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EXHIBIT 6.17
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "AGREEMENT") entered into as of
the 21st day of October, 1999 by and between FLEX ACQUISITION, INC., a Florida
corporation (the "TRANSITORY COMPANY"), and a wholly-owned subsidiary of MIRACOM
CORPORATION, a Nevada corporation ("MIRACOM"), and FLEXRADIO, INC. a Florida
corporation (the "TARGET"), and the Shareholders of the Target, the names,
addresses and respective number of shares held by each Shareholder are stated on
SCHEDULE 5.3 attached hereto, which Schedule is incorporated herein by this
reference (collectively, the Target Shareholders shall be known as the
"SHAREHOLDERS").
WITNESSETH:
WHEREAS, this Agreement contemplates a transaction in which ultimately
Miracom will acquire all of the outstanding capital stock of Target for
6,200,000 shares of Miracom common stock, $.001 par value (the "CONSIDERATION
SHARES") through a reverse subsidiary merger of the Transitory Company into the
Target after which the Target shall survive. This transaction is intended to
qualify as a reorganization under Section 368(a)(2)(E), or in the case that the
transaction contemplated hereby fails to comply with such section with any other
subsection of Section 368 of the Internal Revenue Code of 1986, as amended (the
"CODE"); and
WHEREAS, after the completion of the transactions contemplated by this
Agreement, the Transitory Company shall be dissolved and the Target shall
survive as a subsidiary of Miracom in accordance with the provisions contained
in Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
SECTION 1 - DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings set forth below:
1.1 "AFFILIATE" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise. In the case of an individual,
"Affiliate" shall include such Person's spouse, ancestors and descendants
(whether natural or adopted) and any other individual related by marriage to
such Person.
1.2 "CODE" means the Internal Revenue Code of 1986, as amended.
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1.3 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.4 "GAAP" means Generally Accepted Accounting Principals as such are
amended from time to time.
1.5 "INSIDER" means, with respect to any Person, any officer, director,
Shareholder, partner or Affiliate.
1.6 "KNOWLEDGE" means, with respect to a Person, (a) the actual
knowledge of such Person (which includes the actual knowledge of all officers,
directors and executive employees of such Person) and (b) the knowledge which a
prudent business person would have obtained in the conduct of his or her
business after making reasonable inquiry and exercising reasonable diligence
with respect to the particular matter in question.
1.7 "LIENS" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereon, any sale of
receivables with recourse against the Company or any Affiliate, any filing or
agreement to file a financing statement as debtor under the Uniform Commercial
Code or any similar statute other than to reflect ownership by a third party of
property leased under a lease which is not in the nature of a conditional sale
or title retention agreement, or any subordination arrangement in favor of
another Person (other than any subordination arising in the ordinary course of
business).
1.8 "LOSS" means, with respect to any Person, any diminution in value,
consequential or other damage, liability, demand, claim, action, cause of
action, cost, damage, deficiency, Taxes, penalty, fine or other loss or expense,
whether or not arising out of a third party claim, including all interest,
penalties, reasonable attorneys' fees and expenses and all amounts paid or
incurred in connection with any action, demand, proceeding, investigation or
claim by any third party (including any governmental entity or any department,
agency or political subdivision thereof) against or affecting such Person or
which, if determined adversely to such Person, would give rise to, evidence the
existence of, or relate to, any other Loss and the investigation, defense or
settlement of any of the foregoing, together with interest thereon (at
prevailing market interest rates at the time) from the date on which such Person
provides the written notice of the related claim as described in this Agreement
through and including the date on which the total amount of the claim, including
such interest, is recovered or recouped pursuant to this Agreement.
1.9 "MATERIAL ADVERSE EFFECT" means, as to any Person, any material
adverse effect on the business, financial condition, operations, results of
operations, employee relations, customer or supplier relations, assets or future
prospects of such Person.
1.10 "ORDINARY COURSE OF BUSINESS" means, with respect to any Person,
the ordinary course of that Person's business consistent with past practice
(including, without limitation, with respect to collection of accounts
receivable, purchases of inventory and supplies, repairs and
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maintenance, payment of accounts payable and accrued expenses, levels of capital
expenditures and operation of cash management practices generally).
1.11 "PARTY" OR "PARTIES" means any party or parties to this Agreement,
as the case may be, first stated at the beginning of this Agreement.
1.12 "PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
1.13 "PROPRIETARY RIGHTS" means all (i) patents, patent applications,
patent disclosures and inventions, (ii) trademarks, service marks, trade dress,
trade names, logos, Internet domain names and corporate names and registrations
and applications for registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, source code and object code, data, data bases and
documentation thereof, (vi) trade secrets and other confidential information
(including, without limitation, ideas, formulas, compositions, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
know-how, manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans, proposals,
technical data, copyrightable works, financial and marketing plans and customer
and supplier lists and information), (vii) other intellectual property rights
and (viii) copies and tangible embodiments thereof (in whatever form or medium).
1.14 "PRO RATA SHARE" means, with respect to any Shareholder, a
fraction, the numerator of which is the number of shares of common stock of the
Target owned by such Shareholder at such time the Shareholder exchanges such
Shareholder's common stock of the Target for such Shareholders' respective share
of the Consideration Shares, and the denominator of which is 322,581,
representing all of the issued and outstanding capital stock of Target.
1.15 "RESTRICTED SECURITIES" means the Consideration Shares issued to
the Shareholders hereunder, and any securities issued with respect to any such
securities by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have been (a) effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) distributed to the public through a
broker, dealer or market maker pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act or become eligible for sale pursuant to
Rule 144(k) (or any similar provision then in force) under the Securities Act or
(c) otherwise transferred and new certificates for them not bearing any
Securities Act legend have been delivered by the Company. Whenever any
particular securities cease to be Restricted Securities, the holder thereof
shall be entitled to receive from the Company, without expense, new securities
of like tenor not bearing a Securities Act legend.
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1.16 "SECURITIES AND EXCHANGE COMMISSION" includes any governmental
body or agency succeeding to the functions thereof.
1.17 "SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar federal law then in force.
1.18 "SHAREHOLDERS" shall mean collectively and individually all the
shareholders of the Target, Xxxxx X. Xxxxxxxx, individually, and to the extent
such Shareholder of Target is a business organization in any form whatsoever,
such entity's partners, shareholders, limited partners or beneficial interest
holders as the case may be. Such term "Shareholders" shall at a minimum include
all the parties, listed on SCHEDULE 5.3 "Shareholders of FlexRadio, Inc.",
attached hereto.
1.19 "SUBSIDIARY" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or general partner of such limited
liability company, partnership, association or other business entity.
1.18 "TAX RETURNS" means returns, declarations, reports, claims for
refund, information returns or other documents (including any related or
supporting schedules, statements or information) filed or required to be filed
in connection with the determination, assessment or collection of Taxes of any
party or the administration of any laws, regulations or administrative
requirements relating to any Taxes.
