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ASSET PURCHASE AGREEMENT
BY AND AMONG
ANSCHUTZ DIGITAL MEDIA, INC.
AS PURCHASER,
XXXXX COMMUNICATIONS HOLDINGS LIMITED PARTNERSHIP
XXXXX VIRTUAL MEDIA LIMITED PARTNERSHIP
XXXXX WORLD WIDE DIGITAL LIMITED PARTNERSHIP
XXXXX PRODUCTIONS LIMITED PARTNERSHIP
PROFESSIONAL VIDEO SERVICES CORPORATION
AND
ENHANCED SERVICES OF NEVADA, INC.
AS SELLERS
AND
RMS LIMITED PARTNERSHIP
AND
XXX X. XXXXX
(AS TO ARTICLES IX AND XI ONLY)
DATED AS OF FEBRUARY 16, 1999
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TABLE OF CONTENTS
TITLE PAGE
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ARTICLE I DEFINITIONS AND TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Section 1.2 Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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ARTICLE II ACQUISITION AND DISPOSITION OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.1 Purchase and Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . 10
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Section 2.2 Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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Section 2.3 Nondelivered Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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Section 2.4 No Assignment if Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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ARTICLE III PAYMENT AND DELIVERY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.1 Purchase Price and Payment. . . . . . . . . . . . . . . . . . . . . . . . . . 13
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Section 3.2 Allocation of Consideration. . . . . . . . . . . . . . . . . . . . . . . . . 13
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Section 3.3 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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Section 3.4 Deliveries by the Sellers. . . . . . . . . . . . . . . . . . . . . . . . . . 14
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Section 3.5 Deliveries by RMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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Section 3.6 Deliveries by Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS . . . . . . . . . . . . . . . . . . . 15
Section 4.1 Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . 15
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Section 4.2 Equity; Good Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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Section 4.3 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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Section 4.4 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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Section 4.5 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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Section 4.6 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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Section 4.7 Balance Sheet Information . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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Section 4.8 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . 19
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Section 4.9 Property, Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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Section 4.10 Litigation and Claims, Compliance with Laws . . . . . . . . . . . . . . . . 23
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Section 4.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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Section 4.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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Section 4.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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Section 4.14 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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Section 4.15 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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Section 4.16 Employee Benefits; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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Section 4.17 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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Section 4.18 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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Section 4.19 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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Section 4.20 Brokers, Finders, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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Section 4.21 Questionable Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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Section 4.22 Competing Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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Section 4.23 Compliance With Bulk Sales Act; Uniform Commercial Code . . . . . . . . . . 31
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Section 4.24 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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Section 4.25 Customer and Supplier Relationships; Warranty Claims . . . . . . . . . . . . 31
Section 4.26 Termination of the Xxxxx/PSI Agreements. . . . . . . . . . . . . . . . . . . 31
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Section 4.27 Year 2000 Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF RMS . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.1 Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . 32
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Section 5.2 Equity; Good Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 5.3 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 5.4 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 5.5 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 5.6 Owned Real Property; PSI Securities . . . . . . . . . . . . . . . . . . . . . 34
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Section 5.7 Litigation and Claims; Compliance with Laws . . . . . . . . . . . . . . . . . 34
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Section 5.8 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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Section 5.9 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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Section 5.10 Competing Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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Section 5.11 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . . . . . . . . . . . . . . . 37
Section 6.1 Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . 37
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Section 6.2 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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Section 6.3 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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Section 6.4 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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Section 6.5 Brokers, Finders, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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Section 6.6 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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Section 6.7 Purchase for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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Section 6.8 Limitation on Representations . . . . . . . . . . . . . . . . . . . . . . . . 38
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ARTICLE VII COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.1 Commercially Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . 39
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Section 7.2 Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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Section 7.3 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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Section 7.4 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . 39
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Section 7.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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Section 7.6 Conduct of Business of the Sellers . . . . . . . . . . . . . . . . . . . . . 40
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Section 7.7 Access and Environmental Inspection . . . . . . . . . . . . . . . . . . . . . 41
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Section 7.8 Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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Section 7.9 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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Section 7.10 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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Section 7.11 Supplements to the Schedules Hereto . . . . . . . . . . . . . . . . . . . . 42
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Section 7.12 Delivery of Closing Balance Sheet . . . . . . . . . . . . . . . . . . . . . 43
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Section 7.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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Section 7.14 IHC Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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Section 7.15 Interim Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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Section 7.16 Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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Section 7.17 Corporate Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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Section 7.18 Anschutz/PSI Transaction. . . . . . . . . . . . . . . . . . . . . . . . . . 44
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Section 7.19 Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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ARTICLE VIII CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 45
Section 8.1 Conditions to the Obligations of Purchaser, the Sellers and RMS . . . . . . . 45
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Section 8.2 Conditions to the Obligations of Purchaser . . . . . . . . . . . . . . . . . 45
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Section 8.3 Conditions to the Obligations of the Sellers and RMS . . . . . . . . . . . . 46
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ARTICLE IX SURVIVAL AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 9.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . 47
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Section 9.2 Indemnification by Xxx X. Xxxxx and RMS . . . . . . . . . . . . . . . . . . . 47
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Section 9.3 Indemnification by Purchaser . . . . . . . . . . . . . . . . . . . . . . . . 47
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Section 9.4 Notice and Resolution of Claim . . . . . . . . . . . . . . . . . . . . . . . 48
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ARTICLE X TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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Section 10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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Section 11.2 Amendment, Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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Section 11.3 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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Section 11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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Section 11.5 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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Section 11.6 Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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Section 11.7 Governing Law; Jurisdiction; Service of Process . . . . . . . . . . . . . . 52
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Section 11.8 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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Section 11.9 Transfer and Similar Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 52
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Section 11.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of February 16, 1999 (this
"Agreement"), by and among Anschutz Digital Media, Inc., a Colorado
corporation ("Purchaser"), Xxxxx Communications Holdings Limited Partnership, a
Nevada limited partnership, Xxxxx Virtual Media Limited Partnership, a Nevada
limited partnership, Xxxxx World Wide Digital Limited Partnership, a Nevada
limited partnership, Xxxxx Productions Limited Partnership, a Nevada limited
partnership, Professional Video Services Corporation, a Delaware corporation,
and Enhanced Services of Nevada, Inc., a Nevada corporation (each a "Seller"
and collectively the "Sellers"), RMS Limited Partnership, a Nevada limited
partnership, and Xxx X. Xxxxx (as to Articles IX and XI only).
RECITALS
A. The Sellers are engaged in the business of providing advanced
digital production, post-production and transmission facility, digital media
storage and distribution services, telephony-based data storage and enhanced
services, access and routing services and prepaid telecommunications services
(the "Business");
B. Subject to the terms and conditions contained in this
Agreement, the Sellers intend to sell, transfer and assign to Purchaser, and
Purchaser intends to purchase and acquire from the Sellers, certain assets of
the Sellers relating to the operation of the Business all on the terms set
forth herein; and
C. RMS intends to sell, transfer and assign to Purchaser the
Owned Real Property and the PSI Securities, and Purchaser intends to purchase
and acquire from RMS the Owned Real Property and the PSI Securities on the
terms set forth herein; and
D. The partners or shareholders, as the case may be, of each
Seller and RMS, as applicable, who collectively own all of the outstanding
ownership interests in the Sellers and RMS, have determined that it is in their
collective best interests that the Sellers and RMS sell, transfer and assign to
Purchaser and Purchaser purchases and acquires, those certain assets and
liabilities of the Sellers and RMS as contemplated herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Certain Definitions. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:
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"Affiliate" shall mean, as to any Person (i) any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person, (ii) any corporation or organization (other than a
Subsidiary of such Person) of which such Person is an officer or partner or is,
directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities (other than PSI in the case of RMS), (iii) any trust or other
estate in which such Person has a substantial beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary capacity, and
(iv) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person or who is a director or officer of such Person
or any of its parents or Subsidiaries. The term "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with") as applied to any Person means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or other
ownership interest, by contract or otherwise.
"Agreement" shall have the meaning set forth in the introductory paragraph
to this Agreement.
"Assets" shall have the meaning set forth in Section 2.1(a) hereof.
"Assumed Liabilities" shall have the meaning set forth in Section 2.1(c)
hereof.
"Balance Sheet Date" shall mean December 31, 1998.
"Xxxx of Sale, Assignment and Assumption Agreement" shall mean such bills
of sale, assignment and assumption agreements to be entered into by and between
Purchaser and the Sellers on the date of this Agreement pursuant to which the
Sellers will transfer the Assets held by them to Purchaser and Purchaser will
assume the Assumed Liabilities of the Sellers, as contemplated by Section 2.1
of this Agreement, in form and substance reasonably satisfactory in each case
to Purchaser and the Sellers.
"Business" shall have the meaning set forth in the preamble hereto.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banks in New York City are authorized or obligated by law or executive
order to close.
"Cleanup" shall mean all actions, whether voluntary or compelled by
Environmental Laws, required to: (i) clean-up, remove, treat or remediate
Hazardous Materials in the indoor or outdoor environment; (ii) prevent the
Release of Hazardous Materials so that they do not migrate, endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; (iii) perform pre-remedial studies and investigations and
post-remedial monitoring and care, or (iv) respond to any government or
third-party requests for information or documents in any way relating to
clean-up, removal, treatment or remediation or potential clean-up, removal,
treatment or remediation of Hazardous Materials in the indoor or outdoor
environment.
"Closing" shall have the meaning set forth in Section 3.3 hereof.
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"Closing Date" shall have the meaning set forth in Section 3.3 hereof.
"Confidentiality Agreement" shall mean the Confidentiality Agreement
between the Sellers and Purchaser dated January 8, 1999.
"Contribution Agreement" shall mean that certain Contribution and Share
Exchange Agreement between Precision Systems, Inc., Xxxxx Communications, SVM,
Xxxxx World Wide and Xxxxx Productions dated April 22, 1998, as amended by the
First Amendment thereto dated August 31, 1998 and the Second Amendment thereto
dated October 27, 1998.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Computer Programs" shall mean (i) any and all computer software programs
and software development tools, including all source and object code, (ii)
databases and compilations, including any and all data and collections of data,
whether machine readable or otherwise, (iii) all descriptions, flow-charts and
other work product used to design, plan, organize and develop any of the
foregoing, (iv) all domain names and the content contained on each Seller's
respective Internet site(s); provided such intangibles shall not include any
right or license to use the name "Xxxxx" in any manner whatsoever, including
without limitation any registered trademark, domain names and other rights
containing or incorporating the name "Xxxxx", and (v) all documentation,
including user manuals and training materials, relating to any of the
foregoing; provided that the foregoing shall not include any shrink-wrapped or
similar off-the-shelf products.
"Damages" shall have the meaning set forth in Section 9.2 hereof.
"Employment, Confidentiality and Unfair Competition Agreements" shall mean
the Employment Agreement between Purchaser and X.X. Xxxxxx, and the Agreement
to Protect Confidential Information, Assign Inventions and Prevent Unfair
Competition and Unfair Solicitation between the Purchaser and X.X. Xxxxxx,
forms of which shall be agreed upon by the parties hereto prior to Closing and
attached hereto as Exhibits A-1 and A-2, respectively.
"Environmental Claim" shall mean any claim, action, cause of action,
notice of potential responsibility, information request, notice of violation,
notice of potential violation, complaint, order, directive, investigation or
notice by any Person arising out of, based on or attributable to (i) with
respect to the Sellers, the current or past presence, threatened Release, or
Release, of any Hazardous Material at, on, under or from, any location, whether
or not owned, leased or operated by the Sellers, including any location at
which Hazardous materials originating on or from Sellers' business were sent
for disposal or treatment, (ii) with respect to RMS, the current or past
presence, threatened Release, or Release, of any Hazardous Material at, on,
under or from, the Owned Real Property, including any location at which
Hazardous materials originating on or from the Owned Real Property were sent
for disposal or treatment or (iii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"Environmental Laws" shall mean all applicable federal, state, local and
common laws and regulations relating to pollution or protection of the
environment, including laws and
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regulations, now or hereafter in effect, relating to Releases or threatened
Releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, installation, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials, and all laws and
regulations with regard to record keeping, notification, disclosure and
reporting requirements respecting Hazardous Materials.
"Environmental Liability" shall mean any liability resulting from an
actual, threatened or potential Environmental Claim; from failure to comply
with any Environmental Law; from failure to obtain or comply with any
Environmental Permit; from a Remedial Action; or from harm or injury to any
person, to public health, or to the environment as a result of actual,
threatened or potential exposure to Hazardous Materials.
"Environmental Permits" shall mean all permits, approvals, identification
numbers, licenses, certificates, executions, approvals and any other
authorizations under any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall have the meaning set forth in Section 4.16 hereof.
"Equipment" shall have the meaning set forth in Section 4.9(f) hereof.
"ESI" shall mean Enhanced Services of Nevada, Inc., a Nevada corporation.
"Excluded Liabilities" shall have the meaning set forth in Section 2.1(d)
hereof.
"Excluded Assets" shall have the meaning set forth in Section 2.2 hereof.
"FCC" shall mean the Federal Communications Commission.
"GAAP" shall mean United Sates generally accepted accounting principles
and practices.
"Governmental Authority" shall mean any national, federal, state or local
judicial, legislative, executive or governmental regulatory authority.
"Hazardous Materials" shall mean any wastes, substances, radiation, or
materials (whether solids, liquids or gases) (i) which are hazardous, toxic,
infectious, explosive, radioactive, carcinogenic, or mutagenic; (ii) which are
or become defined or listed as a "pollutants," "contaminants," "hazardous
materials," "hazardous wastes," "hazardous substances," "toxic substances,"
"radioactive materials," "solid wastes," or other similar designations in, or
otherwise subject to regulation under, any Environmental Laws; (iii) without
limitation, which contain polychlorinated bi-phenyls (PCBs), asbestos and
asbestos-containing materials, lead-based paints, urea-formaldehyde foam
insulation, and petroleum or petroleum products (including, without limitation,
crude oil or any fraction thereof) or (iv) which pose a hazard to human or
worker health or safety, natural resources, industrial hygiene, or the
environment, or an impediment to working conditions.
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"Holdco" shall have the meaning set forth in Section 7.14(a) hereof.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"IHC" shall mean Innovative Holding Corporation, a Delaware corporation.
"IHC Shareholders' Agreement" shall have the meaning set forth in Section
7.14(a) hereof.
"IHC Shares" shall mean the 665,421 shares of Series B Preferred Stock of
IHC owned by SVM plus any additional shares, whether common or preferred, of
capital stock of IHC hereafter issued in respect of such shares in connection
with any dividend, stock split, reorganization or restructuring to any Seller
or RMS.
"Indebtedness" of any Person at any date shall include (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices) and including earn-out or similar contingent purchase amounts, (ii)
any other indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (iii) all obligations of such Person under
capitalized lease obligations, (iv) all obligations of such Person in respect
of acceptances issued or created for the account of such Person, (v) all
liabilities secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the payment
thereof, and (vi) all guarantees by such Person of obligations of others.
"Inspection" shall have the meaning set forth in Section 7.7(b) hereof.
"Instruments of Transfer" shall have the meaning set forth in Section
2.1(b) hereof.
"Intellectual Property" shall mean all intellectual property rights used
in or reasonably necessary for the business of the Sellers as currently
conducted or as presently contemplated by the Sellers to be conducted,
including all patents and patent applications, trademarks, trademark
registrations and applications; service marks, service xxxx registrations and
applications, logos, designs, proprietary rights, slogans and general
intangibles of like nature, together with all goodwill related to the
foregoing; trade names, copyrights, copyright registrations and applications;
Computer Programs; product plans, technology, process engineering, drawings,
schematic drawings, secret processes; proprietary knowledge, including without
limitation, trade secrets, know-how, confidential confirmation, proprietary
processes and formulae; provided such intangibles shall not include any right
or license to use the name "Xxxxx" in any manner whatsoever, including without
limitation any registered trademark, domain names and other rights containing
or incorporating the name "Xxxxx"; provided further, that the foregoing shall
not include any shrink-wrapped or similar off-the-shelf products.
"Interim Balance Sheet" shall have the meaning set forth in Section 4.7(b)
hereof.
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"IRS" shall mean the Internal Revenue Service of the United States.
"Knowledge" with respect to any particular representation or warranty
contained in this Agreement, when used to apply to the "Knowledge" of Sellers,
shall be deemed to be followed by the phrase "after due inquiry" and shall mean
the actual knowledge or conscious awareness after due inquiry of the senior
officers of the Sellers.
"Laws" shall mean any applicable federal, state or local law, statute,
ordinance, rule, regulation, order, judgment or decree, administrative order,
decree, administrative and judicial decision.
