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ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

ASSET PURCHASE AGREEMENT | Document Parties: SUNCREST GLOBAL ENERGY CORP | BEACON ENTERPRISE SOLUTIONS GROUP, INC | RFK COMMUNICATIONS, LLC You are currently viewing:
This Asset Purchase Agreement involves

SUNCREST GLOBAL ENERGY CORP | BEACON ENTERPRISE SOLUTIONS GROUP, INC | RFK COMMUNICATIONS, LLC

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Title: ASSET PURCHASE AGREEMENT
Governing Law: Kentucky     Date: 12/28/2007
Law Firm: Frost Brown    

ASSET PURCHASE AGREEMENT, Parties: suncrest global energy corp , beacon enterprise solutions group  inc , rfk communications  llc
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EXHIBIT 10.11

ASSET PURCHASE AGREEMENT

dated October 15, 2007

by and among

BEACON ENTERPRISE SOLUTIONS GROUP, INC.,

RFK COMMUNICATIONS, LLC

and

all of the Members of RFK Communications, LLC

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TABLE OF CONTENTS

Page

Exhibits

Exhibit A - Secured Promissory Note

Exhibit B - Security Agreement

Exhibit C - Bill of Sale

Exhibit D - Instrument of Assumption

Exhibit E - Opinion of the Seller's counsel

Schedules

Schedule 1.6 - Allocation of Purchase Price

Schedule 2.2 - Capitalization/Ownership and Management

Schedule 2.6 - Commission Schedule

Schedule 2.10 - Security Interest of National City Bank

Schedule 2.14 - Agent and Subagent Agreements and Residuals

Schedule 2.23 - Commission Reports for Assigned Contracts

Schedule 2.25 - Transactions with Affiliates

 

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ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement is entered into as of October 15, 2007 by

and among BEACON ENTERPRISE SOLUTIONS GROUP, INC., an Indiana corporation (the

"Buyer"), RFK COMMUNICATIONS, LLC, a Kentucky limited liability company ("RFK"

or the "Seller") and the members of the Seller (collectively, the "Members").

This Agreement contemplates a transaction in which the Buyer will purchase

certain assets and assume certain of the liabilities of the Seller (the "Assumed

Liabilities" as defined in Article IX, below).

Capitalized terms used in this Agreement shall have the meanings ascribed

to them in Article IX.

In consideration of the representations, warranties and covenants herein

contained, the Parties agree as follows.

ARTICLE I

THE ASSET PURCHASE

1.1 Purchase and Sale of Assets.

(a) Upon and subject to the terms and conditions of this Agreement,

the Buyer shall purchase from the Seller, and the Seller shall sell, transfer,

convey, assign and deliver to the Buyer, at the Closing, for the consideration

specified below in this Article I, all right, title and interest in, to and

under the Acquired Assets.

(b) Notwithstanding the provisions of Section 1.1(a), the Acquired

Assets shall not include the Excluded Assets.

1.2 Assumption of Liabilities.

(a) Upon and subject to the terms and conditions of this Agreement,

the Buyer shall assume and become responsible for, from and after the Closing,

the Assumed Liabilities.

(b) Notwithstanding the terms of Section 1.2(a) or any other

provision of this Agreement to the contrary, the Buyer shall not assume or

become responsible for, and the Seller shall remain liable for, the Retained

Liabilities.

1.3 Purchase Price. The Purchase Price to be paid by the Buyer for the

Acquired Assets shall be (a) 300,000 shares (the "Shares") of Buyer Common

Stock; and (b) a Secured Promissory Note in the principal amount of $562,500.00,

with a maturity date of sixty (60) months from the date of Closing, and in the

form attached hereto as Exhibit A.

1.4 [RESERVED]

1.5 The Closing.

 

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(a) The Closing shall take place at the offices of Frost Brown Todd

LLC in Louisville, Kentucky commencing at 9:00 a.m. local time on the Closing

Date, or at such other place as the parties may mutually agree. All transactions

at the Closing shall be deemed to take place simultaneously, and no transaction

shall be deemed to have been completed and no documents or certificates shall be

deemed to have been delivered until all other transactions are completed and all

other documents and certificates are delivered.

