compliance with Laws. The ownership, leasing and use of the Assets
as they currently owned, leased and used by Seller and the conduct of the
Business as it is currently conducted do not violate any laws, the violation of
which, individually or in the aggregate, would have a material adverse effect on
the Business. Seller has not received any notice claiming a violation of law
with respect to the Business.
G. Patents, Trademarks and Copyrights. Other than the trade names
"Volcano Vision" and "Volcano Satellite," Seller does not possess any patent,
patent right, trademark or copyright relative to the Business, and there is no
application pending with any governmental authority for any of the foregoing.
Seller is not a party to any license or royalty agreement applicable to the
Business with respect to any patent, trademark or copyright, except for licenses
respecting general obligations of the Business under the Copyright Act of 1976.
The operations of the Business as currently conducted do not violate or infringe
upon any person's name, right of privacy, copyright, trademark, service xxxx,
license, patent, trade secret, or the like, and there are no suits, claims or
proceedings threatened or outstanding with respect to the same or any facts or
circumstances which could substantiate any of the foregoing.
H. Financial Data. Seller furnishes to Buyer the financial information
attached hereto as Schedule III.H. The data set forth on such schedule includes
the revenues of Seller's DBS Business for the year ended December 31, 1997, and
partial year data for 1998. The financial information set forth on such schedule
is true and correct and fairly presents those financial aspects of Seller's DBS
Business which it portrays. Seller will cause to be prepared, at Buyers'
expense, a statement of Seller's auditors verifying the accuracy of the
financial data on such schedule.
I. Legal Proceedings. There is no judgment or order outstanding, or
any action, suit, complaint, proceeding or investigation by or before any court
or legal authority or any arbitrator pending or threatened, involving or
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affecting all or any part of Seller's Assets of Business.
J. Tax Liens and Obligations. There are no outstanding tax liens,
charges or obligations relative to Seller's Assets, other than those that will
be prorated through the closing process as adjustments to the Base Purchase
Price.
K. Employment Matters. Schedule III.K hereto includes a complete and
correct list of the names and positions of all employees engaged in the Business
and their current hourly wages or monthly salaries. Seller has no employment
agreement of any kind, oral or written, express or implied, that would require
Buyer to employ any person after the Closing Date or to retain any person as an
independent contractor. Seller is in compliance with all federal and state laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours. As soon as practicable as determined by both
Buyer and Seller, Buyer agrees to discuss individually with Seller's employees
the opportunities for employment with Buyer and the wages and benefits which
would be offered to such employees. Seller agrees to make such employees
reasonably available for discussions with Buyer about employment after Closing.
It is Buyer's intent at the execution of this Agreement to maintain a local
presence in the Service Area for such period of time as it is economically
feasible as determined by Buyer. Buyer will consider Seller's current employees
for such positions if such employees are individually willing to discuss the
possibilities of employment with Buyer, it being understood that Buyer has no
obligation to employ any employee of Seller after Closing. Buyer shall not
assume or be responsible for any COBRA or ERISA obligations of Seller. All
claims of any employee against Seller arising or incurred on or prior to the
date of Closing will remain the responsibility of Seller, whether or not the
respective employee is hired by Buyer on or after Closing.
L. Subscribers. Seller has not less than 10,000 active and current
subscribers (not more than 60 days past due) to "Programming Services," which is
defined as one or more tiers of subscription satellite programming for which a
subscriber pays a monthly fee.
M. System Data. As of October, 1992, Seller has the right to provide
Programming Services to approximately 129,820 homes, 21,936 of which do not have
access to a cable television provider(s) and 107,884 of which have access to a
cable television provider. Schedule III.M hereto sets forth rates charged by
Seller for satellite services, breakdown of the channel packages sold, and
general description of marketing promotions and discounts offered to subscribers
since January 1, 1998.
N. Finders and Brokers. Buyer will have no obligation for payment of
any finder's commission or similar fee to any financial advisor, broker or
finder retained by Seller in connection with the transactions contemplated by
this Agreement.
O. Disclosure. No representation or warranty made by Seller in this
Agreement or in any schedule or exhibit to this Agreement, or any statement,
list or certificate furnished or to be furnished by it pursuant to this
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Agreement, contains or will contain any untrue statement of material fact, or
omits or will omit any material fact required to be stated therein or necessary
to make the statements contained therein not misleading in light of the
circumstances in which made.