"Liabilities" shall mean debts, liabilities, commitments, obligations,
duties and responsibilities of any kind and description, whether absolute,
accrued, contingent, monetary or nonmonetary, direct or indirect, known or
unknown or matured or unmatured or of any other nature, including, but not
limited to, liabilities on account of taxes, other governmental charges or
lawsuits brought, whether or not of a kind required by generally accepted
accounting principles to be set forth on a financial statement, which are not
set forth on or disclosed in the Audited Balance Sheet, the Closing Balance
Sheet or the Interim Balance Sheet.
"Licenses" shall have the meaning set forth in Section 4.15(d) hereof.
"Liens" shall mean any lien, pledge, mortgage, security interest, lease,
charge, option, right of first refusal, easement, servitude, transfer
restriction under any shareholder or similar agreement, or any other
encumbrance of any nature whatsoever.
"Litigation" shall mean any litigation, legal action, arbitration,
proceeding, material demand, material claim or investigation pending, or, to
the Knowledge of the Sellers or RMS as the case may be, threatened, planned or
reasonably probable, against, affecting or brought by or against the Sellers or
RMS, the Sellers' or RMS' present or former employees or agents affiliated at
any time with the Sellers or RMS relating to the business of the Sellers or RMS
or any of the Assets or Assumed Liabilities.
"Managed" shall have the meaning set forth in Section 4.13(e).
"Management Agreement" shall mean the management agreement between
Purchaser and the Sellers, a form of which shall be agreed upon by the parties
hereto prior to Closing and attached hereto as Exhibit B.
"Marks" shall mean all trade names, trademarks, service marks, brand
names, brand marks, fictitious names or other Intellectual Property relating
thereto; provided such trade names, trademarks, service marks, brand names,
brand marks, fictitious names or other Intellectual Property shall not include
any right or license to use the name "Xxxxx" in any manner whatsoever,
including without limitation any registered trademark, domain names and other
rights containing or incorporating the name "Xxxxx"
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"Material Adverse Change" shall mean, with respect to the same or any
similar events, acts, conditions or occurrences, whether individually or in the
aggregate resulting in, a material adverse effect on or a material adverse
change in (i) the Assets or the Assumed Liabilities, (ii) any of the Business,
condition (financial or otherwise), operations, assets or liabilities of the
Sellers. For purposes of this definition and without limiting the generality of
the foregoing, an effect or change with respect to the same or any similar
event(s), act(s), condition(s) or occurrence(s) individually or in the
aggregate with respect to which the Sellers would reasonably be expected to
have $2,000,000 in the aggregate or more in Damages being asserted against,
imposed upon or sustained by the Assets taken as a whole or a corresponding
increase in the Assumed Liabilities shall constitute a "material adverse"
change.
"Material Adverse Effect" shall mean, with respect to the same or any
similar events, acts, conditions or occurrences, whether individually or in the
aggregate resulting in, a material adverse effect on or a material adverse
change in (i) the Assets or the Assumed Liabilities, (ii) any of the Business,
condition (financial or otherwise), operations, assets or liabilities of the
Sellers, (iii) the legality or enforceability against the Sellers of this
Agreement or (iv) the ability of the Sellers to perform its obligations and to
consummate the transactions under this Agreement. For purposes of clauses (i)
and (ii) of this definition and without limiting the generality of the
foregoing, an effect or change with respect to the same or any similar
event(s), act(s), condition(s) or occurrence(s) individually or in the
aggregate with respect to which the Sellers would reasonably be expected to
have $100,000 in the aggregate or more in Damages being asserted against,
imposed upon or sustained by the Assets taken as a whole or a corresponding
increase in the Assumed Liabilities shall constitute a "material adverse"
effect.
"Material Contracts" shall have the meaning set forth in Section 4.14(a)
hereof.
"Nondelivered Assets" shall have the meaning set forth in Section 2.3
hereof.
"Other Entity" shall have the meaning set forth in Section 4.2(c) hereof.
"Owned Real Property" shall have the meaning set forth in Section 5.6(a)
hereof.
"Ownership Interests" shall have the meaning set forth in Section 4.2(a)
hereof.
"Permits" shall mean as to any Person, all licenses, permits, franchises,
orders, approvals, concessions, registrations, authorizations and
qualifications under any federal, state or local laws with any and all
Governmental Authorities or with any and all industry or other non-governmental
self-regulatory organizations that are issued to such Person.
"Person" shall mean an individual, a corporation, a partnership, limited
liability company, an association, a trust or other entity or organization.
"Plan of Recapitalization" shall mean that certain Plan of
Recapitalization dated April 22, 1998 by and between RMS and PSI.
"PSI" shall mean Precision Systems, Inc., a Delaware corporation.
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"PSI Board" shall mean the board of directors of PSI.
"PSI Common Stock" shall mean the common stock, par value $.01 per share,
of PSI.
"PSI Interests" shall have the meaning set forth in Section 5.6(b) hereof.
"PSI Securities" shall have the meaning set forth in Section 5.6(b)
hereof.
"Purchase Price" shall have the meaning set forth in Section 3.1 hereof.
"Purchaser" shall have the meaning set forth in the introductory paragraph
to this Agreement.
"Purchaser Indemnified Parties" shall mean Purchaser and its successors,
assigns, Affiliates, agents and employees.
"PVS" shall mean Professional Video Services Corporation, a District of
Columbia corporation.
"Real Estate Transfer Agreement" shall mean that certain Real Estate
Transfer Agreement dated April 22, 1998 by and between RMS and PSI.
"Real Property" shall have the meaning set forth in Section 4.9(b) hereof.
The parties agree that such term shall not encompass Owned Real Property.
"Regulatory Licenses" shall mean all of the licenses, permits, and other
authorizations issued by (i) the FCC with respect to the business of reselling
long distance telecommunications services and the operation of satellite earth
stations, and (ii) the public service commissions of the various states with
respect to the business of reselling long distance telecommunications services.
"Release" shall mean any release, spill, emission, leaking, pumping,
dumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment (including ambient air,
surface water, groundwater and surface or subsurface strata, sewers, storm
drains, or a publicly owned treatment works), or into or out of any property,
including the movement of Hazardous Materials through or in the air, soil,
surface water, groundwater or property.
"Remedial Action" shall mean any action or proceeding to (i) cause the
removal, abatement or containment of any Hazardous Materials, or (ii) to
correct or prevent a Release, or to recover the cost of either of the foregoing
by a Government Authority or third party.
"Requirement of Law" shall mean as to any Persons, the Partnership
Agreement, Certificate of Incorporation, Bylaws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation or
order of an arbitrator or Governmental Authority, in each case applicable to or
binding upon such Person or any of its properties or assets or to which such
Person or any of its properties or assets is subject.
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"RMS" shall mean RMS Limited Partnership, a Nevada limited partnership.
"Schedules" and any references to specific items therein shall mean the
disclosure schedules hereto.
"Seller Indemnified Parties" shall mean the Sellers and their successors,
assigns, Affiliates, agents and employees.
"Sellers" shall have the meaning set forth in the introductory paragraph
to this Agreement.
"Xxxxx Communications" shall mean Xxxxx Communications Holdings Limited
Partnership, a Nevada limited partnership.
"Xxxxx Productions" shall mean Xxxxx Productions Limited Partnership, a
Nevada limited partnership.
"Xxxxx/PSI Agreements" shall mean, collectively, the Contribution
Agreement, the Real Estate Transfer Agreement and the Plan of Recapitalization.
"Xxxxx World Wide" shall mean Xxxxx World Wide Digital Limited
Partnership, a Nevada limited partnership.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other organization, whether incorporated or unincorporated, of
which such Person or any other subsidiary of such person beneficially owns a
majority of the voting or equity interests.
"SVM" shall mean Xxxxx Virtual Media Limited Partnership, a Nevada limited
partnership.
"Systems" shall have the meaning set forth in Section 4.27 hereof.
"Tax Law" shall mean any Law relating to Taxes.
"Tax Return" shall mean any return, report, information return or other
document (including any related or supporting information) with respect to
Taxes.
"Taxes" shall mean all taxes, charges, fees, duties, levies, penalties or
other assessments imposed by any Governmental Authority, including income,
gross receipts, excise, property, sales, gain, use, license, capital stock,
transfer, franchise, payroll, withholding, social security or other taxes,
including any interest, penalties or additions attributable thereto.
"Third Party Software" shall have the meaning set forth in Section 4.9(f)
hereof.
"Year 2000 Compliant" shall have the meaning set forth in Section 4.27
hereof.
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Section 1.2 Terms Generally. The definitions in Sections 1.1
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation"
even if not followed actually by such phrase unless the context expressly
provides otherwise. Unless otherwise expressly defined, terms defined in the
Agreement shall have the same meanings when used in any Exhibit or Schedule and
terms defined in any Exhibit or Schedule shall have the same meanings when used
in the Agreement or in any other Exhibit or Schedule. The words "herein,"
"hereof," "hereto" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular provision of this
Agreement. The phrase "made available" in this Agreement shall mean that the
information referred to has been made available by the party in question. The
phrases "the date of this Agreement," "the date hereof" and terms of similar
import, unless the context otherwise requires, shall be deemed to refer to the
date set forth in the introductory paragraph of this Agreement. References to
"dollars" or "$" in this Agreement shall mean United States dollars unless the
context provides otherwise.
ARTICLE II
ACQUISITION AND DISPOSITION OF ASSETS
Section 2.1 Purchase and Sale of Assets.
(a) At the Closing, upon the terms and subject to the
conditions set forth in this Agreement, the Sellers shall transfer, assign,
convey and deliver to Purchaser and Purchaser shall receive from the Sellers
all right, title and interest in and to all of the Assets (as defined below)
free and clear of all Liens, encumbrances and security interests except for
Assumed Liabilities. It is the intent of the parties hereto that the "Assets"
shall mean (x) the Owned Real Property and the PSI Securities owned by RMS, and
(y) all right, title and interest in all of the assets, tangible or intangible,
along with all contractual and leasehold rights the Sellers hold (subject to
the limitations set forth in Section 2.2), and, including without limitation,
to all of the following assets of Sellers as of the Closing Date:
(i) all Intellectual Property used in or useful to
the conduct of the Business, including without limitation, those items
listed but not exhaustively described on Schedule 2.1(a)(i);
(ii) all contracts, agreements (including employment
agreements), contract rights, license agreements, purchase and sales
orders, quotations and other executory commitments of the Sellers
entered into by the Sellers listed on Schedule 2.1(a)(ii) (the
"Contracts");
(iii) all accounts receivable and all cash, notes or
other securities and accounts attributable to the Sellers for
operations of the Sellers on or after the Closing Date;
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(iv) all computer equipment and related software and
software licenses, office equipment and other personal property of
Sellers listed on Schedule 2.1(a)(iv);
(v) all books of account, customer and supplier lists
including addresses, drawings, files, papers and records of the
Sellers;
(vi) all deposits, advance payments, prepaid items and
expenses, deferred charges, rights of offset and credits and claims
for refund relating to the Sellers;
(vii) all claims, rights and causes in action against
third parties and all rights to insurance proceeds relating to any
damage, destruction or impairment of the assets of the Sellers;
(viii) all licenses, permits, consents and certificates
of any Governmental Authority issued to or held by the Sellers
necessary or incidental to the conduct of the Business, including
without limitation the Regulatory Licenses (to the extent the same are
transferable);
(ix) all goodwill, if any, associated with the Assets,
in particular, or the Sellers, in general;
(x) all shares of capital stock of Holdco ("Holdco
Shares") pursuant to the provisions contained in Section 7.14;
(xi) all Real Property; and
(xii) all other miscellaneous items set forth on
Schedule 2.1(a)(xii).
(b) The sale, conveyance, assignment, transfer and delivery
of the Assets will be effected by delivery by the Sellers or RMS, as
applicable, to Purchaser of (i) a Xxxx of Sale, Assignment and Assumption
Agreement from each Seller, (ii) executed copies of the filings, consents,
approvals, notices or waivers, and copies of the instruments transferring,
registering or issuing the consents, approvals, permits, licenses, permissions,
registrations or other authorizations referred to in Section 7.2 hereof, (iii)
with respect to the Owned Real Property, a warranty deed (the "Warranty Deed")
with respect to the Owned Real Property from RMS, (iv) with respect to the PSI
Securities and subject to the provisions of Section 7.18, the PSI Securities
accompanied by duly executed stock powers, and (v) such other good and
sufficient instruments of conveyance, transfer and assignment (together with
the Xxxx of Sale, Assignment and Assumption Agreement, the "Instruments of
Transfer") as shall be necessary to vest in Purchaser full right, title and
interest in and to the Assets, free and clear of all claims and Liens whether
absolute, accrued, contingent or otherwise except the Assumed Liabilities.
(c) Upon the terms and subject to the conditions of this
Agreement, including but not limited to the exceptions set forth in Section
2.1(d), at the Closing Purchaser will assume and agree to pay, perform and
discharge as and when due the liabilities and obligations of the Sellers listed
in Schedule 2.1(c) (the "Assumed Liabilities"); provided, however, that the
amount
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of Assumed Liabilities as of the Closing Date shall not exceed either (i) the
amount of liabilities as set forth on the Closing Balance Sheet (as defined in
Section 7.12) or (ii) the amount of current assets as set forth on the Interim
Balance Sheet (as defined in Section 4.7(b)); further provided, however, that
(x) as set forth on each of the Interim Balance Sheet and the Closing Balance
Sheet, current liabilities of the Sellers shall not exceed current assets of
the Sellers by more than $500,000, and (y) net working capital of the Sellers
as calculated at Closing shall not be less than $0. The assumption of the
Assumed Liabilities by Purchaser will be effected by delivery by Purchaser to
the Sellers of the duly executed Xxxx of Sale, Assignment and Assumption
Agreement.
(d) Except as may be expressly provided for in this
Agreement, Purchaser shall not assume and the Sellers shall not assign to
Purchaser and shall remain liable for, any liability or obligation, direct or
indirect, absolute or contingent, of the Sellers or any Subsidiary, division,
associate or Affiliate of the Sellers, or of any Person, relating to (i) Taxes
with respect to or attributable to the Assets for all taxable periods through
the Closing Date, Taxes with respect to or attributable to the properties,
business or operations of the Sellers or any Subsidiary, division, associate or
Affiliate of the Sellers and Taxes of the Sellers with respect to or
attributable to the transactions contemplated hereby or otherwise, (ii) any
Liabilities associated with the Excluded Assets, (iii) any Liabilities
associated with the Assumed Liabilities that arise or relate to events that
occur prior to the Closing Date, (iv) any employee benefit plan of any Seller
or any benefits or other amounts payable and provided under any Seller's
employee benefit plan or any contract relating to employment or termination of
employment between any of the Sellers or any of their Affiliates and any of
their respective employees or former employees and (v) any other Liabilities of
the Sellers not disclosed in Schedule 2.1(c) (collectively, the "Excluded
Liabilities").
Section 2.2 Excluded Assets. It is the intention of the parties that no
assets other than the Assets identified in Section 2.1 be sold, transferred or
conveyed to Purchaser pursuant to this Agreement and, as a point of
clarification, the parties agree that the Assets shall specifically not include
any assets of the Sellers set forth on Schedule 2.2 (collectively, the
"Excluded Assets"), all of the Sellers' right, title and interest in and to
which, as the same exist as of the date hereof or as of the Closing Date, shall
be retained by RMS and the Sellers, as the case may be. As a further point of
clarification and not in limitation of the foregoing, the parties agree that
Purchaser is purchasing only assets and not capital stock, partnership
interests or other equity or ownership interests or intercompany notes
receivable or payable held by any party hereto other than the membership
interests in Holdco the PSI Securities; provided that the PSI Securities shall
be deemed Excluded Assets if the PSI Board does not approve the Anschutz/PSI
Transaction in accordance with the provisions of Section 7.18.
Section 2.3 Nondelivered Assets. Notwithstanding anything else contained
in this Agreement, in the event that an Asset is not delivered by the Sellers
to Purchaser at Closing (a "Nondelivered Asset"), the Sellers shall deliver
such Asset to Purchaser as soon as the Sellers have actual knowledge of the
existence of such Nondelivered Asset.
Section 2.4 No Assignment if Breach. Notwithstanding anything contained
in this Agreement to the contrary, this Agreement shall not constitute an
agreement to assign any of the Assets, or to assume any Assumed Liabilities, if
the attempted assignment or assumption of the same, as a result of the absence
of the consent or authorization of a third party, would constitute a breach or
default under any lease, agreement, encumbrance or commitment or would in any
way adversely affect the rights, or increase the obligations, of any party or
any subsidiary with respect
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thereto or would otherwise affect the ability of Purchaser to receive the
benefit of the Assets. If any such consent or authorization is not obtained,
or if an attempted assignment or assumption would be ineffective or would
adversely affect the rights or benefits or increase the obligations of
Purchaser with respect to any such Assets, or Assumed Liabilities, as
appropriate, then the parties shall enter into such reasonable cooperative
arrangements (including without limitation, sublease, agency, partial closing,
management, indemnity or payment arrangements and enforcement at the cost and
for the benefit of Purchaser of any and all rights of the Sellers against an
involved third party) to provide for Purchaser the benefit of such Assets or
such Assumed Liabilities, any transfer or assignment to Purchaser by the
Sellers or a subsidiary of the Sellers, of any such Assets, or any assumption
by Purchaser of any such Assumed Liabilities, which shall require such consent
or authorization or a third party that is not obtained, shall be made subject
to such consent or authorization being obtained.
