Exhibit 10.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
XXX.XXX, INC.
AND
WESTERN REGIONAL NETWORKS, INC.
AND
THE INDIVIDUALS WHOSE NAMES ARE
ON THE SIGNATURE PAGE HERETO
NOVEMBER 24, 1999
TABLE OF CONTENTS
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2. Basic Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
(a) Purchase and Sale of Acquired Assets . . . . . . . . . . . . . . . . . . . .6
(b) Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .6
(c) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
(d) Adjustment to Purchase Price . . . . . . . . . . . . . . . . . . . . . . . .7
(e) The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
(f) Deliveries at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . .8
(g) Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3. Representations and Warranties of the Seller . . . . . . . . . . . . . . . . . .9
(a) Organization of the Seller . . . . . . . . . . . . . . . . . . . . . . . . .9
(b) Authorization of Transaction . . . . . . . . . . . . . . . . . . . . . . . .9
(c) Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
(d) Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
(e) Title to Acquired Assets . . . . . . . . . . . . . . . . . . . . . . . . . 10
(f) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(g) Events Subsequent to Most Recent Month End . . . . . . . . . . . . . . . . 10
(h) Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(i) Legal Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(j) Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(k) Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(l) Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(m) Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(n) Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(o) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(p) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(q) Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(r) Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(s) State PUC Authorizations and FCC Authorizations . . . . . . . . . . . . . . 13
(t) Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(u) Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(v) Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(w) Environmental, Health, and Safety Matters . . . . . . . . . . . . . . . . . 13
(x) Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4. Representations and Warranties of the Buyer . . . . . . . . . . . . . . . . . . 14
(a) Organization of the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Authorization of Transaction . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(e) Buyer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(f) Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(g) Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5. Pre-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Notices and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Operation of the Acquired Assets . . . . . . . . . . . . . . . . . . . . . 15
(d) Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Full Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(f) Notice of Developments . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(g) Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(h) Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(i) Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . 17
6. Conditions to Obligation to Close . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Conditions to Obligation of the Buyer . . . . . . . . . . . . . . . . . . . 17
(b) Conditions to Obligation of the Seller . . . . . . . . . . . . . . . . . . 18
7. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8. Post-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Litigation Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(c) Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(e) Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(f) Survival of Representations and Warranties . . . . . . . . . . . . . . . . 22
(g) Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(h) Indemnification Provisions for Benefit of the Buyer . . . . . . . . . . . . 23
(i) Indemnification Provisions for Benefit of the Seller . . . . . . . . . . . 24
(j) Matters Involving Third Parties . . . . . . . . . . . . . . . . . . . . . . 24
(k) Limitations on Indemnification Obligations . . . . . . . . . . . . . . . . 25
9. Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Tax-Free Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(c) Liquidation of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . 26
10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(b) No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . 26
(c) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(d) Succession and Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 27
(e) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(g) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(h) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(i) Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(j) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(k) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ii
(m) Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(n) Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(o) Incorporation of Exhibits and Schedules . . . . . . . . . . . . . . . . . . 30
(p) Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Exhibit A - Acquired Assets
Exhibit A-1 - Customer Contracts
Exhibit A-2 - Supplier Contracts
Exhibit A-3 - Tangible Assets
Exhibit A-4 - Inventory
Exhibit A-5 - Accounts Receivable
Exhibit A-6 - Real Property Leases and Other Contracts
Exhibit B - Lockup Agreement
Exhibit C - Xxxx of Sale
Exhibit D - Assignment and Assumption of Contracts
Exhibit E - Financial Statements
Exhibit F - PUC and FCC Authorizations
Exhibit G - Registration Rights Agreement
Exhibit H - Opinion of Counsel to Seller
Exhibit I - Opinion of Counsel to Buyer
Exhibit J - Escrow Agreement
Exhibit K - Covenants Not to Compete
Exhibit K-1 - Xxx X. Xxxxxx, Xx.
Exhibit K-2 - Xxxxx Xxxxx
Exhibit L - Plan of Reorganization
Disclosure Schedules
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT entered into as of this 24th day of
November 1999, by and among XXX.XXX, INC., a Delaware corporation (the
"Buyer") and WESTERN REGIONAL NETWORKS, INC., a Colorado corporation and the
shareholders whose names are on the signature page hereto (the "Seller").
The Buyer and Seller are sometimes referred to collectively herein as the
"Parties".
This Agreement contemplates a transaction in which the Buyer will
purchase substantially all of the assets of the Seller in return for the
consideration hereinafter set forth.
The Parties intend that the transaction contemplated by this Agreement
constitute a tax-free reorganization pursuant to Section 368(a)(1)(C) of the
Internal Revenue code of 1986, as amended.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as follows.
1. Definitions.
iii
"ACQUIRED ASSETS" means all right, title, and interest in and to the
assets of the Sellers set forth on Exhibit A hereto.
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts
paid in settlement, liabilities, obligations, taxes, liens, losses, expenses,
and fees, including court costs and reasonable attorney's fees and expenses,
involving or relating to the Acquired Assets.
"ASSIGNMENT AND ASSUMPTION OF CONTRACTS" has the meaning set forth in
Section 2(f) below.
"ASSUMED LIABILITIES" means (a) all obligations of the Seller under
the agreements, contracts, leases, licenses, and other arrangements referred
to in the definition of Acquired Assets, and (b) those other Liabilities and
obligations of the Seller set forth in an appendix to the Disclosure Schedule
(see appendix) under an express statement (that the Buyer has initialed) to
the effect that the definition of Assumed Liabilities will include the
Liabilities and obligations so disclosed; PROVIDED, HOWEVER, that the Assumed
Liabilities shall not include (i) any Liability of the Seller for Taxes, (ii)
any Liability of the Seller for the unpaid Taxes of any Person (other than of
the Seller) under Reg. Section 1.1502-6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by contract, or
otherwise, (iii) any obligations of the Seller to indemnify any Person
(including any of the Seller's stockholders) by reason of the fact that such
Person was a director, officer, employee, or agent of the Seller or was
serving at the request of any such entity as a partner, trustee, director,
officer, employee, or agent of another entity (whether such indemnification
is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such indemnification
is pursuant to any statue, charter document, bylaw, agreement, or otherwise),
(iv) any Liability of the Seller for costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby, (v)
any Liability or obligation of the Seller under this Agreement (or under any
side agreement between the Seller on the one hand and the Buyer on the other
hand entered into on or after the date of this Agreement), or (vi) any other
liability or other obligation of Seller not specifically set forth in an
appendix to the Disclosure Schedule and specifically agreed to by Buyer.
"AUDIT RESULTS" has the meaning set forth in Section 8(a) below.
