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Exhibit 10.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (“ Agreement ”) is
made as of May 18, 2007 (the “ Effective Date
”), by and among Eagle Broadband, Inc., a Texas corporation
(“ Seller ”), and Optical Entertainment Network,
Inc., a Delaware corporation (“ Buyer ”).
BACKGROUND
WHEREAS, Seller owns the equipment and other personal property,
together with all components, parts, additions, accessions,
attachments, substitutions therefore and replacements thereof, that
are currently incorporated into the fiber-optic network installed
and operating at the Greenspoint Technology Center in Houston,
Texas, and the Harris County and Fort Bend, County Texas
subdivisions of Stone Gate, Canyon Gate at the Brazos, Lakes on
Eldridge, Northpointe and Rock Creek, and any homes passed by such
fiber-optic network as of the Effective Date (collectively referred
to herein as the “ BDS Network ”).
WHEREAS, subject to the terms and conditions set forth herein,
Buyer desires to acquire from Seller, and Seller desires to sell to
Buyer, the BDS Network in the manner and on the terms described
herein.
NOW,
THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth in this Agreement,
and intending to be legally bound, the parties agree as
follows:
1.
PURCHASE AND SALE OF THE BDS NETWORK.
1.1
Acquired Assets . On the terms contained in this
Agreement, Seller shall sell, transfer and deliver to Buyer, by
appropriate instruments satisfactory to Buyer and its counsel, all
right, title and interest of Seller and its Affiliates in and to
the BDS Network, including without limitation, all lists, records
and other information pertaining to drawings, blueprints, work
orders, product data, equipment, equipment maintenance,
utilization, and all books, ledgers, files and business records
pertaining to the BDS Network, whether evidenced in writing,
electronically (including, without limitation, by computer) or
otherwise.
1.2
Limited Assumed Liabilities . At the Closing (defined
below), Buyer will assume and agree to pay, defend, discharge and
perform only the liabilities and obligations of Seller for payment
and performance pertaining directly to the BDS Network (the “
Assumed Liabilities ”).
1.3
Excluded Liabilities . Except for the Assumed
Liabilities described in Section 1.2 above, Buyer shall not assume
or become liable for, and shall not be deemed to have assumed or
have become liable for, any other debts, liabilities or obligations
of Seller of any nature whatsoever, whether accrued, absolute or
contingent, whether known or unknown, whether disclosed or
undisclosed, whether due or to become due and regardless of when or
by whom asserted (collectively, “ Excluded Liabilities
”).
2.
PURCHASE PRICE AND CLOSING
2.1
Purchase Price . Subject to the conditions contained
in this Agreement, in consideration for the transfer of the BDS
Network, Buyer shall (i) pay to Seller two hundred thousand dollars
($200,000) (the “ Cash Payment ”) and
(ii) execute and deliver to Seller a promissory note,
substantially in the form attached hereto as Exhibit 2.1 ,
in the original principal amount of one million seven hundred
thousand dollars ($1,700,000) (the “ Note ”).
The Cash Payment and the Note are collectively referred to
herein as the “ Purchase Price ”.
2.2
Payment Upon Subsequent Sale of Buyer or the BDS Network .
In addition to the Purchase Price, in the event (i) Buyer (or
Seller upon foreclosure) subsequently sells the BDS Network or (ii)
Buyer is acquired by a third party (except for a
“Reverse” merger into a “Shell”
Corporation), Buyer shall pay Seller eight hundred thousand dollars
($800,000) by wire transfer of immediately available funds to a
bank account designated in writing by Seller.
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2.3
Closing . The closing of the purchase and sale of the
BDS Network (the “ Closing ”) will take place on
June 15, 2007 (the “ Closing Date ”), at the
offices of [Buyer or Seller] . At the Closing, Buyer
shall deliver to Seller (i) the Cash Payment by wire transfer of
immediately available funds to a bank account designated in writing
by Seller and (ii) the Note executed by Buyer. Following the
Closing, Seller will provide Buyer any assistance reasonably
requested by Buyer in transitioning the operation of the BDS
Network to Buyer.
2.4
Definitions. For purposes of this Agreement, the
following terms have the meanings set forth below:
“ Affiliate ” means when used with respect to
any Person, (a) if such Person is a corporation, any officer or
director thereof and any Person which is, directly or indirectly,
the beneficial owner (by itself or as part of any group) of more
than twenty percent (20%) of any class of any equity security (as
defined in Section 3(a)(ii) of the Securities Exchange Act of 1934,
as amended) thereof, and, if such beneficial owner is a
partnership, any general or limited partner thereof, or if such
beneficial owner is a corporation, any Person controlling,
controlled by or under common control with such beneficial owner,
or any officer or director of such beneficial owner or of any
corporation occupying any such control relationship, (b) if such
Person is a partnership, any general or limited partner thereof and
(c) any other Person which, directly or indirectly, controls or is
controlled by or is under common control with such Person.
