EXHIBIT 10.1
PURCHASE OF ASSETS AND SALE AGREEMENT
BETWEEN AND AMONG
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC..
AND
NEULOGIC MEDIA, LLC
DATED AS OF
October 31, 2005
PURCHASE OF ASSETS AND SALE AGREEMENT
This PURCHASE OF ASSETS AND SALE AGREEMENT (this "Agreement") has
been made and entered into as of the 31st day of October, 2005 between and among
BrightStar Information Technology Group, Inc., a Delaware corporation ("Buyer"),
and Neulogic Media LLC, an Ohio limited liability company with offices at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Seller" or the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is engaged in the business of providing
e-communication solutions and content management systems to clients in the
not-for-profit sector (such business as conducted by the Company being
hereinafter referred to as the "Business"); and
WHEREAS, Buyer desires to purchase, and Seller desires to sell, all
of the assets and business of Seller as a going to concern, free and clear of
all liens, pledges, options, claims, charges, restrictions, security interests,
equities or encumbrances of any kind, on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing premises, and the
representations, warranties and mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller (sometimes
referred to herein collectively as, the "Parties" and individually as, a
"Party") hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS; CLOSING
1.1 Purchase and Sale. Subject to the terms and conditions herein
contained and on the basis of the representations, warranties and covenants set
forth herein, on the Closing Date (as defined in Section 1.4 hereof), the Seller
shall sell, assign, deliver and set over unto Buyer, and Buyer shall purchase
and accept from Seller, all right, title and interest in and to all of the
assets, property, goodwill and business of every kind, nature and description,
real, personal or mixed, tangible or intangible, wherever situated, including,
without limitation, all of the intellectual property listed on Schedule 2.14
hereto, constituting or held or used or useful in connection with the Business
(collectively, the "Assets"), free and clear of any and all liens, pledges,
options, claims, charges, restrictions, security interests, equities or
encumbrances of any kind whatsoever.
1.2 Purchase Price. The purchase price to be paid to Seller for the Assets
shall consist of: (i) $1,800,000, payable to Seller by wire transfer of
immediately available funds in accordance with the schedule set forth in Section
1.3 below (the "Cash Portion") and 139,000,000 shares of common stock, par value
$.001 per share, of Buyer ("Common Stock"), constituting twenty percent (20%) of
the total number of shares of Common Stock outstanding on a fully diluted basis.
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1.3 Payment of Cash Portion of Purchase Price. Buyer shall pay to Seller
the Cash Portion of the Purchase Price in accordance with the following
schedule:
(a) $200,000 as a non-refundable down payment, which amount
has been paid to and received by Seller prior to the date of this Agreement; and
(b) $1,600,000 at the Closing (as defined in Section 1.4
below).
(c) 139,000,000 number of shares or 20% (twenty percent) of
the Common stock position of the Buyer at the time of the Escrow Release Date.
1.4 Closing. The closing of the transactions contemplated hereby (the
Closing") will take place on such date on or prior to December 31, 2005 and at
such time and place as the Parties shall mutually agree.
1.5 Seller's Deliveries. At or prior to the Closing or as mutually agreed
among the parties, Seller shall deliver or cause to be delivered to Buyer:
(a) Possession of all of tangible property included in the
Assets;
(b) all such executed assignments, consents, conveyances,
deeds, waivers and other documents and instruments of transfer as shall, in the
opinion of Buyer and its counsel, be necessary or appropriate to vest in Buyer
good title to all of the Assets, free and clear of all liens, encumbrances and
claims of third parties;
(c) all consents, approvals and notifications required to be
obtained by Seller, as set forth on Schedule 2.27;
(d) one copy of the resolutions adopted by the Board of
Managers of the Company authorizing the execution, delivery and performance by
Seller of this Agreement and the consummation by Seller of the transactions
contemplated hereby, certified by the Secretary of the Company; and
(e) certificates of good standing for the Company issued by
the Secretary of State of Ohio and by the Secretary of State (or equivalent
authority) in each state in which the Company has an office.
1.6 Buyer's Deliveries. At the Closing, Buyer shall deliver or cause
to be delivered to Seller:
(a) one copy of the resolutions adopted by the Board of
Directors of Buyer authorizing the execution, delivery and performance by Buyer
of this Agreement and the consummation by Buyer of the transactions contemplated
hereby, certified by the Secretary of Buyer;
(b) $1,600,000 cash; and
(c) one or more certificates evidencing an aggregate of
139,000,000 shares of Common Stock, in the name of Seller.
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1.7 Employment Agreements. Following the Closing, the Parties shall
negotiate in good faith separately executed Employment Agreements to be entered
into by Buyer and each of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ (the
"Employment Agreements"). Each of the Employment Agreements will contain, among
other things (i) provision for an initial salary of $110,000 which will be
reviewed annually; (ii) provision for reimbursement of authorized expenses;
(iii) a benefits package; and (iv) mutually agreeable non-compete clauses.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as of the date hereof
(the "Execution Date") and as of the Closing as follows:
2.1 Company Organization. The Company is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Ohio. The Company has all corporate power and authority necessary to engage in
the conduct of the Business as presently conducted by it.
2.2 Seller's Authorization. Seller has all power and authority necessary
to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. Assuming due execution and
delivery by Buyer, this Agreement shall constitute the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except insofar as enforceability may be limited by bankruptcy, acts of
government, governmental or regulatory agency, insolvency, moratorium or other
laws which may affect creditors' rights and remedies generally and by principles
of equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
2.3 Subsidiaries. The Company has no subsidiaries and the Company is not a
partner of any partnership or a member of any limited liability company or joint
venture.
2.4 Organizational Instruments of Company. The Company has delivered or
caused to be delivered to Buyer true, correct and complete copies of the
Operating Agreement of the Company, as amended to date (the "Operating
Agreement"). The Company is not in violation of any provision of the Operating
Agreement. There are no agreements or commitments which obligate or require
Seller or the Company to amend or authorize an amendment of the Operating
Agreement.
2.5 Membership Interests. The outstanding membership interests of the
Company ("Membership Interests") consist of an aggregate of 30,000 Membership
Interests, all of which are owned of record by the Company's three principals,
Messrs. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇ in equal amounts. All of the outstanding
Membership Interests have been duly and validly issued and are fully paid and
nonassessable. There are no outstanding options, warrants, rights, puts, calls,
commitments, conversion rights, plans or other agreements of any character to
which the Company is a party or otherwise bound which provide for the
acquisition, disposition or issuance of any Membership Interests. There is no
personal liability, and there are no preemptive or similar rights, attached to
the Membership Interests.
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2.6 No Breach. The execution and delivery by Seller of this Agreement, the
performance by Seller of its obligations hereunder and the consummation of the
transactions contemplated hereby by Seller will not (i) constitute a default
under, result in the cancellation or termination of, accelerate the performance
required under or result in the creation of any lien, claim or encumbrance upon
any of the properties owned, leased or used by the Company pursuant to any
mortgage, indenture, franchise, license, permit, deed of trust, guaranty, note,
agreement, lease or other instrument to which the Company is a party or by or to
which any of its properties or assets is bound or subject; (ii) result in a
violation of or conflict with any law, ordinance, rule or regulation or any
order, writ, judgment, stipulation, award, edict or decree of any court of
competent jurisdiction or any governmental or quasi-governmental or regulatory
agency, authority or instrumentality of competent jurisdiction applicable to
Seller or any of the Assets, which default, breach, cancellation, termination,
acceleration, creation, violation or conflict, singly or in the aggregate, would
have a material adverse effect on the ability of Seller to perform this
Agreement or on the ability of the Company to conduct the Business as presently
conducted by it or on the ownership, leasing or use by the Company of any of the
Assets; or (iii) conflict with, result in a violation of or constitute a default
under the Operating Agreement of the Company.