ARTICLE III
PAYMENT AND DELIVERY
Section 3.1 Purchase Price and Payment. The total purchase
price under this Agreement shall be the sum of ONE HUNDRED SIX MILLION DOLLARS
($106,000,000.00) (the "Purchase Price"); provided, that if the PSI Board does
not approve the Anschutz/PSI Transaction in accordance with Section 7.18, the
Purchase Price will be reduced by $18,250,000. On the Closing Date, Purchaser
will deliver to the Sellers the Purchase Price payable to the Sellers in
immediately available United States funds in accordance with the terms and
provisions set forth herein.
Section 3.2 Allocation of Consideration. The aggregate consideration
paid by Purchaser to the Sellers pursuant to Section 3.1 hereof, shall be
allocated among the Assets as set forth on Exhibit C attached hereto. The
allocation of the Purchase Price was bargained and negotiated for and each
party hereto shall file all Tax Returns (including Form 8594 which has been
agreed upon by both Purchaser and the Sellers) in a manner consistent with
Exhibit C. Purchaser will propose a preliminary Form 8594 once the Closing
Balance Sheet becomes available and submit such Form 8594 for the Sellers'
review and concurrence.
Section 3.3 Closing. Subject to the terms of Article IX, the sale,
conveyance, assignment, transfer and delivery of the Assets by the Sellers and
payment of the Purchase Price and assumption of the Assumed Liabilities by
Purchaser (hereinafter called the "Closing") shall take place at 9:00 A.M.
(Denver time) at the offices of Xxxxx & Xxxxxxx L.L.P., 0000 Xxxxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 on the first business day following
the day on which all conditions set forth in Article VII shall have been
satisfied or waived, or on such other date, time and place as may be mutually
agreed upon by the parties hereto. The date on which the Closing occurs is
referred to herein as the "Closing Date." Notwithstanding the foregoing or any
other provision of this Agreement to the contrary, the parties hereto agree
that the closing of the transactions contemplated herein shall be deemed to
take effect at 12:01 A.M. (Denver time) on the Closing Date.
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Section 3.4 Deliveries by the Sellers. At the Closing, the Sellers shall
deliver to Purchaser:
(a) A duly executed Xxxx of Sale, Assignment and Assumption
relating to the Assets and Assumed Liabilities referred to in Section 2.1(a)
hereof;
(b) Such other good and sufficient Instruments of Transfer as
shall be necessary to vest in Purchaser all of the Sellers' title to the
Assets, free and clear of all Liens;
(c) The certificates referred to in Section 8.2(d) hereof;
(d) Copies of all consents, approvals, authorizations,
agreements and other documentation required pursuant to Section 7.2 hereof;
(e) The Employment, Confidentiality and Unfair Competition
Agreements;
(f) The Management Agreement; and
(g) Such other documents, instruments and writings reasonably
requested by Purchaser at or prior to the Closing.
Purchaser will thereupon take actual possession of the Assets and
assume the Assumed Liabilities.
Section 3.5 Deliveries by RMS. At the Closing, RMS shall deliver to
Purchaser:
(a) the Warranty Deed; and
(b) subject to the provisions of Section 7.18, the PSI
Securities free and clear of all Liens accompanied by duly executed stock
powers.
Purchaser will thereupon take actual possession of the Owned Real
Property and, subject to the provisions of Section 7.18, the PSI Securities.
Section 3.6 Deliveries by Purchaser. At the Closing, Purchaser shall
deliver to the Sellers:
(a) The Purchase Price payable in immediately available
United States funds;
(b) A duly executed Xxxx of Sale, Assignment and Assumption
relating to the Assets and Assumed Liabilities, referred to in Section 2.1(a)
hereof;
(c) The certificate referred to in Section 8.3(c) hereof;
(d) The Employment, Confidentiality and Unfair Competition
Agreements;
(e) The Management Agreement; and
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(f) Such other documents, instruments and writing reasonably
requested by the Sellers at or prior to the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers jointly and severally represent and warrant to Purchaser as
follows:
Section 4.1 Authorization and Validity. Each of the Sellers has full
partnership or corporate power and authority, as the case may be, to enter into
this Agreement and the other documents and instruments to be executed and
delivered by the Sellers pursuant hereto (to the extent that such Person is a
party hereto or thereto) and to carry out its obligations hereunder and
thereunder. The execution, delivery and performance by the Sellers of this
Agreement and the other documents and instruments to be executed and delivered
by the Sellers pursuant hereto, and the consummation by the Sellers of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by the management committee or similar governing body, as
applicable, of the Sellers and no other partnership or corporate act or
proceeding on the part of the Sellers is necessary to authorize the execution
and delivery by the Sellers of this Agreement or the other documents or
instruments to be executed and delivered by the Sellers pursuant hereto, or the
consummation by the Sellers of the transactions contemplated hereby or thereby.
This Agreement and the other documents and instruments to be executed and
delivered by the Sellers pursuant hereto (to the extent that such Person is a
party hereto or thereto) have been duly and validly executed and delivered by
the Sellers (to the extent that such Person is a party hereto or thereto) and,
assuming this Agreement and the other documents and instruments to be executed
and delivered by the Sellers pursuant hereto (to the extent that such Person is
a party hereto or thereto) are the valid and binding obligations of such other
Persons a party hereto or thereto, constitutes a valid and binding obligation
of the Sellers (to the extent that such Person is a party hereto or thereto)
enforceable against the Sellers (to the extent that such Person is a party
hereto or thereto) in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
Section 4.2 Equity; Good Title.
(a) Schedule 4.2(a) sets forth, as of the date hereof, the
names of the holders of partnership or other equity interests of each Seller
and the percentage and nature of ownership of such holder therein (such
partnership and other equity interests are referred to collectively as the
"Ownership Interests"). All of the outstanding Ownership Interests of the
Sellers are validly issued, fully paid and nonassessable, and have not been
issued in violation of any preemptive or similar rights.
(b) All of the outstanding Ownership Interests of the Sellers
are owned beneficially and of record by the respective owners thereof
identified on Schedule 4.2(a), free and clear of all Liens.
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(c) Schedule 4.2(c)(i) sets forth the name, form of
organization, jurisdiction of organization and percentage ownership of any
Person in which the Sellers directly or indirectly own any equity or other
ownership interest (an "Other Entity"). Except as set forth on Schedule
4.2(c)(ii), the Sellers have no Subsidiaries. All outstanding shares of
capital stock, partnership interests and other ownership interests of each
Other Entity are owned beneficially and of record by the Sellers free and clear
of any Liens, preemptive rights and similar rights. Except as set forth on
Schedule 4.2(c)(iii), there are no outstanding options, warrants, calls, rights
or commitments, or any other agreements of any character relating to the sale,
issuance or voting of, or the granting of rights to acquire, any shares of
capital stock of or other debt or equity interest in such Other Entity, or any
securities or other instruments convertible into, exchangeable for or
evidencing the right to purchase any shares of capital stock of or other debt
or equity interest in any such Other Entity. Except for the Other Entities,
the Sellers do not own any equity or other ownership interests in any other
Person.
Section 4.3 Capitalization. As of the date hereof, SVM holds 665,421
shares of Series B Preferred Stock of IHC. To the Knowledge of Sellers, the
authorized capital stock of IHC consists of:
(a) 6,000,000 shares of common stock, of which:
(i) 1,803,820 shares are issued and outstanding;
(ii) 621,302 shares are reserved for issuance upon
conversion of IHC's Series A Preferred Shares;
(iii) 665,421 shares are reserved for issuance upon
conversion of IHC's Series B Preferred Shares;
(iv) 1,338,750 shares (the "Option Shares") are
reserved for issuance pursuant to IHC's 1994 Stock Option Plan, 1995 Stock
Option Plan and 1996 Stock Option Plan; and
(v) 1,110,560 shares shall are reserved for issuance
upon the exercise of the certain warrants.
(b) 1,286,723 shares of Preferred Stock, of which:
(i) 621,302 shares are designated Series A Preferred
Stock, 591,716 of which are issued and outstanding; and
(ii) 665,421 shares are designated Series B Preferred
Stock, all of which are issued and outstanding.
To the Knowledge of Sellers, all of the issued and outstanding shares of
capital stock of IHC and PSI held by the Sellers have been duly authorized and
validly issued, are fully paid and
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nonassessable and were issued in compliance with all applicable state and
federal securities laws. Except as set forth herein or on Schedule 4.3 or as
contemplated by this Agreement and to the Knowledge of Sellers, (x) no
subscription, warrant, option, convertible security or other right (contingent
or otherwise) to purchase or acquire any shares of capital stock of IHC is
authorized or outstanding, (y) IHC does not have any obligation (contingent or
otherwise) to issue any subscription, warrant, option, convertible security or
other such right or to issue or distribute to holders of any shares of its
capital stock any evidence of indebtedness or assets of IHC, and (z) IHC does
not have any obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any shares of its capital stock or any interest therein or to
pay any dividend or make any other distribution in respect thereof.
Section 4.4 Organization. Each of the Sellers that is a
partnership (a) is a duly organized and validly existing partnership under the
laws of the State of Nevada, and (b) has full power and authority to own all of
its properties and assets, including the Assets, and to carry on its business
as it is now being conducted. PVS is a corporation duly organized, validly
existing and in good standing under the laws of the District of Columbia. ESI
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Nevada. Each of PVS and ESI has the corporate power
and authority to own, lease and operate its respective properties and assets,
including the Assets, and to carry on its business as now being conducted and
is duly qualified or licensed to do business as a foreign corporation in good
standing in the jurisdictions in which the ownership, lease or operation of its
property or the conduct of its business requires such qualification, except
jurisdictions in which the failure to be so qualified or licensed would not
reasonably be expected to have a Material Adverse Effect. The Sellers have
delivered to Purchaser a complete and correct copy of the partnership
agreements or other organizational documents of each of the Sellers, each as
amended to date. Such organizational documents are in full force and effect
and the Sellers are not in material violation of any provision of such
organizational documents. None of the Persons listed on Schedule 4.4 hereto
owns any assets of or related to the Business, other than Excluded Assets.
Section 4.5 No Conflict. Except as set forth in Schedule 4.5,
neither the execution, delivery or performance of this Agreement or the other
documents and instruments to be executed and delivered by the Sellers pursuant
hereto, nor the consummation by the Sellers of the transactions contemplated
hereby or thereby, nor compliance by the Sellers with any of the provisions
hereof or thereof will (a) conflict with or result in any breach of any
provision of any of the partnership agreements or similar organizational
documents of the Sellers, (b) constitute a change in control under or require
the consent from or the giving of notice to a third party, result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, or result in the creation of any Lien upon
or affecting any of the Assets pursuant to, any of the terms, conditions or
provisions of any contractual obligation of the Sellers, (c) violate any order,
writ, injunction, decree, statute, rule or regulation of any Governmental
Authority applicable to the Sellers or to which any of their properties or
assets (including the Assets) may be bound, or (d) result in triggering of any
right of first refusal or other right under any partnership or joint venture
agreement to which the Sellers are a party, except in the case of clauses (b),
(c) or (d) for
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such violations, breaches or defaults which would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 4.6 Governmental Consents. Except (a) under the HSR Act,
(b) with respect to the business of reselling long distance telecommunications
services, the consent of the FCC and the public service commissions of the
various states and (c) with respect to licenses to operate satellite earth
stations, the consent of the FCC, no consent, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is
required in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby by
Sellers.
Section 4.7 Balance Sheet Information.
(a) Sellers have delivered to Purchaser a copy of the audited
balance sheet of Sellers (the "Audited Balance Sheet") as of December 31, 1997
(the "Audited Balance Sheet Date"), together with the notes thereto,
accompanied by the reports thereon of Deloitte & Touche LLP, independent public
accountants. The Audited Balance Sheet, together with the notes thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout the
year covered thereby (except to the extent disclosed therein or required by
changes in GAAP), and presents accurately (x) the information purported to be
presented therein and (y) the financial position of Sellers as of the Audited
Balance Sheet Date and for the year then ended. Reserves are reflected on the
Audited Balance Sheet against assets in amounts that have been established on a
basis consistent with past practice and in accordance with GAAP. There have
been no changes in reserves of the Sellers since the Audited Balance Sheet Date
other than changes in such reserves consistent with past practice in such
amounts as would not in the aggregate have a Material Adverse Effect.
(b) Sellers have delivered to Purchaser a copy of the
unaudited balance sheet of Sellers as of December 31, 1998 (the "Interim
Balance Sheet"). The Interim Balance Sheet was prepared in accordance with
GAAP applied on a consistent basis throughout the year covered thereby (except
to the extent disclosed therein or required by changes in GAAP), and presents
accurately (x) the information purported to be presented therein and (y) the
financial position of Sellers as of December 31, 1998 and for the year then
ended. Reserves are reflected on the Interim Balance Sheet against assets in
amounts that have been established on a basis consistent with past practice and
in accordance with GAAP. There have been no changes in reserves of the Sellers
since December 31, 1998 other than changes in such reserves consistent with
past practice in such amounts as would not in the aggregate have a Material
Adverse Effect.
(c) Except as disclosed in Schedule 4.7(c), there are no
Liabilities that are not reflected or reserved against in the Interim Balance
Sheet other than such Liabilities as (i) were incurred in the ordinary course
of business in a manner consistent with past practice since December 31, 1998,
or (ii) would not be required to be presented in financial statements or the
notes thereto prepared in conformity with GAAP, applied in a manner consistent
with past practice, in the preparation of the Interim Balance Sheet.
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Section 4.8 Absence of Certain Changes or Events. Except as set
forth on Schedule 4.8, since September 30, 1998, (a) the Sellers have conducted
their business only in the ordinary course and consistent with past practice,
(b) there has not been any development or event that has or could reasonably be
expected to have, individually or in the aggregate with any other development
or event, a Material Adverse Effect and (c) except as contemplated in this
Agreement, none of the Sellers has:
(i) adopted any amendment to its partnership
agreement or similar organization documents other than such amendments
which have been previously provided to Purchaser;
(ii) (A) sold, leased, transferred or disposed of
any assets or rights, other than assets or rights that individually or
in the aggregate would not be material, in either case, in the
ordinary course of business consistent with past practice, (B)
incurred any Lien thereupon, except for Liens incurred in the ordinary
course of business consistent with past practice which Liens would not
in the aggregate be material, (C) acquired or leased any assets or
rights other than assets or rights that individually or in the
aggregate would not be material in the ordinary course of business
consistent with past practice, or (D) entered into any commitment or
transaction with respect to (A), (B) or (C) above;
(iii) (A) incurred, assumed or refinanced any
Indebtedness or (B) made any loans, advances or capital contributions
to, or investments in, any Person;
(iv) paid, discharged or satisfied any liability,
obligation, or Lien other than payment, discharge or satisfaction of
(A) Indebtedness as it matures and become due and payable or (B)
liabilities, obligations or Liens in the ordinary course of business
consistent with past practice;
(v) (A) changed any of the accounting or tax
principles, practices or methods used by the Sellers, except as
required by changes in applicable Tax Laws, or (B) changed reserve
amounts or policies;
(vi) made any change in the compensation payable
or to become payable to any of its officers, employees, agents,
consultants or Persons acting in a similar capacity (other than
general increases in wages to employees who are not officers or
Persons acting in a similar capacity or Affiliates in the ordinary
course consistent with past practice), or to Persons providing
management services, entered into or amended any employment,
severance, consulting, termination or other agreement or employee
benefit plan or made any loans to any of its Affiliates, officers,
employees, agents or consultants or Persons acting in a similar
capacity or made any change in its existing borrowing or lending
arrangements for or on behalf of any of such Persons pursuant to an
employee benefit plan or otherwise;
(vii) paid or made any accrual or arrangement for
payment of any pension, retirement allowance or other employee benefit
pursuant to any existing plan,
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agreement or arrangement to any Affiliate, officer, employee or Person
acting in a similar capacity; or paid or agreed to pay or made any
accrual or arrangement for payment to any Affiliate, officers,
employees or Persons acting in a similar capacity of any amount
relating to unused vacation days, except payments and accruals made in
the ordinary course consistent with past practice; grant, issue,
accelerate or accrue salary or other payments or benefits pursuant to
any pension, profit-sharing, bonus, extra compensation, incentive,
deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, severance pay, retirement or
other employee benefit plan, agreement or arrangement, or any
employment or consulting agreement with or for the benefit of any
Affiliate, officer, employee, agent or consultant or Person acting in
a similar capacity, whether past or present; or amend in any material
respect any such existing plan, agreement or arrangement in a manner
consistent with the foregoing;
(viii) entered into any collective bargaining
agreement;
(ix) made any payments (other than regular
compensation payable to officers and employees or Persons acting in a
similar capacity of such Seller in the ordinary course consistent with
past practice), loans, advances or other distributions to, or enter
into any transaction, agreement or arrangement with, such Seller's
Affiliates, officers, employees, agents, consultants or Persons acting
in a similar capacity, stockholders of their Affiliates, associates or
family members;
(x) made or authorized any capital expenditures,
except in the ordinary course consistent with past practice not in
excess of $10,000 individually or $25,000 in the aggregate;
(xi) incurred any Taxes, except in the ordinary
course of business consistent with past practice;
(xii) settled or compromised any Tax liability or
agreed to any adjustment of any Tax attribute or made any election
with respect to Taxes;
(xiii) failed to duly and timely file any Tax Return
with the appropriate Governmental Authorities required to be filed by
it in a true and complete and correct form or to timely pay all Taxes
shown to be due thereon;
(xiv) (A) entered into, amended, renewed or
permitted the automatic renewal of, terminated or waived any right
under, any Material Contract, or, except in the ordinary course of
business consistent with past practice, any other agreement, or (B)
took any action or failed to take any action that, with or without
either notice or lapse of time, would constitute a default under any
Material Contract;
(xv) (A) made any change in its working capital
practices generally, including accelerating any collections of cash or
accounts receivable or deferring payments or (B) failed to make timely
accruals, including with respect to accounts payable and liabilities
incurred in the ordinary course of business;
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(xvi) failed to renew (at levels consistent with
presently existing levels), terminated or amended or failed to perform
any of its obligations or permitted any material default to exist or
caused any material breach under, or entered into (except for renewals
in the ordinary course of business consistent with past practice), any
material policy of insurance;
(xvii) disposed of or permitted to lapse any
material Intellectual Property;
(xviii) except in the ordinary course of business
consistent with past practice pursuant to appropriate confidentiality
agreements, and except as required by any Law, any existing agreements
set forth on Schedule 4.14 or as may be reasonably necessary to secure
or protect intellectual or other property rights of such Seller,
provided any confidential information regarding the Business to any
Person other than Purchaser;
(xix) waived, or agreed to waive, any right of
material value to the Assets; or
(xx) materially changed, or agreed to materially
change, any of the Sellers' business policies or practices relating to
or affecting the Assets including, without limitation, production,
advertising, marketing, pricing, purchasing, accounting, sales,
returns, budget or product acquisition policies or practices.
