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EXHIBIT 2.7
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (the "Agreement"), is made this
2nd day of November, 1998, by and between Anserphone, Inc., a Delaware
corporation ("Buyer"), Anserphone Systems, Inc., an Alabama corporation (the
"Seller"), and the Stockholders of the Seller listed on the signature pages
hereto (the "Stockholders", and each individually, a "Stockholder").
W I T N E S S E T H :
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WHEREAS, the Seller is principally engaged in the business of
supplying operator, answering and telemarketing services (the "Business") and is
the end user subscribers for certain toll free telephone numbers listed on
Schedule 2.1(q) hereto (the "Toll Free Telephone Numbers");
WHEREAS, the Stockholders are presently the owners of all of
the issued and outstanding capital stock of the Seller; and
WHEREAS, the Seller desires to sell to Buyer, and Buyer
desires to purchase from the Sellers substantially all of its assets and
operations subject to certain liabilities, all in the manner and subject to the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereby agree as follows:
1. TERMS OF ACQUISITION.
1.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and
conditions of this Agreement, on the Effective Date (as defined in Section 1.6
below), the Seller shall, and the Stockholders shall cause the Seller to, sell,
transfer, convey, assign and deliver ("Transfer") to Buyer, and Buyer shall
purchase, acquire and accept from the Seller, the Business and all of such
Seller's rights, properties, assets, contracts, leases and businesses of every
kind, character and description, whether tangible or intangible, real, personal
or mixed, accrued, contingent or otherwise, and wherever located, less and
except the Excluded Assets (as defined in Section 1.2 below) (after giving
effect to the exclusion of the Excluded Assets, such assets are hereinafter
collectively referred to as the "Transferred Assets"), free and clear of all
liens, claims and encumbrances, including, without limitation:
(a) all machinery, equipment, furniture, office
equipment, telephone equipment, computers and computer equipment, spare parts,
supplies, tools and vehicles;
(b) all of the Seller's right, title and interest in and
to any income and payments due to the Seller, including, without limitation,
all accounts and accounts receivable whether or not reflected on the Seller's
books and records, but expressly excluding the Excess
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In this Exhibit, "[***]" represents material omitted from this Exhibit and
filed separately with the Securities and Exchange Commission and for which
Confidential Treatment has been requested.
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Receivables (as defined in Section 9.1 hereof);
(c) all letters of credit, leases of real and personal
property, rental agreements, commitments, insurance policies (other than the
disability policies listed on Schedule 1.2(c) hereto), purchase orders, sales
orders, service agreements, maintenance agreements, distribution agreements,
supply agreements and all other contracts, agreements and understandings,
whether written or oral, and all rights, claims and causes of action thereunder,
whether pending or inchoate;
(d) all prepaid assets and all deposits, refunds, rebates and
other rights to payment relating to the Transferred Assets;
(e) all intangible assets (including, without limitation, all
issued and applied for patents, trademarks, copyrights, trade names, trade
secrets, service marks, customer lists, relationships and arrangements with
customers, covenants not to compete, authors, designers and suppliers,
inventions, formulae, processes and permits, computer software and source code,
and all licenses, agreements and applications with respect to any of the
foregoing, any goodwill associated with any of the foregoing, and all claims and
causes of action relating to any of the foregoing, including claims and causes
of action for past infringement) arising from or utilized in the operations of
the Business, including the names "Anserphone" and all derivations thereof;
(f) to the extent transferable, all licenses, authorizations
and permits issued by any governmental agency relating to the Business or the
Transferred Assets, and all applications therefor pending; and
(g) all books, records and files (other than minute and stock
books and other similar corporate records) relating to the Business and the
Transferred Assets and the operations thereof for all periods ending on or
before the Effective Date, but excluding such items which relate to the Excluded
Assets or the liabilities of the Seller not assumed by Buyer.
1.2 EXCLUDED ASSETS. Notwithstanding anything in Section 1.1
to the contrary, the Seller shall retain all of their right, title and interest
in and to all of, and shall not Transfer to Buyer any of, the following assets,
rights and properties (the "Excluded Assets"):
(a) all cash, and cash equivalents, of the Seller on the
Effective Date;
(b) the Excess Receivables (as defined in Section 9.1 below);
(c) any proceeds and any other consideration paid or payable
in accordance with this Agreement and all rights of the Seller under this
Agreement or any agreement or instrument executed pursuant hereto or thereto,
including, without limitation, the Seller's rights to enforce Buyer's
representations, warranties and covenants hereunder and the obligations of Buyer
to pay, perform or discharge the Assumed Liabilities;
(d) all minute books, stock books and similar corporate
records of the Seller; and
(e) the items set forth on Schedule 1.2(f).
1.3 NO ASSUMPTION OF LIABILITIES. Except as expressly set
forth in Schedule
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1.3 hereto Buyer shall not assume and shall have no liability for, any
liabilities or obligations of the Seller, known or unknown, fixed or contingent
("Liabilities") including, without limitation, the following:
(a) any liability in respect of accounts payable;
(b) any liability in respect of any indebtedness whether or
not secured by the Transferred Assets;
(c) subject to Section 1.10(b) hereof, any liability for any
Federal, state, local or foreign income, capital gains, franchise taxes, taxes
on capital, sales and use tax, or employee withholding taxes (including, without
limitation, any deferred income tax liability and any penalties and interest
thereon);
(d) any liability for expenses incurred by, or for claims made
against, the Seller in connection with or resulting from or attributable to this
Agreement or the transactions contemplated hereby, if any;
(e) any liability for any investment banking, brokerage or
similar charge or commission, or any attorneys' or accountants' fees and
expenses, payable or incurred by the Seller in connection with the preparation,
negotiation, execution or delivery of this Agreement or the transactions
contemplated hereby;
(f) any liability of the Seller to Buyer arising out of any
misrepresentation or breach of any warranty of the Seller contained in this
Agreement or any of the schedules or exhibits hereto or in any certificate,
agreement, instrument or other document delivered pursuant hereto or out of the
failure of the Seller to perform any of their agreements or covenants contained
herein or therein or to perform or satisfy any of the Liabilities;
(g) any liability or obligation to employees including,
without limitation, liabilities and obligations in respect of compensation and
severance (including, without limitation, severance obligations arising as a
result of the transactions contemplated hereby) and any liability or obligation
under any employee pension, benefit or other plan; and
(h) any other liability arising from or relating to the
operation of the Business on or prior to the Effective Date to the extent not
otherwise specifically set forth in this Section 1.3.
The Seller shall remain fully liable for, and shall promptly pay when due, all
such Liabilities.
1.4 [Intentionally Omitted]
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1.5 PURCHASE PRICE.
(a) As the purchase price for all of the Transferred
Assets (the "Purchase Price"), (i) Buyer shall pay to the Seller an aggregate
sum, subject to adjustment as provided in Section 1.7 below, of [*******] in
cash (the "Cash Purchase Price").
(b) The Cash Purchase Price shall be payable in the form
of a bank cashier's check, certified check or federal funds wire transfer to an
account of the Seller designated by it in writing prior to Closing and shall be
due and payable as follows: (i) [*******] at Closing and (ii) [******] on the
earlier of (x) one hundred fifty (150) days after Closing or (y) the final
determination of the Financial Statements as described in Section 1.7 below.
1.6 CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of the Seller's
counsel, in New Orleans, at 10:00 A.M., November 2, 1998, or at such other place
and/or on such other date and time as shall be agreed upon by Buyer and the
Seller (the "Effective Date"), which Closing shall be effective as of 12:01 a.m.
on the date of Closing.
1.7 EBITDA ADJUSTMENT TO PURCHASE PRICE.
(a) Within one hundred fifty (150) days after Closing,
Buyer shall cause KPMG Peat Marwick LLP to deliver to the Seller an audited
balance sheet and related statements of income, retained earnings and cash flows
for the Seller for its fiscal years ended December 31, 1997 (the "1997 Financial
Statements"), and for the 12-month periods ended October 31, 1998 (the "12-Month
Financial Statements"), all of which financial statements shall be prepared in
accordance with generally accepted accounting principles ("GAAP") and the rules
and regulations of the Securities Exchange Commission applicable to financial
reporting of public companies.
(b) The Seller shall have forty-five (45) days from
delivery of the 1997 Financial Statements and the 12-Month Financial Statements
(collectively, the "Financial Statements") to raise any objection thereto by
delivery of written notice to Buyer setting forth such objections in reasonable
detail. In the event that the Seller shall fail to so deliver such written
objections with respect to any of the Financial Statements within such 45-day
period, then any such Financial Statements in respect of which no such objection
is so delivered shall be deemed final and binding on the parties. In the event
that any such objections are so delivered, Buyer and the Seller shall attempt,
in good faith, to resolve such objections and, if unable to do so within fifteen
(15) days of delivery of such objections, shall, within five (5) business days
thereafter designate a nationally recognized firm of independent public
accountants, mutually satisfactory to Buyer and the Seller (the "Independent
Accountants"). In the event that Buyer and the Seller are unable to agree on the
Independent Accountants within such 5-business day period, the Independent
Accountants shall be designated jointly by the independent accountants of Buyer
and the Seller within three (3) business days thereafter. The Independent
Accountants shall resolve all remaining objections to the Financial Statements
made by the Seller in accordance herewith within thirty (30) days from its date
of designation. The determination of the Independent Accountants shall be final
and binding on the parties. The fees and expenses of the Independent Accountant
shall be borne by the Stockholders, jointly and severally, unless the
determination of the Independent Accountants shall result in an increase in the
amount of the Purchase Price of more than ten (10%) percent over the amount of
the Purchase Price as determined from the Financial Statements originally
delivered to the Seller.