"XXXX OF SALE" means the Xxxx of Sale attached hereto as Exhibit C.
"BUYER" has the meaning set forth in the preface above.
"BUYER SHARE" means any share of the common stock, $0.001 par value
per share, of the Buyer.
2
"CASH" means cash and cash equivalents (including marketable
securities and short term investments) calculated in accordance with GAAP
applied on a basis consistent with the preparation of the Financial
Statements.
"CLOSING" has the meaning set forth in Section 2(e) below.
"CLOSING DATE" has the meaning set forth in Section 2(e) below.
"CLOSING FINANCIAL STATEMENTS" has the meaning set forth in Section
3(f) below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of the Parties that is not already generally available
to the public.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 3 below.
"DISTRIBUTEES" has the meaning set forth in Section 2(c)(ii) below.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension
Benefit Plan, (c) qualified defined benefit retirement plan or arrangement
which is an Employee Pension Benefit Plan (including any Multiemployer Plan),
or (d) Employee Welfare Benefit Plan or material fringe benefit or other
retirement, bonus, or incentive plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(1).
"ENVIRONMENTAL, HEALTH, AND SAFETY REQUIREMENTS" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution
or protection of the environment, including without limitation all those
relating to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, release, threatened release, control, or
cleanup of any hazardous materials, substances or wastes, chemical substances
or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise or
radiation, each as amended and as now or hereafter in effect.
3
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means each entity which is treated as an affiliate
with Seller for purposes of ERISA.
"ESCROW AGENT" has the meaning set forth in Section 2(c)(iv) below.
"ESCROW AGREEMENT" has the meaning set forth in Section 9 below.
"ESCROW FUND" has the meaning set forth in Section 9 below.
"ESCROW PERIOD" has the meaning set forth in Section 2(c)(iv) below.
"ESCROW SHARES" has the meaning set forth in Section 2(c)(iv) below.
"EXCLUDED ASSETS" means the assets of the Seller not purchased by the
Buyer hereunder.
"FCC AUTHORIZATIONS" means all approvals, consents, permits, licenses,
certificates, and authorizations given by the Federal Communications
Commission or similar federal governmental agency to provide the
telecommunications services currently provided by the Seller and to conduct
its business as it is currently conducted.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions, and reexaminations thereof, (b) all trademarks,
service marks, trade dress, logos, trade names, and corporate names, together
with all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing
plans and proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
4
"KNOWLEDGE" means actual knowledge after reasonable investigation.
"LIABILITY" OR "LIABILITIES" means any liability (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due), including any liability for Taxes.
"LOCKUP AGREEMENT" has the meaning set forth in Section 2(c)(v) below.
"LOCKUP PERIODS" has the meaning set forth in Section 2(c)(v) below.
"LOCKUP SHARES" has the meaning set forth in Section 2(c)(v) below.
"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth in
Section 3(f) below.
"MOST RECENT MONTH END" has the meaning set forth in Section 3(f)
below.
"MOST RECENT FISCAL YEAR END" has the meaning set forth in Section
3(f) below.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"PARTY" has the meaning set forth in the preface above.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"PRE-CLOSING REVENUE" has the meaning set forth in Section 2(d) below.
"PURCHASE PRICE" has the meaning set forth in Section 2(c)(i) below.
"RECURRING REVENUE RATE" has the meaning set forth in Section 2(d)
below.
"REGISTERED SHARES" has the meaning set forth in Section 2(c)(iii)
below.
"SAS NO. 71" means the Statements on Auditing Standards, Number 71,
issued by the American Institute of Certified Public Accountants.
"SEC" means the United States Securities and Exchange Commission.
"SEC FILINGS" has the meaning set forth in set forth in Section 4(d)
below.
5
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, OTHER THAN (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and, (c) purchase money
liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary Course of Business and not
incurred in connection with the borrowing of money.
"SELLER" has the meaning set forth in the preface above.
"STATE PUC AUTHORIZATIONS" means all approvals, consents, permits,
licenses, certificates, and authorizations given by any state or local
regulatory authority to provide the telecommunications services currently
provided by the Seller and to conduct its business as it is currently
conducted.
"TANGIBLE ASSETS" has the meaning set forth in Section 3(m) below.
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.
2. Basic Transaction.
(a) PURCHASE AND SALE OF ACQUIRED ASSETS. On and subject to the
terms and conditions of this Agreement, the Buyer agrees to purchase from
the Seller, and the Seller agrees to sell, transfer, convey, and deliver
to the Buyer, all of the Acquired Assets at the Closing, for the
consideration specified below in this Section 2.
(b) ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become
responsible for the Assumed Liabilities at the Closing. The Buyer will
not assume or have any responsibility, however, with respect to any other
obligation or Liability of the Seller not expressly included within the
definition of Assumed Liabilities.
(c) PURCHASE PRICE. The Buyer agrees to pay to the Seller at
the Closing:
i. In exchange for the Acquired Assets, the Buyer will
issue to the Seller that number of the Buyer Shares equal to
$2,850,000 (the
6
"Purchase Price") divided by the average closing price per share
of the Buyer Shares for the five (5) day period ending on the day
prior to the Closing Date (the "Closing Price").
The Purchase Price set forth herein is subject to adjustments in
accordance with Section 2(d) below.
ii. The number of shares of Buyer Shares to be issued
pursuant to Section 2(c)(i) above shall be allocated among and
distributed by the Seller to itself and its shareholders, officers
and directors (the "Distributees") as determined by the Seller in
its sole and absolute discretion.
iii. At the Closing Date, thirty-five and 42/100 percent
(35.42%) of the Buyer Shares issued pursuant to Section 2(c)(i)
above will be registered under the Securities Act (the "Registered
Shares"). Subject to the provisions of Rule 145 of the Securities
Act of 1933, as amended, the Distributees shall be allowed to
sell, trade and otherwise transfer the Registered Shares;
PROVIDED, HOWEVER, that the Distributees may not sell, trade or
otherwise transfer more than 4,000 shares in one day, and the
Distributees may not sell, trade or otherwise transfer any such
Registered Shares during the first 30 minutes and the final 30
minutes of any trading day.
iv. At and as of the Closing Date, to secure the
obligations set forth under Section 8 below, and as more fully
described in Section 9 below, the Buyer shall deposit with an
escrow agent (the "Escrow Agent") that number of the Buyer Shares
equal to twenty percent (20%) of the Buyer Shares issued pursuant
to Section 2(c)(i) above (the "Escrow Shares"), which Escrow
Shares shall be held by the Escrow Agent for eighteen (18) months
following the Closing Date (the "Escrow Period"). The Escrow
Shares shall be registered under the Securities Act ninety (90)
days prior to the expiration of the Escrow Period.
v. The remaining forty-four and 58/100 percent (44.58%)
of the Buyer's Shares issued pursuant to Section 2(c)(i) above
will be issued on the Closing Date and subject to a lockup
agreement (the "Lockup Shares") in the form attached hereto as
Exhibit B (the "Lockup Agreement") for the following periods of
time: twenty percent (20%) of the Buyer's Shares for a period of
six (6) months from the date of issuance, and an additional
twenty-four and 58/100 percent (24.58%) of the Buyer's Shares for
a period of twelve (12) months from the date of issuance (the
"Lockup Periods"). The Lockup Shares shall be registered under
the Securities Act on or prior to the date of the expiration of
the relevant Lockup Periods.
