SUPPLEMENTAL AGREEMENT AND PLAN OF SHARE EXCHANGE
This
SUPPLEMENTAL AGREEMENT AND PLAN OF SHARE EXCHANGE (this “Agreement”),
is
made as of the 25th day of January, 2008, by and among MULTIBAND CORPORATION,
a
publicly traded Minnesota corporation (“Multiband”
),
DirecTECH Holding Company, Inc., a Delaware corporation (“DTHC”),
and
Michigan Microtech, Inc, a Michigan corporation (“MMT”). Each party hereto may
be referred to herein individually as a “Party”
and
collectively, as the “Parties”.
MMT,
Multiband, and DTHC are collectively referred to herein as the “Corporate
Parties”.
WITNESSETH:
WHEREAS,
DTHC, Multiband, Multiband HoldCo, Inc., a Delaware corporation and wholly-owned
subsidiary of Multiband, and certain stockholders of DTHC entered into that
certain Agreement and Plan of Merger, dated October 31, 2007 (the “Original
Agreement”);
WHEREAS,
the Parties intend to honor the substance of the Original Agreement and
effectuate the transactions contemplated therein (the “Original
Transaction”)
provided, however, that the parties have mutually agreed to extend the deadline
set forth in Section 11.1.3 of the Original Agreement from March 31, 2008 to
December 31, 2008;
WHEREAS,
the closing of the Original Transaction has been delayed due to circumstances
beyond the control of the Parties, and the Parties have agreed to enter into
the
transactions contemplated in this Agreement in order to maintain positive
relations with each other and ultimately complete the transactions contemplated
by the Original Agreement;
WHEREAS,
DTHC owns one hundred percent (100%) of the issued and outstanding shares of
capital stock of MMT and desires to exchange Fifty One Percent (51%) of the
issued and outstanding shares of capital stock of MMT or 1,020,000 shares (the
“MMT
Shares”)
upon
the terms and subject to the conditions set forth herein; and
WHEREAS,
Multiband desires to issue One Million Four Hundred Ninety Thousand newly issued
shares of Multiband’s common stock (the “Multiband
Shares”)
to
DTHC in exchange for the MMT Shares upon the terms and subject to the conditions
set forth herein; and
WHEREAS,
as an inducement to DTHC to enter into this Agreement, Multiband is willing
to
execute and deliver to DTHC a Registration Rights Agreement in the form
described in Section 3.3.7 of this Agreement and attached hereto as Schedule
3.3.7.
NOW,
THEREFORE, in consideration of the foregoing and of the mutual agreements,
covenants, representations and warranties hereinafter set forth, the Parties
hereto, intending to be legally bound, hereby agree as follows:
SECTION
1. Defined
Terms
The
following terms used in this Agreement shall have the meanings indicated below:
1.1 “1933
Act”
shall
mean the Securities Exchange Act of 1933, as amended.
1.2 “1934
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
1.3 “Affiliate
Agreement”
shall
mean the agreement attached to this Agreement as Schedule
1.3.
1.4 “Certificate” shall
have the meaning given in Section 2.4.2 of this Agreement.
1.5 “Certificates
of Exchange”
shall
mean those certain Certificates of Share Exchange that must be filed with the
Michigan Secretary of State and the Minnesota Secretary of State as required
under Michigan and Minnesota law, respectively.
1.6 “Closing”
shall
have the meaning given in Section 3.1 of this Agreement.
1.7 “Closing
Date”
shall
have the meaning given in Section 3.1 of this Agreement.
1.8 “COBRA”
shall
have the meaning given in Section 4.10.6 of this Agreement.
1.9 “Code”
shall
mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
1.10 “Confidentiality
Agreement” shall
have the meaning given in Section 6.5 of this Agreement.
1.11 “Corporate
Parties”
shall
mean MMT, DTHC, and Multiband.
1.12 “Defined
Benefit Plan”
shall
have the meaning given in Section 4.10.1 of this Agreement.
1.13 “DirecTECH
Holding Company EIAP”
shall
mean the DirecTECH Holding Company Eligible Individual Account Plan, which
forms
a part of the DirecTECH Holding Company Employee Stock Ownership Plan.
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1.14 “DirecTECH
Holding Company ESOP”
shall
mean the DirecTECH Holding Company Employee Stock Ownership Trust, which forms
a
part of the DirecTECH Holding Company Employee Stock Ownership
Plan.
1.15 “DOJ” shall
have the meaning given in Section 6.6 of this Agreement.
1.16 “DTHC”
shall
have the meaning given in the heading of this Agreement.
1.17 “DTHC
Affiliate”
or
“MMT
Affiliate”
shall
mean DTHC and DirecTECH, Inc., a California corporation, DirecTECH Delaware,
Inc., a Delaware corporation, DirecTECH Protection, Inc., a Delaware
corporation, DirecTECH MDU, Inc., a Delaware corporation, DirecTECH Development
Corporation, a Delaware corporation, DirecTECH Southwest, a Louisiana
corporation, JBM, Inc., a Kentucky corporation, and MMT.
1.18 “DTHC
ESOT”
shall
mean the DirecTECH Holding Company Employee Stock Ownership Trust, which forms
a
part of the DirecTECH Holding Company ESOP and the DirecTECH Holding Company
EIAP.
1.19 “DTHC Independent
Appraiser and Financial Advisor”
shall
have the meaning set forth in Section 4.18 of this Agreement.
1.20 “DTHC-MMT
Shareholder’s Agent”
shall
have the meaning given in Section 14. of this Agreement.
1.21 “DTHC
or MMT Facilities”
shall
mean any real property, leaseholds, or other interests currently or formerly
owned or operated in connection with DTHC or MMT and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated in connection with DTHC or MMT.
1.22 “DTHC
or MMT Material Adverse Affect”
means
any state of facts, development, event, circumstance, occurrence, or effect
that, individually or taken collectively with all other events, circumstances,
or effects that have occurred prior to the date of determination of the
occurrence of the DTHC or MMT Material Adverse Affect, (a) is materially adverse
to the condition (financial or otherwise), business, operations, prospects,
or
results of operations of DTHC and the DTHC Affiliates taken as a whole, (b)
impairs the ability of DTHC or MMT to perform its obligations hereunder, or
(c)
delays the consummation of the Share Exchange (hereinafter defined in Section
2.1.).
1.23 “Due
Diligence Period”
shall
mean the period that originally commenced on July 6, 2007, and originally ended
November 30, 2007, and that will now be extended until February 1,
2008.
1.24 “Effective
Time” shall
have the meaning set forth in Section 2.1.3 of this Agreement.
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1.25 “Environmental,
Health and Safety Liabilities”
shall
mean any cost, damages, expense, liability, obligation or other responsibility
arising from or under any Environmental Law or occupational safety and health
law, including those consisting of or relating to (a) any environmental, health
or safety matter or condition (including on-site or off-site contamination,
occupational safety and health and regulation of any chemical substance or
product); (b) any fine, penalty, judgment, award, settlement, legal or
administrative proceeding, damages, loss, claim, demand or response, remedial
or
inspection cost or expense arising under any Environmental Law or occupational
safety and health law; (c) financial responsibility under any Environmental
Law
or occupational safety and health law for cleanup costs or corrective action,
including any cleanup, removal, containment or other remediation or response
actions (“Cleanup”)
required by any Environmental Law or occupational safety and health law (whether
or not such Cleanup has been required or requested by any Governmental Body
or
any other person) and for any natural resource damages; or (d) any other
compliance, corrective or remedial measure required under any Environmental
Law
or occupational safety and health law.
1.26 “Environmental
Law”
shall
mean any Legal Requirement that requires or relates to (a) advising appropriate
authorities, employees or the public of intended or actual Releases of
pollutants or hazardous substances or materials, violations of discharge limits
or other prohibitions and the commencement of activities, such as resource
extraction or construction, that could have significant impact on the
Environment; (b) preventing or reducing to acceptable levels the Release of
pollutants or hazardous substances or materials into the Environment; (c)
reducing the quantities, preventing the Release or minimizing the hazardous
characteristics of wastes that are generated; (d) assuring that products are
designed, formulated, packaged and used so that they do not present unreasonable
risks to human health or the Environment when used or disposed of; (e)
protecting resources, species or ecological amenities; (f) reducing to
acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil or other potentially harmful substances; (g)
cleaning up pollutants that have been Released, preventing the Threat of Release
or paying the costs of such clean up or prevention; or (h) making responsible
parties pay private parties, or groups of them, for damages done to their health
or the Environment or permitting self-appointed representatives of the public
interest to recover for injuries done to public assets.
1.27 “ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as amended.
1.28 “ERISA
Affiliate”
shall
have the meaning given in Section 4.10.1 of this Agreement.
1.29 “Event
of Default”
shall
mean the occurrence of one or more of the following events:
(a) The
consummation of the Original Transaction does not occur on or prior to December
31, 2008;
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(b) Any
amount due and owing on the Promissory Note, whether by its terms or as
otherwise provided herein, is not paid on the due date thereof and not cured
within a thirty (30) day period after the payment due date;
(c) Any
amount due and owing under the Employee Leasing Agreement by and among DTHC,
MMT, and Multiband.
(d) Any
action is taken by MMT to change the signature authority on MMT bank accounts
resulting in DTHC officers or employees failing to hold exclusive signature
authority to disburse funds from such accounts.
(e) Any
oral
or written warranty, representation, certificate or statement in the Original
Agreement, this Agreement, the Promissory Note, or any other agreement with
DTHC
and/or MMT shall be false in any material respect when made or at any
time;
(f) Any
failure to perform or default in the performance of any covenant, condition
or
agreement contained in the Original Agreement, this Agreement or the Promissory
Note and, if capable of being cured, such failure to perform or default in
performance continues for a period of thirty (30) days after such failure to
perform or default in performance;
(g) Any
default by Multiband in the payment of principal, interest or any other sum
for
any other obligation beyond any period of grace provided with respect thereto
or
in the performance of any other term, condition or covenant contained in any
agreement (including, but not limited to any capital or operating lease or
any
agreement in connection with the deferred purchase price of property) under
which any such obligation is created, the effect of which default is to cause
or
permit the holder of such obligation (or the other party to such other
agreement) to cause such obligation to become due prior to its stated maturity
or terminate such other agreement which has a Multiband Material Adverse Effect;
provided, however, that Multiband may contest in good faith any such obligations
for a period of time not to exceed ninety days (90) without causing an Event
of
Default; further provided, that after such ninety day (90) period such contest
is not resolved in favor of the Multiband, then an Event of Default shall occur
unless Multiband’s potential liability is bonded over to the satisfaction of
DTHC or the continuing dispute does not have a Multiband Material Adverse
Effect;
(h) The
entry
of any judgment, decree, levy, attachment, garnishment or other process, or
the
filing of any liens (other than the liens created in favor of DTHC and/or its
senior lender) against the MMT Shares and/or any other collateral securing
the
Promissory Note (the “Collateral”), and such judgment or other process shall not
have been, within sixty (60) days from the entry thereof, (i) bonded over to
the
satisfaction of DTHC and its senior lender and appealed, (ii) vacated, or (iii)
discharged, or the loss, theft, destruction, seizure or forfeiture, or the
occurrence of any material deterioration or impairment of the Collateral or
any
material decline or depreciation in the value or market price thereof (whether
actual or reasonably anticipated), which causes the Collateral, in the sole
and
reasonable opinion of DTHC and its senior lender acting in good faith, to become
unsatisfactory as to value or character. The cause of such deterioration,
impairment, decline or depreciation shall include, but is not limited to, the
failure by Multiband to do any act deemed reasonably necessary by DTHC and
its
senior lender to preserve and maintain the value and collectability of the
Collateral;
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(i) The
occurrence of a material default under or the termination of any of the
Multiband Contracts;
(j) The
occurrence of any development, condition or event which results in a Multiband
Material Adverse Effect other than as otherwise set forth in this Section
1.29;
(k) The
occurrence of a change in control of Multiband without DTHC’s 60-day prior
written approval, which shall not be unreasonably withheld. For this purpose,
“change in control” shall mean the occurrence of any of the following events:
(i). Approval by shareholders of Multiband of (1) any consolidation or merger
of
Multiband other than one involving DTHC or its subsidiaries in which Multiband
is not the continuing or surviving corporation or pursuant to which shares
of
stock of Multiband would be converted into cash, securities or other property,
other than a consolidation or merger of Multiband in which holders of its common
shares immediately prior to the consolidation or merger have substantially
the
same proportionate ownership of common shares of the surviving corporation
immediately after the consolidation or merger as immediately before, or (2)
a
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of Multiband;
(ii.)
a change in the majority of members of the board of directors of Multiband
within a 24-month period; (iii.) either (1) receipt by the company of a report
on Schedule 13D, or an amendment to such a report, filed with the Securities
and
Exchange Commission ("SEC") pursuant to section 13(d) of the 1934 Act disclosing
that any person, group, corporation or other entity (a "Person") is the
beneficial owner, directly or indirectly, of 20% or more of the outstanding
stock of Multiband or (2) actual knowledge by Multiband of facts, on the basis
of which any person is required to file such a report on Schedule 13D, or an
amendment to such a report, with the SEC (or would be required to file such
a
report or amendment upon the lapse of the applicable period of time specified
in
Section 13(d) of the ▇▇▇▇ ▇▇▇) disclosing that such a person is the beneficial
owner, directly or indirectly, of 20% or more of the outstanding stock of
Multiband; (iv.) purchase by any Person (as defined in section 13 (d) of the
1934 Act), corporation or other entity, other than Multiband or a Multiband
Affiliate, of shares pursuant to a tender or exchange offer, to acquire any
shares of Multiband (or securities convertible into stock) for cash, securities
or any other consideration provided that, after consummation of the offer,
such
person, group, corporation or other entity is the beneficial owner (as defined
in rule 13d-3 under the 1934 Act), directly or indirectly, of 20% or more of
the
issued and outstanding shares of Multiband (calculated as provided in Paragraph
(d) of Rule 13d-3 under the 1934 Act in the case of rights to acquire stock);
(v.) Multiband combines with another company other than DTHC and/or its
subsidiaries and is the surviving corporation but, immediately after the
combination, the shareholders of Multiband immediately prior to the combination
do not hold, directly or indirectly, more than 50% of the Voting Stock of the
combined company (there being excluded from the number of shares held by such
shareholders, but not from the Voting Stock of the combined company, any shares
received by affiliates (as defined in the rules of the Securities and Exchange
Commission) of such other company in exchange for stock of such other
company);
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(l) The
entry
of any judgment decree, levy, attachment, garnishment or other process, or
the
filing of any lien against Multiband which is not fully covered by insurance
and
which judgment or other process would have a Multiband Material Adverse Effect
on the ability of Multiband to perform under this Agreement or under any other
agreement between DTHC and/or the DTHC Affiliates or Multiband, as
applicable;
(m) Any
proceeding involving Multiband is commenced by or against Multiband under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law or statute of the federal government or any
state
government, and in the case of any such proceeding being instituted against
Multiband, (i) Multiband by any action or failure to act indicates its approval
of, consent to or acquiescence therein; or (ii) an order shall be entered
approving the petition in such proceedings and such order is not vacated, stayed
on appeal or otherwise shall not have ceased to continue in effect within sixty
(60) days after the entry thereof;
(n) Multiband
makes an assignment for the benefit of creditors, fails to pay, or admits in
writing its inability to pay its debts as they mature; or if a trustee of any
substantial part of the assets of Multiband is applied for or appointed, and
in
the case of such trustee being appointed in a proceeding brought against
Multiband, and Multiband by any action or failure to act indicates its approval
of, consent to, or acquiescence in such appointment and such appointment is
not
vacated, stayed on appeal or otherwise shall not have ceased to continue in
effect within sixty (60) days after the date of such appointment;
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(o) Prior
to
the closing of all of the transactions contemplated by the Original Agreement,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall have been removed as a member of the Multiband Board
of
Directors (unless by a majority of the Multiband shareholders at an annual
meeting thereof) and shall not have been replaced with J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or
▇▇▇▇▇ ▇. Block; and
(p) Any
portion of or interest in the MMT Shares is transferred to a third party or
cancelled (other than a lien or liens issued to DTHC and/or MB Bank) or any
MMT
assets are transferred to Multiband or a third party not in the ordinary course
of business as normally conducted. The Parties agree that transfers by MMT
to
DTHC under the Employee Leasing Agreement by and among DTHC, MMT, and Multiband
are considered to be in the ordinary course of business.
1.30 “Exchange
Agent” shall
have the meaning given in Section 2.4.1 of this Agreement.
1.31 “Exchange
Fund” shall
have the meaning given in Section 2.4.1 of this Agreement.
1.32 “Exchange
Ratio” shall
have the meaning given in Section 2.1.4 of this Agreement.
1.33 “FTC” shall
have the meaning given in Section 6.6 of this Agreement.
1.34 “GAAP” shall
have the meaning given in Section 4.5 of this Agreement.
1.35 “Governmental
Body”
means
any national, federal, state or local governmental, judicial or regulatory
agency, authority or body within or outside the United States.
1.36 “Hazardous
Activity”
shall
mean the distribution, generation, handling, importing, management,
manufacturing, processing, production, refinement, Release, storage, transfer,
transportation, treatment or use (including any withdrawal or other use of
groundwater) of Hazardous Material in, on, under, about or from the DTHC or
MMT
Facilities or the Multiband Facilities, respectively, or any part thereof into
the Environment and any other act, business, operation or thing that increases
the danger, or risk of danger, or poses an unreasonable risk of harm, to persons
or property on or off the DTHC or MMT Facilities or the Multiband Facilities,
respectively, or that may affect the value of the DTHC or MMT Facilities or
the
Multiband Facilities, respectively, or the respective businesses.
1.37 “Hazardous
Material”
shall
mean any substance, material or waste which is or will foreseeably be regulated
by any Governmental Body, including any material, substance or waste which
is
defined as a “hazardous waste,” “hazardous material,” “hazardous substance,”
“extremely hazardous waste,” “restricted hazardous waste,” “contaminant,” “toxic
waste” or “toxic substance” under any provision of Environmental Law, and
including petroleum, petroleum products, asbestos, presumed asbestos-containing
material or asbestos-containing material, urea formaldehyde and polychlorinated
biphenyls.
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1.38 “HSR
Act” shall
have the meaning given in Section 6.6 of this Agreement.
1.39 “Knowledge”
shall
mean actual knowledge as of the date of this Agreement, through and including
the Closing Date; provided, however, that the term Knowledge shall encompass
not
only the actual knowledge of such individual(s) or entity(ies), but, in the
case
of the Corporate Parties, also shall include the knowledge that a reasonably
prudent corporate officer or director of a corporation would
possess.
1.40 “Legal
Requirement”
means
any federal, state, local, municipal, foreign, international or multinational
judgment or other administrative order, decree, constitution, law, ordinance,
principle of common law, rule, regulation, statute or treaty.
1.41 “Letter
of Intent”
shall
mean that certain Letter of Intent issued by Multiband to DTHC, dated July
6,
2007, and amended and restated and dated as of September 17, 2007, and October
11, 2007.
1.42 “MMT
Closing Documents” shall
have the meaning set forth in Section 4.14 of this Agreement.
1.43 “MMT
Contracts”
shall
have the meaning set forth in Section 4.8 of this Agreement.
1.44 “MMT
Employee Plans” shall
have the meaning set forth in Section 4.10.1 of this Agreement.
1.45 “MMT
Net Name” shall
have the meaning given in Section 4.15.2 of this Agreement.
1.46 “MMT
Shares”
shall
have the meaning given in the recitals to this Agreement.
1.47 “Multiband”
shall
have the meaning given in the heading to this Agreement.
1.48 “Multiband
Balance Sheet” shall
have the meaning set forth in Section 5.17.2 of this Agreement.
1.49 “Multiband
Balance Sheet Date” shall
have the meaning set forth in Section 5.17.2 of this Agreement.
1.50 “Multiband
Contracts”
shall
have the meaning set forth in Section 5.8 of this Agreement.
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1.51 “Multiband
Closing Documents” shall
have the meaning set forth in Section 5.14 of this Agreement.
1.52 “Multiband
Employee Plan(s)”
shall
have the meaning set forth in Section 5.10.1 of this Agreement.
1.53 “Multiband
ERISA Affiliate”
shall
have the meaning set forth in Section 5.10.1 of this Agreement.
1.54 “Multiband Facilities”
shall
mean any real property, leaseholds, or other interests currently or formerly
owned or operated in connection with the Multiband Parties and the Multiband
Affiliates and any buildings, plants, structures, or equipment (including motor
vehicles, tank cars, and rolling stock) currently or formerly owned or operated
in connection with the Multiband Parties and the Multiband
Affiliates.
1.55 “Multiband
Material Adverse Affect”
means
any state of facts, development, event, circumstance, occurrence, or effect
that, individually or taken collectively with all other events, circumstances,
or effects that have occurred prior to the date of determination of the
occurrence of the Multiband Material Adverse Affect, (a) is materially adverse
to the condition (financial or otherwise), business, operations, prospects,
or
results of operations of the Multiband Affiliates taken as a whole, (b) impairs
the ability of the Multiband Affiliates to perform their obligations hereunder,
or (c) delays the consummation of the Original Transaction.
1.56 “Multiband
Net Names”
shall
have the meaning set forth in Section 5.15.2 of this Agreement.
1.57 “Multiband
Parties”
shall
have the meaning set forth in the heading to this Agreement.
1.58 “Multiband
SEC Reports” shall
have the meaning set forth in Section 5.17.1 of this Agreement.
1.59 “Multiband
Share(s)”
shall
have the meaning set forth in the recitals to this Agreement.
1.60 “North
Star Trust Company”
shall
mean the institutional trustee of the DTHC ESOT.
1.61 “Original
Agreement”
shall
have the meaning given in the recitals to this Agreement.
1.62 “Original
Transaction”
shall
have the meaning given in the recitals to this Agreement.