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(c) The Cash Purchase Price shall be adjusted in each of the
following instances, based on the Financial Statements, as finally determined in
accordance herewith, by the amount (the "Adjustment Amount") determined as
follows:
(i) in the event that the sum of [******] (the
"Adjustment Target") shall exceed 12-Month EBITDA (as defined below) by more
than [******] (e.g. [**]), the Cash Purchase Price shall be reduced by an amount
equal to [****] for each $1.00 of the entire excess over 12 - month EBITDA
(rounded down to the nearest whole dollar); and
(ii) in the event that 12-Month EBITDA shall exceed the
Adjustment Target by more than [*****] (e.g. [**]), the Cash Purchase Price
shall be increased by an amount equal to [****] for each $1.00 of the entire
excess over the Adjustment Target (rounded down to the nearest whole dollar);
and
Within thirty (30) business days of the final determinations of the Financial
Statements, the Seller shall pay to Buyer (whether or not the sum of such
Adjustment Amounts shall exceed the Cash Purchase Price) any Adjustment Amount
calculated pursuant to Section 1.7(c)(i) above, in the aggregate, by wire
transfer of immediately available funds to an account designated in writing by
Buyer and Buyer shall pay to the Seller the Adjustment Amount calculated
pursuant to 1.7(c)(ii) above.
(d) For purposes hereof, "12-Month EBITDA" shall mean the
earnings of the Seller for the 12-month period ended October 31, 1998, as set
forth in the 12-Month Financial Statements before deduction for interest, taxes,
depreciation and amortization, in each case determined in accordance with GAAP,
as adjusted for extraordinary non-recurring income and expenditures as set forth
on Schedule 1.7(d) hereto, with respect to non-recurring income, to the extent
actually received and with respect to non-recurring expenditures, to the extent
actually incurred, and to the extent of the amounts thereof which Buyer
determines will not be incurred by it in the operation of the Business in the
ordinary course from and after the Effective Date.
1.8 PURCHASE PRICE ALLOCATION.
(a) The parties acknowledge and agree that the Purchase Price
shall be allocated among the Transferred Assets in accordance with Schedule 1060
of the Internal Revenue Code of 1986, as amended (the "Code") and as set forth
in a written notice to the Seller promptly after the final determination of the
Financial Statements (the "Allocation Notice"). The parties shall not take any
position for purposes of Federal, state or local income taxes respecting the
allocation of the Purchase Price which is inconsistent with the allocation set
forth in such Allocation Notice.
(b) If, as a result of any allocation in the Allocation
Notice, Seller is required, pursuant to Section 1245 of the Code, to recapture
depreciation taken by Seller with respect to depreciable assets included in the
Transferred Assets, Buyer shall indemnify, and hold Seller harmless, on an
after-tax basis, for the difference between the tax incurred by Seller with
respect to the amount of such depreciation recapture on such assets at the
ordinary income rate and the amount of such tax Seller would have incurred had
such depreciation recapture amount been taxed at the long term capital gains
rate, together with any interest or penalties thereon incurred by Seller as a
result of (i) Buyer's failure to promptly pay to Seller amounts due pursuant to
this
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Section 1.10 or (ii) any tax audit related to the proper characterization of
such allocation.
(c) Seller may claim any amounts pursuant to this Section 1.10
at any time within fifteen days from delivery of the Allocation Notice by
delivery of written notice ("Adjustment Notice") to Buyer setting forth a
reasonably detailed calculation of the amount claimed, together with a copy of
Seller's tax returns on which such recapture income is reported. Buyer shall
have fifteen days from delivery of the Adjustment Notice to raise any objection
thereto by delivery of written notice setting forth such objections in
reasonable detail. In the event that Buyer shall fail to deliver such written
objections with such period, the calculation set forth in the Adjustment Notice
shall be deemed final and binding on the parties (unless the Internal Revenue
Service, pursuant to a tax audit, shall reallocate any allocation in the
Allocation Notice) and Buyer shall thereupon promptly pay to Seller the amount
set forth in the Adjustment Notice as directed therein. In the event that any
such objections are delivered, Buyer and the Seller shall attempt, in good
faith, to resolve such objections and if unable to do so within fifteen days
from the delivery thereof, shall promptly appoint a mutually acceptable
independent certified public accountant (who shall be the Independent
Accountant, if one has been designated pursuant to Section 1.7 above) whose
determination with respect to such objection will be final and binding on the
parties. The cost of any such accountant will be shared equally by Buyer and the
Seller.
2. REPRESENTATIONS AND WARRANTIES.
2.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE
STOCKHOLDERS. The Seller and the Stockholders hereby, jointly and severally,
represent and warrant to, and covenant and agree with, Buyer as follows:
(a) ORGANIZATION, GOOD STANDING AND POWER. The Seller is
a corporation duly organized, validly existing and in good standing and
authorized to exercise its corporate powers, rights and privileges under the
laws of the State of Alabama with full corporate power and authority to own,
lease and operate its properties and to carry on its business as presently
conducted by it. Schedule 2.1(a) hereto sets forth all states and other
jurisdictions in which the Seller is duly qualified and in good standing to do
business as a foreign corporation. There are no other states or jurisdictions in
which the character and location of the properties owned or leased by it, or the
conduct of its business makes such qualification necessary, except where failure
to so qualify would not have a material adverse effect on the financial
condition, business or operations of the Seller. Copies of the Seller's Articles
of Incorporation and all amendments thereto, and of the Seller's By-Laws, as
amended to date, are attached to Schedule 2.1(a) and are complete and correct.
To the best knowledge of the Seller and the Stockholders, the Seller's minute
books contain complete and accurate records of all meetings and other corporate
actions, including, without limitation, actions by unanimous written consent of
the Stockholders and board of directors of the Seller (including all committees
of its board of directors).
(b) AUTHORITY. The execution and delivery by the Seller
and the Stockholders of this Agreement and all of the agreements, schedules,
exhibits, documents and instruments specifically provided for hereunder to be
executed and/or delivered by any or all of them (all of the foregoing, including
this Agreement, being hereinafter sometimes collectively referred to as the
"Executed Agreements"), the performance by the Seller and any or all of the
Stockholders (to the extent that they are parties thereto) of their respective
obligations under the Executed Agreements, and the consummation of the
transactions contemplated by the Executed Agreements, have been duly and validly
authorized by all necessary corporate action on the part of the Seller and by
the Stockholders, and the Seller has all necessary corporate power and authority
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with respect thereto. This Agreement has been, and upon Execution and delivery
of each of the other Executed Agreements such other Executed Agreements will be,
duly executed and delivered. Neither the execution and delivery by the Seller
and any or all of the Stockholders (to the extent that they are parties thereto)
of the Executed Agreements, nor the consummation of the transactions
contemplated hereby or thereby, nor the performance by the Seller and any or all
of the Stockholders (to the extent that they are parties thereto) of their
respective obligations under the Executed Agreements, shall (nor with the giving
of notice or the lapse of time or both would) (i) conflict with or result in a
breach of any provision of the Articles of Incorporation or By-Laws of the
Seller, (ii) give rise to a default, or any right of termination, cancellation
or acceleration, or otherwise result in a loss of any material contractual
benefits to the Seller, under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which the Seller or any Stockholder is a party or by which it or
any of their properties or assets may be bound, (iii) violate, in any material
respect, any order, writ, injunction, decree, law, statute, rule or regulation
applicable to the Seller or any of the Stockholders or any of their respective
properties or assets, (iv) result in the creation or imposition of any lien,
claim, restriction, charge or encumbrance upon any of the properties or assets
of the Seller, or (v) interfere with or otherwise materially and adversely
affect the ability of the Seller to carry on its business as now conducted.
(c) INTERESTS IN OTHER ENTITIES. Except as set forth in
Schedule 2.1(c) hereto, the Seller does not (i) own, directly or indirectly, of
record or beneficially, any shares of voting stock or other equity securities of
any other corporation or entity, (ii) have any ownership interest, direct or
indirect, of record or beneficially, in any entity, or (iii) have any
obligation, direct or indirect, present or contingent, to purchase or subscribe
for any interest in, advance or loan monies to, or in any way make investments
in, any person or entity, or to share any profits or capital investments in
other persons or entities, or both.
(d) GOVERNMENTAL AUTHORIZATIONS; THIRD PARTY CONSENTS. Except
as set forth in Schedule 2.1(d) hereto, no approval, consent, compliance,
exemption, authorization or other action by, or notice to or filing with, any
governmental authority or any other entity, and no lapse of a waiting period, is
necessary or required to be obtained by the Seller or any Stockholder in
connection with the execution, delivery or performance by any of them, of this
Agreement, any of the Executed Agreements or the transactions contemplated
hereby.
(e) PROJECTIONS. The Seller has delivered to Buyer a set of
projections (the "Projections"), a copy of which is attached hereto as Schedule
2.1(e), which the Seller and the Stockholders have been advised are material to
Buyer in its decision to enter into this Agreement. The Projections are based on
the best estimates of the Seller and the Stockholders derived from reasonable
expectations at the time the Projections were made, and the Seller and the
Stockholders believe that Buyer is justified in relying thereon, there being,
however, no guarantee of the achievement of the Projections.