(b) At the Closing:

(i) the Seller shall deliver to the Buyer the various

certificates, instruments and documents referred to in Section 5.1;

(ii) the Buyer shall deliver to the Seller the various

certificates, instruments and documents referred to in Section 5.2;

(iii) the Buyer shall execute and deliver to the Seller the

Secured Promissory Note in substantially the form attached hereto as Exhibit A;

(iv) the Buyer and the Seller shall execute and deliver to

each other the Security Agreement in substantially the form attached hereto as

Exhibit B;

(v) the Seller shall execute and deliver to the Buyer a bill

of sale in substantially the form attached hereto as Exhibit C and such other

instruments of conveyance as the Buyer may reasonably request in order to effect

the sale, transfer, conveyance and assignment to the Buyer of valid ownership of

the Acquired Assets;

(vi) the Buyer shall execute and deliver to the Seller an

instrument of assumption in substantially the form attached hereto as Exhibit D

and such other instruments as the Seller may reasonably request in order to

effect the assumption by the Buyer of the Assumed Liabilities;

(vii) the Buyer shall deliver to the Seller a stock

certificate registered in the name of the Seller representing a number of shares

of Buyer Common Stock as is equal to the number of Shares; and

(viii) the Buyer and the Seller shall execute and deliver to

each other a cross-receipt evidencing the transactions referred to above.

1.6 Allocation. The Buyer and the Seller agree to allocate the Purchase

Price (and all other capitalizable costs) among the Acquired Assets and the

non-solicitation and non-competition covenants set forth in Sections 6.2 and 6.3

for all purposes (including financial accounting and tax purposes) in accordance

with the allocation schedule attached hereto as Schedule 1.6. The Buyer and the

Seller agree to use the allocations determined pursuant to this Section 1.6 for

all tax purposes, including without limitation, those matters subject to Section

1060 of the Code, and the Treasury regulations promulgated thereunder. The Buyer

and the Seller shall prepare and submit to the other for review their IRS Forms

8594 within ninety (90) days after Closing. Each party shall have thirty (30)

days to complete its review.

 

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1.7 Further Assurances. At any time and from time to time after the

Closing, at the request of the Buyer and without further consideration, the

Seller shall execute and deliver such other instruments of sale, transfer,

conveyance and assignment and take such actions as the Buyer may reasonably

request to more effectively transfer, convey and assign to the Buyer, and to

confirm the Buyer's rights to, title in and ownership of, the Acquired Assets

and to place the Buyer in actual possession and operating control thereof.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller represents and warrants to the Buyer that, except as set forth

in the Disclosure Schedule, the statements contained in this Article II are true

and correct as of the date of this Agreement and will be true and correct as of

the Closing as though made as of the Closing, except to the extent such

representations and warranties are specifically made as of a particular date (in

which case such representations and warranties will be true and correct as of

such date). The Disclosure Schedule shall be arranged in sections and

subsections corresponding to the numbered and lettered sections and subsections

contained in this Article II. Disclosures in any section or subsection of the

Disclosure Schedule shall qualify such other sections or subsections of the

Disclosure Schedule to the extent it is reasonably apparent from the content of

such disclosure that such disclosure is relevant to such other sections or

subsections.

2.1 Organization, Qualification and Corporate Power. The Seller is a

limited liability company validly existing and in good standing under the laws

of the Commonwealth of Kentucky. The Seller is duly qualified to conduct

business and is in good standing under the laws of the Commonwealth of Kentucky,

which jurisdiction constitutes the only jurisdiction in which the nature of the

Seller's business or the ownership or leasing of Seller's properties requires

such qualification. The Seller has all requisite power and authority to carry on

the business in which it is engaged and to own and use the properties owned and

used by it. The Seller has furnished to the Buyer complete and accurate copies

of its Articles of Organization, as amended, and its Operating Agreement. The

Seller is not in default under or in violation of any provision of its Articles

of Organization, as amended, or its Operating Agreement. There are no other

agreements or instruments setting forth (i) rights, preferences and privileges

of the Members with respect to the Seller and/or among the Members, or (ii)

matters relating to the operation and governance of the Seller.