1.63 “Party”
shall
have the meaning given in the recitals to this Agreement.
1.64 “Parties”
shall
have the meaning given in the recitals to this Agreement.
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1.65 “PBGC” shall
have the meaning given in Section 4.10.2 of this Agreement.
1.66 “Person”
shall
have the meaning given in Section 2.4.2 of this Agreement.
1.67 “Promissory
Note”
shall
have the meaning given in Section 2.1 of this Agreement.
1.68 “Registration
Rights Agreement” shall
have the meaning given in Section 3.3.7 of the Original Agreement.
1.69 “Representatives” shall
have the meaning given in Section 6.5 of this Agreement.
1.70 “Share
Exchange”
shall
have the meaning given in Section 2.1 of this Agreement.
1,71 “Share Exchange
Consideration” means
the
Promissory Note and the MMT and Multiband shares transferred pursuant to Section
2.1 of this Agreement.
1.72 “SOX” shall
have the meaning given in Section 5.17.4 of this Agreement.
1.73 “Stock
Pledge Agreement”
shall
have the meaning given in Section 2.1.5 of this Agreement.
1.74 “Tax”
means
any net income, gross income, gross receipts, sales, use, ad valorem, franchise,
profits, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profit tax, custom duty or other
tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest and any penalty, addition to tax or additional amount
imposed by any taxing authority (whether domestic or foreign).
1.75 “Tax
Return”
means
any return (including any information return), report, statement, schedule,
notice, form or other document or information filed with or submitted to, or
required to be filed with or submitted to, any Governmental Body in connection
with the determination, assessment, collection or payment of any Tax or in
connection with the administration, implementation or enforcement of, or
compliance with, any Legal Requirement relating to any Tax.
1.76 “Taxing
Authority” means
any
Governmental Entity having jurisdiction with respect to any Tax.
SECTION
2. Share
Exchange
2.1 Subject
to the terms and conditions of this Agreement, at the Effective Time (as defined
in Section 2.1.3 herein), the MMT Shares, shall be exchanged for the Multiband
Promissory Note executed by Multiband in favor of DTHC (the “Promissory
Note”)
and
One Million Four Hundred Ninety Thousand shares of Multiband (the “Share
Exchange”). Multiband shall continue to be governed by the laws of the state of
Minnesota, and the separate corporate existence of Multiband and MMT with all
of
their rights, privileges, immunities and franchises shall continue unaffected
by
the Share Exchange.
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2.1.1 Cancellation
of DTHC’s Interest in the MMT Shares.
Subject
to the terms and conditions set forth in this Agreement, all of DTHC ’s right,
title, and interest to the MMT Shares owned by DTHC and listed on Schedule
4.3
attached
hereto shall be cancelled and retired and shall cease to exist;
2.1.2 Rule
145.
Notwithstanding
anything to the contrary in this Agreement, no certificates representing the
Multiband Shares shall be delivered to a person who is a Multiband “affiliate”
for purposes of Rule 145 of the 1933 Act until such person shall have executed
and delivered to Multiband an Affiliate Agreement;
2.1.3 Effective
Time.
The
Share Exchange shall become effective at the time the Certificates of Exchange
have been filed with the Secretary of State of Minnesota and the Secretary
of
State of Michigan or at such later time as may be agreed by the Corporate
Parties as specified in the Certificate of Exchange. However, the Share Exchange
and this Agreement will be deemed effective at 12:01 AM, March 1, 2008 for
purposes of establishing Multiband’s rights to and ownership of MMT’s revenues,
incomes and expenses.
2.1.4 Exchange
Ratio.
Multiband
shall issue to DTHC One and 4607/10,000 (1.46) Multiband Shares in exchange
for
each MMT Share for a total of One Million Four Hundred Ninety Thousand Multiband
Shares. The ratio of Multiband Shares issued in exchange for each MMT Share
is
referred to in this Agreement as the “Exchange
Ratio”.
2.1.5 Promissory
Note. The
original principal amount of the Promissory Note shall be Two Million Two
Hundred Forty Six Thousand and No/100 Dollars ($2,246,000.00) and shall bear
interest at a rate of five percent (5%) per annum. The Promissory Note shall
be
secured by: (a) a pledge of the MMT Shares by Multiband to DTHC pursuant to
the
Stock Pledge Agreement; and (b) first-priority, perfected security interest
in
the MMT Shares. In an Event of Default, DTHC shall be entitled to the remedies
provided for under this Agreement and the Stock Pledge Agreement and such other
remedies that are afforded to a secured creditor under applicable state and
federal law. The terms and provisions of the Stock Pledge Agreement and the
Promissory Note are hereby incorporated into this Agreement.
2.2 Articles
of Incorporation and By-laws.
2.2.1 The
Articles of Incorporation of Multiband and MMT, respectively, as in effect
immediately prior to the Effective Time shall remain in effect, until duly
amended as provided therein or by applicable law.
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2.2.2 The
By-Laws of Multiband and MMT, respectively, as in effect immediately prior
to
the Effective Time shall remain in effect, until duly amended as provided
therein or by applicable law.
2.3 Directors
and Officers of Multiband of MMT.
At the
Effective Time, each of the directors and officers of Multiband and MMT
immediately prior to the Effective Time shall be the directors and officers
of
Multiband and MMT, each to hold office until their respective death, permanent
disability, resignation or removal or until his or her respective successor
is
duly elected and qualified, all in accordance with the Articles of Incorporation
and Bylaws of Multiband and MMT and applicable Law; provided, however, that
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall be appointed as an additional member of Multiband’s
Board of Directors on the Closing Date to hold office until the next regularly
scheduled meeting of Multiband shareholders is held in 2008 to elect all
Multiband directors all in accordance with the Articles of Incorporation and
Bylaws of Multiband and applicable Law. In the event Minnesota law precludes
▇▇.
▇▇▇▇▇▇▇’▇ appointment to the board, then Multiband agrees to nominate ▇▇.
▇▇▇▇▇▇▇ to be elected to the board at its next annual meeting of shareholders
in
2008.
2.4 Exchange
of Certificates for Shares.
2.4.1 Exchange
Agent.
As of
the Effective Time, Multiband shall deposit, or shall cause to be deposited,
with an exchange agent selected by Multiband, with DTHC’s and MMT’s prior
written approval, which shall not be unreasonably withheld (the “Exchange
Agent”),
for
the benefit of the holder of the MMT Shares, the Promissory Note, the Stock
Pledge Agreement, the certificates representing the Multiband Shares, and any
cash and any dividends or other distributions with respect to the Multiband
Shares to be issued or paid pursuant to this Sections 2. in exchange for the
outstanding MMT Shares upon due surrender of the Certificate pursuant to the
provisions of this Section 2. (such cash and certificates for Multiband Shares,
together with the amount of any dividends or other distributions payable with
respect thereto, being hereinafter referred to as the “Exchange
Fund”).
2.4.2 Exchange
Procedures.
Appropriate transmittal materials shall be provided by the Exchange Agent to
DTHC as the holder of record of the MMT Shares as soon as practicable after
the
Effective Time advising DTHC of the effectiveness of the Share Exchange and
the
procedure for surrendering the certificate representing the MMT Shares (the
“Certificate”)
to the
Exchange Agent, in form and substance satisfactory to Multiband and DTHC which
Multiband will be relying upon in connection with the issuance of Multiband
Shares. Upon the surrender of the Certificate to the Exchange Agent in
accordance with the terms of such transmittal materials, DTHC shall be entitled
to receive in exchange therefore: (a) a certificate representing that number
of
whole shares of the Multiband Shares that DTHC is entitled to receive pursuant
to this Section 2.; (b) a check in the amount (after giving effect to any
required tax withholdings) of (i) any cash in lieu of fractional shares, plus
(ii) any unpaid non-stock dividends and any other dividends or other
distributions that DTHC has the right to receive pursuant to the provisions
of
this Section 2.; (c) a Registration Rights Agreement in form and substance
reasonably satisfactory to Multiband and DTHC, and the Certificate so
surrendered shall forthwith be cancelled. No interest will be paid or accrued
on
any amount payable upon due surrender of the Certificates. In the event of
a
transfer of ownership of the MMT Shares that is not registered in the transfer
records of MMT, a certificate representing the proper number of the Multiband
Shares, together with a check for any cash to be paid upon due surrender of
the
Certificate and any other dividends or distributions in respect thereof, may
be
issued and/or paid to such a transferee if the Certificate formerly representing
such MMT Shares is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid. If any certificate for the
Multiband Shares is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the Person requesting such exchange shall pay
any transfer or other taxes required by reason of the issuance of certificates
for Multiband Shares in a name other than that of the registered holder of
the
Certificate surrendered, or shall establish to the satisfaction of Multiband
or
the Exchange Agent that such tax has been paid or is not
applicable.
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For
the
purposes of this Agreement, the term “Person”
shall
mean any individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Body or other entity of any kind or
nature.
2.4.3 Distributions
with Respect to Unexchanged Shares; Voting.
All of
the Multiband Shares to be issued pursuant to the Share Exchange shall be deemed
issued and outstanding as of the Effective Time, and whenever a dividend or
other distribution is declared by Multiband in respect of the Multiband Shares,
the record date for which is at or after the Effective Time, that declaration
shall include dividends or other distributions in respect of all shares issuable
pursuant to this Agreement. No dividends or other distributions in respect
of
the Multiband Shares shall be paid to DTHC until the Certificate is surrendered
for exchange in accordance with this Section 2.
2.4.4 Transfers.
At or
after the Effective Time, there shall be no transfers on the stock transfer
books of MMT of the MMT Shares that were issued and outstanding immediately
prior to the Effective Time, except for the recording of the transfer of the
MMT
Shares from DTHC to Multiband.
2.4.5 Fractional
Shares.
Notwithstanding any other provision of this Agreement, no fractional shares
of
the Multiband Shares will be issued, and DTHC, if entitled to receive a
fractional share of the Multiband Shares but for this Section 2.4.5, shall
be
entitled to receive a cash payment in lieu thereof, which payment shall be
calculated by the Exchange Agent and shall represent DTHC’s proportionate
interest in a share of the Multiband Shares based on the net proceeds from
the
sale by the Exchange Agent on behalf of DTHC of the aggregate fractional shares
of the Multiband Shares that DTHC otherwise would be entitled to receive. Any
such sale shall be made by the Exchange Agent within five business days after
the date upon which the Certificate (or affidavit(s) of loss in lieu thereof)
that would otherwise result in the issuance of such fractional shares of
Multiband Shares have been received by the Exchange Agent.
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2.4.6 Lost,
Stolen or Destroyed Certificate.
In the
event that the Certificate shall have been lost, stolen or destroyed, upon
the
making of an affidavit of that fact by the Person claiming the Certificate
to be
lost, stolen or destroyed and, if required by Multiband, the posting by such
Person of a bond in customary amount as indemnity against any claim that may
be
made against it with respect to such Certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed Certificate the Multiband Shares,
and any cash, unpaid dividends and other distributions that would be payable
or
deliverable in respect thereof pursuant to this Agreement had such lost, stolen
or destroyed Certificate been surrendered.
SECTION
3. Closing
3.1 Date,
Time and Place.
Provided
that all of the closing conditions precedent and mutual conditions set forth
in
Sections 8. and 9. have been satisfied (or waived as provided in this Agreement,
or otherwise will be satisfied at the closing), the “Closing”
of
the
transactions provided for in this Agreement shall take place no later than
11:59
p.m. Pacific Standard Time on February 6, 2008, at Multiband in New Hope,
Minnesota, unless another date, place and time shall be agreed to between the
Corporate Parties. The date and time of the Closing is sometimes herein called
the “Closing
Date”.
3.2 Deliveries
by DTHC and MMT at the Closing.
At the
Closing, DTHC and MMT will deliver of cause to be delivered to Multiband the
following:
3.2.1 The
Articles of Incorporation of MMT and all amendments thereto, certified by the
Secretary of the State of Michigan, dated as of a date within five (5) days
prior to the Closing Date;
3.2.2 A
“good
standing” certificate (or equivalent thereof) for MMT, dated as of a date within
five (5) days prior to the Closing Date;
3.2.3 The
Certificate, duly endorsed or accompanied by duly executed stock powers (via
delivery to the Exchange Agent, pursuant to Section 2. of this Agreement);
3.2.4 Certificates
of the President of DTHC and MMT, dated as of the Closing Date, confirming
(A)
the truth and correctness of all of the representations and warranties of DTHC
and MMT, respectively, contained herein as of the Closing Date and as of all
times between the date hereof and the Closing Date, subject to the provisions
of
Section 4. hereof, and (B) that all agreements and covenants of DTHC and MMT,
respectively, specified herein have been complied with;
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3.2.5 A
certificate of the Secretary of MMT, dated as of the Closing Date, in form
and
substance reasonably satisfactory to Multiband, as to (a) the lack of amendments
to MMT’s Articles of Incorporation since the date of the certificate referred to
in Section 3.2.1. above; (b) MMT’s Bylaws; (c) the resolutions and/or Special
Meeting Minutes of MMT’s Board of Directors authorizing the execution and
performance of this Agreement and the transactions contemplated hereby; and
(d)
the incumbency and signatures of MMT’s officer who executes this
Agreement;
3.2.6 A
certificate of the Secretary of DTHC, dated as of the Closing Date, in form
and
substance reasonably satisfactory to Multiband, as to (a) the resolutions and/or
Special Meeting Minutes of DTHC’s Board of Directors authorizing the execution
and performance of this Agreement and the transactions contemplated hereby
(in
DTHC’s capacity as the sole shareholder of MMT); and (b) the incumbency and
signatures of DTHC’s officer who executes this Agreement;
3.2.7 The
favorable legal opinion of counsel to DTHC and MMT, dated as of the Closing
Date, in substantially the form set forth in Schedule
3.2.7.,
attached hereto, unless waived;
3.2.8 A
MMT
Collateral Assignment and Pledge Agreement by and among, DTHC, MMT, MB Financial
Bank, N.A. mutually acceptable to such parties; and
3.2.9 Such
other documents and instruments as Multiband may reasonably request to
effectuate the transactions contemplated by this Agreement and any other
transactions contemplated hereby.
3.3 Deliveries
by Multiband at the Closing.
At the
Closing, Multiband will deliver or cause to be delivered to DTHC the
following:
3.3.1 The
Articles of Incorporation of Multiband and all amendments thereto, certified
by
the Secretary of the State of Minnesota, dated as of a date within five (5)
days
prior to the Closing Date;
3.3.2 A
“good
standing” certificate (or equivalent thereof) for Multiband, dated as of a date
within five (5) days prior to the Closing Date;
3.3.3 A
certificate, or certificates, representing the Multiband Shares, duly endorsed
or accompanied by duly executed stock powers, together with the Promissory
Note
and the Stock Pledge Agreement (and a related Multiband Guaranty Agreement);
3.3.4 Certificates
of the Chief Executive Officer, President, and Chief Financial Officer of
Multiband, dated as of the Closing Date, confirming (A) the truth and
correctness of all of the representations and warranties of Multiband contained
herein as of the Closing Date and as of all times between the date hereof and
the Closing Date, subject to the provisions of Section 5. hereof, and (B) that
all agreements and covenants of Multiband and the Multiband Shareholder
specified herein have been complied with;
-16-
3.3.5 A
certificate of the Secretary of Multiband, dated as of the Closing Date, in
form
and substance reasonably satisfactory to DTHC, as to (a) the lack of amendments
to Multiband’s Articles of Incorporation since the date of the certificate
referred to in Section 3.3.1. above; (b) Multiband’s Bylaws; (c) the resolutions
and/or Special Meeting Minutes of Multiband’s Board of Directors authorizing the
execution and performance of this Agreement and the transactions contemplated
hereby; and (d) the incumbency and signatures of Multiband’s officers who
execute this Agreement;
3.3.6 The
favorable legal opinion of counsel to Multiband, dated as of the Closing Date,
in substantially the form set forth in Schedule
3.3.6.,
attached hereto, unless waived;
3.3.7 The
Registration Rights Agreement executed by Multiband in substantially the form
attached hereto as Schedule
3.3.7.
3.3.8 The
consents and approvals of Multiband described in Section 7.1.11(k) of this
Agreement.
3.3.9 Such
other documents and instruments as DTHC and/or MMT may reasonably request to
effectuate the transactions contemplated by this Agreement and any other
transactions contemplated hereby.
SECTION
4. Representations
and Warranties of DTHC and MMT with Respect to MMT
Except
as
set forth in the corresponding disclosure schedule, as material inducement
to
Multiband to enter into this Agreement and to close the transactions
contemplated hereunder, DTHC and MMT hereby make the following representations,
warranties and agreements to and with the Multiband Affiliates:
4.1 Proper
Corporate and Governmental Approvals.
DTHC
and
MMT have full power and authority to execute, deliver and perform this Agreement
and the other agreements contemplated hereby, and to consummate the transactions
contemplated hereby and thereby. This Agreement and the documents contemplated
hereby have been, or will be when executed and delivered at or prior to the
Closing, duly executed and delivered by DTHC and MMT and constitute, or will
constitute when executed and delivered, the legal, valid and binding obligations
of DTHC and MMT, enforceable against DTHC and MMT in accordance with their
terms, except as the enforceability hereof or thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization and/or other similar laws
affecting creditors’ rights generally and by general principles of equity,
whether considered in a proceeding at law or in equity. Except as indicated
in
Schedule
4.1,
no
approval of any Government Body or governmental agency is required to consummate
the transactions contemplated hereby, except any approvals heretofore obtained.
The Board of Directors of DTHC and MMT has (a) approved this Agreement and
the
transactions contemplated hereby; (b) decided to retain Shareholder Strategies,
Inc. to consider the issuance of an opinion letter that this Agreement and
the
exchange are advisable and in the best interests of DTHC, and MMT will so advise
the DTHC, as the sole shareholder of MMT, accordingly upon receipt of such
opinion letter; and (c) resolved to recommend that DTHC approves the Share
Exchange subject to the terms of this Agreement. Such resolutions of the Board
of Directors of DTHC and MMT have not been rescinded and are in full force
and
effect.
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4.2 Good
Standing.
DTHC
and
MMT are in good standing in the State of Delaware, Michigan, and/or in all
states in which DTHC or MMT is authorized to conduct business.
4.3 Capital
Structure. The
aggregate number of shares of capital stock that MMT is authorized to issue
is
two million (2,000,000) authorized shares of common stock, of which two million
(2,000,000) shares are issued and presently outstanding. MMT agrees that it
shall not, prior to the Closing, issue more shares of its common stock and/or
alter the capital structure of MMT in any manner. All such issued MMT Shares
have been validly issued and are fully paid and non-assessable. At the Closing,
DTHC, as the sole shareholder of MMT, shall have good and marketable title
to
the MMT Shares, free and clear of all claims, liens and encumbrances (including
but not limited to any security interest and/or lien held by MB Bank unless
otherwise consented to in writing by Multiband), excepting restrictions on
transfer imposed by the Securities Act of 1933, as amended, and applicable
state
securities laws.
There
are
no outstanding options, warrants, or other securities convertible into the
MMT
Shares. Except as indicated above, MMT does not have any outstanding securities
of any kind. Except as set forth in Schedule
4.3,
MMT is
not a party to any contract obligating MMT, directly or indirectly, to issue
additional securities of any kind. Except as set forth on Schedule
4.3,
none
of the MMT Shares have been transferred in violation of, or are subject to,
any
preemptive rights, rights of first offer, or subscription agreements. Except
as
set forth on Schedule
4.3,
MMT is
not a party to any stockholder agreement, voting agreement, voting trust, or
any
such similar arrangements with respect to the transfer, voting, or other rights
associated with its securities, and to MMT’s Knowledge, there are no such
agreements, trusts, or arrangements to which MMT is a party. MMT has not
repurchased or otherwise acquired any of its securities since June 1, 2005.
There are no obligations, contingent or otherwise, for MMT to repurchase,
redeem, or otherwise acquire any of its securities other than as indicated
on
Schedule
4.3
attached
hereto. There are no declared or accrued unpaid dividends with respect to MMT’s
securities. MMT does not have outstanding or authorized any stock appreciation,
phantom stock, profit participation, or similar rights. MMT does not have
outstanding any bonds, debentures, notes, or other obligations or debt
securities the holders of which have a right to vote (or convertible into,
or
exercisable into, or exercisable or exchangeable for, securities having the
right to vote) on any matter.
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4.4 Absence
of Conflict with Charter Documents, Bylaws and Material
Contracts.
Except
as
set forth in Schedule
4.4,
the
execution and delivery of this Agreement, the consummation of the transactions
provided for herein and the fulfillment of the terms hereof by DTHC do not
and
will not, with or without the giving of notice, the lapse of time or both,
result in the material breach of any of the terms and provisions of, or
constitute a default under, or conflict with, any material agreement or other
instrument (including without limitation, DTHC’s and/or MMT’s Articles of
Incorporation and Bylaws) by which DTHC and MMT are bound, any judgment, decree,
order or award of any court, Governmental Body or arbitrator, or any material
applicable law, rule or regulation.
4.5 Financial
Statements.
The
consolidated financial statements of DTHC as of December 31, 2006, and the
fiscal year then ended, audited by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, DTHC’s certified public
accountants, have been prepared in accordance with generally accepted accounting
practices (“GAAP”)
and
fairly represent the financial condition of DTHC and MMT on such date. Since
such date, there has, in DTHC’s reasonable opinion, been no material adverse
change in the financial condition of DTHC and/or MMT.
4.6 Condition,
Ownership and Status of Owned and Leased Real and Personal
Property.
4.6.1 MMT
does
not own any real property (including without limitation any option or other
right or obligation to purchase any real property or any interest
therein).