P. Seller Contracts. Schedule III.P hereto contains a complete and
accurate list of all "Seller Contracts." Except as set forth in such schedule:
(1) each Seller Contract is in full force and effect and is valid and
enforceable in accordance with its terms; (2) Seller is, and at all times has
been, in compliance with all material applicable terms and requirements of each
Seller Contract under which Seller has or had any obligation or liability or by
which Seller or any of the Assets is or was bound; (3) no event has occurred or
circumstance exists that (with or without notice or lapse of time) may
contravene, conflict with, or result in a material violation or breach of, or
give Seller or other person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Seller Contract; and (4) Seller has not given or
received from any other person, at any time any notice or other communication
(whether oral or written) regarding any actual, alleged, possible, or potential
material violation or breach of, or default under, any Seller Contract. Seller
currently holds the Member Agreement which gives Seller exclusive rights to
provide Programming Services to homes in the Service Area, and such agreement is
in full force and effect with no defaults thereunder.
IV. Representations and Warranties of Buyer.
To induce Seller to enter into this Agreement, Buyer represents and
warrants to Seller as of the date of this Agreement and as of the Closing, as
follows:
A. Organization and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
has all requisite corporate power and authority to carry on its business as
currently conducted and to own, lease, use and operate its assets.
B. Authority and Validity. Buyer has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement.
Buyer's execution, delivery, performance and consummation of this Agreement have
been duly authorized by all requisite corporate action of Buyer. This Agreement
is the valid and binding obligation of Buyer, enforceable in accordance with its
terms.
C. No Breach or Violation. Subject to obtaining the Required Consents,
all of which are listed on Schedule VC hereto, the execution, delivery and
performance of this Agreement by Buyer will not: (1) violate any provision of
the charter or bylaws of Buyer; (2) violate any legal requirement; (3) require
any consent, approval or authorization of, or any filing with or notice to, any
person, which has not been obtained or (4)(a) violate, conflict with or
constitute a breach of or default under (without regard to requirements of
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notice, passage of time or elections of any person), (b) permit or result in the
termination, suspension or modification of, (c) result in the acceleration of
(or give any person the right to accelerate) the performance of Buyer under, or
(d) result in the creation or imposition of any encumbrance under, any
instrument or other agreement to which Buyer is a party or by which Buyer or any
of its assets is bound or affected, except for purposes of this clause (4) such
violations, conflicts, breaches, defaults, terminations, suspensions,
modifications, and accelerations as would not, individually or in the aggregate
have a material adverse effect on Buyer or on the validity, binding effect or
enforceability of this Agreement.
D. Disclosure. No representation or warranty by Buyer in this
Agreement or in any exhibit to this Agreement, or any statement or certificate
furnished or to be furnished by Buyer pursuant to this Agreement, contains or
will contain any untrue statement of material fact, or omits or will omit any
material fact required to be stated therein or necessary to make the statements
contained therein not misleading in light of the circumstances in which made.
E. Finders and Brokers. Seller will have no obligation for payment of
any finder's commission or similar fee to any financial advisor, broker or
finder retained by Buyer in connection with the transactions contemplated by
this Agreement.
V. Additional Covenants.
A. Access to Premises and Records. Between the date of this Agreement
and the Closing Date, and upon not less than 48 hours' notice, Seller will give
Buyer and its representatives full access at reasonable times to the premises
and books and records of the Business and to all the Assets which are under the
control of Seller and will furnish to Buyer and its representatives such
information regarding the Business and the Assets as Buyer may from time to time
reasonably request. Seller, its officers and its employees will cooperate with
and assist Buyer in its reasonable requests for information.
B. Continuity and Maintenance of Operations: Current Financial
Information. Except as Buyer may otherwise agree in writing, until the Closing:
1. Seller will continue to operate its Business in the ordinary
course consistent with past practices and will use its best
efforts to keep available the services of its employees employed
in connection with the Business and to preserve any beneficial
business relationships with customers, suppliers and others
having business dealings with the Seller relating to the
Business. Without limiting the generality of the foregoing,
Seller will maintain the Assets in good condition and repair,
will maintain adequate inventories of equipment consistent with
past practice, will maintain insurance as in effect on the date
of this Agreement, and will keep all of its business books,
records and files in the ordinary course of business all in
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accordance with past practices. Seller will not itself, and nor
will it permit any of its officers, directors, shareholders,
agents or employees to, pay any of the subscriber accounts
receivable prior to the Closing Date. Seller will continue to
implement its procedures for disconnection and discontinuance of
service to subscribers whose accounts are delinquent in
accordance with those in effect on the date of this Agreement.
