PURCHASE AGREEMENT
Exhibit
10.22
This
PURCHASE AGREEMENT (“Agreement”) is entered into this 7th day of December, 2006,
to be effective as of January 2, 2007, between Connex Services, Inc., a Texas
corporation having its offices at 0000 XX 0000 Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx
00000 (hereinafter referred to as “Seller”), and Eagle Broadband, Inc., a Texas
corporation having its offices at 000 Xxxxxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxx
00000
(hereinafter referred to as “Buyer”).
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1.
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Seller
is hereby selling and Buyer is hereby purchasing the following
assets
(“Assets”) of Seller at the price, terms and conditions hereinafter set
forth:
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All
of
seller’s right, title and interest in and to its list of customers (although
some may not be currently active), together with all other historical records,
documents, part specifications and quantities sold. The list of customers
is
represented by Seller to be essentially all significant customers sold by
Seller
within the past two (2) years and is set forth on “Schedule A”, annexed hereto
and made a part hereof.
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2.
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Buyer
shall not assume or pay any of Seller’s liabilities. Seller shall
indemnify, defend and hold Buyer harmless from any and all liability
for
any of Seller’s obligations or liabilities, existing, accrued or
contingent and any and all expenses including reasonable attorneys’ fees
therewith, which indemnity shall survive closing of this Agreement.
In the
event a claim is made against Buyer for any of Seller’s obligations or
liabilities, Buyer shall notify Seller, in writing, of such
claim.
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3.
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The
Purchase Price for the Assets purchased hereunder is the sum of
Six
Hundred Thirty-Eight Thousand Dollars ($638,000.00), which Buyer
shall pay
by delivering to Seller a number of shares of Buyer’s common stock
(“Common Stock”) equal to the Purchase Price divided by the closing price
of Buyer’s Common Stock as reported by the American Stock Exchange on the
date immediately preceding the Closing Date (the “Closing Price”). The
Common Stock deliverable hereunder will be issued to Seller promptly
upon
Buyer’s receipt of listing approval from the American Stock Exchange,
which application therefor Buyer shall file with the American Stock
Exchange no later than the business day immediately following the
Closing
Date.
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4.
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All
shares of Common Stock of the Buyer issued to the Seller will not
have
been registered under the Securities Act of 1933, as amended (the
“Act”),
on the basis that this transaction is exempt under the Act and
such shares
shall have the status of securities acquired under Section 4(2)
of the
Act, as not involving any public offering. Promptly upon Buyer’s receipt
of listing approval from the American Stock Exchange, and in no
event more
than five (5) business days, Buyer agrees to file a registration
statement
with the SEC to register a number of shares of Common Stock equal
to Four
Hundred Thousand Dollars ($400,000.00) divided by the Closing Price;
provided, that Buyer has obtained the written consent to register
such
shares from Dutchess Private Equities Fund, L.P. No assurance can
be given
that any registration statement filed will become
effective.
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5.
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In
determining the value of the Common Stock to be issued in exchange
for the
Assets purchased hereunder, Seller acknowledges that it is relying
solely
on the financial and other information regarding the Buyer’s financial
condition, operating results and business and other matters on
file with
the SEC. Such financial information has been prepared in accordance
with
GAAP, is audited where appropriate, and to the best of Buyer’s belief is
current as regards SEC filing requirements. Seller further acknowledges
that Buyer has not made and is not making any representations or
warranties with respect to itself other than as expressly set forth
in
this Agreement and for the information contained in its materials
filed
with the SEC.
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6.
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Seller
acknowledges that in accepting Buyer’s Common Stock as payment for the
Assets, Seller becomes an investor in the Common Stock of Buyer,
and in
that capacity Seller represents and warrants to and with Buyer
as
follows:
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(a) Seller
acknowledges that investment in Buyer’s stock is speculative and involves a high
degree of risk and the possible loss of its entire investment.
(b) Seller
is
familiar with the operations of Buyer, has evaluated the merits and risks
of
this transaction, has made its independent judgment as to the value of the
securities to be issued in exchange for the Assets purchased by reviewing
the
financial and other information regarding Buyer that is publicly available
and
on file with the SEC. Seller has had the opportunity to request additional
information and to ask questions and receive answers concerning the business
operations of Buyer, and is satisfied with the results of it investigation
of
Buyer.
(c) Seller
is
acquiring the Buyer’s shares in good faith for the purpose of investment in
Buyer and not for the purpose of distributing or publicly selling the shares
to
others, reselling, assigning, pledging or hypothecating the shares, or dividing
its participation in ownership of the shares with others.