Section 4.9 Property; Assets.
(a) Except as set forth on Schedule 4.9(a), the Sellers
own, or otherwise have a valid leasehold interest or licenses providing
sufficient and legally enforceable rights to use, all of the property and
assets necessary or otherwise material to the conduct of the Business. The
Sellers have good and marketable (other than with respect to personal property)
title to all assets reflected on the Interim Balance Sheet or acquired since
the date of the Interim Balance Sheet, free and clear of all Liens, other than
immaterial assets disposed of since the Balance Sheet Date in the ordinary
course of business consistent with past practice. As of the Closing Date, the
Sellers shall have good and marketable (other than with respect to personal
property) title to all assets reflected on the Closing Balance Sheet or
acquired since the date of the Closing Balance Sheet, free and clear of all
Liens, other than immaterial assets disposed of since the Balance Sheet Date in
the ordinary course of business consistent with past practice. Such assets are
generally in good operating condition and repair (ordinary wear and tear
excepted), have been reasonably maintained consistent with standards generally
followed in the industry, are suitable for their present uses and, in the case
of owned structures, are structurally sound.
(b) Schedule 4.9(b) contains a list of all real property
owned or leased by the Sellers (the "Real Property"), indicating whether such
property is owned or leased. The current use of the Real Property by the
Sellers does not violate the certificate of occupancy thereof or any local
zoning or similar land use or other Laws and none of the structures on the Real
Property encroaches upon real property of another Person, and no structure of
any other Person encroaches upon any Real Property. The Sellers have not
received notice of any pending or threatened condemnation proceeding, or of any
sale or other disposition in lieu of condemnation,
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affecting any of the Real Property. Each parcel of Real Property abuts on or
has direct vehicular access to a public road.
(c) Schedules 2.1(a)(i), 2.1(a)(ii), 2.1(a)(iv) and
2.1(a)(xii) set forth as of December 31, 1998, a complete and accurate list of
all furniture, equipment, automobiles and all other tangible personal property
owned by, in the possession of, or used by the Sellers in connection with their
Business which have a book value in excess of $5,000 per item. Such personal
property is not held under any lease, security agreement, conditional sales
contract, or other title retention or security arrangement or subject to any
liens or encumbrances, or is located other than in the possession of the
Sellers.
(d) All receivables of the Sellers reflected on the
Interim Balance Sheet or created after the Balance Sheet Date arose from valid
transactions in the ordinary course of business. All receivables of the
Sellers which shall have been reflected on the Closing Balance Sheet or created
after the Balance Sheet Date shall have arisen from valid transactions in the
ordinary course of business.
(e) Except as set forth on Schedule 4.9(e), by completing
the transactions contemplated herein Purchaser will obtain at Closing all such
assets, tangible or intangible and contractual, license and leasehold rights
necessary for Purchaser (i) to operate the Business as operated on the date
hereof, and (ii) to utilize the Assets and contractual, license and leasehold
rights in the same manner as they were used on the date of this Agreement. With
the exception of those assets used in the Business pursuant to license and
leasehold rights in favor of the Sellers, as of the date hereof all of the
assets used in the Businesses are owned by the Sellers and none are owned by
any other party.
(f) The Assets as identified on Schedule 2.1(a) include
(i) all machinery or equipment, including without limitation, computer
hardware, with an original market value in excess of $25,000 used to conduct
the Business (the "Equipment"), together with the date of acquisition of each
piece of Equipment and the location of each piece of Equipment and (ii) all
material software and computer programs used in the Business, including any
Computer Programs not wholly owned by the Sellers ("Third Party Software")
imbedded therein, in machine readable source code forms and in machine
executable object code forms and all related specifications (including, without
limitation, all logic architectures, algorithms and logic flows and all
physical, functional, operating and design parameters, operation systems and
procedures (including developmental methodology), designs, design revisions,
related application software in any language, concepts, ideas, processes,
techniques, software design and test tools, Third Party Software interfaces,
methods of implementation and packaging, all associated know-how and show-how
and all related programmer and user manuals, which are used by the Sellers to
install, operate, maintain, correct, test, repair, enhance, extend, modify,
prepare derivative works based upon design and develop software and computer
programs.
(g) Schedule 4.9(g) contains a true and correct list of
all securities of PSI held by Xxxxx Communications (the "PSI Notes"). Xxxxx
Communications owns the PSI Notes free and clear of all Liens.
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Section 4.10 Litigation and Claims; Compliance with Laws.
(a) Schedule 4.10(a)(i) sets forth all Litigation as of the
date hereof, including the name of the claimant, the date of the alleged act or
omission, a detailed narrative as to the nature of the alleged act or omission,
the date the matter was referred to an insurance carrier of the Sellers (if
referred), the estimated amount of exposure, the amount the Sellers have
reserved, or the amount of the Sellers' claim and estimated expenses of the
Sellers in connection with such matters. Except as set forth in Schedule
4.10(a)(ii), there is no Litigation which is not fully covered by the insurance
policies referenced in Section 4.12. Neither the Sellers, nor the Assets, are
subject to any order, consent decree, settlement or similar agreement with any
Governmental Authority. There is no judgment, injunction, decree, order or
other determination of an arbitrator or Governmental Authority specifically
applicable to the Sellers or any of their properties or assets. There is no
Litigation relating to alleged unlawful discrimination or sexual harassment. As
of the date hereof, there is no Litigation which seeks to prevent consummation
of the transactions contemplated hereby or which seeks material damages in
connection with the transactions contemplated hereby.
(b) Except as set forth in Schedule 4.10(b), the Sellers have
complied and are in compliance with all Laws applicable to the Sellers and the
Business except where the failure to be in compliance would not reasonably be
expected to have a Material Adverse Effect. Except as set forth in Schedule
4.10(b), the Sellers hold all material licenses, permits and other
authorizations of Governmental Authorities necessary to conduct their business
as now being conducted or, under currently applicable Laws, to continue to
conduct their business as now being conducted. Except as set forth in Schedule
4.10(b), to the Knowledge of the Sellers, there is no intent on the part of the
Sellers to make any changes in the conduct of the Business that will result in
or cause the Sellers to be in noncompliance with applicable Laws or that will
require changes in or a loss of any such licenses, permits or other
authorizations or an increase in any expenses related thereto except where such
noncompliance, change, loss or increase would not reasonably be expected to
have a Material Adverse Effect. Such licenses, permits and other
authorizations as aforesaid held by the Sellers are valid and in full force and
effect, and there are no (a) Actions pending, or to the Knowledge of the
Sellers, threatened or (b) Investigations to the Knowledge of the Sellers
pending or threatened that could result in the termination, impairment or
nonrenewal thereof.
Section 4.11 Taxes. The Sellers have timely filed or caused to be filed
with the appropriate federal, state and local Governmental Authority all Tax
Returns required to be filed and each such Tax Return is true, complete and
correct in all material respects. All Taxes shown to be due on such Tax
Returns, all Taxes arising from or attributable to the Assets required to be
paid, and all Taxes arising from or attributable to the Assets required to be
withheld by or with respect to the Sellers have been timely paid or, if
applicable, withheld and paid to the appropriate Governmental Authority. There
are no deficiencies or assessment of Taxes from any taxing authority with
respect to or attributable to the Assets in such amounts as would in the
aggregate have a Material Adverse Effect. There are no ongoing audits or
examinations of any of the Tax Returns relating to or attributable to the
Assets. The Sellers have not granted any requests, agreements, consents or
waiver to extend the statutory period of limitations applicable to the
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assessment of any Taxes with respect to or attributable to the Assets, and the
Sellers are not aware of any material issue with respect to or attributable to
the Assets that could be raised by any Governmental Authority.
Section 4.12 Insurance. Schedule 4.12 sets forth a complete and accurate
list as of the date hereof of all primary, excess and umbrella policies, bonds
and other forms of insurance owned or held by or on behalf of or providing
insurance coverage to the Sellers and their business, properties and Assets (or
their officers, salespersons, agents or employees or Persons acting in a
similar capacity) and the extent, if any, to which the limits of liability
under such policies have been exhausted. Each of the Sellers has in effect,
and since commencement of their operations, has maintained in effect, motor
vehicle and comprehensive general liability insurance and workers' compensation
insurance covering the Business and fire and extended coverage insurance with
respect to the properties and assets of the Sellers. True and complete copies
of such policies have been previously provided to Purchaser. All such policies
are in full force and effect and all such policies in such amounts will be
outstanding and in full force and effect without interruption until the
Closing. The Sellers have not received notice of default under any such
policy, nor have they received written notice of any pending or threatened
termination or cancellation, coverage limitation or reduction, or material
premium increase with respect to any such policy. Schedule 4.12 sets forth a
complete and accurate summary of all of the self-insurance coverage provided by
the Sellers. Except as set forth on Schedule 4.12, no letters of credit have
been posted and no cash has been restricted to support any reserves for
insurance on the Interim Balance Sheet. No letters of credit shall have been
posted and no cash shall have been restricted to support any reserves for
insurance on the Closing Balance Sheet.
Section 4.13 Environmental Matters.
(a) The Sellers have been and are in compliance with and have
no liability under the Environmental Laws (which compliance includes the
possession by the Sellers of all Environmental Permits and other governmental
authorizations required under applicable Environmental Laws, and compliance
with the terms and conditions thereof), except for such non-compliance and
liability which could not reasonably be expected to have a Material Adverse
Effect. The Sellers have not received any communication from any Person or
Governmental Authority alleging that the Sellers are not in such compliance,
and there are no past or present (or, to the Knowledge of Sellers, anticipated)
actions, activities, circumstances, conditions, events or incidents that may
prevent or interfere with such compliance in the future. All Environmental
Permits maintained by Sellers are identified on Schedule 4.13(a). The
execution and delivery by the Sellers of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, violate, or
result in the violation of, or default (with or without notice or lapse of
time, or both) under, any provision of, or result in the termination or
acceleration of, or give rise to a right of termination or acceleration of or
the loss of any benefit under, any material Environmental Permit applicable to
the Sellers or any of the Assets, other than those violations, defaults,
terminations, accelerations or rights which would not individually or in the
aggregate have a Material Adverse Effect.
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(b) No transfers of Environmental Permits, no additional
Environmental Permits, and no notifications to, filings with or approval of any
Governmental Authority, will be required to permit the conduct of the business
of the Sellers in compliance with all applicable Environmental Laws immediately
following the Closing Date as conducted by the Sellers immediately prior to the
Closing Date.
(c) There are no Environmental Claims (other than
investigations) pending or, to the Knowledge of the Sellers, threatened against
the Sellers or against any Person or entity whose liability for any
Environmental Claim the Sellers have or may have retained or assumed either
contractually or by operation of law. To the Knowledge of the Sellers, there
are no Environmental Claims (including investigations) pending or threatened
against the Sellers or against any Person or entity whose liability for any
Environmental Claim the Sellers have or may have retained or assumed either
contractually or by operation of law.
(d) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including the Release or
presence of any Hazardous Materials, which could reasonably be expected to form
the basis of any Environmental Claim against the Sellers, or to the Knowledge
of the Sellers, against any Person or entity whose liability for any
Environmental Claim the Sellers have or may have retained or assumed either
contractually or by operation of law.
(e) The Sellers have not, and to the Knowledge of the Sellers
no other Person has, placed, stored, deposited, discharged, buried, dumped,
generated or disposed or caused the Release of (collectively, "Managed") any
Hazardous Materials at, on, beneath or adjacent to any Real Property or other
property formerly owned, operated or leased by the Sellers or any predecessor
of the Sellers, except for such Hazardous Materials Managed in the ordinary
course of business of the Sellers (which Hazardous Materials, if any, were and
are Managed in accordance with applicable Environmental Laws).
(f) The Sellers have delivered true, complete and correct
copies and results of any reports, studies, analyses, tests or monitoring
possessed or initiated by or for the Sellers pertaining to Hazardous Materials
in, on, beneath or adjacent to any Real Property and any other properties
formerly owned, operated or leased by the Sellers or any predecessor of the
Sellers or regarding the Sellers' or any predecessor of the Sellers' compliance
with applicable Environmental Laws or regarding a Cleanup, an Environmental
Claim or an Environmental Liability. A list of all such documents is set forth
on Schedule 4.13(f).
(g) Without in any way limiting the generality of the
foregoing, no properties owned, operated or leased by the Sellers or any
predecessor of the Sellers contain any underground improvements, including but
not limited to treatment or storage tanks, or underground piping associated
with such tanks, polychlorinated bi-phenyls, asbestos or asbestos-containing
materials, wetlands, filled in land, landfills, underground injection xxxxx,
radioactive materials, or septic tanks, or waste disposal pits in which process
wastewater or any Hazardous Materials have been discharged, stored, treated or
disposed of.
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(h) No Real Property, and no property to which Hazardous
Materials originating on or from such properties or the Assets has been sent
for treatment, storage, or disposal, is listed or proposed to be listed on the
National Priorities List or CERCLIS or on any other governmental database or
list of properties that may or do require investigation or cleanup under
Environmental Laws. All locations at which the Sellers have themselves
disposed of any Hazardous Substances, or of which the Sellers have written
notice of the disposal of any Hazardous Substances by any third party on the
Sellers' behalf are listed in Schedule 4.13(h).
Section 4.14 Material Contracts.