2. Seller agrees it will NOT: (a) make any material business
decisions which could adversely affect the Business or the
Assets; (b) change the rates charged for Programming Services
from those listed on Schedule III.M hereto; (c) sell, transfer or
assign any of the Assets (other than in the ordinary course of
business) or permit the creation of any material encumbrance on
any Asset; (d) permit the amendment or cancellation of any
license or Seller Contract or any other material contract or
agreement (other than those constituting Excluded Assets) which
affects or is applicable to the Business; (e) enter into any
contract or commitment or incur any indebtedness or other
liability or obligation of any kind relating to the Business
involving an expenditure which, in the aggregate, would exceed
$50,000, if such contract, commitment, indebtedness, liability or
obligation, by its terms, will survive the Closing; or (f) take
or omit to take any action that would cause Seller to be in
breach of any of its representations or warranties in this
Agreement. Notwithstanding the foregoing, Seller may, at any time
prior to or at the Closing, transfer, distribute, assign or sell
to any person, or retain for Seller's own account, any or all of
the Excluded Assets (none of which are to be transferred to Buyer
at the Closing).
3. Seller will deliver to Buyer copies of unaudited, monthly
statements of operating revenues of the Business and any internal
financial reports with respect to the operations of the Business
between the date of this Agreement and the Closing.
4. Following the Closing, Buyer may occupy the office premises
currently used by Seller to conduct the Business, free of rent,
for a period of 60 days. Seller will make such premises available
to Buyer after such 60-day period pursuant to commercially
reasonable lease terms to be negotiated by the parties. Seller
will further provide for Buyer to maintain Seller's current
arrangement with The Volcano Telephone Company for the provision
of customer order processing for pay-per-view and similar
services for a period of at least 60 days, with the charges for
such services to be paid by Buyer.
C. Required Consents. "Required Consents" are defined as all licenses,
authorizations, approvals and consents required under Seller Contracts or
otherwise for (1) Seller to transfer the Assets and the Business to Buyer, (2)
Buyer to conduct the Business and to own, lease, use and operate the Assets at
the places and in the manner in which the Business is conducted as of the date
of this Agreement and on the Closing Date, (3) Buyer to assume and perform
15
the Seller Contracts, and (4) Buyer to collaterally assign the Assets to its
lenders as security for Buyer's indebtedness.
1. Within 10 business days after execution of this Agreement,
Buyer and Seller shall submit to the NRTC, and thereafter, as
required by the NRTC to DIRECTV, an application to transfer to
Buyer the Member Agreement. Each of the parties will take all
additional action that may be necessary, proper or advisable and
will furnish each other such necessary information and reasonable
assistance as the other may reasonably request in connection with
its preparation of filings or submissions required by either the
NRTC or DIRECTV.
2. Seller and Buyer agree to use their best efforts to obtain all
Required Consents, but Buyer will not be required to agree to any
material adverse changes in, or the imposition of any material
adverse condition upon the transfer to Buyer of any Seller
Contract as a condition to obtaining any Required Consent. Seller
will use its best efforts to obtain, at its expense, such
estoppel certificates or similar documents from lessors and
other persons who are parties to Seller Contracts as Buyer may
reasonably request.
3. Each party shall bear its own expenses in connection with
obtaining the Required Consents, except that (a) filing fees for
any governmental approval or review and (b) processing or
transfer fees in connection with NRTC and/or DIRECTV approvals to
transfer the Member Agreement shall be divided equally between
the parties.
D. No Shopping. Seller shall not, during the period commencing on the
date of this Agreement and ending with the earlier to occur of the Closing or
the termination of this Agreement, directly or indirectly (1) solicit or
initiate the submission of proposals or offers from any person for, (2)
participate in any discussions pertaining to, or (3) furnish any information to
any person other than Buyer relating to any direct or indirect acquisitions or
purchase of all or any portion of the Assets or the securities of Seller,
whether by purchase, merger or otherwise, or any such business combination. The
Seller shall cause its respective officers, employees, representatives, agents
and affiliates to refrain from doing any of the foregoing.
E. Notification of Certain Matters. Seller will promptly notify Buyer
of any material fact, event, circumstance or action (1) which, if known to
Seller on the date of this Agreement, would have been required to be disclosed
by Seller to Buyer pursuant to this Agreement, or (2) the existence or
occurrence of which would cause any of Seller's representations or warranties
under this Agreement not to be correct; and Buyer will promptly notify Seller of
any material fact, event, circumstance or action which, if known to Buyer on the
date of this Agreement, would have been required to be disclosed by Buyer to
Seller pursuant to this Agreement, or the existence or occurrence of which
16
would cause any of Buyer's representations or warranties under this Agreement
not to be correct.