2.7 Financial Statements. The Seller has heretofore delivered to the Buyer
a true, correct and complete copy of the Company's (i) unaudited financial
statements as of December 31, 2004 (the "Annual Statements"), and (ii) the
unaudited financial statements of the Company for the period commencing on
January 1, 2005 and ending September 30, 2005 (the "Interim Statements" and,
together with the Annual Statements, the "Financial Statements") . All of the
Financial Statements were prepared in accordance with generally accepted
accounting principles consistently applied, and fairly present the financial
position of the Company as of the dates thereof and its results of operations
for the periods indicated, except that the Interim Statements are subject to
normal recurring adjustments which might be required as a result of a year-end
audit. The books and records of the Company are in all material respects
complete and correct, have been maintained in accordance with good business
practices and Rule 17a3 promulgated by the SEC under the Securities and Exchange
Act of 1934, as amended (the "Exchange Act"), and accurately reflect the basis
for the financial condition of the Company as set forth in the Financial
Statements.
2.8 Tax Matters. All Federal, state, local and foreign income, sales, use,
property, franchise, privilege, employment (including, without limitation,
social security) and other taxes, tax returns, reports, estimates and
information statements required to be paid or filed by, or with respect to, the
Company have been paid or timely filed for all years and periods for which such
payments, returns, reports, estimates and information statements were due
(taking into account all filing date extensions), all taxes shown thereon to be
payable have been paid, there are no outstanding waivers or extensions of
statutes of limitation with respect to any taxes required to be shown on any tax
return and there are no material misstatements contained in any such return,
report, estimate or information statement. The Company has not incurred any
liability with respect to any Federal, state, local or foreign tax, except in
the ordinary course of the Business. There are no presently pending or
threatened audits or assessments by any Federal, state, local or foreign taxing
authority involving issues which pertain to the Company or any of the properties
owned by the Company.
2.9 Real Property Schedule 2.9 attached hereto contains a complete and
accurate list of all real property leased (whether as lessor or lessee) or
subject to contract or commitment of purchase or sale or lease (whether as
lessor or lessee) by the Company. The Company does not own any real property.
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2.10 Owned Personal Property.
(a) All of the tangible personal property and assets
(including, without limitation, leasehold improvements, furnishings, furniture,
office equipment, vehicles, inventories, machinery, equipment, structures and
movable fixtures) that are, individually or in the aggregate, material to the
conduct of the Business as presently conducted by the Company and which are
owned by the Company, are reflected in the Financial Statements. All of such
personal property is in good condition and is suitable for the purposes for
which it is used. All items of inventory are in merchantable condition, of first
quality and in conformance to the specifications for such products, saleable or
usable in the ordinary course of the Business for the purposes for which
intended. Without limiting the foregoing, the inventories do not include any
obsolete or defective materials or excess stock items or any item that was at
any prior time written off or written down by the Company. There are no assets
or properties necessary for or used in the conduct of the Business which are not
owned or leased by, or licensed to, the Company.
2.11 Title to Owned Properties. The Company is the sole and exclusive
owner of, and has good and marketable title to, all of the properties and assets
owned by it and used in the Business, free and clear of all liens, claims,
pledges, charges, security interests and other encumbrances.
2.12 Absence of Changes. Since September 30, 2005, there has not been with
respect to the Company:
(a) any change in the conduct of the Business or any change in
practices, operations or policies with respect to (i) the method of selling
services, (ii) the standard commissions, ▇▇▇▇-ups or terms and conditions of
sale of services (including standard terms regarding discounts and commissions,
but excluding price changes), (iii) the method for accounting for sale of
services or commissions, (iv) the compensation of employees, (v) the policy
regarding maintenance of inventory levels or (vi) the conduct of accounts
receivable collection and accounts payable payment activities of the Business;
(b) any change which has affected, or may reasonably be
expected to affect, the Business Conditions of the Company from that shown in
the Financial Statements (other than changes relating to the economy in general
or the Company's industry in general and not specifically relating to the
Company, as to which no representation is made herein);
(c) other than in the ordinary course of business, any change
in any of the properties, assets, licenses, permits or franchises of the Company
or any change in the methods of accounting or accounting practice or manner of
conducting the Business which has, or may reasonably be expected to have, a
material adverse effect on the Business Conditions of the Company;
(d) any damage, destruction or loss (whether or not covered by
insurance) with respect to the property of the Company;
(e) other than in the ordinary course of business, any
amendment, modification or termination of any existing, or adoption, approval,
execution or delivery of any new contract, agreement, plan, lease, license,
permit or franchise;
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(f) other than in the ordinary course of business (which
includes but is not limited to financial advisory services), any acquisition or
disposition by the Company of any material asset or property;
(g) any direct or indirect redemption, purchase or other
acquisition of any Membership Interests of the Company or any declaration,
setting aside or payment of any dividend or other distribution on or with
respect to, or any split, combination or similar change in, Membership Interests
of the Company;
(h) any incurrence, assumption or guarantee of any
indebtedness or obligation relating to any lending or borrowing of money or any
other liability, except current liabilities and commitments incurred in the
ordinary course of business;
(i) any payment of any obligation or liability other than
current liabilities in the ordinary course of business;
(j) any notification or indication to Seller or the Company
that a material customer of the Company intends to discontinue or reduce its
relationship with the Company;
(k) any waiver or compromise of any right of material value;
(l) any receipt of any notice of termination of any contract,
policy, lease, franchise, permit, governmental consent, regulatory approvals,
grant or authorization, license or other agreement, or of any breach or event of
default with respect to any of the foregoing, which, individually or in the
aggregate, has had, or may reasonably be expected to have, an adverse effect on
the Business or the Company; and no such termination is or has been threatened
against the Company; or
(m) any agreement to do any of the things described in this
Section 2.12.
2.13 Litigation. Except as set forth on Schedule 2.13, there are no
claims, lawsuits, actions, customer complaints, arbitrations or administrative
or regulatory or governmental proceedings or regulatory or governmental
investigations pending or threatened or contemplated either by or against the
Company or against any officer, director, employee or agent of the Company which
purport to relate to activities of any such person as an officer, director,
employee or agent of the Company. Except as set forth on Schedule 2.13, there
are no judgments, orders, injunctions, decrees, stipulations or awards (whether
rendered by a court, commission, securities exchange, self-regulatory
organization or administrative agency, or by arbitration) outstanding against
the Company or any of its properties or assets.
2.14 Intellectual Property. Except as set forth in Schedule 2.14, the
Company does not own any copyright, trademark, patent or trade name, or have any
license to use any copyright, trademark, patent or trade name, or use any
copyright, trademark, patent or trade name in its operations or the Business.