(a) Schedule 2.1(a)(ii) lists (without duplication) each of
the following contracts and other agreements (or, in the case of oral
contracts, summaries thereof) to which the Sellers are a party or by or to
which the Sellers or any of their assets or properties is bound or subject
(such contracts and agreements being "Material Contracts"):
(i) any advertising, market research and other
marketing agreements that require a payment of in excess of $10,000
per year;
(ii) any employment, severance, non-competition,
consulting or other agreements of any nature with any current or
former stockholder, partner, officer or employee of the Sellers or any
Affiliate of any of such Persons;
(iii) any agreements relating to the making of any loan
or advance by the Sellers that require a payment of in excess of
$10,000 per year or concern assets valued in excess of $10,000;
(iv) any agreements providing for the indemnification
by the Sellers of any Person that require a payment of in excess of
$10,000 per year or concern assets valued in excess of $10,000;
(v) any agreements with any Governmental Authority
except those entered into in the ordinary course of business which are
not material to the Sellers;
(vi) all customer and supplier contracts and any other
contracts, agreements and other arrangements for the sale of assets or
for the furnishing of services, goods or products by the Sellers (A)
with firm commitments having a value in excess of $25,000 or (B)
having a term which is greater than six months and which is not
terminable by the Sellers on less than 90 days' notice without the
payment of any termination fee or similar payment;
(vii) any broker, distributor, dealer, representative
or agency agreements that require a payment of or generate revenues in
excess of $10,000 per year or concern assets valued in excess of
$10,000;
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(viii) any agreements (including settlement agreements)
currently in effect pursuant to which the Sellers license the right to
use any Intellectual Property to any Person or from any Person, and
research and development agreements;
(ix) any confidentiality agreements entered into by
the Sellers during the period commencing three years prior to the date
hereof pursuant to which confidential information has been provided to
a third party or by which the Sellers were restricted from providing
information to third parties, other than those entered into the
ordinary course of business relating to the Sellers' operations;
(x) any voting trust or similar agreements relating
to any of the Ownership Interests to which any Seller is a party;
(xi) any leases of Real Property that require a
payment of or generate revenues in excess of $10,000 per year or
concern assets valued in excess of $10,000;
(xii) any joint venture, partnership or similar
documents or agreements;
(xiii) any agreements that limit or purport to limit the
ability of the Sellers to own, operate, sell, transfer, pledge or
otherwise dispose of any assets valued in excess of $10,000; and
(xiv) all other agreements, contracts or commitments
not made in the ordinary course of business which are material to the
Sellers.
(b) Each Material Contract is legal, valid and binding on and
enforceable against the Sellers, and, to the Knowledge of the Sellers, the
other parties thereto, and is in full force and effect. Upon consummation of
the transactions contemplated by this Agreement, each Material Contract shall
remain in full force and effect without any loss of benefits thereunder and
without the need to obtain the consent of any party thereto to the transactions
contemplated by this Agreement, other than those contracts and agreements
specified on Schedule 7.8 and notice to, and consent of, landlords under
certain leases of Real Property. The Sellers are not (and with the giving of
notice or lapse of time would not be) in material breach of, or material
default under, any Material Contract and, to the Knowledge of the Sellers, no
other party thereto is in material breach of, or material default under, any
Material Contract. The Sellers have not received any written notice that any
Material Contract is not enforceable against any party thereto, that any
Material Contract has been terminated before the expiration of its term or that
any party to a Material Contract intends to terminate such Material Contract
prior to the termination date specified therein, or that any other party is in
breach of, or default under, any Material Contract. True and complete copies
of all Material Contracts or, in the case of oral agreements, if any, written
summaries thereof have been delivered to Purchaser.
Section 4.15 Intellectual Property.
(a) The Sellers are the sole and exclusive owner of, or have
the valid right to use the Intellectual Property free and clear of all Liens.
Schedule 2.1(a)(i) sets forth a complete
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and accurate list (including which the Sellers are the owner or licensee
thereof) of all (i) patents and patent applications, (ii) trademark or service
xxxx registrations and applications, (iii) copyright registrations and
applications, and (iv) material unregistered copyrights, service marks,
trademarks and trade names, each as owned or licensed by the Sellers. The
Sellers currently are listed in the records of the appropriate United States or
state agency as the sole owner of record for each owned application and
registration listed on Schedule 2.1(a)(i).
(b) The Intellectual Property registrations listed on
Schedule 2.1(a)(i) are valid and subsisting, in full force and effect in all
material respects, and have not been canceled, expired or abandoned. Except as
set forth on Schedule 4.15(b), there is no pending, existing, or to the
Knowledge of the Sellers, threatened, opposition, interference, cancellation
proceeding or other legal or governmental proceeding before any court or
registration authority in any jurisdiction against the Intellectual Property
registrations listed on Schedule 2.1(a)(i). To the Knowledge of the Sellers,
there is no pending, existing or threatened opposition, interference,
cancellation proceeding or other legal or governmental proceeding before any
court or registration authority in any jurisdiction against any of the
Intellectual Property.
(c) Schedule 2.1(a)(i) lists all of the Computer Programs
other than off-the-shelf applications which are owned, licensed, leased or
otherwise used by the Sellers in connection with the operation of its
businesses as currently conducted, and identifies which is owned, licensed,
leased, or otherwise used, as the case may be. Each Computer Program listed on
Schedule 2.1(a)(i) is either (i) owned by the Sellers, (ii) currently in the
public domain or otherwise available to Sellers without the license, lease or
consent of any third party, or (iii) used under rights granted to Sellers
pursuant to a written agreement, license or lease from a third party, which
written agreement, license or lease is identified on Schedule 2.1(a)(i). The
Sellers use the Computer Programs set forth on Schedule 2.1(a)(i) in connection
with the operation of their business as conducted on the date hereof and such
use does not to the Knowledge of the Sellers violate the rights of any third
party. Except for Third Party Software, all Computer Programs set forth in
Schedule 2.1(a)(i) were either developed by (x) employees of the Sellers within
the scope of their employment, (y) third parties as "work-made-for-hire", as
that term is defined under Section 101 of the United States copyright laws,
pursuant to written agreements or (z) independent contractors who have assigned
their rights to the Sellers pursuant to written agreements.
(d) Schedule 2.1(a)(i) sets forth a complete and accurate
list of all material agreements pertaining to the use of or granting any right
to use or practice any rights under any Intellectual Property, whether the
Sellers are the licensee or licensor thereunder (the "Licenses") and any
written settlements or assignments relating to any Intellectual Property. The
Licenses are valid and binding obligations of each party thereto, enforceable
against each such party in accordance with their terms, and there are no
breaches or defaults by Sellers under any Licenses.
(e) To the Knowledge of the Sellers, no trade secret or
confidential know-how material to the business of the Sellers as currently
operated has been disclosed or authorized to be disclosed to any third party,
other than pursuant to a non-disclosure agreement that protects the Sellers'
proprietary interests in and to such trade secrets and confidential know-how.
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(f) To the Knowledge of the Sellers, the conduct of the
Business does not infringe upon any intellectual property right owned or
controlled by any third party and no third party is infringing upon any
Intellectual Property owned by the Sellers and no such claims have been made
against a third party by the Sellers. Except as set forth on Schedule 4.15(b),
there are no claims or suits pending or, to the Knowledge of the Sellers,
threatened, and the Sellers have not received any written notice of a third
party claim or suit (x) alleging that the Sellers' activities or the conduct of
their businesses infringes upon or constitutes the unauthorized use of the
proprietary rights of any third party, or (y) challenging the ownership, use,
validity or enforceability of the Intellectual Property.
(g) There are no settlements, consents, judgments or orders
or other agreements which restrict the rights of the Sellers to use any
Intellectual Property, or other agreements which restrict the Sellers' rights
to use any Intellectual Property owned by the Sellers.
(h) The consummation of the transactions contemplated hereby
will not result in the loss or impairment of the right of Purchaser or its
successors to own or use any of the Intellectual Property currently owned or
used by the Sellers nor will it require the consent of any Governmental
Authority or third party in respect of any such Intellectual Property and no
present or former employee, or officer of the Sellers have any right, title, or
interest, directly or indirectly, in whole or in part, in any Intellectual
Property.
Section 4.16 Employee Benefits; ERISA. Except as set forth on Schedule
4.16, none of the Sellers nor any trade or business, whether or not
incorporated (an "ERISA Affiliate"), that together with the Sellers would be
deemed a "single employer" within the meaning of Section 4001(b)(1) of ERISA
sponsors or contributes to, have ever sponsored or contributed to, or have been
required to contribute to, any "employee benefit plan," as defined by Section
3(3) of ERISA, or any other plan, program or arrangement, including without
limitation any "multiemployer plan," as such term is defined in Section 3(37)
of ERISA, for the benefit of, relating to or with any employee of any Person.
Section 4.17 Labor Matters. Except as set forth on Schedule 4.17, (i)
there is no labor strike, dispute, slowdown, stoppage or lockout actually
pending, or to the Knowledge of the Sellers, threatened against or affecting
the Sellers and during the past five years there has not been any such action,
(ii) the Sellers are not a party to or bound by any collective bargaining or
similar agreement with any labor organization, or work rules or practices
agreed to with any labor organization or employee association applicable to
employees of the Sellers, (iii) none of the employees of the Sellers is
represented by any labor organization and the Sellers have no Knowledge of any
union organizing activities among the employees of the Sellers within the past
five years, nor does any question concerning representation exist concerning
such employees, (iv) there are no written personnel policies, rules or
procedures applicable to employees of the Sellers, other than those set forth
on Schedule 4.17, true and correct copies of which have been delivered to
Purchaser at least ten days prior to the Closing Date, (v) the Sellers are, and
have at all times been, in compliance, in all material respects, with all
applicable Laws respecting employment and employment practices, terms and
conditions of employment, wages, hours of
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work and occupational safety and health, and are not engaged in any unfair
labor practices as defined in the National Labor Relations Act or other
applicable Laws, (vi) there is no unfair labor practice charge or complaint
against the Sellers pending or, to the Knowledge of the Sellers, threatened
before the National Labor Relations Board or any similar state or foreign
agency, (vii) there is no grievance arising out of any collective bargaining
agreement or other grievance procedure, (viii) to the Knowledge of the Sellers,
no charges with respect to or relating to the Sellers are pending before the
Equal Employment Opportunity Commission or any other agency responsible for the
prevention of unlawful employment practices, (ix) the Sellers have not received
a notice of the intent of any federal, state, local or foreign agency
responsible for the enforcement of labor or employment Laws to conduct an
investigation with respect to or relating to the Sellers and no such
investigation is in progress, and (x) there are no complaints, lawsuits or
other proceedings pending or, to the Knowledge of the Sellers, threatened in
any forum by or on behalf of any present or former employee of the Sellers, any
applicant for employment or classes of the foregoing alleging breach of any
express or implied contract or employment, any Laws governing employment or the
termination thereof or other discriminatory, wrongful or tortious conduct in
connection with the employment relationship.
Section 4.18 Records.
(a) The record books of the Sellers contain complete and
accurate records of all actions taken by the partners, the management committee
(or similar governing body) of the Sellers. Complete and accurate copies of
all such minute books have been made available by the Sellers to Purchaser. All
officers of the Sellers have been properly elected.
(b) The accounting books and records of the Sellers are
complete and correct, have been maintained in accordance with applicable Laws
and good business practices and accurately reflect the basis for the financial
condition and results of operations of the Sellers set forth in the
consolidated financial statements of the Sellers.
Section 4.19 Affiliate Transactions. Schedule 4.19 lists all
agreements, arrangements and currently proposed agreements and arrangements, by
or between the Sellers, on the one hand, with or for the benefit of any current
or former shareholder, partner, officer or other Affiliate of the Sellers or any
of such Person's Affiliates, or any entity in which any such Person has a direct
or indirect material interest. Schedule 4.19 lists all payments of any kind in
excess of $25,000 since June 30, 1998 from the Sellers to or for the benefit of
any current or former partner, officer or other Affiliate of the Sellers or any
of such Persons' Affiliates, or any entity in which any such Person has a direct
or indirect material equity interest. All outstanding debts and other
obligations of the Sellers to any of its respective partners or owners were
incurred in return for fair and adequate consideration paid or delivered by them
in cash or other property. All debts of the Sellers' officers, partners or the
respective Affiliates of the Sellers to the Sellers (excluding obligations of
MOR Music TV, Inc. written off as uncollectible) are reflected on the Interim
Balance Sheet. All debts of the Sellers' officers, partners or the respective
Affiliates of the Sellers to the Sellers (excluding obligations of MOR Music TV,
Inc. written off as uncollectible) shall have been reflected on the Closing
Balance Sheet.
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Section 4.20 Brokers, Finders, Etc. The Sellers have not employed and are
not subject to the valid claim of, nor has any Seller incurred any Liability
that would be payable by the Sellers, for any brokerage, finder's or other fees
or commissions of any broker, finder or other financial intermediary in
connection with the transactions contemplated by this Agreement.
Section 4.21 Questionable Payments. Neither the Sellers nor any officer
(or Person of similar capacity) thereof used any funds of the Sellers for
unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, made any direct or indirect unlawful payments
to government officials or employees from corporate funds, established or
maintained any unlawful or unrecorded fund or corporate moneys or other assets;
made any false or fictitious entries on the books or records of any such
corporations, made any bribe, payoff, kickback or other unlawful payment.
Section 4.22 Competing Business. The Sellers have no direct or indirect
interest of any nature whatever in any Person which conducts or has any
arrangement or agreement with any Person to conduct on its behalf the business
of providing advanced digital production, post-production and transmission
facility and digital media storage and distribution services.
Section 4.23 Compliance With Bulk Sales Act; Uniform Commercial Code. The
Sellers are not, on the effective date of Closing, indebted to or a debtor of
any Person except for the Assumed Liabilities (excluding obligations owed to
other Sellers or their Affiliates). There are not, and will not be, any
creditors who can object to the transfer of the assets under any applicable
Bulk Sales Act or the Uniform Commercial Code, or statutes of similar import,
if applicable.
Section 4.24 Other Information. No representation or warranty of the
Sellers in this Agreement, nor any statement, certificate or other document
furnished or to be furnished by the Sellers to Purchaser pursuant to this
Agreement, nor the Exhibits and Schedules hereto, contains any untrue statement
of a material fact, or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding the
foregoing, Purchaser acknowledges certain general risks inherent to acquiring
and investing in the Assets and the Business and has reviewed the risk factors
described by the Sellers as set forth on Schedule 4.24. The F.A.S. Note
referenced in Schedule 2.1(a)(ii) has been excluded from all financial
statements previously furnished to Purchaser by the Sellers.
Section 4.25 Customer and Supplier Relationships; Warranty Claims. Except
as set forth in Schedule 4.25, the Sellers have not received any notice that
any customer or supplier intends to discontinue or alter the prices or terms
of, or substantially diminish its relationship with the Sellers. Other than as
set forth in Schedule 4.25, there are no outstanding warranty claims against
the Sellers by any of their customers with respect to products sold or services
rendered by the Sellers.
Section 4.26 Termination of the Xxxxx/PSI Agreements. Prior to the
execution of this Agreement the Sellers and RMS have terminated each of the
Xxxxx/PSI Agreements and none of the Sellers or RMS have any further
obligations, nor does PSI have any rights, thereunder relating to the Assets.
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Section 4.27 Year 2000 Program. Except as set forth in Schedule
4.27:
(a) To the Knowledge of the Sellers, all devices,
systems, machinery, information technology, computer software and hardware and
other date sensitive technology (collectively, the "Systems") necessary for the
Sellers to carry on the Business are Year 2000 Compliant to the extent
necessary to ensure no material disruption of the operations of Purchaser. As
used herein, "Year 2000 Compliant" means that the Systems are designed to be
used prior to, during and after the Gregorian calendar year 2000 A.D. and will
operate during each such time period without error relating to date or date
sensitive data, specifically including any error relating to, or the product
of, date data which represents or references difference centuries or more than
one century.
(b) The Sellers have undertaken an adequately detailed
inventory, review and assessment of all areas within its business operations
that could be adversely affected by the failure of the Sellers to be Year 2000
Compliant on a timely basis, developed an adequately detailed plan and timeline
for becoming Year 2000 Compliant on a timely basis and to date, implemented the
plan in accordance with that timetable in all material respects.
(c) The Sellers have made written inquiry of each of
their key suppliers, vendors and customers, and have obtained in writing
confirmation from all such persons, as to whether such persons have initiated
programs to become Year 2000 Compliant and on the basis of such confirmations,
the Sellers reasonably believe that all such persons will be or will become so
compliant.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF RMS
RMS represents and warrants to Purchaser as follows:
Section 5.1 Authorization and Validity. RMS has full partnership
power and authority to enter into this Agreement and the other documents and
instruments to be executed and delivered by RMS pursuant hereto (to the extent
that such Person is a party hereto or thereto) and to carry out its obligations
hereunder and thereunder. The execution, delivery and performance by RMS of
this Agreement and the other documents and instruments to be executed and
delivered by RMS pursuant hereto, and the consummation by RMS of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by the management committee or similar governing body of RMS and no
other partnership act or proceeding on the part of RMS is necessary to
authorize the execution and delivery by RMS of this Agreement or the other
documents or instruments to be executed and delivered by RMS pursuant hereto,
or the consummation by RMS of the transactions contemplated hereby or thereby.