(d) Seller
understands and acknowledges that it has been advised by Buyer that shares
of
the Common Stock will not have been registered under the Act, on the basis
that
this transaction is exempt under the Act and the shares shall have the status
of
securities acquired under Section 4(2) of the Act, as not involving any public
offering Seller acknowledges that Buyer is relying on the statutory exemption
from the registration requirements under the Texas Securities Act, basing
its
reliance in part on the Seller’s representations set forth in this
Agreement.
(e) Seller
acknowledges that the available financial statements and forecasts cannot
be
relied upon as an indication of future results. Future operations of Buyer
will
be dependent, in part, on the company’s ability to continue as a going concern,
the company’s liquidity constraints and ability to obtain financing and working
capital on favorable terms, the continued acceptance of the company’s products,
increased levels of competition, new products and technological changes,
the
company’s dependence upon third-party suppliers, intellectual property rights,
and other risks detailed from time to time in the company’s periodic reports
filed with the Securities and Exchange Commission. Many of these factors
cannot
be controlled by Buyer. No representation had been made that actual results
of
operations will conform to historical results or forecasted
results.
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7.
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Representations
and Warranties of Seller. As a material inducement to Buyer to
enter into
this Agreement and with the understanding that Buyer will be relying
thereon in consummating the transactions contemplated by this Agreement,
Seller represents and warrants to Buyer as
follows:
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(a) Seller
is
a corporation duly organized, validly existing and in good standing under
the
laws of the State of Texas, and has all requisite corporate power and capital
assets to carry on its business as it is now being conducted.
(b) Seller
has full corporate power and authority to enter into this Agreement and to
sell
the Assets in accordance with the terms of this Agreement. The execution,
delivery and performance of this Agreement by Seller, and all other agreements
or instruments to be executed by Seller pursuant to this Agreement, have
been
duly and effectively authorized by its board of directors and its shareholders,
and no other corporate proceedings on its part are necessary to authorize
this
Agreement or the transactions contemplated by this Agreement. This Agreement
constitutes, and such other agreements or instruments will constitute, the
legal, valid and binding obligations of Seller, enforceable in accordance
with
their respective terms, except as enforcement may be limited by bankruptcy,
insolvency, or other similar laws affecting the enforcement of creditors’ rights
in general, moratorium laws or by general principles of equity.
(c) Seller
is
not engaged in any legal action or other proceedings before any court or
administrative agency. Seller is not a party to any action or proceeding,
nor
has Seller been threatened with any such action or proceeding, nor, to the
knowledge of Seller, does there exist any basis therefor, which will or could
have a material adverse effect on the condition, financial or otherwise,
of the
Assets. No order, writ, injunction or decree has been issued by, or requested
of, any court or governmental agency which does or may result in any material
adverse change in the Assets.
(d) Seller
has not received any notice that any major customer intends to terminate,
limit
or reduce its business relations with Seller either currently or following
the
consummation of the transactions contemplated by this Agreement.
(e) Seller
has not withheld from Buyer any material facts relating to the Assets. No
representation or warranty of Seller in this Agreement contains any untrue
statement of material fact required to be stated herein to make the statement
not misleading.
(f) Seller
is
not in violation of, and the execution, delivery and performance of this
Agreement by Seller and the consummation of the transactions contemplated
by
this Agreement does not and will not result in any breach or acceleration
of,
any of the terms or conditions of its articles of incorporation or by-laws,
or
of any mortgage, bond, indenture, contract, agreement, license or other
instrument or obligation to which Seller is a party or by which the Assets
are
bound. The execution, delivery and performance of this Agreement or the other
agreements contemplated by this Agreement will not result in the violation
of
any statute, regulation, judgment, writ, injunction or decree of any court,
nor
require the consent, approval, permission or other authorization of any court,
arbitrator or governmental, administrative or self-regulatory authority or
any
other third party.
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8.
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As
a material inducement to Seller to enter into this Agreement and
with the
understanding that Seller will be relying thereon in consummating
the
transactions contemplated by this Agreement, Buyer represents and
warrants
to Seller as follows:
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(a) Buyer
is
a corporation duly organized, validly existing and in good standing under
the
laws of the State of Texas, and has all requisite corporate power and capital
assets to carry on its business as it is now being conducted.
(b) Buyer
has
the full corporate power and authority to enter into this Agreement and purchase
the Assets in accordance with the terms of this Agreement. The execution,
delivery and performance of this Agreement by Buyer pursuant to this Agreement
have been duly and effectively authorized by the board of directors of Buyer
and
no other corporate proceedings on the part of Buyer are necessary to authorize
this Agreement or the transactions contemplated by this Agreement. This
Agreement constitutes, and such other agreements and instruments will
constitute, the legal, valid and binding obligations of Buyer which are,
or will
be, enforceable against Buyer in accordance with their respective terms,
except
as enforcement may be limited by bankruptcy, insolvency, or other similar
laws
affecting the enforcement of creditors rights in general, moratorium laws
or by
general principles of equity.