Each of the registered trademarks, patents and trade names listed in Schedule
2.14 has been validly issued and is owned by the Company free and clear of all
liens, claims and encumbrances; and the Company has the exclusive rights to use
all such copyrights, registered trademarks, patents and trade names in the
Business and operations. Except as set forth in Schedule 2.14, the Company owns
or has rights to use all copyrights, trademarks, trade names, know-how, trade
secrets and other proprietary rights necessary to conduct its operations and the
Business and Seller does not know of any claim, or any basis of any claim, that
the Company has infringed any copyright, trademark, trade name, know-how, trade
secret or other proprietary right of any other person. Seller knows of no
potential claim of infringement of any copyright, trademark, trade name,
know-how, trade secret or other proprietary right of any other person that has
not been asserted but that, if asserted, would adversely affect the Business or
the Company.
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2.15 Compliance with Laws; Licenses, Approvals and Other Authorizations.
Schedule 2.15 lists all permits, licenses and other similar authority necessary
or appropriate for the conduct of the Business of the Company. The conduct of
the Business of the Company complies in all material respects with all
applicable laws, ordinances, governmental licenses, permits, regulations, orders
and other authorizations (including, without limitation, those issued by any
self-regulatory organization or administrative agency), with which failure to
comply would adversely affect the Business Conditions of the Company. The
Company has filed all reports and statements, together with any amendments
required to be made with respect thereto, that it was required to file with any
governmental or regulatory authority, securities exchange or self-regulatory
organization or any agency having jurisdiction over the Company, its business or
operations. Each license, permit, order and other authorization which is
material to the Business Conditions of the Company has been duly obtained and is
in full force and effect.
2.16 Undisclosed Liabilities. To the best of its knowledge, the Company
has no obligations or liabilities of any nature, whether absolute, accrued,
contingent or otherwise, except and to the extent disclosed in Schedule 2.16
hereto. Except as set forth in any Schedule attached hereto, nothing has come to
the attention of the Company which would cause it to believe that there exists
any circumstances, conditions, events or arrangements which are likely to
hereafter give rise to any such obligations or liabilities.
2.17 Material Contracts and Other Data. Schedule 2.17 is a correct
---------------------------------
and complete list setting forth:
(a) all material licenses, clearing agreements and leases of
items of personal property with an individual fair market value in excess of
$2,000, exclusive of leasehold improvements, permits, franchises, concessions
and the like to which the Company is a party;
(b) all existing contracts to which the Company is a party,
except (i) agreements with respect to securities transactions or engagement
letters of the Company in the ordinary course of the Business, (ii) other
agreements entered into in the ordinary course of the Business and involving the
payment by or to the Company of less than $1,000 with respect to any one
contract and (iii) contracts which are terminable by the Company upon not more
than 90 days' notice and with a termination penalty, if any, not exceeding
$1,000, but in any event including all contracts to which Company or any of its
affiliates is also a party; and
(c) all outstanding loans and debt instruments where the
Company is the debtor, a surety or a guarantor.
2.18 Pension and Other Employee Plans; Employees.
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(a) Other than as set forth on Schedule 2.18, the Company has
not maintained any employee benefit plans as defined in Section 2(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and has
no profit sharing, bonus, stock purchase, stock option, severance or any other
employee benefit plan agreements, programs or arrangements, whether maintained
for current employees, former employees or retirees (the "Plans"), except
individual arrangements by the Company with employees relating to their
employment . All of the benefit plans listed on Schedule 2.18 are fully-funded
and the Company has no actual or contingent liabilities with respect thereto;
and neither this Agreement nor the consummation of the transactions contemplated
hereby will result in any withdrawal or other liability owed by the Company or
Buyer with respect to any such benefit plan.
(b) There is no bonus, deferred compensation or commission
arrangement, or any employment agreement, with any of the Company's employees.
All of the Company's employees are employed at will.
2.19 Environmental Matters. The Company has complied with and is in
compliance with all Federal, state, local and foreign statutes, laws,
ordinances, regulations, rules, permits, judgments, orders and decrees
applicable to it or any of its properties, assets, operations or businesses,
relating to environmental protection, including, without limitation, standards
relating to air, water, land and the generation, storage, transportation,
treatment or disposal of solid wastes and hazardous wastes. The Company has
obtained and adhered to all permits and other approvals necessary to store,
dispose of and otherwise handle hazardous wastes and has reported, to the extent
required by federal, state, local and foreign statutes, laws, ordinances,
regulations, rules, permits, judgments, orders and decrees, all past and present
sites owned or operated by the Company where hazardous wastes have been treated,
stored or disposed of. The Company has made a diligent search and knows of no
location on any of the property now or previously owned or used by it where
hazardous wastes or other harmful substances may have entered or are likely to
enter into the soil or groundwater. The Company has made a diligent search and
knows of no on-site or off-site location to which it has transported hazardous
wastes or arranged for the transportation of hazardous wastes, which site is the
subject of any Federal, state, local or foreign enforcement action or any other
investigation which could lead to any claim against the Company or Buyers for
any clean-up cost, remedial work, damage to natural resources or personal
injury, including, but not limited to, claims under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended.
2.20 Insurance. Schedule 2.20 hereto lists all of the insurance policies
which cover employees, properties, products or operations (including, without
limitation, fire, public liability, worker's compensation and vehicular
insurance policies) and which are owned by the Company or under which the
Company is an insured or beneficiary or loss payee. Except as set forth in
Schedule 2.20, (i) there are no disputes with, or reservations of rights by,
insurers or underwriters under any such policies with respect to any pending
suit, action or proceeding or asserted or unasserted claim to which such
policies relate; (ii) all premiums due for such policies have been paid and no
such policy is subject to retroactive premium adjustment; (iii) there are no
defaults by the Company or, to the knowledge of Seller, by any insurer or
underwriter under any such policy; (iv) no misrepresentation has been made in
any application which would result in termination of any such policy or result
in a refusal to pay claims thereunder; and (v) no notice has been received of
cancellation or non-renewal relating to such policies.
2.21 Banks; Proxies. Schedule 2.21 hereto sets forth (i) the name of each
bank at which the Company maintains an account, safe deposit box, lock box or
vault; (ii) the name of each individual authorized by the Company to effect
transactions with respect to such account, safe deposit box, lock box or vault;
and (iii) all outstanding proxies, powers of attorney and other similar
instruments delivered to act on behalf of the Company other than proxies, powers
of attorney and other similar instruments delivered in the ordinary course of
the Business.
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2.22 Customers and Suppliers. There has not been and Seller does not
recognize a basis on which one should reasonably anticipate, by reason of the
transactions contemplated by this Agreement or otherwise, any material adverse
change in relations between the Company and any of its present customers and/or
suppliers.
2.23 No Violation of Law. The Company is not engaging in any activity or
omitting to take any action as a result of which it is in violation of any law,
rule, regulation, ordinance, statute, order, injunction or decree, or any other
requirement of any court or governmental or administrative body or agency,
applicable to the Company.
2.24 Labor Matters. The Company is not a party to any representation or
collective bargaining agreement with any employees of the Company. Seller has no
reason to believe that there are pending or threatened any representation
campaigns, collective bargaining elections or other organizing efforts with
respect to any employees of the Company.
2.25 Full Disclosure. To the best of Seller's knowledge, neither this
Agreement nor any agreement, document, instrument, certificate or statement made
or furnished to Buyer in connection with this Agreement and the transactions
contemplated hereby contains any untrue statement of a material fact or omits
the statement of a material fact required to be stated in order to make the
statements contained herein and therein not misleading in light of the
circumstances in which they are or were made.