F. Risk of Loss. Seller will maintain up to and through the Closing
Date policies of insurance in adequate amounts covering the Assets. Seller will
bear the risk of any loss or damage to the Assets resulting from fire, theft or
other casualty (except reasonable wear and tear) at all times prior to the
Closing. If any such loss or damage is so substantial as to prevent normal
operation of any material portion of the Business or the replacement or
restoration of the lost or damaged property within 20 days after the occurrence
of the event resulting in such loss or damage, Seller will promptly notify
Buyer of that fact and Buyer, at any time within 10 days after receipt of such
notice, may elect by written notice to Seller either (1) to terminate this
Agreement, in which case, Buyer and Seller will be discharged of any and all
obligations hereunder and, in such case, Buyer shall be entitled to the Buyer
Deposit, or (2) to proceed to consummate the transactions contemplated by this
Agreement. If Buyer elects to consummate the transactions contemplated by this
Agreement notwithstanding such loss or damage and does so, there will be no
adjustment in the consideration payable to Seller on account of such loss or
damage, but all insurance proceeds payable as a result of the occurrence of the
event resulting in such loss or damage will be delivered by Seller to Buyer, or
the rights to such Proceeds will be assigned by Seller to Buyer if not yet paid
over to Seller.
G. Transfer Taxes. Seller will collect from Buyer all sales, use and
vehicle transfer taxes and fees payable with respect to transfer of the Assets
and will remit the same to the taxing authorities. In the event that any
governmental authority shall at any time impose or otherwise require or demand
payment by or from either Seller or Buyer of any other transfer, excise,
documentary or license taxes or fees with respect to the sale or transfer of the
Assets, Seller and Buyer shall equally divide such other taxes or fees.
H. Non-Competition Agreement. At the Closing, Seller shall sign and
deliver to Buyer a Non-Competition Agreement substantially in the form of
Exhibit F attached hereto and incorporated herein by reference. The
consideration for the Non-Competition Agreement executed by Seller shall be
allocated as part of the purchase price paid to Seller in accordance with
Section II.B.5 above.
I. Updated Schedules. Not less than five (5) business days prior to
Closing, Seller will deliver to Buyer revised copies of Schedules which shall
have been updated to show any changes occurring between the date of this
Agreement and the date of delivery; provided, however, that for purposes of
Seller's representations and warranties and covenants in this Agreement, all
references to the Schedules will mean the version of the Schedules attached to
this Agreement on the date of signing, and provided further that if the effect
of any such updates to Schedules is to disclose any one or more additional
properties, privileges, rights, interests or claims as Assets, or disclose
previously undisclosed liabilities, Buyer, at or before Closing, will have the
right (to be exercised by notice to Seller) to cause any one or more of such
items to be designated as and deemed to constitute Excluded Assets for all
17
purposes under this Agreement. In the event any update to one or more Schedules
constitutes a material, adverse impact on the Business or the Assets, Buyer may,
at its option (1) proceed to consummate the transaction hereunder with a
corresponding reduction in the Purchase Price agreed to by the parties or (2)
refuse to consummate the transaction hereunder.
J. Use of Seller's Name. Buyer may continue to operate the Business
using Seller's trade names and all derivations and abbreviations of such name
and related marks for a period not to exceed 120 days after the Closing Date;
provided, however, that Buyer shall use its best efforts during such period to
communicate to customers and members of the public that Buyer is the new owner
of the Business, and Buyer shall not conduct any advertising utilizing Seller's
trade names.
K. Satisfaction of Conditions. Each party will use its reasonable best
efforts to satisfy, or to cause to be satisfied, the conditions to the
obligations of the other party to consummate the transactions contemplated by
this Agreement, provided that Buyer will not be required to agree to any
increase in the amount payable with respect to, or any modification that makes
more burdensome in any material respect any of the Assets or Assumed
Liabilities.
L. Confidentiality. No party, nor its respective officers, employees,
trustees, agents, representatives or affiliates, will issue any press release or
make any other public announcement regarding this Agreement or the transactions
contemplated hereby without the consent of the other party. Each party will
hold, and will cause its employees, consultants, advisors and agents to hold, in
confidence, the terms of this Agreement and any non-public information
concerning the other party obtained pursuant to this Agreement. Notwithstanding
the preceding, a party may disclose such information to the extent required by
any legal requirement (including disclosure requirements under federal and state
securities laws), but the party proposing to disclose such information will
first notify and consult with the other party concerning the proposed
disclosure, to the extent reasonably feasible. Each party also may disclose such
information to employees, consultants, advisors, agents and actual or potential
lenders whose knowledge is necessary to facilitate the consummation of the
transactions contemplated by this Agreement. Each party's obligation to hold
information in confidence will be satisfied if it exercises the same care with
respect to such information as it would exercise to preserve the confidentiality
of its own similar information.
M. Transition. Seller shall cooperate in good faith with Buyer to
assure a smooth transition and operation of the Business after Closing. In
connection with the foregoing, Seller agrees to continue to accept payment of
accounts receivable for the benefit of Buyer for a period of 90 days after
Closing.