2.2 Capitalization. Section 2.2 of the Disclosure Schedule sets forth a

complete and accurate list, as of the date of this Agreement, of (i) all

Members, indicating the number of shares or membership interests or units, as

applicable, of the Seller held by each Member and (ii) all outstanding options,

warrants or other instruments giving any party the right to acquire any shares,

membership interests or units or equity securities of the Seller. There are no

outstanding agreements or commitments to which the Seller is a party or which

are binding upon the Seller for the redemption of any of its equity. The Seller

has only one class of shares outstanding. There are no outstanding options,

warrants or similar rights relating to the Seller or their respective equity

securities.

 

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2.3 Authorization of Transaction. The Seller has all requisite power and

authority to execute and deliver this Agreement and the Ancillary Agreements and

to perform its obligations hereunder and thereunder. The performance by the

Seller of this Agreement and the Ancillary Agreements and the consummation by

the Seller of the transactions contemplated hereby and thereby have been duly

and validly authorized by all necessary actions on the part of the Seller.

This Agreement has been duly and validly executed and delivered by the

Seller and constitutes, and each of the Ancillary Agreements, upon its execution

and delivery by the Seller, will constitute, a valid and binding obligation of

the Seller, enforceable against The Seller in accordance with its terms, except

as enforceability may be limited by bankruptcy, insolvency, reorganization,

moratorium, arrangement or other similar laws from time to time in effect and

except as to the remedy of specific performance which may not be available under

the laws of various jurisdictions.

2.4 Noncontravention. Except for obtaining the written consent of

Lightyear, TNCI and Paytek, neither the execution and delivery by the Seller of

this Agreement or the Ancillary Agreements, nor the consummation by the Seller

of the transactions contemplated hereby or thereby, will (a) conflict with or

violate any provision of the Articles of Organization or Operating Agreement of

the Seller, (b) require on the part of the Seller any notice to or filing with,

or any permit, authorization, consent or approval of, any Governmental Entity,

(c) conflict with, result in a breach of, constitute (with or without due notice

or lapse of time or both) a default under, result in the acceleration of

obligations under, create in any party the right to terminate, modify or cancel,

or require any notice, consent or waiver under, any contract or instrument to

which the Seller is a party or by which the Seller is bound or to which any of

its assets is subject, (d) result in the imposition of any Security Interest

upon any asset or assets of the Seller or (e) violate any order, writ,

injunction, decree, statute, rule or regulation applicable to the Seller or any

of its properties or assets.

2.5 Subsidiaries. The Seller has no Subsidiaries. The Seller does not

directly or indirectly control or have any direct or indirect equity

participation or similar interest in any corporation, partnership, limited

liability company, joint venture, trust or other business association or entity.

2.6 Financial Statements. The Seller has provided to the Buyer the

Financial Statements. The Financial Statements (i) were prepared on a consistent

basis throughout the periods covered thereby in accordance with reasonable

accounting practices, and (ii) fairly and accurately present the cash flows from

the Agent Contracts for the periods indicated, consistent with the books and

records of the Seller.

2.7 Absence of Certain Changes. Since the Most Recent Balance Sheet Date,

(a) there has occurred no event or development which, individually or in the

aggregate, has had, or could reasonably be expected to have in the future, a

Seller Material Adverse Effect, and (b) the Seller has not taken any of the

actions set forth in paragraphs (a) through (n) of Section 4.4.

2.8 Undisclosed Liabilities. The Seller has no knowledge of any liability

(whether known or unknown to the Buyer, whether absolute or contingent, whether

liquidated or unliquidated and whether due or to become due), except for (a)

liabilities shown on the Most

 

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Recent Balance Sheet, (b) contractual and other liabilities incurred in the

Ordinary Course of Business which are not required by GAAP to be reflected on a

balance sheet and which are not material, and (c) liabilities which have arisen

since the Most Recent Balance Sheet Date in the Ordinary Course of Business.

