Exhibit 10.15
ASSET
PURCHASE AGREEMENT
by
and among
STARVOX COMMUNICATIONS,
INC.
and
CAPITAL TELECOMMUNICATIONS,
INC.,
individually and collectively
as the “ Seller ”
and
MANHATTAN TELECOMMUNICATIONS
CORPORATION,
and
EACH OF THE SEVERAL PURCHASER
DESIGNEES
individually and collectively
as the “Purchasers”
Dated and
Effective
as of
November 21,
2007
ASSET PURCHASE
AGREEMENT
This ASSET PURCHASE AGREEMENT (this “ Agreement
”) is executed to be effective as of November 21, 2007
(“ Effective Date ”), by and among
(A)
each of STARVOX
COMMUNICATIONS, INC., a Delaware corporation (“
StarVox ”), and its wholly-owned subsidiary, CAPITAL
TELECOMMUNICATIONS, INC., a Pennsylvania corporation (“
CTI ”), each of StarVox and CTI individually and
collectively comprising, and referred to herein as, “
Seller ”; and
(B)
MANHATTAN
TELECOMMUNICATIONS CORPORATION, a Delaware corporation (“
MTC ”), and each of those certain wholly-owned MTC
subsidiaries identified on Schedule 1.5 as PURCHASER
DESIGNEES, MTC and each such Purchaser Designee individually and
collectively comprising, and referred to herein as, “
Purchaser ”.
Seller and
Purchaser may be referred to in this Agreement individually as a
“ Party ” and, collectively, as the “
Parties ”.
W I T N E S S E T H:
WHEREAS , Seller is a facilities-based
provider of wholesale and retail voice and data communications and
internet services and, in such connection, is engaged in reselling
communications access lines to those Business Customers (as
hereinafter defined) located within territory serviced by
Verizon Communications, including, without limitation, the States
of Delaware, Pennsylvania, Maryland, New Jersey and portions of
Connecticut (collectively, the “ Verizon Territory
”); and
WHEREAS , on the terms and subject to the
conditions set forth in this Agreement, Seller desires to sell, and
Purchaser desires to purchase, those certain assets that are
defined herein as the Subject Assets;
NOW, THEREFORE,
in consideration of the
foregoing and the mutual promises contained in this Agreement and
other good and adequate consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties, intending to be
legally bound, agree as follows:
ARTICLE 1
PURCHASE AND SALE OF
ASSETS
1.1.
Purchase and
Sale. In
accordance with the terms and subject to the conditions set forth
in this Agreement, and for the consideration herein stated, on the
Closing Date (as defined below), Seller agrees to sell, convey,
assign and transfer to Purchaser, and Purchaser agrees to purchase
and accept from Seller, all of Seller’s right, title and
interest in and to the following (collectively, the “
Subject Assets ”):
(a)
all of the telecommunications business access lines within the
Verizon Territory (“ Business Access Lines
”) being provided as of the Effective Date and up through the
applicable Closing Date by Seller on a resale (or other
non-primary-carrier) basis to those business customers as so
identified on the Verizon Billing and Customer Service Data to
Seller (as hereinafter defined) as of the Closing Date (together
with their subsidiaries, affiliates, successors, transferees,
assigns, agents or other related persons, collectively the “
Business Customers ”). The number of Business
Access Lines of Business Customers which Seller claims exist within
the Verizon Territory is approximately 17,560 (the “
Represented Number ”). On the Closing Date,
Seller shall provide Purchaser with the most current Verizon
billing and customer service data and invoices pertaining to the
Business Customers (the “ Verizon Billing and Customer
Service Data ”), and the actual number of Business Access
Lines shall be determined therefrom to be the number of
Business Access Lines as so reflected on the most current Verizon
Billing and Customer Service Data (the “ Actual Business
Line Number ”). The determination of whether a
particular
Business Access Line is a business line
shall be based on Verizon’s designation of such line in the
Verizon Billing and Customer Service Data.