(d) ADJUSTMENT TO PURCHASE PRICE.
7
i. The Purchase Price set forth in Section 2(c)(i)
above is based upon an average pre-closing monthly recurring
revenue rate directly derived from the Acquired Assets of $147,500
(or an annualized revenue rate of $1,770,000) (the "Recurring
Revenue Rate"). In the event that the monthly revenue rate
directly derived from the Acquired Assets for the month
immediately preceding the Closing (the "Pre-Closing Revenue") is
less than or greater than the Recurring Revenue Rate, the Purchase
Price shall be reduced or increased by $19.32 for each dollar that
the Pre-Closing Revenue is less or more than the Recurring Revenue
Rate. For purposes of this Agreement, the Recurring Revenue Rate
has been determined through accrual-based accounting in accordance
with GAAP for revenues that recur each month on a customer
specific and plan type basis.
ii. The Purchase Price shall be further reduced by the
amounts of Unearned Revenue and Prepaid Customer Accounts set
forth on the Most Recent Month End Closing Financial Statements.
iii. Following the reduction set forth in section
2(d)(ii), above, the Purchase Price shall be increased by $30,000
to reflect certain special transaction costs incurred by the
Seller.
(e) THE CLOSING. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place by in presence or by
telephone conference call, or at the corporate headquarters of the Buyer,
000 00xx Xxxxxx, Xxxxx Xxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000,
commencing at 10:00 a.m. local time on the earlier of (i) 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 (ii) November 24,
1999 (the "Closing Date"); PROVIDED, HOWEVER, that the Closing Date may
be extended upon mutual written agreement of the Parties.
Notwithstanding the time at which the signatures are affixed to this
Agreement and the Exhibits hereto, the Closing shall be deemed to have
occurred at midnight on the Closing Date.
(f) DELIVERIES AT THE CLOSING. At the Closing: (i) the Buyer
will deliver to the Seller (A) the various certificates, instruments, and
documents referred to in Section 6 below, and (B) the Purchase Price
specified in Sections 2(c)(i) through 2(c)(iii); (ii) the Seller will
deliver to the Buyer (A) the various certificates, instruments, and
documents referred to in Section 6 below, (B) the Xxxx of Sale in the
form attached hereto as Exhibit C, and (C) the Assignment and Assumption
of Contracts in the form attached hereto as Exhibit D; and (iii) each
Party shall deliver such other instruments of sale, transfer, conveyance,
and assignment as the other Party and its counsel reasonably may request.
8
(g) ALLOCATION. The Parties agree that the Buyer may allocate
the Purchase Price (and all other capitalizable costs) among the Acquired
Assets for all purposes (including financial accounting and tax purposes)
in the most tax-efficient manner available to the Buyer.
3. Representations and Warranties of the Seller. The Seller
represents and warrants to the Buyer that the statements contained in this
Section 3 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 3), except as set forth in the disclosure schedule
accompanying this Agreement and initialed by the Parties (the "Disclosure
Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this
Section 3:
(a) ORGANIZATION OF THE SELLER. The Seller is a corporation
duly organized, validly existing, and in good standing under the laws of
the State of Colorado.
(b) AUTHORIZATION OF TRANSACTION. The Seller has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. Without
limiting the generality of the foregoing, all individuals who are
signatories to this Agreement have been duly authorized to execute,
deliver, and cause the Seller to perform this Agreement. This Agreement
constitutes the valid and legally binding obligation of the Seller,
enforceable in accordance with its terms and conditions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in Section
2 above), will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Seller is
subject, or any provision of the articles of incorporation or bylaws of
the Seller or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other
arrangement to which the Seller is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets). The Seller does not need to
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order
for the Parties to consummate the transactions contemplated by this
Agreement.
(d) BROKERS' FEES. The Seller has no Liability or obligation
to pay any fees or commissions to any broker, finder, or agent with
respect to the
9
transactions contemplated by this Agreement for which the Buyer could
become liable or obligated, and the Buyer shall have no Liability
whatsoever to such broker.
(e) TITLE TO ACQUIRED ASSETS. As of the date of Closing, the
Seller shall provide to the Buyer good and marketable title to all of the
Acquired Assets, free and clear of any Liabilities, including all debts,
obligations, claims, limitations, liens, Security Interests, restrictions
on transfer, and/or any other encumbrances whatsoever, except for those
Liabilities which are Assumed Liabilities.
(f) FINANCIAL STATEMENTS. Attached hereto as Exhibit E are the
following financial statements of the Seller (collectively, the "Closing
Financial Statements"): (A) unaudited balance sheet and statement of
income relating to the Acquired Assets as of and for the six-month period
ended December 31, 1998 (the "Most Recent Fiscal Year End"); and (B)
unaudited balance sheet and statement of income as of and for the
one-month period ended October 31, 1999 (the "Most Recent Month End")
(collectively, the "Most Recent Financial Statements"). The Most Recent
Financial Statements (without any notes thereto) have been prepared in
accordance with GAAP on a consistent basis throughout the periods covered
thereby, and are true, correct, and complete. The Closing Financial
Statements shall not differ materially from the Audit Results.
(g) EVENTS SUBSEQUENT TO MOST RECENT MONTH END. Since the Most
Recent Month End, there has not been any material adverse change in the
business, financial condition, operations, results of operations, or
future prospects of the Acquired Assets of the Seller.
(h) UNDISCLOSED LIABILITIES. The Seller has no Liability with
respect to (i) the Acquired Assets (and there is no basis for any present
or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving rise to any
Liability), except for Liabilities set forth on the face of the Most
Recent Financial Statements (rather than in any notes thereto) and (ii)
Liabilities which have arisen after the Most Recent Month End in the
Ordinary Course of Business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any breach of contract,
breach of warranty, tort, infringement, or violation of law).