For purposes of this definition, (i) “control”
(including the correlative terms “controlling,”
“controlled by” and “under common control
with”), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or
otherwise; and (ii) all officers, directors, and stockholders of
such party shall be considered an Affiliate of such party.
“ Government Entity ” means any public body or
authority, including courts of competent jurisdiction, domestic or
foreign.
“ Lien ” means any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien, charge,
restriction, adverse claim by a third party, title defect or
encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof, any
assignment or other conveyance of any right to receive income and
any assignment of receivables with recourse against assignor), any
filing of any financing statement as debtor under the Uniform
Commercial Code or comparable law of any jurisdiction and any
agreement to give or make any of the foregoing, other than liens
for Taxes not yet due and payable and liens arising in the ordinary
course of business and not incurred in connection with the
borrowing of money.
“ Person ” means an individual, partnership,
corporation, limited liability company, association, trust,
unincorporated organization, or a government or agency or political
subdivision thereof.
3.
REPRESENTATIONS AND WARRANTIES CONCERNING SELLER.
As an
inducement to Buyer to enter into this Agreement and to consummate
these transactions, Seller represents and warrants to Buyer as follows:
3.1
Organization of Seller . Seller is a corporation,
formed and duly organized under the laws of the State of Texas, has
the requisite power and authority to own and operate the BDS
Network, to enter into this Agreement and to perform the terms of
this Agreement.
3.2
Authority of Seller .
Seller
has full power and authority to enter into this Agreement, to
consummate the transactions contemplated hereby and to comply with
the terms, conditions and provisions hereof. This Agreement
and each other agreement or instrument of Seller contemplated by it
will be, the legal, valid and binding agreement of Seller,
enforceable against Seller in accordance with its terms, except
where such enforceability is limited by any applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or
similar laws or equitable principles affecting the enforcement of
creditor’s rights. The execution, delivery and
performance of this Agreement and the other agreements of Seller
contemplated by it do not require any further authorization, the
consent of or notice to any third party. Neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated herein will conflict with or result
in any violation
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of or constitute a default under any term of any agreement,
mortgage, debt instrument, indenture, or other instrument,
judgment, decree, order, award, law or regulation by which Seller
is bound, or result in the creation of any Lien upon the BDS
Network .
3.3
Title to Property . Except as set forth on Schedule
3.3 , Seller, either directly or through its Affiliates, has
good title to the BDS Network, free and clear of all Liens, claims,
security interests or encumbrances of any kind. Seller has no
obligation or liability (whether known or unknown, accrued,
absolute, contingent, unliquidated or otherwise, whether due or to
become due and regardless of when asserted) relating to the BDS
Network.
3.4
Broker or Finder . Neither Seller, nor any party
acting on Seller’s behalf, has paid or become obligated to
pay any fee or commission to any broker, finder or intermediary for
or on account of the transactions contemplated herein.
3.5
Options, Warrants and Rights of First Refusal . No
Person has any option, warrant or right of first refusal to
purchase the BDS Network.
3.6
Litigation . With respect to the BDS Network, (i)
there are no orders, investigations or claims pending or, to the
best knowledge of Seller, threatened against Seller, or pending or
threatened by either Seller against any third party, at law or in
equity, or before or by any Government Entity (including any
actions, suits, proceedings or investigations with respect to the
transactions contemplated by this Agreement), (ii) neither Seller
nor the BDS Network are subject to any arbitration proceedings
under collective bargaining agreements or otherwise or any
governmental investigations or inquiries, and (iii) to the best
knowledge of Seller, there is no basis for any of the
foregoing.
3.7
Compliance with Laws; Permits . Seller has complied
with all applicable laws relating to the operation of the BDS
Network. No notices have been received by and no claims have
been filed against Seller alleging a violation of any such laws.
Seller holds all permits, licenses, certificates,
accreditations and other authorizations of all Government Entities
required for the conduct of its business and the ownership of the
BDS Network. No notices have been received by Seller alleging
the failure to hold any permit, license, certificate, accreditation
or other authorization of any Government Entity. Seller is in
substantial compliance with all terms and conditions of all
material permits, licenses, accreditations and authorizations which
it holds.
4.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an
inducement to Seller to enter into this Agreement and to consummate
these transactions, Buyer represents, warrants and covenants to
Seller as follows:
4.1
Organization of Buyer . Buyer is a corporation, formed
and duly organized under the laws of the State of Delaware, has the
requisite power and authority to enter into this Agreement and to
perform the terms of this Agreement.
