EXHIBIT 10.6
ACQUISITION OF THE INFORMATION EXCHANGE
XXXX OF SALE
INFORMATION EXCHANGE, L.L.C.
This Xxxx of Sale is entered into between Rocky Mountain Internet, Inc., a
Delaware corporation (the "Company") and the persons whose signature appear
below (the "Owners").
Whereas, the Owners own all of the outstanding equity interests in the
Information Exchange, L.L.C.. The Company and the Owners desire to exchange
shares of common stock of the Company ("Common Stock") for all of Owners' equity
interests in IE (the "Equity Interests") upon the terms and subject to the
conditions set forth herein.
Therefore, the parties agree as follows:
1. Each of the Owners hereby assigns, transfers and conveys to the
Company all of such Owners Equity Interests in IE, in exchange for an aggregate
of 52,723 shares of Common Stock, such shares to be issued to the owners pro
rata according to their respective ownership interests in IE.
2. Each of Xxx Xxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxx and Xxxxxx Xxxxxxx
represents and warrants that they own 51%, 14%, 31% and 4%, respectively, of the
outstanding equity interests in IE, and that upon delivery of such Equity
Interests to the Company, the Company will own 100% of the outstanding equity
interests in IE, free and clear of any lien, claim or encumbrance of any kind
whatsoever.
3. The Company represents and warrants that the shares of Common Stock to
be issued hereunder will be validly issued, fully paid and nonassessable and
free and clear of any lien, claim or encumbrance of any kind whosoever, except
for restrictions on transfer imposed by applicable securities laws.
Effective December 3, 1996, notwithstanding the actual date of execution.
This Xxxx of Sale may be executed in one or more counterparts.
Rocky Mountain Internet, Inc.
By: /s/ D. Xxxx Xxxxxxx /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
/s/ Xxx Xxxxxx /s/ Xxxxx Xxxxxx
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Xxx Xxxxxx Xxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
OF ROCKY MOUNTAIN INTERNET, INC.
December 3, 1996
A special meeting of the board of directors of Rocky Mountain Internet,
Inc., a Delaware corporation (the "Corporation") was held on December 3, 1996,
at the executive offices of the Corporation. Present were Xxx Xxxxxx, Xxxxx
Xxxxxxxx and Xxxxxx Xxx Xxxxxxxx, all the directors of the Corporation. Also
present were Xxxxxx Xxxxx and, by conference telephone, Xxxx Xxxxxxxx, a senior
vice president with Neidiger/Xxxxxx/Xxxxxx, Inc., the Corporation's investment
banker, and, for the initial portion of the meeting, Xxxxxxx Xxxxxx, the
Corporation's attorney.
A general discussion of the proposed acquisition by the Corporation of the
outstanding equity interests in the Information Exchange, LLC ("IE") was had.
Mr, Xxxxxx, a director of the Corporation, is an equity owner in IE, as are
Xxxxx Xxxxxxxx and Xxxxx Xxxxxx, employees of the Corporation. Messrs. Xxxxxxxx
and Van Eeckhout asked questions of Xx. Xxxxxx regarding the advisability,
consideration to be paid and other terms of the proposed transaction, and the
value of the assets to be received by the Corporation. Xx. Xxxxxx explained
that the proposed consideration to be paid by the Corporation consisted of
52,723 shares of common stock, valued for such purpose at a 40% discount from
the most recent bid prices of the common stock based on the restricted nature of
the shares proposed to be issued. Such valuation resulted in a deemed purchase
price for IE of $60,385, or 6.5 times current monthly revenue.
Xx. Xxxxxxxx and Xx. Xxx Xxxxxxxx then reviewed the written opinion of
Neidiger to the effect that the proposed transaction is fair to the Corporation
from a financial point of view. After questioning Xx. Xxxxxxxx regarding the
basis for the Neidiger opinion, Messrs. Xxxxxxxx and Xxx Xxxxxxxx, upon motion
duly made and seconded, voted in favor of the following resolutions, with Xx.
