EXHIBIT 10.43
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the ____ day of May, 1998 by and between Xxxxxx Telecom, Inc., a
Delaware corporation,("Buyer"), Xxx Xxxxxx, ("Xxxxxx"), Xxx Xxxxxxxx
("Xxxxxxxx"), Xxxxxxxx X. Xxxxx("X. Xxxxx"), and Xxxxxxxxxx Xxxx Xxxxx ("X.
Xxxxx") (Cannon, Connolly, X. Xxxxx and X. Xxxxx are collectively referred to as
"Sellers").
R E C I T I A L S
- - - - - - - - -
WHEREAS, WCC Telephone Services Inc., ("WCC"), a California
corporation, is engaged in the business of engineering, installing, removing,
testing and auditing of telecommunication systems (the "Business"): and
WHEREAS, Xxxxxx owns 24% of the issued and outstanding shares of WCC;
and
WHEREAS, Xxxxxxxx owns 24% of the issued and outstanding shares of
WCC; and
WHEREAS, Xxxxx & Hirst, Inc., a California corporation ("Xxxxx &
Xxxxx"), owns 52% of the issued and outstanding shares of WCC; and
WHEREAS, X. Xxxxx owns 50% of the issued and outstanding shares of
Xxxxx & Xxxxx; and
WHEREAS, X. Xxxxx owns 50% of the issued and outstanding shares of
Xxxxx & Xxxxx; and
WHEREAS, Buyer wishes to purchase and Xxxxxx and Xxxxxxxx wish to sell
to Buyer, all of the issued and outstanding shares of WCC owned by them on the
terms and conditions set forth below; and
WHEREAS, Buyer wishes to purchase and X. Xxxxx and X. Xxxxx wish to
sell to Buyer, all of the issued and outstanding shares of stock of Xxxxx &
Hirst owned by them on the terms and conditions set forth below:
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for and in consideration of the mutual promises herein
made, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
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1.1 Purchase and Sale. Subject to the terms and conditions of this
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Agreement, effective as of 11:59 p.m. Pacific Daylight Time on May 29, 1998 (the
"Closing Date"), (a) Buyer agrees to purchase from Xxxxxx and Xxxxxxxx, and
Xxxxxx and Xxxxxxxx agree to sell, assign, transfer and deliver to Buyer, 4,800
of the issued and outstanding shares of stock of WCC, comprising 48% of the
total issued and outstanding shares of stock of WCC (the "WCC Stock"), and (b)
Buyer agrees to purchase from X. Xxxxx and X.Xxxxx, and X. Xxxxx and X. Xxxxx
agree to sell, assign, transfer and deliver to Buyer, all of the issued and
outstanding shares of stock of Xxxxx & Hirst, consisting of 10,000 shares of
stock of Xxxxx & Xxxxx (the "Xxxxx & Xxxxx Stock").
1.2 Acquired Assets. The Business shall include, without limitation,
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all of the following assets (the "Assets") of WCC:
(a) Office furniture and equipment, computers, leasehold improvements
and deposits pursuant to leases, as set forth in Schedule 1.2(a).
(b) Computer software owned or licensed by WCC as set forth in
Schedule 1.2(b).
(c) Equipment leases and other agreements, contracts and instruments
as set forth in Schedule 1.2(c).
(d) All subcontractor agreements and agreements with suppliers to
provide consultants to WCC, including, but not limited to, those
set forth in Schedule 1.2(d).
(e) All Client Agreements including, but not limited to, those forth
in Schedule 1.2(e).
1.3 Excluded WCC Assets and Excluded WCC Liabilities.
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(a) Prior to the Closing Date, all receivables or notes from Sellers
or affiliated parties, including, without limitation, the
receivables and notes set forth in Schedule 1.3 (a) ("Excluded
WCC Assets") to the Disclosure Schedules attached hereto (the
"Disclosure Schedules") will be paid off.
(b) Prior to the Closing Date, Sellers and WCC shall pay off the debt
set forth in Schedule 1.3 (b) to the Disclosure Schedules
("Excluded WCC Liabilities").
1.4 Excluded Xxxxx & Hirst Assets and Excluded Xxxxx & Xxxxx
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Liabilities.
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(a) Prior to the Closing Date, all assets of any kind or nature held
or owned by Xxxxx & Hirst (except for the stock of WCC) ("Excluded
Xxxxx & Xxxxx Assets") shall be transferred out of Xxxxx & Hirst.
(b) Prior to the Closing Date, all liabilities of any kind or nature
owed by Xxxxx & Xxxxx ("Excluded Xxxxx & Hirst Liabilities") shall be
paid off.
1.5 Purchase Price. Subject to the Net Equity requirement set forth
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below, Buyer shall pay the Sellers, in full payment for the WCC Stock
and the Xxxxx & Xxxxx Stock, as follows:
(a) The "Unadjusted Purchase Price." The Unadjusted Purchase Price
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shall be $1,890,000 paid in cash, by cashier's check or wire transfer
at the closing.
(b) Payment of "Net Equity." Within 90 days after the Closing Date,
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Buyer will provide to Sellers a balance sheet as of the Closing Date,
prepared on an accrual basis in accordance with general accepted
accounting principles ("GAAP") (the "Closing Date Balance Sheet"),
which Closing Date Balance Sheet shall include, without limitation, a
liability account for income taxes payable. Sellers will work in good
faith with Buyer in providing Buyer the necessary information for
Buyer to prepare the Closing Date Balance Sheet. The Closing Date
Balance Sheet will set forth the Net Equity, as defined below. Buyer
will pay to the Sellers the Net Equity in excess of $240,000, if any,
within 120 days after the Closing Date. Sellers will pay to Buyer the
Net Equity below $240,000, if any, within 120 days after the Closing
Date.
(c) Earnout Payment. Buyer will pay to Sellers on or before August 31,
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1999, an amount equal to 60% (sixty percent) of the Gross Profit, as
defined below for the twelve month period ending May 29, 1999. In the
event that the closing takes place on a date different from May 29,
1998, the date of the Earnout Payment will be adjusted accordingly.
(d) Allocation. All payments hereunder shall be allocated as
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follows:24% to Xxxxxx, 24% to Xxxxxxxx, 26% to X. Xxxxx and 26% to X.
Xxxxx.
(e) Definitions.
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(i) "Net Equity." The term "Net Equity" shall be defined as all assets
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less all liabilities of WCC , calculated on an accrual basis in
accordance with GAAP. Excluded WCC Assets and Excluded WCC Liabilities
will not be included
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in the determination of Net Equity.
(ii) "Gross Profits". The term "Gross Profits" shall be defined as
all revenues from the Business less all Direct Costs, calculated
on an accrual basis in accordance with GAAP.
(iii) "Direct Costs". The term "Direct Costs" shall be defined as set
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forth on Exhibit A. Amounts attributable to each account
described in Exhibit A shall be categorized consistent with
other similar jobs for which the Buyer accounts and any costs
associated with training shall not be taken into account in the
calculation of Direct Costs.
1.6 Stock Free of Liens. The WCC Stock and the Xxxxx & Xxxxx Stock
-------------------
(collectively, the "Stock") to be transferred hereunder shall be transferred
free and clear of all liens, claims, encumbrances, mortgages, pledges,
restrictions or rights of others or every kind and description.
1.7 Escrow . Notwithstanding any other provision contained herein,
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$150,000 of the Earnout Payment referred to in paragraph 1.5(c) hereof shall, to
the extent not previously set off pursuant to the provisions of Section 7.5
hereof, be placed in an escrow (the "Escrow Account") with a mutually acceptable
escrow agent (the "Escrow Agent") until May 31, 2001, or if any claims are
pending with respect to the Escrow Account prior to such date, the date on which
such claims are resolved. Claims may be made against the Escrow Account in the
manner set forth in paragraph 7.5 hereof.
1.8 Dispute Resolution. If the Sellers have any objections to the Closing
--------------------
Date Balance Sheet or the determination of Gross Profits described in Section
1.5(b) and 1.5(c), they shall deliver a statement describing their objections
("Statement of Objections") to Buyer within 20 business days after receiving the
Closing Date Balance Sheet/Gross Profits determination. Within 20 business days
of receipt by the Buyer of the Statement of Objections, Buyer's independent
accountants shall review the determination to which the objection relates and
supply Sellers with a reasonably detailed response. If the Sellers continue to
have any objections to the Closing Date Balance Sheet/Gross Profits
determination, they shall confirm in writing such objections within five
business days after receipt of the response ("Objection Confirmation"). The
Sellers and Buyer shall use reasonable efforts to resolve any objections to the
calculation of the Closing Date Balance Sheet/Gross Profits determination. If an
Objection Confirmation is given and the parties fail to reach an agreement with
respect to the Closing Date Balance Sheet/Gross Profits determination within 20
business days after Buyer's receipt of the Objection Confirmation, the parties
shall submit the dispute for resolution to the Orange County Office of one of
the six largest firms of independent certified public accountants (the
"Accountant"), other than Buyer's or the Sellers
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accountants as of the Closing, within five business days after the end of the
20-business-day period. Each of the Sellers and the Buyer may submit such
information to the Accountant as such party deems relevant on or before the
expiration of such period. If the Sellers and the Buyer do not agree upon the
selection the Accountant, the selection will be made by the Orange County office
of the American Arbitration Association ("AAA") in accordance with the criteria
specified above, or if no such Accountant is available or willing to resolve the
dispute, the AAA shall select the next largest accounting firm from which a
qualified accountant is available in Orange County, California. The Accountant
shall, within 20 business days after appointment as provided herein, render its
determination as to the Closing Date Balance Sheet/Gross Profits determination
and the amount so selected shall be final and binding on the parties. Any such
amount shall be payable with simple interest thereon at 8 percent from the due
date of such payment. The fees and expenses of the Accountant shall be paid by
the party whose determination was not selected, and if neither party's
determination is selected, shall be allocated between the parties based upon the
proportion in which the final determination was reflective of their respective
positions.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
-----------------------------------------
In order to induce Buyer to enter into this Agreement, each of the Sellers,
jointly and severally, represents and warrants to the Buyer that the statements
contained in this Article II 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 Article II).