1.19 "TAXES" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, or other tax, fee, assessment or charge of any
kind whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
1.20 "TREASURY REGULATIONS" means the United States Treasury
Regulations promulgated pursuant to the Code.
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SECTION 2 - THE MERGER
2.1 THE MERGER. On and subject to the terms and conditions of this
Agreement, the Target will merge with and into the Transitory Company (the
"MERGER") at the Effective Time (defined below). The Target shall be the
corporation surviving the Merger (the "SURVIVING COMPANY").
2.2 EFFECT OF MERGER.
(a) GENERAL. The Merger shall become effective at the time
(the "EFFECTIVE TIME") the Target and the Transitory Company file the Articles
of Merger with the Department of State of the State of Florida. The Merger will
have the effect set forth in the Florida Business Corporation Act. The Surviving
Company may, at any time after the Effective Time, take any action (including
executing and delivering any document) in the name and on behalf of either the
Target or the Transitory Company in order to carry out and effectuate the
transactions contemplated by this Agreement.
(b) SURVIVING COMPANY. At the Effective Time of the Merger,
the Articles of Incorporation, By-Laws, directors and officers of the Surviving
Company shall be identical to those of the Target as in effect immediately prior
to the effectiveness of such Merger.
(c) STATUS AND CONVERSION OF SHARES. At the Effective Time of
the Merger:
(i) Each share of capital stock held by the Target as
treasury stock immediately prior to the effectiveness of the Merger
shall be canceled and extinguished, and no payment or issuance of any
consideration shall be payable or shall be made in respect thereof;
(ii) Each share of capital stock of the Transitory
Company outstanding immediately prior to the effectiveness of the
Merger shall be converted into and shall become one (1) share of common
stock of the Surviving Company; and
(iii) Each share of capital stock of the Target
issued and outstanding immediately prior to the Effective Time of the
Merger (the "TARGET STOCK") shall be canceled and extinguished and
converted into the right to receive a proportionate amount of the
Consideration Shares payable in respect of all of the outstanding
shares of such Target Stock pursuant to Section III of this Agreement.
Such consideration shall be paid and delivered to the Shareholders, as
the only holders of the outstanding Target Stock, upon surrender to the
Surviving Company of the certificates, representing such shares of
outstanding Target Stock at the time and place of the Closing (defined
below). Upon receipt of the certificates representing the Target Stock,
such certificates shall be delivered to Miracom by the Surviving
Company.
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(d) BOOKS AND RECORDS. On the Closing Date (defined below),
the Shareholders shall deliver, and shall cause the Target to deliver, to
Miracom all of the stock books, records and minute books of the Target, all
financial, accounting and tax books and records of the Target, all Proprietary
Rights of the Target, and all supplier, client, customer, sales and other
business records of the Target.
SECTION 3 - MERGER CONSIDERATION
In consideration for the Shareholders' transfer to the Transitory
Company of 100% of the issued and outstanding Target Stock, Miracom shall
exchange 6,200,000 Consideration Shares with the Shareholders for all of the
Shareholders' Target Stock. The Consideration Shares shall be issued to the
Shareholders Pro Rata in accordance with their respective ownership of the
Target immediately preceding the date of this Agreement.
SECTION 4 - CLOSING
4.1 THE CLOSING. The closing of the Merger (the "Closing") shall take
place at the offices of Xxxxxxxxx Xxxxxxx, P.A., 000 Xxxxx Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxxxxxx 00000, commencing at 1:00 p.m. local time on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or such other date as the Parties may mutually determine
(the "Closing Date"); provided, however, that the Closing Date shall be no later
than October 21, 1999.
4.2 At the Closing, Miracom shall deliver to the Shareholders, stock
certificates representing such Shareholders' Pro Rata respective share of the
Consideration Shares for each Shareholder's respective share of Target Stock.
4.3 At the Closing, the Surviving Company shall deliver to Miracom
certificates, registered in the names of the Shareholders, representing all the
issued and outstanding shares of Target Stock which shall constitute all of the
outstanding shares of Capital Stock of the Target. From time to time, at
Miracom's request, whether at or after the Closing and without further
consideration, the Surviving Company and the Shareholders will execute and
deliver such further instruments of conveyance and transfer and take such other
actions as Miracom may reasonably require to more effectively convey and
transfer to the Target and/or Miracom all of the outstanding Target Stock.
4.4 At the Closing, (a) the Target will deliver to Miracom and the
Transitory Company the certificates, instruments, and documents referred to in
this Agreement, (b) Miracom and the Transitory Company will deliver to the
Target the certificates, instruments, and documents referred to in this
Agreement, and (c) the Target and the Transitory Company will file with the
Secretary of State of the State of Florida Articles of Merger in a form
satisfactory to their counsel.
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SECTION 5 - REPRESENTATIONS AND WARRANTIES OF TARGET AND THE SHAREHOLDERS
As a material inducement to Miracom and the Transitory Company to enter
into this Agreement, the Shareholders hereby jointly and severally represent and
warrant to the Transitory Company and Miracom that:
5.1 ORGANIZATION AND CORPORATE POWER. The Target is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and is qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to qualify, which
jurisdictions are listed on SCHEDULE 5.1 attached hereto. The Target possesses
all requisite corporate power and authority and all material licenses, permits
and authorizations necessary to own, lease and operate its properties, to carry
on its businesses as now conducted and presently proposed to be conducted and to
carry out the transactions contemplated by this Agreement.
5.2 AUTHORIZATION OF TRANSACTIONS; TITLE TO TARGET STOCK. The Target
and the Shareholders have duly authorized, executed and delivered this
Agreement. This Agreement constitutes a valid and binding obligation of the
Target and the Shareholders, enforceable in accordance with its terms. The
Shareholders hereby warrant that they are the only Shareholders of the Target
and each Shareholder warrants that such Shareholders' share of the Target Stock
is (and on the Closing Date will be) free of any and all encumbrances, claims,
options, calls and assessments in any form whatsoever and that the Shareholders'
share of the Target Stock may be transferred without any other action, pursuant
to the terms of this Agreement.
5.3 CAPITALIZATION. The authorized capital stock of the Target consists
of 5,000,000 shares of common stock, par value $.01 per share, of which 10,000
shares are issued and outstanding and are owned beneficially and of record as
set forth on SCHEDULE 5.3 attached hereto. The Target has no outstanding stock
or securities convertible or exchangeable for any shares of its capital stock or
containing any profit participation features, nor does it have outstanding any
rights or options to subscribe for or to purchase its capital stock or any stock
or securities convertible into or exchangeable for its capital stock or any
stock appreciation rights or phantom stock plans. The Target is not subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock or any warrants, options or other rights
to acquire its capital stock. All of the outstanding shares of the Target's
capital stock are validly issued, fully paid and nonassessable. There are no
agreements between the Target's Shareholders with respect to the voting or
transfer of the Target's capital stock or with respect to any other aspect of
the Target's affairs.
