Exhibit 2.6
STATE OF TEXAS ss.
ss. ASSET PURCHASE AGREEMENT
COUNTY OF PECOS ss.
This Asset Purchase Agreement is made and entered into this the 30th
day of September, 2003, by and between WIRELESS FRONTIER INTERNET, INC., a
Texas. (hereinafter referred to as "Buyer") and Xxxxxxx & Xxxxxxxx, LTD.
L.L.P., (hereinafter referred to as "Seller"), and is as follows:
WITNESSETH:
WHEREAS, Seller is the owner and holder of certain personal property,
equipment and assets operated under the name of X-Ramp (the "Business"); and
WHEREAS, Buyer desires to purchase and acquire certain assets as well as
lease certain assets incidental to such business.
NOW, THEREFORE, FOR AND IN CONSIDERATION of the terms and provisions
hereof, Seller and Buyer do hereby and herein covenant and agree as follows:
I.
PURCHASE AND SALE OF ASSETS.
On the terms and subject to the conditions herein set forth, on the
Closing Date, Seller shall, and does hereby agree to, convey, transfer, sell and
deliver unto Buyer, for the consideration hereinafter provided, all assets
owned, held or claimed by Seller described or referenced in Exhibit "A" (the
"Assets") attached hereto including, but not limited to, equipment, accounts
receivable, trademarks, if any, trade name, user base, client list, files and
information, goodwill, exclusive use of the domain name xxxxx.xxx" and any other
associated names, all of Seller's rights under its contracts, licenses and
agreements and any and all other assets or rights used, owned or held in
connection with the operation of the businesses known as X-Ramp at the locations
hereinafter delineated as well as the assumption of specific debts delineated in
Exhibit "B" attached hereto. However, the Assets shall not include cash on hand
or currently in the name of the Business deposited in a Depository Institution.
II.
PURCHASE PRICE
The purchase price shall be calculated as follows: Buyer shall pay Seller
$185.00 per customer for 750 "Dial Up" customers and $586.00 per customer for 50
wireless customers and $46,950.00 for the equipment delineated in Exhibit "A"
for a total purchase price of $215,000.00, subject to the outstanding debt of
$50,000.00 bringing the total unencumbered value of the Assets to $165,000.00.
This unencumbered value of the business will be paid in one issue of Ru1e 144
restricted shares of Buyer payable based on the trading price of Buyer's common
stock on April 16, 2004. Additionally, Buyer agree to place in escrow a
sufficient number of free trading shares of Buyer's common stock pursuant to
separate escrow agreement to pay Seller's outstanding debt of $50,000.00 which
will be liquidated piecemeal and the sales
proceeds thereof paid directly to the debt holder, over a 30 to 60 day period
following the closing date. During such time period, Buyer shall make Seller's
debt payments and absorb the cost of liquidating the stock placed in escrow.
III.
LEASE OF ASSETS
A. Personal Property Lease. On the terms and subject to the conditions
herein set forth, on the Closing Date, Seller shall, and does hereby agree to
lease to Buyer, for the consideration hereinafter provided for, any encumbered
assets owned, held or claimed by Seller, if any. Upon satisfaction of the
outstanding debt described or referenced above all such encumbered assets will
transfer and convey unto Buyer as if originally transferred with the
unencumbered assets.
B. Real Property Lease. On the terms and subject to the conditions herein
set forth, on the Closing Date, Seller shall, and does hereby agree to assign
and Buyer hereby agrees to assume the real property lease owned, held or claimed
by Seller used in connection with the operation of the Business, provided the
landlord under the lease consents thereto.
IV.
ADJUSTMENTS OF SALES PRICE
Buyer and Seller shall make the following adjustment at closing:
1. Buyer and Seller agree to prorate all personal property taxes owed for the
year 2003 on the Assets as the 30th of September, 2003.
V.
TIME OF CLOSING
A. The Closing Date pursuant to the terms hereof shall be on or before the
21st day of November, 2003, at 2:00 p.m. but effective as of the close of
business the 30th day of September, 2003. Closing shall be held at
Strategic Abstract & Title Corporation, 000 X. Xxxx, Xxxx Xxxxxxxx, Xxxxx,
unless another time and place are mutually agreed upon by the parties
hereto.
