PURCHASE AGREEMENT
EXHIBIT 2.04
THIS PURCHASE AGREEMENT
("Agreement") is
made and entered into as of April 21, 2009, by and between: MetroConnect, Inc.
(“MTCI”), a Nevada corporation wholly owned subsidiary, NextPhase Technologies,
Inc a California Corporation ("Buyer"), Freedom
Communications Services, Inc (“FCSI”), a California corporation (the "Seller").
RECITALS
A.
Seller desires to transfer and sell, and Buyer desires to acquire, certain
assets from FCSI the Seller on the terms further set forth herein (referred to
herein as the "Acquisition");
B.
Buyer agrees to change the name of the subsidiary company from NextPhase
Technologies, Inc to Freedom Wireless Services, Inc.;
C.
This Agreement and the transactions contemplated hereby have been approved by
the Board of Directors of Buyer and the Board of Directors of the
Seller.
AGREEMENT
The
parties to this Agreement agree as follows:
SECTION
1. DEFINITIONS
"Affiliate" means, with respect
to any Person, any Person directly or indirectly controlling, controlled by, or
under common control with such other Person.
"Ancillary Agreements" means
the Assignment and Assumption Agreement and the Xxxx of Sale.
"Balance Sheet" means the
unaudited balance sheet of the Business as of December 31, 2008 found in
Schedule 3.05.
"Balance Sheet Date" means
December 31, 2008.
“Business” means the business of the Seller
which provides EBTS/CDMA, BTS (Base Transceiver Station), DAS (Distributed
Antenna System) , Micro-Cell and electrical installation and maintenance
solutions to the wireless and telecommunications industries. Our services
include installation and maintenance for all facets of the wireless
infrastructure. We provide Cellular site interior, exterior, network, wiring and
cabling as well site modifications and upgrades to next Generation
configurations. Our expertise including, Motorola iDEN EBTS, Ericsson UMTS, GSM,
Nokia UMTS, Nortel BTS and Lucent CDMA BTS Standards Installation. FCSI maintains all required safety and
technical certifications necessary, i.e. Xxxxxx and CommScope cables and
connectors, Anritsu coaxial sweep testing, as well as Ethernet and fiber optic
topologies. to work with you on your wireless site
technologies.
"Business Intellectual
Property" means all Intellectual Property that is owned or held by or on
behalf of Seller for use, or that is being, and/or has been, used, or is
currently under development for use, in the Business as it has been, is
currently or is currently planned to be conducted.
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"Closing Date" means the date
of the Closing.
"Deferred Revenue" means (i)
contracts of the Seller, as of the date of determination, that are invoiced, but
not yet recognized as revenue and (ii) amounts under contracts for services
that, as of the date of determination, have been billed but not yet recognized
as revenue as a result of an ongoing obligation to perform services and, in all
events, shall be calculated in accordance with the methodologies set forth on
Schedule 1.01(a) hereto. For greater clarity, Deferred Revenue does not include
customer overpayments that have been retained by the Seller.
"Intellectual Property" means
all tangible or intangible proprietary information and materials, including
without limitation:
(a) (i)
all inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereon, and all patents, patent applications and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, divisions, revisions, extensions and re-examinations
thereof, (ii) all trademarks, services marks, trade dress, logos, trade names,
domain names, and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith, (iii) all copyrights and all applications, registrations and renewals
in connection therewith, (iv) all mask works and all applications, registrations
and renewals in connection therewith, (v) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production process and techniques,
methods, schematics, technology, technical data, designs, drawings, flowcharts,
block diagrams, specifications, customer and supplier lists, pricing and cost
information and business and marketing plans and proposals), and (vi) all
software and firmware (including data, databases and related documentation); (b)
all documents, records and files relating to design, end user documentation,
manufacturing, quality control, sales, marketing or customer support for, and
tangible embodiments of, all intellectual property described herein; and(c) all
licenses, agreements and other rights in any third party product or any third
party intellectual property described in (a) and (b) above other than any
"off-the-shelf" third party software or related intellectual
property.
"Lien" means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest, restriction or
encumbrance of any kind in respect of such asset.
"Material Adverse Change" means
a material adverse change in the business, assets, financial condition, or
results of operations of Seller or the Business alone or as taken as a
whole.
"Material Adverse Effect" means
a material adverse effect on the business, assets, financial condition, or
results of operations of Seller or the Business taken as a whole;
"Permitted Lien" means (i)
mechanic's and other similar statutory liens that are not material in nature or
amount, and (ii) liens for Taxes or other governmental charges not yet due and
payable or due but not delinquent or that are being contested in good
faith.