2.26 Consents. Except as set forth in Schedule 2.27, no consent, approval,
exemption or authorization is required to be obtained from, no notice is
required to be given to and no filing is required to be made with any third
party (including, without limitation, self-regulatory organizations,
governmental and quasi-governmental agencies, authorities and instrumentalities
of competent jurisdiction) by Seller (i) in order for this Agreement to
constitute legal, valid and binding obligations of Seller and the Company or to
authorize or permit the consummation by Seller of the transactions contemplated
hereby or (ii) under or pursuant to any self-regulatory organization,
governmental or quasi-governmental permits, licenses, consents, authorizations
or approvals held by or issued to Seller (including, without limitation,
environmental, health, safety and operating permits and licenses) by reason of
this Agreement or the consummation of the transactions contemplated hereby.
2.27 SEC Filings. All reports required to be filed by the Company with the
Securities and Exchange Commission and any other applicable governmental,
quasi-governmental or self-regulatory organization, and pursuant to state and
foreign securities laws, have been duly and timely filed. All such reports were
true, complete and correct as filed, except where the failure to be true,
complete and correct as filed would not have an adverse effect on the Business
or the Assets.
2.28 Books and Records. The Company currently maintains all necessary
books and records pertaining to its business and operations as are required to
be maintained under the Exchange Act, the rules and regulations promulgated
thereunder, the laws and rules and regulations of any state in which the Company
is currently doing business.
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2.29 Fees and Assessments. There are no outstanding fees or
assessments owed by the Company to any industry or similar self-regulatory
organization.
2.30 State Registrations. To the Seller's knowledge, there has not been,
nor is there currently pending or threatened, any inquiry, investigation,
administrative proceeding or civil action undertaken or initiated by such states
or jurisdictions concerning the Company or any of its officers, directors,
registered principals or registered representatives, and the Company has not
operated the Business in a manner which would give rise to any of the foregoing.
2.31 Brokers. No broker, finder or similar agent has been employed by or
on behalf of the Seller, and no person or entity which the Seller has had any
dealings or communications of any kind is entitled to any brokerage commission,
finder's fee or any similar compensation in connection with the execution of
this Agreement or the consummation of the transactions contemplated hereby.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as of the date hereof and
as of the Closing as follows:
3.1 Buyer's Organization and Authorization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and each agreement,
instrument and other document contemplated hereby to which it will be a party
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by Buyer of this Agreement and each agreement, instrument
and other document contemplated hereby to which it will be a party, the
performance by Buyer of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby by Buyer have
been duly authorized by all necessary corporate actions on the part of Buyer.
Assuming due execution and delivery by the Company, this Agreement shall
constitute the legal, valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms, except insofar as enforceability may be
limited by bankruptcy, insolvency, moratorium or other laws which may affect
creditors' rights and remedies generally and by principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at law).
3.2 No Breach. The execution and delivery by Buyer of this Agreement and
of each agreement, instrument and other document contemplated hereby to which it
will be a party, the performance by Buyer of its obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and
thereby by Buyer will not (i) conflict with, result in any violation of or
constitute a default under the certificate of incorporation or the by-laws of
Buyer; (ii) constitute a default under, result in a breach of, result in the
cancellation or termination of, accelerate the performance required under or
result in the creation of any lien, claim or encumbrance upon any of the
material properties of Buyer pursuant to any material mortgage, indenture, deed
of trust, guaranty, note, agreement, lease or other instrument to which Buyer is
a party or by which any of its properties is bound; or (iii) result in a
violation of or conflict with any law, ordinance, rule or regulation or any
order, writ, judgment, stipulation, award, edict or decree of any court of
competent jurisdiction or any governmental or quasi-governmental or regulatory
agency, authority or instrumentality of competent jurisdiction applicable to
Buyer or any of its properties.
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3.3 Consents. No consent, approval or authorization is required to be
obtained from, no notice is required to be given to and no filing is required to
be made with any third party (including, without limitation, self-regulatory
organizations, governmental and quasi-governmental and regulatory agencies,
authorities and instrumentalities of competent jurisdiction) by Buyer in order
for (i) this Agreement to constitute legal, valid and binding obligations of
Buyer or (ii) to authorize or permit the consummation of the transactions
contemplated hereby.
3.4 Brokers. No broker, finder or similar agent has been employed by or on
behalf of Buyer, and no person or entity which Buyer has had any dealings or
communications of any kind is entitled to any brokerage commission, finder's fee
or any similar compensation in connection with the execution of this Agreement
or the consummation of the transactions contemplated hereby.
3.5 Information as to the Buyer. Neither this Agreement nor any of the
Schedules or Exhibits attached hereto contains any untrue statement of a
material fact with respect to the Buyer or omits to state a material fact with
respect to the Buyer necessary to make the statements herein or therein not
misleading.
3.6 Buyer stock. Upon the performance by Seller of its obligations
hereunder, the shares of Common Stock issued and delivered to Seller at the
Closing shall be duly and validly issued, fully paid and nonassessable .
3.7 Percentage of Buyer Stock. The 139,000,000 shares of Common Stock to
be delivered to Seller at the Closing hereunder represents and as of the Closing
shall represent approximately twenty percent (20% ) of Buyer's issued and
outstanding capital stock on a fully diluted basis, after giving effect to the
exercise of all outstanding options to purchase shares of Common Stock and
conversion of all outstanding securities convertible into shares of Common
Stock.
ARTICLE 4
PRE-CLOSING COVENANTS
4.1 Seller's Covenants. Seller agrees that from the Execution Date
until the Closing, it shall:
(a) Grant to Buyer and its counsel, accountants and
representatives reasonable access during normal business hours to (i) all
properties, books, accounts, records, tax returns, contracts and documents of or
relating to the Company and the business, finances, assets and properties of the
Company and (ii) all employees, agents and consultants with whom the Company has
business or other dealings; and to furnish or cause to be furnished to Buyer or
its counsel all data and information concerning the business, assets, finances
and properties of the Company as may be reasonably requested;
11
(b) carry on the Business diligently, in the ordinary course
consistent with past practices, and in substantially the same manner as it
previously had been carried out, and not to make or institute any unusual or
novel methods of purchase, sale, lease, management, accounting or operation that
vary materially from those methods used by the Company as of the date of this
Agreement;
(c) use its best efforts (i) to preserve its business
organization intact and (ii) to preserve its present relationships with
suppliers, regulators, customers and others having business relationships with
the Company;
(d) not amend its Operating Agreement; issue any Membership
Interests; issue or create any warrants, obligations, subscriptions, options or
other commitments under which any additional Membership Interests might be
directly or indirectly authorized, issued or transferred from the Company; or
agree to do any of the foregoing acts;
(e) use its best efforts to continue to carry its existing or
comparable insurance;
(f) except in the ordinary course of business and consistent
with past practice, not grant or agree to grant any increase in salaries, bonus
or other compensation payable or to become payable by it to any officer,
employee or representative; increase or create benefits payable to any officer,
employee or representative under any bonus or pension plan, employee benefit
plan or other contract or commitment; or modify any collective bargaining
agreement to which it is a party or by which it is bound;
(g) not do or agree to do any of the following acts, other
than in the ordinary course of business consistent with past practice, without
the consent of Buyer, which consent shall not be unreasonably withheld:
(i) enter into any contract, commitment or
transaction; however, any transaction which is under engagement by the Company
as of the Execution Date will remain for the benefit of the principals of the
Seller only.