This Agreement and the other documents and instruments to be executed and
delivered by RMS pursuant hereto (to the extent that RMS is a party hereto or
thereto) have been duly and validly executed and delivered by RMS (to the
extent that RMS is a party hereto or thereto) and, assuming this Agreement and
the other documents and instruments to be executed and delivered by RMS
pursuant hereto (to the extent that RMS is a party hereto or thereto) are the
valid and binding obligations of such other Persons a party hereto or thereto,
constitutes a valid and binding
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obligation of RMS (to the extent that RMS is a party hereto or thereto)
enforceable against RMS (to the extent that RMS is a party hereto or thereto)
in accordance with its terms, except that (i) such enforcement may be subject
to applicable bankruptcy, insolvency or other similar laws, now or hereafter in
effect, affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 5.2 Equity; Good Title.
(a) Schedule 5.2(a) sets forth, as of the date hereof,
the names of the holders of partnership interests in RMS and the percentage and
nature of ownership of such holder therein (such partnership interests are
referred to collectively as the "RMS Ownership Interests").
(b) All of the outstanding RMS Ownership Interests are
owned beneficially and of record by the respective owners thereof identified on
Schedule 5.2(a), free and clear of all Liens.
Section 5.3 Organization. RMS is duly organized and validly
existing partnership under the laws of the State of Nevada, and has full power
and authority to own all of its properties and assets, including the Owned Real
Estate, and to carry on its business as it is now being conducted. RMS has
delivered to Purchaser a complete and correct copy of the partnership agreement
as amended to date. Such organizational document is in full force and effect
and RMS is not in material violation of any provision of such organizational
document.
Section 5.4 No Conflict. Except as set forth in Schedule 5.4,
neither the execution, delivery or performance of this Agreement or the other
documents and instruments to be executed and delivered by RMS pursuant hereto,
nor the consummation by RMS of the transactions contemplated hereby or thereby,
nor compliance by RMS with any of the provisions hereof or thereof will (a)
conflict with or result in any breach of any provision of the partnership
agreement of RMS, (b) constitute a change in control under or require the
consent from or the giving of notice to a third party, result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, or result in the creation of any Lien upon or affecting the
Owned Real Property or the PSI Securities, any of the terms, conditions or
provisions of any contractual obligation of RMS, (c) violate any order, writ,
injunction, decree, statute, rule or regulation of any Governmental Authority
applicable to RMS or to which its properties or assets (including the Owned Real
Property) may be bound, or (d) result in triggering of any right of first
refusal or other right under any partnership or joint venture agreement to which
RMS is a party, except in the case of clauses (b), (c) or (d) for such
violations, breaches or defaults which would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 5.5 Governmental Consents. Except under the HSR Act and
filings with federal and state securities regulators relating to the transfer of
the PSI Securities or the IHC Shares and as otherwise set forth on Schedule 5.5,
no consent, order or authorization of, or registration, declaration or filing
with, any Governmental Authority is required in connection
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with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby by RMS.
Section 5.6 Owned Real Property; PSI Securities.
(a) Schedule 5.6(a) contains a list of the real
property owned by RMS to be transferred to Purchaser at Closing in accordance
with the terms hereof (the "Owned Real Property"). Except as set forth on
Schedule 5.6(a), the current use of the Owned Real Property by RMS does not
violate any local zoning or similar land use or other Laws and none of the
structures on the Owned Real Property encroaches upon real property of another
Person, and no structure of any other Person encroaches upon any Real Property.
RMS has not received notice of any pending or threatened condemnation
proceeding, or of any sale or other disposition in lieu of condemnation,
affecting any of the Owned Real Property. Each parcel of Owned Real Property
abuts on or has direct vehicular access to a public road.
(b) Schedule 5.6(b) contains a true and correct
list of all securities of PSI held by RMS (the "PSI Securities" and, together
with the PSI Notes, the "PSI Interests"). RMS owns the PSI Securities free and
clear of all Liens.
Section 5.7 Litigation and Claims; Compliance with Laws.
(a) Schedule 5.7(a)(i) sets forth all Litigation
with respect to the Owned Real Property or RMS' ownership in the PSI Securities
as of the date hereof, including the name of the claimant, the date of the
alleged act or omission, a detailed narrative as to the nature of the alleged
act or omission, the date the matter was referred to an insurance carrier of
RMS (if referred), the estimated amount of exposure, the amount RMS has
reserved, or the amount of RMS' claim and estimated expenses of RMS in
connection with such matters. Except as set forth in Schedule 5.7(a)(ii),
there is no Litigation with respect to the Owned Real Property or RMS'
ownership in the PSI Securities which is not fully covered by the insurance
policies referenced in Section 5.7(a)(ii). Neither the Owned Real Property nor
RMS' ownership in the PSI Securities is subject to any order, consent decree,
settlement or similar agreement with any Governmental Authority. There is no
judgment, injunction, decree, order or other determination of an arbitrator or
Governmental Authority specifically applicable to the Owned Real Property or
RMS' ownership in the PSI Securities. As of the date hereof, there is no
Litigation which seeks to prevent consummation of the transactions contemplated
hereby or which seeks material damages in connection with the transactions
contemplated hereby.
(b) Except as set forth in Schedule 5.7(b), RMS
has complied and is in compliance with all Laws applicable to the Owned Real
Property. Except as set forth in Schedule 5.7(b), the Sellers hold all
material licenses, permits and other authorizations of Governmental Authorities
with respect to its ownership and operations on the Owned Real Property.
Except as set forth in Schedule 5.7(b), to the Knowledge of RMS, there is no
intent to make any changes in the use or operation of the Owned Real Property
that will result in or cause RMS to be in noncompliance with applicable Laws or
that will require changes in or a loss of any such licenses, permits or other
authorizations or an increase in any expenses related thereto except where such
noncompliance, change, loss or increase would not reasonably be expected to
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have a Material Adverse Effect. Such licenses, permits and other
authorizations as aforesaid held by RMS are valid and in full force and effect,
and there are no (a) Actions pending, or to the Knowledge of RMS, threatened or
(b) Investigations to the Knowledge of the Sellers pending or threatened that
could result in the termination, impairment or nonrenewal thereof.
Section 5.8 Taxes. RMS has timely filed or caused to be
filed with the appropriate federal, state and local Governmental Authority all
Tax Returns required to be filed with respect to the Owned Real Property and
each such Tax Return is true, complete and correct in all material respects.
All Taxes shown to be due on such Tax Returns, all Taxes arising from or
attributable to the Owned Real Property required to be paid, and all Taxes
arising from or attributable to the Owned Real Property required to be withheld
by or with respect to RMS have been timely paid or, if applicable, withheld and
paid to the appropriate Governmental Authority. There are no deficiencies or
assessment of Taxes from any taxing authority with respect to or attributable
to the Owned Real Property in such amounts as would in the aggregate have a
Material Adverse Effect. There are no ongoing audits or examinations of any of
the Tax Returns relating to or attributable to the Owned Real Property. RMS
has not granted any requests, agreements, consents or waiver to extend the
statutory period of limitations applicable to the assessment of any Taxes with
respect to or attributable to the Owned Real Property, and RMS is not aware of
any material issue with respect to or attributable to the Owned Real Property
that could be raised by any Governmental Authority.
Section 5.9 Environmental Matters.
(a) RMS has been and is in compliance with and
has no liability under the Environmental Laws with respect to the Owned Real
Property (which compliance includes the possession by RMS of all Environmental
Permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof),
except for such non-compliance and liability which could not reasonably be
expected to have a Material Adverse Effect. With respect to the Owned Real
Property, RMS has not received any communication from any Person or
Governmental Authority alleging that RMS is not in such compliance, and there
are no past or present (or, to the Knowledge of RMS anticipated) actions,
activities, circumstances, conditions, events or incidents that may prevent or
interfere with such compliance in the future. All Environmental Permits
maintained by RMS with respect to the Owned Real Property are identified on
Schedule Section 5.9(a). The execution and delivery by RMS of this Agreement
does not, and the consummation of the transactions contemplated hereby will
not, violate, or result in the violation of, or default (with or without notice
or lapse of time, or both) under, any provision of, or result in the
termination or acceleration of, or give rise to a right of termination or
acceleration of or the loss of any benefit under, any material Environmental
Permit applicable to RMS or the Owned Real Property, other than those
violations, defaults, terminations, accelerations or rights which would not
individually or in the aggregate have a Material Adverse Effect.
(b) No transfers of Environmental Permits, no
additional Environmental Permits, and no notifications to, filings with or
approval of any Governmental Authority, will be required to permit the conduct
of the business of RMS on the Owned Real Property in
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compliance with all applicable Environmental Laws immediately following the
Closing Date as conducted by RMS immediately prior to the Closing Date.
(c) There are no Environmental Claims pending or,
to the Knowledge of RMS, threatened against RMS with respect to the Owned Real
Property or against any Person or entity whose liability for any Environmental
Claim with respect to the Owned Real Property RMS has or may have retained or
assumed either contractually or by operation of law. To the Knowledge of RMS,
there are no Environmental Claims pending or threatened against RMS with
respect to the Owned Real Property or against any Person or entity who1se
liability for any Environmental Claim RMS has or may have retained or assumed
either contractually or by operation of law.
(d) There are no past or present actions,
activities, circumstances, conditions, events or incidents, including the
Release or presence of any Hazardous Materials with respect to the Owned Real
Property which could reasonably be expected to form the basis of any
Environmental Claim against RMS, or to the Knowledge of RMS, against any Person
or entity whose liability for any Environmental Claim with respect to the Owned
Real Property RMS has or may have retained or assumed either contractually or
by operation of law.
(e) RMS has not, and to the Knowledge of RMS no
other Person has, Managed any Hazardous Materials at, on, beneath or adjacent
to the Owned Real Property, except for such Hazardous Materials Managed in the
ordinary course of business of RMS (which Hazardous Materials, if any, were and
are Managed in accordance with applicable Environmental Laws).
(f) RMS has delivered true, complete and correct
copies and results of any reports, studies, analyses, tests or monitoring
possessed or initiated by or for RMS pertaining to Hazardous Materials in, on,
beneath or adjacent to the Owned Real Property or regarding RMS' or, to the
extent in the possession of RMS or its advisors or Affiliates, any predecessor
of RMS' compliance with applicable Environmental Laws or regarding a Cleanup,
an Environmental Claim or an Environmental Liability with respect to the Owned
Real Property. A list of all such documents is set forth on Schedule 5.9(f).
(g) Without in any way limiting the generality of
the foregoing, the Owned Real Property does not contain any underground
improvements, including but not limited to treatment or storage tanks, or
underground piping associated with such tanks, polychlorinated bi-phenyls,
asbestos or asbestos-containing materials, wetlands, filled in land, landfills,
underground injection xxxxx, radioactive materials, or septic tanks, or waste
disposal pits in which process wastewater or any Hazardous Materials have been
discharged, stored, treated or disposed of.
(h) The Owned Real Property, and to the Knowledge
of RMS the property to which Hazardous Materials originating on or from such
Owned Real Property has been sent for treatment, storage or disposal, are not
listed or proposed to be listed on the National Priorities List or CERCLIS or
on any other governmental database or list of properties that may or do
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require investigation or Cleanup under Environmental Laws. All locations at
which RMS has themselves disposed of any Hazardous Substances, or of which RMS
has written notice of the disposal of any Hazardous Substances by any third
party on the Sellers' behalf are listed in Schedule 5.9(h).
Section 5.10 Competing Business. RMS has no direct or indirect
interest of any nature whatever in any Person other than the Sellers which
conducts or has any arrangement or agreement with any Person to conduct on its
behalf the business of providing advanced digital production, post-production
and transmission facility and digital media storage and distribution services.
Section 5.11 Other Information. No representation or warranty of
RMS in this Agreement, nor any statement, certificate or other document
furnished or to be furnished by RMS to Purchaser pursuant to this Agreement, nor
Schedules 5.2(a), 5.4, 5.5., 5.6(a), 5.6(b), 5.7(a)(i), 5.7(a)(ii), 5.7(b),
5.9(f) and 5.9(h) hereto, contain any untrue statement of a material fact, or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represent and warrant to the Sellers as follows:
Section 6.1 Authorization and Validity. Purchaser has full
corporate power and authority to enter into this Agreement and the other
documents and instruments to be executed and delivered by it pursuant hereto and
to carry out its obligations hereunder and thereunder. The execution, delivery
and performance by Purchaser of this Agreement and the other documents and
instruments to be executed and delivered by Purchaser pursuant hereto, and the
consummation by Purchaser of the transactions contemplated hereby and thereby,
have been duly authorized by all necessary corporate action and no other
corporate act or proceeding on the part of Purchaser is necessary to authorize
the execution and delivery by Purchaser of this Agreement or the other documents
or instruments to be executed and delivered by Purchaser pursuant hereto, or the
consummation by Purchaser of the transactions contemplated hereby or thereby.
This Agreement and the other documents and instruments to be executed and
delivered by Purchaser pursuant hereto have been duly and validly executed and
delivered by Purchaser and, assuming this Agreement and the other documents and
instruments to be executed and delivered by Purchasers pursuant hereto are the
valid and binding obligations of such other Persons a party hereto or thereto,
constitutes a valid and binding obligation of Purchaser enforceable against
Purchaser in accordance with its terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights generally, and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
Section 6.2 Organization. Purchaser is a corporation organized
under the laws of the State of Colorado. Purchaser is duly organized, validly
existing and in good standing and has
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full power and authority to carry on its business as presently conducted.
Purchaser has delivered to the Sellers a complete and correct copy of its
articles of incorporation and bylaws, each as amended to date. Such
organizational documents are in full force and effect.
Section 6.3 No Conflict. Neither the execution, delivery
or performance by Purchaser of this Agreement nor the consummation of the
transactions contemplated hereby and compliance by Purchaser with any of the
provisions hereof or thereof will (a) conflict with or result in any breach of
any provision of the articles of incorporation or bylaws of Purchaser, (b)
require any consent, approval or notice under, violate or result in the
violation of, conflict with or result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, result in the termination of, accelerate the
performance required by or result in a right of termination or acceleration,
result in the loss of a material benefit under or result in the creation of any
Lien upon any of the properties or assets of Purchaser under any of the terms,
conditions or provisions of any material contractual obligation of Purchaser or
(c) violate any order, writ, injunction, decree, statute, rule or regulation of
any Governmental Authority applicable to Purchaser or to which any of its
properties or assets may be bound, except in such case as would not materially
impair or delay Purchaser in the consummation of the transactions contemplated
hereby.
Section 6.4 Governmental Consents. Except under the HSR
Act, no consent, order or authorization of, or registration, declaration or
filing with, any Governmental Authority is required in connection with the
execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby by Purchaser.
Section 6.5 Brokers, Finders, Etc. Purchaser has not
employed, and is not subject to the valid claim of, nor has Purchaser incurred
any liability that would be payable by Purchaser, for any brokerage, finder's
or other fees or commissions of any broker, finder or other financial
intermediary in connection with the transactions contemplated by this
Agreement.
Section 6.6 Other Information. No representations or
warranty of Purchaser in this Agreement, nor any statement, certificate or
other document furnished or to be furnished by Purchaser to the Sellers
pursuant to this Agreement, contains any untrue statements or a material fact,
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
Section 6.7 Purchase for Investment. Any securities to
be acquired by Purchaser pursuant to the terms of this Agreement shall be
purchased for investment purposes and not with a view toward any resale or
distribution thereof. Purchaser acknowledges that the securities to be
acquired in accordance herewith have not been registered for the purpose of the
transactions contemplated by this Agreement or otherwise under the Securities
Act of 1933, as amended, or under any state securities laws. Purchaser will
not sell or otherwise distribute all or any portion of the securities acquired
hereunder except in compliance with applicable laws relating to the sale or
other distribution of securities.
Section 6.8 Limitation on Representations. Purchaser
acknowledges and agrees that neither the Sellers nor RMS has made any
representation or warranty regarding the business or
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operations of PSI or IHC and Purchaser is acquiring the PSI Securities
(subject, however, to the provisions of Sections 2.2 and 7.18) and the IHC
Shares on the basis or its own investigation and evaluation of the risks
associated with the ownership of the PSI Securities and the IHC Shares based on
information provided to Purchaser by PSI or IHC or which is otherwise publicly
available and Purchaser is not relying on any information regarding the
business or operations of PSI or IHC provided by the Sellers or RMS other than
the representation set forth in Sections 4.3 and 5.6(b) hereof.
ARTICLE VII
COVENANTS
Section 7.1 Commercially Reasonable Efforts.
(a) Upon the terms and subject to the conditions
hereof, each of the parties hereto agrees to use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement.
(b) In case at any time after the Closing Date
any further action is necessary or desirable to carry out the purposes of this
Agreement, the parties shall use their commercially reasonable efforts to take,
or cause to be taken, all such necessary actions.
Section 7.2 Filings and Consents. The parties hereto
shall use all commercially reasonable efforts to obtain and to cooperate in
obtaining any consent, approval, authorization or order of, and in making any
registration or filing with, any Governmental Authority or other third party
required in connection with the execution, delivery or performance of this
Agreement and the other documents and instruments to be executed pursuant
hereto.