B. At the Closing, Seller and Buyer shall deliver all documents and payments,
necessary or desirable to convey to Buyer all right, title or interest in
the Assets in form suitable to both Buyer and Seller and Buyer's and
Seller's counsel including:
(1) Seller shall prepare and deliver to Buyer an assumption agreement for the
lease, ready for execution for the premises of the Business
(2) Seller shall deliver to Buyer any and all Certificates of Title necessary
for the transfer of title; if any, of the Assets;
(3) Seller shall deliver to Buyer an abandonment, ready for filing, of any
assumed names of the Business;
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(4) Seller shall provide a UCC certificate from the Secretary of State of
Texas, showing no debt owing or liens on the Assets.
(5) Buyer shall, if necessary, prepare and execute at closing a DBA for the
Business.
(6) Seller shall provide Buyer a Certificate of Account Status showing good
standing from the Comptroller of Public Accounts of the State of Texas.
(7) Seller shall deliver to Buyer a Xxxx of Sale in form and substance
suitable to convey the Assets;
(8) Seller will prepare and execute an Assignment of the Contracts delineated
in Exhibit "C."
(9) Buyer and Seller will execute the Escrow Agreement for the benefit of
Seller.
(10) Buyer shall irrevocably instruct stock transfer agent to issue stock to
the Seller as delineated in this Agreement, on April 16, 2004.
(11) Seller shall provide Corporate Resolutions from the Shareholders and
Directors of the General Partner of Seller authorizing the sale of all the
assets of Seller and the entry into this contract as well as authorizing
the President to execute any documents necessary to consummate the
transaction.
VI.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby warrants and represents to Buyer that:
A. Organization and Standing. Seller is a Limited Liability Company duly
organized, validly existing and in good standing under the laws of the
State of Texas and has the requisite power and authority to carry on its
business as it is now being conducted.
B. Seller represents and warrants that it is the sole owner of the Assets
referenced and described in Exhibit "A" attached hereto or referenced
herein with full right, power and authority to sell, lease or dispose of
same, and that the Assets shall be conveyed or leased to Buyer free and
clear of any debt, lien or other encumbrance whatsoever.
C. To the extent relating to or affecting the Assets being conveyed or Leased
hereby, Seller will operate (up to the Closing Date) the Business in the
usual and ordinary manner and has not:
(1) Borrowed or agreed to borrow any funds or incurred, or become subject to,
any obligation or liability (absolute or contingent) covering the Assets
conveyed hereby;
(2) Except in the ordinary course of business and consistent with the past
practice of Seller, sold, transferred or otherwise disposed of, or agreed
to sell, transfer or otherwise dispose of any of the Assets, canceled, or
otherwise terminated, or agreed to cancel or otherwise terminate, any
debts or claims owed to the Seller in connection with the Assets;
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(3) Entered or agreed to enter into any agreement or arrangement granting any
preferential rights to purchase any of the Assets (including management
and control thereof), or requiring the consent of any party to the
transfer and assignment of the Assets (including management and control
thereof);
(4) Suffered any damages, destruction or losses or waived any rights of value
which in the aggregate are material, considering its business;
(5) Other than in the ordinary course of business, made or permitted any
amendment or termination of any contract, agreement or license to which it
is a party or by which it or any of the Assets are subject;
(6) Except as shown in Exhibit "D", incurred or become subject to any claim or
liability for damages or alleged damages for actual or alleged negligence
or other tort or breach of contract which is not fully covered by
insurance underwritten by responsible insurers; and
(7) Entered into, agreed to enter into, or consummated any other transaction
other than in the ordinary course of business.
D. Seller will maintain in a good and workmanlike manner all of the Assets
and will continue to operate and manage said property in a reasonable and
prudent manner.
E. Seller will keep all of the Assets in its recent condition and state of
repair, reasonable wear excepted and after the date of this Agreement,
Seller will not enter into any lease, service, maintenance, or management
agreement with respect to all or any portion of the Assets without the
written consent of the Buyer.
F. Seller owes no obligations, contracted no liabilities or is in breach or
default of any agreement affecting its business, or to which any of the
Assets are subject, or which might affect the consummation of the purchase
and sale described in this Agreement, which have not been made known to
Buyer in writing.
G. Seller further represents that Seller is not conveying the Business or
Assets in contemplation or anticipation of filing bankruptcy.
H. Seller warrants and represents that copies of actual tax returns sent to
the Internal Revenue Service were given to Buyer or Buyer's
representative, for their inspection.