(b)
Seller shall also convey to Purchaser, for no additional
consideration, any and all residential lines that are affiliated
with any Business Customer and all access lines for any additional
residential customer located within the Verizon Territory not
affiliated with a Business Customer (collectively “
Residential Lines ”), provided that no such
Residential Lines shall be counted towards the Actual Business Line
Number. All Residential Lines conveyed hereunder shall
be included in the definition of Subject Customers;
(c)
to the extent relating specifically to Subject Customers only,
(i) all lists, names, addresses, credit, billing and
collection data and other pertinent records and information
maintained by Seller as of the Closing Date (in such form and
medium as so maintained as of such date), (ii) all agreements,
purchase orders or other contractual instruments and documents,
together with all associated rights, obligations and interests as
would otherwise have accrued to Seller from and after the Closing
Date in accordance with the terms thereof, entered into by Seller
with Subject Customers on or prior to the Closing Date with respect
to the Access Lines (the “ Customer Agreements
”);
(d)
without limitation, all cash and cash equivalents, payments,
proceeds, receivables, accounts, collections, rebates, refunds,
reserves, withholdings, recoveries, claims or other entitlements or
amounts of every nature proceeds of every nature payable by or
attributable to Subject Customers to the extent first arising or
accruing and payable at any time, for any period or in respect of
any events or circumstances occurring, on or after the Closing Date
(as hereinafter defined) (collectively, the “ Post-Closing
Cashflow ”); and
(e)
to the extent that Seller is not otherwise entitled as of the
Closing Date per applicable Customer Agreement terms and conditions
to receipt, collection or application thereof, any and all
deposits, prepaid expenses and any other security maintained by
Seller as of the Closing Date pursuant to any Customer Agreement
(“ Subject Deposits ”).
1.2.
Excluded
Assets .
The Subject Assets do not include, and nothing in this Agreement or
any documentation, transaction or other matters contemplated hereby
or thereby shall in any way be deemed or construed as effecting any
transfer or conveyance to Purchaser of any items as described below
in this Section 1.2(a) (collectively, the “
Excluded Assets ”):
(a)
subject to section 5.1 hereof, all of Seller’s copyrights,
patents, inventions, trademarks, logos, trade secrets, know-how,
strategies, plans, budgets, marketing materials and all other forms
of confidential or proprietary information, materials or
intellectual property, whether or not relating to Subject
Customers;
(b)
except to the extent constituting Subject Deposits or Post-Closing
Cashflow, any and all cash, cash equivalents, payments, proceeds,
receivables, accounts, collections, rebates, refunds, reserves,
withholdings, recoveries, claims or other entitlements or amounts
of every nature attributable to or accruing, arising or payable in
respect of any of the Subject Customers, Customer Agreements,
Access Lines or otherwise; and
(c)
any and all rights, interests and entitlements provided in this
Agreement or any related documentation for the benefit of Seller,
including, without limitation, payments and receipts of Earnout
Consideration as described (and defined) below and other amounts as
contemplated hereby.
1.3.
Assumed
Liabilities .
Purchaser hereby agrees that it shall, at all times on and
from the Closing Date, duly pay, discharge and bear sole and full
legal obligation for, and shall save, indemnify and hold harmless
Seller and its subsidiaries, affiliates, successors, transferees,
assigns, agents or other related persons (a “ Related
Person ”) from and against all Assumed Liabilities of any
nature or type whenever and however arising after the Closing
Date. As used herein, “ Assumed Liabilities
” means and includes, in each case with the express exception
of
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any
Excluded Liabilities, (a) only those obligations and
liabilities under the Customer Agreements and otherwise in respect
of any of the Subject Assets solely arising at any time from and
after the Closing Date therefor or are otherwise related to the
ownership and operation of the Subject Assets arising after such
Closing Date and (b) only those carrier and other costs not
otherwise expressly allocated to Seller herein of migrating and
transitioning the Access Lines and Subject Customers to Purchaser
as provided under the Customer Agreements.
1.4.
Excluded
Liabilities .