(f) FINANCIAL STATEMENTS. The Seller has delivered to Buyer
true and complete copies of its unaudited balance sheets as of December 31,
1996, and the related statements of income, retained earnings and cash flows for
the period then ending (the "1996 Financial Statements"), true and complete
copies of its unaudited balance sheets as of December 31, 1997, and the related
statements of income, retained earnings and cash flows for the period then
ending (the "1997 Financial Statements") and true and complete copies of its
unaudited balance sheets for the eight month period ended August 31, 1998 (the
"Interim Balance Sheet"), and the related statements of income, retained
earnings and cash flows for the period then ending
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(collectively, with the Interim Balance Sheet, the "Interim Financial
Statements"). All of such financial statements, including any notes thereto,
were prepared on a consistent basis throughout the periods involved and such
fairly present the financial position of the Seller at the dates thereof and the
results of its operations for the periods as indicated. The books and records of
the Seller are in all material respects complete and correct, have been
maintained in accordance with good business practices, and accurately reflect
the basis for the financial condition and results of operations of the Seller as
set forth in the financial statements referred to herein.
(g) ABSENCE OF UNDISCLOSED LIABILITIES. To the best of the
Seller's and the Stockholders' knowledge, the Seller does not have any
liabilities, commitments or obligations, whether accrued, absolute, contingent
or otherwise which have not been (i) in the case of liabilities, commitments and
obligations of a type customarily reflected on the corporate balance sheet of
the Seller, reflected on the Interim Balance Sheet in accordance with GAAP,
incurred, consistent with past practice, in the ordinary course of business
since the date of the Interim Balance Sheet and which are not material either
individually or in the aggregate or (ii) in the case of all other types of
liabilities and obligations, described in Schedule 2.1(g) hereto.
(h) ABSENCE OF CERTAIN CHANGES. Except as and to the extent
set forth in Schedule 2.1(h) hereto, since August 31, 1998, the Seller has not:
(i) suffered any material adverse change in their working
capital, condition (financial or otherwise), assets, liabilities, business,
operations or prospects;
(ii) incurred any material liabilities or obligations
except items incurred in the ordinary course of business and consistent with
past practice, none of which exceeds $5,000 (counting obligations or liabilities
arising from one transaction or a series or similar transactions, and all
periodic installments or payments under any lease or other agreement providing
for periodic installments or payments, as a single obligation or liability), or
experienced any increase in, or change in any assumption underlying or methods
of calculating, any bad debt, contingency or other reserves;
(iii) permitted or allowed, or agreed to permit or
allow, any of their property or assets (real, personal or mixed, tangible or
intangible) to be subjected to any mortgage, pledge, lien, security interest,
encumbrance, restriction or charge of any kind in excess of $5,000 in the
aggregate, except encumbrances disclosed on Schedule 2.1(h) hereto and which
will be discharged on or prior to the Effective Date ;
(iv) written off, or agreed to write off, as
uncollectible any notes or accounts receivable, except for write-offs in the
ordinary course of business and consistent with past practice, none of which are
material;
(v) canceled any debts or waived or suffered to lapse any
claims or rights of substantial value, or sold, transferred, or otherwise
disposed of any of their properties or assets (real, personal or mixed, tangible
or intangible) or agreed to do any of the foregoing, except in the ordinary
course of business and consistent with past practice;
(vi) disposed of or suffered to lapse any rights to use
any Toll Free Telephone Number listed on Schedule 2.1(q) hereof, patent,
trademark, trade name or copyright, or disposed of or disclosed (except as
necessary in the conduct of their business) to any person any trade secret,
formula, process or know-how or agreed to do any of the foregoing;
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(vii) granted, or agreed to grant, any general increase
in the compensation of officers or employees (including any such increase
pursuant to any bonus, pension, profit-sharing or other plan or commitment) or
any increase in the compensation payable or to become payable to any officer or
employee, and, unless otherwise set forth in Schedule 2.1(h), no such increase
is customary on a periodic basis or is required by agreement or understanding;
(viii) made, or agreed to make, any single capital
expenditure or commitment in excess of $5,000 for additions to property, plant,
equipment or intangible assets or made, or agreed to make, aggregate capital
expenditures and commitments in excess of $5,000 (on a consolidated basis), for
additions to property, plant, equipment or intangible assets;
(ix) made any change in any method of accounting or
accounting practice; or
(x) sold, transferred or leased, or agreed to sell,
transfer or lease, any properties or assets (real, personal or mixed, tangible
or intangible) to, or entered into any agreement or arrangement with, any of its
officers, directors, debtholders, stockholders or employees or any "affiliate"
or "associate" of any of its officers, directors, noteholders, stockholders or
employees (as such terms are defined in Rule 405 promulgated under the
Securities Act and as used herein "Associate" and "Affiliate").
(i) TAX MATTERS. Except as set forth in Schedule 2.1(i)
hereto, the Seller has filed with the appropriate governmental agencies all
Federal, state, local or foreign tax returns and reports required to be filed by
them ("Returns"), have paid in full or made adequate provision for the payment
of, all taxes of every nature, including, but not limited to, income, sales,
franchise and withholding taxes ("Taxes"), together with interest, penalties,
assessments and deficiencies owed by them with respect to all periods covered by
such Returns, and all such Returns were correct and complete in all respects.
The Seller is not currently the beneficiary of any extension of time within
which to file any Returns. The Seller has previously provided Buyer with true
and complete copies of all such Returns filed within the past 3 years. The
provisions for income and other Taxes reflected on the Interim Balance Sheet are
adequate for all accrued and unpaid taxes of the Seller as of the date of the
Interim Balance Sheet, whether (i) incurred in respect of or measured by income
of the Seller for any periods prior to the close of business on that date, or
(ii) arising out of transactions entered into, or any state of facts existing,
on or prior to that date. The provisions for Taxes reflected on the books of
account of the Seller are adequate for all Taxes of Seller which accrued since
the date of the Interim Balance Sheet. There are no filed or other known tax
liens upon any property or assets of the Seller. The Seller has not waived any
statute of limitations in respect of Taxes or executed or filed with any
governmental authority any agreement extending the period for the assessment or
collection of any Taxes, and is a party to any pending or, to the Seller's or
any Stockholder's best knowledge, threatened action or proceeding by any
governmental authority for the assessment or collection of Taxes. To the best
knowledge of the Seller and the Stockholders, no issue has arisen in any
examination of the Seller by any governmental authority that if raised with
respect to any other period not so examined would, if upheld, result in a
material deficiency for any other period not so examined. There is no unresolved
written claim by a governmental authority in any jurisdiction where the Seller
do not file Returns that the Seller is or may be subject to taxation by such
jurisdiction. There has been no examination or audit with respect to Taxes with
respect to any year. The Seller has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing
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to any employee, independent contractor, creditor, stockholder or other third
party.
(j) LITIGATION. Except as set forth in Schedule 2.1(j) hereto,
there are no suits or actions, or administrative, arbitration or other
proceedings or governmental investigations, pending, or to the best knowledge of
the Seller and the Stockholders, threatened against or affecting, or which may
affect, the Seller, or any of its properties, assets or businesses or the
transactions contemplated hereby. To the best knowledge of the Seller and the
Stockholders, there are no outstanding judgments, orders, stipulations,
injunctions, decrees or awards against the Seller which are not satisfied.
(k) COMPLIANCE WITH APPLICABLE LAW. The Seller is, and at all
times since January 1, 1995, have been in compliance in all material respects
with all Federal, state, local and foreign laws, statutes, ordinances,
regulations, and administrative rulings (collectively "Laws"), promulgated by
any governmental or regulatory authority applicable to the Seller or to the
conduct of the Business or operations of the Seller or to the use of their
properties and assets, including, without limitation, all environmental Laws and
all Laws relating to the Toll Free Telephone Numbers. The Seller has not
received, and the Seller and the Stockholders do not know of the issuance or
threatened issuance of, any notices of violation or alleged violation of any
laws by the Seller. Neither the Seller nor the Stockholders know of any pending
legislation in the State of Louisiana applicable to the Seller or to the conduct
of business or operations of the Seller which, if enacted, could have a material
adverse effect on the business, results of operations, financial position or
prospects of the Seller or the value of its properties or assets
(l) ENVIRONMENTAL MATTERS. Except as set forth on Schedule
2.1(l) hereto:
(i) neither the Seller nor its operations or the real property
leased by the Seller as set forth in Schedule 2.1(n) hereto (the "Facility") are
subject to any outstanding written order, consent decree or settlement agreement
with any person relating to (A) any Environmental Laws (as defined in below),
(B) any Environmental Claim (as defined below), or (C) any Hazardous Materials
Activity (as defined below) that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the business,
results of operations, financial position or prospects of the Seller or the
value of its properties or assets;
(ii) the Seller has not received any letter or request for
information under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9604) or any comparable state
law;
(iii) there are, and to the Seller's and the Stockholders'
knowledge, have been no conditions, occurrences, or Hazardous Materials
Activities which could reasonably be expected to form the basis of an
Environmental Claim against the Seller or that, individually or in the
aggregate, could reasonably be expected to have a material adverse effect on the
business, results of operations, financial position or prospects of the Sellers
or the value of its properties or assets;
(iv) neither the Seller nor, to the Seller's and the
Stockholders' knowledge, any predecessor of the Seller, has filed at any time
any notice under any Environmental Law indicating past or present treatment of
Hazardous Materials at the Facility, and none of the Seller's operations
involves the generation, transportation, storage, or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent; and
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(v) compliance with all current or reasonably foreseeable
future requirements pursuant to or under Environmental Laws will not have,
individually or in the aggregate, a reasonable possibility of giving rise to a
material adverse effect on the business, results of operations, financial
position or prospects of the Seller or the value of its properties or assets.