5.4 ABSENCE OF CONFLICTS. The execution and delivery by the Target of
this Agreement and the fulfillment of and compliance with the terms hereof, do
not and shall not;
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(a) conflict with or result in a breach of the terms,
conditions or provisions of;
(b) constitute a default under;
(c) result in the creation of any lien, security interest,
charge or encumbrance upon the Target's capital stock or assets pursuant to;
(d) give any third party the right to modify, terminate or
accelerate any obligation under;
(e) result in a violation of; or
(f) require any authorization, consent, approval, exemption or
other action by or notice or declaration to, or filing with,
any court or administrative or governmental body or agency pursuant to, its
charter or bylaws, or any law, statute, rule or regulation to which it is
subject, or any agreement, instrument, order, judgment or decree to which it is
subject.
5.5 SUBSIDIARIES, INVESTMENTS. The Target does not own or hold any
rights to acquire any shares of stock or any other security or interest in any
other Person, and the Target has never had any Subsidiary.
5.6 FINANCIAL STATEMENTS; LIABILITIES.
(a) FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 5.6(A)
are copies of the Target's unaudited balance sheet as of September 30, 1999 (the
"LATEST BALANCE SHEET") and the related statements of income and cash flows from
its inception date to September 30, 1999. Each of the foregoing financial
statements (including in all cases the notes thereto, if any) (the "FINANCIAL
STATEMENTS") is accurate and complete, is consistent with the Target's books and
records (which, in turn, are accurate and complete), presents fairly the
Target's financial condition and results of operations as of the times and for
the periods referred to therein, and has been prepared in accordance with GAAP,
subject to changes resulting from normal year-end adjustments for recurring
accruals (which shall not be material individually or in the aggregate) and to
the absence of footnote disclosure.
(b) LIABILITIES.
(i) Except as set forth in SCHEDULE 5.6(B) hereto
(and to the extent not disclosed in other Schedules to this Agreement),
the Target has no separate indebtedness or payable outstanding which
individually exceed $5,000.00 or outstanding indebtedness or payables
which in the aggregate exceed $10,000.00. There are no material
contingent or actual liabilities of whatever nature, except as set
forth in SCHEDULE 5.6(B), that are not
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disclosed in the Financial Statements, including but not limited to
liabilities for Taxes or payments of any kind due and payable to any
level of government.
(ii) All indebtedness and accounts payable of the
Target as of the date of this Agreement are set forth on SCHEDULE
5.6(B) hereto (to the extent not disclosed in other Schedules to this
Agreement), which obligations are identified by current outstanding
principal balance and accrued and unpaid interest, if any, owed to each
creditor, together with the name, address and telephone number of each
such creditor.
5.7 OPERATIONS; RECEIVABLES AND INVENTORY. The Target has not commenced
commercial operations. The Target does not have, and has never had, any
receivables or inventory.
5.8 ABSENCE OF CERTAIN DEVELOPMENTS. Except as set forth on the
SCHEDULE 5.8 attached hereto and except as expressly contemplated by this
Agreement, since September 30, 1999, the Target has not:
(a) suffered any change that has had or could reasonably be
expected to have a Material Adverse Effect or suffered any theft, damage,
destruction or casualty loss to its assets, whether or not covered by insurance
or suffered any substantial destruction of its books and records;
(b) paid any dividends or made any other distributions
(whether in cash or in kind) with respect to any shares of its capital stock or
other equity security, except for distributions made to the Shareholders in the
Ordinary Course of Business consistent with past practice to permit the
Shareholders to pay taxes on the income of the Target;
(c) subjected any portion of its properties or assets to any
Lien;
(d) sold, assigned, licensed or transferred (including,
without limitation, transfers to Shareholders or any Insider) any Proprietary
Rights owned by, issued to or licensed to it or disclosed any confidential
information (other than pursuant to agreements requiring the disclosure to
maintain the confidentiality of and preserving all its rights in such
confidential information) or received any confidential information of any third
party in violation of any obligation of confidentiality;
(e) suffered any extraordinary losses or waived any rights of
material value;
(f) entered into any transaction out of the Ordinary Course of
Business or other material transaction, or materially changed any business
practice; or
(g) made any capital expenditures or commitments for capital
expenditures that aggregate in excess of $1,000.00.
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5.9 ASSETS. The Target has good and marketable title to, or a valid
leasehold interest in, the properties and assets used by it, located on its
premises or shown on the Latest Balance Sheet or acquired thereafter, free and
clear of all Liens. The Target's buildings, equipment and other tangible assets
are in good operating condition and are fit for use in the Ordinary Course of
Business. The Target owns or leases all buildings, machinery, equipment, and
other tangible assets necessary for the conduct of its business as presently
conducted.
5.10 LEASED PROPERTIES. Except as disclosed on SCHEDULED 5.10 annexed
hereto, the Target has not entered into any leases or subleases for any real or
personal property.
5.11 REAL PROPERTY DISCLOSURE. Except as disclosed on SCHEDULED 5.10
annexed hereto, there is no real property leased or owned by the Target or used
in its businesses.
5.12 TAXES
(a) TAX RETURNS AND AUDITS.
(i) Except as and to the extent disclosed in Schedule
5.12 annexed hereto: [i] on the date hereof and on the Closing Date,
all federal, state and local tax returns and tax reports required to be
filed by the Target on or before the date of this Agreement or the
Closing Date, as the case may be, have been and will have been timely
filed with the appropriate governmental agencies in all jurisdictions
in which such returns and reports are required to be filed; [ii] all
Taxes due from or with respect to the Target as of the date hereof and
as of the Closing Date have been and will have been fully paid, and
appropriate accruals shall have been made on the Target's books for
Taxes not yet due and payable; [iii] as of the Closing Date, all Taxes
and other assessments and levies which the Target is required by law to
withhold or to collect on or before the Closing Date will have been
duly withheld and collected, and will have been paid over to the proper
governmental authorities to the extent due and payable on or before the
Closing Date; and [iv] there are no outstanding or pending claims,
deficiencies or assessments for Taxes, interest or penalties with
respect to any taxable period of the Target. At and after the Closing
Date, the Target will not have any liability for any federal, state or
local income tax with respect to any taxable period ending on or before
the Closing Date, except as and to the extent disclosed in Schedule
5.12.
(ii) There are no audits pending with respect to any
federal, state or local tax returns of the Target, and no waivers of
statutes of limitations have been given or requested with respect to
any tax years or tax filings of the Target.
(b) TAXABLE STATUS. The Target has not elected to be treated
as an "S Corporation" as such term is defined in the Internal Revenue Code of
1986, as amended, and regulation.
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5.13 CONTRACTS AND COMMITMENTS.