4.6.2 Schedule
4.6.2
sets
forth a complete list of all real property and interests in real property used,
held for use or intended to be used primarily in the operation or conduct of
MMT’s business and identifies any leases, reciprocal easements, operating
agreements, licenses or similar agreements relating thereto. True and complete
copies of each agreement set forth on Schedule
4.6.2
has
previously been furnished to Multiband. Each agreement set forth on Schedule
4.6.2
is in
full force and effect and has not been amended in writing or otherwise, and
no
party thereto is in default or breach thereunder. No event has occurred which,
with the passage of time or the giving of notice or both, would cause a breach
of or default under such agreements. MMT has not received written notice of
any
claimed abatements, offsets, defenses or other bases for relief or adjustment
under any such agreement.
4.7 Litigation
and Compliance with Laws.
Except
as set forth in Schedule
4.7
of this
Agreement, (a) MMT is not engaged in or a party to any legal action,
investigation, arbitration or other proceeding before any court, administrative
agency or arbitrator in which a final determination adverse to MMT would have
a
material adverse effect on the assets, financial condition or operations of
the
business; and (b) MMT has not been charged with and, to its best knowledge,
is
not under investigation with respect to any violation of any provision of
federal, state or other applicable law or administrative
regulation.
-19-
4.8 Status
of Material Contracts.
MMT
has
made available to Multiband true and complete copies of any material documents,
contracts and commitments to which MMT is a party (the “MMT
Contracts”).
To
the best of its knowledge, (a) MMT is not in default of any material term or
provision of any MMT Contract; and (b) the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not cause a breach of any MMT Contract.
4.9 Status
of Labor Relations.
Except
as set forth on Schedule
4.9
attached
hereto, (a) neither MMT nor any MMT Affiliate in the last six years has been
or
is a party to any collective bargaining or other labor contract, and (b) during
the last six years, there has not been, there is not presently pending or
existing, and to MMT’s Knowledge there is not threatened, (i) any strike,
slowdown, picketing, organizing campaign, work stoppage, or employee grievance
process, (ii) any proceeding against or affecting MMT relating to the
alleged violation of any Legal Requirement pertaining to labor relations or
employment matters, including any charge or complaint filed by an employee
or
union with the National Labor Relations Board, the Equal Employment Opportunity
Commission, or any comparable Governmental Body, organizational activity, or
other labor or employment dispute against or affecting MMT or its premises,
or
(iii) any application for certification of a collective bargaining agent. Except
as set forth on Schedule
4.9
attached
hereto, no event has occurred or circumstance exists that could provide the
basis for any work stoppage or other labor dispute. There is no lockout of
any
employees or independent contractors by MMT, and no such action is contemplated
by MMT. Except as set forth on Schedule
4.9
attached
hereto, MMT and the MMT Affiliates have complied in all material respects with
all Legal Requirements relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational safety and
health, and plant closing. Except as set forth on Schedule
4.9
attached
hereto, MMT is not liable for the payment of any compensation, damages, taxes,
fines, penalties, or other amounts, however designated, for failure to comply
with any of the foregoing Legal Requirements, including without limitation
any
retroactive workers’ compensation.
4.10 Status
of Employee Benefit Plans.
4.10.1
Set
forth
on Schedule
4.10.1(a)
is a
list of all “employee benefit plans” as defined by Section 3(3) of ERISA, all
specified fringe benefit plans as defined in Section 6039D of the Code, and
all
other bonus, incentive-compensation, deferred-compensation, profit-sharing,
stock-option, stock-appreciation-right, stock-bonus, stock-purchase,
employee-stock-ownership, savings, severance, change-in-control,
supplemental-unemployment, layoff, salary-continuation, retirement, pension,
health, life-insurance, disability, accident, group-insurance, vacation,
holiday, sick-leave, fringe-benefit or welfare plan, and any other employee
compensation or benefit plan, agreement, policy, practice, commitment, contract
or understanding (whether qualified or nonqualified, currently effective or
terminated, written or unwritten) and any trust, escrow or other agreement
related thereto that (a) is maintained or contributed to by MMT a Affiliate
or
any other person controlled by, controlling or under common control with MMT
(within the meaning of Section 414 of the Code or Section 4001(a)(14) or 4001(b)
of ERISA) (“ERISA
Affiliate”)
or has
been maintained or contributed to in the last six years by MMT, or any ERISA
Affiliate, or with respect to which MMT has or may have any liability, and
(b)
provides benefits, or describes policies or procedures applicable to any current
or former director, officer, employee, independent contractor or service
provider of MMT or any ERISA Affiliate, or the dependents of any thereof,
regardless of how (or whether) liabilities for the provision of benefits are
accrued or assets are acquired or dedicated with respect to the funding thereof
(collectively, the “MMT
Employee Plans”).
Schedule
4.10.1(b)
identifies as such any MMT Employee Plan that is (w) a “Defined
Benefit Plan”
(as
defined in Section 414(l) of the Code); (x) a plan intended to meet the
requirements of Section 401(a) of the Code; (y) a “Multiemployer Plan” (as
defined in Section 3(37) of ERISA); or (z) a plan subject to Title IV of ERISA,
other than a Multiemployer Plan.
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4.10.2
MMT
has
delivered to Multiband copies of (a) the documents comprising each MMT Employee
Plan (or, with respect to any MMT Employee Plan which is unwritten, a detailed
written description of eligibility, participation, benefits, funding
arrangements, assets and any other matters which relate to the obligations
of
MMT any ERISA Affiliate); (b) all trust agreements, insurance contracts or
any
other funding instruments related to the MMT Employee Plans; (c) all rulings,
determination letters, no-action letters or advisory opinions from the IRS,
the
U.S. Department of Labor, the Pension Benefit Guaranty Corporation
(“PBGC”)
or any
other Governmental Body that pertain to any MMT Employee Plan and any open
requests therefor; (d) the most recent actuarial and financial reports (audited
and/or unaudited) and the annual reports filed with any Government Body with
respect to the MMT Employee Plans during the current year and each of the three
preceding years; (e) all collective bargaining agreements pursuant to which
contributions to any MMT Employee Plan(s) have been made or obligations incurred
(including both pension and welfare benefits) by MMT or any ERISA Affiliate,
and
all collective bargaining agreements pursuant to which contributions are being
made or obligations are owed by such entities; (f) all contracts with
third-party record keepers, trustees, appraisers, actuaries, accountants,
attorneys, investment managers, consultants and other independent contractors
that relate to any MMT Employee Plan; (g) with respect to MMT Employee Plans
that are subject to Title IV of ERISA, the Form PBGC-1 filed for each of the
three most recent plan years; and (h) all summary plan descriptions, summaries
of material modifications and memoranda, employee handbooks and other written
communications, including communications to MMT Employee Plan participants,
regarding the MMT Employee Plans.
4.10.3
Except
as
set forth on Schedule
4.10.3,
MMT has
made full payment for all amounts that are required under the terms of each
MMT
Employee Plan to be paid as contributions with respect to all periods prior
to
and including the last day of the most recent fiscal year of such MMT Employee
Plan ended on or before the date of this Agreement and all periods thereafter
prior to the Closing Date, and no accumulated funding deficiency or liquidity
shortfall (as those terms are defined in Section 302 of ERISA and Section 412
of
the Code) has been incurred with respect to any such MMT Employee Plan, whether
or not waived. The value of the assets of each MMT Employee Plan exceeds the
amount of all benefit liabilities (determined on a plan termination basis using
the actuarial assumptions established by the PBGC as of the Closing Date) of
such MMT Employee Plan. MMT is not required to provide security to a MMT
Employee Plan under Section 401(a)(29) of the Code. The funded status of each
MMT Employee Plan that is a Defined Benefit Plan is disclosed on Schedule
4.10.3
in a
manner consistent with the Statement of Financial Accounting Standards No.
87.
MMT has paid in full all required insurance premiums, subject only to normal
retrospective adjustments in the ordinary course, with regard to the MMT
Employee Plans for all policy years or other applicable policy periods ending
on
or before the Closing Date.
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4.10.4
Except
as
disclosed on Schedule
4.10.4,
no MMT
Employee Plan, if subject to Title IV of ERISA, has been completely or partially
terminated, nor has any event occurred nor does any circumstance exist that
could result in the partial termination of such MMT Employee Plan. The PBGC
has
not instituted or threatened a proceeding to terminate or to appoint a trustee
to administer any of the MMT Employee Plans pursuant to Subtitle 1 of Title
IV
of ERISA, and no condition or set of circumstances exists that presents a
material risk of termination or partial termination of any of the MMT Employee
Plans by the PBGC. No MMT Employee Plan has been the subject of, and no event
has occurred or condition exists that could be deemed, a reportable event (as
defined in Section 4043 of ERISA) as to which a notice would be required
(without regard to regulatory monetary thresholds) to be filed with the PBGC.
MMT has paid in full all insurance premiums due to the PBGC with regard to
the
MMT Employee Plans for all applicable periods ending on or before the Closing
Date.
4.10.5
None
of
MMT, the MMT Shareholder, North Star Trust Company, or any fiduciary of any
MMT
Employee Plan, or any ERISA Affiliate has any liability or has Knowledge of
any
facts or circumstances that might give rise to any liability, and the
transactions contemplated by this Agreement will not result in any liability,
(a) for the termination of or withdrawal from any MMT Employee Plan under
Sections 4062, 4063 or 4064 of ERISA, (b) for any lien imposed under Section
302(f) of ERISA or Section 412(n) of the Code, (c) for any interest payments
required under Section 302(e) of ERISA or Section 412(m) of the Code, (d) for
any excise tax imposed by Section 4971 of the Code, (e) for any minimum funding
contributions under Section 302(c)(11) of ERISA or Section 412(c)(11) of the
Code, or (f) for withdrawal from any Multiemployer Plan under Section 4201
of
ERISA.
4.10.6 MMT
has,
at all times, complied, and currently complies, in all material respects with
the applicable continuation requirements for its welfare benefit plans,
including (a) Section 4980B of the Code (as well as its predecessor provision,
Section 162(k) of the Code) and Sections 601 through 608, inclusive, of ERISA,
which provisions are hereinafter referred to collectively as “COBRA”,
and
(b) any applicable state statutes mandating health insurance continuation
coverage for employees. Set forth on Schedule
4.10.6
is a
list of all individuals who are current or former COBRA beneficiaries, their
relationship to MMT, the welfare plans they participated in, the benefits they
elected to receive under COBRA and the expiration (or expected expiration)
of
their coverage.
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4.10.7
The
form
of all MMT Employee Plans is in material compliance with the applicable terms
of
ERISA, the Code, and any other applicable laws, including the Americans with
Disabilities Act of 1990, the Family Medical Leave Act of 1993 and the Health
Insurance Portability and Accountability Act of 1996, and such plans have been
operated in accordance with their terms and each of the MMT Employee Plans
and
the administration thereof, is and has been in compliance with the requirements
of any and all applicable statutes, orders, or governmental rules or
regulations, including, but not limited to, ERISA and the Code. To MMT’s and
each MMT Shareholder’s Knowledge, none of MMT or any fiduciary of a MMT Employee
Plan has violated the requirements of Section 404 of ERISA. All required reports
and descriptions of the MMT Employee Plans (including Internal Revenue
Service/Department of Labor Form 5500 Annual Reports, Summary Annual Reports
and
Summary Plan Descriptions and Summaries of Material Modifications) have been
(when required) timely filed with the IRS, the U.S. Department of Labor or
other
Governmental Body and distributed as required, and all notices required by
ERISA
or the Code or any other Legal Requirement with respect to the MMT Employee
Plans have been appropriately given.
4.10.8 Each
MMT
Employee Plan that is intended to be qualified under Section 401(a) of the
Code
has received a favorable determination letter from the IRS, and none of MMT
and
the MMT Affiliates or any fiduciary of any Employee Benefit Plan, has Knowledge
of any circumstances that will or could result in revocation of any such
favorable determination letter. Each trust created under any MMT Employee Plan
has been determined to be exempt from taxation under Section 501(a) of the
Code,
and none of MMT and the MMT Affiliates or any fiduciary of any Employee Benefit
Plan has Knowledge of any circumstance that will or could result in a revocation
of such exemption. Each Employee Welfare Benefit Plan (as defined in Section
3(1) of ERISA) that utilizes a funding vehicle described in Section 501(c)(9)
of
the Code or is subject to the provisions of Section 505 of the Code has been
the
subject of a notification by the IRS that such funding vehicle qualifies for
tax-exempt status under Section 501(c)(9) of the Code or that the plan complies
with Section 505 of the Code, unless the IRS does not, as a matter of policy,
issue such notification with respect to the particular type of plan. With
respect to each MMT Employee Plan, no event has occurred or condition exists
that will or could give rise to a loss of any intended tax consequence or to
any
Tax under Section 511 of the Code.
4.10.9 There
is
no material pending or threatened proceeding relating to any MMT Employee Plan,
nor is there any basis for any such proceeding. No action, lawsuit, grievance,
or arbitration or other manner of litigation or claim with respect to the assets
thereof of any MMT Employee Plan (other than routine claims for benefits made
in
the ordinary course of plan administration, for which plan administrative review
procedures have not been exhausted) is pending, threatened or imminent against
or with respect to any of the MMT Employee Plans, the Trust, MMT, any ERISA
affiliate, or any Fiduciary of a MMT Employee Plan. None of MMT, the MMT
Shareholder, North Star Trust Company, or any fiduciary of a MMT Employee Plan
has engaged in a transaction with respect to any MMT Employee Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
could reasonably be expected to subject MMT to a material Tax or penalty imposed
by either Section 4975 of the Code or Section 502(l) of ERISA or a violation
of
Section 406 of ERISA. The transactions contemplated by this Agreement will
not
result in the assessment of a Tax or penalty under Section 4975 of the Code
or
Section 502(l) of ERISA nor result in a violation of Section 406 of
ERISA.
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4.10.10 MMT
and
the MMT Affiliates have maintained workers’ compensation coverage as required by
applicable state law through purchase of insurance and not by self-insurance
or
otherwise except as disclosed on Schedule
4.10.10.
4.10.11 Except
as
set forth on Schedule
4.10.11
and as
required by Legal Requirements, the consummation of the transactions
contemplated by this Agreement will not accelerate the time of vesting or the
time of payment, or increase the amount, of compensation due to any present
of
former director, employee, officer, or independent contractor of MMT or the
MMT
Affiliates. There are no contracts or arrangements with respect to the providing
for payments that could subject any person to liability for tax under Section
4999 of the Code.
4.10.12 Except
as
set forth on Schedule
4.10.12
and for
the continuation coverage requirements of COBRA, MMT does not have any potential
liability for benefits to present or former employees, independent contractors
or their respective dependents following termination of employment or retirement
under any of the MMT Employee Plans that are Employee Welfare Benefit
Plans.
4.10.13 No
written or oral representations have been made to any employee, independent
contractor, or former employee or former independent contractor of MMT promising
or guaranteeing any employer payment or funding for the continuation of medical,
dental, life or disability coverage for any period of time beyond the end of
the
current plan year (except to the extent of coverage required under COBRA).
No
written or oral representations have been made to any present or former employee
or independent contractor of MMT or MMT Affiliate or former independent
contractor concerning the employee benefits of Multiband.
4.10.14 MMT
and
the MMT Affiliates do not maintain any “multiemployer plan” within the meaning
of Section 4001(a)(3) of ERISA.
4.11 Status
of Environmental Liabilities.
Except
as set forth on Schedule
4.11,
4.11.1 MMT
is,
and at all times has been, in full compliance with, and has not been and is
not
in violation of or liable in any material respects under, any Environmental
Law.
Neither MMT nor any of the MMT Affiliates has any basis to expect, nor has
any
of them or any other person for whose conduct they are or may be held to be
responsible received, any actual or threatened order, notice, or other
communication from (a) any Governmental Body or private citizen acting in
the public interest, or (b) the current or prior owner or operator of any
facilities, of any actual or potential violation or failure to comply with
any
Environmental Law, or of any actual or threatened obligation to undertake or
bear the cost of any Environmental, Health, and Safety Liabilities with respect
to any of the MMT Facilities or any other properties or assets (whether real,
personal, or mixed) in which MMT or any of the MMT Affiliates has had an
interest, or with respect to any property or facility at or to which Hazardous
Materials were generated, manufactured, refined, transferred, imported, used,
or
processed by MMT or any of thee MMT Affiliates or any other person for whose
conduct they are or may be held responsible, or from which Hazardous Materials
have been transported, treated, stored, handled, transferred, disposed,
recycled, or received.
-24-
4.11.2 There
are
no pending or, to the Knowledge of any of MMT or any of the MMT Affiliates,
threatened claims, encumbrances, or other restrictions of any nature, resulting
from any Environmental, Health, and Safety Liabilities or arising under or
pursuant to any Environmental Law, with respect to or affecting any of the
MMT
Facilities or any other properties and assets (whether real, personal, or mixed)
in which MMT or any of the MMT Affiliates has or had an interest.
4.11.3 Neither
MMT nor any of the MMT Affiliates has any basis to expect, nor has any of them
or any other person for whose conduct they are or may be held responsible,
received, any citation, directive, inquiry, notice, order, summons, warning,
or
other communication that relates to any Hazardous Activity, Hazardous Materials,
or any alleged, actual, or potential violation or failure to comply with any
Environmental Law, or of any alleged, actual, or potential obligation to
undertake or bear the cost of any Environmental, Health, and Safety Liabilities
with respect to any of the MMT Facilities or any other properties or assets
(whether real, personal, or mixed) in which MMT or any of the MMT Affiliates
had
an interest, or with respect to any property or facility to which Hazardous
Materials generated, manufactured, refined, transferred, imported, used, or
processed by MMT or any of the MMT Affiliates, or any other person for whose
conduct they are or may be held responsible, have been transported, treated,
stored, handled, transferred, disposed, recycled, or received.
4.11.4 Neither
MMT nor any of the MMT Affiliates, or any other person for whose conduct they
are or may be held responsible, has any Environmental, Health, and Safety
Liabilities with respect to the MMT Facilities or with respect to any other
properties and assets (whether real, personal, or mixed) in which MMT or any
of
the MMT Affiliates, has or had an interest, or at any property geologically
or
hydrologically adjoining the MMT Facilities or any such other property or
assets.
4.11.5 To
the
Knowledge of MMT and the MMT Affiliates, there are no Hazardous Materials
present on or in the environment at the MMT Facilities or at any geologically
or
hydrologically adjoining property, including any Hazardous Materials contained
in barrels, above or underground storage tanks, landfills, land deposits, dumps,
equipment (whether moveable or fixed) or other containers, either temporary
or
permanent, and deposited or located in land, water, sumps, or any other part
of
the MMT Facilities or such adjoining property, or incorporated into any
structure therein or thereon. None of MMT or any of the MMT Affiliates and
any
other person for whose conduct they are or may be held responsible, or any
other
person, has permitted or conducted, or is aware of, any Hazardous Activity
conducted with respect to the MMT Facilities or any other properties or assets
(whether real, personal, or mixed) in which MMT or any of the MMT Affiliates
has
or had an interest.
-25-
4.11.6 There
has
been no release or, to the Knowledge of any of MMT or any of the MMT Affiliates,
threat of release, of any Hazardous Materials at or from the MMT Facilities
or
at any other locations where any Hazardous Materials were generated,
manufactured, refined, transferred, produced, imported, used, or processed
from
or by the MMT Facilities, or from or by any other properties and assets (whether
real, personal, or mixed) in which MMT or any of the MMT Affiliates has or
had
an interest, or any geologically or hydrologically adjoining property, whether
by MMT any of the MMT Affiliates or any other person.
4.11.7 MMT
has
delivered to Multiband true and complete copies and results of any reports,
studies, analyses, tests, or monitoring possessed or initiated by MMT or any
of
the MMT Affiliates pertaining to Hazardous Materials or Hazardous Activities
in,
on, or under the MMT Facilities, or concerning compliance by MMT or any of
the
MMT Affiliates or any other person for whose conduct they are or may be held
responsible, with Environmental Laws.
4.12 Status
of Insurance Policies.
4.12.1 MMT
has
delivered to Multiband: (a) copies of all material policies of insurance to
which MMT, any of the MMT Shareholder or any of their respective MMT Affiliates
is a party or under which any such person is or has been covered at any time
within the five years preceding the date of this Agreement and which relates
to
MMT and the MMT Affiliates; (b) statements of any insurance brokerage fees
paid,
if any, in addition to premiums shown on current policies, (c)
schedules/registers of insurance for each of the five years preceding the
earliest policy year referenced in clause (a) hereof, showing brokers, carriers,
policy numbers, dates of coverage, types of insurance, limits provided and
premiums, (d) copies of all pending applications for policies of insurance;
copies of all applications filed in connection with current policies and (e)
any
statement by the auditor of MMT’s financial statements with regard to the
adequacy of such entity’s coverage or of the reserves for claims. Set forth on
Schedule
4.12.1
is a
list of all policies of insurance related to MMT and the MMT Affiliates,
including the policy number of each such policy.
4.12.2 Schedule
4.12.2
describes: (a) any self-insurance arrangement by or affecting MMT and the MMT
Affiliates, including any reserves established thereunder and any partial
self-insurance such as through deductibles of more than $100,000 each
occurrence, at any time during the ten years preceding the date of this
Agreement; (b) any current or previous contract or arrangement, other than
a
policy of insurance, for the transfer or sharing of any risk related to MMT
and
the MMT Affiliates, including any captive insurance company participation;
and
(c) all obligations of MMT and the MMT Affiliates to third parties with respect
to insurance (including such obligations under leases and service agreements)
and identifies the policy under which such coverage is provided.
-26-
4.12.3 Schedule
4.12.3
sets
forth, by year, for the current policy year and each of the ten preceding policy
years: (a) a summary (whether internally prepared or insurance company issued)
of the loss experience under each policy; (b) a statement describing each open
claim and all closed claims for an amount in excess of $100,000 under an
insurance policy, which sets forth: (1) the name of the claimant; (2) a
description of the policy by insurer, type of insurance, and period of coverage;
and (3) the amount and a brief description of the claim; and (c) a statement
describing the loss experience for all claims that were self-insured, including
the number and aggregate cost of such claims.