(vi) Notwithstanding anything in this Section 2.1(l) to the
contrary, no event or condition has occurred or is occurring with respect to the
Seller relating to any Environmental Law, any Release (as defined in subsection
(vii) below) of Hazardous Materials, or any Hazardous Material Activity,
including any matter disclosed on Schedule 2.1(l), which, individually or in the
aggregate, has had or could reasonably be expected to have a material adverse
effect on the business, results of operations, financial position or prospects
of the Seller or the value of its properties or assets.
(vii) The following terms used in this Section 2.1(l) shall
have the following meanings:
(A) "Environmental Laws" shall mean any and all current
statutes, ordinances, orders, rules regulations, guidance documents, judgments,
governmental authorizations, or any other requirements of governmental
authorities relating to (1) environmental matters, including those relating to
any Hazardous Materials Activity (as defined below) or (2) the generation, use,
storage, transportation, Release or disposal of Hazardous Materials (as defined
below), in any manner applicable to the Seller or the Facility.
(B) "Environmental Claim" shall mean any investigation,
notice, notice of violation, claim, action, suit, proceeding, demand, abatement
order or other order or directive (conditional or otherwise), by any
governmental authority or any other person, arising (1) pursuant to or in
connection with any actual or alleged violation of any Environmental Laws, (2)
in connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (3) in connection with any actual or alleged damage,
injury, threat or harm to natural resources or the environment.
(C) "Hazardous Materials" shall mean (1) any chemical,
material or substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "acutely hazardous waste", "radioactive waste", "biohazardous
waste", "pollutant", "toxic pollutant", "contaminant", "restricted hazardous
waste", "infectious waste", "toxic substances", or any other term or expression
intended to define, list or classify substances by reason of properties harmful
to health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws), (2) any oil, petroleum,
petroleum fraction or petroleum derived substance, (3) any drilling fluids,
produced waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources, (4) any flammable
substances or explosives, (5) any radioactive materials, (6) any
asbestos-containing materials, (7) urea formaldehyde foam insulation, (8)
electrical equipment which contains oil or dielectric fluid containing
polychlorinated biphenyls, (9) pesticides, and (10) any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by
governmental authority or which may or could pose a hazard to the health and
safety of the owners, occupants or any other persons in the
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vicinity of the Facility or to the indoor or outdoor environment.
(D) "Hazardous Materials Activity" shall mean any past,
current, proposed or threatened activity, event or occurrence involving any
Hazardous Materials, including the use, manufacture, possession, storage,
holding, presence, existence, location, Release (as defined below), threatened
Release, discharge, placement, generation, transportation, processing,
construction, treatment, abatement, removal, remediation, disposal, disposition
or handling of any Hazardous Materials, and any corrective action or response
action with respect to any of the foregoing.
(E) "Release" shall mean any release, spill, emission,
leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into the indoor
or outdoor environment (including, without limitation, the abandonment or
disposal of any barrels, containers or other closed receptacles containing any
Hazardous Materials), including the movement of any Hazardous Materials through
the air, soil, surface water or ground water.
(m) PERMITS. A list of all permits, approvals, licenses,
certificates, franchises, authorizations, consents and orders ("Permits")
necessary and material to the operation of the business of the Seller in the
manner in which it is presently conducted is set forth on Schedule 2.1(m)
hereto. All such Permits are valid and remain in full force and effect. The
Seller has not engaged in any activity which would cause revocation or
suspension of any such Permits and no action or proceeding looking to or
contemplating the revocation or suspension of any thereof is pending or
threatened. To the best knowledge of the Seller and the Stockholders, no
additional Permits will be required to permit the Seller to continue their
business substantially in the manner it is presently conducted after the
consummation of the transactions contemplated hereby.
(n) TITLE TO PROPERTIES. The Transferred Assets constitute all
assets which have been used in the Business since December 31, 1997, and which
are necessary for the conduct of the Business, except as set forth in Schedule
2.1(n) hereto, and except for the Excluded Assets. The Seller does not own any
real property. Except as set forth in Schedule 2.1(n) hereto, the Seller has
good title to all of the properties and assets (personal and mixed, tangible and
intangible) reflected on the Interim Balance Sheet or thereafter acquired or
which it purports to own (except properties or assets sold or otherwise disposed
of in the ordinary course of business consistent with past practice subsequent
to the date of the Interim Balance Sheet which in the aggregate did not have a
book value in excess of $5,000), free and clear of all mortgages, liens,
pledges, charges or encumbrances of any nature whatsoever. Schedule 2.1(n) also
contains an accurate list and a brief description of all (i) leases (whether by
or to the Seller) and contracts and commitments for the purchase or sale or
lease (whether as lessor or lessee), of the Seller with respect to real property
and (ii) leases (whether by or to the Seller) and title retention or conditional
sales agreements and other security devices of the Seller with respect to items
of personal property having a book value in excess of $5,000. There are no
existing defaults by the Seller under any of the agreements set forth in
Schedule 2.1(n) and no event of default has occurred which (whether with or
without notice, lapse of time or both) would constitute a default by the Seller
thereunder. All lessors thereunder have consented (where such consent is
necessary) to the consummation of the transactions contemplated by this
Agreement without requiring modification of the rights and obligations of the
Seller thereunder. All of the tangible property (whether owned or leased)
included in the Transferred Assets are located at the real property leased by
the Seller as set forth in Schedule 2.1(n) hereto.
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(o) ACCOUNTS RECEIVABLE; FIXED ASSETS.
(i) The accounts receivable reflected on the Interim
Balance Sheet arose in the ordinary course of business for services performed or
goods delivered and none are subject to any offsets. The accounts receivable of
the Seller which were thereafter added arose in the ordinary course of business
for services performed or goods delivered and none are subject to any offsets.
Set forth on Schedule 2.1(o) is a true and complete list of the Seller's
accounts receivable as of November 1, 1998, and aging with respect thereto. At
least ninety five (95%) percent of the Closing Receivable (as defined in Section
9.1 hereof) will be good and collectible in the ordinary course of business at
the aggregate amount recorded on the Seller's books of accounts.
(ii) Schedule 2.1(o) hereto contains a complete and
accurate list of all machinery, equipment and other fixed assets of the Seller
(the "Equipment") having a book value in excess of $500. Each such item of
Equipment is in good operating condition, normal wear and tear excepted, and is
fit for its intended use. Each such item has been maintained, in all material
respects, in accordance with prudent business practice and no such maintenance
has been deferred.
(p) INTELLECTUAL PROPERTY. Schedule 2.1(p) hereto lists all
licenses, patents, copyrights, or trademarks owned or used by the Seller in the
conduct of the Business and all applications therefor (the "Intellectual
Property"). No officer or director, Stockholder or employee of the Seller nor
any of their Affiliates or Associates has any ownership or other interest in any
of the Intellectual Property. To the best knowledge of the Sellers and the
Stockholders, none of the Intellectual Property is being infringed upon by, or
infringes, any licenses, patents, copyrights, trademarks or other intellectual
property rights of any other person or entity. Except as set forth in Schedule
2.1(p), the validity of the Intellectual Property and the title thereto of the
Seller has not been questioned in any litigation or governmental inquiry or
proceeding to which the Seller, is a party, and, to the best knowledge of the
Seller and the Stockholders, no such litigation, governmental inquiry or
proceeding is threatened. The conduct of the business of the Seller as presently
conducted does not conflict with valid licenses, trademarks, trademark rights,
trade names, trade name rights, service marks or patents of others in any way
likely to affect adversely, in any material respect, the Intellectual Property.
(q) TOLL FREE TELEPHONE NUMBERS. Schedule 2.1(q) hereto sets
forth a complete list of all Toll Free Telephone Numbers owned or used by the
Seller in the conduct of the Business. No officer or director, Stockholder or
employee of the Seller nor any of its Affiliates or Associates has any ownership
or other interest in the Toll Free Telephone Numbers. The Seller has not
warehoused, brokered or hoarded (as those terms are defined in the Second Report
and Order and Further Notice of Proposed Rulemaking in CC Docket No. 95-155,
Released April 11, 1997, by the Federal Communications Commission ("FCC")) any
of the Toll Free Telephone Numbers in violation of any applicable FCC rules or
regulations.
(r) INSURANCE. Schedule 2.1(r) hereto contains a complete and
correct list of all policies of insurance in which the Seller or their officers
or directors (in such capacity) are an insured party, beneficiary or loss
payable payee. Complete and accurate copies of all such policies have been
previously provided to the Buyer. Such policies are in full force and effect
and, in the reasonable judgment of the Seller and the Stockholders, provide the
type and amount of coverage reasonably required for the Business.
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(s) BANK ACCOUNTS AND POWERS OF ATTORNEY. Schedule 2.1(s)
hereto contains a complete and correct list showing (i) the name of each bank in
which the Seller has an account or safe deposit box and the names of all persons
authorized to draw thereon or have access thereto, and (ii) the names of all
persons, if any, holding powers of attorney from the Seller.