(a) Except as specifically contemplated by this Agreement and
except as set forth and fully described on SCHEDULE 5.13(A) attached hereto, the
Target is not a party to or bound by, whether written or oral, any:
(i) collective bargaining agreement or contract with
any labor union or any bonus, pension, profit sharing, retirement or
any other form of deferred compensation plan or any stock purchase,
stock option, hospitalization insurance or similar plan or practice,
whether formal or informal;
(ii) any contract for the employment of any officer,
individual employee or other person on a full-time or consulting basis
or any severance agreements;
(iii) agreement or indenture relating to the
borrowing of money or to mortgaging, pledging or otherwise placing a
Lien on any of its assets;
(iv) contract under which the Target has advanced or
loaned any other Person amounts in the aggregate exceeding $5,000;
(v) agreement under which the Target has granted any
Person any registration rights (including, without limitation, demand
and piggyback registration rights);
(vi) agreements with respect to the lending or
investing of funds;
(vii) any license or royalty agreements;
(viii) guaranty of any obligation, other than
endorsements made for collection;
(ix) lease or agreement under which it is lessee of,
or holds or operates, any personal property owned by any other party
calling for payments in excess of $5,000 annually;
(x) lease or agreement under which it is lessor of or
permits any third party to hold or operate any property, real or
personal, owned or controlled by it;
(xi) contract or group of related contracts with the
same party continuing over a period of more than six months from the
date or dates thereof, not terminable by it on 30 days or less notice
without penalties or involving more than $10,000;
(xii) contract which prohibits it from freely
engaging in business anywhere in the world;
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(xiii) other agreement material to it whether or not
entered into in the Ordinary Course of Business; or
(xiv) any oral agreements and/or contracts.
(b) Except as disclosed on SCHEDULE 5.13(B):
(i) no contract or commitment has been
breached or canceled by the other party and neither the Target
nor any Shareholder has Knowledge of any anticipated breach by
any other party to any contract other than as set forth on the
SCHEDULE 5.13(B);
(ii) other than as set forth on SCHEDULE
5.13(B), no customer or supplier has indicated in writing or
orally to the Target or any Shareholder that it shall stop or
decrease the rate of business done with the Target or that it
desires to renegotiate its contract or current arrangement
with the Target;
(iii) the Target has performed all the
obligations required to be performed by it in connection with
all of the contracts or commitments that the Target has
entered into is not in default under or in breach of any
contract or commitment, and no event has occurred which with
the passage of time or the giving of notice or both would
result in a default or breach thereunder;
(iv) the Target has no present expectation
or intention of not fully performing any obligation pursuant
to any contract that the Target entered into; and
(v) other than as set forth on SCHEDULE
5.13(B), each agreement is legal, valid, binding, enforceable
and in full force and effect and will continue as such
following the consummation of the transactions contemplated
hereby.
5.14 PROPRIETARY RIGHTS.
(a) The only Proprietary Rights owned or used by the Target or
required to be used by the Target to operate the Target's business are listed on
SCHEDULE 5.14 (the "TARGET PROPRIETARY RIGHTS"). Xxxxx X. Xxxxx and Xxxxx X.
Xxxxxxxx, two of the Shareholders, have filed an application for registration
with the United States Patent Office for the patent designated on SCHEDULE 5.14,
which patent and all rights thereto have been assigned to the Target by Xxxxx X.
Xxxxx and Xxxxx X. Xxxxxxxx. Other than to the Target, the Shareholders have not
assigned, licensed or given any Person the right to use any of the Proprietary
Rights. The Target owns, free of all Liens, all right, title and interest to the
Proprietary Rights. The Proprietary Rights are entirely owned by the Target and
are the only Proprietary Rights necessary for the operation of the businesses of
the Target as presently conducted or as contemplated to be conducted by Miracom.
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(b) Neither the Target nor the Stockholders has received any
notices of invalidity, infringement or misappropriation from any third party
with respect to any of the Proprietary Rights. Neither the Target nor the
Shareholders has interfered with, infringed upon, misappropriated or otherwise
come into conflict with any Proprietary Rights of any third parties. To the
Knowledge of the Shareholders, no third party has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any of the
Proprietary Rights.
(c) The transactions contemplated by this Agreement shall have
no adverse effect on the Target's right, title and interest in and to any of the
Proprietary Rights. The Target has taken all necessary and desirable actions to
maintain and protect the Proprietary Rights.
5.15 LITIGATION; PROCEEDINGS. There are no actions, suits, proceedings,
orders, investigations or claims pending or, to the Knowledge of the
Shareholders, threatened against or affecting the Target (or to the Knowledge of
the Shareholders, pending or threatened against or affecting any of the
officers, directors or key employees of the Target with respect to its
businesses or proposed business activities) at law or in equity, or before or by
any governmental department, commission, board, bureau, agency or
instrumentality (including, without limitation, any actions, suits, proceedings
or investigations with respect to the transactions contemplated by this
Agreement); and the Target is not subject to any arbitration proceedings under
collective bargaining agreements or otherwise or, to the Knowledge of the
Shareholders, any governmental investigations or inquiries. The Target is not
subject to any judgment, order or decree of any court or other governmental
agency, and the Target has not received any opinion or memorandum or legal
advice from legal counsel to the effect that it is exposed, from a legal
standpoint, to any liability or disadvantage which may be material to its
business.
5.16 BROKERAGE. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of the
Target or the Shareholders.
5.17 GOVERNMENTAL LICENSES AND PERMITS. SCHEDULE 5.17 attached hereto
contains a complete listing and summary description of all permits, licenses,
certificates, approvals and other authorizations of any governmental entity or
any department, agency or political subdivision thereof, or other similar rights
(collectively, the "LICENSES") owned or possessed by the Target or used by it in
the conduct of its businesses. Except as stated on SCHEDULE 5.17, the Target
owns or possesses all right, title and interest in and to all of the Licenses
that are necessary to conduct their businesses as presently conducted,
including, without limitation, all Licenses required under any federal, state or
local law relating to public health and safety, employee health and safety,
pollution or protection of the environment. The Target is in compliance with the
terms and conditions of such Licenses and have not received any notices that
they are in violation of any of the terms or conditions of such Licenses. The
Target has taken all necessary action to maintain such Licenses. No loss or
expiration of any such License is threatened, pending or reasonably foreseeable
other than expiration in accordance with the terms thereof. Except as stated on
SCHEDULE 5.17, all of the Licenses shall survive the transactions contemplated
by the Merger and the transactions contemplated hereby.
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5.18 EMPLOYEES. All employees and independent contractors are disclosed
on SCHEDULE 5.18 annexed hereto. To the Knowledge of the Shareholders, no
employee or independent contractor, if any, of the Target has any plans to
terminate his, her or its employment or relationship as an independent
contractor with the Target. The Target has complied with all applicable laws
relating to the employment of personnel and labor. The Target is not a party to
or bound by any collective bargaining agreement, nor has the Target experienced
any strikes, grievances, unfair labor practices claims or other material
employee or labor disputes. The Target has not engaged in any unfair labor
practice. The Target has no Knowledge of any organizational effort presently
being made or threatened by or on behalf of any labor union with respect to
employees of the Target, if any.