4.12.4 Except
as
set forth on Schedule
4.12.4:
(a) all
policies that provide coverage to any of MMT, or any of the MMT Affiliates:
(1)
are valid, outstanding, and enforceable; (2) are issued by an insurer that
is
financially sound and reputable; (3) taken together, provide adequate insurance
coverage for the assets and the operations of MMT for all risks normally insured
against by a person carrying on the same business or businesses as MMT and
for
all risks to which MMT is normally exposed; (4) are sufficient for compliance
with all Legal Requirements and contracts related to MMT and the MMT Affiliates;
(5) will continue in full force and effect following the Closing Date; and
(6)
do not provide for any retrospective premium adjustment or other
experienced-based liability, (b) MMT or any of the MMT Affiliates has not
received (1) any refusal of coverage or any notice that a defense will be
afforded with reservation of rights, or (2) any notice of cancellation or any
other indication that any insurance policy is no longer in full force or effect
or will not be renewed or that the issuer of any policy is not willing or able
to perform its obligations thereunder, (c) MMT and the MMT Affiliates have
paid
all premiums due, and has otherwise performed all of its obligations, under
each
policy related to MMT and the MMT Affiliates or that provides coverage for
MMT
and the MMT Affiliates; and (d) MMT has given notice to the insurer of all
claims that may be insured thereby.
4.13 Compliance
with Specified Matters Relating to Taxes, Permits and
Licenses.
To its
Knowledge, MMT has timely filed or caused to be timely filed (or has received
an
appropriate extension of time to file) all material Tax Returns that are or
were
required to be filed by it prior to the Closing Date, pursuant to applicable
Legal Requirements, and such Tax Returns were true and correct in all material
respects. In addition, and to its Knowledge, MMT has paid all Taxes that have
or
may have become due pursuant to such Tax Returns or otherwise, or pursuant
to
any assessment received by MMT. To its Knowledge, MMT possesses
all rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own its properties and to transact the businesses
in
which it is now engaged.
4.14 Enforceability.
This
Agreement constitutes the legal, valid and binding obligation of MMT and each
MMT Shareholder (only with respect to Section 9. of this Agreement for the
MMT
Shareholder), enforceable against each of them in accordance with its terms.
Upon the execution and delivery by MMT and each MMT Shareholder (only with
respect to Section 9. of this Agreement for the MMT Shareholder) of each
agreement to be executed or delivered by MMT or such MMT Shareholder at the
Closing (collectively, the “MMT
Closing Documents”),
each
of the MMT Closing Documents will constitute the legal, valid and binding
obligation of MMT and each MMT Shareholder (only with respect to Section 9.
of
this Agreement for the MMT Shareholder) who is a party to the MMT Closing
Documents, enforceable against it/them in accordance with its respective terms
except as enforcement is affected by laws of bankruptcy, reorganization,
insolvency and creditors’ rights generally and by general principles of equity,
whether considered in a proceeding at law or in equity. MMT and, upon obtaining
the third party consents reference on Schedules
8.4
and
9.4,
each
MMT Shareholder has the absolute and unrestricted right, power and authority
to
execute and deliver this Agreement (only with respect to Section 9. of this
Agreement for the MMT Shareholder) and the MMT Closing Documents to which it
is
a party and to perform its obligations under this Agreement (only with respect
to Section 9. of this Agreement for the MMT Shareholder) and the MMT Closing
Documents, and such action has been duly authorized by all necessary action
by
such MMT Shareholder and board of directors, as necessary.
-27-
4.15 Intellectual
Property.
4.15.1
Set
forth
on Schedule
4.15.1
is a
list and description of all patents, patent rights, trademarks, service marks,
trade names, brands and copyrights (whether or not registered and, if
applicable, including pending applications for registration) owned, used,
licensed or controlled by or MMT, or any of the MMT Affiliates and all goodwill
associated therewith comprising their intellectual property assets. MMT and
the
MMT Affiliates own or have the right to use and MMT and the MMT Affiliates
shall
as of the Closing Date own or have the right to use their business names, all
assumed fictitious business names, any and all information, know-how, trade
secrets, patents, copyrights, trademarks, trade names (and all derivatives
thereof), software, formulae, methods, processes and other intangible properties
that are necessary or customarily used by MMT and the MMT Affiliates for the
ownership, management or operation of their business that otherwise comprise
their intellectual property assets, including those listed on Schedule
4.15.1.
Except
as set forth on Schedule
4.15.1,
(a) MMT and the MMT Affiliates are the sole and exclusive owners of all
right, title and interest in and to all of their intellectual property assets,
and have the exclusive right to use, transfer and license the same, free and
clear of any claim or conflict with their intellectual property assets of
others; (b) no royalties, honorariums or fees are payable to any person by
reason of the ownership or use of any of their intellectual property assets;
(c) there have been no claims made against or asserting the invalidity,
abuse, misuse, or unenforceability of any of their intellectual property assets
and no grounds for any such claims exist; (d) none of MMT or any of the
MMT Affiliates has made any claim of any violation or infringement by others
of
any of their intellectual property assets or interests therein and, to the
Knowledge of and MMT and the MMT Affiliates, no grounds for any such claims
exist; (e) MMT and the MMT Affiliates have not received any notice that
they are in conflict with or infringing upon the asserted intellectual property
rights of others in connection with their intellectual property assets, and,
to
their Knowledge, neither the use of their intellectual property assets nor
the
operation of their business is infringing or has infringed upon any intellectual
property rights of others; (f) their intellectual property assets are
sufficient and include all intellectual property rights necessary for MMT and
the MMT Affiliates to lawfully operate their business as presently being
operated; (g) no interest in any MMT’s and/or the MMT Affiliates’
intellectual property assets has been assigned, transferred, licensed or
sublicensed by MMT or the MMT Affiliates to any person other than Multiband
pursuant to this Agreement; (h) to the extent that any item constituting
part of the MMT and MMT Affiliates’ intellectual property assets has been
registered with, filed in or issued by, any Governmental Body, such
registrations, filings or issuances are listed on Schedule
4.15.1
and were
duly made and remain in full force and effect; (i) to the Knowledge of MMT
and the MMT Affiliates, there has not been any act or failure to act during
the
prosecution or registration of, or any other proceeding relating to, any of
their intellectual property assets or of any other fact which could render
invalid or unenforceable, or negate the right to issuance of any of their
intellectual property assets; (j) to the extent any MMT and/or MMT
Affiliate intellectual property asset constitutes proprietary or confidential
information, such information has been adequately safeguarded from disclosure;
and (k) to the Knowledge of MMT and the MMT Affiliates, all of MMT’s and
the MMT Affiliates’ current intellectual property assets will remain in full
force and effect following the Closing without alteration or
impairment.
-28-
4.15.2
Schedule
4.15.2
contains
a list and summary description of all rights in internet web sites and internet
domain names presently used by MMT and the respective MMT Affiliates
(collectively “MMT
Net Name(s)”).
To
MMT’s and the MMT Affiliates’ Knowledge, all MMT Net Names have been registered
and are in compliance with all formal Legal Requirements. To MMT’s and the MMT
Affiliates’ Knowledge, no MMT Net Name has been or is now involved in any
dispute, opposition, invalidation or cancellation proceeding and, to the
Knowledge of MMT and the MMT Affiliates, no such action is threatened with
respect to any MMT Net Name. To the Knowledge of MMT and the MMT Affiliates,
there is no domain name application pending of any other person which would
or
would potentially interfere with or infringe any MMT Net Name. To MMT’s and the
MMT Affiliates’ Knowledge, no MMT Net Name is infringed or has been challenged,
interfered with or threatened in any way. To MMT’s and MMT’s Affiliates’
Knowledge, no MMT Net Name infringes, interferes with or is alleged to interfere
with or infringe the trademark, copyright or domain name of any other
person.
4.16 Conflicting
Interests.
Except
as
set forth in
Schedule 4.16,
no
present or former officer or director, and no MMT Affiliate has (a) any
material interest in any property used in or pertaining to the business of
MMT
or the MMT Affiliates; or (b) any contract, commitment, arrangement or
understanding with MMT or any MMT Affiliate.
4.17 Completeness
of Statements.
No
representation or warranty of MMT or the MMT Affiliates herein, and no written
statement or certificate furnished, or to be furnished, by or on behalf of
MMT
or the MMT Affiliates to HoldCo or its agents pursuant hereto or in connection
with the transactions contemplated hereby, contains or will contain on the
Closing, any untrue statement of a material fact or omits or will omit to state
a material fact necessary in light of the circumstances to make the statements
contained herein or therein not misleading.
-29-
4.18 Cooperation
with Independent Appraiser.
MMT and
the MMT Affiliates have provided or will provide the DTHC independent appraiser
and financial advisor (the “DTHC
Independent Appraiser”)
with
all information requested by it in connection with the independent appraisal
of
the fair market value of the MMT Shares and the Multiband Shares, and have
not
withheld any information that, to MMT’s and the MMT Affiliates’, might have an
adverse effect on the outcome of such independent appraisal.
4.19 Completeness
of Disclosures.
MMT has
disclosed to Multiband all material information it is aware of or has actual
knowledge of in connection with the business, financial condition, valuation
and
prospects of MMT and the MMT Affiliates, and, to their Knowledge, no facts
or
circumstances exist which could materially adversely affect MMT or the MMT
Affiliates. To the best of MMT’s Knowledge, after diligent investigation, the
representations and warranties made by the MMT Parties in this Section 4. are
true, complete and accurate.
SECTION
5. Representations,
Warranties and Covenants of the Multiband Parties
Except
as
set forth in the corresponding Disclosure Schedule, as material inducement
to
MMT and DTHC to enter into this Agreement and to close the transactions
contemplated hereunder, the Multiband Parties make the following representations
and warranties to MMT and DTHC:
5.1 Proper
Corporate and Governmental Approvals.
5.1.1 The
Multiband Parties have full power and authority to execute, deliver and perform
this Agreement and the other agreements contemplated hereby, and to consummate
the transactions contemplated hereby and thereby. This Agreement and the
documents contemplated hereby have been, or will be when executed and delivered
at or prior to the Closing, duly executed and delivered by the Multiband Parties
and constitute, or will constitute when executed and delivered, the legal,
valid
and binding obligations of the Multiband Parties, enforceable against the
Multiband Parties in accordance with their terms, except as the enforceability
hereof or thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization and/or other similar laws affecting creditors’ rights generally
and by general principles of equity, whether considered in a proceeding at
law
or in equity. Except as indicated in Schedule 5.1, no approval of any government
body or governmental agency is required to consummate the transactions
contemplated hereby, except any approvals heretofore obtained.
5.1.2 The
execution and delivery of this Agreement by Multiband and the consummation
by
Multiband of the transactions contemplated hereby have been duly authorized
by
all necessary corporate action on the part of Multiband. This Agreement has
been
duly executed and delivered by Multiband and, assuming due authorization,
execution, and delivery by MMT, constitutes the valid and binding obligation
of
Multiband, enforceable against each of them in accordance with its terms, except
as such enforceability may be limited by: (i) bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting or relating to
creditors’ rights generally, and (ii) the availability of injunctive relief and
other equitable remedies.
-30-
5.1.3 The
Board
of Directors of Multiband has, by the unanimous vote of all directors now in
office, (i) approved this Agreement and the transactions contemplated hereby,
and (ii) determined that the Share Exchange is advisable and in the best
interests of Multiband’s shareholders. Such resolutions have not been rescinded
and are in full force and effect.
5.2 Good
Standing.
The
Multiband Affiliates are in good standing in the State of Minnesota and in
all
states in which the Multiband Affiliates are authorized to conduct
business.
5.3 Capital
Structure.
5.3.1 Multiband
Capital Structure.
The
aggregate number of shares of capital stock that Multiband is authorized to
issue is (a) Twenty Million (20,000,000) authorized shares of Common Stock,
no
par value, of which Seven Million Four Hundred Forty Three Thousand Twenty-Two
(7,443,022) Multiband Shares are issued and outstanding shares of Common Stock
no par value for the period ending December 31, 2007); (b) Three Hundred
Sixty-Four Thousand Eight Hundred Forty- Five (364,845) are currently issued
and
outstanding shares of convertible preferred stock as of December 31, 2007;
and
(c) Three Million Eighty-Eight Thousand Eight Hundred Seventy-Three (3,088,873)
shares as of December 31, 2007, which are in the form of exercisable stock
warrants. Multiband has, and will continue to have at all times until the
Closing hereunder, a sufficient number of authorized but unissued shares of
its
Common Stock to be able to issue all of the Multiband Shares which are to be
issued hereunder to the MMT Shareholder or will obtain authorization from its
shareholders to increase its authorized number of shares prior to the
Closing.
All
issued and outstanding Multiband Shares have been duly authorized and validly
issued, are fully paid and non-assessable, and were issued in full compliance
with all applicable federal and state securities laws. Except for Multiband’s
Common Stock and Preferred Stock, Multiband does not have any issued and
outstanding securities of any kind. Set forth on Schedule
5.3.1.
attached
hereto is a true and correct list of each option holder, the number of options
to acquire Multiband capital stock held by each option holder, and the grant
date of each option. Except as set forth on Schedule
5.3.1,
there
are no outstanding options, warrants, or other securities convertible into
the
Multiband Shares. Except as set forth in Schedule
5.3.1,
Multiband is not a party to any contract obligating Multiband, directly or
indirectly, to issue additional securities of any kind. Except as set forth
on
Schedule
5.3.1.,
none of
the Multiband Shares have been transferred in violation of, or are subject
to,
any preemptive rights, rights of first offer, or subscription agreements. Except
as set forth on Schedule
5.3.1.,
Multiband is not a party to any stockholder agreement, voting agreement, voting
trust, or any such similar arrangements with respect to the transfer, voting,
or
other rights associated with its securities, and to Multiband’s Knowledge, there
are no such agreements, trusts, or arrangements to which Multiband is a party.
Multiband has not repurchased or otherwise acquired any of its common stock
since 2005. There are no obligations, contingent or otherwise, for Multiband
to
repurchase, redeem, or otherwise acquire any of its securities other than as
indicated on Schedule
5.3.1.
attached
hereto. Except as set forth in Schedule
5.3.1.,
there
are no declared or accrued unpaid dividends with respect to Multiband’s
securities. Except as set forth on Schedule
5.3.1.,
Multiband does not have outstanding or authorized any stock appreciation,
phantom stock, profit participation, or similar rights. Multiband does not
have
outstanding any bonds,
debentures, notes, or other obligations or debt securities the holders of which
have a right to vote (or convertible into, or exercisable into, or exercisable
or exchangeable for, securities having the right to vote) on any
matter.
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5.3.2 Subsidiaries.
(a) Schedule
5.3.2
attached
hereto contains a true and correct list of Multiband’s subsidiaries and sets
forth with respect to each subsidiary the jurisdiction of formation. The issued
and outstanding shares of capital stock of each subsidiary has been duly
authorized and validly issued, are fully paid and nonassessable, and are owned
by Multiband free and clear of any liens.
(b) Each
Multiband subsidiary is validly existing and in good standing under the laws
of
the jurisdiction of its formation, has all requisite power to own, lease, and
operate its properties and to carry on its business as now being duly conducted,
and is in good standing in each jurisdiction in which it owns or leases property
or conducts any business so as to require such qualification, except for those
jurisdictions in which the failure to be so qualified and in good standing
would
not reasonably be expected to have, individually or in the aggregate, a
Multiband Material Adverse Affect.
(c) Other
than shares of capital stock owned by Multiband, no Multiband subsidiary has
issued and outstanding securities of any kind. No Multiband subsidiary is a
party to any contract obligating such subsidiary, directly or indirectly, to
issue any additional securities.
(d) No
Multiband subsidiary has outstanding any bonds, debentures, notes, or other
obligations or debt securities the holders of which have a right to vote (or
convertible into, or exercisable into, or exercisable or exchangeable for,
securities having the right to vote) on any matter.
(e) Other
than subsidiaries set forth on Schedule
5.3.2,
neither
Multiband nor any Multiband subsidiary, either directly or indirectly, owns
any
securities or other interest in any corporation, partnership, joint venture,
or
other business association or entity, or to provide funds to or make any
investment.
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(f) Multiband
and its subsidiaries have no obligations, contingent or otherwise, to provide
funds or make an investment (in the form of a loan, capital contribution, or
otherwise) in any entity.
5.4 Absence
of Conflict with Charter Documents, Bylaws and Material Contracts;
Authorization.
5.4.1 Except
as
set forth on Schedule
5.4.1,
the
execution and delivery of this Agreement, the consummation of the transactions
provided for herein and the fulfillment of the terms hereof by the Multiband
Parties do not and will not, with or without the giving of notice, the lapse
of
time or both, result in the breach of any of the terms and provisions of, or
constitute a default under, or conflict with, any material agreement or other
instrument (including without limitation, the Multiband, and/or the Multiband
Affiliates’ Articles of Incorporation and Bylaws) by which the Multiband Parties
are bound, any judgment, decree, order or award of any court, Governmental
Body
or arbitrator, or any material applicable law, rule or regulation.
5.4.2 No
authorization or order of, declaration, registration, or filing with, or notice
to any governmental entity is required by or with respect to Multiband in
connection with the execution and delivery of this Agreement and the
consummation of the Share Exchange, except for: (a) such filings as may be
necessary under the ▇▇▇▇-▇▇▇▇▇- ▇▇▇▇▇▇ Act, or (b) such filings as may be
required under the 1933 Act or the 1934 Act or the rules of the NASDAQ Stock
Market.
5.5 Financial
Statements.
The
financial statements of the Multiband Affiliates as of December 31, 2006, and
the fiscal year then ended, audited by ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇,
▇▇▇▇▇▇▇▇▇’s certified public accountants, have been prepared in accordance with
generally accepted accounting practices and fairly represent the financial
condition of Multiband on such date. Since December 31, 2006, there has been
no
material adverse change in the financial condition of the Multiband Affiliates.
The financial statements of the Multiband Affiliates as of December 31, 2007,
and the fiscal year then ended have been prepared in accordance with generally
accepted accounting practices and fairly represent the financial condition
of
Multiband on such date.
5.6 Condition,
Ownership and Status of Owned and Leased Real and Personal
Property.
5.6.1 The
Multiband Affiliates do not own any real property (including without limitation
any option or other right or obligation to purchase any real property or any
interest therein).
5.6.2 Schedule
5.6.2
sets
forth a complete list of all real property and interests in real property used,
held for use or intended to be used primarily in the operation or conduct of
the
Multiband Affiliates’ business and identifies any leases, reciprocal easements,
operating agreements, licenses or similar agreements relating thereto. True
and
complete copies of each agreement set forth on Schedule
5.6.2
has
previously been furnished to DTHC and MMT. Each agreement set forth on
Schedule
5.6.2
is in
full force and effect and has not been amended in writing or otherwise, and
no
party thereto is in default or breach thereunder. No event has occurred which,
with the passage of time or the giving of notice or both, would cause a breach
of or default under such agreements. None of the Multiband Parties, any
shareholder of Multiband or any Multiband Affiliate has received written notice
of any claimed abatements, offsets, defenses or other bases for relief or
adjustment under any such agreement.
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5.7 Litigation
and Compliance with Laws.
Except
as set forth in Schedule
5.7
of this
Agreement, (a) the Multiband Affiliates are not engaged in or a party to any
legal action, investigation, arbitration or other proceeding before any court,
administrative agency or arbitrator in which a final determination adverse
to
any Multiband Affiliate would have a material adverse effect on the assets,
financial condition or operations of the business; and (b) the Multiband
Affiliates have not been charged with and, to their Knowledge, are not under
investigation with respect to any violation of any provision of federal, state
or other applicable law or administrative regulation. There is no unsatisfied
judgment, penalty, or award against or affecting the Multiband Affiliates or
any
of their respective properties or assets that has or would reasonably be
expected to have, individually or in the aggregate, a Multiband Material Adverse
Affect.
5.8 Status
of Material Contracts.
The
Multiband Affiliates have made available to DTHC and MMT true and complete
copies of any material documents, contracts and commitments to which any of
the
Multiband Affiliates is a party (the “Multiband
Contracts”).
To
their Knowledge, the Multiband Affiliates are not in default of any material
term or provision of any of the Multiband Contracts. The execution and delivery
of this Agreement and the consummation of the transactions contemplated by
this
Agreement will not cause a breach of any of the Multiband Contracts.
5.9 Status
of Labor Relations.
Except
as set forth on Schedule
5.9
attached
hereto, (a) neither the Multiband Affiliates have not been or are not currently
a party to any collective bargaining or other labor contract; and (b) there
has
not been, there is not presently pending or existing, and to the Multiband
Affiliates’ Knowledge there is not threatened, (1) any strike, slowdown,
picketing, organizing campaign, work stoppage, or employee grievance process,
(2) any proceeding against or affecting the Multiband Affiliates relating
to the alleged violation of any Legal Requirement pertaining to labor relations
or employment matters, including any charge or complaint filed by an employee
or
union with the National Labor Relations Board, the Equal Employment Opportunity
Commission, or any comparable Governmental Body, organizational activity, or
other labor or employment dispute against or affecting Multiband or its
premises, or (3) any application for certification of a collective bargaining
agent. Except as set forth on Schedule
5.9
attached
hereto, no event has occurred or circumstance exists that could provide the
basis for any work stoppage or other labor dispute. There is no lockout of
any
employees or independent contractors by the Multiband Affiliates, and no such
action is contemplated by Multiband. Except as set forth on Schedule
5.9
attached
hereto, the Multiband Affiliates have complied in all material respects with
all
Legal Requirements relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational safety and
health, and plant closing. Except as set forth on Schedule
5.9
attached
hereto, the Multiband Affiliates are not liable for the payment of any
compensation, damages, taxes, fines, penalties, or other amounts, however
designated, for failure to comply with any of the foregoing Legal Requirements,
including without limitation any retroactive workers’ compensation.