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"Person" means an individual,
corporation, partnership, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"to Seller's Knowledge", "Known to Seller" and words of
similar import means the knowledge of Seller's officers or directors or Parent’s
officers or directors.
SECTION
2. DESCRIPTION OF
TRANSACTION
2.1. ASSETS
TO BE TRANSFERRED. Upon the terms and subject to the conditions of
this Agreement, Buyer agrees to purchase from Seller and Seller agrees to sell,
transfer, assign and deliver, or cause to be sold, transferred, assigned and
delivered, to Buyer at Closing all of Seller's right, title and interest in the
following assets of the Business, as listed below (the "Purchased
Assets"):
(a)
The personal property and interests therein used by Seller or held by Seller for
use in connection with the Business, including equipment, furniture, office
equipment, and communications equipment, as listed on Schedule
3.07;
(b) Xxxxxxxxx
Xxxxxxxx agrees to become President of MetroConnect, Inc and Freedom Wireless
Services, Inc upon completion of this agreement, further the Board of Directors
on April 13, 2009 voted to bring Xxxxxxxxx Xxxxxxxx on as a board member upon
completion of this closing.
(c) all
rights under all contracts, agreements, licenses, commitments, sales and
purchase orders and other instruments used by Seller or held by Seller for use
in connection with the Business, as listed on Schedule 3.11 other than contracts
and such other documents indicated thereon as "Excluded Contracts" (the "Excluded Contracts") but
including any contract or other document which would be listed on Schedule 3.11
but for any dollar limitation contained in Section 3.11 (collectively, the
"Contracts");
(d) all
transferable licenses, permits or other governmental authorizations affecting,
or relating in any way to, the Business, including without limitation the items
listed on Schedule 3.3;
2.2.
Assumption
of Liabilities. Upon
the terms and subject to the conditions of this Agreement, Buyer agrees,
effective at the Closing, to assume the following liabilities (the "Assumed
Liabilities"):
(a) all
liabilities and obligations of Seller arising under the Contracts (other than
liabilities or obligations attributable to any failure by Seller to comply with
the terms thereof except to the extent reserved for in the Seller's
financial statements and specifically disclosed to Buyer, (ii) for obligations
of Seller under warranty claims or expenses assumed under Section 2.03(b) or
(iii) as specifically identified on Schedule 2.03(a)) including, without
limitation obligations associated with Deferred Revenue;
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(b) all
liabilities and obligations of Ford Motor Credit (“FMC”) (3) three 2007 Ford
F-150 pick up trucks, currently financed by Ford Motor Credit. Buyer agrees to
pay FMC all back payments due at the time of closing approximately $4230 and all
payments forward. Seller agrees to turn all rights to ownership on the vehicles
listed above. Upon complete payoff to FMC Seller agrees to release all ownership
to Buyer.
2.3. Excluded
Liabilities. Notwithstanding any provision in this Agreement or any other
writing to the contrary, Buyer is assuming only the Assumed Liabilities and is
not assuming any other liability or obligation of Seller or any Affiliate of
Seller (or any predecessor owner of all or part of its business and assets) of
whatever nature whether presently in existence or arising or asserted
hereafter. All such other liabilities and obligations shall be retained by and
remain obligations and liabilities of Seller or its Affiliates (all such
liabilities and obligations not being assumed being herein referred to as the
"Excluded Liabilities"). Without limiting the foregoing, none of the following
shall be Assumed Liabilities for the purposes of this Agreement:
(a) Any
and all liabilities and obligations of Seller for Taxes, (including any Taxes
that arise as a result of the transactions contemplated by this
Agreement);
(b) Any
liabilities or obligations relating to employee benefits or compensation
arrangements existing as of the end of the day on the day immediately preceding
the Closing Date;
(c) any
claims for refunds based on any warranty, express or implied, for products or
services provided to the extent not reserved therefore on the Balance Sheet or
not properly accrued since the Balance Sheet Date;
(d) any
environmental liabilities;
(e) any
liability or obligation relating to an Excluded Asset; and
(f) any
liability or obligation relating to or arising under any Excluded
Contract.