(i) LEGAL COMPLIANCE. The Seller has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal,
state, local, and foreign governments (and all agencies thereof), with
respect to the Acquired Assets, including all State PUC Authorizations
and the FCC Authorizations, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim,
10
demand, or notice has been filed or commenced against any of them
alleging any failure so to comply.
(j) TAX MATTERS. The Seller has timely filed all Tax Returns
with respect to the ownership and operation of the Acquired Assets and
paid all Taxes due thereunder, and no Liability exists for any unpaid
Taxes relative to the Acquired Assets prior to the Closing.
(k) REAL PROPERTY. The Seller does not own any interest in any
real property. Section 3(k) of the Disclosure Schedule lists and
describes briefly all real property leased or subleased to the Seller
related to the Acquired Assets. The Seller has delivered to the Buyer
correct and complete copies of the leases and subleases listed in Section
3(k) of the Disclosure Schedule (as amended to date). Other than such
leases or subleases, the Acquired Assets do not include any real property
or any interest therein. With respect to each lease and sublease listed
in Section 3(k) of the Disclosure Schedule:
i. the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect, except where the
illegality, invalidity, non-binding nature, unenforceability or
ineffectiveness would not have a material adverse effect on the
financial condition of the Seller;
ii. the lease or sublease will continue to be legal,
valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby, except where the illegality, invalidity,
non-binding nature, unenforceability or ineffectiveness would not
have a material adverse effect on the financial condition of the
Seller;
iii. no party to the lease or sublease is in breach or
default, and no event has occurred which, with notice or lapse of
time, would constitute a breach or default or permit termination,
modification, or acceleration thereunder;
iv. no party to the lease or sublease has repudiated any
provision thereof;
v. there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
vi. with respect to each sublease, the representations
and warranties set forth in subsections (i) through (v) above are
true and correct with respect to the underlying lease;
11
vii. Seller has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold, except as set forth in the Disclosure
Schedules;
viii. all facilities leased or subleased thereunder have
received all approvals of governmental authorities (including
licenses and permits) required in connection with the operation
thereof and have been operated and maintained in accordance with
applicable laws, rules, and regulations; and
ix. all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the
operation of said facilities.
(l) INTELLECTUAL PROPERTY. The Seller owns or has the right to
use pursuant to license, sublicense, agreement, or permission all
Intellectual Property necessary for the operation of the Acquired Assets
as presently operated, free and clear of any Security Interests,
Liabilities or other restrictions.
(m) TANGIBLE ASSETS. The Seller owns all tangible assets set
forth in Exhibit A-3 (the "Tangible Assets"). Each such Tangible Asset
is free from material defects (patent and latent), has been maintained in
accordance with normal industry practice, is in good operating condition
and repair (subject to normal wear and tear), and is suitable for the
purposes for which it presently is used.
(n) CONTRACTS. Except as set forth in Section 3(n) of the
Disclosure Schedule, no material contracts or other agreements exist
relating to the Acquired Assets to which the Seller is a party.
(o) INSURANCE. The Acquired Assets have been, and will be
until the Closing Date, covered by an insurance policy (providing
property, casualty, and liability coverage) adequately insuring the
Acquired Assets.
(p) LITIGATION. The Seller (i) is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge,
relative to the Acquired Assets, nor (ii) is it a party or, to the
Knowledge of the Seller, is threatened to be made a party to any action,
suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator with respect to the
Acquired Assets. The Seller does not have any reason to believe that any
such action, suit, proceeding, hearing, or investigation may be brought
or threatened against the Seller relative to the Acquired Assets.
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(q) WARRANTIES. No product or service sold, leased, or
delivered by the Seller with respect to the Acquired Assets is subject to
any guaranty, warranty, or other indemnity.
(r) GUARANTIES. The Seller is not a guarantor or otherwise is
liable for any Liability or other obligation (including indebtedness) of
any other Person with respect to the Acquired Assets.
(s) STATE PUC AUTHORIZATIONS AND FCC AUTHORIZATIONS. Exhibit F
hereto identifies each of the State PUC Authorizations and the FCC
Authorizations which has been issued to the Seller with respect to the
Acquired Assets. None of the State PUC Authorizations or the FCC
Authorizations has been modified, amended, or otherwise altered, and each
remains legal, valid, binding, in full force and effect, and unaffected
by the transactions contemplated by this Agreement.
(t) EMPLOYEES. Section 4(t) of the Seller Disclosure Schedule
sets forth all executive, key employee, and groups of employees, that the
Seller is aware have plans to terminate employment with the Seller.
Neither the Seller nor its Predecessors is a party to or bound by any
collective bargaining agreement, nor has any of them experienced any
strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes. Neither the Seller nor its Predecessors
has committed any unfair labor practice. The Seller 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 Seller. The
Seller and its Predecessors have complied in all material respects to all
applicable federal, state and local laws, statutes, rules, ordinances and
regulations regarding their respective employees.
(u) EMPLOYEE BENEFITS. The Seller has no Employee Benefit Plan
that it maintains, or to which it contributes, or has any obligation to
contribute.
(v) GUARANTIES. Neither the Seller nor its Predecessors is a
guarantor or otherwise is liable for any Liability or obligation
(including indebtedness) of any other Person.
(w) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS. Seller has
complied, and is in compliance, with all Environmental, Health, and
Safety Requirements.
(x) DISCLOSURE. The representations and warranties contained
in this Section 3 do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements and information contained in this Section 3 not misleading.
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4. Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Seller that the statements contained in this
Section 4 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 4).
(a) ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) AUTHORIZATION OF TRANSACTION. The Buyer has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the
Buyer, enforceable in accordance with its terms and conditions.
(c) NONCONTRAVENTION. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in Section
2 above), will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Buyer is
subject or any provision of its charter or bylaws or (ii) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which the Buyer is a
party or by which it is bound or to which any of its assets is subject.
The Buyer does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments
and assumptions referred to in Section 2 above).
(d) SEC FILINGS. The Buyer has filed all required reports,
schedules, forms, statement and other documents with the SEC since
January 1, 1998 (the "SEC Filings"). As of their respective dates, the
SEC Filings complied in all material respects with the requirements of
the Securities Act or the Securities Exchange Act, as the case may be,
the rules and regulations of the SEC promulgated thereunder applicable to
such SEC Filings , and none of the SEC Filings when filed contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
14
(e) BUYER SHARES. The Buyer Shares will be, when issued, duly
issued and validly existing, free and clear of any Liabilities and other
encumbrances and restrictions, except as set forth herein.
(f) BROKERS' FEES. The Buyer has no Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement for which the Seller
could become liable or obligated.