VI. Conditions to Closing.
A. Conditions to the Obligations of Buyer and Seller. The obligations
of each party to consummate the transactions contemplated by this Agreement to
take place at the Closing are subject to the satisfaction or waiver of each of
the following conditions:
18
1. No action, suit or proceeding is pending or threatened and no
legal requirement has been enacted or deemed to be applicable to
any of the transactions contemplated by this Agreement by a
governmental authority, which would (a) prohibit Buyer's
ownership of the Business or the Assets, (b) compel Buyer to
dispose of or hold separate all or a material portion of the
Business or the Assets, or (c) prevent or make illegal the
consummation of any transactions contemplated by this Agreement.
2. The applicable waiting period under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder, with respect to the
transaction contemplated by this Agreement shall have expired
without the receipt of any objection or threat of any litigation
by a governmental authority to restrain the consummation of the
transaction contemplated by this Agreement and all approvals of
governmental authorities required to consummate the transaction
contemplated by this Agreement shall have been obtained.
B. Conditions to the Obligations of Buyer. The obligations of Buyer to
consummate the transactions contemplated by this Agreement to take place at the
Closing are subject to the satisfaction or waiver by Buyer of each of the
following conditions:
1. All representations and warranties of Seller contained in this
Agreement are true in all material respects, in each case on and
as of the Closing Date with the same effect as if made on and as
of the Closing Date, except for changes specifically permitted or
contemplated by this Agreement.
2. Seller has performed and complied in all material respects
with each obligation, agreement, covenant and condition required
by this Agreement to be performed or complied with by Seller at
or prior to the Closing.
3. Seller has executed (or caused to be executed) and delivered
to Buyer each of the following items: (a) an opinion letter from
Seller's legal counsel dated the Closing Date substantially in
the form attached hereto as Exhibit G (the final opinion letter
must be approved by Buyer at least two (2) days prior to
Closing); (b) certificates of status for Seller from the
California and Nevada Secretaries of State; and (c) motor vehicle
title certificates and such other transfer instruments as Buyer
may reasonably deem necessary or advisable to transfer the Assets
to Buyer and to perfect Buyer's rights in the Assets.
4. Seller has delivered to Buyer: (a) evidence, in form and
substance satisfactory to Buyer, that all of the Required
Consents have been obtained or given on terms and conditions
reasonably acceptable to Buyer and are in full force and effect,
including, without limitation, approval of the transfer to Buyer
of the Member Agreement on terms and conditions acceptable to
Buyer in its sole discretion; (b) to the extent obtained by
Seller, the estoppel certificates or similar documents
19
described in Section V.C.2; and (c) evidence, in form and
substance satisfactory to Buyer, from the NRTC that all invoices
due have been paid and that Seller is not in default with the
NRTC.
5. No action, proceeding or investigation has been instituted or
threatened prior to Closing by or before any court or
administrative agency which would, if determined adversely to
Buyer's interest, materially impair the ability of Buyer to
realize the benefits of the transactions contemplated by this
Agreement. Nothing in this Section shall be construed so as to
give Buyer any unfair option to delay or avoid closing on this
transaction. There must be a reasonable basis supported by fact
to invoke the protection of this provision.
6. Seller has delivered to Buyer: (a) a certificate, dated the
Closing Date, signed by Seller's chief executive officer, stating
that to the best of her knowledge in her corporate capacity the
conditions set forth in Sections VI.B.1 and VI.B.2 are satisfied;
(b) a copy of the resolutions of the board of directors and
shareholders of Seller authorizing the execution, delivery and
performance of this Agreement by Seller, and a certificate of
Seller, dated as of the Closing, that such resolutions were duly
adopted and are in full force and effect as of the date of
Closing; and (c) such other documents as Buyer may reasonably
request in connection with the transactions contemplated by this
Agreement.
7. Seller has not less than 10,000 active and current
subscribers (not more than 60 days past due) to Programming
Services pursuant to the NRTC Performance Indicator Report from
the last complete NRTC billing cycle preceding the Closing Date,
and Seller has delivered to Buyer a certificate in confirmation
thereof, signed for Seller by the president or the chief
financial officer of Seller.
C. Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement to take place at the
Closing are subject to the satisfaction or waiver by Seller of each of the
following conditions:
1. Buyer has paid the Base Purchase Price required to be paid at
the Closing, as adjusted in accordance with this Agreement.
2. All representations and warranties of Buyer contained in this
Agreement are true and correct in all material respects, in each
case on and as of the Closing Date with to the same effect as if
made on and as of the Closing Date, except for changes
specifically permitted or contemplated by this Agreement.
3. Buyer in all material respects has performed and complied with
each obligation, agreement, covenant and condition required by
this Agreement to be performed or complied with by Buyer at or
prior to the Closing.