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5.10 Status
of Employee Benefit Plans.
5.10.1
Set
forth
on Schedule
5.10.1
attached
hereto is a list of all “employee benefit plans” as defined by Section 3(3) of
ERISA, all specified fringe benefit plans as defined in Section 6039D of the
Code, and all other bonus, incentive-compensation, deferred-compensation,
profit-sharing, stock-option, stock-appreciation-right, stock-bonus,
stock-purchase, employee-stock-ownership, savings, severance, change-in-control,
supplemental-unemployment, layoff, salary-continuation, retirement, pension,
health, life-insurance, disability, accident, group-insurance, vacation,
holiday, sick-leave, fringe-benefit or welfare plan, and any other employee
compensation or benefit plan, agreement, policy, practice, commitment, contract
or understanding (whether qualified or nonqualified, currently effective or
terminated, written or unwritten) and any trust, escrow or other agreement
related thereto that (a) is maintained or contributed to by the Multiband
Affiliates or any other person controlled by, controlling or under common
control with the Multiband Affiliates (within the meaning of Section 414 of
the
Code or Section 4001(a)(14) or 4001(b) of ERISA) (“Multiband
ERISA Affiliate”)
or has
been maintained or contributed to in the last six years by Multiband, or any
Multiband ERISA Affiliate, or with respect to which the Multiband Affiliates
have or may have any liability, and (b) provides benefits, or describes policies
or procedures applicable to any current or former director, officer, employee,
independent contractor or service provider of the Multiband Affiliates or any
Multiband ERISA Affiliate, or the dependents of any thereof, regardless of
how
(or whether) liabilities for the provision of benefits are accrued or assets
are
acquired or dedicated with respect to the funding thereof (collectively, the
“Multiband
Employee Plans”).
Schedule
5.10.1
attached
hereto identifies as such any Multiband Employee Plan that is (w) a Defined
Benefit Plan; (x) a plan intended to meet the requirements of Section 401(a)
of
the Code; (y) a “Multiemployer
Plan” (as
defined in Section 3(37) of ERISA); or (z) a plan subject to Title IV of ERISA,
other than a Multiemployer Plan.
5.10.2
The
Multiband Affiliates have delivered to DTHC and MMT copies of (a) the documents
comprising each Multiband Employee Plan (or, with respect to any Multiband
Employee Plan which is unwritten, a detailed written description of eligibility,
participation, benefits, funding arrangements, assets and any other matters
which relate to the obligations of the Multiband Affiliates or any Multiband
ERISA Affiliate); (b) all trust agreements, insurance contracts or any other
funding instruments related to the Multiband Employee Plans; (c) all rulings,
determination letters, no-action letters or advisory opinions from the IRS,
the
U.S. Department of Labor, the PBGC or any other Governmental Body that pertain
to any Multiband Employee Plan and any open requests therefor; (d) the most
recent actuarial and financial reports (audited and/or unaudited) and the annual
reports filed with any Government Body with respect to the Multiband Employee
Plans during the current year and each of the three preceding years;
(e) all collective bargaining agreements pursuant to which contributions to
any Multiband Employee Plan(s) have been made or obligations incurred (including
both pension and welfare benefits) by the Multiband Affiliates or any Multiband
ERISA Affiliate, and all collective bargaining agreements pursuant to which
contributions are being made or obligations are owed by such entities; (f)
all
contracts with third-party record keepers, trustees, appraisers, actuaries,
accountants, attorneys, investment managers, consultants and other independent
contractors that relate to any Multiband Employee Plan; (g) with respect to
Multiband Employee Plans that are subject to Title IV of ERISA, the Form PBGC-1
filed for each of the three most recent plan years; and (h) all summary plan
descriptions, summaries of material modifications and memoranda, employee
handbooks and other written communications, including communications to
Multiband Employee Plan participants, regarding the Multiband Employee
Plans.
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5.10.3
Except
as
set forth on Schedule
5.10.3
attached
hereto, the Multiband Affiliates have made full payment for all amounts that
are
required under the terms of each Multiband Employee Plan to be paid as
contributions with respect to all periods prior to and including the last day
of
the most recent fiscal year of such Multiband Employee Plan ended on or before
the date of this Agreement and all periods thereafter prior to the Closing
Date,
and no accumulated funding deficiency or liquidity shortfall (as those terms
are
defined in Section 302 of ERISA and Section 412 of the Code) has been incurred
with respect to any such Multiband Employee Plan, whether or not waived. The
value of the assets of each Multiband Employee Plan exceeds the amount of all
benefit liabilities (determined on a plan termination basis using the actuarial
assumptions established by the PBGC as of the Closing Date) of such Multiband
Employee Plan. Multiband is not required to provide security to a Multiband
Employee Plan under Section 401(a)(29) of the Code. The funded status of each
Multiband Employee Plan that is a Defined Benefit Plan is disclosed on
Schedule
5.10.3
attached
hereto in a manner consistent with the Statement of Financial Accounting
Standards No. 87. The Multiband Affiliates have paid in full all required
insurance premiums, subject only to normal retrospective adjustments in the
ordinary course, with regard to the Multiband Employee Plans for all policy
years or other applicable policy periods ending on or before the Closing
Date.
5.10.4
Except
as
disclosed on Schedule
5.10.4
attached
hereto, no Multiband Employee Plan, if subject to Title IV of ERISA, has been
completely or partially terminated, nor has any event occurred nor does any
circumstance exist that could result in the partial termination of such
Multiband Employee Plan. The PBGC has not instituted or threatened a proceeding
to terminate or to appoint a trustee to administer any of the Multiband Employee
Plans pursuant to Subtitle 1 of Title IV of ERISA, and no condition or set
of
circumstances exists that presents a material risk of termination or partial
termination of any of the Multiband Employee Plans by the PBGC. No Multiband
Employee Plan has been the subject of, and no event has occurred or condition
exists that could be deemed, a reportable event (as defined in Section 4043
of
ERISA) as to which a notice would be required (without regard to regulatory
monetary thresholds) to be filed with the PBGC. The Multiband Affiliates have
paid in full all insurance premiums due to the PBGC with regard to the Multiband
Employee Plans for all applicable periods ending on or before the Closing
Date.
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5.10.5
None
of
the Multiband Affiliates nor any Multiband ERISA Affiliate has any liability
or
has Knowledge of any facts or circumstances that might give rise to any
liability, and the transactions contemplated by this Agreement will not result
in any liability, (a) for the termination of or withdrawal from any Multiband
Employee Plan under Sections 4062, 4063 or 4064 of ERISA, (b) for any lien
imposed under Section 302(f) of ERISA or Section 412(n) of the Code, (c) for
any
interest payments required under Section 302(e) of ERISA or Section 412(m)
of
the Code, (d) for any excise tax imposed by Section 4971 of the Code, (e) for
any minimum funding contributions under Section 302(c)(11) of ERISA or Section
412(c)(11) of the Code, or (f) for withdrawal from any Multiemployer Plan under
Section 4201 of ERISA.
5.10.6
The
Multiband Affiliates have, at all times, complied, and currently complies,
in
all material respects with the applicable continuation requirements for its
welfare benefit plans, including (a) COBRA and (b) any applicable state statutes
mandating health insurance continuation coverage for employees. Set forth on
Schedule
5.10.6
is a
list of all individuals who are current or former COBRA beneficiaries, their
relationship to the Multiband Affiliates, the welfare plans they participated
in, the benefits they elected to receive under COBRA and the expiration (or
expected expiration) of their coverage.
5.10.7
The
forms
of all Multiband Employee Plans is in compliance with the applicable terms
of
ERISA, the Code, and any other applicable laws, including the Americans with
Disabilities Act of 1990, the Family Medical Leave Act of 1993 and the Health
Insurance Portability and Accountability Act of 1996, and such plans have been
operated in accordance with their terms and each of the Multiband Employee
Plans
and the administration thereof, is and has been in compliance with the
requirements of any and all applicable statutes, orders, or governmental rules
or regulations, including, but not limited to, ERISA and the Code. To the
Multiband Affiliates’ Knowledge, none of the Multiband Affiliates or any
fiduciary of a Multiband Employee Plan has violated the requirements of Section
404 of ERISA. All required reports and descriptions of the Multiband Employee
Plans (including Internal Revenue Service/Department of Labor Form 5500 Annual
Reports, Summary Annual Reports and Summary Plan Descriptions and Summaries
of
Material Modifications) have been (when required) timely filed with the IRS,
the
U.S. Department of Labor or other Governmental Body and distributed as required,
and all notices required by ERISA or the Code or any other Legal Requirement
with respect to the Multiband Employee Plans have been appropriately
given.
5.10.8
Each
Multiband Employee Plan that is intended to be qualified under Section 401(a)
of
the Code has received a favorable determination letter from the IRS, and none
of
the Multiband Affiliates or any fiduciary of any Employee Benefit Plan, has
Knowledge of any circumstances that will or could result in revocation of any
such favorable determination letter. Each trust created under any Multiband
Employee Plan has been determined to be exempt from taxation under Section
501(a) of the Code, and none of the Multiband Affiliates or any fiduciary of
any
Employee Benefit Plan has Knowledge of any circumstance that will or could
result in a revocation of such exemption. Each Employee Welfare Benefit Plan
(as
defined in Section 3(1) of ERISA) that utilizes a funding vehicle described
in
Section 501(c)(9) of the Code or is subject to the provisions of Section 505
of
the Code has been the subject of a notification by the IRS that such funding
vehicle qualifies for tax-exempt status under Section 501(c)(9) of the Code
or
that the plan complies with Section 505 of the Code, unless the IRS does not,
as
a matter of policy, issue such notification with respect to the particular
type
of plan. With respect to each Multiband Employee Plan, no event has occurred
or
condition exists that will or could give rise to a loss of any intended tax
consequence or to any Tax under Section 511 of the Code.
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5.10.9
There
is
no material pending or threatened proceeding relating to any Multiband Employee
Plan, nor is there any basis for any such proceeding. No action, suit,
grievance, or arbitration or other manner of litigation or claim with respect
to
the assets thereof of any Multiband Employee Plan (other than routine claims
for
benefits made in the ordinary course of plan administration, for which plan
administrative review procedures have not been exhausted) is pending, threatened
or imminent against or with respect to any of the Multiband Employee Plans,
the
Multiband Affiliates, any ERISA affiliate, or any fiduciary of a Multiband
Employee Plan. None of Multiband or any fiduciary of a Multiband Employee Plan
has engaged in a transaction with respect to any Multiband Employee Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
could reasonably be expected to subject Multiband to a Tax or penalty imposed
by
either Section 4975 of the Code or Section 502(l) of ERISA or a violation of
Section 406 of ERISA. The Contemplated Transactions will not result in the
assessment of a Tax or penalty under Section 4975 of the Code or Section 502(l)
of ERISA nor result in a violation of Section 406 of ERISA.
5.10.10 The
Multiband Affiliates have maintained workers’ compensation coverage as required
by applicable state law through purchase of insurance and not by self-insurance
or otherwise except as disclosed on Schedule
5.10.10.
5.10.11 Except
as
set forth on Schedule
5.10.11
and as
required by Legal Requirements, the consummation of the transactions
contemplated by this Agreement will not accelerate the time of vesting or the
time of payment, or increase the amount, of compensation due to any present
of
former director, employee, officer, or independent contractor of the Multiband
Affiliates. There are no contracts or arrangements with respect to the Multiband
Affiliates providing for payments that could subject any person to liability
for
tax under Section 4999 of the Code.
5.10.12 Except
as
set forth on Schedule
5.10.12
and for
the continuation coverage requirements of COBRA, the Multiband Parties do not
have any potential liability for benefits to present or former employees,
independent contractors or their respective dependents following termination
of
employment or retirement under any of the Multiband Employee Plans that are
Employee Welfare Benefit Plans.
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5.10.13 No
written or oral representations have been made to any employee, independent
contractor, or former employee or former independent contractor of the Multiband
Parties promising or guaranteeing any employer payment or funding for the
continuation of medical, dental, life or disability coverage for any period
of
time beyond the end of the current plan year (except to the extent of coverage
required under COBRA). No written or oral representations have been made to
any
present or former employee or independent contractor of Multiband or Multiband
Affiliate or former independent contractor concerning the employee benefits
of
the Multiband Parties.
5.10.14 The
Multiband Affiliates do not maintain any “multiemployer plan” within the meaning
of Section 4001(a)(3) of ERISA.
5.11 Status
of Environmental Liabilities.
Except
as set forth on Schedule
5.11,
5.11.1
The
Multiband Parties are, and at all times has been, in full compliance with,
and
has not been and is not in violation of or liable in any material respects
under, any Environmental Law. No Multiband Party or any Multiband Affiliate
has
any basis to expect, nor has any of them or any other person for whose conduct
they are or may be held to be responsible received, any actual or threatened
order, notice, or other communication from (a) any Governmental Body or
private citizen acting in the public interest, or (b) the current or prior
owner
or operator of any Multiband Facilities, of any actual or potential violation
or
failure to comply with any Environmental Law, or of any actual or threatened
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Multiband Facilities or any other
properties or assets (whether real, personal, or mixed) in which the Multiband
Parties or any Multiband Affiliate has had an interest, or with respect to
any
property or Facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used, or processed by the
Multiband Parties or any Multiband Affiliate or any other person for whose
conduct they are or may be held responsible, or from which Hazardous Materials
have been transported, treated, stored, handled, transferred, disposed,
recycled, or received.
5.11.2
There
are
no pending or, to the Knowledge of the Multiband Parties or any Multiband
Affiliate, threatened claims, encumbrances, or other restrictions of any nature,
resulting from any Environmental, Health, and Safety Liabilities or arising
under or pursuant to any Environmental Law, with respect to or affecting any
of
the Multiband Facilities or any other properties and assets (whether real,
personal, or mixed) in which the Multiband Parties or any Multiband Affiliate
has or had an interest.
5.11.3
No
Multiband Party or any Multiband Affiliate has any basis to expect, nor has
any
of them or any other person for whose conduct they are or may be held
responsible, received, any citation, directive, inquiry, notice, order, summons,
warning, or other communication that relates to Hazardous Activity, Hazardous
Materials, or any alleged, actual, or potential violation or failure to comply
with any Environmental Law, or of any alleged, actual, or potential obligation
to undertake or bear the cost of any Environmental, Health, and Safety
Liabilities with respect to any of the Multiband Facilities or any other
properties or assets (whether real, personal, or mixed) in which any Multiband
Party or any Multiband Affiliate had an interest, or with respect to any
property or facility to which Hazardous Materials generated, manufactured,
refined, transferred, imported, used, or processed by the Multiband Parties
or
any Multiband Affiliate, or any other person for whose conduct they are or
may
be held responsible, have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
-39-
5.11.4
Neither
the Multiband Parties nor any Multiband Affiliate, or any other person for
whose
conduct they are or may be held responsible, has any Environmental, Health,
and
Safety Liabilities with respect to the Multiband Facilities or with respect
to
any other properties and assets (whether real, personal, or mixed) in which
the
Multiband Parties or any Multiband Affiliate, has or had an interest, or at
any
property geologically or hydrologically adjoining the Multiband Facilities
or
any such other property or assets.
5.11.5
To
the
Knowledge of the Multiband Parties and the Multiband Affiliates, there are
no
Hazardous Materials present on or in the environment at the Multiband Facilities
or at any geologically or hydrologically adjoining property, including any
Hazardous Materials contained in barrels, above or underground storage tanks,
landfills, land deposits, dumps, equipment (whether moveable or fixed) or other
containers, either temporary or permanent, and deposited or located in land,
water, sumps, or any other part of the Multiband Facilities or such adjoining
property, or incorporated into any structure therein or thereon. None of
Multiband or a Multiband Affiliate and any other person for whose conduct they
are or may be held responsible, or any other person, has permitted or conducted,
or is aware of, any Hazardous Activity conducted with respect to the Multiband
Facilities or any other properties or assets (whether real, personal, or mixed)
in which the Multiband Parties or any Multiband Affiliate has or had an
interest.
5.11.6
There
has
been no release or, to the Knowledge of the Multiband Parties or a Multiband
Affiliate, threat of release, of any Hazardous Materials at or from the
Multiband Facilities or at any other locations where any Hazardous Materials
were generated, manufactured, refined, transferred, produced, imported, used,
or
processed from or by the Multiband Facilities, or from or by any other
properties and assets (whether real, personal, or mixed) in which the Multiband
Parties or any Multiband Affiliate has or had an interest, or any geologically
or hydrologically adjoining property, whether by the Multiband Parties or any
Multiband Affiliate or any other person.
5.11.7
The
Multiband Parties have delivered to DTHC and MMT true and complete copies and
results of any reports, studies, analyses, tests, or monitoring possessed or
initiated by the Multiband Parties, or a Multiband Affiliate pertaining to
Hazardous Materials or Hazardous Activities in, on, or under the Multiband
Facilities, or concerning compliance by the Multiband Parties or any Multiband
Affiliate or any other person for whose conduct they are or may be held
responsible, with Environmental Laws.
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5.12 Status
of Insurance Policies.
5.12.1
The
Multiband Parties have delivered to DTHC and MMT: (a) copies of all policies
of
insurance to which the Multiband Parties, or any Multiband Affiliate is a party
or under which any such person is or has been covered at any time within the
five years preceding the date of this Agreement and which relates to the
business of the Multiband Parties; (b) statements of any insurance brokerage
fees paid, if any, in addition to premiums shown on current policies, (c)
schedules/registers of insurance for each of the five years preceding the
earliest policy year referenced in clause (a) hereof, showing brokers, carriers,
policy numbers, dates of coverage, types of insurance, limits provided and
premiums, (d) copies of all pending applications for policies of insurance;
copies of all applications filed in connection with current policies and (e)
any
statement by the auditor of Multiband’s financial statements with regard to the
adequacy of such entity’s coverage or of the reserves for claims. Set forth on
Schedule
5.12.1
is a
list of all policies of insurance related to the Multiband Parties, including
the policy number of each such policy.
5.12.2
Schedule
5.12.2
describes: (a) any self-insurance arrangement by or affecting the Multiband
Parties, including any reserves established thereunder and any partial
self-insurance such as through deductibles of more than $100,000 each
occurrence, at any time during the ten years preceding the date of this
Agreement; (b) any current or previous contract or arrangement, other than
a
policy of insurance, for the transfer or sharing of any risk related to
Multiband, including any captive insurance company participation; and (c) all
obligations of Multiband to third parties with respect to insurance (including
such obligations under leases and service agreements) and identifies the policy
under which such coverage is provided.
5.12.3
Schedule
5.12.3
sets
forth, by year, for the current policy year and each of the ten preceding policy
years: (a) a summary (whether internally prepared or insurance company issued)
of the loss experience under each policy; (b) a statement describing each open
claim and all closed claims for an amount in excess of $100,000 under an
insurance policy, which sets forth: (1) the name of the claimant; (2) a
description of the policy by insurer, type of insurance, and period of coverage;
and (3) the amount and a brief description of the claim; and (c) a statement
describing the loss experience for all claims that were self-insured, including
the number and aggregate cost of such claims.
5.12.4 Except
as
set forth on Schedule
5.12.4:
(a) all
policies that provide coverage to the Multiband Parties, or any Multiband
Affiliate: (1) are valid, outstanding, and enforceable; (2) are issued by an
insurer that is financially sound and reputable; (3) taken together, provide
adequate insurance coverage for the assets and the operations of the Multiband
Parties for all risks normally insured against by a person carrying on the
same
business or businesses as Multiband and for all risks to which the Multiband
Parties are normally exposed; (4) are sufficient for compliance with all Legal
Requirements and contracts related to the Multiband Parties; (5) will continue
in full force and effect following the Closing Date; and (6) do not provide
for
any retrospective premium adjustment or other experienced-based liability;
(b)
the Multiband Parties or any Multiband Affiliate have not received (1) any
refusal of coverage or any notice that a defense will be afforded with
reservation of rights, or (2) any notice of cancellation or any other indication
that any insurance policy is no longer in full force or effect or will not
be
renewed or that the issuer of any policy is not willing or able to perform
its
obligations thereunder; (c) the Multiband Parties and the Multiband Affiliates
have paid all premiums due, and has otherwise performed all of its obligations,
under each policy related to the Multiband Parties and the Multiband Affiliates
or that provides coverage for the Multiband Parties and the Multiband
Affiliates; and (d) the Multiband Parties have given notice to the insurer
of
all claims that may be insured thereby.
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5.13 Compliance
with Specified Matters Relating to Taxes, Permits and
Licenses.
To their
Knowledge, the Multiband Parties have timely filed or caused to be timely filed
(or has received an appropriate extension of time to file) all material Tax
Returns that are or were required to be filed by them prior to the Closing
Date,
pursuant to applicable Legal Requirements, and such Tax Returns were true and
correct in all material respects. In addition, and to their Knowledge, the
Multiband Parties have paid all Taxes that have or may have become due pursuant
to such Tax Returns or otherwise, or pursuant to any assessment received by
Multiband. To their Knowledge, the Multiband Parties possess
all rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle them to own their properties and to transact the businesses
in which they are now engaged.
5.14 Enforceability.
This
Agreement constitutes the legal, valid and binding obligation of the Multiband
Parties, enforceable against them in accordance with its terms. Upon the
execution and delivery by the Multiband Affiliates of each agreement to be
executed or delivered by the Multiband Affiliates at the Closing (collectively,
the “Multiband
Closing Documents”),
each
of the Multiband Closing Documents will constitute the legal, valid and binding
obligation of the Multiband Affiliates, enforceable against them in accordance
with their respective terms except as enforcement is affected by laws of
bankruptcy, reorganization, insolvency and creditors’ rights generally and by
general principles of equity, whether considered in a proceeding at law or
in
equity. The Multiband Parties have the absolute and unrestricted right, power
and authority to execute and deliver this Agreement and the Multiband Closing
Documents to which it is a party and to perform its obligations under this
Agreement and the Multiband Closing Documents, and such action has been duly
authorized by all necessary action by such Multiband Parties’ shareholders and
boards of directors, and by the Multiband Affiliates’ board of
directors.