Xxxxxx abstaining:
RESOLVED, that whenever these resolutions authorize the taking of any
action by the "Proper Officers," such action may be taken by the president and
any vice president of the Corporation, any one of them acting alone, or to the
extent necessary for purposes of certification and attestation, any secretary or
assistant secretary of the Corporation.
RESOLVED, that Xxxxxx Xxxxx shall serve as secretary of the meeting and
shall prepare minutes of the meeting for approval of the directors.
FURTHER RESOLVED, that it is in the best interests of the Corporation to
acquire IE for consideration consisting of 52,723 shares of common stock of the
corporation, such shares to be issued to the holders of equity interests in IE
pro rata according to their respective interests.
FURTHER RESOLVED, that the Proper Officers be, and each of them hereby
is, with full authority to act without the others, authorized to execute and
deliver, in the name and on behalf of the Corporation, a xxxx of sale and all
other documents, instruments, agreements and certificates to be delivered by
the Corporation pursuant to or in connection with the acquisition of IE (the
"Transaction Documents"), with such additions, deletions or changes therein
and modifications thereof, if any, as the Proper Officer executing the same
shall approve (the execution thereof by any such officer to be conclusive
evidence of his or her approval of any such additions, deletions, changes or
modifications) and that each of the officers of the Corporation hereby is
authorized and directed to take any and all appropriate action on behalf of
the Corporation to perform its obligations under the Transaction Documents.
FURTHER RESOLVED, that the Secretary and Assistant Secretaries of the
Corporation are hereby authorized and directed to sign any Secretary's
Certificates required to be delivered pursuant to or in connection with the
Transaction Documents and to make such attestations as may be required pursuant
to or in connection with the Transaction Documents.
FURTHER RESOLVED, that the Proper Officers of the Corporation be, and each
of them hereby is, authorized and directed to take any and all actions necessary
and advisable to consummate the transactions contemplated hereby, and to carry
out the purpose and intent of the foregoing resolutions.
FURTHER, RESOLVED, that the Proper Officers are further authorized, but
shall not be required, to take any action including, without limitation,
completing or conforming any document delivered by or on behalf of the
Corporation with respect to the transactions described in the foregoing
resolutions and to execute any other instruments, assurances, certificates, or
waivers for or on behalf of the Corporation as may be necessary or advisable to
consummate the transactions contemplated herein.
FURTHER RESOLVED, that all acts of the Proper Officers acting on behalf of
the Corporation in connection with the negotiation and execution of the
transactions contemplated herein and all other necessary instruments, documents,
and agreements relating thereto are approved, ratified and confirmed.
FURTHER RESOLVED, that each and all of the resolutions, acts, and
proceedings of the officers of the Corporation, since the last ratification of
acts as evidenced by the records in the minute book of the Corporation, are
hereby approved, ratified, and made the acts and deeds of the Corporation.
There being no further business to come before the meeting, the meeting
upon motion duly made and seconded was adjourned.
Respectfully submitted,
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
Approved and Signed:
/s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
/s/ Xxxxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxxxx X. Xxxxxxxx
/s/ Xxxxxx Xxx Xxxxxxxx
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Xxxxxx Xxx Xxxxxxxx
Being all of the directors of the
Corporation
August 7, 1996
To the Members
The Information Exchange, Limited Liability Company
0000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
We have compiled the accompanying statement of Assets, Liabilities, and
Members' Equity--cash basis of The Information Exchange Limited Liability
Company as of July 31, 1996, and the related statement of revenues and
expenses--cash basis for the seven months then ended, in accordance with
Statement on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial
statements information that is the representation of management. We have not
audited or reviewed the accompanying financial statements and, accordingly,
do not express an opinion or any other form of assurance on them.
The Company has chosen under the Internal Revenue Code to be a limited
liability company. In lieu of income taxes, the members of a limited
liability company are taxed on their proportionate share of the Company's
taxable income. Therefore, no provision or liability for federal income taxes
has been included in these financial statements.