4. Buyer has executed and delivered to Seller each of the
following items: (a) the Xxxxxxx Money Escrow Agreement; (b) the
Indemnity Escrow Agreement
20
substantially in the form attached hereto as Exhibit B; (c) the
Assignment and Assumption of Contracts Agreement substantially in
the form attached hereto as Exhibit D; (d) the Assignment and
Assumption of Equipment Financing Agreements and Customer
Equipment Lease Agreements substantially in the form attached
hereto as Exhibit E; and (e) a Non-Competition Agreement
substantially in the form attached hereto as Exhibit F.
5. Buyer has delivered to Seller the following: (a) a
certificate, dated the Closing Date, signed by the chief
executive officer of Buyer, stating that to the best of his
knowledge in his corporate capacity, the conditions set forth in
Sections VI.C.2 and VI.C.3 are satisfied; (b) a copy of the
resolutions of the board of directors of Buyer authorizing the
execution, delivery and performance of this Agreement by Buyer,
and a certificate of Buyer, dated as of the Closing, that such
resolutions were duly adopted and are in full force and effect as
of the date of Closing; and (c) such other documents as Seller
may reasonably request in connection with the transactions
contemplated by this Agreement.
D. Waiver of Conditions. Either party may waive in writing any or all
of the conditions to its obligations under this Agreement.
VII. Termination.
A. Events of Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned at any time prior
to the Closing:
1. by the mutual written consent of Buyer and Seller; or
2. Buyer or Seller, if the transactions contemplated by this
Agreement to take place at the Closing have not been consummated
on or before February 27, 1999, other than as extended by mutual
agreement of the parties, provided, however, that if the failure
to consummate the transactions is the result of (a) a breach or
default by such party in the performance of any of its
obligations under this Agreement or (b) the failure of any
representation or warranty of such party to be accurate, then the
termination of the Agreement shall not limit the right of the
other party to pursue its legal remedies resulting from such
breach or failure, except that Buyer and Seller will have no
liability in any event if, for any reason whatsoever, the NRTC or
DIRECTV do not approve transfer to Buyer of Seller's Member
Agreement.
B. Liabilities in Event of Termination. The termination of this
Agreement will in no way limit any obligation or liability of any party based on
or arising from a breach or default by such party with respect to any of its
representations, warranties, covenants or agreements contained in this
Agreement.
C. Procedure Upon Termination. In the event of the termination of this
Agreement by Buyer or Seller pursuant to this Section VII, notice of such
termination will promptly be given by the terminating party to the other.
21
VIII. Survival of Representations and Warranties; Indemnification.
A. Survival of Representations and Warranties. The representations,
warranties, and covenants of Buyer and Seller in this Agreement and in the
documents and instruments to be delivered by Seller pursuant to this Agreement
will survive the Closing without limitation until the first anniversary of the
Closing Date.
B. Indemnification by Seller. Seller will indemnify, defend and hold
harmless Buyer and its shareholders and its and their respective affiliates, and
the shareholders, directors, officers, employees, agents, successors and assigns
of any of such persons, from and against:
1. all losses, damages, liabilities, deficiencies or obligations
of or to Buyer resulting from or arising out of (a) any breach of
any then surviving representation or warranty made by Seller in
this Agreement, (b) any breach o any covenant, agreement or
obligation of Seller contained in this Agreement, (c) any third
party claim with respect to any act or omission of Seller with
respect to Seller's operation of the Assets or Seller's conduct
of the Business, which act or omission occurred prior to or on
the Closing Date without regard to whether such third party claim
with respect to such act or omission is asserted before or after
the Closing Date, (d) any liability or obligation of Seller not
included in the Assumed Liabilities, (e) any claim that the
transactions contemplated by this Agreement violate any
fraudulent conveyance laws of any jurisdiction, (f) any liability
or obligation of Buyer relating to the parties non-compliance
with any applicable bulk sales laws, including, without
limitation, bulk sales laws under the Uniform Commercial Code.
2. all claims, actions, suits, proceedings, demands, judgments,
assessments, fines, interest, penalties, costs and expenses
(including, without limitation, settlement costs and reasonable
legal, accounting, experts' and other fees, costs and expenses)
incident or relating to or resulting from any of the foregoing.
C. Indemnification by Buyer. Buyer will indemnify, defend and hold
harmless Seller and its shareholders and its and their respective affiliates,
and the shareholders, directors, officers, employees, agents, successors and
assigns of any of such persons, from and against:
1. all losses, damages, liabilities, deficiencies or obligations
of or to Seller or any such other indemnified person resulting
from or arising out of (a) any breach of any representation or
warranty made by Buyer in this Agreement, (b) any breach of any
covenant, agreement or obligation of Buyer contained in this
Agreement, (c) the failure by Buyer to perform any of its
obligations in respect of the Assumed Liabilities and (d) any
third party
22
claim with respect to any act or omission of Buyer with respect
to Buyer's operation of the Assets or Buyer's conduct of the
Business, which act or omission occurred after the Closing Date;
and
2. all claims, actions, suits, proceedings, demands, judgments,
assessments, fines, interest, penalties, costs and expenses
(including, without limitation, settlement costs and reasonable
legal, accounting, experts' and other fees, costs and expenses)
incident or relating to or resulting from any of the foregoing.