(t) EMPLOYEE ARRANGEMENTS; ERISA. The Seller has (i) no union,
collective bargaining, employment, management, severance or consulting
agreements to which the Seller is a party or are otherwise bound, and (ii) no
deferred compensation agreements, pension and retirement plans, profit-sharing
plans, stock purchase and stock option plans. Schedule 2.1(t) hereto contains a
true and complete list of all compensation, incentive, bonus, severance,
disability, hospitalization, medical insurance, life insurance and other
employee benefit plans, programs or arrangements maintained by the Seller or
under which the Seller has any material obligations (other than obligations to
make current wage or salary payments) in respect of, or which otherwise cover,
any of the current or former officers, employees or consultants of the Seller,
or its beneficiaries (each an "Employee Benefit Plan" and collectively the
"Employee Benefit Plans"). No Employee Benefit Plan is subject to Title IV of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 412 of the Internal Revenue Code of 1986, as amended (the "Code"). All
contributions to and payments from the Employee Benefit Plans which may have
been required to be made in accordance with the Employee Benefit Plans have been
made or are properly accrued and reflected on the Balance Sheets or the books
and records of the Seller. Schedule 2.1(t) hereto also lists the names,
compensation and all accrued and unused vacation and sick time of all persons
employed by the Seller. The Seller has no Employee Benefit Plans which are
qualified for Federal income tax exemption under Sections 401 and 501 of the
Code.
(u) CERTAIN BUSINESS MATTERS. Except as set forth in Schedule
2.1(u) hereto (i) the Seller is not a party to or bound by any distributorship,
dealership, sales agency, franchise or similar agreement which relates to the
sale, distribution or servicing of the Toll Free Telephone Numbers or services
related thereto, (ii) the Seller does not have any sole-source supplier of
significant goods or services (other than utilities) with respect to which
practical alternative sources are not available on comparable terms and
conditions, (iii) there are not pending and, to the Seller's and the
Stockholders' best knowledge there are not threatened, any labor negotiations
involving or affecting the Seller and, to the Seller's and the Stockholders'
best knowledge, no organizing activities involving union representation exist in
respect of any of their employees, (iv) the Seller neither gives nor is bound by
any express warranties relating to its services and, to the best knowledge of
the Seller and the Stockholders, there has been no assertion of any breach of
warranties which could have a material adverse effect on the Business or
condition (financial or otherwise) of the Seller and, to the best knowledge of
the Seller and the Stockholders, there are no problems or potential problems
with respect to any product sold or services provided by the Seller which could
have a material adverse effect on the Business, (v) the Seller is not a party to
or bound by any agreement which limits its freedom to compete in any line of
business or with any person or entity, (vi) the Seller is not a party to or
bound by any agreement which based on current economic circumstances will result
in a material loss when performed, and (vii) the Seller is not a party to or
bound by any agreement or involved in any transaction in which any officer,
director, debtholder or Stockholder, or any Affiliate or Associate of any such
person has, or had when made, a direct or indirect material interest.
(v) CONTRACTS. Schedule 2.1(v) hereto contains a complete and
correct list and brief description of any and all material contracts,
commitments, obligations and
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undertakings, written or oral, involving amounts in excess of $5,000, to which
the Seller is a party or otherwise bound. True and complete copies of all
contracts, commitments, obligations and undertakings set forth in Schedule
2.1(v) hereto have been furnished to Buyer, and except as expressly stated in
Schedule 2.1(v), each of them is in full force and effect, and to the Seller's
and the Stockholders' best knowledge, (a) no person or entity which is a party
thereto or otherwise bound thereby is, to the best knowledge of the Seller and
the Stockholders, in default thereunder, and (b) no event, occurrence, condition
or act exists which, with the giving of notice or the lapse of time or both,
would give rise to a default or right of cancellation thereunder, the Seller is
not in default thereunder and no event, occurrence, condition or act exists by
or on behalf of the Seller which, with the giving of notice or the lapse of time
or both would give rise to a default by the Seller thereunder, there have been
no threatened cancellations thereof and there are no outstanding disputes
thereunder. To the best of the Seller's and the Stockholders' knowledge there is
no reason why any of the contracts listed on Schedule 2.1(v), could not be
continued between Buyer and the Seller's contractual partners on the same terms
and conditions as currently apply. Neither the Seller nor any Stockholder has
any reason to believe that any of the Seller's contractual partners will
terminate its relationship with the Seller as a result of the acquisition of the
Seller's assets by Buyer.
(w) BROKERS. No agent, broker, person or firm acting on behalf
of the Seller or the Stockholders or under the authority of any of the
foregoing, is or shall be entitled to a brokerage commission, finder's fee, or
other like payment in connection with any of the transactions contemplated
hereby, from the Seller or any of the Stockholders.
(x) DISCLOSURE. No representation or warranty made by the
Seller or the Stockholders herein or in any of the Executed Agreements omits or
will omit to state a material fact necessary in order to make the statements
therein not misleading.
(y) [intentionally omitted].
(z) DISCLOSURE SCHEDULES. All schedules to this Agreement are
integral parts to this Agreement. Nothing in a schedule shall be deemed adequate
to disclose an exception to a representation or warranty made herein, unless the
schedule identifies the reason for the exception. The Seller and the
Stockholders are responsible for preparing and arranging the schedules
corresponding to the lettered and numbered paragraphs contained herein.
Disclosure made in a specific schedule shall not be deemed to have been
disclosed with respect to any other schedule unless a cross-reference appears.
(aa) PRINCIPAL PLACE OF BUSINESS; RESIDENCE. The Seller's
principal place of business is located at 0000 Xxxxxxxxxx Xxxx Xxxxx, Xxxxx X,
Xxxxxx, Xxxxxxx 00000
2.2 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
of the Stockholders severally represents and warrants to, and covenants and
agrees with Buyer, with respect to such Stockholder as follows:
(a) CAPACITY; VALIDITY. Such Stockholder has the legal
capacity to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed by such Stockholder.
(b) RIGHTS TO TOLL FREE TELEPHONE NUMBERS. Such Stockholder
does not own or possess any rights in or to the Toll Free Telephone Numbers
listed on Schedule 2.1(q)
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hereto.
2.3 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to, and covenants and agrees with, the Seller as
follows:
(a) ORGANIZATION, STANDING AND POWER. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and authority to own, lease and
operate its properties and to carry on its business as presently conducted by it
and is qualified in each other jurisdiction in which qualification is required
for it to own, lease and operate its properties and carry on its business as
presently conducted by it, except to the extent that failure to so qualify would
not have a material adverse effect on the financial condition, business or
operations of Buyer.
(b) AUTHORITY. The execution and delivery by Buyer of this
Agreement and of each of the other Executed Agreements to which it shall be a
party, the performance by Buyer of its obligations under this Agreement or such
Executed Agreements and the consummation of the transactions contemplated hereby
and thereby, have been duly and validly authorized by all necessary corporate
action on the part of Buyer, and Buyer has all necessary corporate power with
respect thereto. This Agreement and the Executed Agreements are, or when
executed and delivered by Buyer shall be, the valid and binding obligations of
Buyer, enforceable in accordance with their respective terms, except to the
extent that enforceability may be limited by the operation of bankruptcy,
insolvency or similar laws. Neither the execution and delivery by Buyer of the
Executed Agreements, nor the consummation of the transactions contemplated
thereby, nor the performance by Buyer of its obligations under the Executed
Agreements, shall (nor with the giving of notice or the lapse of time or both
would) (i) conflict with or result in a breach of any provision of the Articles
of Incorporation or By-Laws of Buyer, (ii) violate any order, writ, injunction,
decree, law, statute, rule or regulation or (iii) interfere with or otherwise
materially and adversely affect the ability of Buyer to carry on its business as
now conducted.
(c) BROKERS. No agent, broker, person or firm acting on behalf
of Buyer or under its authority is or shall be entitled to a brokerage
commission, finder's fee, or other like payment in connection with any of the
transactions contemplated hereby.
3. PRE-CLOSING COVENANTS. The Stockholders and the Seller
jointly and severally covenant and agree to perform or take any and all such
actions to effectuate the following from the date hereof until the Effective
Date:
3.1 INVESTIGATION BY BUYER. Buyer may, prior to the Effective
Date, through its representatives (including its counsel, accountants and
consultants) make such investigations of the properties, offices and operations
of the Seller and such audit of the financial condition of the Seller as it
deems necessary or advisable in connection with the transactions contemplated
hereby, including, without limitation, any investigation enabling it to
familiarize itself with such properties, offices, operations and financial
condition; such investigation shall not, however, affect the Seller's or the
Stockholders' representations, warranties and agreements hereunder. The Seller
and the Stockholders shall permit Buyer and its authorized representatives to
have, after the date hereof, full access to the premises and to all books and
records and Returns of the Seller and Buyer shall have the right to make copies
thereof and excerpts therefrom. The Seller and the Stockholders shall furnish
Buyer with such financial and operating data and other information with respect
to the Seller as Buyer may from time to time reasonably request.
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3.2 CARRY ON IN ORDINARY COURSE. Except with Buyer's prior
written consent, the Seller shall, and each Stockholder shall cause the Seller
to, carry on its business diligently and substantially in the same manner as
heretofore conducted, and shall not (a) enter into or agree to enter into any
extraordinary transaction, contract, lease or commitment, (i) declare any
dividends, nor make any distributions or payments to the Stockholders other than
employment compensation to the extent that any such action could cause any
condition set forth in Section 4.1 hereof not to be satisfied on or prior to
Closing, (ii) redeem any shares of any Seller's capital stock or issue any
capital stock or enter into any agreement which grants a right to acquire any
Seller's capital stock to the extent that any such action could cause any
condition set forth in Section 4.1 hereof not to be satisfied on or prior to
Closing, (iii) increase the compensation of any employee of the Seller, other
than ordinary year-end increases or enter into any severance agreement or
employment agreement with any employee of the Seller; (iv) loan or advance any
amounts to any officer, director, Stockholder or employee of the Seller or enter
into any agreement with any of the foregoing or any person related to any of the
foregoing, to the extent that any such action could cause any condition set
forth in Section 4.1 hereof not to be satisfied on or prior to Closing, (v)
acquire or dispose of any assets, other than acquisitions or dispositions in the
ordinary course of business not material in amount or to the Business, and (vi)
encumber or commit to encumber any of its assets to the extent that any such
action could cause any condition set forth in Section 4.1 hereof not to be
satisfied on or prior to Closing, (vii) take any action, or suffer any action to
be taken, which could cause any of the representations or warranties of any
Stockholders or the Seller contained herein not to be true and correct on and as
of the Effective Date, (viii) repay (including by way of offset) any
indebtedness for borrowed money except for regularly scheduled payments thereof
in accordance therewith to the extent that any such action could cause any
condition set forth in Section 4.1 hereof not to be satisfied on or prior to
Closing, or (ix) enter into any agreement to take any of the foregoing actions.