(ii) except for a co-location lease with Time
Warner, make any capital expenditures in excess of $5,000 individually or
$10,000 in the aggregate, or enter into any lease of capital equipment or
property under which the annual lease charge is in excess of $5,000;
(iii) sell, transfer, encumber, retire, abandon or
dispose of any property of the Company;
(iv) pay any obligation or liability, fixed or
contingent, other than current liabilities and obligations disclosed in this
Agreement or the Schedules hereto;
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(v) except for credits to Baton Rouge and Greater
New Orleans, waive or compromise any right or claim;
(vi) cancel, without full payment, any note, loan or
other obligation owed to the Company;
(vii) discharge or satisfy any security interest,
lien or encumbrance;
(viii) mortgage, pledge or subject to lien,
charge or encumbrance any of the Company's assets;
(ix) make any loans to any person or entity;
(x) incur any indebtedness for borrowed money to
any person or entity except for trade payables incurred in the ordinary
course of business;
(xi) settle or compromise any of the actions, suits
or proceedings described in response to Section 2.13;
(xii) take any action or omit to take any action
which could cause a material breach or violation of (in and of itself, with the
giving of notice, passage of time or both) any contract, agreement, commitment
or obligation or any federal, state, foreign, territorial or possessions law,
rule, regulation, order or notice; or
(xiii) fail to pay its payables in the ordinary
course of business consistent with past practice;
(h) not to declare, set aside or pay any money or make any
distribution with respect to its Membership Interests, directly or indirectly
purchase, redeem or otherwise acquire any Membership Interests, enter into any
agreement obligating it to do any of the foregoing acts or cause the Company to
borrow any funds;
(i) not to modify, amend, cancel or terminate any of its
existing contracts or agreements, or agree to do any of the foregoing acts,
except in the ordinary course of business;
(j) to refrain from entering into any agreement, committing to
take any action or taking any action which would, if taken at or before the
Closing, make any of the representations or warranties of Seller contained in
this Agreement untrue or incorrect as of the Closing or prevent Seller from
performing or cause Seller not to perform its covenants hereunder;
(k) not to apply to transfer or otherwise attempt to transfer,
assign or otherwise dispose of, or take any action which might reasonably be
expected to jeopardize its rights to possess or enjoy, any license or other
rights granted to the Company by any industry or similar self-regulatory
organization or any governmental agency or authority;
(l) to continue to file all regulatory reports, audits,
notifications and other documents required by applicable laws, rules,
regulations, orders and notices; to continue in full force and effect all
licenses, leases, policies, rights and authorizations necessary or appropriate
to operate the Company; and to comply with all laws, rules, regulations, orders
and notices applicable to the Company or the Business;
4.2 Buyer's Covenants. From the Execution Date hereof until the Closing,
Buyer shall refrain from entering into any agreement, committing to take any
action or taking any action which would, if taken at or before the Closing, make
any of the representations or warranties of Buyer contained in this Agreement
untrue or incorrect as of the Closing or prevent Buyer from performing or cause
Buyer not to perform its covenants hereunder.
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4.3 Authorization and Approvals. As soon as practicable following the
execution of this Agreement, Seller shall diligently and in good faith prepare
and process all applications and filings required for the transfer or reissuance
of any and all licenses of the Company to Buyer.
ARTICLE 5
CONDITIONS TO CLOSING
5.1 Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the transactions contemplated hereby are subject to the satisfaction
(unless waived by Buyer in writing), at or before the Closing, of the following
conditions:
(a) All representations and warranties by Seller as contained
in this Agreement or in any written statement delivered by Seller under this
Agreement shall be true at and as of the Closing as if such representations and
warranties were made at and as of the Closing;
(b) Seller shall have performed all of its obligations,
satisfied all conditions and complied with all of its covenants and agreements
hereunder at or prior to the Closing
(c) All final consents, approvals, authorizations of or
notices to or filings with applicable self-regulatory organizations,
governmental authorities and other third parties necessary or appropriate for
the transfer of ownership of the Assets and the Business and the consummation of
the transactions contemplated by this Agreement shall have been obtained without
conditions that would impose an unreasonable burden on Buyer.
(d) During the period from the Execution Date to the Closing,
there shall not have occurred any material adverse change in the Business,
Assets or results of operations or financial condition of the Company; and
(e) No action, complaint, notification or proceeding shall
have been received, instituted or threatened in writing challenging or seeking
to enjoin or restrict the execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby, or challenging or
questioning the compliance of the Company with any law, rule, regulation or
notice.
5.2 Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated hereby are subject to the satisfaction
(unless waived by Seller in writing), at or before the Escrow Release Date, of
the following conditions:
(a) All representations and warranties by Buyer as contained
in this Agreement or in any written statement delivered by Buyer under this
Agreement shall be true at and as of the Closing as if such representations and
warranties were made at and as of the Closing;
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(b) Buyer shall have performed and complied with all covenants
and agreements, and satisfied all conditions, that it is required by this
Agreement to perform, comply with or satisfy, before or at the Closing;
(c) All final consents, approvals, authorizations of or
notices to or filings with applicable self-regulatory organizations,
governmental authorities and other third parties necessary or appropriate for
the transfer of ownership of the Assets and Business to Buyer and the
consummation of the transactions contemplated by this Agreement shall have been
obtained without conditions that would impose an unreasonable burden on Seller;
and
(d) No action, complaint, notification or proceeding shall
have been received, instituted or threatened in writing challenging or seeking
to enjoin or restrict the execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby.
ARTICLE 6
POST-CLOSING COVENANTS AND ADDITIONAL AGREEMENTS
6.1 Transactional Taxes and Costs.
(a) Seller shall be responsible for all transfer, conveyance,
excise, stamp, documentary or other similar taxes and other governmental taxes,
duties, charges, fees, imposts and assessments, and all interest and penalties
thereon, imposed at any time by any taxing authority with respect to this
Agreement, the transfer, assignment, conveyance or delivery of the Membership
Interests or the consummation of the transactions contemplated hereby (the
"Transactional Taxes"). If Buyer shall be required to pay any of the
Transactional Taxes, Seller shall promptly reimburse Buyer therefor.
(b) Buyer shall be responsible for all filing fees, notarial
fees and other similar fees and costs arising out of this Agreement, the
transfer, assignment, conveyance or delivery of the Assets or the consummation
of the transactions contemplated hereby other than the Transactional Taxes (the
"Transactional Costs"). Buyer shall promptly pay and discharge all of the
Transactional Costs. If Seller shall be required to pay any of the Transactional
Costs, Buyer shall promptly reimburse Seller therefor.
6.2 Further Assurances. At any time and from time to time after the
Closing, the Parties shall execute, deliver, acknowledge and file all such
further documents and instruments of transfer, assignment or conveyance, and do
all such further acts and things, as may be reasonably required in order to
consummate the transactions contemplated hereby and to vest in Buyer good title,
free and clear of all liens, encumbrances and claims by third parties, in and to
all of the Assets and the Business.
6.3 Business Records.
(a) Except as otherwise provided in Section 6.3(b), from and
after the Closing Seller shall promptly deliver or make available to Buyer all
books, records and files which pertain to the Business or the Company or any of
the Assets and which are possessed by Seller or any of its members, employees,
agents or representatives (collectively, the "Business Records").