(c) Buyer’s
shares, when issued and delivered to Seller, shall be deemed to be, and shall
be, fully paid and validly issued shares of stock of Buyer and Seller shall
not
be liable to any further call or assessment thereon, and any holder of said
shares of stock shall not be liable for any further payment in respect
thereto.
(d) The
audited fiscal year financial statements and the unaudited quarterly and
pro
forma combined financial statements filed by Buyer with the SEC were prepared
in
accordance with GAAP and fairly present Buyer’s financial position and results
of operations for the covered periods.
(e) No
representation or warranty of Buyer in this Agreement contains any untrue
statement of material fact required to be stated herein to make the statement
not misleading.
(f) Buyer
is
not in violation of, and the execution, delivery, and performance of this
Agreement or the other agreements contemplated by this Agreement and the
consummation of the transactions contemplated by this Agreement do not and
will
not result in any breach or acceleration of, any of the terms or conditions
of
its articles of incorporation or by-laws, or of any mortgage, bond, indenture,
contract, agreement, license or other instrument or obligation to which Buyer
is
a party. The execution, delivery and performance of this Agreement or the
other
agreements contemplated by this Agreement will not result in the material
violation of any statute, regulation, judgment, writ, injunction or decree
of
any court, threatened or entered in a proceeding or action in which Buyer
is,
was or may be bound.
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9.
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In
consideration of the benefits to Seller hereunder, and in order
to induce
Buyer to enter into this Agreement, Seller hereby covenants and
agrees
with Buyer as follows:
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(a) That
for
a period of one (1) year after the Closing Date, Seller shall not, and Seller
shall cause each person, corporation or other entity related to, controlling
or
controlled by Seller, to not solicit or attempt to solicit any of the customers,
clients or accounts listed on Schedule A with the intent or purpose to perform
for such customer, client or account the same or similar services sold by
Buyer.
(b) That
for
a period of two (2) years after the Closing Date, Seller shall not, and Seller
shall cause each person, corporation or other entity related to, controlling
or
controlled by Seller, to not, without the prior written consent of Buyer,
induce
or attempt to induce any employee of Buyer to leave the employ of Buyer,
or in
any way interfere with the relationship between Buyer and any employee
thereof.
(c) In
the
event a court of competent jurisdiction deems any provision in this Section
to
be unreasonable, unenforceable or invalid, then such provision(s) shall be
interpreted as broadly as may be considered reasonable by such court and
this
Section shall be deemed amended to the maximum scope of business, duration
or
geographic scope as such court determines to be reasonable and , as so amended,
shall be enforced.
(d) The
parties acknowledge and agree that the breach of the provisions of this Section
could not be adequately compensated with monetary damages and would irreparably
injure Buyer, and, accordingly, that injunctive relief and specific performance
shall be appropriate remedies to enforce the provisions of this Section,
and the
parties waive (a) any claim or defense that there is an adequate remedy at
law
for such breach, and (b) the necessity of posting a bond or similar security;
provided, however, that nothing contained herein shall limit the remedies,
legal, or equitable, otherwise available to Buyer, and all remedies of the
parties herein are in addition to any remedies available to the parties at
law
or otherwise.
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10.
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The
Closing shall take place on December 7, 2006 (the “Closing Date”). On the
Closing Date, Seller shall execute and deliver to Buyer such bills
of
sale, assignments and other good and sufficient instruments of
conveyance
and transfer, in form and substance reasonably satisfactory to
Buyer, as
are effective to transfer the Assets. The parties shall each deliver
to
the other such other documentation, such as board of director and
shareholder resolutions, as the other party shall reasonably
request.
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11.
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All
representations and warranties of the parties made in this Agreement
or as
provided in this Agreement shall survive the Closing Date for a
period of
two (2) years thereafter notwithstanding any investigation at any
time
made by or on behalf of the other party (“Survival Period”). All
representations and warranties related to any specific claim asserted
in
writing prior to the expiration of the Survival Period shall survive
until
such claim shall be resolved and payment in respect thereof, if
any is
owing, shall be made.
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12.
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Indemnification.