2.4. Assignment
of Contracts and Rights. Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign any
Purchased Asset or any claim or right or any benefit arising thereunder or
resulting therefrom if an attempted assignment thereof, without consent of a
third party thereto, would constitute a breach or other contravention thereof or
in any way adversely affect the rights of Buyer or Seller thereunder. Seller and
Buyer will use their best efforts (but without any payment of money by
Seller or Buyer) to obtain the consent of the other parties to any such
Purchased Asset or claim or right or any benefit arising thereunder for the
assignment thereof to Buyer as Buyer may request. If such consent is not
obtained, or if an attempted assignment thereof would be ineffective or would
adversely affect the rights of Seller or Buyer thereunder so that Buyer would
not in fact receive all such rights, Seller and Buyer will cooperate in a
mutually agreeable arrangement under which Buyer would obtain the benefits and
assume the obligations thereunder in accordance with this Agreement,
including
subcontracting, sub-licensing, or subleasing to Buyer, or under which Seller
would enforce for the benefit of Buyer, with Buyer assuming Seller's
obligations, any and all rights of Seller against a third party thereto. Seller
will promptly pay to Buyer when received all monies received by Seller under any
Purchased Asset or any claim or right or any benefit arising thereunder, except
to the extent the same represents an Excluded Asset. In such event, Seller and
Buyer shall, to the extent the benefits therefrom and obligations thereunder
have not been provided by alternate arrangements satisfactory to Buyer and
Seller, negotiate in good faith an adjustment in the consideration paid by Buyer
for the Purchased Assets.
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2.5. Purchase
Price; Closing.
(a) The
purchase price for the Purchased Assets (the "Purchase Price") is $500,000 in
U.S. dollars.
(b) The
closing (the "Closing")
of the purchase and sale of the Purchased Assets and the assumption of the
Assumed Liabilities hereunder shall take place at the offices of
MetroConnect, Inc., Anaheim, California upon execution of this
Agreement or at such other place as Buyer and Seller may agree. At the
Closing,
(i)
Buyer shall prepare and sign a note with a cash payment equal to $500,000 for a period of 2
years, 7% interest per year. This note can also be convertible at the Sellers
option at $1.00 per share.
(ii) Each
of Seller and Buyer shall execute and deliver each of the Ancillary Agreements
to be entered into by it at the Closing, in each case substantially in the form
attached as an Exhibit to this Agreement and Seller shall deliver to Buyer such
deeds, bills of sale, endorsements, consents, assignments and other good and
sufficient instruments of conveyance and assignment (the "Conveyance Documents") as the
parties and their respective counsel shall deem reasonably necessary or
appropriate to vest in Buyer all right, title and interest in, to and under the
Purchased Assets..
(iii) Seller
shall have arranged with Buyer for the physical delivery of the Personal
Property and all copies of the Business Intellectual Property, and the physical
embodiment thereof.
(iv) Seller
and Buyer shall execute and deliver all such instruments, documents and
certificates as may be reasonably requested by the other party that are
necessary, appropriate or desirable for the consummation at the Closing of the
transactions contemplated by this Agreement.
2.6. Allocation
of Purchase Price.
(a) As
soon as practicable after the Closing, Buyer shall deliver to Seller a statement
(the "Allocation Statement"), setting forth the value of the Purchased Assets
and of the covenant not to compete described in Section 5.04 hereof, which shall
be used for the allocation of the Purchase Price and the Assumed Liabilities
among the Purchased
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Assets
and the covenant not to compete (the allocation shall be made in accordance with
all applicable provisions of the Code and any applicable state or local
law).
SECTION
3. REPRESENTATIONS AND
WARRANTIES OF SELLER
Except as
set forth in the disclosure schedules dated as of the date hereof and delivered
herewith to Buyer, (which disclosure schedules identify the section and
subsection to which each disclosure therein relates), Seller and Parent hereby
represents and warrant to Buyer as of the date hereof that:
3.1. Corporate
Existence and Power. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on the Business as now
conducted. Seller is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect.
3.2. Corporate
Authorization. The execution, delivery and performance by Seller of this
Agreement and each of the Ancillary Agreements, and the consummation by Seller
of the transactions contemplated hereby and thereby are within Seller's
corporate powers and have been duly authorized by all necessary corporate action
on the part of Seller. Each of this Agreement and each Ancillary Agreement to
which Seller is a party has been duly executed and delivered by Seller and
constitutes a valid and binding agreement of Seller, enforceable in accordance
with its terms.
3.3. Governmental
Authorization; Consents.
(a)
The execution, delivery and performance by Seller of this Agreement and each of
the Ancillary Agreements to which Seller is a party require no action by or in
respect of, or filing with, any governmental body, agency, or
official.
(b)
Except as set forth in Schedule 3.3, no consent, approval, waiver or other
action (a "Required
Consent") by any Person (other than any governmental body, agency,
official or authority referred to in (a) above) under any contract listed on
Schedule 3.11 or any other material contract, agreement, indenture, lease,
instrument, or other document binding upon or to which the Seller is a party is
required or necessary for the execution, delivery and performance by Seller of
this Agreement and each Ancillary Agreement to which Seller is a party, or for
the consummation of the transactions contemplated hereby or
thereby.