I. Except as disclosed in writing to Buyer, Seller has not incurred, and
neither it nor any of the Assets are subject to, any liabilities or
obligations (accrued, absolute, contingent or otherwise), other than
unsecured trade accounts payable arising in the ordinary course of
business since September 30, 2003. There are no facts in existence on the
date hereof and known to Seller that might reasonably serve as the basis
for any material liabilities or obligations of Seller not disclosed in
writing to Buyer.
J. To the best of Seller's knowledge, all federal, state, county, local and
other taxes, including, without limitation, income taxes, corporate
franchise taxes, and sales and ad
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valorem taxes, due and payable by Seller on or before the Closing Date
have been paid, and Seller has filed all tax returns and reports required
to be filed by it with all such taxing authorities. The liabilities for
federal, state, county, local and other taxes reflected in the balance
sheet represent reasonable and adequate provision for the payment of all
accrued and unpaid federal, state, county, local and other taxes of Seller
for all periods ending on or prior to September 30, 2003, whether or not
disputed. No assessments of deficiencies have been made against Seller,
and no extensions of time are in effect for the assessment of such
deficiencies.
K. To the best of Seller's knowledge, Seller warrants that there are no
claims, actions, suits, proceedings or investigations pending or
threatened against or affecting Seller or any of the Assets, at laws or in
equity, or before or by any court or federal, state, municipal or other
governmental department, commission, board, agency, or instrumentality.
Seller is not subject to any continuing court or administrative order,
writ, injunction, or decree applicable to it or to its business, property,
or employees, and Seller is not in default with respect to any order,
writ, injunction or decree of any court or federal, state, municipal or
other governmental department, commission, board, agency or
instrumentality.
L. Seller shall execute and deliver, at Closing, such Bills of Sale, Leases,
Assignments, Escrow Agreements and other instruments deemed necessary or
proper to transfer to Buyer all of the Assets being sold pursuant to this
Agreement, as is delineated in Section V of this Agreement. All such
documents shall be in form and substance satisfactory to Seller and Buyer.
M. Seller shall prepare appropriate closing instructions directing payment,
from the purchase price due Seller, of all such matters that need to be
considered, such as applicable prorations, if any, which would pertain to
the Assets covered hereunder, and any just claims against Seller received
prior to the time set for consummation of the purchase and sale described
in this Agreement, which should have the effect of reducing the Purchase
Price.
VII.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby warrants and represents to Seller that:
(a) Buyer has had access to Seller's books and records and an opportunity
to ask questions concerning the books, records, and Assets and Buyer has
satisfied themselves that the business is consistent with their needs and
expectations; and
(b) Buyer has inspected the Assets and has obtained a third party to
inspect the Assets, and has found such property to be in good working condition,
reasonable wear and tear accepted, and agrees to accept the same "AS IS, WHERE
IS" condition.
(c) Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas, and has full and corporate power
and authority to conduct its business as it is now being conducted and enter
into and carry out the provisions of this Agreement.
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(d) Neither the execution and delivery of this Agreement, nor the
consummation of the transaction contemplated hereby, will violate any provisions
of the Articles of Incorporation or By-Laws of Buyer or violate any provisions
of any agreement of other obligation to which Buyer is a party of by which Buyer
is bound or to which its assets are subject, or violate or result in a breach
of, or constitute a default under, any judgment, order, decree, rule or
regulation of any court or government agency to which Buyer is subject.
(e) The execution and delivery and performance of this Agreement has been
authorized by the Board of Directors of Buyer, and this Agreement constitutes
the valid and legally binding obligation of Buyer, enforceable in accordance
with its terms.
VIII.
RISK OF LOSS
All risk of ownership and loss as to the Assets, whether by fire,
vandalism, theft, casualty, or otherwise shall remain with Seller until Closing,
as well as all rights under Seller's casualty and property insurance. If any
such destruction, loss or damages amounts to more than FIFTY THOUSAND DOLLARS
($50,000.00), Buyer may, at its option terminate this Agreement. All risk of
ownership and loss to the Assets, whether by fire, vandalism, theft, casualty,
or otherwise will belong to Buyer after the Closing.
IX.
ASSUMPTIONS OF LIABILITIES
Other than as specifically set forth in this Agreement, Buyer shall not
and does not assume any of Seller's liabilities, including, but not limited to,
any liabilities to any employees of Seller, all taxes of any kind (including,
without limitation, all income, franchise, excise and employment taxes,
including any interest and penalties thereon), and liabilities arising under any
suits, actions or proceedings against Seller or the Assets, and any other debts
or contingencies or any other liabilities of Seller, whether fixed or
contingent, and all such liabilities shall remain the sole obligations of
Seller.