2.9 Tax Matters.

(a) The Seller has: (i) properly filed all material Tax Returns that

it is and was required to file, and all such Tax Returns were true, correct and

complete in all material respects; (ii) has properly paid on a timely basis all

material Taxes, whether or not shown on its Tax Returns, that were due and

payable; has withheld or collected all material Taxes that the Seller is or was

required by law to withhold or collect and, to the extent required, have been

properly paid on a timely basis to the appropriate Governmental Entity; and (iv)

has complied with all information reporting and back-up withholding requirements

in all material respects, including maintenance of the required records with

respect thereto, in connection with amounts paid to any employee, independent

contractor, creditor or other third party.

(b) The unpaid Taxes of the Seller for periods through the date of

the Most Recent Balance Sheet Date do not materially exceed the accruals and

reserves for Taxes (excluding accruals and reserves for deferred Taxes

established to reflect timing differences between book and Tax income) set forth

on the Most Recent Balance Sheet. All Taxes attributable to the period from and

after the Most Recent Balance Sheet Date and continuing through the Closing Date

are, or will be, attributable to the conduct by the Seller of its operations in

the Ordinary Course of Business.

(c) No examination or audit of any Tax Return of the Seller by any

Governmental Entity is currently in progress or, to the knowledge of the Seller,

threatened or contemplated. Kentucky and its local subdivisions are the only

jurisdictions (other than United States federal) in which the Seller files, or

is required to file or has been required to file a material Tax Return or is or

has been liable for material Taxes on a "nexus" basis. The Seller has not been

informed by any jurisdiction that the jurisdiction believes that the Seller was

required to file any Tax Return that was not filed.

(d) RFK is, and has been since its inception, validly classified and

treated as a "partnership" for federal income tax purposes and has been validly

treated in a similar manner for purposes of the income Tax laws of all states in

which it has been subject to taxation.

(e) The Seller has delivered or made available to the Buyer (i)

complete and correct copies of all Tax Returns relating to Taxes for all Taxable

periods ending December 31, 2006, 2005 and 2004 and (ii) complete and correct

copies of all private letter rulings, revenue agent reports, information

document requests, notices of assessment, notices of proposed deficiencies,

deficiency notices, protests, petitions, closing agreements, settlement

agreements, pending ruling requests and any similar documents submitted by,

received by or agreed to by or on behalf of the Seller relating to Taxes for all

Taxable periods for which the applicable statute of limitations has not yet

expired.

 

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(f) The Seller has not (i) waived any statute of limitations with

respect to Taxes or agreed to extend the period for assessment or collection of

any Taxes, (ii) requested any extension of time within which to file any Tax

Return, which Tax Return has not yet been filed, or (iii) executed or filed any

power of attorney relating to Taxes with any Governmental Entity.

(g) The Seller is not a party to any litigation regarding Taxes.

(h) (i) There are no Security Interests with respect to Taxes upon

any of the Acquired Assets, other than with respect to Taxes not yet due and

payable; and (ii) to the Seller's and Members' knowledge, there is no basis for

the assertion of any claim relating or attributable to Taxes, which, if

adversely determined, would result in any Security Interest on the Acquired

Assets, or would reasonably be expected to have, individually or in the

aggregate, a Seller Material Adverse Effect.

(i) None of the Acquired Assets (i) is property that is required to

be treated as being owned by any other person pursuant to the provisions of

former Section 168(f)(8) of the Internal Revenue Code of 1954, or (ii) is "tax

exempt use property" within the meaning of Section 168(h) of the Code.

(j) The Seller has maintained complete and accurate records,

including all applicable exemption, resale or other certificates, of (i) all

sales to purchasers claiming to be exempt from sale and use Taxes based on the

exempt status of the purchaser, and (ii) all other sales for which sales Tax or

use Tax was not collected by the Seller and as to which the Seller is required

to receive and retain resale certificates or other certificates relating to the

exempt nature of the sale or use or non-applicability of the sale and use Taxes.

(k) The Seller is not bound by any Tax indemnity, Tax sharing or Tax

allocation agreement. The Seller is not a "foreign person" within the meaning of

Section 1445 of the Code.