Seller hereby agrees that it shall, at all times on and from
the Closing Date, duly pay, discharge and bear sole and full legal
obligation for, and shall save, indemnify and hold harmless
Purchaser and its Related Persons from and against all Excluded
Liabilities of any nature or type whenever and however arising
prior to the Closing Date. By its execution and delivery
hereof, Purchaser is not assuming, nor shall it or any of its
Related Persons incur or be subjected to any obligations or
liabilities in respect of, any Excluded Liabilities. As used
in this Agreement, “ Excluded Liabilities ”
means and includes (a) any and all obligations and liabilities
under the Customer Agreements or otherwise in respect of any of the
Subject Assets arising at any time prior to the Closing Date
therefor or are otherwise related to the ownership and operation of
the Subject Assets arising prior to such Closing Date; (b) all
obligations and liabilities of Seller and/or its Related Persons to
Verizon and other carriers, vendors and service providers for any
and all termination, recertification, transition or other
nonrecurring or special charges, assessments, fees, costs or
impositions to the extent arising or accruing in favor of such
carriers, vendors and service providers as a direct result of the
Closing hereunder pursuant to the terms and conditions of
Seller’s (or such Related Persons’) own agreements
existing with such persons; (c) all commission , agency fee,
and other obligations to agents and other third parties relating to
the ownership and operation of the Subject Assets, whether arising
prior to, or after the closing Date; and (d) all obligations
and liabilities relating directly and exclusively to any Excluded
Asset hereunder.
1.5.
Purchaser
Designees . The Parties expressly acknowledge
and agree that the Subject Assets are to be conveyed in accordance
with all applicable laws, rules, regulations, orders, decisions or
any other legal requirements whatsoever (collectively, “
Legal Requirements ”) of the United States Federal
Communications Commission (“ FCC ”) or any other
Legal Authority in or of the various jurisdictions comprising the
Territory having authority over any such Subject Assets or the
conveyance thereof. Accordingly, the Parties agree that MTC
shall be entitled to designate in writing, as the named Purchaser
under the relevant Bill of Sale (as hereinafter defined) covering
the particular Subject Assets to be conveyed thereto, one or more
of its wholly-owned subsidiaries identified on Schedule 1.5
hereto (each, a “ Designated Subsidiary ”) that,
as of the Closing Date, possesses all authorizations, approvals and
qualifications by or of Legal Authorities in or for any relevant
jurisdiction with the Territory as necessary to receive such
conveyance in compliance with all Legal Requirements thereof.
Simultaneously with its acceptance of and countersignature to any
such Bill of Sale, each Purchaser Designee shall assume and accede
to all rights, interests, obligations and liabilities applicable
to, and shall for all purposes be included in all references in
this Agreement to, Purchaser; provided , that no such
assumption or accession by one or more Purchaser Designees shall in
any way reduce, limit or impair the covenants, obligations and
liabilities of MTC as the specified Purchaser hereunder at all
times and for all purposes on and after the Effective Date, the
timely and proper payment and performance of which covenants,
obligations and liabilities shall at all such times and for all
such purposes be and remain the full and absolute legal
responsibility of MTC, as principal obligor with respect
thereto.
ARTICLE 2
EARNOUT PAYMENTS; SELLER
OPTION
2.1.
Purchase
Price . In consideration for the transfer and
conveyance of the Subject Assets, Purchaser agrees to pay to
Seller, subject to adjustments and pursuant to the terms and
conditions of this Agreement, the aggregate sum of
$2,634,000.00 (the “Purchase Price”) (calculated at the
rate of the Represented Number times $150), adjusted and
payable as follows:
(a)
On the Closing Date, there shall be paid to Seller, as against the
Purchase Price, the product of: (x) the Actual Business Line
Number, times (y) $150, times (z) 80% (the “
Initial Payment ”)
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(b)
On the Attrition Determination Date (as hereinafter defined), there
shall be paid as a final payment against the Purchase Price, the
Post Closing Settlement Payment, as defined and determined in
accordance with Section 10.4 hereof.
2.2.
Initial
Deposit : On the Effective Date of this Agreement,
Purchaser shall pay a $500,000 deposit against the Purchase Price,
in immediately available funds (the “Initial Deposit”),
by wire transfer or certified bank check, to be held in escrow by
Purchaser’s Counsel (“Escrow Agent”) pursuant to
the Escrow Agreement annexed hereto as Exhibit A (the
“Escrow Agreement). Escrow Agent shall provide
Purchaser with wire transfer instructions on or before the
Execution Date ;
2.3.