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5.15. Intellectual
Property.
5.15.1 Set
forth
on Schedule
5.15.1
is a
list and description of all patents, patent rights, trademarks, service marks,
trade names, brands and copyrights (whether or not registered and, if
applicable, including pending applications for registration) owned, used,
licensed or controlled by or the Multiband Parties or any Multiband Affiliate
and all goodwill associated therewith comprising their intellectual property
assets. The Multiband Parties and the Multiband Affiliates own or have the
right
to use and the Multiband Parties and the Multiband Affiliates shall as of the
Effective Time own or have the right to use their business names, all assumed
fictitious business names, any and all information, know-how, trade secrets,
patents, copyrights, trademarks, trade names (and all derivatives thereof),
software, formulae, methods, processes and other intangible properties that
are
necessary or customarily used by the Multiband Parties and the Multiband
Affiliates for the ownership, management or operation of their businesses that
otherwise comprise their intellectual property assets, including those listed
on
Schedule
5.15.1.
Except
as set forth on Schedule
5.15.1,
(a) the Multiband Parties and the Multiband Affiliates are the sole and
exclusive owners of all right, title and interest in and to all of their
intellectual property assets, and have the exclusive right to use, transfer
and
license the same, free and clear of any claim or conflict with their
intellectual property assets of others; (b) no royalties, honorariums or
fees are payable to any person by reason of the ownership or use of any of
their
intellectual property assets; (c) there have been no claims made against or
asserting the invalidity, abuse, misuse, or unenforceability of any of their
intellectual property assets and no grounds for any such claims exist; (d)
the Multiband Parties and the Multiband Affiliates have not made any claim
of
any violation or infringement by others of any of their intellectual property
assets or interests therein and, to the Knowledge of the Multiband Parties
and
the Multiband Affiliates, no grounds for any such claims exist; (e) the
Multiband Parties and the Multiband Affiliates have not received any notice
that
they are in conflict with or infringing upon the asserted intellectual property
rights of others in connection with their intellectual property assets, and,
to
their Knowledge, neither the use of their intellectual property assets nor
the
operation of their business is infringing or has infringed upon any intellectual
property rights of others; (f) their intellectual property assets are
sufficient and include all intellectual property rights necessary for the
Multiband Parties and the Multiband Affiliates to lawfully operate their
business as presently being operated; (g) no interest in any the Multiband
Parties’ and or Multiband Affiliates’ intellectual property assets has been
assigned, transferred, licensed or sublicensed by the Multiband Parties or
the
Multiband Affiliates to any person other than the Multiband Parties or a
Multiband Affiliate pursuant to this Agreement; (h) to the extent that any
item constituting part of the Multiband Parties and Multiband Affiliates’
intellectual property assets has been registered with, filed in or issued by,
any Governmental Body, such registrations, filings or issuances are listed
on
Schedule
5.15.1
and were
duly made and remain in full force and effect; (i) to the Knowledge of
Multiband and the Multiband Affiliates, there has not been any act or failure
to
act during the prosecution or registration of, or any other proceeding relating
to, any of their intellectual property assets or of any other fact which could
render invalid or unenforceable, or negate the right to issuance of any of
their
intellectual property assets; (j) to the extent any of the Multiband
Parties or Multiband Affiliates’ intellectual property asset constitutes
proprietary or confidential information, such information has been adequately
safeguarded from disclosure; and (k) to the Knowledge of the Multiband
Parties, all of the Multiband Parties’ current intellectual property assets will
remain in full force and effect following the Effective Time without alteration
or impairment.
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5.15.2 Schedule
5.15.2
contains
a list and summary description of all rights in internet web sites and internet
domain names presently used by the Multiband Parties and the Multiband
Affiliates comprising part of their intellectual property assets (collectively
“Multiband
Net Names”).
To the
Multiband Parties’ and the Multiband Affiliates’ Knowledge, all Multiband Net
Names have been registered and are in compliance with all formal Legal
Requirements. No Multiband Net Name has been or is now involved in any dispute,
opposition, invalidation or cancellation Proceeding and, to the Knowledge of
the
Multiband Parties and the Multiband Affiliates, no such action is threatened
with respect to any Multiband Net Name. To the Knowledge of the Multiband
Parties and the Multiband Affiliates, there is no domain name application
pending of any other person which would or would potentially interfere with
or
infringe any Multiband Net Name. To the Multiband Parties’ and the Multiband
Affiliates’ Knowledge, no Multiband Net Name is infringed or, to the Knowledge
of the Multiband Parties and the Multiband Affiliates, has been challenged,
interfered with or threatened in any way. To the Multiband Parties and the
Multiband Affiliates’ Knowledge, no Multiband Net Name infringes, interferes
with or is alleged to interfere with or infringe the trademark, copyright or
domain name of any other person.
5.16 Conflicting
Interests.
Except
as set forth in Schedule
5.16,
no
present or former officer or director of the Multiband Parties or the Multiband
Affiliates has (a) any material interest in any property used in or
pertaining to the business of the Multiband Parties or the Multiband Affiliates;
or (b) any contract, commitment, arrangement or understanding with the
Multiband Parties or any Multiband Affiliate.
5.17 SEC
Filings; Financial Statements.
5.17.1
Multiband
and the Multiband Affiliates have filed all forms, reports, and documents to
be
filed with the SEC since March, 2001 (collectively, the “Multiband
SEC Reports”).
As of
the respective dates that they were filed (and if amended or superseded by
a
filing prior to the date of this Agreement, then on the date of such filing),
(a) each of the Multiband SEC Reports complied in all material respects with
the
requirements of the 1933 Act and the 1934 Act, as the case may be, and (b)
none
of the Multiband SEC Reports contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. No Multiband Affiliate is required
to file any form, report, or other document with the SEC or any similar
governmental entity or any national securities exchange or quotation
service.
5.17.2
Each
of
the consolidated financial statements (including in each case any notes thereto)
contained in the Multiband SEC Reports was prepared in accordance with GAAP
applied on a consistent basis throughout the periods indicated (except as may
be
indicated in the notes thereto, or in the case of unaudited financial
statements, as permitted by Form 10-Q of the SEC), and each presents fairly,
in
all material respects, the consolidated financial position, results of
operations, and cash of Multiband and its consolidated subsidiaries, as at
the
respective dates thereof and for the respective periods indicated therein
(subject, in the case of unaudited financial statements, to normal and recurring
year-end adjustments which would not reasonably be expected to be, individually
or in the aggregate, material to the Multiband Affiliates taken as a whole).
The
most recent Multiband balance sheet contained in the Multiband SEC Reports
as of
September 30, 2007, is hereinafter referred to as the “Multiband
Balance Sheet”
and the
date thereof is hereinafter referred to as the “Multiband
Balance Sheet Date”.
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5.17.3
Multiband
has furnished to DTHC and MMT a complete and correct copy of any amendments
or
modifications, which have not yet been filed with the SEC but which were
required to be filed, to agreements, documents, or other instruments that
Multiband previously filed with the SEC pursuant to the 1933 Act and the ▇▇▇▇
▇▇▇.
5.17.4
Multiband
is in compliance with (a) the applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of
2002 (“SOX”),
and
(b) the applicable NASDAQ listing and corporate governance rules and
regulations, except for an equity deficiency of $600,000, as of September 30,
2007, pursuant to NASDAQ’s minimum equity requirements.
5.17.5
Multiband
has established and maintained disclosure controls and procedures (as defined
in
Rule 13a-15 promulgated under the 1934 Act). Such disclosure controls and
procedures are sufficient to ensure that all information that is required to
be
disclosed by Multiband in the reports that it files or submits under the 1934
Act is recorded, processed, summarized, and reported within the time periods
specified in the SEC’s rules and forms, and that all such information is
accumulated and communicated to Multiband’s management as appropriate to allow
timely decisions regarding required disclosure and to make the certifications
of
Multiband’s Chief Executive Officer and Chief Financial Officer required under
the 1934 Act with respect to such reports.
5.17.6
Multiband
has established and maintained internal controls over financial reporting (as
defined in Rule 13a-15 promulgated under the 1934 Act). Such internal controls
over financial reporting provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP. There are no significant deficiencies or
material weaknesses in the design or operation of Multiband’s internal controls,
which could have a Multiband Material Adverse Affect with respect to Multiband’s
ability to record, process, summarize, and report financial data. There is
no
fraud, whether or not material, that involves Multiband’s management or other
Multiband employees who have a significant role in Multiband’s internal
controls.
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5.17.7
Since
March 2005, Multiband has not received any oral or written notification of
a
“reportable condition” or “material weakness” in Multiband’s internal controls
(as defined in the Statements of Auditing Standards 60, as in effect on the
date
hereof).
5.18 No
Undisclosed Liabilities.
The
Multiband Affiliaties have no liabilities, obligations, or commitments of any
nature whatsoever, asserted or unasserted, known or unknown, absolute or
contingent, accrued or unaccrued, matured or unmatured, or otherwise, except
(a)
those which are adequately disclosed in the Multiband Balance Sheet, and (b)
those which have been incurred in the ordinary course of business and consistent
with past practice since the Multiband Balance Sheet Date and which would not
reasonably be expected to have, individually or in the aggregate, a Multiband
Material Adverse Affect. The Multiband Affiliates are not a party to, and do
not
have a commitment to become a party to, any joint venture, off-balance sheet
partnership, or similar contract or arrangement (including any contract or
arrangement relating to any transaction or relationship between or among the
Multiband Affiliates, on the one hand, and an unconsolidated affiliates,
including any structured finance, special purpose, or limited purpose entity
or
person, on the other hand, or any “off-balance sheet arrangement” (as defined in
Item 303(a)(iv) of Regulation S-K).
5.19 Taxes.
5.19.1
Each
of
the Multiband Affiliates has duly and timely filed all Tax Returns required
to
have been filed by or with respect to the Multiband Affiliates and will duly
and
timely file all Tax Returns due between the date hereof and the Closing Date.
Each such Tax Return correctly and completely reflects all liability for Taxes
and all information required to be reported thereon. All Taxes owed by the
Multiband Affiliates (whether or not shown on any Tax Return) have been timely
paid (or, if due between the date hereof and the Closing Date, will be duly
and
timely paid). Each of the Multiband Affiliates has adequately provided for,
in
its books of account and records, all Liability for all unpaid Taxes, being
current Taxes not yet due and payable.
5.19.2
Each
of
the Multiband Affiliates has withheld and timely paid all Taxes required to
have
been withheld and paid by it and has complied with all information reporting
and
backup withholding requirements, including maintenance of required records
related thereto.
5.19.3
The
statute of limitations for the assessment of income Taxes has expired for all
periods prior to January 1, 2004. The Multiband Affiliates are not the
beneficiaries of any extension of time within which to file any Tax Return,
nor
has any Multiband Affiliate made (or had made on its behalf) any requests for
extension. The Multiband Affiliates have not waived (or is subject to a waiver)
of any statute of limitations in respect of Taxes or has agreed to (or is
subject to) any extension of time with respect to a Tax assessment or
deficiency.
5.19.4
Schedule
5.19.4
indicates those Multiband Affiliates’ Tax Returns that have been audited and
those Tax Returns that are currently the subject of audit. Except as set forth
on Schedule
5.19,
there
is no material action now pending or threatened against or with respect to
the
Multiband Affiliates in respect of any Tax or any assessment or deficiency.
There are no liens for Taxes (other than for current Taxes not yet due and
payable) upon the Multiband Affiliates’ assets. The Multiband Affiliates have
delivered to DTHC and MMT correct and complete copies of all Federal income
Tax
Returns, examination reports, and statements of deficiencies assessed against
or
agreed to by the Multiband Affiliates.
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5.19.5
Schedule
5.19.5
lists as
of the date of this Agreement all jurisdictions in which the Multiband
Affiliates currently file Tax Returns. No claim has been made by any Taxing
Authority in any jurisdiction where the Multiband Affiliates do not file Tax
Returns that any of them is or may be subject to taxation by that jurisdiction
or that any of them must file Tax Returns.
5.19.6
The
Multiband Affiliates have not filed any consent pursuant to the collapsible
corporation provisions of Section 341(f) of the Code (or any corresponding
provisions of state, local, or foreign income Tax law). None of the assets
or
properties of the Multiband Affiliates constitutes tax exempt bond financed
property or tax-exempt use property within the meaning of Section 168 of the
Code. The Multiband Affiliates are not parties to any “safe harbor lease” within
the meaning of Section 168(f)(8) of the Code, as in effect prior to amendment
by
the Tax Equity and Fiscal Responsibility Act of 1982, or to any “long-term
contract” within the meaning of Section 460 of the Code. The Multiband
Affiliates have never been United States real property holding corporations
within the meaning of Section 897(c)(2) of the Code. The Multiband Affiliates
are not “foreign persons” within the meaning of Section 1445 of the Code. The
Multiband Affiliates have not made any payments, and are not obligated to make
any payments, or are parties to any agreement that under certain circumstances
could obligate them or any one of them to make payments that would result in
a
nondeductible expense under Section 280G of the Code or an excise tax to the
recipient of such payments pursuant to Section 4999 of the Code.
5.19.7
The
Multiband Affiliates have not been the “distributing corporation” (within the
meaning of Section 355(c)(2) of the Code) with respect to a transaction
described in Section 355 of the Code within the five-year period ending as
of
the date of this Agreement. The Multiband Affiliates have not received any
ruling from any Tax Authority or have entered into (or is subject to) any
agreement with a Taxing Authority. The Multiband Affiliates have disclosed
on
their Tax Returns all positions taken therein that could give rise to a
substantial understatement of Federal income Tax within the meaning of Section
6662 of the Code.
5.19.8
The
Multiband Affiliates (a) have never been parties to a Tax allocation or sharing
agreement or Tax indemnification agreement, (b) have never been members of
an
affiliated, consolidated, condensed, or unitary group, (c) have no liability
for
or obligation to pay Taxes of any other person under Treas. Reg. Section
1.1502-6 (or any similar provision of Tax law), or as a transferee or successor,
by contract or otherwise. The Multiband Affiliates are not parties to any joint
venture, partnership, or other arrangement that is treated as a partnership
for
Federal income Tax purposes.
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5.19.9
The
Multiband Affiliates have not entered into any transaction that constitutes
a
“reportable transaction” within the meaning of Treasury Regulation Section
1.6011-4(b).
5.20 Absence
of Certain Changes or Events.
Since
the
Multiband Balance Sheet Date to the date of this Agreement:
(a) there
has
not been a Multiband Material Adverse Effect;
(b) the
Multiband Affiliates have not amended or otherwise modified their articles
of
incorporation or other organizational instruments;
(c) the
Multiband Affiliates have not declared, set aside, or paid any dividend or
other
distribution (whether in cash, stock or property) with respect to any of its
securities;
(d) the
Multiband Affiliates have not split, combined, or reclassified any of their
securities, or issued, or authorized for issuance, any securities except for
the
grant of Multiband stock options and the issuance of shares of Multiband Common
Stock upon exercise of Multiband stock options, in each case, in the ordinary
course of business consistent with past practice;
(e) there
has
not been any material damage, destruction, or loss with respect to the property
and assets of the Multiband Affiliates, whether or not covered by
insurance;
(f) there
has
not been any revaluation of the Multiband Affiliates’ assets, including writing
down the value of inventory or writing off notes or accounts receivable, other
than in the ordinary course of business consistent with past
practice;
(g) the
Multiband Affiliates have not made any change in accounting practices;
or
(g) the
Multiband Affiliates have not agreed, whether in writing or otherwise, to do
any
of the foregoing.
5.21 Completeness
of Statements.
No
representation or warranty of the Multiband Parties or the Multiband Affiliates
herein, and no written statement or certificate furnished, or to be furnished,
by or on behalf of the Multiband Parties or the Multiband Affiliates to DTHC
and
MMT or its agents pursuant hereto or in connection with the transactions
contemplated hereby, contains or will contain on the Closing, any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in light of the circumstances to make the statements contained herein
or therein not misleading.
5.22 Cooperation
with Independent Appraiser.
The
Multiband Parties and the Multiband Affiliates have provided or will provide
the
Multiband Independent Appraiser with all information requested by it in
connection with the independent appraisal of the fair market value of the
Multiband Shares, and have not withheld any information that, to the Multiband
Parties’ and the Multiband Affiliates’ Knowledge, might have an adverse effect
on the outcome of such independent appraisal.
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5.23 Completeness
of Disclosures.
The
Multiband Parties and the Multiband Affiliates have disclosed to DTHC and MMT
all material information they are aware of or have actual knowledge of in
connection with the business, financial condition, valuation and prospects
of
the Multiband Parties and the Multiband Affiliates, and, to their Knowledge,
no
facts or circumstances exist which could materially adversely affect the
Multiband Parties or the Multiband Affiliates. To the best of the Multiband
Parties’ Knowledge, after diligent investigation, the representations and
warranties made by the Multiband Parties in this Section 5. are true, complete
and accurate.
SECTION
6.
Additional
Agreements
6.1 Conduct
of Business by MMT.
6.1.1 During
the period from the date of this Agreement and continuing until the earlier
of
the termination of this Agreement or the consummation of the transactions
contemplated hereby, MMT shall, and it shall cause the MMT Affiliates
to:
(a) carry
on
its business in the usual, regular, and ordinary course in a manner consistent
with past practice;
(b) use
its
reasonable best efforts consistent with past practices and policies to preserve
intact its present business organization, keep available the services of its
present employees and preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and other having business dealings with
it;
and
(c) use
its
reasonable best efforts to conduct its business in such a manner that on the
Closing Date the representations and warranties of MMT contained in this
Agreement shall be true and correct, as though such representations and
warranties were made on and as of such date, and MMT shall use its reasonable
best efforts to cause all of the conditions to the obligations of MMT under
this
Agreement to be satisfied as soon as practicable following the date
hereof.
6.1.2 Except
as
expressly provided in this Agreement, MMT shall not permit any of MMT Affiliates
to, without the prior written consent of Multiband:
(a) adopt
or
propose any amendment to MMT’s and/or the MMT Affiliates’ Articles of
Incorporation and other organizational instruments;
(b) declare,
set aside or pay any dividend or other distribution (whether in cash, stock
or
other property) with respect to any MMT and/or MMT Affiliates’
securities;
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(c) (i)
issue
or authorize for issuance of any MMT and/or MMT Affiliates’ securities, except
the grant of MMT incentive stock options contemplated on Schedule
4.3
to newly
hired non-officer employees in the ordinary course of business consistent with
past practice, or (ii) except in connection with the Share Exchange, make any
change in any issued and outstanding securities, or redeem, purchase, or
otherwise acquire any securities other than the repurchase at cost from MMT
and/or MMT Affiliates’ employees of MMT Shares in connection with the
termination of their employment pursuant to MMT’s standard of form of
option/restricted shareholder agreement and as otherwise contemplated on
Schedule
4.3;
(d) (i)
other
than pursuant to a written agreement or MMT Benefit Plan in the amount required
hereunder and other than payment of bonuses and increases in salaries or wage
rates or fringe benefits to non-officer employees, contractors or consultants
in
the ordinary course of business consistent with past practice, (A) modify the
compensation or benefits payable or to become payable by MMT and/or the MMT
Affiliates to any of its current or former directors, officers, employees,
contractors or consultants, or (B) modify any bonus, severance, termination,
pension, insurance or other employee benefit plan, payment or arrangement made
to, for or with any current or former directors, employees, contractors, or
consultants of MMT and/or the MMT Affiliates other than as contemplated on
Schedule
6.1.2(d)(i)(B),
or (ii)
enter into any employment (other than offer letters and letter agreements
entered into in the ordinary course of business consistent with past practice
with employees who are terminable “at-will”), severance or termination
agreement;
(e) establish,
adopt, enter into, amend, or terminate any MMT Benefit Plan or any collective
bargaining, thrift, compensation or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any current or former directors, employees,
contractors, or consultants of MMT and/or the MMT Affiliates except in the
ordinary course of business;
(f) other
than (i) sales of inventory, and (ii) other dispositions of property and assets
that are not material, individually or in the aggregate, to MMT and the MMT
Affiliates, taken as a whole, in each case in the ordinary course of business
consistent with past practice, sell, lease, transfer or assign any property
or
assets of the MMT and/or the MMT Affiliates;
(g) except
as
indicated on Schedule
6.1.2(g)
and
other than borrowings in the ordinary course of business consistent with past
practice pursuant to credit facilities existing on the date of this Agreement
or
the financing of ordinary course trade payables consistent with past practice,
(i) assume, incur or guarantee any indebtedness, other than endorsements for
collection in the ordinary course of business, or (ii) modify the terms of
any
existing indebtedness in any material respect;
(h) other
than permitted liens and liens granted pursuant to credit facilities existing
on
the date of this Agreement in connection with borrowings permitted under
subparagraph (g), pledge or permit to become subject to liens any properties
or
assets of MMT and/or the MMT Affiliates;
-50-
(i) other
than travel loans or advances in the ordinary course of business consistent
with
past practice, make any loans, advances or capital contributions to, or
investments in, any other person;
(j) not
cancel any debts or waive any claims or rights of substantial
value;
(k) other
than in the ordinary course of business consistent with past practice, (i)
amend, modify or terminate, or waive, release, or assign any rights under,
any
material contract, (ii) enter into any contract which, if entered into prior
to
the date hereof, would have been required to be set forth in the Schedules
attached to this Agreement;
(l) acquire,
or agree to acquire, from any person any assets, operations, business, or
securities or engage in, or agree to engage in, any merger, consolidation or
other business combination with any person, except in connection with (i)
capital expenditures set forth in Schedule
6.1.2(l)(i),
(ii)
acquisitions of inventory and other tangible assets in the ordinary course
of
business consistent with past practice and (iii) acquisitions of assets,
operations, businesses or securities set forth in Schedule
6.1.2(l)(iii),
and
other such acquisitions not to exceed One Million and No/100 Dollars
($1,000,000.00) in the aggregate;
(m) amend
any
MMT stock option or any other similar plan, or authorize cash payments in
exchange for any of the foregoing;
(n) except
as
indicated on Schedule
6.1.2(n), make
any
filings or registrations, with any governmental entity, except routine filings
and registrations made in the ordinary course of business and filings made
pursuant to this Agreement;
(o) take
any
actions outside the ordinary course of business;
(p) other
than as required by GAAP (as advised by its regular independent accounts),
make
any changes in its accounting methods, principles or practices;
(q) make
any
tax election, change its method of Tax accounting or settle any claim relating
to taxes;
(r) take
any
action or omit to do any act within its reasonable control which action or
omission which is reasonable likely to result in any of the conditions to the
transactions contemplated by the Agreement not being satisfied, except as may
be
required by applicable law; or
-51-
(s) agree,
whether in writing or otherwise, to do any of the foregoing.