2.10 Ownership and Condition of Assets.

(a) Except for the Security Interest of National City Bank

identified in the Disclosure Schedules, the Seller is the true and lawful owner,

and has good title to, all of the Acquired Assets, free and clear of all

Security Interests. Upon execution and delivery by the Seller to the Buyer of

the instruments of conveyance referred to in Section 1.5(b)(iii), the Buyer will

become the true and lawful owner of, and will receive good title to, the

Acquired Assets, free and clear of all Security Interests, except for Security

Interests created by the Buyer.

(b) The Acquired Assets are sufficient for the conduct of the

Seller's business as presently conducted.

2.11 Owned Real Property. The Seller does not own, and has never owned,

any real property.

2.12 Real Property Leases. The Seller is not a party to any Leases, has no

obligations under any Leases, and Seller is not a party to any dispute, oral

agreement or forbearance program with respect to any Lease.

 

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2.13 Intellectual Property. Except for the confidential business

information of the Seller, which has been disclosed to the Buyer, there is no

Seller Intellectual Property.

2.14 Contracts.

(a) Section 2.14 of the Disclosure Schedule lists the following

agreements (written or oral) to which the Seller is a party as of the date of

this Agreement (other than this Agreement and the Ancillary Agreements):

(i) any agreement (or group of related agreements) for the

lease of personal property from or to third parties providing for lease payments

in excess of $5,000 per annum or having a remaining term longer than three

months;

(ii) any agreement (or group of related agreements) for the

purchase or sale of products or for the furnishing or receipt of services (A)

which calls for performance over a period of more than one year, (B) which

involves more than the sum of $5,000, or (C) in which the Seller has granted

manufacturing rights, "most favored nation" pricing provisions or marketing or

distribution rights relating to any products or territory or has agreed to

purchase a minimum quantity of goods or services or has agreed to purchase goods

or services exclusively from a certain party;

(iii) any agreement concerning the establishment or operation

of a partnership, joint venture or limited liability company;

(iv) any agreement (or group of related agreements) under

which it has created, incurred, assumed or guaranteed (or may create, incur,

assume or guarantee) indebtedness (including capitalized lease obligations)

involving more than $5,000 or under which it has imposed (or may impose) a

Security Interest on any of its assets, tangible or intangible;

(v) any agreement for the disposition of any significant

portion of the assets or business of the Seller (other than sales of products in

the Ordinary Course of Business) or any agreement for the acquisition of the

assets or business of any other entity (other than purchases of inventory or

components in the Ordinary Course of Business);

(vi) any agreement concerning exclusivity or confidentiality;

(vii) any employment or consulting agreement;

(viii) any agreement involving any current or former officer,

manager or Member or an Affiliate thereof;

(ix) any agreement under which the consequences of a default

or termination would reasonably be expected to have a Seller Material Adverse

Effect;

(x) any agreement which contains any provisions requiring the

Seller to indemnify any other party (excluding indemnities contained in

agreements for the purchase, sale or license of products entered into in the

Ordinary Course of Business);

 

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(xi) any agreement that could reasonably be expected to have

the effect of prohibiting or impairing the conduct of the business of the Seller

or of the Buyer or any of its subsidiaries as currently conducted and as

currently proposed to be conducted;

(xii) any agreement under which the Seller is restricted from

selling, licensing or otherwise distributing any of its technology or products,

or providing services to, customers or potential customers or any class of

customers, in any geographic area, during any period of time or any segment of

the market or line of business;

(xiii) any agreement which would entitle any third party to

receive a license or any other right to intellectual property of the Buyer or

any of the Buyer's Affiliates following the Closing; and

(xiv) any other agreement (or group of related agreements)

either involving more than $10,000 or not entered into in the Ordinary Course of

Business.