X.
COVENANT NOT TO COMPETE
Buyer and Seller agree that for a period of five (5) years from and after
the Closing Date hereof, (the "Restriction Period") Seller, and Seller's
partners and its or their officers and directors (which shall be collectively
referred to as seller in this section) shall not engage in any business related
to the provision of internet services within a 150 mile radius of any office or
area of service of Seller including Seller's current locations, as well as any
markets entered into during the negotiations and consummation of this agreement
and any markets the Seller anticipated entering into during negotiations of this
agreement (the "Restricted Area.") The term "Internet Services" as used herein
being defined as dial up Internet access, and broadband wireless internet
access, including but not limited to, ISDN, DSL, Cable, Satellite access, but
does not include web hosting and design. Further, during the Restriction Period,
Seller shall not, directly or indirectly, whether individually or as an
employee, contractor, agent, officer, director, or owner (directly or
indirectly) of an entity, engage in a business providing Internet Services in
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or to the Restricted Area. During the Restriction Period and within the
Restriction Area, Seller further agrees that it shall not, either directly or
indirectly, through any person, firm, association or corporation with which they
are now or may hereafter become associated, cause, induce or encourage any
present or future employee of Buyer or of any of its affiliates to leave the
employ of Buyer or any such affiliate to accept employment with it, with any
such person, firm, association, or corporation, or with any business that
conducts a business in competition with or similar to that to be conducted by
Buyer. The foregoing agreement not to compete shall not be held invalid or
unenforceable because of the scope of the territory or actions subject thereto
or restricted thereby, or the period of time within which such agreement is
operative, but any judgment of a court of competent jurisdiction may define the
maximum territory of action subject to and restricted by this paragraph and the
period of time during which such covenant is enforceable. Seller consents to the
entry against it of injunctive relief in the event of its breach of this
covenant.
XI.
CONDITIONS AND OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement shall, at the option of
Buyer, be subject to the following conditions:
A. Buyer shall not have discovered any material error, misstatement, or omission
in the representations or warranties made by Seller throughout the provisions of
this Agreement.
B. Affidavit of Seller. Buyer shall have received an affidavit of Seller
reasonably satisfactory in form and content to Buyer's counsel to the effect:
(ii) that Xxxxx Xxxxxxxx is the majority owner of the Business and Seller has
full and exclusive right to sell the Assets (iii) that the Agreement has been
validly authorized and is binding obligation of Seller, (iv) that the Assets
being acquired by Buyer pursuant to the Agreement are free and clear of any
liens and encumbrances, and Buyer shall receive good and marketable title from
the Seller to the Assets as of the Closing Date; (v) that any lawsuits filed
against the Seller or the Businesses have been settled and Seller has set aside
funds to pay such settlement. and such other matters as Buyer may reasonably
require. In rendering such opinion, Buyer's counsel shall be entitled to rely as
to factual matters upon certificates and other items attached to the affidavit
and satisfactory to Buyer.
C. Seller shall have fully complied with the provisions hereof.
XII.
INDEMNIFICATION
Buyer agrees only to acquire the Assets of the Seller described herein and
nothing herein shall be construed as an assumption by the Buyer of any of the
Seller's liabilities or obligations Except as otherwise permitted by this
Agreement. Seller agrees to indemnify and hold and save Buyer free and harmless
from any and all claims, demands, damages, suits, causes of action, lawsuits,
liability, costs and expenses (including Buyer's attorney's fees in defending
themselves as necessitated by such action) of any kind or character incurred in
connection with, resulting from or on account of:
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(a) All debts, accounts payable, obligations or liabilities of the Seller
for all periods prior to the closing date only.
(b) Any applicable federal, state, county, city, or other taxes of any
nature whatsoever by Seller, incurred, accrued or relating to property owned or
leased for all periods prior to closing date.
(c) Any violations, up to the closing date, of any federal, state, local
or environmental laws, statutes or regulations applicable to the business.
XIII.
EMPLOYEES
Seller shall terminate employment of all employees of the Business other
than those currently on disability leave, upon the actual closing date of this
Agreement. Seller will pay wages through that date, and Buyer shall be
responsible thereafter. It is further agreed that all salaries, wages, vacation
pay, sick leave pay, all other compensation of any form whatsoever, accruing
prior to the closing date, will be fully and finally paid to all employees,
independent contractors, agents and servants of the Seller, at closing, at the
sole risk, cost and expense of the Seller. Buyer will rehire selected employees
upon satisfactory interviews and the employees' execution of noncompete and
nondisclosure agreements.