D. Third Party Claims. Promptly (and in any event within 30 days)
after the receipt by any party of notice if any claim, action, suit or
proceeding by any Person who is not a party to this Agreement (collectively, an
"Action"), which Action is subject to indemnification under this Agreement, such
xxxxx (the "Indemnified Party") will give reasonable written notice to the party
from whom indemnification is claimed (the "Indemnifying Party"). The Indemnified
Party will be entitled, at the sole expense and liability of the Indemnifying
Party, to exercise full control of the defense, compromise or settlement of any
such Action unless the Indemnifying Party, within a reasonable time (and in any
event within 30 days) after the giving of such notice by the Indemnified Party,
(1) admits in writing to the Indemnified Party the Indemnifying Party's
liability to the Indemnified Party for such Action under the terms of this
Section VIII, (2) notifies the Indemnified Party in writing of the Indemnifying
Party's intention to assume such defense, (3) provides evidence reasonably
satisfactory to the Indemnified Party of the Indemnifying Party's ability to pay
the amount, if any, for which the Indemnified Party may be liable as a result of
such Action, and (4) retains legal counsel reasonably satisfactory to the
Indemnified Party to conduct the defense of such Action. The other party will
cooperate with the party assuming the defense, compromise or settlement of any
such Action in accordance with this Agreement in any reasonable manner. The
Indemnified Party will have the right to employ separate counsel and to
participate in (but not control) the defense, compromise or settlement of the
Action, but the fees and expenses of such counsel will be at the expense of the
Indemnified Party unless (1) the Indemnifying Party has agreed to pay such fees
and expenses, (2) any relief other than the payment of money damages is sought
against the Indemnified Party or (3) the Indemnified Party will have been
advised by its counsel that there may be one or more defenses available to it
which are different from or additional to those available to the Indemnifying
Party, and in any such case that portion of the fees and expenses of such
separate counsel that are reasonably related to matters covered by the indemnity
provided will be paid by the Indemnifying Party. No Indemnified Party will
settle or compromise any such Action for which it is entitled to indemnification
under this Agreement without prior written consent of the Indemnifying Party,
unless the Indemnifying Party has failed, after reasonable notice, to undertake
control of such Action in the manner provided in this Agreement. No Indemnifying
Party will settle or compromise any such Action (1) in which any relief other
than the payment of money damages is sought against any Indemnified Party or (2)
in the case of any Action relating to the Indemnified Party's liability
23
for any tax, if the effect of such settlement would be an increase in the
liability of the Indemnified Party for the payment of any tax for any period
beginning after the Closing Date, unless the Indemnified Party consents in
writing to such compromise or settlement.
IX. Miscellaneous.
A. Parties Obligated and Benefited. Subject to the limitations set
forth below, this Agreement will be binding upon the parties and their
respective assigns and successors in interest and will inure solely to the
benefit of the parties and their respective assigns and successors in interest,
and no other Person will be entitled to any of the benefits conferred by this
Agreement. Without the prior written consent of the Buyer, Seller will not
assign any of its rights under this Agreement or delegate any of its duties
under this Agreement.
B. Notices. Any notice, request, demand, waiver or other communication
required or permitted to be given under this Agreement will be in writing and
will be deemed to have been duly given only if delivered in person or sent by
prepaid first class, or certified mail (return receipt requested), or delivered
by commercial courier (e.g., United Parcel Service or Federal Express) or, if
receipt is confirmed, by telecopier:
Escrow Agent: By Mail: By Courier or Express Delivery:
Commerce Bank, N.A. Commerce Bank, N.A.
Corporate Debt Dept., XXXX-0 Xxxxxxxxx Xxxx Xxxx.
X.X. Xxx 000000 000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, XX 00000-0000 Xxxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxx Attention: Xxxx X. Xxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Buyer: Golden Sky Systems, Inc.
000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, President and
Jo Xxxxx Xxxx, Corporate Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy (which will not constitute notice) to:
24
Polsinelli, White, Xxxxxxxx & Shalton, P.C.
000 X. 00xx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq. and
Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Seller: Volcano Vision, Inc. X.X. Xxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy (which will not constitute notice) to:
Xxxx & Xxxxxxxx
Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change the address to which notices are required to be
sent by giving notice of such change in the manner provided in this Section. All
notices will be deemed to have been received on the date of delivery or on the
third business day after mailing in accordance with this Section, except that
any notice of a change of address will be effective only upon actual receipt.