(g) DISCLOSURE. The representations and warranties contained
in this Section 4 do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements and information contained in this Section 4 not misleading.
5. Pre-Closing Covenants. The Parties agree as follows with respect
to the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use its reasonable best
efforts to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver,
of the Closing conditions set forth in Section 6 below).
(b) NOTICES AND CONSENTS. The Seller will give any notices to
third parties, and the Seller will use its reasonable best efforts to
obtain any third party consents, that the Buyer reasonably may request in
connection with the matters referred to in Section 3 above, and shall
otherwise comply with any applicable bulk sales laws. Each of the
Parties will give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and
approvals of governments and governmental agencies in connection with the
matters referred to in Sections 3 and 4 above. Without limiting the
generality of the foregoing, each of the Parties will make any further
filings that may be necessary, proper, or advisable in connection
therewith.
(c) OPERATION OF THE ACQUIRED ASSETS. The Seller will not
engage in any practice, take any action, or enter into any transaction
outside the Ordinary Course of Business, with respect to the Acquired
Assets.
(d) PRESERVATION OF BUSINESS. The Seller will keep the
Acquired Assets substantially intact, including its present use and
operation thereof, and its relationships with licensors, suppliers,
customers, and employees related to the Acquired Assets.
(e) FULL ACCESS. The Seller will permit representatives of the
Buyer to have full access at all reasonable times, and in a manner so as
not to interfere
15
with the normal business operations of the Seller, to all of the
Seller's premises, properties, personnel, books, records (including Tax
records), contracts, and documents of, or pertaining to, the Acquired
Assets.
(f) NOTICE OF DEVELOPMENTS. Each Party will give prompt
written notice to the other Party of any material adverse development
causing a breach of any of its own representations and warranties in
Sections 3 and 4 above. No disclosure by any Party pursuant to this
Section 5(f), however, shall be deemed to amend or supplement this
Agreement or the Exhibits hereto or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(g) EXCLUSIVITY. Until ninety days after the Closing Date, as
it may be extended pursuant to Section 2(e) above, the Seller will not
(i) solicit, initiate, or encourage the submission of any proposal or
offer from any Person relating to the acquisition of any capital stock or
other voting securities, or any substantial portion of the assets, of the
Seller (including any acquisition structured as a merger, consolidation,
or share exchange) or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate
in, or facilitate in any other manner any effort or attempt by any Person
to do or seek any of the foregoing. The Seller will notify the Buyer
immediately if any Person makes any proposal, offer, inquiry, or contact
with respect to any of the foregoing.
(h) LEGEND. The Buyer and the Seller covenant and agree that
sixty four and 58/100 percent (64.58%) of the Buyer Shares will bear the
following legend until the Buyer Shares are registered pursuant to
Sections 2(c)(iv) and 2(c)(v) hereof and the Registration Rights
Agreement (as defined below):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER
HEREOF, BY ACCEPTING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
ISSUER THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
ONLY (A) TO THE ISSUER, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE
STATE SECURITIES LAWS, (C) IN ACCORDANCE WITH RULE 144 UNDER THE
SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS, OR (D) IN ACCORDANCE WITH ANY OTHER EXEMPTION UNDER THE SECURITIES
ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS UPON THE
DELIVERY OF A LEGAL OPINION, REASONABLY SATISFACTORY TO THE ISSUER, TO
THE FOREGOING EFFECT. THE TRANSFER OF THE SECURITIES IS ALSO RESTRICTED
UNDER THE TERMS OF A REGISTRATION RIGHTS AGREEMENT, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL OFFICES OF XXX.XXX, INC.
16
(i) REGISTRATION RIGHTS AGREEMENT. The Buyer shall agree, and
upon any distribution of the Buyer Shares to the Seller the Seller shall
agree, to become a party to and be bound by a Registration Rights
Agreement in the form attached hereto as Exhibit G (the "Registration
Rights Agreement"), setting forth the terms of ownership of the Buyer
Shares; PROVIDED, HOWEVER, that except as provided in Sections 2(c)(iv)
and 2(c)(v) hereof the Seller receiving the Buyer Shares shall not be
entitled to any demand registration rights.
6. Conditions to Obligation to Close.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of
the Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
i. the representations and warranties set forth in
Section 3 above shall be true and correct in all material respects
at and as of the Closing Date;
ii. the Seller shall have performed and complied with
all of its covenants hereunder in all material respects through
the Closing;
iii. no action, suit, or proceeding shall be pending
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge
would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Buyer to
own the Acquired Assets, to operate the Acquired Assets (and no
such injunction, judgment, order, decree, ruling, or charge shall
be in effect);
iv. the Seller and the Buyer shall have entered into the
Assignment and Assumption of Contracts;
v. the Seller shall have delivered to the Buyer the
Xxxx of Sale;
vi. the Seller and the Buyer shall have received all
other authorizations, consents, and approvals of governments and
governmental agencies referred to in Sections 3 and 4 above;
vii. the Seller shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified
above in Section 6(a)(i)-(iii) is satisfied in all respects;
17
viii. the Buyer shall have received from counsel to the
Seller an opinion in form and substance as set forth in Exhibit H
attached hereto, addressed to the Buyer, and dated as of the
Closing Date;
ix. the Buyer shall have completed and shall be
satisfied with its due diligence examination of the Seller;
x. the Buyer's board of directors shall have approved
this Agreement; and
xi. all actions to be taken by the Seller in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of
the Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
i. the representations and warranties set forth in
Section 4 above shall be true and correct in all material respects
at and as of the Closing Date;
ii. the Buyer shall have performed and complied with all
of its covenants hereunder in all material respects through the
Closing;
iii. no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent consummation of
any of the transactions contemplated by this Agreement, or (B)
cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
iv. the Seller and the Buyer shall have entered into the
Assignment and Assumption of Contracts;
v. the Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified
above in Section 6(b)(i)-(iii) is satisfied in all respects;
18
vi. the Seller shall have received from counsel to the
Buyer an opinion in form and substance as set forth in Exhibit I
attached hereto, addressed to the Seller, and dated as of the
Closing Date;
vii. the Seller's board of directors shall have approved
this Agreement; and
viii. all actions to be taken by the Buyer in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
The Seller may waive any condition specified in this Section 6(b) if it
executes a writing so stating at or prior to the Closing.