(b) The Seller has delivered to the Buyer a complete and accurate

copy of each agreement listed in Section 2.14 of the Disclosure Schedule. With

respect to each Assigned Contract so listed and except as disclosed in Section

2.14 of the Disclosure Schedules: (i) the agreement is legal, valid, binding and

enforceable and in full force and effect; (ii) for those agreements to which the

Seller is a party, the agreement is assignable by the Seller to the Buyer

without the consent or approval of any party and will continue to be legal,

valid, binding and enforceable and in full force and effect immediately

following the Closing in accordance with the terms thereof as in effect

immediately prior to the Closing; and (iii) neither the Seller nor, to the

knowledge of the Seller, any other party, is in breach or violation of, or

default under, any such agreement, and no event has occurred, is pending or, to

the knowledge of the Seller, is threatened, which, after the giving of notice,

with lapse of time, or otherwise, would constitute a breach or default by the

Seller or, to the knowledge of the Seller, any other party under such agreement.

2.15 Accounts Receivable. Seller does not have any accounts receivable.

2.16 Insurance. Seller is not a party to any insurance policy (including

fire, theft, casualty, comprehensive general liability, workers compensation,

business interruption, environmental, product liability, errors and omissions,

professional liability, and automobile insurance policies and bond and surety

arrangements).

2.17 Litigation. There is no Legal Proceeding which is pending or has been

threatened in writing against the Seller. There are no judgments, orders or

decrees outstanding against the Seller.

2.18 Warranties. No service or product delivered, made, sold, leased or

licensed by the Seller is subject to any guaranty, warranty, right of return,

right of credit or other indemnity.

2.19 Employees.

(a) The Seller has no employees and has not had any employees.

 

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(b) The Seller is not a party to or bound by any collective

bargaining agreement, nor has it experienced any strikes, grievances, claims of

unfair labor practices or other collective bargaining disputes. The Seller has

no knowledge of any organizational effort made or threatened, either currently

or within the past two years, by or on behalf of any labor union with respect to

employees of the Seller.

2.20 Employee Benefits.

(a) There are no Seller Plans. Neither the Seller nor any ERISA

Affiliate has ever maintained an Employee Benefit Plan subject to Section 412 of

the Code or Title IV of ERISA. At no time has the Seller or any ERISA Affiliate

been obligated to contribute to any "multiemployer plan" (as defined in Section

4001(a)(3) of ERISA).

(b) Seller is not a party to any: (i) agreement with any Member,

manager, executive officer or other key employee of the Seller (A) the benefits

of which are contingent, or the terms of which are altered, upon the occurrence

of a transaction involving the Seller of the nature of any of the transactions

contemplated by this Agreement, (B) providing any term of employment or

compensation guarantee or (C) providing severance benefits or other benefits

after the termination of employment of such manager, executive officer or key

employee; (ii) agreement, plan or arrangement under which any person may receive

payments from the Seller that may be subject to the tax imposed by Section 4999

of the Code or included in the determination of such person's "parachute

payment" under Section 280G of the Code; and (iii) agreement or plan binding the

Seller, including any stock option plan, stock appreciation right plan,

restricted stock plan, stock purchase plan, severance benefit plan or Seller

Plan, any of the benefits of which will be increased, or the vesting of the

benefits of which will be accelerated, by the occurrence of any of the

transactions contemplated by this Agreement or the value of any of the benefits

of which will be calculated on the basis of any of the transactions contemplated

by this Agreement..

2.21 Environmental Matters.

(a) To its knowledge, the Seller has complied with all applicable

Environmental Laws except where failure to do so would not have a Seller

Material Adverse Effect. There is no pending or, to the knowledge of the Seller,

threatened civil or criminal litigation, written notice of violation, formal

administrative proceeding, or investigation, inquiry or information request by

any Governmental Entity, relating to any Environmental Law involving the Seller.

(b) To its knowledge, the Seller does not have any liabilities or

obligations arising from the release of any Materials of Environmental Concern

into the environment.

(c) The Seller is not a party to or bound by any court order,

administrative order, consent order or other agreement with any Governmental

Entity entered into in connection with any legal obligation or liability arising

under any Environmental Law.