15
(b) Except as otherwise provided in Section 6.2 hereof, or as
required by applicable law, rule or regulation, nothing contained herein shall
obligate or require Seller to deliver to Buyer any Business Records which
pertain to the evaluation or negotiation of this Agreement or the transactions
contemplated hereby.
6.4 Access by Seller.
(a) At any time and from time to time from and after the
Closing, and upon reasonable request by Seller, Buyer shall provide full access
to Seller and its members and representatives, at no charge and during normal
business hours, to the facilities and the books, records, files, papers, data
and information relating to the Business, the Assets or the operations of the
Business prior to the Closing.
(b) At any time and from time to time from and after the
Closing, and upon reasonable request by Buyer, Seller and its members or
representatives shall be available to Buyer and its counsel in connection with
the prosecution or defense of any claim, suit, action, proceeding or
investigation relating to or arising from the Assets or the Business, at no
charge.
6.5 Preservation of Records. From and after the Closing, each of Buyer and
Seller shall preserve and maintain all books, records, files, papers, data and
information in its possession relating to the Assets or the Business for such
period as may be required by any law, ordinance, rule, regulation or any order,
writ, judgment, stipulation, edict, award or decree or in connection with any
pending or threatened claim, suit, action, proceeding or investigation
(including, without limitation, tax examinations and audits).
6.6 Standstill. Until the earlier of (i) the Closing or (ii) December 31,
2005, neither Seller nor any of its affiliates, members, officers, directors,
employees, representatives, agents or advisers (collectively, the "Seller
Representatives") shall, directly or indirectly, solicit, initiate or
participate in discussions with, provide any information or assistance to
(including, but not limited to, affording access to the Business, Assets or
books and records of the Company) or enter into any agreement with any person
concerning any transaction that would result, directly or indirectly, in the
transfer to such person (or to any third party), of ownership or control of, or
create or result in the creation of any right of or claim by such person (or any
third party), to the Company or any part of the Business or the Assets.
6.7 Accounts Receivable and Liabilities.
(a) Buyer shall cause all payments on accounts receivable and
other rights to payment relating to the Business ("Accounts Receivable") which
were payable to the Company prior to the Closing and delivered to Buyer after
the Closing to be endorsed and forwarded to Seller as soon as practicable after
receipt.
(b) Seller shall pay all claims, liabilities, losses,
expenses, fines, penalties and damages of any kind or nature whatsoever
(collectively, "Liabilities") which were incurred by the Company prior to the
Closing and presented to Buyer, Seller or the Company for payment before or
after the date hereof. Seller shall indemnify and hold Buyer harmless from and
against any and all damages, claims, losses, liabilities and expenses
(including, without limitation, reasonable legal fees, accounting and other
expenses) asserted against or incurred or sustained by Buyer or the Business
relating to Liabilities pursuant to the procedure set forth in Section 7.4
hereof.
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(c) There shall be no deduction on account of the Prepaid Fees
liability accounts found on Seller's books.
INDEMNIFICATION
6.8 Survival of Representations of Seller. The representations and
warranties set forth in Article 2 shall survive the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby for a period of one year following the Closing. No suit,
action or proceeding may be commenced by Buyer with respect to any claim arising
out of or relating to such representations and warranties more than one year
following the Closing.
6.9 Indemnification by Seller. Subject to Section 7.1, Seller shall
indemnify and hold harmless Buyer and its officers, directors, employees,
agents, representatives, consultants, attorneys, successors, transferors and
assigns (collectively, the "Buyer's Group") from and against any and all
damages, claims, losses, liabilities, fines, penalties and expenses (including,
without limitation, reasonable attorneys fees, accounting and other expenses to
investigate, defend or mitigate any of the foregoing) asserted against or
incurred or sustained by any or all of the Buyer's Group arising out of: (i) any
breach of any covenant or agreement of Seller contained in this Agreement; (ii)
any breach of any of the warranties or representations set forth in Article 2
hereof; (iii) the operations of the Company prior to the Closing, to the extent
such operations involve or result in violations of or noncompliance with any
self-regulatory organization's rules and regulations or any foreign, Federal,
state or local law, ordinance, regulation or rule relating to the conduct of the
Business; (iv) all taxes (including, without limitation, income, payroll, ad
valorem real and personal property, gross receipts, sales, use, franchise and
stamp taxes) imposed by any Federal, state or local government or other taxing
authority in the United States or any foreign government or subdivision or
taxing authority thereof, together with any interest or penalties thereon, which
arise from or relate to the operations of the Company prior to the Closing
(collectively, "Taxes"); (v) the termination by the Company or Buyer, before or
after the Execution Date, of any of the Company's employees; and (vi) all other
liabilities or obligations of the Company other than liabilities or obligations
incurred in connection with the operation of the Business after the Closing.
6.10 Survival of Representations of Buyer. The representations and
warranties set forth in Article 3 shall survive the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby for a period of one year following the Closing. No suit,
action or proceeding may be commenced by Seller with respect to any claim
arising out of or relating to such representations and warranties more than one
year following the Closing.
6.11 Indemnification Procedure.
(a) Upon obtaining knowledge thereof, a person who may be
entitled to indemnification hereunder (the "Indemnitee") shall promptly give the
Party who may be obligated to provide such indemnification (the "Indemnitor")
written notice of any Loss (as defined in Section 7.4(b)) which the Indemnitee
17
has determined has given or could give rise to a claim for indemnification
hereunder (a "Notice of Claim"). A Notice of Claim shall specify in reasonable
detail the nature and all known particulars related to a Loss. The Indemnitor
shall perform its obligations hereunder with respect to a Loss described in a
Notice of Claim within 30 days after the Indemnitor shall have received such
Notice of Claim; provided, however, that such obligations shall be suspended so
long as the Indemnitor is in good faith defending, contesting or otherwise
opposing pursuant to Section 7.4(c) a Loss which constitutes a claim, demand,
suit, action or proceeding described in Section 7.4(c).
(b) As used in this Section 7.4, the term "Loss" shall mean a
damage, liability, claim, loss, expense or cost described in Section 6.1(a),
6.1(b), 6.7(b), or 7.2 hereof, or a fee, commission, compensation or payment
described in Section 10.1, hereof, as the case may be.
(c) With respect to a Loss which constitutes a third-party
claim, demand, suit, action or proceeding and which is the subject of a Notice
of Claim, the Indemnitor shall, in good faith and at its own expense, defend,
contest or otherwise oppose such claim, demand, suit, action or proceeding with
legal counsel selected by it. The Indemnitee shall have the right, but not the
obligation, to participate, at its own expense, in the defense, contest or other
opposition thereof through legal counsel selected by it and shall have the
right, but not the obligation, to assert any and all cross-claims or
counterclaims which it may have. So long as the Indemnitor is, in good faith,
defending, contesting or otherwise opposing such claim, demand, suit, action or
proceeding, the Indemnitee shall (i) at all times cooperate, at its own expense,
in all reasonable ways with, make its relevant files and records available for
inspection and copying by, make its employees reasonably available to and
otherwise render reasonable assistance to the Indemnitor upon request; and (ii)
not compromise or settle such claim, demand, suit, action or proceeding without
the prior written consent of the Indemnitor. If the Indemnitor fails to so
defend, contest or otherwise oppose such claim, demand, suit, action or
proceeding, the Indemnitee shall have the right, but not the obligation, to
defend, contest or otherwise oppose, to assert cross-claims or counterclaims
with respect to and to compromise and settle such claim, demand, suit, action or
proceeding without affecting, impairing or limiting any indemnification to which
the Indemnitee is entitled hereunder. If the Indemnitee is entitled to
indemnification hereunder with respect to such claim, demand, suit, action or
proceeding, the Indemnitor shall also indemnify the Indemnitee for all of the
legal fees and expenses reasonably and actually incurred in connection with the
defense, contest or other opposition of such claim, demand, suit, action or
proceeding pursuant to the immediately preceding sentence.