3.4. Non-Contravention.
The execution, delivery and performance by Seller of this Agreement and
each Ancillary Agreement to which Seller is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not (i) contravene
or conflict with the corporate charter or bylaws of Seller, (ii) assuming
compliance with the matters referred to in Section 3.3(a), contravene or
conflict with any provision of any law, regulation, judgment, injunction, order,
Permit or decree binding upon or
applicable to Seller or the Business; (iii) assuming the receipt of all Required
Consents, constitute a default (with or without notice or lapse of time, or
both) under or give rise to any right of termination, cancellation or
acceleration of any right or obligation of Seller, or to a loss of any benefit,
relating to the Business to which Seller is entitled under any provision of any
agreement, contract or other instrument binding upon Seller or (iv) result in
the creation or imposition of any Lien (other than a Permitted Lien) on any
Purchased Asset.
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3.5. Personal
Property
(a)
Seller has good and marketable title to, or in the case of leased personal
property has valid leasehold interests in, all personal property (including
machinery and equipment, inventory, and furniture) (whether tangible or
intangible) included in the Purchased Assets (the "Personal Property"). All
of such Personal Property is listed on Schedule 3.07. None of such Personal
Property is subject to any Liens, other than:
(i)
Liens disclosed;
(ii) Permitted
Liens; or
(iii) Liens
that do not materially detract from the value of the Personal Property as now
used, or materially interfere with any present or intended use of the Personal
Property.
(b) The
Personal Property has no material defects, is in good operating condition and
repair (ordinary wear and tear excepted), and is generally adequate for the uses
to which it is being put.
3.6. Intentionally Omitted.
3.7. Compliance
with Laws.
(a)
Seller is not and has not been in violation of any applicable provisions of any
laws, statutes, ordinances or regulations and to Seller's Knowledge is not under
investigation with respect to and has not been threatened to be charged with or
given notice of any violation of, any law, rule, ordinance or regulation
applicable to the Purchased Assets or the conduct of the Business.
(b) Schedule
3.14(b) correctly describes each governmental license, permit, concession or
franchise (a "Permit")
material to the Business, together with the name of the governmental agency or
entity issuing such Permit. Except as set forth on Schedule 3.14(b), such
Permits are valid and in full force and effect and, assuming the related
Required Consents have been obtained prior to the Closing Date, are transferable
by Seller and will not be terminated or impaired or become terminable as a
result of the transactions contemplated hereby. Upon consummation of such
transactions, Buyer will, assuming the related Required Consents have been
obtained prior to the Closing Date, have all of the right, title and interest in
all the Permits.
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(c) Seller
is not in default under, and no condition exists that with notice or lapse of
time or both would constitute a default under, any judgment, order or injunction
of any court, arbitrator or governmental body, agency, official or
authority.
3.8. Environmental
Compliance.
(a) The
Seller has complied in all material respects with all federal, state and local
laws (including, without limitation, case law, rules, regulations, orders,
judgments, decrees, permits, licenses and governmental approvals) which are
intended to protect the environment and/or human health or safety (collectively,
"Environmental Laws"); and
(b) The
Seller has not handled, generated, used, stored, transported or disposed of any
material, substance or waste which is regulated by Environmental Laws
("Hazardous Materials"), except where such handling, generation, use, storage,
transportation or disposal has not had, and could not reasonably be expected to
have, a Material Adverse Effect. The foregoing does not constitute a
representation or warranty that no violation of Environmental Laws has occurred
with respect to premises occupied by the Seller, although Seller has no
knowledge of any such violation.
3.9. Customers
and Suppliers. Seller has not received notice from and is not otherwise
aware that (a) any customer (or group of customers under common ownership or
control) that accounted for a material percentage of the aggregate products and
services furnished by the Business during the past 18 months has stopped or
intends to stop purchasing the products or services of the Business or (b) any
supplier (or group of suppliers under common ownership or control) that
accounted for a material percentage of the aggregate supplies purchased by the
Business during the past 18 months has stopped or intends to stop supplying
products or services to the Business.
3.10.
Transactions with
Affiliates; Intercompany Arrangements. There are no agreements, loans,
leases, royalty agreements or other continuing transactions, in each cases
relating to the Business or the Purchased Assets between Seller and (i) any
officer, director or stockholder of Seller or any of their Affiliates or (ii)
any member of any officer, director or stockholder of Seller's family or any of
their Affiliates ("Interested Person"). To the Knowledge of Seller, no
Interested Person (x) has any material direct or indirect interest in any entity
that does business with Seller with respect to the Business or (y) has any
direct or indirect interest in any property, asset or right that is used by
Seller in the conduct of the Business. No Interested Person has any contractual
relationship (including that of creditor or debtor) with Seller other than such
relationships as result solely from being an officer, director or stockholder of
Seller.