2.1 Authority Relative to this Agreement. The Sellers have the full power
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and authority to execute, deliver and perform this Agreement and any agreement
or document contemplated hereby, and to consummate the transactions contemplated
hereby or thereby. The obligations imposed on Sellers by this Agreement, or by
any agreement or document contemplated hereby, constitute the valid and binding
obligations and agreements of Sellers, enforceable against each of them in
accordance with their respective terms except that (i) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights; and (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
2.2 Compliance of Transaction With Laws and Other Instruments. Except as
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set forth in Schedule 2.2 of the Disclosure
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Schedules, the execution, delivery and performance by Sellers of this Agreement
and any agreement or document contemplated hereby, and the performance and
consummation of the transactions contemplated hereby or thereby by Sellers (i)
do not require on behalf of Sellers, WCC, or Xxxxx & Xxxxx any approval, consent
or waiver of, or filing with, any governmental agency, court or other authority
which has not been obtained and which is not in full force and effect as of the
date hereof; (ii) will not conflict with or constitute a breach or violation of
the charter or bylaws of WCC or Xxxxx & Hirst; (iii) will not result in a
violation of any law, regulation, judgment, writ, injunction, order or decree of
any court or governmental or regulatory authority (federal, local or otherwise)
to which WCC or Xxxxx & Xxxxx is subject; and (iv) will not require the
approval, consent or waiver of, or filing with any party to, violate or conflict
with or result in a breach of, or constitute a default or acceleration of or
give rise to a right of termination (or an event which with notice or lapse of
time or both would become a default) under, any provision of any contract,
indenture, mortgage, lease, agreement or other instrument to which Sellers, WCC,
or Xxxxx & Hirst are a party or to which any of its or their assets are subject.
2.3 Capitalization. The entire authorized capital stock of WCC consists of
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10,000 shares of common stock, no par value ("Common Shares of WCC"), of which
10,000 Common Shares of WCC are issued and outstanding. All of the issued and
outstanding Common Shares have been duly authorized, are validly issued, fully
paid, and nonassessable. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require WCC to issue, sell,
or otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to WCC. There are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting of the capital stock of WCC. No debt instrument issued by WCC has or
could have voting rights.
2.4 Stock. Xxxxxx and Xxxxxxxx each hold of record and owns beneficially
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2,400 Common Shares of WCC, and Xxxxx & Hirst owns beneficially 5,200 Common
Shares of WCC, in each case free and clear of any restrictions on transfer
(other than any restrictions under federal or state securities laws), taxes,
security interests, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. Neither the Sellers, nor Xxxxx & Xxxxx, is a
party to any option, warrant, purchase right, or other contract or commitment
that could require the Sellers to sell, transfer, or otherwise dispose of any
capital stock of WCC (other than this Agreement). Neither the Sellers, nor Xxxxx
& Hirst, is a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of WCC.
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2.5 Organization and Qualification. WCC is a corporation duly organized,
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validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to own, lease
and operate its assets and properties and to conduct the Business in the manner
and in the places where such assets and properties are owned, leased or operated
or the Business is conducted by it. WCC has no subsidiaries and does not own,
directly or indirectly, any equity interest in any corporation, partnership,
joint venture or other business entity. Sellers have delivered to the Buyer
correct and complete copies of the charter and bylaws of WCC (as amended to
date). The minute book (containing the records of meetings of the stockholders,
the board of directors, and any committees of the board of directors), the stock
certificate book and the stock record book of WCC are correct and complete. WCC
is not in default under or in violation of any provision of its charter or
bylaws.
2.6 Financial and Other Statements. Schedule 2.6 of the Disclosure
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Schedules contains true and complete copies of (i) WCC's cash basis financial
statements for the year ended December 31, 1997, and (ii) WCC's cash basis
interim financial statements for the period ended March 31, 1998 (collectively
the "Financial Statements"). Except as set forth in Schedule 2.6 , the Financial
Statements fairly present in all material respects the financial position and
results of operation of WCC as of the indicated dates and for the period
indicated therein.
2.7 Title to Properties; Liens; Condition of Properties. WCC has good and
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marketable title to or a valid leasehold in, the properties and assets used by
it, located on its premises, or shown in the Financial Statements or acquired
after the date thereof (the "Acquired Assets"), which shall exclude the
"Excluded WCC Assets" as defined in Section 1.3. None of such assets are subject
to any mortgage, pledge, lien, conditional sale agreement, security interest,
encumbrance, title defect or other charge, except for liens for taxes not yet
due and payable. Schedule 2.7 of the Disclosure Schedules sets forth the
addresses or locations of all facilities (whether leased or owned) of WCC.
2.8 No Undisclosed Liabilities. There are no contractual or non-
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contractual obligations, debts or liabilities of any nature of WCC whether
accrued or unaccrued, contingent or absolute, direct or indirect, recorded or
unrecorded, potential or realized (the "Liabilities") as of December 31, 1997,
which are not otherwise disclosed in the Financial Statements. WCC has not
incurred any Liabilities since December 31, 1997, except for those Liabilities
incurred in the ordinary course of business and consistent with past practice
and which, in any event, would not, in the aggregate, have a material adverse
effect. WCC is not directly or indirectly (i) liable, by guaranty, surety or
otherwise, upon or with respect to, or (ii) obligated in any way to provide
funds in respect of, or (iii) obligated to guaranty or assume any debt, dividend
or
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other obligation of any person, corporation, association, partnership or
other entity.
2.9 Tax Matters. Except as set forth on Schedule 2.9 of the Disclosure
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Schedules, WCC has filed (i) all federal, state, municipal and local tax returns
(whether relating to income, sales, franchise, withholding, real or personal
property, employment or otherwise) ("tax returns") required to be filed; (ii)
all federal, state, municipal and local tax returns (whether relating to income,
sales, franchise, withholding, real or personal property, employment of
otherwise) ("taxes") which are due, pursuant to such returns, or claimed to be
due by any taxing authority, or otherwise due and owing, and any penalties or
other charges due with respect to the late filing of any such return have been
fully paid, and shall be fully paid at the time of closing; (iii) each such tax
return heretofore filed by WCC correctly and accurately reflects the amount of
its tax liability thereunder; (iv) WCC is not currently the beneficiary of any
extension of time within which to file any tax return; (v) no claim has ever
been made by an authority in a jurisdiction where WCC does not file tax returns
that it is or may be subject to taxation by that jurisdiction; (vi) there are no
security interests on any of the assets of WCC that arose in connection with any
failure (or alleged failure) to pay any tax; (vii) WCC has withheld and paid all
taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, creditor, independent contractor, or other third party
and all such taxes shall be withheld or paid by Closing and all such taxes
accrued but not due as of Closing shall be escrowed with Buyer; and (viii) to
the knowledge of the Seller, there is no dispute or claim concerning any tax
liability of WCC.
2.10 Absence of Certain Changes. Since March 31, 1998, there has not been:
--------------------------
(a) any material adverse change in the financial condition, properties,
assets, liabilities, personnel or operations of WCC;
(b) any obligation or liability incurred by WCC, including the obligation to
perform services normally conducted by the Business, other than obligations and
liabilities incurred in the ordinary course of business;
(c) any purchase, sale or other disposition, or any agreement or other
arrangement for the purchase, sale or other disposition, of any of the services,
properties or assets of the Business, except in the ordinary course of business;
(d) any damage, destruction or loss, whether or not covered by insurance,
affecting the Business;
(e) any loss or threatened loss of any permit, license, qualification or
certificate of authority held or enjoyed by WCC
8
which loss has had, or could in the future have, a material adverse effect
("Material Adverse Effect") on the business, properties, financial condition or
results of operation of the Business or Buyer's free and unencumbered ownership
and use of any of the assets or properties of the Business, whether owned or
leased, and whether or not carried or reflected on the books and records of WCC
(the "Assets");
(f) any pending or threatened labor disputes or strikes, labor union
organizational activity, claim or threatened claim of unfair labor practices, or
any material adverse change in relations with WCC's employees generally;
(g) any action taken by WCC outside of the ordinary course of business;
(h) any written notice of termination of, or default under, any contract;
(i) any loan or advance to or any investment in any person, firm or
corporation, except for normal business advances to employees consistent with
past practice;
(j) any increase in the compensation payable or to become payable to any of
its officers or employees (other than nonmaterial increases in the ordinary
course of business) and there has been no establishment, adoption, entering
into, or making of any new grants or awards under, acceleration of payment or
vesting, or any obligation to grant any awards under, or any amendment to any
collective bargaining, bonus, profit sharing, thrift, compensation, stock option
or other equity, pension, retirement, incentive or deferred compensation,
employment, retention, termination, severance, health, life or other welfare,
fringe, Employee Benefit Plan, or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any current or former directors, officers or
employees, or any granting or paying of any benefit not required by any existing
WCC Benefit Plan or other plan or arrangement;
(k) any commitment for any addition to property, plant or equipment not in
the ordinary course of business;
(l) any payment, loan or advance of any amount to, or sale, transfer or
lease of Assets to, or any agreements or arrangements with, any of WCC's
officers, directors or "affiliates," as such term is defined in the rules and
regulations of the Securities and Exchange Commission ("Affiliate");
(m) any charitable or other capital contribution;
(n) any declaration, set aside or payment of any dividend, any distribution
with respect to its capital stock, or any redemption, repurchase, or other
acquisition of any of its capital
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stock;
(o) any failure to pay current liabilities, including accounts payable and
accrued expenses in the ordinary course of business and otherwise in accordance
with their terms; or
(p) any agreement or understanding by WCC to do any of the foregoing.