7. Termination.
(a) TERMINATION OF AGREEMENT. Either of the Parties may
terminate this Agreement as provided below:
i. the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing (A)
in the event the Seller has breached any material representation,
warranty, or covenant contained in this Agreement in any material
respect, the Buyer has notified the Seller of the breach, and the
breach has continued without cure for a period of fifteen (15)
days after the notice of breach; (B) if the Closing shall not have
occurred on or before November 30, 1999 (or such later date, if
extended pursuant to Section 2), by reason of the failure of any
condition precedent under Section 6(a) hereof (unless the failure
results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this
Agreement); and
ii. the Seller may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing (A)
in the event the Buyer has breached any material representation,
warranty, or covenant contained in this Agreement in any material
respect, the Seller has notified the Buyer of the breach, and the
breach has continued without cure for a period of fifteen (15)
days after the notice of breach, or (B) if the Closing shall not
have occurred on or before November 30, 1999 (or such later date,
if extended pursuant to Section 2), by reason of the failure of
any condition precedent under Section 6(b) hereof (unless the
failure results primarily from the Seller itself breaching any
representation, warranty, or covenant contained in this
Agreement).
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(b) EFFECT OF TERMINATION. Notwithstanding the termination of
this Agreement, the confidentiality provisions of this Agreement shall
survive.
8. Post-Closing Covenants. The Parties agree as follows with respect
to the period following the Closing:
(a) GENERAL.
i. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of
Agreement, each of the Parties will take such further action
(including the execution and delivery of such further instruments
and documents) as any other Party reasonably may request, all at
the sole cost and expense of the requesting Party; PROVIDED,
HOWEVER, that the Seller shall provide Buyer, free of charge, with
such assistance, technical and otherwise, as Buyer may reasonably
request in order to facilitate an efficient transition of the
Acquired Assets and Assumed Liabilities from Seller to the Buyer
and to prepare and complete the Audit Results.
ii. The Seller acknowledges and agrees that, from and
after the Closing, the Buyer will be entitled to possession of all
documents, books, records (including Tax records), agreements,
directly relating to the Acquired Assets; PROVIDED, HOWEVER, that
the Buyer shall provide the Seller and its shareholders with
reasonable access to such documents, books, records, agreements,
and financial data as necessary.
iii. The Seller shall provide to the Buyer as soon as
possible and not later than sixty (60) days from the Closing Date:
(A) audited balance sheets and statements of income, changes in
stockholders' equity, and cash flow for Seller as of and for the
twelve-month period ended June 30, 1999; (B) unaudited condensed
statement of income for the twelve-month period ended December 31,
1998; (C) SAS NO. 71 review as of and for the three-month period
ended September 30, 1999, including balance sheet and statements
of income, changes in stockholders' equity, and cash flow; (D) SAS
NO. 71 review of the three-month period ended September 30, 1998,
including statements of income and cash flow; and (E) unaudited
condensed balance sheet and statement of income as of and for the
nine-month period ended September 30, 1999 (collectively, the
"Audit Results"). If Buyer has not received the Audit Results
within sixty (60) days of the Closing, Seller shall return to
Buyer that portion of the Lockup Shares equal to $50,000 divided
by the Closing Price.
(b) LITIGATION SUPPORT. In the event and for so long as any
Party actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
in connection with (i) any
20
transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on
or prior to the Closing Date involving the Acquired Assets, the other
Party will cooperate with the contesting or defending Party and his or
its counsel in the contest or defense, make available his or its
personnel, and provide such testimony and access to his or its books and
records as shall be necessary in connection with the contest or defense,
all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Sections 8(h), 8(i), or 8(j) below).
(c) TRANSITION.
i. None of the Seller or the Seller's shareholders will
take any action that is designed or intended to have the effect of
discouraging any carrier, supplier, lessor, licenser, customer, or
other business associate of the Seller from maintaining the same
business relationships with the Buyer after the Closing as it
maintained with the Seller prior to the Closing. Each of the
Seller and the Seller's shareholders will refer all customer
inquiries relating to the Acquired Assets to the Buyer from and
after the Closing. In addition, each of the Seller and the
Seller's shareholders shall recommend the Internet access and
web-hosting services of the Buyer to any and all future customers
of the Seller who request such a recommendation.
ii. The Seller shall remain liable to the Buyer for all
costs and expenses reasonably incurred by the Seller before the
Closing Date but paid by the Buyer after the Closing Date, and
Seller shall reimburse the Buyer therefor within ten (10) days
after receiving from the Buyer an accounting of such costs and
expenses, together with supporting documentation.
(d) CONFIDENTIALITY. The Seller shall treat and hold as such
all of the Confidential Information, refrain from using any of the
Confidential Information except in connection with this Agreement, and
deliver promptly to the Buyer or destroy, at the request and option of
the Buyer, all tangible embodiments (and all copies) of the Confidential
Information which are in his/her or its possession. In the event that
the Seller or any of the Seller's shareholders is requested or required
(by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information, that the
Seller will notify the Buyer promptly of the request or requirement so
that the Buyer may seek an appropriate protective order or waive
compliance with the provisions of this Section 8(d). If, in the absence
of a protective order or the receipt of a waiver hereunder, the Seller or
the Seller's shareholders are, on the advice of counsel,
21
compelled to disclose any Confidential Information to any tribunal or
else stand liable for contempt, the Seller or the Seller's shareholders
(as the case may be) may disclose the Confidential Information to the
tribunal; PROVIDED, HOWEVER, that the Seller and the Seller's
shareholders shall use their reasonable best efforts to obtain, at the
reasonable request of the Buyer, an order or other assurance that
confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as the Buyer shall
designate.
(e) COVENANT NOT TO COMPETE. For a period of two (2) years
from and after the Closing Date, the Seller, the Seller's shareholders
and their respective Affiliates, agree not to engage directly or
indirectly in any business that offers dial-up Internet access, dedicated
Internet access and web-hosting to third parties in any geographic area
in which the Seller conducts that business as of the Closing Date;
PROVIDED, HOWEVER, that
i. notwithstanding the foregoing, two shareholders,
Xxxxx Xxxxx and Xxx Xxxxxx, Xx., shall be subject only to the
Covenants Not to Compete attached as Exhibit K and to the
provisions of Section 8(e)(iii) below.
ii. no owner of less than one percent (1%) of the
outstanding stock of any publicly traded corporation shall be
deemed to be engaged solely by reason thereof in any business
activity in contravention hereof; and
iii. if the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section
8(e) is invalid or unenforceable, the Parties agree that the court
making the determination of invalidity or unenforceability shall
have the power to reduce the scope, duration, or area of the term
or provision, to delete specific words or phrases, or to replace
any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified
after the expiration of the time within which the judgment may be
appealed.
(f) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Parties contained in this Agreement
shall survive the Closing and shall continue in full force and effect for
a period of two (2) years thereafter.