3.11. Finders'
Fees. There is no investment banker, broker, finder or other intermediary
that has been retained by or is authorized to act on behalf of Seller who might
be entitled to any fee or commission from Buyer, Seller or any of their
respective Affiliates upon consummation of the transactions contemplated by this
Agreement.
3.12. Other Information.
None of this Agreement, the Ancillary Agreements and the schedules,
exhibits and other documents delivered in connection herewith and therewith,
when read together as a whole, contains any untrue statement of a material fact
or omits to state a
material fact necessary in order to make the statements contained therein not
misleading.
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SECTION
4. REPRESENTATIONS AND
WARRANTIES OF BUYER
Buyer
hereby represents and warrants to Seller that:
4.1. Corporate
Authorization. The execution, delivery and performance by Buyer of this
Agreement, each of the Ancillary Agreements and the consummation by Buyer of the
transactions contemplated hereby and thereby are within the corporate powers of
Buyer and have been duly authorized by all necessary corporate action on the
part of Buyer. This Agreement and each of the Ancillary Agreements to which
Seller is a party have been duly executed and delivered by Buyer and constitute
valid and binding agreements of Buyer.
4.2. Governmental
Authorization. The execution, delivery and performance by Buyer of this
Agreement and each of the Ancillary Agreements require no action by or in
respect of, or filing with, any governmental body, agency, official or
authority.
4.3. Non-Contravention.
The execution, delivery and performance by Buyer of this Agreement and
each of the Ancillary Agreements and the consummation by Buyer of the
transactions contemplated hereby and thereby do not and will not (i) contravene
or conflict with the corporate charter or bylaws of Buyer or (ii) assuming
compliance with the matters referred to in Section 4.03, contravene or conflict
with any provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to Buyer.
4.4. Litigation.
There is no action, suit, investigation or proceeding pending against, or
to the knowledge of Buyer threatened against or affecting, Buyer before any
court or arbitrator or any governmental body, agency or official which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated hereby.
4.5. Finders'
Fees. There is no investment banker, broker, finder or other intermediary
that has been retained by or is authorized to act on behalf of Buyer who might
be entitled to any fee or commission from Seller or any of its Affiliates
upon consummation of the transactions contemplated by this
Agreement.
SECTION
5. COVENANTS OF
SELLER
Parent
and Seller agree that:
5.1 Noncompetition.
Seller and Parent agree that for a period of three full years from the
Closing Date, neither it nor any Person that, as of the date of this Agreement
or the Closing Date, is an Affiliate of Seller or Parent
shall:
5.2 Billing.
The Seller agrees that it shall not invoice any customers for, or receive any
customer payment or deposits with respect to, maintenance service contracts that
contain service periods that commence on or after the date of this
Agreement.
5.3 Customer
Payments. The Seller agrees that it shall promptly remit to Buyer all
payments it receives from Customers or rebates from suppliers after the Closing
Date in connection with the Business.
COVENANTS
OF BOTH PARTIES
The
parties hereto agree that:
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5.4 Confidentiality.
The Seller Parent and their Affiliates will hold, and will use their best
efforts to cause their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information
concerning Buyer furnished to Seller and its Affiliates in connection
with the transactions contemplated by this Agreement, and, after the Closing
Date, all confidential documents and information concerning the Business, except
to the extent that such information can be shown to have been (i) previously
known on a nonconfidential basis by Seller or Parent (other than with regard to
all documents and information concerning the Business) or (ii) in the public
domain through no fault of Seller or Parent ; provided that Seller may disclose
such information to its officers, directors, employees, accountants, counsel,
consultants, advisors and agents in connection with the transactions
contemplated by this Agreement so long as such persons are informed by Seller of
the confidential nature of such information and are directed by Seller to treat
such information confidentially in accordance with this Agreement. The Buyer and
its Affiliates will hold, and will use their best efforts to cause their
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence, unless compelled to disclose by
judicial or administrative process or by other requirements of law, all
confidential documents and information concerning both the Seller and the
Business furnished to Buyer and its Affiliates in connection with the
transactions contemplated by this Agreement, but after the Closing Date, only
the confidential documents and information concerning the Seller not related to
the Business except to the extent that such information can be shown to have
been (i) previously known on a nonconfidential basis by Buyer, (ii) in the
public domain through no fault of Buyer or (iii) later lawfully acquired by
Buyer from sources other than Seller; provided that Buyer may disclose such
information to its officers, directors, employees, accountants, counsel,
consultants, advisors and agents in connection with the transactions
contemplated by this Agreement so long as such persons are informed by Buyer of
the confidential nature of such information and are directed by Buyer to treat
such information confidentially in accordance with this Agreement. The
obligation of the disclosing party to hold any such information in confidence
shall be satisfied if they exercise the same care with respect to such
information as they would take to preserve the confidentiality of their own
similar information. If this Agreement is terminated, (a) Seller will, and will
use its best efforts to cause its officers, directors, employees, accountants,
counsel, consultants, advisors and agents to, destroy or deliver to Buyer, upon
request, all documents and other materials, and all copies thereof, obtained by
Seller or on its behalf concerning Buyer in connection with this Agreement that
are subject to such confidence, and (b) Buyer will, and will use its best
efforts to cause its officers, directors, employees, accountants, counsel,
consultants, advisors, and agents to, destroy or deliver to Seller, upon
request, all documents and other materials, and all copies thereof, obtained by
Buyer or on its behalf concerning Seller in connection with this Agreement that
are subject to such confidence. Upon the Closing, Seller shall not retain any
copies of any Business Intellectual Property.