2.11 Patents, Trademarks, Trade Names and Similar Rights. WCC does not own
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any trademarks, logos, service marks, trade names, copyrights or other similar
proprietary rights ("Intangibles") used in the Business, and, to the Seller's
knowledge, has no obligation to any third party with respect thereto.
2.12 Trade Secrets and Customer Lists. WCC has the right to use, without
--------------------------------
liability to others, all trade secrets and customer lists, if any, required and
used in the Business within the last five years and has not disclosed, sold,
licensed, sublicensed or otherwise granted to any third party the right to use
such trade secrets and information. To the Seller's knowledge, WCC is not using
or in any way making use of any confidential information or trade secrets of any
third party, including, without limitation, a former employer of any present or
past employee of WCC.
2.13 Client and Other Agreements. With respect to Client Agreements and the
---------------------------
agreements set forth in Schedule 1.2(e) of the Disclosure Schedules: (i) all
such agreements are legal, valid, binding, enforceable, in full force and
effect, and subject to customer consent of the other party to such agreement,
are fully transferable to Buyer subject to no governmental or regulatory
requirement or impediment; (ii) all such agreements will be legal, valid,
binding and enforceable, and in full force and effect on the same terms and
conditions on the Closing Date; (iii) no party 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 under said
agreements; (iv) no party has repudiated any provision of said agreements; (v)
the list of agreements set forth in the Disclosure Schedules is a complete and
accurate list of all agreements between WCC and its customers; (vi) to the
knowledge of the Sellers, the relationship of WCC with the customers that are
parties to the agreements are good and Sellers know of no set of facts, and have
not received any notice or information from any of the listed customers
indicating an intention to decrease the level of services WCC provides to any
such customer, or to reduce the rates at which WCC is being compensated from
said customers, and no illegal or other payment or consideration has been given
by WCC to secure or maintain any business with its customers; (vii) WCC has not
received any notice of claims from any of the listed customers relating to WCC's
performance of service for such customers; and (viii) no material amount claimed
to be payable to WCC under any of the agreements is
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being disputed by any client.
2.14 Employee Agreements and Plans.
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(a) Neither WCC, nor any ERISA Affiliate maintained, contributed to, or had
(or may have) any liability under any Employee Benefit Plan with respect to its
employees, former employees, or independent contractors. For purposes of this
Section 2.14 and the Agreement:
(i) "Employee Benefit Plan" means (a) any bonus, incentive compensation,
profit sharing, retirement, pension, group insurance, death benefit,
group health, medical expense reimbursement, dependent care, legal
services, flexible benefits or cafeteria, stock option, stock purchase,
stock appreciation rights, phantom stock, savings, deferred
compensation, consulting, severance pay or termination pay, vacation
pay, leave of absence, layoff, life insurance, accident, disability,
workers' compensation, welfare or other employee benefit or fringe
benefit plan, program, arrangement practice or policy which is an
"employee pension benefit plan" as such term is defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or an "employee welfare benefit plan" as defined in Section
3(1) of ERISA, whether written or unwritten; and
(ii) "ERISA Affiliate" means each person (as defined in Section 3(9) of
ERISA) that, together with WCC (or any person whose liabilities WCC has
assumed or is otherwise subject to, whether directly or indirectly,
including as a result of indemnification) would be or has been treated
as a single employer under Section 4001(b) of ERISA or Section 414 of
the Internal Revenue Code of 1986, as amended ("Code").
(b) WCC is not a party to any employment agreement, whether written or oral,
or agreement with change in control or similar provisions, or collective
bargaining agreement or contract with any labor union relating to any employees
or former employees of WCC. Except as set forth in Schedule 2.14 of the
Disclosure Schedules, the execution, delivery or performance of this Agreement
or the consummation of the transactions contemplated by this Agreement will not
entitle any individual to severance pay or accelerate the time of payment or
vesting, or increase the amount of any compensation or benefits due to any
individual nor result in the imposition of any federal excise tax with respect
to any Employee Benefit Plan. WCC does not currently have outstanding any loan
or loans to any current or former employees, nor has WCC guaranteed such loans.
(c) Schedule 2.14 of the Disclosure Schedules sets forth, as
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of the date of this Agreement, with respect to each employee employed by WCC,
his or her name, position, salary or hourly wage, his or her date of employment
and any applicable significant employee benefits or entitlement not available
generally to WCC's employees.
(d) WCC has complied in all respects with all applicable laws relating to
the employment of labor or consultants or independent contractors in connection
with the operation of the Business, including, without limitation, those
relating to wages, hours, collective bargaining, unemployment insurance,
workers' compensation, immigration and naturalization, equal employment
opportunity and the payment and withholding of taxes.
(e) WCC is not a party to any contract with any labor organization, nor has
it agreed to recognize any union or other collective bargaining unit, nor has
any union or other collective bargaining unit been certified as representing any
of its employees. WCC has not experienced any strikes, work stoppages,
significant grievance proceedings or claims of unfair labor practices filed or,
to WCC's or Seller's knowledge, threatened to be filed with respect to the
operation of the Business.
2.15 Litigation, Proceedings, Etc. Except for matters described in Schedule
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2.15 of the Disclosure Schedules, (i) to the best knowledge of the Sellers,
there is no pending claim, action, litigation, suit or proceeding against, or
investigation of WCC; (ii) WCC has not received any notice of any claim, action,
litigation, suit or proceeding against it or investigation of it, and no such
claim, action, suit, proceeding or investigation is pending or threatened
against WCC and (iii) there are no outstanding court, arbitration or agency
orders, decrees or stipulations to which WCC is a party or which are directed to
WCC.
2.16 Compliance With Law and Other Instruments: Permits. WCC is not (and
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has not been for the past twelve months) in violation of, or default under: (i)
any term or provision of its charter or by-laws; (ii) any term or provision of
any financial covenant or any indenture, mortgage, contract, commitment or other
agreement or instrument to which it is a party, or by which it or any of its
properties or business is or may be bound or affected, or (iii) any applicable
law (including, without limitation, the Fair Labor Standards Act and all other
federal and state wage and hour laws), any and all Federal immigration laws,
regulations and promulgations, rule, regulation, judgment, order or decree of
any governmental agency or court, domestic or foreign, having jurisdiction over
it or any of its properties or business, or WCC's employees, consultants or
independent contractors, (iv) WCC owns, possesses, or has obtained licenses,
permits, certifications, registrations, approvals or consents and other
authorizations necessary to own or lease, as the case may be, its business or
operations as presently conducted and all such governmental and
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other licenses, permits, certifications, registrations, approvals, consents and
other authorizations are in good standing, and there are no proceedings pending
or, to the best knowledge of WCC's officers and directors, threatened, or any
basis therefor existing, seeking to cancel, terminate or limit such licenses,
permits, certifications, registrations, approvals, or consents or
authorizations, or related to the breach or failure to comply with any law,
rule, regulation, judgment or decree.
2.17 Transactions with Affiliates. Except as set forth in Schedule 2.17 of
----------------------------
the Disclosure Schedules there is no lease, sublease, indebtedness, contract,
agreement, commitment, understanding or other arrangement of any kind whatsoever
entered into by WCC with Sellers, officers or directors or any Affiliate of any
of them. At Closing, WCC shall cancel all arrangements with any Affiliate.
2.18 Insurance. Set forth in Schedule 2.18 of the Disclosure Schedules is a
---------
list of insurance in force with respect to the Business, which list is true,
complete and accurate in all material respects. WCC has paid all premiums due
under such policies and, to its knowledge, such policies are each outstanding
and in full force and effect on the date hereof. To Sellers' knowledge, no
insurance carrier has refused any application for insurance by WCC.
2.19 Books and Records. All books and records pertaining to the Business
-----------------
have been, or prior to the Closing shall have been, made available for review by
Buyer and its representatives and are correct and complete in all material
respects, have been maintained in accordance with good business practice and
fairly reflect the basis for the financial condition and results of operations
of WCC set forth in the Financial Statements.
2.20 Powers of Attorney; Bank Accounts. There are no outstanding powers of
---------------------------------
attorney executed on behalf of WCC. Set forth in Schedule 2.20 of the Disclosure
Schedules is an accurate and complete list of the name and address of each bank
or other institution where WCC has an account or safe deposit box, the number of
such account, and the names of all persons authorized to draw thereon or have
access thereto.