(g) THIRD PARTY CONSENTS. The Seller shall use its best
efforts to procure, and assist the Buyer in procuring, the consent of any
third party whose
22
consent is required in connection with the transactions contemplated by
this Agreement.
(h) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
i. In the event the Seller breaches any of its
representations, warranties, and covenants contained in this
Agreement, and, if there is an applicable survival period pursuant
to Section 8(f) above, provided that the Buyer makes a written
claim for indemnification against the Seller within such survival
period, then the Seller agrees to indemnify the Buyer from and
against the entirety of any Adverse Consequences the Buyer may
suffer 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 (or the alleged breach).
ii. The Seller agrees to indemnify the Buyer from and
against the entirety of any Adverse Consequences the Buyer may
suffer resulting from, arising out of, relating to, in the nature
of, or caused by any Liability of the Seller.
iii. The Seller agrees to indemnify the Buyer from and
against the entirety of any Adverse Consequences the Buyer may
suffer resulting from, arising out of, relating to, in the nature
of, or caused by any Liability of the Seller for Taxes of the
Seller related to the Acquired Assets.
iv. The Seller agrees to indemnify the Buyer from and
against the entirety of any Adverse Consequences the Buyer and its
shareholders may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Seller's operation of the
Acquired Assets prior to the Closing.
v. The Seller agrees to indemnify the Buyer from and
against the entirety of any Adverse Consequences the Buyer may
suffer resulting from, arising out of, relating to, in the nature
of, or caused by any Liability of the Seller in relation to the
termination of any of the Seller's employees who are not employed
by the Buyer.
vi. The Seller shall not have any liability to the Buyer
for any Adverse Consequences set forth in this Section 8(h) to the
extent that such Adverse Consequences are covered by insurance of
the Buyer.
vii. Notwithstanding anything contained herein to the
contrary, the Seller shall have no liability to the Buyer as a
result of any breach of any representation, warranty or covenant,
to the extent that the Buyer knew that such representation,
warranty or covenant was incorrect prior to the
23
Closing Date, except when such breach is the result of fraud or
willful misconduct.
(i) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLER.
i. In the event the Buyer breaches any of its
representations, warranties, and covenants contained in this
Agreement, and, if there is an applicable survival period pursuant
to Section 8(f) above, provided that the Seller makes a written
claim for indemnification against the Buyer within such survival
period, then the Buyer agrees to indemnify the Seller from and
against the entirety of any Adverse Consequences the Seller may
suffer 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.
ii. The Buyer agrees to indemnify the Seller from and
against the entirety of any Adverse Consequences the Seller and
its shareholders may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Buyer's operation
of the Acquired Assets after the Closing.
iii. The Buyer shall not have any Liability to the Seller
for any Adverse Consequences set forth in this Section 8(i) to the
extent that such Adverse Consequences are covered by insurance of
the Seller.
iv. Notwithstanding anything contained herein to the
contrary, the Buyer shall have no liability to the Seller as a
result of any breach of any representation, warranty or covenant,
to the extent that the Seller knew that such representation,
warranty or covenant was incorrect prior to the Closing Date,
except where such breach is the result of fraud or willful
misconduct.
(j) MATTERS INVOLVING THIRD PARTIES.
i. If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party
Claim") which may give rise to a claim for indemnification against
any other Party (the "Indemnifying Party") under this Section 8,
then the Indemnified Party shall promptly notify each Indemnifying
Party thereof in writing; PROVIDED, HOWEVER, that no delay on the
part of the Indemnified Party in notifying any Indemnifying Party
shall relieve the Indemnifying Party from any obligation hereunder
unless (and then solely to the extent) the Indemnifying Party
thereby is prejudiced.
ii. Any Indemnifying Party will have the right to defend
the Indemnified Party against the Third Party Claim with counsel
of its choice reasonably satisfactory to the Indemnified Party so
long as (A) the
24
Indemnifying Party notifies the Indemnified Party in writing
within fifteen (15) days after the Indemnified Party has given
notice of the Third Party Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of
any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (B) the Indemnifying Party
provides the Indemnified Party with evidence reasonably acceptable
to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations hereunder, (C) the Third
Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an
adverse judgment with respect to, the Third Party Claim is not, in
the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice materially adverse to
the continuing business interests of the Indemnified Party, and
(E) the Indemnifying Party conducts the defense of the Third Party
Claim actively and diligently.
iii. So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 8(i)
and (ii) above, (A) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim, (B) the Indemnified Party will
not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior
written consent of the Indemnifying Party (not to be withheld
unreasonably), and (C) the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent
of the Indemnified Party (not to be withheld unreasonably).
(k) LIMITATIONS ON INDEMNIFICATION OBLIGATIONS.
Notwithstanding the provisions of Section 8(h), through 8(j) above, none
of the Parties shall be obligated to indemnify or pay damages to any
other Party or Parties, as the case may be, from and against any Adverse
Consequences arising from or related to this Agreement to the extent that
such Adverse Consequences arising from or related to this Agreement
exceed the Purchase Price; PROVIDED, HOWEVER, that any claims brought by
a Party against another Party or Parties for fraud or willful misconduct
shall not be subject to the foregoing limitations.
9. Additional Agreements.
(a) ESCROW AGREEMENT. As security for the indemnity of the
Buyer by the Seller provided for in Section 8 above, the Escrow Shares
shall be registered in the name of the Seller, and deposited (with an
executed assignment in blank) with Norwest Bank, N.A. as Escrow Agent,
such deposit to constitute an escrow
25
fund (the "Escrow Fund") to be governed by the terms set forth herein
and in the Escrow Agreement to be signed by all parties thereto (the
"Escrow Agreement"). In the event of any conflict between the terms of
this Agreement and the Escrow Agreement, the terms of the Escrow
Agreement shall govern. All costs and fees of the Escrow Agent for
establishing and administering the Escrow Fund shall be borne equally by
the Parties. Upon compliance with the terms hereof, the Buyer shall be
entitled to obtain indemnity first from the Escrow Fund for all Adverse
Consequences covered by the indemnity provided for in Section 8 above.
If the Escrow Fund is not sufficient to cover any such Adverse
Consequences covered by Section 8 above, then the Buyer shall be
entitled to seek payment directly from the Seller and, if the Seller
cannot or will not cover such Adverse Consequences, then the Buyer shall
be entitled to seek payment directly from the Seller's shareholders
pro-rata to the ownership of the Seller. The form of the Escrow
Agreement is attached hereto as Exhibit J.