3.3 OTHER TRANSACTIONS. From the date hereof until the
Effective Date, the Seller and the Stockholders shall not, and shall cause the
Seller's directors, officers, stockholders, employees, agents and Affiliates or
Associates not to, directly or indirectly, solicit or initiate the submission of
proposals from, or solicit, encourage, entertain or enter into any arrangement,
agreement or understanding with, or engage in any negotiations with, or furnish
any information to, any person, other than Buyer or a representative thereof,
with respect to the acquisition of all or any part of the business or assets of
the Seller or any of its securities. Should the Seller or any of its Affiliates
or Associates, during such period, receive any offer or inquiry relating to such
acquisition, or obtain information that such an offer is likely to be made, they
will provide Buyer with immediate written notice thereof, which notice will
include the identity of the prospective offeror and the price and terms of any
offer.
3.4 CONSENTS. The Stockholders shall cause the Seller to, and
the Seller shall, use its best efforts to obtain in writing, prior to the
Effective Date, all consents, approvals, waivers, authorizations and orders
necessary or reasonably required in order to permit it to effectuate this
Agreement and to consummate the transactions contemplated hereby (collectively,
"Consents"). All such Consents will be in writing and copies thereof will be
delivered to Buyer promptly after the Seller's receipt thereof but no later than
immediately prior to Closing.
3.5 SUPPLEMENTAL DISCLOSURE. The Stockholders and the Seller
agree that, with respect to their representations and warranties made in this
Agreement, they will have a continuing obligation, ending on the Effective Date,
to promptly supplement or amend the schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or
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known at the date of this Agreement and on the Effective Date, would have
been required to be set forth or described in the schedules hereto.
3.6 PUBLIC ANNOUNCEMENTS. The Stockholders and Buyer agree
that they will consult with each other before issuing any press releases or
otherwise making any public statements with respect to this Agreement or the
transactions contemplated hereby and any press release or any public statement
shall be subject to mutual agreement of the parties, except as may be required
by the disclosure obligations of Buyer under applicable securities laws.
4. CONDITIONS TO CLOSING.
4.1 CONDITIONS OF BUYER'S OBLIGATION TO CLOSE. The obligation
of Buyer to close under this Agreement is subject to the satisfaction of the
following conditions any of which may be waived by Buyer in writing at or prior
to Closing:
(a) AGREEMENTS AND CONDITIONS. On or before the Effective
Date, the Stockholders and the Seller shall have complied with and duly
performed all agreements and conditions on their part to be complied with and
performed pursuant to or in connection with this Agreement on or before the
Effective Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Stockholders and the Seller contained in this Agreement, or
otherwise made in connection with the transactions contemplated hereby, shall be
true and correct in all material respects on and as of the Effective Date with
the same force and effect as though such representations and warranties had been
made on and as of the Effective Date.
(c) LOSS, DAMAGE OR DESTRUCTION. Between the date hereof and
the Effective Date there shall not have been any loss, damage or destruction to
or of any of the assets, property or business of the Seller in excess of $5,000
in the aggregate, whether or not covered by insurance, nor shall the assets,
properties, business or prospects of the Seller have been adversely affected in
any way as a result of any fire, accident, or other casualty, war, civil strife,
riot or act of God or the public enemy or otherwise.
(d) NO LEGAL PROCEEDINGS. No court or governmental action or
proceeding shall have been instituted or threatened to restrain or prohibit the
transactions contemplated hereby, and on the Effective Date there will be no
court or governmental actions or proceedings pending or threatened against or
affecting the Seller which involve a demand for any judgment or liability,
whether or not covered by insurance, and which may result in any material
adverse change in the business, operations, properties or assets or in the
condition, financial or otherwise, of the Seller.
(e) CERTIFICATE. Buyer shall have received a certificate dated
the Effective Date and executed by the Stockholders and an authorized officer of
the Seller to the effect that the conditions expressed in Sections 4.1(a),
4.1(b), 4.1(c) and 4.1(d) have been fulfilled.
(f) CONSENTS. Buyer shall have received all Consents necessary
to effectuate this Agreement and to consummate the transactions contemplated
hereby.
(g) RELATED TRANSACTION. Buyer shall have consummated the
acquisition of the assets of Anserphone of New Orleans, Inc.
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(h) NAME CHANGE. Buyer shall have received a duly authorized
and executed document which amends the certificate of incorporation of the
Seller to change the Seller's name to a name other than Anserphone, or any
derivative thereof or any similar name, and is otherwise in form for filing with
the Secretary of State of the State of Louisiana.
(i) CERTIFICATES OF STATUS. Buyer shall have received
certificates from the Secretary of State of the State of Alabama and of each
jurisdiction set forth in Schedule 2.1(a) hereto, providing that the Seller has
filed its most recent annual report, has not filed articles of dissolution and
is in good standing in each such jurisdiction.
(j) OPINION OF COUNSEL. The Stockholders shall have furnished
Buyer with a favorable opinion of Xxxxxxxx Xxxx & Xxxxx P.C., counsel for the
Seller and the Stockholders, dated as of the Effective Date, and in form and
substance satisfactory to Buyer.
(k) BILLS OF SALE. Buyer shall have received such bills of
sale, deeds of transfer, assignments and other documents in form and substance
satisfactory to Buyer conveying the Transferred Assets to Buyer.
(l) APPROVAL OF BUYER'S LENDER. Buyer shall have received the
approval of its lender to effectuate this Agreement and to consummate the
transactions contemplated hereby.
4.2 CONDITIONS OF THE STOCKHOLDERS' AND THE SELLER'S
OBLIGATIONS TO CLOSE. The obligations of the Stockholders and the Seller to
close under this Agreement are subject to the following conditions any of which
may be waived by the Seller in writing at or prior to Closing:
(a) AGREEMENTS AND CONDITIONS. On or before the Effective
Date, Buyer shall have complied with and duly performed all agreements and
conditions on its part to be complied with and performed pursuant to or in
connection with this Agreement on or before the Effective Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer contained in this Agreement, shall be true and correct in
all material respects on and as of the Effective Date with the same force and
effect as though such representations and warranties had been made on and as of
the Effective Date.
(c) CLOSING CERTIFICATE. The Stockholders shall have received
a certificate dated the Effective Date and executed by an authorized officer of
Buyer to the effect that the conditions contained in Section 4.2(a) and (b) have
been fulfilled.
5. FURTHER ASSURANCES. From time to time after the Closing,
and without further consideration, the Seller shall execute and deliver such
other instruments of conveyance, assignment, transfer and delivery and take such
other actions as Buyer may reasonably request in order more effectively to
Transfer to Buyer, to place Buyer in possession or control of, all of the
rights, properties, assets and businesses intended to be Transferred hereunder,
to assist in the collection of any and all such rights, properties and assets,
and to enable Buyer to exercise and to enjoy all of the rights and benefits of
the Seller with respect thereto.
6. TRANSFER TAXES. The Seller shall pay all income and gains
taxes, if any,
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incurred in connection with the transactions contemplated by this Agreement,
subject to section 1.10 hereof. Except as hereinabove provided, the party hereto
which is responsible under applicable law shall bear and pay in their entirety
all other taxes and registration and transfer fees, if any, payable by reason of
the Transfer of the Transferred Assets pursuant to this Agreement. Each party
hereto will cooperate to the extent practicable in minimizing all taxes (other
than income taxes) and fees levied by reason of the Transfer of the Transferred
Assets.
7. INDEMNIFICATION.
7.1 SURVIVAL OF REPRESENTATIONS. The representations and
warranties of the Stockholders in this Agreement or in any document delivered
pursuant hereto shall survive the Effective Date for a period of three (3) years
and shall then terminate; PROVIDED, HOWEVER, that (i) any such representation
and warranty shall survive the time it would otherwise terminate only with
respect to claims of which notice has been given as provided in this Agreement
prior to such termination and (ii) such time limitation shall not apply to the
representations and warranties set forth in Sections 2.1(i), 2.1(l) and 2.1(n)
hereof, which shall survive until the expiration of the applicable statute of
limitations.
7.2 INDEMNITORS; INDEMNIFIED PERSONS. For purposes of this
Section 7, each party which, pursuant to this Section 7, shall agree to
indemnify any other person or entity shall be referred to, as applicable, as the
"Indemnitor", and each such person and entity who is entitled to be indemnified
by any Indemnitor shall be referred to as the "Indemnified Person" with respect
to such Indemnitor.