2.21 Broker's Fees. With the exception of Benefit Capital Financial
-------------
Services, Inc., which shall be paid by WCC at the Closing, WCC has no obligation
or liability to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
2.22 Miscellaneous. All compensation payments including vacation, per diem,
-------------
holiday and sickness payments, required to be paid to WCC's personnel for any
period prior to the Closing, will be paid in full at the time of Closing. WCC
has not entered into
13
any employment agreement and/or arrangement with nonexempt personnel
guaranteeing a minimum number of work hours during any predetermined time
period. Except as is necessary to close the Business and pay off obligations,
Sellers agree not to use the name WCC Telephone Services, Inc., or any similar
name for any purpose. All Field Personnel who are classified as "independent
contractors" are correctly classified as such, and all employees who are non-US
citizens have valid, legal and current visas, are in compliance with applicable
United States Immigration Laws, and have properly executed Employment
Eligibility Verification Forms (I-9).
2.23 Year 2000. To the best of Seller's knowledge, all software used in
---------
the Business, or provided to WCC, whether licensed, owned, or used by vendors,
is Year 2000-compliant.
2.24 Disclosure. The statements contained in this Agreement, and in any
----------
written documents or Schedules attached hereto prepared and delivered by or on
behalf of WCC or Sellers pursuant to the terms hereof are true and correct in
all material respects, and such statements, documents or Schedules do not omit
any material fact required by the terms hereof or thereof to be stated herein or
therein or necessary to make the statements contained herein or therein not
misleading. There is no fact known to Sellers or WCC which would have a material
adverse effect on the Business, other than those which have been set forth in
this Agreement or in the Disclosure Schedules attached hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF X. XXXXX AND X. XXXXX
-------------------------------------------------------
In order to induce Buyer to enter into this Agreement, each of X. Xxxxx and
X. Xxxxx, jointly and severally, represent and warrant to the Buyer that the
statements contained in this Article III 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 Article III).
3.1 Capitalization. The entire authorized capital stock of Xxxxx & Hirst
--------------
consists of 100,000 shares of common stock, no par value (Common Shares of
Xxxxx & Xxxxx"), 10,000 of which Common Shares of Xxxxx & Hirst are issued and
outstanding. All of the issued and outstanding Common Shares of Xxxxx & Xxxxx
have been duly authorized, and are validly issued, fully paid, and
nonassessable. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Xxxxx & Hirst to issue, sell,
or otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation,
14
or similar rights with respect to Xxxxx & Xxxxx. There are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of Xxxxx & Hirst. No debt instrument issued by
Xxxxx & Xxxxx has or could have voting rights.
3.2 Stock. X. Xxxxx and X. Xxxxx each hold of record and own beneficially
-----
5,000 Common Shares of Xxxxx & Hirst, free and clear of any restrictions on
transfer (other than any restrictions under federal or state securities laws),
taxes, security interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. Neither X. Xxxxx nor X. Xxxxx is a
party to any option, warrant, purchase right, or other contract or commitment
that could require X. Xxxxx or X. Xxxxx to sell, transfer, or otherwise dispose
of any capital stock of Xxxxx & Hirst (other than this Agreement). Neither X.
Xxxxx nor X. Xxxxx is a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of Xxxxx & Hirst.
3.3 Organization and Qualification. Xxxxx & Xxxxx is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its assets and properties and to conduct its
Business in the manner and in the places where such assets and properties are
owned, leased or operated or the business is conducted by it. Except for its
interest in WCC, Xxxxx & Hirst has no subsidiaries and does not own, directly or
indirectly, any equity interest in any corporation, partnership, joint venture
or other business entity. Sellers have delivered to the Buyer correct and
complete copies of the charter and bylaws of Xxxxx & Xxxxx (as amended to date).
The minute book (containing the records of meetings of the stockholders, the
board of directors, and any committees of the board of directors), the stock
certificate book and the stock record book of Xxxxx & Hirst are correct and
complete. Xxxxx & Xxxxx is not in default under or in violation of any provision
of its charter or bylaws.
3.4 No Undisclosed Liabilities. Except as set forth on Schedule 3.4 of
--------------------------
the Disclosure Schedules, there are no contractual or non-contractual
obligations, debts or liabilities of any nature of Xxxxx & Hirst whether accrued
or unaccrued, contingent or absolute, direct or indirect, recorded or
unrecorded, potential or realized (the "Xxxxx & Xxxxx Liabilities") as of the
date hereof. Xxxxx & Hirst is not directly or indirectly (i) liable, by
guaranty, surety or otherwise, upon or with respect to, or (ii) obligated in any
way to provide funds in respect of, or (iii) obligated to guaranty or assume any
debt, dividend or other obligation of any person, corporation, association,
partnership or other entity.
15
3.5 Business. The business of Xxxxx & Xxxxx consists solely of the
--------
purchase and resale of telecommunications installation related material.
Revenues for the calendar year 1997 and the first quarter of 1998 were $67,773
and $16,811, respectively.
3.6 Tax Matters. Except as set forth on Schedule 3.6 of the Disclosure
-----------
Schedules, Xxxxx & Hirst has filed (i) all federal, state, municipal and local
tax returns (whether relating to income, sales, franchise, withholding, real or
personal property, employment or otherwise) ("tax returns") required to be
filed; (ii) all federal, state, municipal and local tax returns (whether
relating to income, sales, franchise, withholding, real or personal property,
employment or otherwise) ("taxes") which are due, pursuant to such returns, or
claimed to be due by any taxing authority, or otherwise due and owing, and any
penalties or other charges due with respect to the late filing of any such
return have been fully paid, and shall be fully paid at the time of closing;
(iii) each such tax return heretofore filed by Xxxxx & Xxxxx correctly and
accurately reflects the amount of its tax liability thereunder; (iv) Xxxxx &
Hirst is not currently the beneficiary of any extension of time within which to
file any tax return; (v) no claim has ever been made by an authority in a
jurisdiction where Xxxxx & Xxxxx does not file tax returns that it is or may be
subject to taxation by that jurisdiction; (vi) there are no security interests
on any of the assets of Xxxxx & Hirst that arose in connection with any failure
(or alleged failure) to pay any tax; (vii) Xxxxx & Xxxxx has withheld and paid
all taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, creditor, independent contractor, or other third
party and all such taxes shall be withheld or paid by Closing and all such taxes
accrued but not due as of Closing shall be escrowed with Buyer; and (viii) to
the knowledge of X. Xxxxx and X. Xxxxx, there is no dispute or claim concerning
any tax liability of Xxxxx & Hirst.
3.7 Employee Agreements and Plans.
-----------------------------
(a) Neither Xxxxx & Xxxxx, nor any Xxxxx & Hirst ERISA Affiliate maintained,
contributed to, or had (or may have) any liability under any Employee Benefit
Plan with respect to its employees, former employees, or independent
contractors. For purposes of this Section 3.7:
(i) "Employee Benefit Plan" means (a) any bonus, incentive compensation,
profit sharing, retirement, pension, group insurance, death benefit,
group health, medical expense reimbursement, dependent care, legal
services, flexible benefits or cafeteria, stock option, stock purchase,
stock appreciation rights, phantom stock, savings, deferred
compensation, consulting, severance pay or termination pay, vacation
pay, leave of absence, layoff, life insurance, accident, disability,
workers'
16
compensation, welfare or other employee benefit or fringe
benefit plan, program, arrangement practice or policy which is an
"employee pension benefit plan" as such term is defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or an "employee welfare benefit plan" as defined in Section
3(1) of ERISA, whether written or unwritten; and
(ii) "Xxxxx & Xxxxx ERISA Affiliate" means each person (as defined in
Section 3(9) of ERISA) that, together with Xxxxx & Hirst (or any person
whose liabilities Xxxxx & Xxxxx has assumed or is otherwise subject to,
whether directly or indirectly, including as a result of
indemnification) would be or has been treated as a single employer
under Section 4001(b) of ERISA or Section 414 of the Internal Revenue
Code of 1986, as amended ("Code").
(b) Xxxxx & Hirst is not a party to any employment agreement, whether
written or oral, or agreement with change in control or similar provisions, or
collective bargaining agreement or contract with any labor union relating to any
employees or former employees of Xxxxx & Xxxxx. The execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated by this Agreement will not entitle any individual to severance pay
or accelerate the time of payment or vesting, or increase the amount of any
compensation or benefits due to any individual nor result in the imposition of
any federal excise tax with respect to any Employee Benefit Plan. Xxxxx & Xxxxx
does not currently have outstanding any loan or loans to any current or former
employees, nor has Xxxxx & Hirst guaranteed such loans.
(c) Xxxxx & Xxxxx currently has no employees, and has had only one employee
during the period of its operations. Such employee commenced employment on
October 1, 1995 and terminated employment on December 31, 1997.
(d) Xxxxx & Hirst has complied in all respects with all applicable laws
relating to the employment of labor or consultants or independent contractors in
connection with the operation of its business, including, without limitation,
those relating to wages, hours, collective bargaining, unemployment insurance,
workers' compensation, immigration and naturalization, equal employment
opportunity and the payment and withholding of taxes.
(e) Xxxxx & Xxxxx is not a party to any contract with any labor
organization, nor has it agreed to recognize any union or other collective
bargaining unit, nor has any union or other collective bargaining unit been
certified as representing any of its employees. Xxxxx & Hirst has not
experienced any strikes, work stoppages, significant grievance proceedings or
claims of unfair labor practices filed or, to Xxxxx & Xxxxx'x knowledge,
threatened
17
to be filed with respect to the operation of its business.