C. Legal Remedies and Attorneys' Fees. Any dispute or claim between
the parties to this Agreement that arises out of this Agreement or that in any
manner relates to the transactions under this Agreement shall be resolved
exclusively by binding arbitration before a single arbitrator, pursuant to the
rules and procedures of the American Arbitration Association pertaining to
commercial arbitrations. Judgment upon the award may be entered by any court
having jurisdiction thereof. The location of such arbitration proceedings shall
be (1) Kansas City, Missouri, in the event of an arbitration claim initiated by
Seller or (2) San Francisco, California, in the event of an arbitration claim
initiated by Buyer. The filing of a cross-claim shall not change the location
of the arbitration proceedings. The prevailing party in any such arbitration
shall be entitled to recover reasonable attorneys' fees and other costs from
the other party. In the event of litigation to enforce any arbitration award or
any other litigation related to this Agreement or the transactions, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
other costs from the other party.
25
D. Right to Specific Performance. The parties acknowledge that the
unique nature of the assets to be purchased and sold pursuant to this Agreement
and the limited number of parties interested in purchasing such assets render
money damages an inadequate remedy for the breach by either party of its
obligations under this Agreement. The parties agree that in the event of breach
and non-performance by one party of its obligations under this Agreement, the
other party will be entitled to a decree of specific performance of the
Agreement, to be issued in the arbitration proceeding specified in the preceding
section.
E. Waiver. This Agreement or any of its provisions may not be waived
except in writing. The failure of any party to enforce any right arising under
this Agreement on one or more occasions will not operate as a waiver of that or
any other right on that or any other occasion.
F. Captions. The article and section captions of this Agreement are
for convenience only and do not constitute a part of this Agreement.
G. Choice of Law. This Agreement and the rights of the parties under
it will be governed and construed in all respects in accordance with the laws of
the State of Missouri.
H. Rights Cumulative. All rights and remedies of each of the parties
under this Agreement will be cumulative, and the exercise of one or more rights
or remedies will not preclude the exercise of any other right or remedy
available under this Agreement or applicable law.
I. Further Actions. Seller and Buyer will execute and deliver to the
other, from time to time at or after the Closing, for no additional
consideration and at no additional cost to the requesting party, such further
assignments, certificates, instruments, records, or other documents, assurances
or things as may be reasonably necessary to give full effect to this Agreement
and to allow each party fully to enjoy and exercise the rights accorded and
acquired by it under this Agreement.
J. Time. If the last day permitted for the giving of any notice or the
performance of any act required or permitted under this Agreement falls on a day
which is not a business day, the time for the giving of such notice or the
performance of such act will be extended to the next succeeding business day.
K. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original.
L. Entire Agreement. This Agreement (including the provisions and
contents of the Schedules and Exhibits referred to in this Agreement, which are
incorporated in and constitute a part of this Agreement) contains the entire
agreement of the parties and supersedes all prior oral or written agreements
and understandings with respect to the subject matter herein. In that regard,
26
this Agreement is intended to and does supersede and replace entirely that
certain Acquisition Proposal and Negotiation Protocol Agreement between the
Buyer and Seller dated as of June 8, 1998. This Agreement may not be amended or
modified except by a writing signed by the parties.
M. Severability. Any term or provision of this Agreement which is
invalid or unenforceable will be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or enforceable the remaining rights
of the person intended to be benefited by such provision or any other provisions
of this Agreement.
N. Construction. This Agreement has been negotiated by Buyer and
Seller and its respective legal counsel, and legal or equitable principles that
might require the construction of this Agreement or any provision of this
Agreement against the party drafting this Agreement will not apply in any
construction or interpretation of this Agreement.
O. Late Payments. If either party fails to pay the other any amounts
when due under this Agreement, the amounts due will bear interest from the due
date to the date of payment at the annual rate publicly announced from time to
time by Citibank, N.A. as its prime rate plus 3%, adjusted as and when changes
in such prime rate are made, provided, however, that such interest rate shall
in no event exceed any applicable legal restriction of usury or similar laws.
P. Expenses. Except as otherwise expressly provided in this Agreement,
each party will pay all of its expenses, including attorneys' and accountants'
fees, in connection with the negotiation of this Agreement, the performance of
its obligations and the consummation of the transactions contemplated by this
Agreement.
The parties have executed this Agreement as of the day and year first
above written.
SELLER:
Volcano Vision, Inc.
By /s/ Xxxxxx X.Xxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxx, President
27
BUYER:
Golden Sky Systems, Inc.
By /s/ Xxxxxx X. Xxxxx
-------------------------
Xxxxxx X. Xxxxx, President