(b) TAX-FREE REORGANIZATION. The Parties intend that the
transaction contemplated by this Agreement constitute a tax-free
reorganization pursuant to Section 368(a)(1)(C) of the Code; PROVIDED,
HOWEVER, that the Parties acknowledge and agree that neither Party has
represented to the other Party or Parties that such transaction will be
treated as such by the Internal Revenue Service.
(c) LIQUIDATION OF THE SELLER. The Seller's shareholders agree
that, as expeditiously as possible following the Closing Date, they will
liquidate the Seller pursuant to a plan of reorganization (the
"Reorganization Plan"), a copy of which is attached hereto as Exhibit L.
The Parties acknowledge and agree that neither Buyer nor its counsel has
reviewed the Reorganization Plan and that Buyer makes no representation
or warranty with respect to the validity, legality or legitimacy of the
Reorganization Plan.
10. Miscellaneous.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall
issue any press release or make any public announcement relating to the
subject matter of this Agreement prior to the Closing without the prior
written approval of the other Party; PROVIDED, HOWEVER, that any Party
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use
its reasonable best efforts to advise the other Party prior to making the
disclosure).
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns.
26
(c) ENTIRE AGREEMENT. This Agreement and the Exhibits and
Schedules hereto (including the documents referred to herein) constitutes
the entire agreement between the Parties and supersedes any prior
understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject
matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either
this Agreement or any of its rights, interests, or obligations hereunder
without the prior written approval of the other Party; PROVIDED, HOWEVER,
that the Buyer may (i) assign any or all of its rights and interests
hereunder to one or more of its Affiliates and (ii) designate one or more
of its Affiliates to perform its obligations hereunder (in any or all of
which cases the Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder).
(e) COUNTERPARTS. This Agreement may be executed by facsimile
and in any number of counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same
instrument. This Agreement may be executed by facsimile, provided that
the original counterpart is delivered within five (5) days of such
execution.
(f) HEADINGS. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given if (and then two business days after) it is sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed
to the intended recipient as set forth below:
IF TO THE SELLER:
Xxxxxxx & Xxxxxxx, P.C.
000 X. Xxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxx
E-Mail: xxxxxxxx@xxxxxxx.xxx
COPY TO:
IF TO THE BUYER:
27
XXX.XXX, Inc.
000 00xx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx, Chairman & CEO
E-Mail: xxxxxxxx@xxx.xxx.xxx
COPY TO:
XXX.XXX, Inc.
000 00xx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx, General Counsel
E-Mail: xxxxx.xxxxxxx@xxxx.xxx.xxx
Holland & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000-00000
Attention: Xx. Xxxxx X. Xxxx
E-Mail: xxxxx@xxxxxxxxxxx.xxx
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but
no such notice, request, demand, claim, or other communication shall be
deemed to have been duly given unless and until it actually is received by
the intended recipient. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
(h) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Colorado
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Colorado or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
State of Colorado.
(i) ARBITRATION. The Parties hereby covenant and agree that,
except as otherwise set forth in this Agreement, any suit, dispute,
claim, demand, controversy or cause of action of every kind and nature
whatsoever, known or unknown, fixed or contingent, that the Parties may
now have or at any time in the future claim to have based in whole or in
part, or arising from or that in any way is related to the negotiations,
execution, interpretation or enforcement of this Agreement (collectively,
the "Disputes") shall be completely and finally settled by submission of
any such Disputes to arbitration under the Rules of Arbitration
28
and Conciliation of the American Arbitration Association then in effect.
If the Parties to the Dispute are unable to agree on a single arbitrator,
then such binding arbitration shall be conducted before a panel of three
(3) arbitrators that shall be comprised of one (1) arbitrator designated
by each Party to the Dispute and a third arbitrator designated by the two
(2) arbitrators selected by the Parties to the Dispute. Unless the
Parties to the Dispute agree otherwise, the arbitration proceedings shall
take place in Denver, Colorado and the arbitrator(s) shall apply the law
of the State of Colorado, USA, to all issues in dispute, in accordance
with Section 10(h). The findings of the arbitrator(s) shall be final and
binding on the Parties to the Dispute. Judgment on such award may be
entered in any court of appropriate jurisdiction, or application may be
made to that court for a judicial acceptance of the award and an order of
enforcement, as the party seeking to enforce that award may elect.
Notwithstanding any applicable rules of arbitration, all arbitral awards
shall be in writing and shall set forth in particularity the findings of
fact and conclusions of law of the arbitrator or arbitrators. If the
Buyer makes any claim based upon the alleged intentional fraud or willful
misconduct of the Seller or its shareholders and such claim is not found
by the arbitrator(s) to be valid or proven, the Buyer shall pay the costs
of the Seller or its shareholders incurred in connection with such
arbitration proceeding (including reasonable attorneys fees).
(j) AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and
signed by the Buyer and the Seller. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior
or subsequent such occurrence.
(k) SEVERABILITY. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term
or provision in any other situation or in any other jurisdiction.
(l) EXPENSES. Each of the Buyer and the Seller will bear its
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
(m) REPRESENTATIVE. The individual shareholders set forth on
the signature page hereto hereby appoint Xxxxx Xxxxxxx to act as their
representative to receive notices and to act on their behalves with
respect to this Agreement and the Exhibits and Schedules hereto.
29
(n) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue
of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local, or foreign statute or law shall
be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including"
shall mean including without limitation. Nothing in the Disclosure
Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. Without limiting the generality of
the foregoing, the mere listing (or inclusion of a copy) of a document or
other item shall not be deemed adequate to disclose an exception to a
representation or warranty made herein (unless the representation or
warranty has to do with the existence of the document or other item
itself). The Parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any
Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of
the relative levels of specificity) which the Party has not breached
shall not detract from or mitigate the fact that the Party is in breach
of the first representation, warranty, or covenant.
(o) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(p) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance with
their specific terms or otherwise are breached. Accordingly, each of the
Parties agrees that the other Party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and
to enforce specifically this Agreement and the terms and provisions
hereof in any action instituted in any court of the United States or any
state thereof having jurisdiction over the Parties and the matter
(subject to the provisions set forth in Section 10(i) above), in addition
to any other remedy to which it may be entitled, at law or in equity.
*****
30
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
XXX.XXX, INC.
By:
------------------------------------------
Xxxxxxx X. Xxxxxx
Title: Chairman and CEO
WESTERN REGIONAL NETWORKS, INC.
By:
------------------------------------------
Title:
---------------------------------------
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Xxxxx Xxxxx
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Xxxxx Xxxxxxx
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Xxxxxxx Xxxxxx
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Xxxxx Xxxxxxxxxx
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Xxx X. Xxxxxx, Xx.
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