3.8 Litigation Proceedings, Etc. (i) There is no pending claim, action,
---------------------------
litigation, suit or proceeding against, or investigation of Xxxxx & Hirst; (ii)
Xxxxx & Xxxxx has not received any notice of any claim, action, litigation, suit
or proceeding against it or investigation of it, and no such claim, action,
suit, proceeding or investigation is pending or threatened against Xxxxx &
Hirst; and (iii) there are no outstanding court, arbitration or agency orders,
decrees or stipulations to which Xxxxx & Xxxxx is a party or which are directed
to Xxxxx & Hirst.
3.9 Compliance With Law and Other Instruments; Permits. Xxxxx & Xxxxx is
--------------------------------------------------
not (and has not been for the past twelve months) in violation of, or default
under: (i) any term or provision of its charter or by-laws; (ii) any term or
provision of any financial covenant or any indenture, mortgage, contract,
commitment or other agreement or instrument to which it is a party, or by which
it or any of its properties or business is or may be bound or affected, or (iii)
any applicable law.
3.10 Transactions with Affiliates. There is no lease, sublease,
----------------------------
indebtedness, contract, agreement, commitment, understanding or other
arrangement of any kind whatsoever entered into by Xxxxx & Hirst with Sellers,
officers or directors or any Affiliate of any of them. At Closing, Xxxxx & Xxxxx
shall cancel all arrangements with any Affiliate.
3.11 Insurance. There is no insurance in force with respect to Xxxxx &
---------
Hirst.
3.12 Books and Records. All books and records pertaining to Xxxxx & Xxxxx
-----------------
have been, or prior to the Closing shall have been, made available for review by
Buyer and its representatives and are correct and complete in all material
respects, have been maintained in accordance with good business practice and
fairly reflect the basis for the financial condition and results of operations
of Xxxxx & Hirst.
3.13 Powers of Attorney. There are no outstanding powers of attorney
------------------
executed on behalf of Xxxxx & Xxxxx.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
In order to induce Sellers to enter into this Agreement, the Buyer
represents and warrants to the Sellers that the statements contained in this
Article IV 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
18
were substituted for the date of this Agreement through this Article IV).
4.1 Authority Relative to this Agreement. The Buyer has the full corporate
------------------------------------
power and authority, and has taken all necessary and proper action, corporate
and otherwise, to execute, deliver and perform this Agreement and any other
agreement or document contemplated hereby, and to consummate the transactions
contemplated hereby or thereby. All action on the part of Buyer necessary for
the authorization, execution, delivery and performance of this Agreement and any
other agreement or document contemplated hereby, and the consummation of the
transactions contemplated hereby or thereby, has been taken. The obligations
imposed on Buyer by this Agreement, or by any agreement or document contemplated
hereby, constitute the valid and binding obligations and agreements of Buyer,
enforceable against it in accordance with their respective terms, except that
(i) such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights; and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
4.2 Compliance of Transaction With Laws and Other Instruments. The
---------------------------------------------------------
execution, delivery and performance by Buyer of this Agreement and any agreement
or document contemplated hereby, and the performance and consummation of the
transactions contemplated hereby or thereby by Buyer (i) do not require on
behalf of Buyer any approval, consent or waiver of, or filing with, any
governmental agency, court or other authority which has not been obtained and
which is not in full force and effect as of the date hereof; (ii) will not
result in a violation of any law, regulation, judgment, writ, injunction, order
or decree of any court or governmental or regulatory authority (federal, local
or otherwise) to which Buyer is subject; (iii) will not conflict with or
constitute a breach or violation of the charter or bylaws of Buyer; and (iv)
will not require the approval, consent or waiver of, or filing with any party
to, violate or conflict with or result in a breach of, or constitute a default
or acceleration of or give rise to a right of termination (or an event which
with notice or lapse of time or both would become a default) under, any
provision of any contract, indenture, mortgage, lease, agreement or other
instrument to which Buyer is a party or to which any of its assets are subject.
4.3 Organization and Qualification. Buyer is a corporation duly organized,
------------------------------
validly existing and in good standing under the laws of its state of
incorporation.
4.4 Consents. Buyer is not subject to any law, ordinance, regulation,
--------
rule, order, judgment, injunction, decree, contract,
19
commitment, lease, agreement, instrument or other restriction of any kind, which
by its provisions would prevent the consummation of this Agreement or any of the
transactions contemplated hereby, without the consent, filing with or
notification of any third party which has not already been obtained or made or
will not be obtained prior to the Closing.
4.5 Broker's Fees. Buyer has no liability or obligation except to Elite
-------------
Investment Group, LLC, to pay any fees or commissions to any broker, investment
bankers, finder or agent with respect to the transactions contemplated by this
Agreement.
4.6 Status of Stock. Buyer is purchasing the Stock for its own account,
---------------
for investment purposes only, and not with a view to or for sale in connection
with any distribution of such Stock.
ARTICLE V
BUYER'S CONDITIONS TO CLOSING
-----------------------------
The obligations of Buyer to purchase the WCC Stock and the Xxxxx & Hirst
Stock and to consummate the transactions contemplated hereby, are subject to the
fulfillment in all respects on or prior to the Closing Date of each of the
following conditions:
5.1 Representations and Warranties. The representations and warranties
------------------------------
made by Sellers in Articles II and III hereof shall be true and correct when
--------------------
made, and shall be true and correct in all material respects on the Closing Date
with the same force and effect as if they had been made on and as of the Closing
Date, except for changes permitted or contemplated by this Agreement and except
that representations which are specifically made as of a specified date shall be
true and correct as of such earlier date.
5.2 Performance. All covenants, agreements and conditions contained in
-----------
this Agreement to be performed or complied with by Seller on or prior to the
Closing Date shall have been performed or complied with in all material
respects.
5.3 Closing Deliveries. Buyer shall have received all documents and
------------------
instruments required pursuant to Section 6.2 hereof.
------------
5.4 Absence of Litigation. No action, suit or proceeding before any court
---------------------
or any governmental body or authority shall be pending against either Sellers,
WCC, Xxxxx & Xxxxx, or Buyer which seeks to impose substantial damages in
connection with, or to restrain or invalidate the transactions contemplated by,
this Agreement, and no preliminary or permanent injunction or order that would
prohibit or restrain such transactions shall be in effect.
5.5 Absence of Certain Changes. There shall not have occurred
--------------------------
20
prior to the Closing Date (a) any material adverse change in the Business, or
any event or condition which, with the passage of time or the filing of notice,
may cause or create any such adverse change, or (b) the legal inability of
Sellers to convey, assign and transfer to Buyer the WCC Stock or the Xxxxx &
Hirst Stock.
5.6 Further Assurances. All actions to be taken by the Sellers 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 satisfactory in form and substance to
the Buyer. The Buyer may waive any condition specified in this Article V if it
executes a writing so stating at or prior to the Closing Date.
5.7 Miscellaneous. (a) Xxxxxx shall have executed and delivered to Buyer
-------------
the employment agreement attached hereto, (b) Sellers shall have delivered to
Buyer, from or with respect to the State of California, a good standing
certificate, letter of good standing, and tax release certificate with respect
to WCC and Xxxxx & Hirst, and, with respect to Xxxxx & Xxxxx, a Certificate of
Payment (tax release) from the State Board of Equalization, (c) Buyer shall have
received an opinion from Counsel for Sellers, dated the Closing Date,
satisfactory in form and substance to counsel for Buyer and (d) Buyer shall have
received the Articles of Incorporation and the By-Laws of WCC and Xxxxx & Hirst
as amended to the date hereof, and a certification by an officer of WCC that
same are true and complete copies of such documents as in effect at the time of
certification.
5.8 Workers' Compensation. Seller shall deliver to Buyer workers'
---------------------
compensation certificates in all states requested by Buyer.
5.9 Excluded Liabilities. Sellers shall have provided Buyer with evidence
--------------------
of payment or satisfaction of all Excluded WCC Liabilities and Excluded Xxxxx &
Xxxxx Liabilities.
5.10 Excluded Assets. Sellers shall have provided Buyer with evidence of
---------------
transfer of all Excluded WCC Assets out of WCC and all Excluded Xxxxx & Hirst
Assets out of Xxxxx & Xxxxx.
5.11 Employees. At the Closing Date, WCC shall have no fewer than 35
-----------
employees that have agreed to be employed by Buyer.
ARTICLE VI
SELLERS' CONDITIONS TO CLOSING
------------------------------
The obligations of Sellers to sell the Stock and the obligation of Sellers
to consummate the transactions contemplated hereby are
21
subject to the fulfillment in all respects on or prior to the Closing of each of
the following conditions:
6.1 Representations and Warranties. The representations and warranties
------------------------------
made by Buyer in Article IV hereof shall be true and correct when made, and
-----------
shall be true and correct in all respects on the Closing with the same force and
effect as if they had been made on and as of the Closing, except for changes
permitted or contemplated by this Agreement and except that representations
which are specifically made as of a specified date shall be true and correct as
of such earlier date.
6.2 Performance. All covenants, agreements and conditions contained in
-----------
this Agreement to be performed or complied with by Buyer on or prior to the
Closing shall have been performed or complied with in all respects.
6.3 Closing Deliveries. Sellers shall have received all documents and
------------------
instruments required pursuant to Section 8.2 hereof.