5.5 Further
Assurances.
(a) Subject
to the terms and conditions of this Agreement, each party will use its best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement and the Ancillary
Agreements. Seller and Buyer each agree to execute and deliver such other
documents, certificates, agreements and other writings and to take such other
actions as may be necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement and to vest in
Buyer good and marketable title to the Purchased Assets.
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(b) Seller
hereby constitutes and appoints, effective as of the Closing Date, Buyer and its
successors and assigns as the true and lawful attorney of Seller with full power
of substitution in the name of Buyer or in the name of Seller, but for the
benefit of Buyer (i) to collect for the account of Buyer any items of Purchased
Assets and (ii) to institute and prosecute all proceedings which Buyer may in
its sole discretion deem proper in order to assert or enforce any right, title
or interest in, to or under the Purchased Assets, and to defend or compromise
any and all actions, suits or proceedings in respect of the Purchased Assets.
Buyer shall be entitled to retain for its account any amounts collected pursuant
to the foregoing powers, including any amounts payable as interest in respect
thereof.
5.6 Certain
Filings. Seller and Buyer shall cooperate with each other (a) in
determining whether any action by or in respect of, or filing with, any
governmental body, agency, official or authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements and (b) in taking
such actions or making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such actions, consents,
approvals or waivers.
5.7 Public
Announcements. The parties agree to consult with each other before
issuing any press release or making any public statement with respect to this
Agreement or the transactions contemplated hereby and, except as may be required
by applicable law or stock exchange regulation, will not issue any such press
release or make any such public statement prior to such
consultation.
5.8
Information
Requests. After the Closing, for a period of six months, both the Buyer
and the Seller will afford to the other party's officers, employees, counsel,
accountants and other authorized representatives reasonable access during normal
business hours to all personnel, books and records relating to the Purchased
Assets, and shall furnish to such persons such financial and operating
data and other information concerning the Purchased Assets as such persons from
time to time reasonable requests. Prior to the Closing, Seller shall provide
Buyer with the records and data from their call logging and bug tracking
software in an electronic or printed format that is reasonably acceptable to
both parties.
5.9 Employment Agreement. Buyer and Xxxxxxxxx Xxxxxxxx shall execute an
employment agreement. Buyer
agrees to issue or reserve for 1,000,000 (one million) Common Shares of
MetroConnect, to be issued in a name to be supplied by Xxxxxxxxx
Xxxxxxxx as a signing bonus.
11
SECTION
6. SURVIVAL;
INDEMNIFICATION
6.1. Survival
(a) The
covenants, agreements, representations and warranties of the parties hereto
contained in this Agreement or the Ancillary Agreements or in any certificate or
other writing delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the Closing until the first anniversary of the Closing
Date, except as to matters as to which a Person has made a claim for indemnity
or given notice of claim on or prior to the first anniversary of the Closing
Date, which matters shall survive the expiration of such period until such claim
is finally resolved and any obligations with respect thereto are fully
satisfied, or
(i)
in the case of Section 7.1 (Confidentiality);
(ii) in
the case of Section 5.1 (Noncompetition), for the period set forth therein;
and
(iii) in
the case of Section 9.2(a)(iv), until the expiration of the applicable statute
of limitations giving effect to any waivers, extensions or mitigation
thereof.
Notwithstanding
the preceding sentence, any covenant, agreement, representation or warranty in
respect of which indemnity may be sought under Section 10.02 shall survive the
time at which it would otherwise terminate pursuant to the preceding sentence,
if notice of the inaccuracy or breach thereof giving rise to such right to
indemnity shall have been given to the party against whom such indemnity may be
sought prior to such time.
(b) All
indemnification payments made under this Agreement shall be treated as
adjustments to the Purchase Price.