Management has elected to omit substantially all of the disclosures
ordinarily included in financial statements prepared on the cash basis of
accounting. If the omitted disclosures were included in the financial
statements, they might influence the user's conclusions about the Company's
assets, liabilities, equity, revenue and expenses. Accordingly, these
financial statements are not designed for those who are not informed about
such matters.
Xxxxx & Associates, P.C.
THE INFORMATION EXCHANGE
Statement of Assets, Liabilities and Members' Equity--Cash Basis
July 31, 1996
ASSETS
Current Assets:
Cash in Bank $ (3,192.)
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TOTAL CURRENT ASSETS (3,192.)
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Plant, Property and Equipment
Telephone Equipment 71,718.
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71,718.
Less Accumulated Depreciation (23,340.)
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48,378.
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TOTAL ASSETS $ 45,186.
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LIABILITIES & MEMBERS' EQUITY
Current Liabilities
Accrued payroll taxes $ 1,691.
Current portion of lease obligation 28,430.
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TOTAL CURRENT LIABILITIES 30,121.
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Long-term Liabilities
Lease Obligation 43,406.
Less Current Portion (28,430.)
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Total Long-Term Debt 14,976.
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TOTAL LIABILITIES 45,097.
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Members' Equity
Members' Equity 29,333.
Current year expenses over revenue 29,244.
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TOTAL MEMBERS' EQUITY 89.
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TOTAL LIABILITIES & MEMBERS' EQUITY $ 45,186.
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SEE ACCOUNTANTS' COMPILATION REPORT
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THE INFORMATION EXCHANGE LIMITED LIABILITY COMPANY
Statement of Revenues and Expenses--Cash Basis
For The Seven Months Ended July 31, 1996
Rental Revenues $50,918. 100.00%
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Expenses:
Auto expense 978. 1.92
Bank charges 170. .33
Commissions 616. 1.21
Contract labor 86. .17
Depreciation 12,249. 24.06
Dues & subscriptions 1,165. 2.29
Employee benefits 2,399. 4.71
Equipment maintenance 800. 1.57
Entertainment 335. .66
Insurance 424. .83
Interest expense 3,201. 6.29
Legal & accounting 760. 1.49
Miscellaneous expense 162. .32
Office supplies 1,290. 2.53
Parking 567. 1.11
Payroll taxes 3,032. 5.95
Postage & shipping 653. 1.28
Printing 467. .92
Promotion 2,020. 3.97
Rent 300. .59
Repairs 455. .89
Salaries & wages 31,494. 61.85
Sales taxes 879. 1.73
Telephone & communications 4,444. 8.73
Telephone lines & data circuits 12,040. 23.65
Travel 509. 1.00
Worker's compensation 241. .47
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Total Operating Expenses 81,736. 160.52
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(30,818.) (60.52)
Other income 1,574. 3.09
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Net Expenses Over Revenue $(29,244.) (57.43)%
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SEE ACCOUNTANTS' COMPILATION REPORT
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THE INFORMATION EXCHANGE LIMITED LIABILITY COMPANY
Statement of Cash Flows--Cash Basis
For The Seven Months Ended July 31, 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net Expenses over Revenue $(29,244.)
Noncash Expenses:
Depreciation 12,249.
Changes is Assets and Liabilities:
Increase (Decrease) In:
Accrued Payroll Taxes 877.
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Net Cash Used by Operating Activities (16,118.)
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment (16,262.)
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Net Cash Used by Investment Activities (16,262.)
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CASH FLOWS FROM FINANCING ACTIVITIES
Payments of Lease Obligation (8,833.)
Additional Capital Lease Utilized 16,262.
Contribution by Members to Equity 24,600.
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Net Cash Provided by Financing Activities 32,029.
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Net Decrease in Cash ( 351.)
Cash Balance, January 1, 1996 (2,841.)
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Cash Balance, July 31, 1996 $(3,192.)
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Supplemental Disclosure:
Interest paid $ 3,201.
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SEE ACCOUNTANTS' COMPILATION REPORT
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