Section 7.3 Publicity. So long as this Agreement is in
effect, without the prior consent of the other parties hereto, which consent
shall not be unreasonably withheld or delayed, none of the parties hereto
shall, nor shall any of them permit Affiliates which any of them control to,
issue or cause the publication of any press release or other public statement
or announcement with respect to this Agreement or the transactions contemplated
hereby except as may be required by law or by obligations pursuant to any
listing agreement with a national securities exchange. A party making any
statement or announcement pursuant to the requirements of applicable law or the
listing agreement of a national securities exchange shall provide a copy
thereof to the other parties hereto to the extent possible prior to issuing
such statement or announcement.
Section 7.4 Notification of Certain Matters. The Sellers
shall give prompt notice to Purchaser upon becoming aware of, and Purchaser
shall give prompt notice to the Sellers upon becoming aware of, (a) the
occurrence or non-occurrence of any event, the occurrence or non-occurrence of
which would cause any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Closing Date
and (b) any material failure of the Sellers or Purchaser, as the case may be,
to comply with or satisfy any
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covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 7.4 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
Section 7.5 Expenses. Whether or not the transactions
contemplated hereby are consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby will be
paid by the party incurring such costs and expenses.
Section 7.6 Conduct of Business of the Sellers. The
Sellers covenant and agree that, except for actions taken to implement this
Agreement and the transactions contemplated hereby or as disclosed in Schedules
hereto or as consented to by Purchaser, from and after the date of this
Agreement and until the Closing Date the Sellers will not take any action or
elect to omit to take any action the result of which in either case will be to:
(a) Issue, grant or make any commitment to grant,
any Ownership Interests or other rights relating to the Sellers' Ownership
Interests, debt instruments or other securities;
(b) Redeem, repurchase or otherwise reacquire any
Ownership Interests or make any commitment with respect thereto, or declare or
pay any distribution to the partners or owners of the Sellers or their
Affiliates other than as contemplated by the terms of this Agreement;
(c) Cause the Sellers to suffer any adverse
change that is material in its working capital, financial condition, assets,
Liabilities, reserves, business, operations or business relationships with
existing suppliers, contractors, licensors or customers;
(d) Incur any Liabilities except Liabilities (x)
incurred in the ordinary course of business and consistent with past practice
or (y) in an aggregate amount of no greater than $25,000 (including Liabilities
arising from one transaction or a series of similar transactions, and all
periodic installments or payments under any lease or other agreement providing
for periodic installments or payments, as a single Liability);
(e) Pay, discharge or satisfy any claim or
Liabilities other than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of Liabilities reflected
or reserved against in the Interim Balance Sheet or the Closing Balance Sheet
or incurred in the ordinary course of business and consistent with past
practice since the Balance Sheet Date;
(f) Permit or allow any of its properties or
assets (real, personal or mixed, tangible or intangible) to become subject to
any Lien except in the ordinary course of business consistent with good
financial practices;
(g) Write off as uncollectible any notes or
accounts receivable, except for immaterial write-offs in the ordinary course of
business and consistent with past practice;
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(h) Cancel any debts or waive any claims or
rights that, individually or in the aggregate, would have a Material Adverse
Effect;
(i) Sell, transfer, or otherwise dispose of any
of its properties or assets (real, personal or mixed, tangible or intangible),
except (i) in the ordinary course of business and consistent with past
practice, or (ii) in an aggregate amount not exceeding $10,000 with respect to
all other assets and properties;
(j) Capitalize any work, project or other form of
services performed or to be performed, except in accordance with generally
accepted accounting principles;
(k) Introduce any new, or significantly change
any, management operation or accounting policy, including tax accounting
methods and procedures, or operate its properties or assets other than
substantially as previously operated and in the ordinary course;
(l) Suffer any damage, destruction or loss to its
properties or assets (whether or not covered by insurance) which could have
been prevented by reasonably prudent action on the part of the Sellers; or
(m) Make or commit to make any capital
expenditures not in the ordinary course of business for any single item in
excess of $25,000 other than as required by any contract listed on Schedule
4.14
Section 7.7 Access and Environmental Inspection.
(a) Access. The Sellers shall afford to the
officers, employees, accountants, counsel and other representatives of
Purchaser, access, upon reasonable prior request or notice, during normal
business hours from the date hereof until the Closing Date, to all of the
Sellers' offices, properties, books, contracts, commitments and records and,
during such period, the Sellers shall furnish promptly to Purchaser all other
information concerning its business, properties and personnel as Purchaser may
reasonably request. Purchaser will hold any such information which is
nonpublic in confidence in accordance with the provisions of the
Confidentiality Agreement.
(b) Environmental Inspection. Sellers and RMS
hereby grant to Purchaser a license to enter and inspect the Real Property and
the Owned Real Property ("Inspection"), such Inspection to be completed prior
to Closing. In order to complete such Investigation, Purchaser or its
designated consultant shall have the right but not the obligation: (i) to
conduct tests of the soil, surface or subsurface waters, and air quality at,
in, on, beneath or about the Real Property, in a manner consistent with good
engineering practice; (ii) to inspect all records, reports, permits,
applications, monitoring results, studies, correspondence, data and any other
information or documents relevant to Hazardous Materials, compliance with
Environmental Laws, or environmental conditions at the Real Property and the
Owned Real Property; and (iii) to inspect and test all buildings and equipment
at the Real Property and the Owned Real Property for asbestos-containing
materials or other Hazardous Materials. Purchaser agrees to conduct such
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investigations in a manner that minimizes the disruption to the Sellers' or
RMS' business activities, and the Sellers and RMS agree to permit Purchaser
reasonable access to all portions of the Real Property and Owned Real Property,
both during business hours and after business hours. Purchaser agrees to keep
and hold confidential any and all reports, summaries, studies or results that
are the product of its Inspection, and not to disclose such reports without the
written consent of Sellers or RMS or unless required to do so by applicable
law. All costs and expenses of performing the Inspection shall be borne by
Purchaser.
Section 7.8 Management Agreement. Notwithstanding the
provisions of Section 7.2 or Section 7.9, to the extent that the Sellers are
unable to obtain the consent, approval, authorization or order of any
Governmental Authority for the transfer of any Regulatory Licenses or such
other consents or approvals as set forth on Schedule 7.8, the parties shall
execute the Management Agreement at Closing.
Section 7.9 Consents. Prior to the Closing, the Sellers
shall use all commercially reasonable efforts to obtain all consents necessary
to the consummation of the transactions contemplated hereby. All such consents
will be in writing and executed counterparts thereof will be delivered to
Purchaser at or prior to the Closing. Notwithstanding any other provision of
this Agreement, the parties hereto agree that the Sellers may seek to obtain
any consents or waivers from any Persons necessary to consummate the
transactions contemplated hereby; provided that the Sellers and their
representatives shall use their best efforts to restrict access to any
information concerning this Agreement and the transactions contemplated hereby
to those Persons that "need to know"; provided further, that the Sellers and
their representatives will request and encourage those Persons who are informed
of this Agreement or the transactions contemplated hereby to treat any such
information so provided in accordance with the terms of the Confidentiality
Agreement as if such Persons were a party thereto.
Section 7.10 No Solicitation. The Sellers shall not, and
shall use their best efforts to ensure that none of their respective officers,
managers, employees, investment bankers, attorneys, accountants and other
agents, shall, directly or indirectly: (i) initiate, solicit or encourage, or
take any action to facilitate the making of, any offer or proposal which
constitutes or is reasonably likely to lead to a business combination involving
the Sellers, or (ii) in the event of an unsolicited offer by another Person for
any of the assets, engage in negotiations or discussions with, or provide any
information or data to, any Person relating to any such offer.
Section 7.11 Supplements to Schedules. From time to time
prior to the Closing, the Sellers shall promptly supplement or amend any
Schedule hereto with respect to any matter, condition or occurrence hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such Schedule. Except with
respect to a supplement or amendment not objected to in writing by Purchaser
within five business days after receipt thereof, no supplement or amendment
shall be deemed to cure any breach of any representation or warranty made in
this Agreement or have any effect for the purpose of determining the compliance
by the Sellers with the covenants set forth in Section 7.1. The parties hereto
recognize and acknowledge that certain assets will be acquired and disposed of
and that certain liabilities will be incurred and discharged in the ordinary
course of business;
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provided, however, that the parties do not intend for this sentence to alter or
modify the conditions or prohibitions of taking such actions contained
elsewhere in this Agreement.
Section 7.12 Delivery of Closing Balance Sheet.
(a) No later than ten Business Days prior to the
Closing Date, Sellers shall deliver to Purchaser a copy of the audited balance
sheet of Sellers (the "Closing Balance Sheet") as of the Balance Sheet Date,
together with the notes thereto, accompanied by the reports thereon of Deloitte
& Touche LLP, independent public accountants, or another "Big Five" independent
accounting firm. The Closing Balance Sheet, together with the notes thereto,
shall be prepared in accordance with GAAP applied on a consistent basis
throughout the year covered thereby (except to the extent disclosed therein or
required by changes in GAAP), and shall present accurately (x) the information
purported to be presented therein and (y) the financial position of Sellers as
of the Closing Balance Sheet Date and for the year then ended. Reserves shall
be reflected on the Closing Balance Sheet against assets in amounts that have
been established on a basis consistent with past practice and in accordance
with GAAP. There shall be no changes in reserves of the Sellers since the
Closing Balance Sheet Date other than changes in such reserves consistent with
past practice in amounts not in the aggregate material.
(b) There shall be no Liabilities that are not
reflected or reserved against in the Closing Balance Sheet other than such
Liabilities as (i) were incurred in the ordinary course of business in a manner
consistent with past practice since the Balance Sheet Date, or (ii) would not
be required to be presented in financial statements or the notes thereto
prepared in conformity with GAAP, applied in a manner consistent with past
practice, in the preparation of the Interim Balance Sheet.
Section 7.13 Further Assurances. From and after the
Closing Date, the Sellers shall promptly execute, acknowledge and deliver any
other assurances or documents reasonably requested by Purchaser to permit
Purchaser to satisfy its obligations hereunder or to evidence title, or to
provide Purchaser with the benefits enumerated in this Agreement.
Section 7.14 IHC Interests.
(a) Subject to Section 7.14(b), prior to Closing,
SVM shall transfer to a newly-formed wholly owned limited liability company
("Holdco") (i) the IHC Shares, and (ii) all rights and obligations of SVM under
that certain Shareholders' Agreement dated as of May 13, 1998 by and among IHC,
Innovative Telecom Corporation, SVM and certain other shareholders of IHC a
party thereto (the "IHC Shareholders' Agreement"). At Closing all of the
outstanding interests in Holdco shall be transferred to Purchaser as part of
the Assets.
(b) If SVM is unable to obtain the consent of IHC
and the other IHC shareholders party thereto to transfer the rights and
obligations of SVM under the IHC Shareholders' Agreement, in lieu of Section
7.14(a)(ii), SVM covenants and agrees that it shall sell any shares purchased
from the shareholders of IHC at SVM's cost and Purchaser covenants and agrees
to loan such funds to SVM as are necessary to purchase such shares of IHC;
provided,
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however, that upon SVM concluding any purchase of securities of IHC in
accordance with this Section 7.14(b), SVM shall immediately transfer such
shares so acquired to Purchaser and Purchaser shall forgive and release any
loans made in connection with such purchase.
Section 7.15 Interim Funding. From the date hereof until
the Closing Date, Purchaser undertakes to negotiate on commercially reasonable
terms (including with respect to rates of return, restrictive provisions and
security interests) and, upon mutual agreement of the parties, loan such funds
to the Sellers as are necessary to operate the Business in the ordinary course
and to facilitate the pursuit of such commercial opportunities as the Sellers
and Purchaser collectively deem reasonable. Upon consummation of the
transactions contemplated hereby (other than a consummation pursuant to the
Share Purchase Option), Purchaser shall assume all liabilities under such
financing.
Section 7.16 Reporting. The parties hereto hereby
disclaim any "group" or other similar status under the Securities Exchange Act
of 1934, as amended.
Section 7.17 Corporate Name.
(a) As of the Closing and thereafter, none of the
Sellers, RMS or Xxx X. Xxxxx shall directly or indirectly use the name "Xxxxx"
(i) in connection with any business or operation directly or indirectly related
to the Business as of the date hereof or (ii) in conjunction with any name or
names that are similar to or that may be confused with the current names of the
Sellers or their Subsidiaries with any businesses or operations in the Business
or that in any way suggest the business or operations of any such entity are
similar to the businesses or operations of the Business. The Sellers, RMS and
Xxx X. Xxxxx agree that the legal names (and any associated domain names) of
each of the Sellers and their respective Subsidiaries with businesses or
operations in the Business shall be changed to comply with the terms of this
Section 7.18 within 30 days of the Closing.
(b) Purchaser covenants and agrees that it shall
not use the name "Xxxxx" in any aspect of its businesses after six months
following the Closing Date, and any use of such name subsequent to the Closing
shall be strictly to facilitate the transition of ownership and limited to the
use of such names as employed in the ordinary course of business prior to
Closing. The Sellers, RMS and Xxx X. Xxxxx covenant and agree that as of the
Closing and for a period of 10 years thereafter they shall not use the name
"Xxxxx" or any derivation thereof in any businesses or operations in the
Business.
Section 7.18 Anschutz/PSI Transaction. Prior to Closing,
Purchaser shall make an offer to enter into an agreement with PSI on
substantially similar terms as are contemplated under the Contribution
Agreement, the Real Estate Transfer Agreement and the Plan of Recapitalization
(any transaction contemplated by such agreement, the "Anschutz/PSI
Transaction"). If the PSI Board approves of the Anschutz/PSI Transaction prior
to the satisfaction of the conditions to Closing set forth in Article VIII, (a)
the PSI Interests shall be deemed to be Assets, and (b) the
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Purchase Price shall not be affected hereby. If the PSI Board does not approve
of the Anschutz/PSI transaction, (a) the PSI Interests shall be deemed to be
Excluded Assets, (b) the Purchase Price shall be reduced by $18,250,000, (c)
RMS will not be deemed to make any representations or warranties with respect
to the PSI Securities and (d) Xxxxx Communications will not be deemed to make
any representations or warranties with respect to the PSI Notes.
Section 7.19 Employees. Purchaser hereby covenants and
agrees that at Closing it shall make offers of employment to all employees of
the Sellers on terms and conditions substantially equivalent to those provided
as of the Closing Date. For purposes of calculating an employee's right or
ability to participate in a benefit or other plan offered by Purchaser, credit
shall be given to such employee for the term of such employee's employment with
the Sellers.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Conditions to the Obligations of Purchaser,
the Sellers and RMS. The obligations of each party hereto effect the Closing
are subject to the satisfaction (or waiver) at or prior to the Closing of the
condition that no temporary restraining order, preliminary or permanent
injunction or other order or decree which prevents the consummation of the
transactions contemplated hereby shall have been issued and remain in effect,
and no statute, rule or regulation shall have been enacted by any Governmental
Authority which makes the consummation of the transactions contemplated hereby
illegal and the waiting period under the HSR Act shall have expired or been
earlier terminated.
Section 8.2 Conditions to the Obligations of Purchaser.
The obligation of Purchaser to effect the Closing is subject to the
satisfaction (or waiver by Purchaser) at or prior to the Closing, of the
following conditions:
(a) Representation and Warranties. The
representations and warranties of the Sellers and RMS contained herein shall
have been true and correct in all material respects when made and shall be true
and correct in all material respects as of the Closing, as if made as of the
Closing.
(b) Covenants. The Sellers and RMS shall have
performed in all respects the covenants and obligations required to be
performed by them on or prior to the Closing.
(c) No Material Adverse Change. There shall not
have been, or no event shall have occurred, which could reasonably be expected
to result in, a Material Adverse Change.
(d) The Sellers' and RMS' Certificate. Each
Seller and RMS shall have furnished Purchaser with a certificate, dated the
Closing Date, to the effect that the conditions set forth in Sections 8.2(a),
(b) and (c) have been satisfied.
(e) Litigation. No litigation shall have been
commenced and be continuing which seeks to prevent consummation of the
transactions contemplated hereby or which seeks material damages from
Purchaser, any of their Affiliates, the Sellers or RMS in connection with the
transactions contemplated hereby.
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(f) Consents. All consents, approvals, permits
or authorizations required to be obtained, declarations or filings required to
be made and waiting periods or terminations required to have occurred prior to
the Closing from or with any Governmental Authority or third party in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, shall have been obtained,
made or occurred, except as described in Schedule 7.8.
(g) Employment, Confidentiality and Unfair
Competition Agreements. The Employment, Confidentiality and Unfair Competition
Agreements shall have been executed and delivered by the parties thereto.