Pay-over Obligation and
Resolution . Except as otherwise expressly provided
herein, after the Closing, if Purchaser or Seller receives or
otherwise holds funds that the other party is so entitled to, such
party shall hold the funds in trust for the other party and shall
remit such amounts to the other party within ten (10) days of
receipt thereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser
represents and warrants to Seller as follows:
3.1.
Authorization and
Enforceability . Purchaser is duly organized and validly
existing under the laws of, in the case of (x) MTC, the State
of Delaware and (y) each Purchaser Designee, such jurisdiction
specified therefor on Schedule 1.5 hereto, and is legally
qualified to do business in such jurisdictions comprising the
Territory and as are otherwise necessary to conduct its business,
and has all requisite power and authority (corporate or otherwise)
to own, lease and operate its properties and to carry on its
business as now conducted and as to be conducted immediately after
giving effect to the Closing Date hereunder. Purchaser has taken
all action necessary to authorize the execution, delivery and
performance by it of this Agreement and all other agreements and
instruments reasonably necessary to complete the transactions
contemplated by this Agreement (the “ Purchaser
Documents ”) and has full power and authority to enter
into the Purchaser Documents and carry out the terms thereof on the
Effective Date and up to and through the Closing Date.
Purchaser has duly executed and delivered this Agreement and
will on the Closing Date so execute and deliver the applicable
Purchaser’s Documents. The Purchaser’s Documents
as delivered at the Closing Date will be valid and binding
obligations of Purchaser enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, moratorium or
similar laws and equitable principles affecting creditors’
rights generally.
3.2.
Compliance
. The execution, delivery
and performance of this Agreement and the Purchaser’s
Documents by Purchaser, the compliance by Purchaser with the
provisions of this Agreement and the Purchaser’s Documents
the consummation of the transactions contemplated by this Agreement
will not conflict with or result in the breach of any of the terms
or provisions of or constitute a default under:
(a)
the articles of organization or bylaws of Purchaser;
(b)
any note, indenture, mortgage or deed of trust or loan agreement to
which Purchaser is a party or by which Purchaser is bound;
or
(c)
any material Legal Requirement of any federal, state, local or
foreign court or regulatory authority or administrative or
arbitrative body, agency or tribunal, or any other governmental
body whatsoever (“ Legal Authority ”) applicable
to Purchaser.
3.3.
Consents; Regulatory
Approvals . Except as specifically identified on
Schedule 3.3 (each, an “ Outstanding Purchaser
Approval ”), Purchaser possesses as of the Effective Date
all consents, approvals and
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authorizations of third parties necessary to
the conduct of its business and operations as presently conducted
and otherwise as required in connection with its execution,
delivery and performance of this Agreement through the Closing Date
hereunder, including, without limitation, all certificates of
authority, permits, licenses, approvals and authorizations of and
from all Legal Authorities within the all jurisdictions comprising
the Territory as necessary for it to own, operate and accept and
receive conveyance of the Subject Assets and to provide
communications services as contemplated hereby to all Subject
Customers located therein in compliance with all applicable Legal
Requirements (collectively, the “ Purchaser-Required
Approvals ”), in each case excluding, for all purposes of
this Section 3.3, any items specifically constituting
Closing-Required Approvals subject to the provisions of (and as
defined in) Section 5.3 below.
3.4.
Brokers
. Purchaser has no
obligation to pay any fees or commissions to any broker, finder,
agent or other intermediary in connection with the negotiation or
consummation of the transactions contemplated hereby as a result of
any action or agreement of Purchaser (a “ Purchaser
Commissions ”). Purchaser shall be responsible for
payment of any such Purchaser Commission and shall defend, and hold
harmless Seller for any claims against Seller by such third parties
owed a Purchaser Commission.
3.5.
Legal
Proceedings .
There are no claims, actions, suits, inquiries, investigations or
proceedings before any Legal Authority pending or, to
Purchaser’s knowledge, threatened against Purchaser relating
to the transactions contemplated hereby or relating to the Subject
Assets.
3.6.
NO OTHER
REPRESENTATIONS . EXCEPT FOR THOSE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE 3 OR AS
MAY BE CONTAINED (AND EXPRESSLY DESIGNATED AS SUCH) IN ANY
OTHER PURCHASER’S DOCUMENT, PURCHASER HAS NOT MADE ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF
ANY
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