6.2. Indemnification.
(a) Seller
hereby indemnifies Buyer against and agrees to hold it harmless from any and all
damage, loss, liability and expense (including without limitation reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) ("Damage") incurred or suffered
by Buyer arising out of:
(i) any
misrepresentation or breach of warranty (determined without regard to any
materiality qualification contained in any representation or warranty giving
rise to claim for indemnity hereunder) made or to be performed by Seller
pursuant to the provisions of this Agreement the Ancillary Agreements and any
certificate or other writing delivered pursuant hereto or thereto;
and
(ii)
any claim, action, suit or proceeding by any third party (a "Business Third
Party Claim") alleging facts that if proven true would constitute a
misrepresentation or breach of warranty by Seller;
(iii) any
breach of any covenant made by Seller; and
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(iv) any
Tax obligations of Seller (other than any Tax obligations under Section 8.03(c)
hereof), whether as a result of a Permitted Lien or otherwise, notwithstanding
any disclosure on any disclosure schedule hereto or otherwise of the possibility
of any such Taxes or the existence of any reserves therefor.
(b) Buyer
hereby indemnifies Seller against and agrees to hold it harmless from any and
all Damages incurred or suffered by Seller arising out of:
(i)
any misrepresentation or breach of warranty (determined without regard to any
materiality qualification contained in any representation or warranty giving
rise to claim for indemnity hereunder) made or to be performed by Buyer pursuant
to the provisions of this Agreement the Ancillary Agreements and any certificate
or other writing delivered pursuant hereto or thereto; and
(ii)
any Business Third Party Claim alleging facts that if proven true would
constitute a misrepresentation or breach of warranty by Buyer; and
(iii)
any breach of any covenant made by Buyer.
6.3. Limitation
of Indemnification. Notwithstanding the provisions of Section 9.2, (i)
neither Seller nor Buyer shall be liable for Damages under Section 9.2(a)(i) and
9.02(b)(i), respectively unless the aggregate amount of Damages with respect to
all such misrepresentations or breaches of warranty (determined without regard
to any materiality qualification contained in any representations, warranty or
covenant giving rise to claim for indemnity hereunder) exceeds $25,000 and
Seller's maximum liability under Section 9.2(a) shall not exceed
$1,500,000.
6.4. Procedures.
Any party seeking indemnification (the "Indemnified Party") shall give
prompt notice to the party against whom indemnity is sought (the "Indemnifying
Party") of the assertion of any Third Party Claim; provided that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party of any liability or obligation hereunder, except to the
extent that the Indemnifying Party has been prejudiced thereby. The Indemnifying
Party may, and at the request of the Indemnified shall, participate in and
control the defense of any Third Party Claim at its own expense. If the
Indemnifying Party assumes control of the defense of any Third Party Claim, the
Indemnifying Party shall not be liable for any settlement effected by the
Indemnified Party without its consent of any Third Party Claim. Notwithstanding
the foregoing, if the Indemnifying Party assumes the defense of a Third Party
Claim and if the Indemnified Party later determines in good faith that a Third
Party Claim is likely to materially adversely affect it or its business in a
manner that may not be adequately compensated by the money damages, then the
Indemnified Party may, by written notice to the Indemnifying Party, assume the
exclusive right to defend, compromise, or settle such claim. If the Indemnified
Party shall so assume the exclusive right to defend, compromise, or settle such
claim, all attorneys' fees and other expenses incurred by the Indemnified Party
in the defense, compromise or settlement of such claim shall be at the
Indemnified Party's expense and shall not be eligible for indemnification from
the Indemnifying Party, but the Indemnifying Party shall be entitled to be
indemnified by the Indemnifying Party for the
full amount of any other Damages suffered by the Indemnified Party as a result
of or arising out of the Third Party Claim. The party controlling the defense of
any third party suit, action or proceeding shall keep the other party advised of
the status of such action, suit or proceeding and the defense thereof and shall
consider in good faith recommendations made by the other party with respect
thereto.
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6.5. Exclusive
Remedy. After the Closing, Section 9.02 shall provide the exclusive
remedy for any misrepresentation or breach of warranty, covenant or other
agreement or other claim arising out of this Agreement or the transactions
contemplated hereby, other than the covenants contained in Sections 5.04
(Noncompetition) and 7.01 (Confidentiality), or with respect to claims for
fraud, willful misrepresentation or willful breach.
SECTION
7. MISCELLANEOUS
PROVISIONS
7.1. Fees
And Expenses. Each party to this Agreement shall bear and pay all fees,
costs and expenses (including legal fees and accounting fees) that have been
incurred or that are incurred by such party in connection with the transactions
contemplated by this Agreement.