4.2
Authority of Buyer . Buyer has full power and
authority to enter into this Agreement, to consummate the
transactions contemplated hereby and to comply with the terms,
conditions and provisions hereof. This Agreement is, and each
other agreement or instrument of Buyer contemplated by it will be,
the legal, valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms, except where such
enforceability is limited by any applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or
similar laws or equitable principles affecting the enforcement of
creditor’s rights. Neither the execution and delivery
of this Agreement nor the consummation of the transactions
contemplated by it will conflict with or result in any violation of
or constitute a default under any term of the certificate of
incorporation or bylaws of Buyer, or any agreement, mortgage, debt
instrument, indenture, franchise, license, permit, authorization,
lease or other instrument, judgment, decree, order, award, law or
regulation by which Buyer is bound.
4.3
Broker or Finder .
Neither Buyer nor any party acting on
its behalf has paid or become obligated to pay any fee or
commission to any broker, finder or intermediary for or on account
of these transactions.
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4.4
Litigation . There is no action, suit or proceeding
pending or, to the knowledge of Buyer threatened to which Buyer is
party that questions the legality or propriety of the transaction
contemplated by this Agreement. Buyer is not subject to any
order, judgment or decree, or any other restriction, that is likely
to prevent or hinder the transaction contemplated by this
Agreement.
5.
INDEMNIFICATION
5.1
Survival of Representations, Warranties, Etc. The
representations and warranties of Seller and Buyer contained in
this Agreement shall survive the Closing and remain in full force
and effect until one year after the Closing Date (the “
Expiration Date ”). All representations and
warranties contained in this Agreement and all claims with respect
thereto shall terminate on the Expiration Date; provided that if
notice of any claim for indemnification pursuant to Section 5.2(ii)
or 5.3(ii) shall have been given prior to the Expiration Date and
such notice describes with reasonable specificity or description
the circumstances with respect to which such indemnification claim
relates, such indemnification claim shall survive until such time
as such claim is finally resolved.
5.2
Seller Indemnification . Seller agrees to indemnify
Buyer and its officers, directors, employees, agents,
representatives, Affiliates, successors and assigns (collectively,
the “ Buyer Parties ”), and hold it and them
harmless against any loss, liability, deficiency, damage or expense
(including legal expenses and costs and including interest and
penalties) (a “ Loss ”) that any of the Buyer
Parties may suffer, sustain or become subject to, as a result of
(i) any breach of any covenant or agreement of Seller herein;
(ii) the inaccuracy or breach of any representation or warranty
made by Seller in this Agreement; (iii) any claims of any
brokers or finders claiming by, through or under Seller,
(iv) the assertion against any of the Buyer Parties of any
liability or claim relating to any Excluded Liability, or (v) the
operation of the BDS Network prior to April 1, 2006.
5.3
Buyer Indemnification . Buyer agrees to indemnify
Seller and its officers, directors, employees, agents,
representatives, Affiliates, successors and assigns (collectively,
the “ Seller Parties ”) and hold the Seller
Parties harmless against any Loss that any of the Seller Parties
may suffer, sustain or become subject to, as the result of
(i) any breach of any covenant or agreement of Buyer herein;
(ii) the inaccuracy or breach of any representation or warranty
made by Buyer in this Agreement; (iii) any claims of any
brokers or finders claiming by, through or under Buyer,
(iv) the assertion against any of the Seller Parties of any
liability or claim relating to any Assumed Liability, or (v) the
operation of the BDS Network on and after April 1, 2006.
5.4
Defense of Claims . If a party hereto seeks
indemnification under this Section 5, such party (the “
Indemnified Party ”) shall give written notice
(“ Notice of Loss ”) to the other party (the
“ Indemnifying Party ”) of the facts and
circumstances giving rise to the claim. In that regard, if
any suit, action, claim, liability or obligation (a “
Proceeding ”) shall be brought or asserted by any
third party which, if adversely determined, would entitle the
Indemnified Party to indemnity pursuant to this Section 5, the
Indemnified Party shall within 30 days notify the Indemnifying
Party of the same in writing, specifying in detail the basis of
such claim and the facts pertaining thereto; provided, that the
failure to so notify an Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the
extent such failure shall have harmed the Indemnifying Party.
The Indemnifying Party, if it so elects, shall assume and
control the defense of such Proceeding (and shall consult with the
Indemnified Party with respect thereto), including the employment
of counsel reasonably satisfactory to the Indemnified Party and the
payment of expenses; provided, however, that in the event any
Proceeding shall be brought or asserted by any third party which,
if adversely determined, would not entitle the Indemnified Party to
full indemnity pursuant to Section 5, the Indemnified Party may
elect to participate in a joint defense of such Proceeding (a
“ Joint Defense Proceeding ”) for which the
expenses of such joint defense will be shared equally by such
parties and the employment of counsel shall be reasonably
satisfactory to both parties. If the Indemnifying Party
elects to assume and control the defense of a Proceeding, it will
provide notice thereof within 30 days after the Indemnified Party
has given notice of the matter and if such Proceeding is not a
Joint Defense Proceeding, the Indemnified Party shall have the
right to employ counsel separate from counsel employed by the
Indemnifying Party in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel employed
by the Indemnifie
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