5.19 EMPLOYEE BENEFIT MATTERS. Except as disclosed on SCHEDULE 5.19
annexed hereto, the Target has no employee benefit plans or arrangements (i.e.,
pension plans, employee welfare benefit plans, deferred compensation plans,
stock option plans, bonus plans, stock purchase plans, hospitalization,
disability and other insurance plans, severance or termination pay plans and
policies, whether or not described in ERISA.
5.20 INSURANCE. SCHEDULE 5.20 attached hereto lists and briefly
describes each insurance policy maintained by the Target with respect to its
properties, assets and business, together with a claims history since its
inception. All of such insurance policies are in full force and effect, and the
Target is not in default with respect to its obligations under any such
insurance policies and the Target has not been denied insurance coverage. Except
as set forth on SCHEDULE 5.20, the Target has no self-insurance or co-insurance
programs, and the reserves set forth on the Latest Balance Sheet are adequate to
cover all anticipated liabilities with respect to self-insurance or coinsurance
programs.
5.21 OFFICERS AND DIRECTORS; BANK ACCOUNTS. SCHEDULE 5.21 attached
hereto lists all officers and directors of the Target, and all bank accounts,
safety deposit boxes and lock boxes (designating each authorized signatory with
respect thereto) for the Target.
5.22 AFFILIATE TRANSACTIONS. Except as disclosed on SCHEDULE 5.22
attached hereto, no Insider is a party to any agreement, contract, commitment or
transaction with the Target or which pertains to the business of the Target or
has any interest in any property, real or personal or mixed, tangible or
intangible, used in or pertaining to the business of the Target.
5.23 COMPLIANCE WITH LAWS. The Target and its officers, directors,
partners, agents and employees have complied with and are in compliance with all
applicable laws, regulations and ordinances of foreign, federal, state and local
governments and all agencies thereof which are applicable to the business,
business practices (including, but not limited to, the Target's marketing and
sales of its products and services) or any leased properties of the Target and
to which the Target may be subject, and no claims have been filed against the
Target alleging a violation of any such laws or regulations, and the Target has
not received notice of any such violations.
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5.24 DISCLOSURE. Neither this Agreement nor any of the schedules,
attachments or Exhibits hereto, contain any untrue statement of a material fact
or omit a material fact necessary to make each statement contained herein or
therein, not misleading. There is no fact which has not been disclosed to the
Target of which any Shareholder has Knowledge which has had a Material Adverse
Effect on the Target or could reasonably be anticipated to have a Material
Adverse Effect on the Surviving Company.
5.25 LEGAL REPRESENTATION. The Target and the Shareholders acknowledge
that prior to contemplating entering into this Agreement that they were informed
and understand that Xxxxxxxxx Xxxxxxx, P.A. has acted and continues to act as
counsel for Miracom and that Xxxxxxxxx Traurig, P.A. informed both the Target
and the Shareholders of their respective need for separate counsel regarding the
matters contemplated in this Agreement.
SECTION 6 - REPRESENTATIONS AND WARRANTIES OF TRANSITORY COMPANY AND MIRACOM
As a material inducement to the Target and the Shareholders to enter
into this Agreement, Miracom hereby represents and warrants to the Target and
the Shareholders that:
6.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION.
(a) Miracom is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada,
with all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby.
(b) The Transitory Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Florida, with all necessary power and authority to consummate
the Merger with the Target as contemplated hereby. The Transitory
Company is a wholly-owned subsidiary of Miracom, and will have no
material assets or liabilities at the time of the Closing.
6.2 AUTHORIZATION OF TRANSACTIONS; BINDING AGREEMENT. Miracom and the
Transitory Company have duly authorized, executed and delivered this Agreement.
This Agreement constitutes a valid and binding obligation of Miracom and the
Transitory Company, enforceable in accordance with its terms.
6.3 ABSENCE OF CONFLICTS. The execution and delivery by Miracom and the
Transitory Company of this Agreement and the fulfillment of and compliance with
the terms hereof, do not and shall not:
(a) conflict with or result in a breach of the terms,
conditions or provisions of;
(b) constitute a default under;
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(c) result in the creation of any lien, security interest,
charge or encumbrance upon their assets pursuant to;
(d) give any third party the right to modify, terminate or
accelerate any obligation under;
(e) result in a violation of; or
(f) require any authorization, consent, approval, exemption or
other action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency pursuant to, its charter or
bylaws, or any law, statute, rule or regulation to which it is subject, or any
agreement, instrument, order, judgment or decree to which it is subject.
6.4 CONSIDERATION SHARES. When transferred or issued to the
Shareholders pursuant to this Agreement, all Consideration Shares delivered to
the Shareholders shall be duly authorized, validly issued and fully paid and
non-assessable.
6.5 INVESTMENT. Miracom will be acquiring ownership of the outstanding
capital stock of the Target for its own account, for investment purposes only,
and not with a view to the resale or distribution thereof.
SECTION 7 - CONDITIONS PRECEDENT TO CLOSING
7.1 CONDITIONS PRECEDENT TO MIRACOM OR TRANSITORY COMPANY'S
PERFORMANCE. The obligations of Miracom to consummate the transactions
contemplated by this Agreement are further subject to the satisfaction, at or
before the Closing Date, of all the following conditions, any one or more of
which may be waived in writing by Miracom:
(a) Accuracy of Representations and Warranties. All
representations and warranties made by the Shareholder in this Agreement, in any
Schedule(s) hereto, and/or in any written statement delivered to Miracom under
this Agreement shall be true and correct in all material respects on and as of
the Closing Date as though such representations and warranties were made on and
as of that date.
(b) Performance. The Target and the Shareholders shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by them
on or before the Closing Date.
(c) Certification. Miracom shall have received a certificate,
dated the Closing Date, signed by the Shareholders, certifying, in such detail
as Miracom and its counsel may reasonably request, that the conditions specified
in Sections 7.1(a) and 7.1(b) above have been fulfilled.
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(d) Resolutions. Miracom shall have received certified
resolutions of the Board of Directors and the Shareholders of the Target, in
form reasonably satisfactory to counsel for Miracom, authorizing the Target's
execution, delivery and performance of this Agreement and the Merger, and all
actions to be taken by the Target hereunder (including resolutions which (i)
elect such persons as officers and directors of the Target and (ii) amend the
Articles of Incorporation and By-laws of the Target, as shall be determined by
Miracom).
(e) Good Standing Certificates. The Shareholders shall have
delivered to Miracom a certificate or telephone confirmation issued by the
Secretary of State of Florida, evidencing the good standing of the Target in
Florida as of a date not more than ten (10) calendar days prior to the Closing
Date.
(f) Absence of Litigation. No action, suit or proceeding by or
before any court or any governmental body or authority, against any Shareholder
or the Target or pertaining to the transactions contemplated by this Agreement
or their consummation, shall have been instituted on or before the Closing Date,
which action, suit or proceeding would, if determined adversely, have a Material
Adverse Effect on the business, financial condition, operations or prospects of
the Target, or impair the ability of any of the Shareholders to deliver in the
Merger all of their Target Stock free and clear of all pledges, liens, claims,
charges, options, calls, encumbrances, restrictions and assessments whatsoever.