(d) Whether or not a Notice of Claim has been given pursuant
to Section 7.4(a), Seller shall have the right, at its own expense, to
participate in the defense, contest or other opposition of all of actions,
claims, demands, suits or proceedings which involve events occurring or
conditions existing prior to the Closing with respect to the Business or the
Assets and which, in the sole opinion of Seller, might have an adverse impact on
Seller. Seller shall give prompt written notice to Buyer of its election to
exercise such right. Without the prior written consent of Seller, Buyer shall
not settle or compromise any action, demand, claim, suit or proceeding with
respect to which Seller shall have given such a notice. If Seller does not
consent to such a settlement or compromise, Seller will assume the defense,
contest or other opposition of such action, demand, claim, suit or proceeding
for its own account, whereupon Buyer shall be released from any liability with
respect to such action, claim, demand, suit or proceeding to the extent that
such liability exceeds the liability which Buyer would have had with respect to
such a settlement or compromise. Except as otherwise provided in the preceding
sentence, neither such right nor the exercise thereof shall be construed to
modify, expand or enlarge the obligations or liabilities of Seller hereunder in
any respect.
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(e) Notwithstanding anything to the contrary herein contained,
the Parties agree that neither Seller nor Buyer shall have any indemnity
obligation under this Article 7 until the Party claiming indemnification
hereunder has suffered aggregate Losses by reason of the other Party's breaches
of this Agreement in excess of $10,000, at which point Seller or Buyer (as the
case may be) will be obligated to indemnify the other Party from and against all
such Losses in excess of $10,000; and the Parties further agree that in no event
shall the aggregate liability of Seller or Buyer for indemnification claims made
pursuant to this Article 7 exceed $1,000,000.
6.12 Subrogation. Any Indemnitor hereunder shall be subrogated to the
rights of the Indemnitee with respect to any claims, suits or demands for which
the Indemnitor has indemnified the Indemnitee.
ARTICLE 7
PUBLICITY AND CONFIDENTIALITY
7.1 Publicity. The Parties agree that no publicity, release or
announcement concerning the execution and delivery of this Agreement, the
provisions hereof or the transactions contemplated hereby shall be issued by
either Party without the prior written approval of the form and content of such
publicity, release or announcement by the other; provided, however, that no such
approval shall be required when such publicity, release or announcement is
required by (i) any applicable law, ordinance, rule or regulation; (ii) any
applicable rules or regulations of a national or foreign stock exchange; or
(iii) any order, writ, judgment, stipulation, award, edict or decree of any
court of competent jurisdiction or any governmental or quasi-governmental or
regulatory agency, authority or instrumentality of competent jurisdiction and,
provided further, that, prior to issuing any publicity, release or announcement
without such prior written approval, the issuing Party shall have given
reasonable prior notice to the non-issuing Party of the content, timing, context
and other facts relevant to such intended issuance and, if requested by the
non-issuing Party, shall have used reasonable efforts at its own expense to
obtain a protective order or similar relief for the benefit of such other Party.
7.2 Confidentiality.
(a) All data, reports, records and other information of any
kind received by either Party ("Receiving Party") from the other Party or its
affiliates, shareholders, members, directors, officers, employees, agents,
representatives or consultants (the "Delivering Party") under this Agreement
shall be treated by the Receiving Party as confidential (collectively,
"Confidential Information"). A Receiving Party shall not use Confidential
Information for its own benefit and shall use all reasonable efforts to maintain
the confidentiality of Confidential Information (including, without limitation,
using all reasonable efforts to prevent disclosure of Confidential Information
to or by its shareholders, prospective investors, members, directors, officers,
affiliates, employees, agents, representatives and consultants and the use by
any of the foregoing of Confidential Information for their own benefit). If a
Receiving Party or, to the knowledge of a Receiving Party, any of its
shareholders, members, directors, officers, affiliates, employees, agents,
representatives or consultants is required to disclose Confidential Information
to any court, self-regulatory organization, governmental or quasi-governmental
agency, authority or instrumentality, such Receiving Party shall, prior to such
disclosure, immediately notify the other Party of such requirement and all
particulars related to such requirement; and the other Party shall have the
right, at its expense, to object to such disclosure and to seek confidential
treatment of any Confidential Information to be so disclosed on such terms as it
shall determine.
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(b) The restrictions set forth in Section 8.2(a) shall not
apply to the use or disclosure of Confidential Information: (i) pursuant to any
other agreement between the Parties; (ii) by a Party in connection with
exercising its rights or performing its duties or obligations under this
Agreement or the agreements, instruments and other documents contemplated
hereby; (iii) as contemplated by the last two sentences of Section 8.2(a); or
(iv) with respect to Confidential Information which (A) is or becomes generally
available to the public through no fault or neglect of a Receiving Party or any
of its shareholders, members, directors, officers, affiliates, employees,
agents, representatives or consultants, (B) is received in good faith on a
non-confidential basis from a third party who discloses such Confidential
Information to a Receiving Party without violating any obligations of secrecy or
confidentiality or (C) was already in the possession of a Receiving Party at the
time of receipt as demonstrated by the prior dated written records of such
Receiving Party.
7.3 Survival. This Article 8 shall survive the termination of this
Agreement for any reason and the consummation of the transactions contemplated
hereby.
ARTICLE 8
NOTICES
All notices, demands, requests or other communications
(collectively, "notices") required or permitted to be given pursuant to this
Agreement shall be given in writing, shall be transmitted by personal delivery;
by registered or certified mail, return receipt requested, postage prepaid; or
by telegram, telecopier or other electronic means and shall be addressed as
follows:
When Seller is to be notified:
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Neulogic Media LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
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When Buyer is to be notified:
Brightstar Information Technology Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇, Chairman
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Gusov Ofsink LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
A Party may designate a new address to which notices required or
permitted to be given pursuant to this Agreement shall thereafter be transmitted
by giving written notice to that effect to the other Parties. Each notice
transmitted in the manner described in this Article 9 shall be deemed to have
been given, received and become effective for all purposes at the time it shall
have been (i) delivered to the addressee as indicated by the return receipt (if
transmitted by mail), the affidavit of the messenger (if transmitted by personal
delivery) or the receipt of confirmation (if transmitted by telegram, telecopier
or other electronic means) or (ii) presented for delivery to the addressee as so
indicated during normal business hours, if such delivery shall have been refused
for any reason.
ARTICLE 9
BROKERAGE FEES; CERTAIN EXPENSES
9.1 Brokerage Fees. Each Party agrees to indemnify the other Parties for,
and shall hold such other Parties harmless from, any claim or liability for any
fee, commission, compensation or other payment by any broker, finder,
consultant, advisor or similar agent who claims to have been, or who was in
fact, engaged by or on behalf of such Party, pursuant to the procedure set forth
in Section 7.5 hereof.