------------
6.4 Absence of Litigation. No action, suit or proceeding before any court
---------------------
or any governmental body or authority shall be pending against either Sellers,
WCC, Xxxxx & Xxxxx, or Buyer which seeks to impose substantial damages in
connection with, or to restrain or invalidate the transactions contemplated by
this Agreement and no preliminary or permanent injunction or order that would
prohibit or restrain such transactions shall be in effect.
ARTICLE VII
FURTHER AGREEMENTS
------------------
7.1 Expenses. Sellers shall pay their costs incurred in connection with
--------
the preparation, negotiation, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby including, without
limitation, the fees of the attorneys and accountants of Sellers. Buyer shall
pay its costs incurred in connection with the preparation, negotiation,
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby including, without limitation, the fees of its
attorneys and accountants.
7.2 Press Releases. Buyer may prepare and issue press releases regarding
--------------
this transaction, but will provide advance notice to Sellers thereof.
7.3 Survival of Representations. The representations and warranties
---------------------------
contained herein are and will be deemed and construed to be continuing
representations and warranties and will survive the Closing and, other than
fraudulent misrepresentations made by Sellers and breach of the representations
set forth in Section 2.9,
22
continue in full force and effect thereafter, for fifteen (15) months after the
Closing Date. All fraudulent misrepresentations and breach of the representation
set forth in Section 2.9 made by Sellers shall continue in full force and effect
until expiration of the applicable statute of limitations. If a notice of breach
is given within any applicable time period, the Sellers shall be responsible for
all Damages (as defined below) resulting from, arising out of, or related to
such breach, including all Damages suffered after the date notice has been
given.
7.4 Indemnification.
---------------
(a) From and after the Closing Date, Sellers, jointly and severally,
shall defend, indemnify and hold harmless Buyer from and against any and all
claims, actions, causes of action, lawsuits, losses, costs, damages, liabilities
and expenses, including reasonable attorneys' fees and expenses (collectively,
"Damages"), incurred by Buyer that arise out of:
(i) a breach of the representations, warranties, covenants and
agreements given or made by Sellers in this Agreement, any of the Disclosure
Schedules or under or pursuant to any document, certificate, schedule or
instrument delivered by or on behalf of Sellers in connection herewith;
(ii) all matters arising out of or in connection with the operation
of the Business or of Xxxxx & Hirst before the Closing including, without
limitation, all matters referred to in Section 2.23 hereof;
(iii) all Excluded WCC Liabilities and Excluded WCC Assets;
(iv) all Excluded Xxxxx & Xxxxx Liabilities and Excluded Xxxxx &
Hirst Assets;
(v) any claim, action, suit or proceeding asserted or instituted on
the basis of any matter described in clauses (i), (ii), (iii) or (iv) of this
Section 7.4(a).
(b) From and after the Closing Date, Buyer shall defend, indemnify and hold
harmless Sellers from and against any and all Damages incurred by Sellers
arising out of (i) a breach of the representations, warranties, covenants and
agreements given or made by Buyer in this Agreement, any of the Disclosure
Schedules, or under or pursuant to any document, certificate, schedule or
instrument delivered by or on behalf of Buyer in connection herewith; (ii) all
matters arising solely out of or solely in connection with the operation of the
Business after the Closing, and (iii) any claim, action, suit or proceeding
asserted or instituted on the basis of any matter described in clauses (i) or
(ii) of this Section 7.4(b).
23
(c) No claim, demand, suit or cause of action shall be brought under clauses
(i), (ii) or (iii) or this paragraph 7.4 against the Sellers (except for claims,
demands, suits and causes of action arising out of: (i) a breach of the
representations and warranties set forth in Article III, (ii) any matter arising
out of or in connection with the operation of Xxxxx & Xxxxx before the Closing;
(iii) any excluded Xxxxx & Hirst Liabilities; and (iv) the matter referred to in
Schedule 2.15 of the Disclosure Schedules) unless and until the aggregate amount
of Damages under such clauses exceeds $25,000, in which event the Buyer shall be
entitled to indemnification from the Sellers for all Damages under such clauses,
including damages not in excess of $25,000, up to a maximum aggregate liability
of $1,800,000.
7.5 Procedures; Third Party Claims. If a claim to which the
------------------------------
indemnification provisions of Section 7.4 apply, arises out of any suit, claim
------------
or other assertion of liability by a third party (hereinafter collectively, the
"Claims" and individually, a "Claim"), the indemnified party agrees to give
written notice within a reasonable time to the indemnifying party of the
existence of such Claim, it being understood that the failure to give such
notice shall not affect the indemnified party's right to indemnification and the
indemnifying party's obligation to indemnify as set forth in this Agreement,
unless the indemnifying party's ability to contest, defend or settle with
respect to such Claim is thereby demonstrated and materially prejudiced.
The obligations and liabilities of the parties hereto with respect to their
respective indemnities pursuant to Section 7.4 resulting from any Claim, shall
------------
be subject to the following additional terms and conditions:
(a) The indemnifying party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense
or opposition to such Claim, subject to the right of approval by
indemnified party, which right shall not be unreasonably withheld.
(b) In the event that the indemnifying party shall elect not to
undertake such defense or opposition, or within 30 days after
notice of any such Claim from the indemnified party shall fail to
defend or oppose, the indemnified party (upon further written
notice to the indemnifying party) shall have the right to
undertake the defense, opposition, compromise or settlement of
such Claim, by counsel or other representatives of its own
choosing, on behalf of and for the account and risk of the
indemnifying party (subject to the right of the indemnifying party
to assume the defense of or opposition to such Claim at any time
prior to
24
settlement, compromise or final determination thereof).
(c) Anything in this Section 7.5 to the contrary notwithstanding, (i)
------------
if there is a reasonable probability that a Claim may adversely
affect the indemnified party, the indemnified party shall have the
right, at its own cost and expense, to participate in the defense,
opposition, compromise or settlement of the Claim, (ii) the
indemnifying party shall not, without the indemnified party's
written consent, settle or compromise any Claim or consent to
entry of any judgment which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of
such Claim, and (iii) in the event that the indemnifying party
undertakes defense of or opposition to any Claim, the indemnified
party, by counsel or other representative of its own choosing and
at its sole cost and expense, shall have the right to consult with
the indemnifying party and its counsel or other representatives
concerning such Claim and the indemnifying party and the
indemnified party and their respective counsel or other
representatives shall cooperate in good faith with respect to such
Claim.
(d) No undertaking of defense or opposition to a Claim shall be
construed as an acknowledgment by such party that it is liable to
the party claiming indemnification with respect to the Claim at
issue or other similar Claims.
7.6 Set-Off. In the event the indemnifying party is required to make any
-------
payments under Section 7.4 hereof, or in the event the indemnifying party is
required to reimburse the Indemnified Party pursuant to Section 7.4 hereof, the
indemnified party, may, in lieu of seeking such payments from the indemnifying
party or in lieu of seeking reimbursement from the indemnifying party, set-off
such amounts from amounts due to the indemnifying party pursuant to paragraph
1.5 hereof, or if the payment set forth in paragraph 1.5 has already been made
and has been placed in the Escrow Account, the indemnified party may make a
claim against the Escrow Account, whereupon the matter shall be referred to
binding arbitration in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.
7.7 Conduct of Business Pending Closing.
-----------------------------------
(a) Except as set forth in the Disclosure Schedules, during the period
from the date of this Agreement to the date of
25
Closing (the "Closing Date"), WCC and Xxxxx & Xxxxx shall conduct the Business
according to their ordinary and usual course of business, consistent with past
practice. Without limiting the generality of the foregoing, prior to the Closing
Date, neither WCC nor Xxxx & Hirst will, without the prior written consent of
Buyer, engage in any of the following transactions:
(i) enter into any new employment agreement with officers,
directors or employees;
(ii) grant any increase in the compensation payable or to become
payable to the Sellers or any other officers or employees or establish, adopt,
enter into, or make any new grants or awards under, accelerate payment or
vesting, become obligated to grant any awards under, or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option or other
equity, pension, retirement, incentive or deferred compensation, employment,
retention, termination, severance, health, life or other welfare, fringe,
Employee Benefit Plan, or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any current or former directors, officers or
employees, or grant or pay any benefit not required by an existing Employee
Benefit Plan or other plan or arrangement.
(iii) make a commitment for any significant investment of a
capital nature;
(iv) enter into any waiver, release or relinquishment of any
contract rights, except, in each case, in the ordinary course of business and
consistent with past practice;
(v) enter into any new leases for property except in the ordinary
course of business, or terminate any of the Client Agreements;
(vi) acquire the assets of any business or any corporation,
partnership or other business organization or otherwise acquire any assets which
are material in the aggregate to the Business;
(vii) sell, lease or otherwise dispose of any Asset except in the
ordinary course of business consistent with past practice;
(viii) create, assume or incur any encumbrance on any of the Assets;
(ix) amend, terminate or waive any right of substantial value
arising under any of the Client Agreements or otherwise relating to the
Business;
(x) fail to pay current liabilities, including
26
accounts payable and accrued expenses, in the ordinary course of business and
otherwise in accordance with their terms;
(xi) collect any accounts receivable outside of the ordinary course
and in advance of their due dates;
(xii) take or perform any action which would or might cause any
representation or warranty made by Sellers herein to be rendered inaccurate, in
whole or in part, and/or which would prevent, inhibit or preclude the
satisfaction, in whole or in part, of any covenant required to be performed or
satisfied by Sellers at or prior to the Closing and/or the implementation of the
within transaction;
(xiii) agree in writing or otherwise take any of the foregoing actions
or any action which would make any representation or warranty in this Agreement
to be untrue or incorrect; or
(xiv) otherwise engage in any practice, take any action, or enter into
any transaction of the sort described in Section 2.10 above.