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(a) Seller
will fully indemnify and hold harmless Buyer, its officers, directors, employees
and affiliates against and in respect of any and all liabilities, losses,
damages, deficiencies, costs, or expenses (including, without limitation,
the
reasonable fees and expenses of investigation and counsel) (collectively,
“Losses”) resulting from (i) any misrepresentation or breach of any
representation, warranty, covenant or agreement by Seller made in this
Agreement; (ii) any claims, proceedings, actions or investigations made or
brought by third parties based on or arising from acts, omissions or states
of
fact relating to Seller or the Assets and occurring or in existence prior
to the
Closing Date; or (iii) the failure of Seller to timely pay any taxes
relating to or resulting from the Assets for any and all periods through
and
including the Closing Date.
(b) Buyer
will fully indemnify and hold harmless the Seller, its officers, directors,
shareholders, employees and affiliates against and in respect of any and
all
Losses resulting from (i) any misrepresentation or breach of any
representation, warranty, covenant or agreement by Buyer made in this Agreement
or as provided in this Agreement or (ii) any claims, proceedings, actions
or
investigations made or brought by third parties based on or arising from
acts,
omissions or states of fact relating to Buyer or the Assets and occurring
after
the Closing Date.
(c) Any
indemnification claim of a party must be asserted prior to the expiration
of the
Survival Period. Following the expiration of the Survival Period, a party
may
not assert any claims for indemnification under this Section.
(d) Each
party’s responsibility shall not apply to the first $1,000 of Losses, and is
subject to a maximum responsibility of $500,000.
(e) Any
person entitled to indemnification under this Agreement shall (i) give prompt
notice to the indemnifying party of any third party claim with respect to
which
it seeks indemnification and (ii) permit such indemnifying party to assume
the
defense of such claim with counsel reasonably satisfactory to the indemnified
party; provided, that any person entitled to indemnification under this
Agreement shall have the right to employ separate counsel and to participate
in
the defense of such claim, but the fees and expenses of such counsel shall
be at
the expense of such person.
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13.
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Any
claim or controversy arising among or between the parties hereto
pertaining to this Agreement and any claim or controversy arising
out of
or respecting any matter contained in this Agreement or any difference
as
to the interpretation of any of the provisions of this Agreement
shall be
settled by arbitration in Houston, Texas, by three (3) arbitrators
under
the then prevailing rules of the American Arbitration
Association.
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14.
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This
writing is intended by the parties as a final expression of their
agreement and is intended also as a complete and exclusive statement
of
the terms of their agreement. No course of prior dealings between
the
parties and no usage of the trade shall be relevant to supplement
or
explain any term used in this
Agreement.
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15.
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This
Agreement can be modified or rescinded only by a writing by both
parties
or their duly sworn authorized
agents.
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16.
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No
claim or right arising out of the breach of this Agreement can
be
discharged in whole or in part by a waiver or renunciation of such
claim
or right unless the waiver or renunciation is in writing signed
by the
aggrieved party.
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17.
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The
invalidity or unenforceability of any particular provision of this
Agreement shall not affect other provisions hereof and this Agreement
shall be construed in all respects as if such invalid or unenforceable
provisions were omitted.
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18.
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This
Agreement shall inure to the benefit of and be binding upon the
parties
named herein as the Seller and the Buyer and, except as heretofore
provided, to their respective successors, assigns, heirs, executors,
legal
representatives and administrators.
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19.
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All
notices, consents, requests, demands, instructions or other communications
provided for in this Agreement shall be in writing and shall be
deemed
validly given, made and served when delivered personally, or sent
by
certified or registered mail, postage prepaid, overnight courier,
by
telephone facsimile or electronic mail, pending the designation
of another
address, addressed as follows:
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Connex
Services, Inc.
0000
XX
0000 Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Attn:
Xxxxxx X. Xxxxxxx
Ph:
(000)
000-0000
Fax:
(000) 000-0000
Email:
xxxxxxxxxx@xxxxxxxxxxxxxx.xxx
Eagle
Broadband, Inc.
000
Xxxxxxxxxx Xxxxx
Xxxxxx
Xxxx, Xxxxx 00000
Attn:
Xxxxx Xxxxx, President
Ph:
(000)
000-0000
Fax:
(000) 000-0000
Email:
xxxxxx@xxxxxxxxxxxxxx.xxx
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20.
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This
Agreement shall be executed simultaneously in two or more counterparts,
each of which shall be deemed an original but all of which together
shall
constitute one and the same instrument, and this Agreement shall
be
construed under the laws of the State of
Texas.
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IN
WITNESS WHEREOF the parties hereto have set their hands and seals the day
and
year first above written.
Connex
Services, Inc. Eagle
Broadband, Inc.
By: /s/
Xxxxxxx X. Xxxxxxx By: /s/
Xxxxx Xxxxx
Name: Xxxxxxx
X. Xxxxxxx Name: Xxxxx
Xxxxx
Title: President
and
CEO
Title: President
and CEO