6.2 Conduct
of Business by Multiband.
6.2.1 During
the period from the date of this Agreement and continuing until the earlier
of
the termination of this Agreement or the consummation of the transactions
contemplated hereby, the Multiband Affiliates shall:
(a) carry
on
its business in the usual, regular and ordinary course in a manner consistent
with past practice;
(b) use
its
reasonable best efforts consistent with past practices and policies to preserve
intact its present business organization, keep available the services of its
present employees and preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings with
it;
and
(c) use
its
reasonable best efforts to conduct its business in such a manner that on the
Closing Date the representations and warranties of the Multiband Affiliates
contained in this Agreement shall be true and correct, as though such
representations and warranties were made on and as of such date, and the
Multiband Affiliates shall use their reasonable best efforts to cause all of
the
conditions to the obligations of the Multiband Affiliates under this Agreement
to be satisfied as soon as practicable following the date hereof.
6.2.2 Except
as
expressly provided in this Agreement, the Multiband Affiliates shall
not:
(a) adopt
or
propose any amendment to their Articles of Incorporation or other organizational
instruments, except, if required, to increase its authorized Multiband Share
capitalization from 20,000,000 to 100,000,000 shares and legally effectuate
the
Closing of the Share Exchange;
(b) declare,
set aside, or pay any dividend (except for preferred stock dividends paid
monthly or quarterly in the ordinary course of business) or other distribution
(whether in cash, stock or other property) with respect to any
securities;
(c) (i)
issue
or authorize for issuance any securities, except the grant of Multiband stock
options to newly hired non-officer employees in the ordinary course of business
consistent with past practice and/or the issuance of shares of Multiband Common
Stock and/or Preferred Stock upon the exercise of Multiband stock options,
except as necessary to effectuate the terms of this Agreement, or (ii) make
any
change in the issued and outstanding securities, or redeem, purchase or
otherwise acquire any securities other than the repurchase at cost from
employees of Multiband Shares in connection with the termination of their
employment pursuant to Multiband’s standard form of option/restricted shares
agreement;
-52-
(d) (i)
other
than pursuant to a written agreement or Multiband Benefit Plan in the amount
required hereunder and other than payment of bonuses and increases in salaries
or wage rates or fringe benefits to non-officer employees, contractors or
consultants in the ordinary course of business consistent with past practice,
(A) modify the compensation or benefits payable or to become payable by the
Multiband Affiliates to any of its current or former directors, officers,
employees, contractors or consultants, or (B) modify any bonus, severance,
termination, pension, insurance or other employee benefit plan, payment or
arrangement made to, for or with any current or former directors, employees,
contractors or consultants of the Multiband Affiliates, or (ii) enter into
any
employment (other than offer letters and letter agreements entered into in
the
ordinary course of business consistent with past practice with employees are
terminable “at-will”), severance or termination agreement;
(e) establish,
adopt, enter into, amend or terminate any Multiband Benefit Plan or any
collective bargaining, thrift, compensation or other plan, agreement trust,
fund, policy or arrangement for the benefit of any current or former directors,
employees, contractors or consultants of the Multiband Affiliates;
(f) other
than (i) sales of inventory, and (ii) other dispositions of property and assets
that are not material, individually or in the aggregate, to the Multiband
Affiliates, taken as a whole, in each case in the ordinary course of business
consistent with past practice, sell, lease, transfer or assign any property
or
assets of the Multiband Affiliates;
(g) other
than borrowings in the ordinary course of business consistent with past practice
pursuant to credit facilities existing on the date of this Agreement or the
financing of ordinary course trade payables consistent with past practice,
(i)
assume, incur or guarantee any indebtedness, other than endorsements for
collection in the ordinary course of business, or (ii) modify the terms of
any
existing indebtedness if any material respect;
(h) other
than permitted liens and liens granted pursuant to credit facilities existing
on
the date of this Agreement in connection with borrowings permitted under
subparagraph (g), pledge or permit to become subject to liens any properties
or
assets of the Multiband Affiliates;
(i) other
than travel loans or advances in the ordinary course of business consistent
with
past practice, make any loans, advances or capital contributions to, or
investments in, any other person;
(j) not
cancel any debts or waive any claims or rights of substantial
value;
-53-
(k) other
than in the ordinary course of business consistent with past practice, (i)
amend, modify or terminate, or waive, release or assign any rights under, any
material contract, (ii) enter into any contract which, if entered into prior
to
the date hereof, would have been required to be set forth in the Schedules
attached to this Agreement;
(l) acquire,
or agree to acquire, from any person any assets, operations, business or
securities or engage in, or agree to engage in, any merger, consolidation or
other business combination with any person, except in connection with (i)
capital expenditures set forth in Schedule
6.2.2(l)(i),
(ii)
acquisitions of inventory or other tangible assets in the ordinary course of
business consistent with past practice and (C) acquisitions of assets,
operations, businesses or securities set forth in Schedule
6.2.2(l)(ii),
and
other such acquisitions not to exceed One Million and No/100 Dollars
($1,000,000.00) in the aggregate;
(m) not
settle or compromise any litigation other than settlements or compromises of
litigation where the settlement is limited solely to the release of claims
and
the monetary payment by the Multiband Affiliates does not exceed One Million
and
No/100 Dollars ($1,000,000.00) in the aggregate or Five Hundred Thousand and
No/100 Dollars ($500,000.00) in any individual case;
(n) amend
any
Multiband stock option or any other similar plan, or authorize cash payments
in
exchange for any of the foregoing;
(o) make
any
filings or registrations, with any governmental entity, except routine filings
and registrations made in the ordinary course of business and filings in
connection with this Agreement;
(p) take
any
actions outside the ordinary course of business;
(q) other
than as required by GAAP (as advised by its regular independent accounts),
make
any changes in its accounting methods, principles or practices;
(r) make
any
tax election, change its method of Tax accounting or settle any claim relating
to taxes;
(s) take
any
action or omit to do any act within its reasonable control which action or
omission which is reasonably likely to result in any of the conditions to the
transactions contemplated by this Agreement not being satisfied, except as
may
be required by applicable law; or
(t) agree,
whether in writing or otherwise, to do any of the foregoing.
6.4 Meetings
of Board of Directors and Shareholders.
-54-
6.4.1 As
promptly as practicable, each of DTHC, MMT and Multiband shall take all action
necessary under the laws of Delaware, Michigan, and Minnesota and the respective
Certificate and Articles of Incorporation and other organizational instruments
to call, convene and hold a meeting of its respective boards of directors and/or
shareholders as required under the applicable state laws to consider, in the
case of, DTHC, MMT, and Multiband, respectively, the adoption of this Agreement
and the Share Exchange. Unless there has been a change in recommendation,
Multiband shall use its reasonable best efforts to solicit from its board of
directors the adoption of this Agreement and approval of the Share Exchange
and
take actions necessary or advisable to notify the
SEC and the NASDAQ Stock Market
and to
take any other necessary actions pursuant to the laws of Minnesota..
6.5 Access
to Information.
Subject
to the terms of the confidentiality provisions of the Letter of Intent (the
“Confidentiality
Agreement”),
each
of Multiband and MMT shall, and shall cause the Multiband Affiliates and the
MMT
Affiliates to, afford to the other party’s officers, directors, employees,
accountants, counsel and other agents (“Representative(s)”)
reasonable access to its properties, assets and records during the period prior
to the Closing Date to obtain all information concerning its business as such
other party may reasonable request. Each of Multiband and MMT shall furnish
to
the other Party all such documents and copies of documents and records and
information with respect to itself and the Multiband Affiliates and the MMT
Affiliates and copies of any working papers relation thereto as the other Party
may reasonably request. Nothing in this Section 6.5 shall require Multiband
or
MMT, as the case may be, to provide any access, or to disclose any information,
if permitting such access or disclosing such information would (a) violate
applicable law, (b) violate any of its obligations with respect to
confidentiality (provided
that
each
party shall, upon the request of the other party, use its reasonable best
efforts to obtain the required consent of any third party to such access or
disclosure), or (c) result in the loss of attorney-client privilege
(provided
that
each
party shall use its reasonable best efforts to allow for such access or
disclosure in a manner that does not result in a loss of attorney-client
privilege). Each of Multiband and MMT also will consult with the other Party
regarding its business on a regular basis.
6.6 Regulatory
Approvals.
6.6.1
Each
of
MMT and Multiband shall promptly apply for, and take all reasonable necessary
actions to obtain or make, as applicable, all authorizations, orders,
declarations and filings with, and notices to, any Governmental Body or other
person required to be obtained or made by it for the consummation of the
transactions contemplated hereby. Each Corporate Party shall cooperate with
and
promptly furnish information to the other Corporate Party necessary in
connection with any requirements imposed upon such other Corporate Party in
connection with the consummation of the transactions contemplated hereby. Each
of MMT and Multiband shall furnish to each other’s counsel such necessary
information and reasonable assistance as the other may request in connection
with its preparation of any filing or submission that may be necessary under
the
HSR Act. MMT and Multiband shall be equally responsible for all filing and
other
similar fees payable in connection with such filings, and for any local counsel
fees.
-55-
6.6.2 Each
of
MMT and Multiband shall keep the other apprised of the status of any
communications with, and any inquiries or requests for additional information
from, the FTC and the DOJ and any other Governmental Body and shall comply
promptly with any such inquiry or request. Each of the MMT and Multiband shall
give the other reasonable prior notice of any communication with, and any
proposed understanding or agreement with, any governmental entity regarding
any
authorizations, orders, declarations and filings with, and notices to, any
governmental entity, and permit the other to review and discuss in advance,
and
consider in good faith the views of the other in connection with, any proposed
communication, understanding or agreement with any governmental entity with
respect to the transactions contemplated by this Agreement. Notwithstanding
the
foregoing, (a) neither MMT nor Multiband shall be required to (i) consent to
the
divestiture, license or other disposition or holding separate (through the
establishment of a trust or otherwise) of any of their or their respective
affiliates’ assets, or (ii) consent to any other structural or conduct remedy or
enter into any settlement or agree to any order regarding antitrust matters
respecting the transactions contemplated by this Agreement, and (b) neither
MMT
nor Multiband nor any of their respective affiliates shall have any obligation
to contest, administratively or in court, any ruling, order or other action
of
any Governmental Body or any other person respecting the transactions
contemplated by this Agreement; provided,
however,
that
each of MMT and Multiband shall both promptly respond to the DOJ or the FTC
to
any request for additional information.
6.7 Public
Announcements.
The
initial press release relating to this Agreement shall be a joint press release,
the text of which has been agreed to by each of Multiband, DTHC, and MMT.
Thereafter, each of Multiband, DTHC, and MMT shall not issue any press release
or otherwise make any public statements with respect to this Agreement, the
Share Exchange, or any of the other transactions contemplated by this Agreement
without the prior consent of the other Corporate Parties (such consent not
to be
unreasonably withheld or delayed); provided that a Corporate Party may, without
such consent (but after prior consultation to the extent practicable in the
circumstances), issue such press releases and make such public statements that
it believes are required by applicable law or the rules of the
NASDAQ Stock Market.
Notwithstanding the foregoing, a Corporate Party may make public statements
in
response to questions from the press, analysts, investors and make internal
announcements to employees, so long as such statements and announcements are
consistent with previous press releases or public statements made jointly by
Multiband, DTHC, and MMT and do not violate the terms of the Confidentiality
Agreement.
6.8 Notification
of Certain Matters.
Each of
Multiband, DTHC, and MMT shall give prompt notice to the other Corporate Parties
of any fact, event or circumstance known to it that (a) individually or taken
together with all other facts, events and circumstances known to it, has had
or
would reasonable be expected to have a Multiband Material Adverse Effect or
a
DTHC or MMT Material Adverse Effect, as applicable, (b) would cause or
constitute a breach of any of its representations, warranties, covenants, or
agreements contained herein, (c) the failure of any condition precedent to
its
obligations, (d) any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the Share Exchange, (e) any notice or other communication from any governmental
entity in connection with the Agreement or the Share Exchange; provided,
however, that (i) the delivery of any notice pursuant to this Section 6.7 shall
not prevent or cure any misrepresentations, breach of warranty or breach of
covenant, and (ii) disclosure by Multiband or MMT shall not be deemed to amend
or supplement the MMT Disclosure Schedules or Multiband Disclosure Schedule
or
constitute an exception to any representation or warranty.
-56-
6.9 Extension
of Time to Connsumate Original Transaction.
The
parties mutually agree to extend the deadline stated in Section 11.1.3 of the
Original Agreement from March 31, 2008 to December 31, 2008.
SECTION
7.
General
Conditions to the Share Exchange
7.1 The
obligations of DTHC, MMT, and Multiband to consummate the Share Exchange are
subject to the satisfaction on or prior to the Closing Date of the following
conditions:
7.1.1 Multiband
and MMT Director and Shareholder Approvals.
The
Multiband and MMT board of directors’ approval and the MMT shareholder’s
approval of the Share Exchange shall have been obtained.
7.1.2 Governmental
Body Approvals.
All
authorizations and orders of, declarations and filings with, and notices to
any
Governmental Body required to permit the consummation of the Share Exchange
shall have been obtained or made and shall be in full force and
effect.
7.1.3 Legality.
No
temporary restraining order, preliminary or permanent injunction, or other
order
preventing the consummation of the Share Exchange shall be in effect. No law
shall have been enacted or shall be deemed applicable to the Share Exchange
which makes the consummation of the Share Exchange illegal.
7.1.4 Litigation.
No
action
shall be pending or threatened before any court or other Governmental Body,
in
each case that has a reasonable likelihood of success, (a) seeking to prevent
consummation of the Share Exchange or seeking to obtain from Multiband or MMT
damages that are material in relation to the Multiband Affiliates, taken as
a
whole, or MMT and MMT Affiliates, taken as a whole, as the case may be, (b)
seeking to impose any material limitation on the right of Multiband to control
the MMT and the MMT Affiliates, (c) seeking to restrain or prohibit Multiband’s
or MMT’s ownership or operation (or that of their respective Multiband and MMT
Affiliates) or any portion of the business or assets of the Multiband
Affiliates, taken as a whole, or of MMT and the MMT Affiliates, taken as a
whole, or to compel MMT or Multiband or any of their respective Multiband and
MMT Affiliates to dispose of or hold separate any portion of the business or
assets of the Multiband Affiliates, taken as a whole, or of MMT and the MMT
Affiliates, taken as a whole, and if such business or assets relate to MMT
or
any of the MMT Affiliates, such business or assets are material to the financial
condition, results of operations or prospects of the MMT and the MMT Affiliates,
taken as a whole, and if such business or assets relate to the Multiband
Affiliates, such business or assets are material to the financial condition,
results of operations or prospects of the Multiband Affiliates, taken as a
whole.
-57-
7.1.5 Due
Diligence.
Each
Party shall have been satisfied in its reasonable discretion with their due
diligence review and inspections of the business, operations, assets and records
of the other Parties with respect to the operation of the other Parties and
the
transactions contemplated by this Agreement.
7.1.6 Fairness
Opinions for the Share Exchange.
Multiband’s, DTHC’s, and MMT’s independent appraisers and financial advisors
shall have issued opinion letters and corresponding valuation reports to
Multiband’s, MMT’s, and DTHC’s Boards of Directors, respectively, dated as of
the Closing, to the effect that the transactions contemplated by this Agreement
as a whole, including the Share Exchange, are fair to Multiband, MMT, and DTHC
and their shareholders, respectively, from a financial point of
view.
7.1.7 Blue
Sky Approvals.
Multiband shall have received all state securities and “blue sky” permits
and
approvals necessary to consummate the transactions contemplated hereby.
7.1.8 Registration
Rights Agreement.
The
relevant parties shall have entered into the Registration Rights Agreement
in
favor of each of the MMT Shareholders substantially the form set forth on
Schedule
7.1.8.
7.1.9 Supplemental
Closing Conditions.
As
specific additional conditions to the Closing of the transactions contemplated
by this Agreement, the Closing is contingent on the satisfaction of the
following conditions, which are for the benefit of the Parties, and which may
only be waived by the Parties:
(a)
completion by the Parties of a financial statement audit and/or due diligence
review of the Corporate Parties’ future prospects and historical operations;
(b)
reasonably satisfactory transfer of “market” leases on any of the MMT equipment
(as necessary);
(c)
mutually agreeable written “triple-net leases” with the owners of the real
property in which MMT’s primary operating facilities are currently located, for
a minimum term of five years following the Closing plus a renewal option of
five
years, with lease rates adjusted every 18 months tied to a mutually acceptable
economic index;
-58-
(d)
the
Corporate Parties’ long-term debt shall be in the ordinary course of business as
of the Closing;
(e)
completion of bylaws, articles of incorporation, and other corporate governance
provisions reasonably acceptable to the Parties;
(f)
the
Board of Directors of Multiband as of the Closing shall initially consist of
members mutually agreeable to the Boards of Directors of the Corporate Parties;
provided, however, that the “inside” members of the Board of Directors of
Multiband shall initially, to the extent not in violation of state statutes,
NASDAQ and/or SEC rules, be ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
(g)
the
Board of Directors of MMT shall initially remain intact as of the Closing;
(h)
MB
Financial, N.A., shall consent to the Share Exchange, to be evidenced by
modification of certain provisions of that certain Loan Agreement by and between
MB Financial, N.A., and DTHC, pursuant to the Third Amendment
thereof;
(i)
North
Star Trust Company, in its capacity as, Trustee of the DTHC ESOT shall not
have
issued any objections to the transactions contemplated by this Agreement by
5:00
p.m. EST on February 6, 2008;
(j)
an
independent appraisal of the valuation of MMT completed by the DTHC Independent
Appraiser demonstrates that the fair market value of the Multiband Shares and
the Promissory Note is at least equal
to
the fair market value of the MMT Shares, and such independent appraisal and
valuation is reviewed and accepted in good faith by DTHC;
(k)
(1)
MMT shall transfer its employees to employment by one or more of DTHC’s wholly
owned subsidiary corporations (other than MMT), (2) DTHC or one or more of
its
wholly owned subsidiary corporations (other than MMT) shall lease such former
MMT employees to Multiband under terms and conditions reasonably acceptable
to
DTHC and Multiband, and (3) Multiband and DTHC shall agree upon an appropriate
manner for MMT’s employees who currently participate in the DirecTECH Holding
Company EIAP and DirecTECH Holding Company ESOP to handle the fact that the
MMT
employees will no longer be allowed to participate in the DirecTECH Holding
Company EIAP and DirecTECH Holding Company ESOP subsequent to the Effective
Time
unless they remain employees of DTHC or one of its wholly owned subsidiary
corporations; and
(l)
Multiband shall provide its written consent and approval of the following
matters:
(i)
That
certain 2007 ESOP Stock Purchase Agreement, by and among DTHC, North Start
Trust
Company in its capacity as trustee (the “Trustee”) of the DTHC ESOT, and Bas
▇▇▇▇▇▇▇▇▇ Master, LLC, a Delaware limited liability company (“▇▇▇▇▇▇▇▇▇ LLC”),
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Trust, LLC, a Delaware limited liability company (“▇▇▇▇▇▇▇
LLC”), Building Blocks Family Trust, LLC, a Delaware limited liability company
(“Block LLC”), ▇▇▇▇▇▇ Bucks LLC, a Delaware limited liability company (“▇▇▇▇▇▇
LLC”), Bruister Family Limited Liability Company (“Bruister LLC”), and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇, an individual, all of whom are stockholders of DTHC (the “DTHC
Stockholders”), dated December 27, 2007 (the “2007 ESOP SPA”);
-59-
(ii)
the
financing transactions of DTHC reflected in that certain Second Amendment to
Loan and Security Agreement by and among DTHC, its subsidiaries, MB Financial
Bank, N.A., a national banking association and senior lender to DTHC (the
“Bank”), and the DTHC Stockholders (the “Second Amendment”) and related
documents, pursuant to which the Bank has (a) provided approximately $3.2M
of
term loan financing and a one day loan of approximately $12M to fund the 2007
ESOP SPA and the transactions contemplated thereby, (b) make available a $5.0M
acquisition line of credit to DTHC, and (c) assisted DTHC and the DTHC ESOT
in
refinancing approximately $11.5M of outstanding debt of the DTHC ESOT;
(iii)
Amendments to Executive Employment Agreements for ▇▇▇▇▇ ▇. Block, J. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as provided in Schedule 19.(a) of the Second
Amendment;
(iv)
those certain Management Services Agreements for J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇, and ▇▇▇▇▇ ▇. Block to be executed with Mulitband upon the closing
of
the transactions contemplated by the Original Agreement;
(v)
that
certain Early Retirement Letter Agreement for ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇;
(vi)
that
certain pledge of rights under that certain Stock Pledge Agreement by and
between MB Financial, N.A., and MMT; and
(vii)
that certain Third Amendment to the Loan Agreement by and between MB Financial,
N.A., and DTHC.