7.3 INDEMNITY OF THE SELLER AND THE STOCKHOLDERS. The Seller
and the Stockholders hereby jointly and severally agree to indemnify, hold
harmless, pay and reimburse, Buyer and its directors, officers, agents and
employees from and against any and all claims, liabilities, losses, damages and
expenses incurred by such Indemnified Persons (including reasonable attorneys'
fees and disbursements) which shall be caused by or related to or shall arise
out of (a) any material breach or alleged breach of any representation or
warranty of the Seller and the Stockholders contained in this Agreement, (b) any
breach of any covenant or agreement of the Seller or the Stockholders contained
in the Agreement, and (c) any failure by the Seller to satisfy the Liabilities,
and shall reimburse such Indemnified Persons for all costs and expenses
(including reasonable attorneys' fees and disbursements) as they shall be
incurred, in connection with paying, investigating, preparing for or defending
any action, claim, investigation, inquiry or other proceeding, whether or not in
connection with pending or threatened litigation, which shall be caused by or
related to or shall arise out of such breach or alleged breach, whether or not
any such Indemnified Person shall be named as a party thereto and whether or not
any liability shall result therefrom.
7.4 INDEMNITY OF BUYER. Buyer hereby agrees to indemnify, hold
harmless, pay and reimburse the Stockholders and the Seller and the Seller's
directors, officers, agents and employees from and against any and all claims,
liabilities, losses, damages and expenses incurred by them (including reasonable
attorneys' fees and disbursements) which shall be caused by or related to or
shall arise out of (a) any material breach or alleged breach of any
representation or warranty of Buyer contained in this Agreement and (b) any
breach of any covenant or agreement of Buyer contained in the Agreement and
shall reimburse such Indemnified Persons for all costs and expenses (including
reasonable attorneys' fees and disbursements) as shall be incurred, in
connection with paying, investigating, preparing for or defending any action,
claim, investigation, inquiry or other proceeding, whether or not in connection
with pending or threatened litigation,
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which shall be caused by or related to or shall arise out of such breach or
alleged breach, whether or not such Indemnified Persons shall be named as a
party thereto and whether or not any liability shall result therefrom.
7.5 PROCEDURES FOR INDEMNIFICATION. Promptly after becoming
aware of a claim for indemnification hereunder (including a claim or suit by a
third party), such Indemnified Person shall notify the Indemnitor of the
commencement of such claim, but failure to so notify the Indemnitor shall not
relieve the Indemnitor from any liability which the Indemnitor may have
hereunder or otherwise, unless the Indemnitor shall be materially prejudiced by
such failure or unless such failure is intentional. If the Indemnitor does not
object in writing to any indemnification claim (other than a third party claim)
within five days of receiving notice thereof, the Indemnified Person shall be
entitled to promptly recover from the Indemnitor (including by way of offset)
the amount of such claim, and no later objection by the Indemnitor shall be
permitted. In the event that the Indemnitor contests such claim, the parties
shall attempt to resolve the dispute in good faith, but if they have not done so
within ten days after the Indemnitor received notice thereof, then any of such
parties may pursue such other remedies as may be available to it, hereunder, at
law or otherwise.
7.6 DEFENSE OF THIRD PARTY CLAIMS. The Indemnitor shall assume
the defense of any third party action or proceeding, including the employment of
counsel reasonably satisfactory to the Indemnified Person, and shall pay the
fees and disbursements of such counsel. In the event, however, that such
Indemnified Person shall reasonably determine in its judgment that having common
counsel would present such counsel with a conflict of interest or alternative
defenses shall be available to an Indemnified Person or if the Indemnitor shall
fail to assume the defense of the action or proceeding in a timely manner, then
such Indemnified Person may employ separate counsel to represent or defend it in
any such action or proceeding and the Indemnitor shall pay the reasonable fees
and disbursements of such counsel; PROVIDED, HOWEVER, that the Indemnitor shall
not be required to pay the fees and disbursements of more than one separate
counsel for all Indemnified Persons in any jurisdiction in any single action or
proceeding. The Indemnified Person shall also have the right to participate in
any action or proceeding defended by the Indemnitor and to retain its own
counsel at such Indemnified Person's own expense, so long as such participation
does not interfere with the Indemnitor's control of such litigation. The
Indemnitor further agrees that it shall not, without the prior written consent
of the Indemnified Person settle or compromise or consent to the entry of any
judgment in any action or proceeding in respect of which indemnification may be
sought hereunder unless such settlement, compromise or consent shall include an
unconditional release of each Indemnified Person under Section 7.2 or Section
7.3, as the case may be, from all liability arising out of such claim, action,
suit or proceeding. In the event that, upon the failure of the Indemnitor to
assume to defense of any action or proceeding in a timely manner, the
Indemnified Person shall defend, such Identified Person shall be entitle to
settle, compromise or consent to the entry of any judgment, without the consent
of the Indemnitor and without affecting its rights against Indemnitor hereunder.
8. NON-COMPETITION; CONFIDENTIALITY.
8.1 NON-COMPETITION. Following the Effective Date and for a
period of five (5) years thereafter (the "Non-Competition Period"), the Seller
and the Stockholders shall not, directly or indirectly, (a) engage in any
business or activity that competes with Buyer's or any of its affiliate's
outsourced client telemarketing/teleservices business, anywhere in the
contiguous United States; (b) enter the employ of any person or entity
engaged in any business or activity that competes with any such business or
render any consulting or other services to any person or entity
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for use in or with the effect of competing with any such business; or (c) have
an interest in any business or activity that competes with any such business, in
any capacity, including, without limitation, as an investor, partner,
stockholder, officer, director, principal, agent, employee, or creditor;
PROVIDED, HOWEVER, that nothing herein shall prevent the purchase or ownership
by any Stockholder of less than 5% of the outstanding equity securities of any
class of securities of a company registered under Section 12 of the Securities
and Exchange Act of 1934, as amended.
8.2 NO COMPETING INTERESTS. Each Stockholder hereby represents
and warrants to Buyer that he has no ownership or other interest in any business
or activity that competes, directly or indirectly, with the Business.
8.3 NON-DISRUPTION. During the Non-Competition Period, the
Seller and the Stockholders shall not, directly or indirectly, interfere with,
disrupt or attempt to disrupt any present or prospective relationship,
contractual or otherwise, between the Seller or any of its Affiliates, on the
one hand, and any of their customers, suppliers or employees, on the other hand.
8.4 CONFIDENTIALITY. The Seller and the Stockholders shall not
at any time, directly or indirectly, use communicate, disclose or disseminate
any Confidential Information in any manner whatsoever (except to his personal
financial or legal advisors and as may be required under legal process by
subpoena or other court order; provided that, the Seller or any Stockholder will
take reasonable steps to give the Buyer sufficient prior written notice in order
to contest such requirement or order). "Confidential Information" means any and
all information (oral or written) relating to the Buyer or any person
controlling, controlled by, or under common control with the Buyer or any of
their respective activities, including, but not limited to, information relating
to trade secrets, proprietary information, software, software codes,
advertising, sales, marketing and other materials customers and supplier lists,
data processing reports, customer sales analyses, invoice, price lists or
information, and information pertaining to any governmental investigation,
except such information which is generally known in the industry or in the
public domain (such information not being deemed to be in the public domain
merely because it is embraced by more general information which is in the public
domain), other than as a result of a breach of the provisions hereof.
8.5 REMEDIES UPON BREACH. The Seller and the Stockholders
acknowledge and agree that (a) Buyer shall be irreparably injured in the event
of a breach by the Seller or a Stockholder of any of the obligations under this
Section 8; (b) monetary damages shall not be an adequate remedy for such breach;
(c) Buyer shall be entitled to injunctive relief, in addition to any other
remedy which it may have, in the event of any such breach; and (d) the existence
of any claims which the Seller or Stockholder may have against Buyer, whether
under this Agreement or otherwise, shall not be a defense to the enforcement by
Buyer of any of its rights under this Agreement.
9. POST-CLOSING COVENANTS.
9.1 COLLECTION OF ACCOUNTS RECEIVABLE. (a) From and after
Closing, Buyer shall collect, and promptly deposit, all accounts receivable of
the Seller as of the Effective Date ("Closing Receivables"), in the ordinary
course of business and shall not discount, except in the ordinary course of
business consistent with the past practice of the Seller, any such accounts
receivable or permit any account debtor any right of set-off for claims arising
out of or in connection with the conduct of the Business after Closing.
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(b) At such time as Buyer shall have received, in cleared
funds, [**************] of the amount of Closing Receivables and/or the Closing
Receivables as defined in the Asset Purchase Agreement dated November 2, 1998,
among Buyer, Protocol Holdings, Inc., Anserphone of New Orleans, Inc. and
Xxxxxxx X. Xxxx, Xx. and X. Xxxxxxx Xxxx ("Collection Threshold"), all amounts
thereafter collected thereon shall be shared by Buyer and the Seller (i) [****]
to the Seller ("Excess Receivables") and (ii) [****] to Buyer. Buyer shall make
payments to the Seller in respect of the Excess Receivables promptly after then
end of each month. Until such time as Buyer shall make payments of amounts due
to the Seller pursuant to this Section 9.1, Buyer shall hold the amounts thereof
in trust for the Seller, but shall not be obligated to segregate any such
amounts. All payments received from account debtors of Buyer shall be applied
first against the oldest outstanding undisputed obligations of such account
debtor to Buyer, notwithstanding any direction of such account debtor to the
contrary. In the event that Buyer shall receive written notice from any account
debtor which shall dispute the amount of any Closing Receivable, or shall be
otherwise unable to collect any Closing Receivable, the Seller shall cooperate
with, and assist, Buyer in the resolution of such dispute, if any, and the
collection of such receivable. Buyer shall not otherwise be obligated to
commence any action against, or alter its relationship with, any such account
debtor. At the request of Buyer, and upon Buyer's assignment to the Seller of
any disputed Closing Receivable or Closing Receivable which is more than 90 days
past due, Seller shall pay to Buyer the full amount thereof, to the extent, but
only to the extent, that the Collection Threshold has not then been met. At the
request of the Seller, Buyer shall assign to the Seller all Closing Receivables
which are more than 150 days past due upon Seller's payment to Buyer of the full
amount thereof, to the extent, but only to the extent, that the Collection
Threshold has not been met. To the extent that the Seller shall utilize the
capabilities of the Buyer (I.E., personnel, facilities, etc.) in the collection
of such assigned Closing Receivables the Seller shall pay to the Buyer a
factoring fee of fifteen (15%) percent of all collections thereon.