(b) During the period from the date of this Agreement to the Closing Date,
Sellers will:
(i) take and perform any and all actions necessary to render accurate
and/or maintain the accuracy of, all of the representations and warranties of
Sellers and WCC herein contained and satisfy each covenant or condition required
to be performed or satisfied by Sellers prior to the Closing and/or cause or
permit the implementation of the within transaction;
(ii) carry on and maintain the Business in substantially the same
form, style and manner as operated by Sellers prior to this Agreement and use
their best efforts to preserve its business organization and its relationships
with its customers, all employees and others having business relations with
Sellers, and not voluntarily engage in any transaction not in the ordinary
course of business without the prior consent of Buyer;
(iii) use their best efforts in good faith to cause each of WCC's
customers including, but not limited to those listed on Schedule 1.2(e) of the
Disclosure Schedules, to indicate their intention to continue to be bound by the
terms and conditions of the Client Agreements;
(iv) use their best efforts in good faith to cause each of its
employees to continue employment with Seller following the Closing Date; and
(v) give prompt written notice to Buyer of any material development
affecting WCC's or Xxxxx & Xxxxx'x assets,
27
clients, liabilities, business, financial condition, operations, results of
operations, or future prospects; and give prompt written notice to Buyer of any
material development affecting Seller's ability to consummate the transactions
contemplated by this Agreement. No disclosure, pursuant to this paragraph "7.7
(b)(v)", however, shall cure any misrepresentation, breach of warranty, or
breach of covenant.
7.8 Continued Disclosure. If any event or state of facts occurs or arises
--------------------
between the earlier of the date hereof (or the date as of which disclosure has
been made with respect to such type of event or state of facts) and the Closing
Date that, had it occurred or arisen prior to or on such date, would have been
required by the terms hereof to be disclosed herein, Seller shall give notice
thereof in writing to Buyer within five days of the happening of such event or
state of facts. The giving of such notice and the disclosure of such event or
state of facts shall in no way change the conditions precedent to the
obligations of Buyer as set forth in Article VII.
-----------
7.9 Full Access. Sellers will permit representatives of the Buyer to have
-----------
full access to all premises, properties, personnel, books, records, contracts
and documents of or pertaining to WCC and Xxxxx & Hirst.
7.10 Exclusivity. WCC and Xxxxx & Xxxxx will not and Sellers will not cause
-----------
or permit WCC or Xxxxx & Hirst to: (i) solicit, initiate, or encourage the
submission of any proposal or offer from any person or entity relating to the
acquisition of any capital stock or other voting securities, or any substantial
portion of the assets of, WCC or Xxxxx & Xxxxx (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 or entity to do or seek any of the foregoing. The Sellers
will not vote the WCC Stock or the Xxxxx & Hirst Stock in favor of any such
acquisition structured as a merger, consolidation, or share exchange. The
Sellers will notify the Buyer immediately if any person or entity makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.
7.11 Tax Returns. Sellers will provide to Buyer, within 45 days following
-----------
the Closing Date, draft federal and state tax returns and draft cash basis
financial statements for WCC and Xxxxx & Xxxxx covering, in each instance, the
period from January 1, 1998 to the Closing Date.
28
ARTICLE VIII
CLOSING DELIVERIES
------------------
8.1 Closing. Subject to the conditions contained in this Agreement, the
-------
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at a location mutually agreeable to Buyer and Seller at 10:00 a.m.
Pacific Coast Time on May 29, 1998. The effective time for purposes of
apportionments and other matters involving allocations for the Closing shall be
11:59 p.m., Pacific Daylight Time, on May 29, 1998.
8.2 Deliveries.
----------
(a) At the Closing, Buyer shall deliver to Sellers:
(i) The Purchase Price pursuant to Section 1.4 hereof;
-----------
(ii) Certified copies of the resolutions of the Board of
Directors of Buyer authorizing Buyer to execute and deliver this Agreement, any
agreement or document contemplated hereby, and to consummate the transactions
contemplated hereby and thereby;
(iii) A certificate of an executive officer of Buyer, dated the
Closing Date, certifying that: (A) all representations and warranties made by
Buyer in Article III hereof were true and correct when made, and are true and
correct on the Closing Date, except for changes permitted or contemplated by
this Agreement and except that representations which are specifically made as of
a specified date shall be true and correct as of such earlier date; and (B) all
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by Buyer on or prior to the Closing Date have been performed or
complied with;
(iv) A duly executed Employment Agreement, in substantially the
form attached as Exhibit A-1 hereto; and
(v) Opinion of Buyer's counsel.
(b) At the Closing, Sellers shall deliver to Buyer:
(i) for the WCC Stock and the Xxxxx & Hirst Stock
accompanied by executed assignment documents or endorsed in blank;
(ii) Possession of all assets used in the Business, except for
Excluded WCC Assets;
(iii) All contracts, leases, agreements or other
29
documents, books, financial and accounting records of WCC not previously
delivered or not located on the premises of WCC, to the extent such items are
used in the Business, and are not Excluded Assets or items related to Excluded
Assets and all documents, books, financial and accounting records of Xxxxx and
Xxxxx not previously delivered to Buyer;
(iv) A duly executed Employment Agreement, in substantially the
form attached as Exhibit A-1 hereto;
(v) A certificate of the Sellers, dated as of the Closing Date,
certifying that: (i) all representations and warranties made by Sellers in
Article II and Article III hereof were true and correct when made, and are true
and correct on the Closing Date except for changes permitted or contemplated by
this Agreement and except that representations which are specifically made as of
a specified date shall be true and correct as of such earlier date; and (ii) all
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by Sellers on or prior to the Closing Date have been performed
or complied with;
(vi) An opinion of Sellers' counsel in a form to be mutually
agreed by the parties;
(vii) Evidence satisfactory to the Buyer of payment of all payroll,
payroll withholding taxes and vacation accrued but not due as of the end of
business as of the date of Closing;
(viii) All documents required by Article V hereof; and
(ix) All other documents required by this Agreement.
ARTICLE IX
POST-CLOSING COVENANTS AND AGREEMENTS
-------------------------------------
9.1 Further Assurances. If at any time and from time to time after the
------------------
Closing, Buyer determines that any further assignment, consent to assignment or
other document or any further action is necessary or desirable to carry out the
purposes of and to make effective the transactions contemplated by this
Agreement, Sellers agree to execute and deliver all such instruments and to take
such actions as may be reasonably necessary or advisable for such purpose.
9.2 Covenant Not to Compete; Nondisclosure and Confidentiality.
----------------------------------------------------------
(a) Non-Compete. During the later of (i) the employment of Xxxxxx with
Buyer, and one (1) year thereafter, or (2) for a
30
period of five (5) years from the date of this Agreement (provided that with
respect to Sellers other than Xxxxxx, the period of this covenant not to compete
shall terminate five (5) years from the date of this Agreement), Sellers shall
not directly or indirectly through representatives agents or otherwise (i)
engage in competition with the Business sold hereunder, its successors or
assigns within 150 miles from Brea, California, and within 150 miles from any
office currently or for the next twelve months under the management or direction
of Xxxxxx (hereafter the "Territory") or with respect to WCC's or Buyer's
"customers" as defined in this paragraph; or (ii) provide information, solicit
or sell for, own, or organize any interest in, either directly or through any
affiliate or subsidiary corporation, partnership or other entity, or become
engaged by, act as agent for, or in any manner assist, any person, corporation
or other entity that is directly or indirectly in competition with Buyer or
Sellers' Business, or their successors or assigns in the Territory or with
respect to Buyer's or WCC's "customers" as defined in this paragraph. Sellers
further agree that within the restrictive period, they will not in any way
attempt to divert from Buyer or WCC any business whatsoever and Sellers further
agree that during said restrictive period they will not influence or attempt to
influence any of the customers of Buyer or Sellers not to do business with Buyer
or WCC; Sellers further agree that they will not make or permit the making of
any public announcement or statement of any kind that they were formerly
employed or connected with Buyer or WCC, which announcement has as its purpose
directly or indirectly the intent to violate the provisions of this Agreement.
The term "customer", as used herein, shall mean any person or entity which
Sellers have contact with and do business with for Buyer or WCC at any time
while employed by WCC or Buyer. None of the foregoing restrictions upon Sellers
shall restrict their investment in up to 2 percent of the outstanding stock of
any publicly-traded corporation.
(b) Confidential Information. During the term set forth in paragraph (a)
and thereafter, Sellers shall not divulge any of Buyer's or WCC's business
contacts, customers, suppliers, technology, know-how, trade secrets, marketing
techniques, books and records, computer programs, lists, plans, databases, or
any other confidential or proprietary information or make available to any other
persons any documents, files or other papers concerning the foregoing or the
Business or financial affairs of WCC or Buyer. During the term set forth in
paragraph (a) Seller shall not solicit the employment of any employee or
consultant currently or provisionally employed or retained by Buyer or WCC.