9.2 Certain Expenses. Except as otherwise provided herein and regardless
of whether the transactions contemplated hereby are consummated, (i) each Party
will pay all expenses incurred by it in connection with the transactions
contemplated hereby and (ii) the Company shall pay all expenses incurred by it
(A) on or before the Closing in connection with the transactions contemplated
hereby (including, without limitation, the preparation of the Schedules attached
hereto and other documents related to the transactions contemplated hereby) and
(B) after the Closing, in connection with its post-Closing obligations
hereunder; provided, however, that Buyer will not be obligated to pay any legal
fees in connection with such contemplated transactions or post-Closing
obligations (all of which will be borne by Seller).
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ARTICLE 10
MISCELLANEOUS
10.1 Governing Law; Forum. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of New
York (without giving effect to the laws, rules or principles of the State of New
York regarding conflict of laws). Each Party agrees that any proceeding arising
out of or relating to this Agreement or the breach or threatened breach of this
Agreement may be commenced and prosecuted in any court in the State of New York.
Each Party consents and submits to the non-exclusive personal jurisdiction of
any such court with respect to any such proceeding. Each Party consents to
service of process upon him, her or it with respect to any such proceeding by
registered mail, return receipt requested and by any other means permitted by
applicable laws and rules. Each Party waives any objection that he, she or it
may now or hereafter have to the laying of venue of any such proceeding in any
such court and any claim that he, she or it may now or hereafter have that any
such proceeding in any such court has been brought in an inconvenient forum.
10.2 Binding Effect; Assignment; Third-Party Beneficiaries. This Agreement
shall be binding upon the Parties and their respective heirs, legal
representatives, estates, successors and assigns, as the case may be, and shall
inure to the benefit of the Parties and their respective heirs, legal
representatives, estates, successors and permitted assigns; provided, however,
that no Party may assign any of its rights or delegate any of its duties under
this Agreement, by operation of law or otherwise, without the prior written
consent of the other Party and any attempted assignment or delegation of this
Agreement by a Party without the prior written consent of the other Party shall
be null and void and of no force or effect.
10.3 Entire Agreement. This Agreement, together with the Exhibits and
Schedules attached hereto, constitutes the entire agreement and understanding
among the Parties with respect to the subject matter hereof and cancels and
supersedes all previous or contemporaneous contracts, representations,
warranties and understandings and agreements, whether oral or written, by or
between the Parties with respect to the subject matter hereof. Except for the
representations and warranties expressly set forth herein, Buyer disclaims
reliance upon (i) any representations, warranties or guarantees (whether express
or implied and whether oral or written) by Seller or any of its members,
directors, officers, employees, agents or representatives or (ii) any other
information with respect to the Business, the Company or its industry provided
by or on behalf of them. Notwithstanding the foregoing, each Party agrees that
the other Party shall have the right to rely upon the representations,
warranties, covenants and agreements of each Party contained in this Agreement.
Nothing contained in any document or instrument of conveyance, transfer,
assignment or delivery delivered pursuant hereto shall amend, extend, modify,
renew or alter in any manner any representation, warranty, covenant, agreement
or indemnity contained herein.
10.4 Amendments. No addition to, and no cancellation, renewal, extension,
modification or amendment of, this Agreement shall be binding upon a Party
unless such addition, cancellation, renewal, extension, modification or
amendment is set forth in a written instrument which states that it adds to,
amends, cancels, renews, extends or modifies this Agreement and which is
executed and delivered on behalf of such Party by an authorized signatory or
attorney-in-fact for such Party.
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10.5 Waivers. No waiver of any provision of this Agreement shall be
binding upon a Party unless such waiver is expressly set forth in a written
instrument which is executed and delivered on behalf of such Party by an officer
of (in the case of a corporation) or attorney-in-fact for such Party. Such
waiver shall be effective only to the extent specifically set forth in such
written instrument. Neither the exercise (from time to time and at any time) by
a Party of, nor the delay or failure (at any time or for any period of time) to
exercise, any right, power or remedy shall constitute a waiver of the right to
exercise, or impair, limit or restrict the exercise of, such right, power or
remedy or any other right, power or remedy at any time and from time to time
thereafter. No waiver of any right, power or remedy of a Party shall be deemed
to be a waiver of any other right, power or remedy of such Party or shall,
except to the extent so waived, impair, limit or restrict the exercise of such
right, power or remedy.
10.6 Headings; Counterparts. The headings set forth in this Agreement have
been inserted for convenience of reference only, shall not be considered a part
of this Agreement and shall not limit, modify or affect in any way the meaning
or interpretation of this Agreement. This Agreement may be signed in any number
of counterparts, each of which (when executed and delivered) shall constitute an
original instrument, but all of which together shall constitute one and the same
instrument. This Agreement shall become effective and be deemed to have been
executed and delivered by all of the Parties at such time as counterparts shall
have been executed and delivered by each of the Parties, regardless of whether
each of the Parties has executed the same counterpart. It shall not be necessary
when making proof of this Agreement to account for any counterparts other than a
sufficient number of counterparts which, when taken together, contain signatures
of all of the Parties.
10.7 Severability. If any provision of this Agreement shall hereafter be
held to be invalid, unenforceable or illegal in any jurisdiction under any
circumstances for any reason, (i) such provision shall be reformed to the
minimum extent necessary to cause such provision to be valid, enforceable and
legal and preserve the original intent of the Parties or (ii) if such provision
cannot be so reformed, such provision shall be severed from this Agreement. Such
holding shall not affect or impair the validity, enforceability or legality of
such provision in any other jurisdiction or under any other circumstances.
Neither such holding nor such reformation or severance shall affect or impair
the legality, validity or enforceability of any other provision of this
Agreement.
10.8 Certain References. As used herein, references to a "person" means an
individual or an entity, including, without limitation, a corporation, limited
liability company, partnership, joint venture, trust, joint-stock company,
association, unincorporated organization or group acting in concert. References
to the phrases "to the knowledge of Seller", "to Seller's knowledge" and similar
phrases shall in all cases herein mean "to the knowledge of Seller after
reasonable inquiry".
10.9 Exclusive Remedy. The sole and exclusive rights, powers and remedies
of the Parties, other than such injunctive or other equitable remedies as may be
available to a Party, for a breach or default under this Agreement (including,
without limitation, a breach of or default under any of the representations,
warranties, covenants or agreements contained in this Agreement) shall be
recovery under Sections 6.1 and 6.7 and indemnification under Sections 6.1 and
6.7 and Articles 7 and 10 hereof, in each case limited as set forth therein.
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IN WITNESS WHEREOF, the Parties have executed and delivered or
caused this Agreement to be executed and delivered by their duly authorized
representatives as of the date first above written.
BUYER:
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
By:
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Director
SELLER:
Neulogic Media, LLC
By:
------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
SCHEDULES
Schedule 2.9 Leased Real Property
Schedule 2.14 Intellectual Property
Schedule 2.15 Licenses and Other Authorizations
Schedule 2.16 Undisclosed Liabilities
Schedule 2.17 Material Contracts and Other Data
Schedule 2.20 Insurance
Schedule 2.21 Banks; Proxies
Schedule 2.27 Consents
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