(g) Consents. All necessary disclosures to and agreements and
consents of (a) any parties to any Material Contracts and/or any licensing
authorities which are material to the Target's business, (including all
outstanding indebtedness and leases) and (b) any governmental authorities or
agencies to the extent required in connection with the transactions contemplated
by this Agreement, shall have been obtained, shall be in such form as shall be
satisfactory to Miracom and true and complete copies thereof shall be delivered
to Miracom on or before the Closing Date.
(h) Settlement of Accounts. All debts, liabilities and other
monetary obligations owed to the Target by any of the Shareholders of the Target
and/or any of their Affiliates on or prior to the Closing Date, shall have been
fully paid to the Target in immediately available funds, such that no such
debts, liabilities or obligations shall be outstanding on and after the Closing
Date.
(i) Condition of Property. Between the date of this Agreement
and the Closing Date, assets of the Target having an aggregate fair market value
of $10,000.00 or more shall not have been lost, destroyed or irreparably damaged
by fire, flood, explosion, theft or any other cause, unless covered by
insurance.
(j) No Material Adverse Change. On the Closing Date, there
shall not have occurred any event or condition materially and adversely
affecting the financial condition, results of operations or business prospects
of the Target from those reflected in the Financial Statements.
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(k) Satisfactory Due Diligence Investigation. Miracom, in its
sole and absolute discretion, shall be satisfied with the results of its due
diligence investigation of, without limitation, the Shareholders, the Target,
the Target's business and its financial condition.
(l) Execution and Delivery of Exhibits. On or before the
Closing Date, the Target shall have executed and delivered to the Transitory
Company the appropriate Articles of Merger, and the Shareholders shall have
executed and delivered to the other parties thereto the Subscription Agreement.
(m) Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incidental thereto, shall be reasonably
satisfactory in form and substance to Miracom and its counsel. The Shareholder
shall have submitted to Miracom or its representatives for examination the
originals or true and correct copies of all records and documents relating to
the business and affairs of the Target which Miracom may have requested in
connection with said transactions.
(n) Evidence of Assignment of Patent. Deliver to Miracom prior
to Closing the assignment of patent rights executed by Xxxxx X. Xxxxx and Xxxxx
X. Xxxxxxxx, assigning all their right, title and interest in the provisional
patent identified in Schedule 5.14 hereto (and any ensuing patents and
derivation thereof) to Target.
7.2 CONDITIONS PRECEDENT TO THE TARGET'S AND THE SHAREHOLDERS'
PERFORMANCE. The obligations of the Target to consummate the Merger and of the
Shareholders to consummate the transactions contemplated by this Agreement are
further subject to the satisfaction, at or before the Closing Date, of all of
the following conditions, any one or more of which may be waived in writing by
the Shareholders:
(a) Accuracy of Representations and Warranties. All
representations and warranties made by Miracom in this Agreement and/or in any
written statement delivered by Miracom under this Agreement shall be true and
correct in all material respects on and as of the Closing Date as though such
representations and warranties were made on and as of that date.
(b) Performance. Miracom shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by Miracom on or before
the Closing Date.
(c) Certification. The Shareholders shall have received a
certificate, dated the Closing Date, signed by Miracom certifying, in such
detail as the Shareholders and their counsel may reasonably request, that the
conditions specified in Sections 7.2(a) and 7.2(b) above have been fulfilled.
(d) Resolutions. The Shareholders shall have received
certified resolutions of the Board of Directors of Miracom and the Transitory
Company, in form reasonably satisfactory to counsel for the Shareholders,
authorizing the Merger and Miracom's and the Transitory Company's execution,
delivery and performance of this Agreement and all actions to be taken by
Miracom and the Transitory Company hereunder.
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(e) Execution and Delivery of Exhibits. The Transitory Company
shall have executed and delivered to the Target the Articles of Merger.
(f) Proceedings and Instruments Satisfactory. All proceedings
to be taken in connection with the transactions contemplated by this Agreement,
and all documents incidental thereto, shall be reasonably satisfactory in form
and substance to the Shareholders and their counsel.
SECTION 8 - INDEMNIFICATION
8.1 SURVIVAL. All representations, warranties, covenants and agreements
set forth in this Agreement or in any writing or certificate delivered in
connection with this Agreement shall survive the Closing and the consummation of
the transactions contemplated hereby and shall not be affected by any
examination made for or on behalf of any Party, the knowledge of any of such
Party's officers, directors, Shareholders, employees or agents, or the
acceptance of any certificate or opinion. Notwithstanding the foregoing, no
Party shall be entitled to recover for any Loss pursuant to SECTION 8.1 unless
written notice of a claim thereof is delivered to the other Party prior to the
Applicable Limitation Date, as defined below in this SECTION 8.1.
8.2 APPLICABLE LIMITATION DATE. For purposes of this Agreement, the
term "APPLICABLE LIMITATION DATE" shall mean November ___, 2000 (one year from
the Closing Date); provided that the Applicable Limitation Date with respect to
the following Losses shall be as follows:
(a) with respect to any Loss arising from or related
to a breach of the representations and warranties of Target and the
Shareholders set forth in SECTION 5.12 (TAXES) and SECTION 5.19
(EMPLOYEE BENEFITS MATTERS), the Applicable Limitation Date shall be
the 60th day after expiration of the statute of limitations (including
any extensions thereto to the extent that such statute of limitations
may be tolled) applicable to the Tax or ERISA regulation which gave
rise to such Loss; and
(b) with respect to any Loss arising from or related
to a breach of the representations and warranties of Flex and the
Shareholders set forth in SECTION 5.1 (ORGANIZATION AND CORPORATE
POWER), SECTION 5.14 (PROPRIETARY RIGHTS), SECTION 5.23 (AUTHORIZATION
OF TRANSACTIONS), SECTION 5.3 (CAPITALIZATION), SECTION 5.4 (ABSENCE OF
CONFLICTS) and with respect to any Loss arising from or related to a
breach of the representations and warranties of Miracom or the
Transitory Company set forth in there shall be no Applicable Limitation
Date (i.e., such representations and warranties shall survive forever).
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(c) notwithstanding the foregoing, no Party shall be entitled
to recover for any Loss pursuant to this SECTION 8 unless written notice of a
claim thereof is delivered to the other Party prior to the Applicable Limitation
Date.