(h) Management Agreement. The Management
Agreement in the form of Exhibit B attached hereto shall have executed and
delivered by the parties thereto.
(i) Legal Opinion of Sellers' and RMS' Counsel.
The Sellers and RMS shall have furnished an opinion of Xxxxx & XxXxxxxx,
counsel to the Sellers and RMS, in a form to be mutually agreed upon by the
parties hereto prior to Closing and attached as Exhibit D hereto.
(j) Transfer of IHC Shares. SVM shall have
transferred to Holdco (i) the IHC Shares and (ii) all rights and obligations
under the IHC Shareholders' Agreement (except to the extent not required
pursuant to Section 7.14(b)).
Section 8.3 Conditions to the Obligations of the Sellers
and RMS. The obligations of the Sellers and RMS to effect the Closing is
subject to the satisfaction (or waiver by the Sellers and RMS) on or prior to
the Closing, of the following conditions:
(a) Representations and Warranties. The
representations and warranties of Purchaser contained herein shall have been
true and correct in all material respects when made and shall be true and
correct in all material respects as of the Closing, as if made as of the
Closing.
(b) Covenants. Purchaser shall have performed in
all respects the covenants and obligations required to be performed by it at or
prior to the Closing.
(c) Certificate. Purchaser shall have furnished
Sellers and RMS with a certificate dated the Closing Date, signed on its behalf
by an authorized signatory of Purchaser, to the effect that the conditions set
forth in Sections 8.3(a) and (b) have been satisfied.
(d) Employment, Confidentiality and Unfair
Competition Agreements. The Employment, Confidentiality and Unfair Competition
Agreements shall have been executed and delivered by the parties thereto.
(e) Legal Opinion of Purchaser's Counsel.
Purchaser shall have furnished an opinion of Xxxxx & Xxxxxxx L.L.P., counsel to
Purchasers, in a form to be mutually agreed upon by the parties hereto prior to
Closing and attached as Exhibit E hereto.
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ARTICLE IX
SURVIVAL AND INDEMNIFICATION
Section 9.1 Survival of Representations and Warranties.
Each of the representations and warranties made by Purchaser in this Agreement
shall terminate on the date which is 18 months from the Closing Date. Each of
the representations and warranties made by the Sellers and RMS in this
Agreement shall terminate on the date which is 18 months from the Closing Date;
provided, however, that (i) the representations and warranties contained in
Sections 4.11, 4.12, 4.16 and 5.8 shall survive the Closing until 90 days
following the expiration of the applicable statute of limitations and (ii) the
representations and warranties contained in Sections 4.13 and 5.9 shall survive
the Closing until the sixth anniversary of the Closing Date. In the event
notice of any claim for indemnification under Section 9.2(a) hereof shall have
been given within the applicable survival period, the representations and
warranties that are the subject of such indemnification claim shall survive
until such time as such claim is finally resolved. The covenants and
agreements of the parties set forth in this Agreement and the indemnification
obligations of the parties hereunder shall survive indefinitely except as
expressly provided herein.
Section 9.2 Indemnification by Xxx X. Xxxxx and RMS.
(a) Subject to the other provisions of this
Article IX, Xxx X. Xxxxx and RMS shall jointly and severally indemnify, defend
and hold harmless Purchaser Indemnified Parties from and against any and all
costs, expenses, losses, damages and liabilities (including reasonable
attorneys' fees and expenses) ("Damages") suffered by any of Purchaser
Indemnified Parties to the extent resulting from, arising out of, or incurred
with respect to, or (in the case of claims asserted against any of Purchaser
Indemnified Parties by a third party) alleged to result from, arise out of or
have been incurred with respect to, (i) any breach of or inaccuracy in any
representation or warranty as of the date made or as of the Closing Date of any
of the Sellers or RMS contained in this Agreement, (ii) any breach of any
covenant of any of the Sellers or RMS contained in this Agreement, (iii) all
Litigation relating to the Assets and the operations of the Business prior to
the Closing and (iv) any and all Damages resulting directly or indirectly from
any of the Xxxxx/PSI Agreements.
(b) In no event shall Xxx X. Xxxxx or RMS be
liable to the Purchaser Indemnified Parties with respect to any breaches of
representations and warranties unless the aggregate Damages therefrom exceed
$350,000, and then only to the extent the Damages exceed $350,000. In no event
shall the aggregate liability of the Xxx X. Xxxxx and RMS for Damages resulting
from breaches of the representations and warranties set forth in Articles IV or
V exceed $50,000,000.
Section 9.3 Indemnification by Purchaser.
(a)Subject to the other provisions of this Article
VIII, Purchaser shall indemnify, defend and hold harmless the Seller
Indemnified Parties from and against any and all Damages
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suffered by any of the Seller Indemnified Parties to the extent resulting from,
arising out of, or incurred with respect to, or (in the case of claims asserted
against any of the Seller Indemnified Parties by a third party) alleged to
result from, arise out of or have been incurred with respect to, (i) any breach
of or inaccuracy in any representation or warranty as of the date made or as of
the Closing Date of Purchaser contained in this Agreement, (ii) any breach of
any covenant of any of Purchaser contained in this Agreement, (iii) all
litigation relating to the operation of the Assets and the Business subsequent
to Closing, and (iv) all Damages relating to any transaction between PSI and
Purchaser.
(b) In no event shall Purchaser be liable to the
Seller Indemnified Parties with respect to any breaches of representations and
warranties unless the aggregate Damages therefrom exceed $350,000, and then
only to the extent the Damages exceed $350,000. In no event shall the
aggregate liability of Purchaser for Damages resulting from breaches of the
representations and warranties set forth in Article VI exceed $50,000,000.
Section 9.4 Notice and Resolution of Claim.
(a) An indemnified party under this Agreement
shall promptly give written notice to the indemnifying party after obtaining
knowledge of any third party claim or litigation against the indemnified party
as to which recovery may be sought against the indemnifying party because of
the indemnity set forth in Sections 9.2 and 9.3, specifying in reasonable
detail the claim or litigation and the basis for indemnification; provided,
however, that the failure of the indemnified party promptly to notify the
indemnifying party of any such matter shall not release the indemnifying party,
in whole or in part, from its obligations under this Article VIII except to the
extent the indemnified party's failure to so notify in breach of this Section
9.4(a) materially prejudices the indemnifying party's ability to defend against
such third party claim or litigation. The indemnified party shall permit the
indemnifying party to assume the defense of any such claim, litigation or any
litigation resulting from such third party claim.
(b) If the indemnifying party assumes the defense
of any such third party claim or litigation, the obligations of the
indemnifying party under this Agreement shall include taking all steps
necessary in the investigation, defense or settlement of such claim or
litigation (including the retention of legal counsel) and holding the
indemnified party harmless from and against any and all losses caused by or
arising out of any settlement approved by the indemnifying party or any
judgment in connection with such claim or litigation. The indemnifying party
shall not, in the defense of such claim or litigation, consent to entry of any
judgment (except with the written consent of the indemnified party) or enter
into any settlement (except with the written consent of the indemnified party):
(i) that does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the indemnified party a complete release from, all
liability in respect of such claim or litigation, or (ii) the effect of which
is to permit any injunction, declaratory judgment, other order or other
equitable relief to be entered, directly or indirectly, against any indemnified
party. The indemnifying party shall permit the indemnified party to
participate in such defense or settlement through counsel chosen by the
indemnified party, with the fees and expenses of such counsel borne by the
indemnified party.
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(c) Failure by the indemnifying party to notify
the indemnified party of its election to assume the defense of any such claim
or litigation by a third party within 30 days after notice thereof has been
given to the indemnifying party shall be deemed a waiver by the indemnifying
party of its right to assume the defense of such claim or litigation. If the
indemnifying party does not assume the defense of such claim or litigation by a
third party, the indemnified party may defend or settle such clam or litigation
in such matter as the indemnified party may deem appropriate and may settle
such claim or litigation on such terms as it may deem appropriate.
ARTICLE X
TERMINATION
Section 10.1 Termination. This Agreement may be
terminated at any time prior to Closing:
(i) by written agreement of Purchaser and each of
the Sellers;
(ii) by the Sellers or Purchaser, by giving
written notice of such termination to the other party, if the Closing shall not
have occurred on or prior to March 15, 1999; provided, however, that the right
to terminate this Agreement under this Section 10.1 shall not be available to
any party whose failure to perform any material covenant or obligation under
this Agreement has been the cause of or resulted in the failure of the Closing
to occur on or before such date;
(iii) by Purchaser at any time prior to Closing if
the value of all assets net of liabilities ("Net Assets") as reflected on the
Closing Balance Sheet is at least $1,000,000 lower than Net Assets as reflected
on the Interim Balance Sheet;
(iv) by either Purchaser or the Sellers by giving
written notice of termination to the other party, if there shall have been a
material breach of any of the covenants or agreements or any of the
representations or warranties set forth in this Agreement on the part of the
other party, which breach is not cured within ten days following written notice
given by the terminating party to the party committing such breach, or which
breach, by its nature, cannot be cured prior to the Closing; provided, however,
that the right to terminate this Agreement under this Section 10.1 shall not be
available if at the time the terminating party is in material breach of any
representation, warranty, covenant or other agreement contained herein; or
(v) by either Purchaser or the Sellers by written
notice of termination to the other party if any Governmental Authority of
competent jurisdiction shall have issued any statute, rule, regulation, order,
decree or injunction or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and such statute, rule, regulation, order, decree or injunction or
other action shall have become final.
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Section 10.2 Effect of Termination. In the event of the
termination of this Agreement in accordance with Section 10.1 hereof, this
Agreement shall thereafter become void and have no effect, and no party thereto
shall have any liability to any other party hereto or any of its respective
Affiliates, officers or employees, except for the obligations of the parties
hereto contained in this Section 10.2 and in Sections 11.1, 11.5, 11.6 and 11.8
hereof, and provided that nothing contained in this Section 10.2 shall relieve
any party from liability for a breach of any provision of this Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices. All notices or other communications
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended, if
delivered by registered or certified mail, return receipt requested, or by a
national courier service, or if sent by facsimile, provided, however, that the
facsimile is promptly followed by telephone confirmation thereof to the
appropriate person at the address set forth below, or at such other address as
may be designated in writing hereafter, in the same manner, by such person.
To the Sellers:
Xxxxx Communications Holdings Limited Partnership
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxx
with a copy to:
Xxxxx & XxXxxxxx
000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Xx.
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To Purchaser:
Anschutz Digital Media, Inc.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
One Xxxxx Center
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Any such notice shall be deemed delivered (a) on the date delivered if by
personal delivery, (b) on the date upon which the return receipt is signed or
delivery is refused or the notice is designed by the postal authorities as a
not deliverable, as the case may be, if mailed by registered or certified mail,
(c) on the next succeeding business day if sent by national courier service, or
(d) on the date telecommunicated if by telecopier if confirmed by telephone
confirmation.
Section 11.2 Amendment, Waiver. Any provision of this Agreement
may be amended or waived if, and only if such amendment or waiver is in writing
and signed, in the case of an amendment, by Purchaser and each Seller, or in
the case of a waiver, by the party against whom the waiver is to be effective.
No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
Section 11.3 Assignment. No party to this Agreement may assign
any of its rights or obligations under this Agreement without the prior written
consent of the other parties hereto; provided that Purchaser may assign any of
its rights and obligations hereunder in whole or in part to any of its
respective Affiliates without obtaining the consent of the other parties
hereto.
Section 11.4 Entire Agreement. This Agreement (including all
Exhibits and Schedules hereto) contains the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, with respect to such
matters (including without limitation the letter agreement dated January 29,
1999 among Purchaser and the Sellers).
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Section 11.5 Parties in Interest. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than Purchaser, the
Sellers or their successors or permitted assigns, any rights or remedies under
or by reason of this Agreement.
Section 11.6 Expense. All costs and expenses incurred by
Purchaser in connection with this Agreement and the transactions contemplated
hereby, including costs associated with a confidential filing under the HSR
Act, shall be borne by Purchaser, and all costs and expenses incurred by the
Sellers in connection with this Agreement and the transactions contemplated
hereby shall be borne by the Sellers.
Section 11.7 Governing Law; Jurisdiction; Service of Process.
This Agreement shall be governed by the laws of the State of Colorado, its
rules of conflict of laws notwithstanding. Purchaser, the Sellers hereby agree
and consent to be subject to the non-exclusive jurisdiction of the federal and
state courts of the State of Colorado in any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby. Each
party hereby irrevocably consents to the service of any and all process in any
such suit, action or proceeding by the delivery of such process to such party
at the address and in the manner provided in Section 11.1
Section 11.8 Specific Performance. The parties hereto agree that
if any of the provisions of this Agreement are not performed in accordance with
their specific terms or are otherwise breached, irreparable damage would occur,
no adequate remedy at law would exist and damages would be difficult to
determine, and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or equity.
Section 11.9 Transfer and Similar Taxes. Notwithstanding any
other provision of this Agreement to the contrary, (a) the Sellers shall assume
and promptly pay when due all sales, property, use, privilege, transfer,
documentary, gains, stamp, duties, recording and similar Taxes and fees
(including any penalties, interest or additions) imposed upon any party
incurred in connection with the transactions contemplated by this Agreement,
(b) RMS and Purchaser shall pay on a pro rata basis (based on the transfer of
ownership at Closing) the property taxes, utilities and insurance premiums owed
or owing with respect to the Owned Real Property, (c) Purchaser shall pay the
costs of recording the Warranty Deed and the transfer taxes assessed thereon
pursuant to T.C.A. Section 67-4-409 and (d) Purchaser shall pay any transfer or
sales tax and related costs associated with the transfer and title renewal of
any motor vehicles.
Section 11.10 Headings. The heading references herein and in the
table of contents hereto are for convenience purposes only, do not constitute a
part of this Agreement, and shall not be deemed to limit or affect any of the
provisions hereof.
[SIGNATURE PAGES FOLLOW]
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SIGNATURES
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date first written above.
ANSCHUTZ DIGITAL MEDIA, INC.
By: /s/ XXXXX XXXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxxx
-----------------------------------
Title: Vice President
----------------------------------
XXXXX COMMUNICATIONS HOLDINGS
LIMITED PARTNERSHIP
By: Holdings Investments, Inc.
General Partner
By: /s/ XXX X. XXXXX
--------------------------------
Xxx X. Xxxxx
President
XXXXX VIRTUAL MEDIA
LIMITED PARTNERSHIP
By: Magnatone Entertainment Group, Inc.
General Partner
By: /s/ XXX X. XXXXX
--------------------------------
Xxx X. Xxxxx
President
XXXXX WORLD WIDE DIGITAL
TRANSMISSION & VAULTING
LIMITED PARTNERSHIP
By: Xxxxx World Wide, Inc.
General Partner
By: /s/ XXX X. XXXXX
--------------------------------
Xxx X. Xxxxx
President
Signature Page 1 of 2
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XXXXX PRODUCTIONS
LIMITED PARTNERSHIP
By: Xxxxxxxxx Communications, Inc.
General Partner
By: /s/ XXX X. XXXXX
--------------------------------
Xxx X. Xxxxx
President
PROFESSIONAL VIDEO
SERVICES CORPORATION
By: /s/ XXX X. XXXXX
-------------------------------------
Name:
-----------------------------------
Title: Chairman
----------------------------------
ENHANCED SERVICES OF NEVADA, INC.
By: /s/ XXX X. XXXXX
-------------------------------------
Xxx X. Xxxxx
President
RMS LIMITED PARTNERSHIP
By: Xxxxxxx Xxxxxxx, Inc.
General Partner
By: /s/ C. XXXXXX XXXXXX, XX.
--------------------------------
C. Xxxxxx Xxxxxx, Xx.
President
/s/ XXX X. XXXXX
----------------------------------------
Xxx X. Xxxxx
(as to Articles IX and XI only)
Signature Page 2 of 2
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EXHIBIT A-1
Form of Employment Agreement
60
EXHIBIT A-2
Form of
Agreement to Protect Confidential Information, Assign Inventions and
Prevent Unfair Competition and Unfair Solicitation
61
EXHIBIT B
Form of Management Agreement
62
EXHIBIT C
Allocation of Purchase Price
63
EXHIBIT D
Form of Opinion of Xxxxx & XxXxxxxx
64
EXHIBIT E
Form of Opinion of Xxxxx & Xxxxxxx L.L.P.
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EXHIBITS
A-1. Form of Employment Agreement
A-2. Form of Agreement to Protect Confidential Information, Assign
Inventions and Prevent Unfair Competition and Unfair Solicitation
B. Form of Management Agreement
C. Purchase Price Allocation
D. Form of Opinion of Xxxxx & XxXxxxxx
E. Form of Opinion of Xxxxx & Xxxxxxx L.L.P.
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SCHEDULES TO ASSET PURCHASE AGREEMENT
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[TO BE PROVIDED BY SELLER]