All
of
the agreements referenced in Section 7.1.11(l) herein shall be attached hereto
in their final form as Schedule
7.1.11(l)
to this
Agreement.
7.1.12 DTHC,
MMT, and Multiband shall each have executed that certain Employee Leasing
Agreement by and among the Parties.
SECTION
8. Conditions
Precedent to DTHC’s and MMT’s Obligation to Close the Transactions Contemplated
by this Agreement
The
following shall be conditions precedent to the obligation of DTHC and MMT to
close the transactions contemplated by this Agreement, any of which may be
waived in whole or in part by DTHC and MMT:
-60-
8.1 The
representations and warranties of Multiband set forth in this Agreement shall
have been true and correct at and as of the date hereof (without giving effect
to any Multiband Material Adverse Effect qualifications and other qualifications
based on the word “material” or similar phrases set forth therein) and shall be
true and correct at and as of the Closing Date as if made at and as of the
Closing Date, except to the extent that such representations and warranties
refer specifically to an earlier date, in which case such representations and
warranties shall have been true and correct as of such earlier date, except
where the failure of such representations and warranties to be true and correct
(without giving effect to any Multiband Material Adverse Effect qualifications
and other qualifications based on the word “material” or similar phrases set
forth therein) has not had and would not reasonably be expected to have,
individually or in the aggregate, a Multiband Material Adverse Effect. MMT
and
DTHC shall have received a certificate dated as of the Closing Date signed
on
behalf of Multiband by the President of Multiband to such effect.
8.2 Multiband
shall have performed, or complied with in all material respects all obligations
required to be performed or complied with by it under this Agreement at or
prior
to the Closing Date. MMT and DTHC shall have received a certificate signed
on
behalf of Multiband by the President of Multiband to such effect.
8.3 There
shall not have occurred any event, occurrence or change that has had, or would
reasonably be expected to have, a Multiband Material Adverse
Effect.
8.4 The
third
party consents set forth on Schedule
8.4
shall
have been obtained.
8.5 MMT
and
DTHC shall have received the deliveries set forth in Section
3.3.
8.6 All
actions, proceedings, instruments and documents required to enable the Multiband
Parties to perform this Agreement or matters incident thereto (other than
matters for which MMT is responsible under the terms of this Agreement), and
all
other legal matters not relating to a default by MMT of its obligations
hereunder, shall have been duly taken, satisfied, executed or delivered, as
the
case may be, to the reasonable satisfaction of DTHC and MMT.
8.8 The
Multiband Parties’ and the Multiband Affiliates’ Boards of Directors shall have
approved this Agreement and all other transactions contemplated
hereby.
8.9 The
DTHC
ESOT shall have received an opinion letter and corresponding report, reasonably
acceptable to the DTHC Board of Directors, of the DTHC Independent Appraiser,
dated as of the Closing Date, to the effect that (a) the fair market value
of
the Multiband Shares and the Promissory Note that DTHC receives in the Share
Exchange is not less than the fair market value of the MMT Shares that DTHC
transfers to Multiband in the Share Exchange, as the term “fair market value” is
defined in Section 3(18)(B) of ERISA, and the applicable “adequate
consideration” regulations hereunder, and (b) the transactions contemplated
hereby, including the Share Exchange, and any and all related transactions
and
events provided for pursuant to this Agreement, will be fair to the DTHC
shareholders from a financial standpoint.
-61-
8.10 Management
Services Agreements.
Multiband shall have executed and delivered Management Services Agreements
for
(at a minimum) J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. Block, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in
substantially the form attached hereto as Schedule
8.10
attached
hereto, with only such changes as are approved by the Corporate
Parties.
8.11 DTHC
and
MMT shall have been satisfied in its reasonable discretion with its due
diligence review and inspections of the business, operations assets and records
of the Multiband Parties with respect to the operation of the Multiband Parties
and the transactions contemplated hereby; provided, however, that if DTHC or
MMT
does not deliver to the Multiband Parties a written notice of termination of
this Agreement as a result of such due diligence review and the review of the
Disclosure Schedules on or before the later of (a) the fifth day after final
delivery of the Disclosure Schedules, or (b) seven (7) days prior to the Closing
Date, then this condition shall be deemed to have been fulfilled.
8.12 DTHC
shall have determined in its reasonable discretion based upon advice of counsel
that the tax treatment of the Share Exchange followed by the ultimate merger
of
Multiband HoldCo, Inc. with and into DTHC, with DTHC surviving (as originally
contemplated by the Original Agreement), and the transfer of the Multiband
Shares to DTHC’s stockholders will not adversely impact DTHC’s
stockholders.
-62-
SECTION
9.
Conditions to Obligation of Multiband to Effect the Share Exchange
The
obligation of Multiband to effect the Share Exchange is subject to the
satisfaction (or waiver by Multiband in its sole discretion) of the following
further conditions:
9.1 The
representations and warranties of MMT set forth in this Agreement shall have
been true and correct at and as of the date hereof (without giving effect to
any
MMT Material Adverse Effect qualifications and other qualifications based on
the
word “material” or similar phrases set forth therein) and shall be true and
correct at and as of the Closing Date as if made at and as of the Closing Date,
except to the extent that such representations and warranties refer specifically
to an earlier date, in which case such representations and warranties shall
have
been true and correct as of such earlier date, except where the failure of
such
representations and warranties to be true and correct (without giving effect
to
any MMT Material Adverse Effect qualifications and other qualifications based
on
the word “material” or similar phrases set forth therein) has not had and would
not reasonably be expected to have, individually or in the aggregate, a MMT
Material Adverse Effect. Multiband shall have received a certificate dated
the
Closing Date signed on behalf of MMT by the President of MMT to such
effect.
9.2 MMT
shall
have performed or complied with in all material respects all obligations
required to be performed or complied with by it under this Agreement at or
prior
to the Closing Date. Multiband shall have received a certificate signed on
behalf of MMT by the President or Chief Financial officer of MMT to such
effect.
9.3 There
shall not have occurred any event, occurrence or change that has had, or would
reasonably be expected to have, a DTHC or MMT Material Adverse
Effect.
9.4 The
third
party consents set forth on Schedule
9.4
shall
have been obtained.
9.5
Multiband
shall have received the deliveries set forth in Section
3.2.
9.6 DTHC
shall eliminate any and all intercompany accounts and transactions with MMT
in a
manner reasonably satisfactory to Multiband.
SECTION
10.
Survival
The
representations, warranties, covenants, and agreements included in this
Agreement and in any certificate delivered pursuant hereto shall terminate
on
the Closing Date, except that the covenants and agreements set forth in Sections
6., 7., 10., 12., 13., 14., 15., 16.4, 16.5, 16.6, and 16.22 of this Agreement
shall survive the Closing.
SECTION
11.
Termination
-63-
11.1. This
Agreement may be terminated at any time by any Party:
11.1.1 Upon
material breach of this Agreement by any other Party;
11.1.2 By
the
written agreement of Multiband, DTHC, and MMT;
11.1.3 By
Multiband, DTHC, or MMT, by written notice to the other Parties if the
transactions contemplated hereby shall not have been consummated pursuant hereto
by 5:00 p.m. P.S.T. on March 31, 2008, unless such date shall be extended by
the
mutual written consent of Multiband, DTHC, and MMT; provided, however, that
no
Party may give such notice if its breach of this Agreement has precluded the
consummation of this Agreement;
11.1.4 By
a
failure to satisfy fully any of the conditions precedent benefiting such Party
at or prior to the Closing;
11.1.5 If
the
Multiband board of directors’ approval and/or MMT shareholder’s approval shall
not have been obtained at the Multiband directors’ meeting or the MMT
shareholder’s special meeting, respectively, or any adjournment or postponement
thereof; or
11.1.6 If
required regulatory approvals for the transactions contemplated by this
Agreement have not been obtained or if conditions imposed on this Agreement
by
regulatory authorities are unacceptable in the reasonable judgment of any
Party.
11.2 In
the
event of the termination of this Agreement pursuant to this Section 11., this
Agreement shall be void, without any liability to any Party in respect hereof
or
of the transactions contemplated hereby on the part of any Party hereto, or
any
of its directors, officers, employees, agents, consultants, representatives,
advisers, attorneys, stockholders or shareholders except as set forth in Section
11.3; provided, however, that the provisions of Sections 6., 6.7, 7., 10.,
11.3,
13., and 16.4 of this Agreement shall remain in full force and effect and
survive any termination of this Agreement.
11.3 Remedies.
Any
Corporate Party terminating this Agreement pursuant to Section 11.1 shall have
the right to recover damages sustained by such Party as a result of any breach
by the other Party of any representation, warranty, covenant or agreement
contained in this Agreement or fraud or willful misrepresentation; provided,
however, that the party seeking relief is not in breach of any representation,
warranty, covenant or agreement contained in this Agreement under circumstances
which would have permitted the other Party to terminate the Agreement under
Section 11.1.
SECTION
12.
Securities
Laws Compliance Procedures
12.1 Investment
Intent. Multiband
shall effectuate the issuance of the Multiband Shares in a private placement
pursuant to Section 4(2) of the 1933 Act and the 1934 Act. The Parties
acknowledge and agree that Multiband shall be entitled to receive from DTHC,
as
a condition to such issuance as a private placement pursuant to Section 4(2)
of
the Securities Act, a certificate in form and substance to be agreed upon by
Multiband and DTHC. Such certificate shall acknowledge that DTHC is
a
sophisticated investor with knowledge and experience in business and financial
matters, knows, or has had the opportunity to acquire, all information
concerning the business, affairs, financial condition and prospects of Multiband
which it deems relevant to make a fully informed decision regarding the
consummation of the transactions contemplated hereby and is able to bear the
economic risk and lack of liquidity inherent in holding the Multiband Shares.
Such
certificate shall further acknowledge that DTHC will acquire the Multiband
Shares for his, her or its own account, and not with a view to, or for resale
in
connection with any distribution or public offering thereof.
-64-
12.2 Multiband
Shares Not Registered.
The
Multiband Shares to be issued in the Share Exchange have not been registered
under the 1933 Act or any state securities laws by reason of their contemplated
issuance in transactions exempt from the registration requirements of the 1933
Act. DTHC,
by
virtue of the Share Exchange and the conversion into the Multiband Shares of
the
MMT Shares held by DTHC, shall be bound by the provisions in this Section.
The
Multiband Shares may not be transferred or resold without (a) registration
under
the 1933 Act or any applicable state securities laws, or (b) an exemption from
the registration requirements of the 1933 Act and applicable state securities
laws. Although Rule 144 promulgated under the 1933 Act by the SEC may permit
sales at a future date provided such Rule remains in effect, in any event each
Recipient may not sell any securities pursuant to Rule 144 prior to the
expiration of a one-year period after such Recipient has acquired such
securities. Any sales pursuant to Rule 144 can be made only in full compliance
with the provisions of Rule 144.
SECTION
13.
Further
Assurances
The
Parties agree to execute and deliver all such other instruments and take all
such other action as any Party may reasonably request from time to time, before
or after the Closing and without payment of further consideration therefor,
in
order to effectuate the transactions provided for herein. The Parties shall
cooperate fully with each other and with their respective counsel and
accountants in connection with any steps required to be taken as part of their
respective obligations under this Agreement, including, without limitation,
the
preparation of financial statements and tax returns.
SECTION
14.
Designation
of Agent
For
convenience purposes only in connection with closing the transactions
contemplated by this Agreement, DTHC hereby irrevocably appoints ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, not individually but solely in his capacity as the Corporate Secretary
of DTHC (with full indemnification rights and a right of advancement from DTHC),
as DTHC’s and MMT’s attorney-in-fact and agent (sometimes in this Agreement
referred to as the “DTHC-MMT
Shareholder’s Agent”)
to
take any action and to execute any documents on behalf of DTHC and MMT with
respect to this Agreement and the transactions provided for herein, including
but not limited to the making and execution of any amendments to this Agreement
(except amendments to this Section 14.), the giving and receipt of any notices
pursuant hereto, the execution of any and all documents required to be executed
in order to complete Closing hereunder, the acceptance of service of process
in
connection with any claim related to this Agreement and the compromise or
settlement of any and all disputes which may hereafter arise pursuant to any
provision of this Agreement or any matter or thing growing out of this Agreement
or the transactions provided for herein. Such appointment shall, to the fullest
extent permitted by the law, survive the liquidation of DTHC and MMT. In the
event of the incompetency, incapacity, bankruptcy, death or resignation of
the
DTHC-MMT Shareholder’s Agent, DTHC shall appoint a successor to serve in such
capacity and shall give Multiband written notice of such appointment. Such
appointment of a successor shall be irrevocable.
-65-
SECTION
15.
Indemnity
Against Brokerage Commissions and Finder’s Fees
The
Parties hereby represent and warrant that there is no person or entity entitled
to receive from any Party any brokerage commission or finder’s fee in connection
with this Agreement or the transactions provided for herein, and each hereby
indemnifies and agrees to hold the other Parties hereto harmless from and
against any claim for brokerage commission or finder’s fee based on any
retention or alleged retention of a broker or finder by such Party.
SECTION
16.
Miscellaneous
16.1 Indulgences,
Waivers, Etc.
Neither
the failure nor any delay on the part of any Party to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power
or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of such right, remedy,
power of privilege with respect to any occurrence be construed as a waiver
of
such right, remedy, power or privilege with respect to any other occurrence.
No
waiver shall be effective unless it is in writing and is signed by the Party
asserted to have granted such waiver.
16.2 Controlling
Laws.
This
Agreement is to be construed in accordance with and governed by the internal
laws of the State of Minnesota, without giving effect to any choice of law
rule
that would cause the application of the laws of any jurisdiction other than
the
internal laws of the State of Minnesota to the rights and duties of the
Parties.
16.3 Public
Announcements and Confidentiality.
The
Parties acknowledge that the transactions described herein are of a confidential
nature and shall not be disclosed prior to the Closing except to agents,
representatives, counsel, accountants and consultants unless otherwise
specifically provided in this Agreement or as required by law. None of the
Parties hereto shall make any public disclosure of the terms of this Agreement
prior to the Closing, except as required by law or mutually agreed to by the
Corporate Parties, such requirement to be substantiated by a written opinion
of
counsel. The Parties shall endeavor to make only those press releases or other
public disclosures as are required by law; provided, however, that no press
release or other public disclosure prior to the Closing shall be made without
a
minimum of twenty-four (24) hours prior consultation with the other Parties.
-66-
16.4 Costs.
Each
Party shall be responsible for and bear all of its own costs and expenses
incurred in connection with the Share Exchange, including, without limitation,
all accounting, legal, finder, broker and other fees and expenses.
16.5 Dispute
Resolution. Any
controversy arising out of or relating to this Agreement, its enforcement or
interpretation, or because of an alleged breach, default or misrepresentation
in
connection with any of its provisions, or any other controversy arising out
of
this Agreement, including, without limitation, any state or federal statutory
claims, shall be submitted to arbitration in St. ▇▇▇▇, Minnesota, before a
sole
arbitrator selected from Judicial Arbitration and Mediation Services, Inc.,
or
its successor (“JAMS”), or if JAMS is no longer able to supply the arbitrator,
such arbitrator (the “Arbitrator”) shall be selected from the American
Arbitration Association, and the Arbitration shall be conducted in accordance
with JAMS as the exclusive forum for the resolution of such dispute; provided,
however, that provisional injunctive relief may, but need not, be sought by
the
Parties in a court of law while arbitration proceedings are pending, and any
provisional injunctive relief granted by such court shall remain effective
until
the matter is finally determined by the Arbitrator. Final resolution of any
dispute through arbitration may include any remedy or relief which the
Arbitrator deems just and equitable, including any and all remedies provided
by
applicable state or federal statutes. At the conclusion of the arbitration,
the
Arbitrator shall issue a written decision that sets forth the essential findings
and conclusions upon which the Arbitrator's award or decision is based. Any
award or relief granted by the Arbitrator hereunder shall be final and binding
on the Parties hereto and may be enforced by any court of competent
jurisdiction. The Parties acknowledge and agree that they are hereby waiving
any
rights to trial by jury in any action, proceeding or counterclaim brought by
either of the Parties against the other in connection with any matter whatsoever
arising out of or in any way connected with this Agreement. The Arbitrator
shall
determine the allocation of associated fees and costs in accordance with
applicable law.
16.6 Applicable
Law.
This
Agreement shall be governed in all respects by Minnesota law except as otherwise
indicated herein.
16.7 Notices.
All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received only when delivered (personally, by courier service such
as
Federal Express or DHL or by other messenger) or when deposited in the United
States mails, registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below:
-67-
|
If
to Multiband:
|
Multiband
Corporation
|
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn:
President
|
|
|
If
to DTHC or MMT:
|
Michigan
Microtech, Inc.
|
|
c/o
DirecTECH Holding Company, Inc.
|
|
|
▇▇
▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
|
|
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
|
Attn:
Chairman of the Board
|
|
|
With
a copy to:
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP
|
|
Attorneys
& Counselors at Law
|
|
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
|
Any
Party
may alter the address to which communications or copies are to be sent by giving
notice of such changes of address to the other Parties in conformity with the
provisions of this Section 16. for the giving of notice.
16.8 Exhibits
and Schedules.
All
Exhibits and Schedules attached hereto are herby incorporated by reference
into,
and made a part of, this Agreement.
16.9 Assignment.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the Parties and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the Parties hereto without
the
prior written consent of the other Parties.
16.10 Binding
Nature of Agreement.
This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective heirs, personal representatives, successors and assigns, except
that no Party may assign or transfer its rights or obligations under or interest
in this Agreement without the prior written consent of the other
Parties.
16.11 No
Third-Party Beneficiaries.
The
terms and provisions of this Agreement are intended solely for the benefit
of
the Parties hereto and their respective successors and permitted assigns, and
it
is not the intention of the Parties to confer third-party benefits upon any
other person except as otherwise indicated in this Agreement.
16.12 Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original as against any Party whose signature appears thereon,
and all of which shall together constitute one and the same instrument. If
executed in multiple counterparts, this Agreement shall become binding when
two
or more counterparts hereto, individually or taken together, bear the signatures
of all of the Parties reflected hereon as the signatories. Facsimile counterpart
signatures to this Agreement shall be acceptable at the Closing if the
originally executed counterpart is delivered within a reasonable time
thereafter.
-68-
16.13 Provisions
Separable.
The
provisions of this Agreement are independent of and separable from each other,
and no provision shall be affected or rendered invalid or unenforceable by
virtue of the fact that any other provision may be invalid or unenforceable
in
whole or in part for any reason. Any term or provision of this Agreement that
is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof
or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid
or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and unenforceable and that comes closest to expressing
the intention of the invalid and unenforceable term or provision, and this
Agreement shall be enforceable as so modified after the expiration of the time
within which the judgment may be appealed.
16.14 Entire
Agreement.
This
Agreement, together with the related agreements referred to herein, contains
the
entire understanding among the Parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements and conditions, express or implied, oral or written,
including, without limitation, the Letter of Intent. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.
16.15 Disclaimer
of Representations.
Except
as expressly set forth in Sections 4. and 5. hereof and the Schedules referred
to therein, the Parties have not made any representations or warranties to
each
other, MMT and DTHC, individually and collectively, expressly acknowledge that
they are not relying on any other information received from any other Party
or
its representatives (including, without limitation, any projections, forecasts
or forward-looking information).
16.16 Amendments
and Modifications.
This
Agreement may not be amended or modified other than by an agreement in writing
signed by all of the Parties. Notwithstanding the foregoing, however, nothing
shall preclude any two Parties from agreeing in writing to a modification of
their rights and duties with respect to each other, but no such agreement shall
be binding on Parties to this Agreement who have not consented in writing
thereto.
-69-
16.17 Section
and Paragraph Headings and Recitals.
The
Section and Paragraph headings in this Agreement and the recitals at the
beginning of this Agreement are for convenience only; they form no part of
this
Agreement and shall not affect its interpretation.
16.18 Gender,
Etc.
Words
used herein, regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate.
16.19 Duty
of Cooperation.
Each
Party shall cooperate in good faith with the other Parties generally, and in
particular will make available, as the other Parties reasonably request,
management decisions, liaison personnel, information, approvals and acceptances
so that the other Parties may properly perform their obligations under this
Agreement.
16.20 Time
of the Essence.
With
regarding to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
16.21 Construction.
The
construction of this Agreement shall not take into consideration the Party(ies)
who drafted or whose representative drafted any portion of this Agreement,
and
no canon of construction shall be applied that resolves ambiguities against
the
drafter of a document. The Parties acknowledge that they were advised by
competent counsel that each has chosen to represent such Party and each Party
has had a full opportunity to comment upon and negotiate the terms of this
Agreement. The language used in this Agreement is the language chosen by the
Parties hereto to express their mutual intent as a result of arm’s length
bargaining.
16.22 Exclusivity.
Until
December 31, 2008, the Parties shall not, directly or indirectly, through any
representatives or otherwise, solicit or entertain offers from, negotiate with
or in any manner encourage, discuss, accept or consider any proposal of any
other person or entity relating to the acquisition of any of their shares of
capital stock, their assets or business, in whole or in part, whether directly
or indirectly, through purchase, merger, consolidation, or otherwise (other
than
sales of inventory in the ordinary course of business).
[Signatures
on next page]
-70-
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date
first written above.
|
MMT:
|
MICHIGAN
MICROTECH, INC.
a
Michigan corporation
|
|
| |
|
|
| By: | ||
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Its: Vice President | ||
|
MULTIBAND:
|
MULTIBAND
CORPORATION,
a
Minnesota corporation
|
|
| |
|
|
| By: | ||
|
▇▇▇ ▇▇▇▇▇▇ |
||
| Its: CEO | ||
|
DTHC:
|
DIRECTECH
HOLDING COMPANY, INC.,
a
Delaware corporation
|
|
| |
|
|
| By: | ||
|
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ |
||
| Its: President & CEO | ||
-71-