8.3 INDEMNIFICATION.
(a) TRANSITORY COMPANY AND MIRACOM INDEMNIFICATION. Target and
the Shareholders shall jointly and severally indemnify the Transitory Company
and Miracom, as well as their present and future officers, directors,
Shareholders, employees, agents, representatives, affiliates, successors, heirs
and assigns (collectively, the "TRANSITORY COMPANY PARTIES") and hold each of
them harmless from and against and pay on behalf of or reimburse such Transitory
Company Parties in respect of the entirety of any Losses the Transitory Company
Parties may suffer, sustain or become subject to, through and after the date of
the claim for indemnification resulting from, arising out of, relating to, in
the nature of, or caused by:
(i) the breach of any representation or warranty
made by Target and the Shareholders in SECTION 5 of this Agreement;
(ii) the breach of any covenant or agreement made by
Target and the Shareholders in this Agreement; or
(iii) any Loss arising out of or related to any claim
by any Person that the transactions contemplated by this Agreement
constituted a fraudulent transfer or conveyance of the Assets of
Target.
The Transitory Company Parties' remedy for any indemnification
of Losses hereunder may be satisfied by proceeding against Target or any one or
more Shareholders individually for all or any portion of any such Loss.
(b) TARGET AND SHAREHOLDERS INDEMNIFICATION. The Transitory
Company shall indemnify Target and the Shareholders (collectively, the
"SHAREHOLDER PARTIES") and hold each of them harmless from and against and pay
on behalf of or reimburse such Shareholder Parties in respect of the entirety of
any Losses the Shareholder Parties may suffer, sustain or become subject to,
through and after the date of the claim for indemnification resulting from,
arising out of, relating to, in the nature of, or caused by the breach of any
representation or warranty made by the Transitory Company contained in this
Agreement.
(c) RIGHT TO DEFEND. The Party or Parties seeking
indemnification under this SECTION 8 (the "INDEMNIFIED PARTY") shall give
written notice to the other Party or Parties, as the case may be (the
"INDEMNIFYING PARTY") after receiving written notice of any action, lawsuit,
proceeding, investigation or other claim against it (if by a third party) or
discovering the liability, obligation or facts giving rise to such claim for
indemnification, describing the claim, the amount thereof (if known and
quantifiable), and the basis thereof. The failure to so notify the Indemnified
Party shall not relieve the Indemnifying Party of its or his obligations
hereunder except to the extent such failure shall have prejudiced the Indemnying
Party. If any action,
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lawsuit, proceeding, investigation or other claim shall be brought or asserted
by any third party which, if adversely determined, would entitle a Party to
indemnity pursuant to this SECTION 8, the Indemnifying Party shall promptly
notify the Indemnified Party of the same in writing, specifying in detail the
basis of such claim and the facts pertaining thereto and the Indemnified Party
shall be entitled to participate in the defense of such action, lawsuit,
proceeding, investigation or other claim giving rise to the indemnitee's claim
for indemnification at its expense, and at its option (subject to the
limitations set forth below), if, but only if, the Indemnifying Party gives
notice of such election to the Indemnified Party within ten (10) business days
after receiving notice of such action, lawsuit, proceeding, investigation or
other claim. Prior to participating in such claim the Indemnifying Party shall:
(i) agree to be fully responsible for all Losses
relating to such claims and that it will provide full indemnification
to the Indemnitor Party for all Losses relating to such claim; and
(ii) unconditionally guarantee the payment and
performance of any liability or obligation which may arise with respect
to such claim or the facts giving rise to such claim for
indemnification; and
(iii) furnish the Indemnified Party with reasonable
evidence that the Indemnified Party will be able to satisfy any such
liability;
and provided further that the Indemnifying Party shall not have the
right to assume control of such defense and shall pay the fees and
expenses of counsel retained by the Indemnified Party, if the claim
which the Indemnifying Party seeks to assume control:
(i) seeks non-monetary relief;
(ii) involves criminal or quasi-criminal allegations
solely against the Party to be indemnified;
(iii) involves a claim as to which the Indemnified
Party reasonably believes an adverse determination would be detrimental
or injurious the Indemnified Party's reputation or future business
prospects; or
(iv) involves a claim which, upon petition by the
Indemnifying Party, the appropriate court rules that the Indemnifying
Party failed or is failing to vigorously prosecute or defend.
(d) SEPARATE COUNSEL. If the Indemnifying Party is permitted
to assume and control the defense and elects to do so, the Indemnified Party
shall have the right to employ counsel separate from counsel employed by the
Indemnifying Party in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel employed by the Indemnified Party
shall be at the expense of the Indemnified Party unless (i) the employment
thereof has been specifically authorized by the Indemnifying Party in writing,
or (ii) the
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Indemnifying Party has been advised by counsel that a reasonable likelihood
exists of a conflict of interest between the Indemnifying Party and the
Indemnified Party.
(e) SETTLEMENTS. If the Indemnifying Party shall control the
defense of any such claim, the Indemnifying Party shall obtain the prior written
consent of the Indemnified Party (which shall not be unreasonably withheld)
before entering into any settlement of a claim or ceasing to defend such claim,
if pursuant to or as a result of such settlement or cessation, injunction or
other equitable relief will be imposed against the Indemnitee Party or if such
settlement does not expressly unconditionally and irrevocably release the
Indemnitee Party from all liabilities and obligations with respect to such
claim, with prejudice.
(f) PAYMENT. The Indemnifying Party shall pay the Indemnified
Party in immediately available funds promptly after the Indemnified Party
provides the Indemnifying Party with written notice of a claim hereunder and the
Parties reasonably agree that there is a reasonable basis for such claim.
Amounts paid to or on behalf of any Party as indemnification shall be treated as
adjustments to the consideration paid hereunder.
SECTION 9 - ACQUISITION OF SHARES BY THE SHAREHOLDERS
9.1 GENERAL PROVISIONS. The Surviving Company and the Shareholders
acknowledge that the Consideration Shares to be delivered pursuant to this
Agreement will be "RESTRICTED SECURITIES" for purposes of the Federal securities
laws and thus will be transferable only pursuant to;
(a) public offerings registered under the Securities Act;
(b) Rule 144 or Rule 144A of the Securities and Exchange
Commission (or any similar rule or rules then in force) if such rule is
available; and
(c) subject to the conditions specified in SECTION 9.2 below,
any other legally available means of transfer;
(d) a legend will be placed on the shares of Common Stock
issued hereunder in accordance with SECTION 9.3 below.
9.2 OPINION DELIVERY In connection with the subsequent transfer of any
Restricted Securities (other than a transfer described in SECTION 9.1(A) above),
the holder thereof shall deliver written notice to Miracom describing in
reasonable detail the transfer or proposed transfer, together with an opinion of
counsel which (to Miracom's reasonable satisfaction) is knowledgeable in
securities law matters to the effect that such transfer of Restricted Securities
may be effected without registration of such Restricted Securities under the
Securities Act.
9.3 INVESTMENT REPRESENTATIONS. Each of the Shareholders hereby
represents that it is acquiring the Restricted Securities acquired pursuant
hereto for its own account with the
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present intention of holding such securities for purposes of investment, and
that it has no present intention of selling such securities; provided that
nothing contained herein shall prevent the Shareholders and subsequent holders
of Restricted Securities from transferring such securities in compliance with
the provisions of this SECTION 9. Each certificate or instrument representing
Restricted Securities shall be imprinted with a legend in substantially the
following form:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"), OR ANY STATE SECURITIES ACT, AND MAY
NOT BE SOLD, PLEDGED, TRANSFERRED OR DISPOSED OF UNLESS THEY
ARE REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE
SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE."