(c) Sellers have carefully considered the nature and extent of the
restrictions upon them and the rights and remedies conferred upon Buyer under
this Agreement and hereby acknowledge and agree that the same are reasonable in
time and territory.
(d) It is stipulated that a breach by Sellers of the
31
restrictive covenants set forth herein will cause irreparable damage to Buyer
and that in the event of any breach of the provisions under this Section, Buyer,
in addition to any other remedies it has, shall be entitled to an injunction
restraining Sellers from violating or continuing a violation of the restrictive
covenants herein contained. It is further stipulated that the existence of any
claim or cause of action on the part of Sellers against Buyer, whether arising
from this Agreement or otherwise shall in no way constitute a defense to the
enforcement of the restrictive covenants contained herein, and the restrictive
periods in which Buyer is entitled to an injunction shall be extended in an
amount which equals the time period which the Sellers are or have been in
violation of the restrictive covenants contained herein. In the event of a
breach of the restrictive covenants contained in the Agreement, Sellers, jointly
and severally, agree to the payment of or reimbursement of, Buyer's reasonable
attorney's fees and disbursements incurred in enforcing any such provision. The
provisions of this Section shall survive the Closing Date. If any of the
provisions of this Section shall be held invalid, illegal, or unenforceable by
the final decision of a court of competent jurisdiction and all appeals
therefrom shall have failed or the time for such appeals shall have expired the
provision or provisions shall be deemed eliminated from this Agreement to such
jurisdiction but the remaining provisions shall nevertheless be given full
effect. In the event this Agreement or any portion hereof is more restrictive
than permitted by the law of the jurisdiction in which enforcement is sought,
this Agreement or such portion shall be limited in that jurisdiction only to the
extent required by the law of that jurisdiction. If a court of competent
jurisdiction shall determine that the terms of this Section are partially or
wholly inoperative, unenforceable or invalid in a particular case because of
their time or geographic scope or for any other reason such court shall have the
power to limit such time or geographic scope or otherwise to recast the terms of
this Agreement in such case so as to permit its enforcement to the greatest
extent permitted by applicable law.
(e) Nothing in this Section 9.2 shall be interpreted as restricting the
ability of the Sellers to continue to conduct the business previously conducted
by Xxxxx & Xxxxx involving the purchase and resale of telecommunications
installation-related materials.
9.3 Resignations. Immediately following Closing, Xxxxxx and Xxxxxxxx shall
------------
resign as directors, and Xxxxxxxx shall resign as an officer and employee of
WCC.
ARTICLE X
TERMINATION; WAIVER
-------------------
10.1 Termination. This Agreement may be terminated at any time
-----------
32
prior to the Closing as follows:
(a) the Buyer and the Sellers may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving written notice to
the Sellers at any time prior to the Closing (i) in the event the Sellers have
breached any representation, warranty, or covenant contained in this Agreement
in any material respect, the Buyer has notified the Seller of breach, and the
breach has continued without cure for a period of 10 days after the notice of
breach, or (ii) if the Closing shall not have occurred on or before June 30,
1998, by reason of Sellers being unable or unwilling to effect a Closing on or
before, June 30, 1998, or by reason of the failure of any condition precedent
under Article V hereof (unless the failure results primarily from the Buyer
itself breaching any representation, warranty, or covenant contained in this
Agreement), or (iii) if Buyer in its sole discretion is not satisfied with the
results of its continuing legal, business and accounting due diligence regarding
Seller; and
(c) the Sellers may terminate this Agreement by giving written notice to the
Buyer at any time prior to the Closing (i) in the event the Buyer has breached
any representation, warranty, or covenant contained in this Agreement in any
material respect, any of the Sellers has notified the Buyer of the breach, and
the breach has continued without cure for a period of 10 days after the notice
of breach, or (ii) if the Closing shall not have occurred on or before June 30,
1998, by reason of Buyer being unable or unwilling to effect a Closing on or
before June 30, 1998, or by reason of the failure of any condition precedent
under Article VI hereof (unless the failure results primarily from the Sellers
itself breaching any representation, warranty, or covenant contained in this
Agreement).
10.2 Effect of Termination; Specific Performance.
-------------------------------------------
(a) In the event of the termination of this Agreement pursuant to
Section 10.1 hereof, notice thereof shall be promptly given by the terminating
party to the other party and thereafter this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party or its
directors, officers or stockholders, except that (i) the provisions of Section
7.1 hereof shall remain in effect and (ii) nothing in this Section 10.2 shall
relieve any party to this Agreement from liability for breach of this Agreement
or any misrepresentation hereof, including pursuant to paragraph (b) hereof.
(b) In the event of a breach or threatened breach by Sellers or Buyer
of any of the agreements and obligations set forth herein, monetary damages or
the other remedies at law that may be
33
available to the non-breaching party for such breach or threatened breach will
be inadequate and, without prejudice to the nonbreaching party's right to pursue
any remedies at law or in equity available to it for such breach or threatened
breach, including without limitation the recovery of damages, the non-breaching
party will be entitled to injunctive relief as a means of having the breaching
party comply with the provisions herein.
10.3 Extension; Waiver. At any time prior to the Closing, the parties
-----------------
hereto may (i) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein by the other party or in any
document, certificate or writing delivered pursuant hereto by the other party,
or (iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of either party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. No waiver of any breach of a provision of this Agreement
shall constitute or be deemed a waiver of any other breach of the same or any
other provision of this Agreement, and no delay or failure to take action with
respect to any breach or provision of this Agreement shall constitute or be
deemed a waiver of the right to enforce this Agreement and to take action
against such breach or any subsequent breach of the same or any other provision.
ARTICLE XI
MISCELLANEOUS PROVISIONS
------------------------
11.1 Entire Agreement; Amendment. Except with respect to those documents
---------------------------
signed in connection with the Closing of the transactions contemplated by this
Agreement and those documents that, by their terms, modify or supersede this
Agreement, this Agreement (including the Disclosure Schedules), contains the
entire agreement between the parties hereto and supersedes all prior oral or
written agreements, promises, representations, commitments or understandings
with respect to the matters provided for herein. This Agreement may be modified
or amended only by a writing duly executed by Buyer and Sellers, which
modification or amendment shall be binding upon all of the parties hereto.
11.2 Assignment and Binding Effect. This Agreement and the rights and
-----------------------------
obligations of any party hereunder may not be assigned by any party without the
prior written consent of the other party hereto. All covenants, agreements,
statements, representations, warranties and indemnities in this Agreement by and
on behalf of either of the parties hereto shall bind and inure to the benefit of
their respective heirs, successors and permitted assigns of the parties hereto.
34
11.3 Waivers. No waiver of any of the provisions of this Agreement shall be
-------
deemed or shall constitute a continuing waiver, and no waiver shall be binding
unless executed in writing by the party making the waiver.
11.4 Notices. All notices, demands or other communications which may be or
-------
are required to be given by any party to any other party pursuant to this
Agreement, shall be in writing and shall be mailed by certified mail, return
receipt requested, postage prepaid, or transmitted by hand delivery, national
overnight express, telegram or facsimile transmission, addressed as follows:
(a) If to Buyer:
Xxxxxx International, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Xx. Vice President-Finance
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
XxXxxxx, XxXxxxx & Xxxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
(b) If to Sellers:
c/o WCC Telephone Services, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx X
Xxxx, XX 00000
with a copy to: Xxxx Xxxxxx
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
until such time as either party notifies the other of a change of address. Each
notice or other communication which shall be mailed, delivered or transmitted in
the manner described above shall be deemed sufficiently given and received for
all purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, or the affidavit of messenger or telefax
transmission log being deemed conclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
35
11.5 Governing Law; Jurisdiction and Venue. This Agreement shall be
-------------------------------------
governed by and construed in accordance with the laws of the State of
California, without giving effect to the principles of conflicts of laws
thereof. Each party hereby submits to the personal jurisdiction of the United
States District Court for the District of New Jersey or any court of the State
of New Jersey, and hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
court. In addition, each party hereby irrevocably and unconditionally waives, to
the fullest extent permitted by law, (i) any objection which it may now have or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any related matter in such court, (ii)
the defense of an inconvenient forum to the maintenance of any suit, action or
proceeding in any such court, and (iii) trial by jury in any such suit, action
or proceeding.
11.6 Counterparts; Execution. To facilitate execution, this Agreement may
-----------------------
be executed in as many counterparts as may be required, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute but a single agreement.
11.7 Effective Time of Closing. Notwithstanding the time at which Closing
-------------------------
takes place, the Closing shall be deemed to be effective as of 11:59 p.m.
Pacific Daylight Time on the Closing Date.
11.8 Severability. Any provision of this Agreement which is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11.9 No Third Parties Benefited. This Agreement is made and entered into
--------------------------
for the sole protection and benefit of the parties hereto, their successors and
assigns, and no other person or persons shall have any right of action under
this Agreement.
11.10 Recitals, Schedules and Exhibits. The recitals, schedules, and
--------------------------------
exhibits to this Agreement are incorporated herein and, by this reference, made
a part hereof as if fully set forth at length herein.
11.11 Section Headings. The section headings used herein are inserted for
----------------
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
36
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
or caused this Agreement to be executed on its behalf, as of the date first
above written.
BUYER:
XXXXXX TELECOM, INC.
By:________________________________
Its:_______________________________
SELLERS:___________________________
-----------------------------------
Xxx Xxxxxx
-----------------------------------
Xxx Xxxxxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxxxx Xxxx Xxxxx