XIV.
DEFAULT
If Seller or Buyer fail to comply with any of the terms hereof, either
party may terminate this contract and seek any relief as may be provided by law.
XV.
INVALID PROVISIONS
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under the present or future laws, such provision shall be fully
severable; the Agreement shall be construed and enforced as if such provision
had never comprised a part of this Agreement and full force and effect and shall
not be affected by the illegal, invalid, or unenforceable provisions or by its
severance from this Agreement.
XVI.
MISCELLANEOUS PROVISIONS
A. This Agreement is governed by the laws of the State of Texas.
B. Each individual party shall be responsible for their own legal expenses.
C. Buyer acknowledges that this Agreement and its contents are not public and
Buyer agrees to maintain the confidentiality, as best it can pending closing of
this Agreement and all its terms, conditions and covenants.
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D. This Asset Purchase Agreement, along with the Xxxx of Sale, assignment and
assumption of Contracts and Escrow Agreement shall constitute the entire
agreements between the parties hereto with respect to the subject matter hereof.
This Agreement may not be amended, except by an instrument in writing, signed by
the Buyer and the Seller.
E. This agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
F. The paragraph captions in this Agreement are for the convenience only and
shall not in any way limit or be deemed to construe and interpret the terms and
provisions hereof. All words herein in the neuter gender shall be deemed to
include words in the male or female gender, and vice versa, whenever the context
shall so require. Likewise, all words herein in the singular shall be deemed to
include words in the plural, and vice versa, whenever the context shall so
require.
XVII.
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All statements contained herein, in any exhibit hereto, or in any
certificate or other written instrument delivered by or on behalf of Seller or
Buyer pursuant to this Agreement, or in connection with the transactions
contemplated hereby, shall be deemed representations and warranties by Seller or
Buyer, as the case may be. Regardless of any investigation at any time made by
or on behalf of any party hereto, or of any information any party may have in
respect thereof, all covenants, agreements, representations and warranties made
hereunder, or pursuant hereto, or in connection with the transactions
contemplated hereby, shall survive the Closing and shall continue in effect
thereafter for a period of two (2) years after the Closing Date, and five (5)
years with regard to the Covenant Not to Compete.
XVIII.
NOTICES
Whenever in this Agreement notice is required or permitted to be given by
either party or the other, such notices shall be in writing and sent by
certified or registered mail, return receipt requested, addressed as follows:
Buyer: Wireless Frontier Internet, Inc
000 X. Xxxxxxxxx
Xxxx Xxxxxxxx, Xxxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxx, Xx.
0000 X. Xxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Seller: Xxxxxxx & Xxxxxxxx Ltd., L.L.P.
00 Xxxxxxxxxx
Xxxxxx,Xxxxx 00000
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With a copy to: Xxxxxxx X. Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Notices shall be deemed delivered when deposited in the United States mail
as above provided. Changes of address by either party must be by notice to the
other in the same manner as above specified.
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as
of the ___ day of November, 2003 but effective for all intents and purposes as
of the 30th day of September, 2003.
Seller:
Xxxxxxx & Xxxxxxxx, LTD. L.L.P.
By: Xxxxxxx & Xxxxxxxx, Inc.
its General Partner
By: /s/ Xxxx Xxxxxxx
---------------------------------
Xxxx Xxxxxxx, President
Buyer:
WIRELESS FRONTIER INTERNET, INC.
By: /s/ Xxxx Xxxxxxxx
----------------------------------
XXXX XXXXXXXX, CEO
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COUNTY OF UVALDE ss.
This instrument was acknowledged before me on this 20 day of November,
2003, by Xxxx Xxxxxxx, President of Xxxxxxx & Xxxxxxxx, Inc., the General
Partner of Xxxxxxx & Xxxxxxxx Ltd. L.L.P.
/s/ [Notary Public, State of Texas]
------------------------------------
Notary Public, State of Texas
STATE OF TEXAS ss.
COUNTY OF PECOS ss.
This instrument was acknowledged before me on this 20 day of November,
2003, by XXXX XXXXXXXX, CEO OF WIRELESS FRONTIER INTERNET, INC.
/s/ Xxxxx Xxxxxxx
--------------------------------
Notary Public, State of Texas
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