SECTION 10 - LIQUIDATION AND DISSOLUTION OF THE TRANSITORY COMPANY
From and after the Closing, the Transitory Company will not engage in
any business and at the Closing the Transitory Company shall immediately
distribute the shares of Target Stock to Miracom. The Transitory Company and
Miracom agree that immediately after the Consideration Shares are distributed,
that the shares of the Transitory Company shall be redeemed and cancelled. The
Transitory Company and Miracom agree to comply with all applicable state law
requirements concerning a liquidation and dissolution of a corporation,
including, without limitation any obligation to create a liquidating trust and
provide such trust with assets sufficient to satisfy any liabilities of the
Transitory Company.
SECTION 11 - GENERAL PROVISIONS
11.1 FURTHER ASSURANCES. The Parties agree that, from time to time
hereafter, and upon request, each of them will execute, acknowledge and deliver
such other instruments as may be reasonably required to more effectively carry
out this Agreement's terms and conditions.
11.2 ACCESS TO INFORMATION. All Parties agree to provide reasonable
access to their books, records, and properties prior to Closing and agree to
fully cooperate by making necessary introductions and assisting in the
collection of whatever information is required.
11.3 NON-ASSIGNABILITY; BINDING EFFECT. Other than the assignment of
rights by Miracom to the Transitory Company as and to the extent contemplated by
Section [1] above, neither this Agreement, nor any of the rights or obligations
of the parties hereunder, shall be assignable by any party hereto without the
prior written consent of all other parties hereto. Otherwise, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.
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11.4 SEVERABILITY AND REFORMATION. In the event that any provision or
any portion of any provision of this Agreement shall be held invalid, illegal or
unenforceable under applicable law, such provision or portion of the Agreement
shall be stricken and the remainder of this Agreement shall remain valid and
enforceable, unless such invalidity, illegality or unenforceability
substantially either; (i) diminishes the rights and obligations, taken as a
whole, of any party hereunder or (ii) eliminates the ability to treat this
transaction as a tax-free reorganization, under the Code whereby no Party shall
be liable for any Federal Income Tax as a result of the transaction contemplated
by this Agreement. In such case, the Parties agree to take any and all steps
required to minimize the OVERALL income tax effect of the transaction
contemplated by this Agreement by modifying this Agreement to minimize such tax
liability pursuant to Section 11.11 of this Agreement.
11.5 ATTORNEYS' FEES. In the event of suit to enforce the terms of this
Agreement, the prevailing party shall be entitled to collect from the
non-prevailing party reasonable attorneys' fees, costs and expenses (including
those incurred through all trial, appellate and post-judgment collection
proceedings).
11.6 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida without regard to any
conflict of laws provisions.
11.7 NOTICES. All notices, requests, demands and other communications
pursuant to this Agreement shall be in writing, and shall be deemed to have been
duly given if delivered or mailed, certified mail, first class, postage prepaid,
to the Surviving Company at:
Miracom, Inc.
c/o Greenberg Xxxxxxx, P.A.
Attention: Xxxxxx Xxxxxx, Esq.
000 Xxxxx Xxxxxx Xxx., 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to: Miracom Corporation
000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
or if to the Target, at: Flex Radio, Inc.
c/o Xxxxx Xxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
11.8 EXPENSES. Except as provided for in this SECTION 11.8 any expenses
in connection with this Agreement or the transactions herein provided for shall
be paid for by the Party incurring such expenses Miracom agrees to pay the
expenses incurred for the documentation and legal activities required to
complete the transaction contemplated by this
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Agreement. Notwithstanding the preceding Surviving Company and the Shareholders
shall remain liable for their individual consultants.
11.9 COUNTERPARTS. This Agreement may 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.
11.10 HEADINGS. The Section headings used in this Agreement and the
titles of the Schedules hereto are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of the provisions
hereof or of the information set forth in such Schedules.
11.11 AMENDMENT, MODIFICATION AND WAIVER. No amendment or modification
of this Agreement or any Exhibit or Schedule hereto shall be valid unless made
in writing and signed by the party to be charged therewith. Each party may waive
any condition intended to be for its benefit. Each amendment, modification,
supplement or waiver shall be in writing and signed by the parties to be
charged.
11.12 ENTIRE AGREEMENT. This Agreement and the Schedules delivered with
it and the other agreements specifically provided for under this Agreement
represent the parties' entire Agreement and no provision or document of any kind
shall be included in, or form a part of, this Agreement unless it is in writing
and is delivered to the other party by the party to be charged.
11.13 ADEQUATE REPRESENTATION.
(a) Each Party hereby understands and acknowledges that
Xxxxxxxxx Traurig pursuant to the request of Miracom, the Transitory Company and
the Target has agreed to act as counsel for Miracom. Miracom, Transitory Company
and Target further acknowledge that each has been fully apprised of the
implications and possible conflicts of interest of Xxxxxxxxx Xxxxxxx acting as
counsel for Miracom. Each Party hereby acknowledges that it has waived, and
reasserts such waiver of any conflict of interest Xxxxxxxxx Traurig may have as
a result of such representation.
(b) The Parties acknowledge that Xxxxxxxxx Xxxxxxx fully
informed the Parties of the potential tax implications of the transaction
contemplated by this Agreement. Such Parties agree to hold Xxxxxxxxx Traurig
harmless for any adverse tax implications resulting from the transaction(s)
contemplated by this Agreement.
(c) With regards to this SECTION 11.13, the Parties agree to
execute any and all waivers and/or indemnitee agreements reasonably requested by
Xxxxxxxxx Xxxxxxx in order to protect Xxxxxxxxx Traurig pursuant to the terms of
this SECTION 11.13.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
MIRACOM CORPORATION
By: /s/ Xxx Xxxx
-------------------------------------
Print Name: Xxx Xxxx
Title: Chief Financial Officer
"THE TRANSITORY COMPANY"
FLEX ACQUISITION, INC.
By: /s/ Xxx Xxxx
-------------------------------------
Print Name: Xxx Xxxx
Title: Secretary
"THE SURVIVING COMPANY"
FLEXRADIO, INC.
By /s/ Xxxxx X. Xxxxx
--------------------------------------
Print Name: Xxxxx X. Xxxxx
Title: President
SHAREHOLDERS OF FLEX RADIO, INC.
/s/ Xxxxx X. Xxxxx
-----------------------------------------
Individually
SELECT MEDIA, INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Print Name: Xxxxxx Xxxxxxx
Title: President
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OFFICIAL SPORTS MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------------
Print Name: Xxxx Xxxxxx
Title: President
FLEX TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Print Name: Xxxxx Xxxxxxxx
Title: President
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