(c) In furtherance and not in limitation of Buyer's rights
hereunder, Buyer is hereby expressly authorized, and is hereby irrevocably
appointed as attorney-in-fact, with full power of substitution, to act in
Seller's name and stead, to take any and all actions it may, in its discretion,
deem necessary to collect all Closing Receivables, to endorse the Seller's name
on any and all instruments and other payments thereon or with respect thereto
and to deposit all payments, in any form received, in accounts of Buyer, subject
to Buyers obligations pursuant to Section 9.2 (b) above. This power of attorney
is coupled with an interest.
(d) It is expressly acknowledged and agreed that any amount
received by a stockholder in respect of a Closing Receivable shall be deemed to
have been received by him as an employee of Buyer and on its behalf.
9.2 PAYMENTS OF INVOICES
(a) To the extent that the Seller or Buyer (the "Invoiced
Party") shall receive invoices, or shall otherwise be required to pay amounts,
which represent, in whole or in part, liabilities (such as utility and phone
bills, ordinary maintenance contracts, sales commissions, etc., relating to
periods either before or after the Closing) and which, pursuant to the terms
hereof, are to be satisfied by the other (the "Responsible Party"), the Invoiced
Party may, in its discretion, (a) pay such amounts and demand payment from the
Responsible Party, provided that no individual amount exceeds $1,000, (b) demand
payment from the Responsible Party prior to any such payment by the Invoiced
Party or (c) demand that the Responsible Party make such payment directly,
provided that if only a portion is due from the Responsible Party and a portion
from the Invoiced Party, the Invoiced Party shall make payment of its portion to
the Responsible Party
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simultaneously with such request.
(b) Upon any demand by an Invoiced Party pursuant to Section
9.2(a) above, whether for payment to the Invoiced Party or to a third party
obligee, shall promptly make such payment.
(c) Each party shall maintain copies of invoices and records
of payments in respect of all payments made by them pursuant to this Section 9.2
and, upon request, promptly provide copies thereof to the other.
(d) Each party shall have the right to set-off against amounts
due to the other, amounts due to it from the other which shall not be paid in
accordance herewith.
9.3 EMPLOYEE VACATION ACCRUALS. Buyer agrees to credit all
former employees of the Seller, which become employees of the Buyer, with the
vacation and sick day accruals set forth in Schedule 9.3 hereof, in accordance
with the policies, with respect to vacation and sick days set forth in such
Schedule 2.1(t) hereto.
10. MISCELLANEOUS PROVISIONS.
10.1 CONFIDENTIALITY. The Seller, the Stockholders and Buyer
agree not to, directly or indirectly, without the prior written consent of the
other, use or disclose to any person, firm or corporation, any materials or
information obtained in Buyer's due diligence investigation of the Seller not a
part of the Purchased Assets, or any of the terms of this Agreement, except as
may be required by the disclosure obligations of Buyer under applicable
securities laws or as may be required to be disclosed to the attorneys and/or
accountants of the parties hereto in connection with the transactions
contemplated hereby.
10.2 NOTIFICATION. Each party hereto shall give the other
party or parties hereto prompt written notice of (a) the existence of any fact
or the occurrence of any event which constitutes, or with the giving of notice
or the passage of time or both would constitute, a breach of any representation
or warranty of the party giving such notice made herein or pursuant hereto and
(b) the taking of any action by the party giving such notice that would breach
or violate, or constitute a default under, any agreement or covenant of such
party made herein or pursuant hereto. The giving of any such notice shall not
affect, modify or limit in any way any representation, warranty, agreement or
covenant of the parties made herein or pursuant hereto.
10.3 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
10.4 NOTICES. All notices, requests, demands and other
communications which are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed duly given when delivered by
hand, or posted in the United States mail by registered or certified mail with
postage pre-paid, return receipt requested, (a) if to Buyer, to Protocol
Acquisition Sub 2, Inc., c/o Protocol Communications, Inc. 0000 Xxxxxxxx Xxxx.,
Xxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx XxXxxx; copy to Xxxxxxx, Calamari &
Xxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxx X. Xxxxxxx, Esq.,
facsimile number: (000) 000-0000, and (b) if to the Seller or the Stockholders,
to Xxxxxxx X. Read and X. Xxxxxxx Read, 00000 X. 0xx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000; copy to Xxxxxxx X. Xxxxxxxx, 0000 Xxxxxxx Xxxxxx, Xxxxx
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2195, Xxx Xxxxxxx, Xxxxxxxxx 00000, facsimile number: (000) 000-0000; or to such
other address(es) as shall be specified by like notice to the other parties.
10.5 AMENDMENTS. This Agreement may be amended or modified at
any time prior to the Effective Date, but only by a written instrument executed
by all of the parties hereto.
10.6 ENTIRE AGREEMENT. This Agreement (together with the other
agreements, certificates, instruments and documents delivered pursuant hereto)
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings,
oral and written, among the parties hereto with respect to the subject matter
hereof.
10.7 APPLICABLE LAW. This Agreement and the legal relations
among the parties hereto shall be governed by and construed in accordance with
the internal laws of the State of Delaware. The parties hereby consent to the
exclusive jurisdiction of Federal and Louisiana courts located in the St.
Tammany Parish and agree that service of process by certified mail, return
receipt requested, shall constitute personal service for all purposes hereof.
10.8 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Date by any of the following:
(a) By mutual written agreement of Buyer and the Seller;
(b) By either Buyer or the Seller, if the Closing has not
occurred by November 15, 1998, upon written notice by such terminating party,
provided that at the time such notice is given a material breach of this
Agreement by such terminating party shall not be the principal reason for the
Closing's failure to occur;
(c) Subject to the provisions of Section 10.9 hereof, by
Buyer, by written notice to the Seller, if there has been a material violation
or breach of any of the Stockholders' or the Seller's covenants or agreements
made herein or in connection herewith or if any representation or warranty of
the Stockholders or the Seller made herein or in connection herewith proves to
be materially inaccurate or misleading; or
(d) Subject to the provisions of Section 10.9 hereof, by the
Seller, by written notice to Buyer, if there has been a material violation or
breach of any of Buyer's covenants or agreements made herein or in connection
herewith or if any representation or warranty of Buyer made herein or in
connection herewith proves to be materially inaccurate or misleading.
10.9 EFFECTS OF TERMINATION. If this Agreement is terminated
as provided in Section 10.8 hereof, then this Agreement shall forthwith become
void and there shall be no liability or obligation on the part of any party
hereto (or any of their respective stockholders, officers, directors or
employees), except based on the agreements contained in Sections 7.3 and 7.4
hereof; PROVIDED, however, that if Buyer terminates this Agreement pursuant to
Section 10.8(c) hereof, or the Seller terminates this Agreement pursuant to
Section 10.8(d) hereof, the non-terminating party shall remain liable for any
breach hereof.
10.10 HEADINGS. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
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10.11 FEES AND DISBURSEMENTS. Buyer shall pay its own
expenses, and the fees and disbursements of the counsel, accountants or auditors
retained by it in connection with the preparation, execution and delivery of
this Agreement and the fees and expenses and disbursements of the counsel to the
Seller and the Stockholders shall be paid by the Stockholders.
10.12 ASSIGNMENT. This Agreement may not be assigned by the
Seller or any Stockholder without the prior written consent of Buyer.
10.13 BINDING EFFECT; BENEFITS. This Agreement shall inure to
the benefit of, and be binding upon, the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto and their respective heirs, legal representatives, successors
and permitted assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
10.14 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.
[NEXT PAGE IS SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this
Asset Purchase Agreement the day and year first above written.
ANSERPHONE, INC.
------------------------------------------
By: /s/ Xxxxxxx X. Xxxxxx
Name:
Title:
ANSERPHONE SYSTEMS, INC.
------------------------------------------
By: /s/ Xxxxxxx X. Read
Name:
Title:
Stockholders:
/s/ Xxxxxxx X. Read U/p/a Dated 10/29/98
------------------------------------------
M'xxxxx Read Xxxxx
/s/ Xxxxxxx X. Read U/p/a Dated 10/29/98
------------------------------------------
Xxxxxx Xxxxxx Read
/s/ Xxxxxxx X. Read U/p/a Dated 10/29/98
------------------------------------------
Sidonie Read Poidivent
/s/ Xxxxxxx X. Read U/p/a Dated 10/29/98
------------------------------------------
Xxxxxxx Xxxxx Read
[Did Not Sign]
------------------------------------------
Xxxxx Read Xxxx
/s/ Xxxxxxx X. Read U/p/a Dated 10/29/98
------------------------------------------
Xxxxxxxx Xxxxxx
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/s/ Xxxxxxx X. Read U/p/a Dated 10/29/98
-----------------------------------------
Xxxxxxxx Xxxxxxxxx Xxxx
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