7.2. Attorneys'
Fees. If any action or proceeding relating to this Agreement or the
enforcement of any provision of this Agreement is brought against any party
hereto, 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).
7.3. Notices.
All notices and other communications required or permitted under this Agreement
and the transactions contemplated hereby shall be in writing and shall be deemed
to have been duly given, made and received on the date when delivered by hand
delivery with receipt acknowledged, or upon the next "Business Day" (meaning a
day, other than a Saturday or a Sunday, or a federal holiday upon which offices
of the federal government are not open for business) following receipt of
facsimile transmission or delivery by a nationally recognized courier, or upon
the fifth day after deposit in the United States mail, registered or certified
with postage prepaid, return receipt requested, addressed as set forth
below:
(a)
If to Buyer:
with
a copy (not constituting notice) to:
(b)
If to Seller:
with
a copy (not constituting notice) to:
Any party
may alter the address to which its communications are to be sent by giving
notice of such change in conformity with the provisions of this Section 9.4 for
the giving of notice
7.4. Confidentiality.
On and at all times after the Closing Date, Seller and Buyer shall keep
confidential, and shall not use or disclose to any other Person, any non-public
document or other non-public information in Seller's or Buyer's
possession that relates to the business of the other party.
14
7.5. 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.
7.6. 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.
7.7. Governing
law. 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).
7.8. Successors
and assigns. Buyer and seller may not assign this agreement without the
written consent of the other party; provided, however, (i) buyer may freely
assign any or all of its rights under this agreement (including its
indemnification rights under section 7), in whole or in part, to any other
person, in connection with the sale of all or any material portion of the
purchased assets, without obtaining the consent or approval of any other party
hereto or of any other person and (ii) seller may freely assign any or all of
its rights under this agreement (including its indemnification rights under
section 8), in connection with a sale of all or substantially all of seller's
assets, without obtaining the consent or approval of any other party hereto or
of any other person. Subject to the foregoing, the provisions of this agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and
assigns.
7.9. Remedies
cumulative;
specific performance. The rights and remedies of the parties hereto shall
be cumulative (and not alternative). The parties to this agreement agree that,
in the event of any breach or threatened breach by any party to this agreement
of any covenant, obligation or other provision set forth in this agreement for
the benefit of any other party to this agreement, such other party shall be
entitled (in addition to any other remedy that may be available to it) to (a) a
decree or order of specific performance or mandamus to enforce the observance
and performance of such covenant, obligation or other provision and (b) an
injunction restraining such breach or threatened breach.
7.10.
Waiver.
(a) Except
as otherwise provided in this Agreement, 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) Except
as otherwise provided in this Agreement, 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.
15
7.11. 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 all of
the parties hereto.
7.12. 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.
7.13. Entire
Agreement. This agreement, the schedules, exhibits, instruments and the
other agreements referred to herein set forth the entire understanding of the
parties hereto relating to the subject matter hereof and thereof and supersede
all prior agreements and understandings among or between any of the parties
relating to the subject matter hereof and thereof; provided, however, that the
mutual confidentiality agreement executed by and between buyer and seller on
April 21, 2009 shall not be superseded by this agreement and shall remain in
effect in accordance with its terms until the date on which such mutual
confidentiality agreement is terminated in accordance with its
terms.
7.14. Construction.
(a) The
parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this agreement.
(b) Except
as otherwise indicated, all references in this Agreement to "Sections" and
"Exhibits" are intended to refer to Sections of this Agreement and Exhibits to
this Agreement.
7.15. Publicity.
The parties agree not to issue any press release or similar publicity concerning
the Acquisition until the press release in the form attached hereto as Exhibit
E, is released on or after August 24, 2000. The parties will work in a positive
manner together and in no event will any executive officer of either party make
any negative statements about the other party regarding the Acquisition
or the Purchased Assets.
16
The
parties hereto have caused this Agreement to be executed and delivered as of
April 21, 2009.
Freedom
Communications Services, Inc.
|
|
By:
/s/ Xxxxxxxxx
Xxxxxxxx
Name:
Xxxxxxxxx Xxxxxxxx
Title: Chief
Executive Officer/President
|
|
By:
/s/ Xxxxxx X.
Xxxxxxxxx
Name:
Xxxxxx X. Xxxxxxxxx
Title: Chief
Executive Officer/President
|
|
17
=================================================================
ASSET
PURCHASE AGREEMENT
by and
among:
MetroConnect,
Inc.
A Nevada
corporation;
Freedom
Communications Services, Inc.
a
California corporation
---------------------------
Dated as
of April 21,
2009
==================================================================
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EXHIBITS
TABLE
OF CONTENTS