(d) The Seller does not have possession of, or access to, or

knowledge of, any documents (whether in hard copy or electronic form) that

contain any environmental reports, investigations and audits relating to

premises currently or previously owned or operated by the

 

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Seller (whether conducted by or on behalf of the Seller or a third party, and

whether done at the initiative of the Seller or directed by a Governmental

Entity or other third party).

(e) The Seller is not aware of any material environmental liability

of any solid or hazardous waste transporter or treatment, storage or disposal

facility that has been used by the Seller.

2.22 Legal Compliance. The Seller is currently conducting, and has at all

times conducted, its business in material compliance with each applicable law

(including rules and regulations thereunder) of any federal, state, local or

foreign government, or any Governmental Entity, and the Seller has had valid

Permits to conduct such business with respect to each jurisdiction (and at such

times) for which it has been required to have such Permits except where the lack

of any such Permit would not have a Seller Material Adverse Effect. The Seller

has not received any notice or communication from any Governmental Entity

alleging noncompliance with any applicable law, rule or regulation.

2.23 Customers and Suppliers. Section 2.23 of the Disclosure Schedule sets

forth a commission report for each of the Assigned Contracts. No carrier that is

a party to any of the Assigned Contracts has provided written or verbal notice

to the Seller within the past year that it will stop, or materially reduce its

activity below historic levels in connection with the Assigned Contract to which

the carrier is a party.

2.24 Permits. There are no Permits issued to or held by the Seller. Such

listed Permits are the only Permits that are required for the Seller to conduct

its business as presently conducted or as proposed to be conducted. Each such

Permit is in full force and effect; the Seller is in material compliance with

the terms of each such Permit; and, to the knowledge of the Seller, no

suspension or cancellation of such Permit is threatened.

2.25 Certain Business Relationships With Affiliates. No Affiliate of the

Seller (a) owns any property or right, tangible or intangible, which is used in

the business of the Seller, (b) has any claim or cause of action against The

Seller, or (c) owes any money to, or is owed any money by, the Seller. Section

2.25 of the Disclosure Schedule describes any transactions or relationships

between the Seller and any Affiliate thereof which occurred or have existed

since the beginning of the time period covered by the Financial Statements.

2.26 Brokers' Fees. The Seller do not have any liability or obligation to

pay any fees or commissions to any broker, finder or agent with respect to the

transactions contemplated by this Agreement.

2.27 [RESERVED]

2.28 Disclosure. No representation or warranty by the Seller contained in

this Agreement, and no statement contained in the Disclosure Schedule or any

other document, certificate or other instrument delivered or to be delivered by

or on behalf of the Seller pursuant to this Agreement, contains or will contain

any untrue statement of a material fact or omits or will omit to state any

material fact necessary, in light of the circumstances under which it was or

will be made, in order to make the statements herein or therein not misleading.

 

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2.29 [RESERVED].

2.30 Government Contracts.

(a) The Seller has not been suspended or debarred from bidding on

contracts or subcontracts with any Governmental Entity; and to Seller's

knowledge no such suspension or debarment has been threatened or initiated; and

the consummation of the transactions contemplated by this Agreement will not

result in any such suspension or debarment of the Seller or the Buyer (assuming

that no such suspension or debarment will result solely from the identity of the

Buyer). The Seller has not been nor is now being audited or investigated by the

United States Government Accounting Office, the United States Department of

Defense or any of its agencies, the Defense Contract Audit Agency, the

contracting or auditing function of any Governmental Entity with which it is

contracting, the United States Department of Justice, the Inspector General of

the United States, or any prime contractor with a Governmental Entity; nor, to

the knowledge of the Seller, has any such audit or investigation been

threatened. To the knowledge of the Seller, there is no valid basis for (i) the

suspension or debarment of the Seller from bidding on contracts or subcontracts

with any Governmental Entity or (ii) any claim (including any claim for return

of funds to the Government) pursuant to an audit or investigation by any of the

entities named in the foregoing sentence. The Seller has no agreements,

contracts or commitments which require the Seller to obtain or maintain a

security clearance with any Governmental Entity.

(b) To the knowledge of the Seller, no basis exists for any of the

following with respect to any of its contracts or subcontracts with any

Governmental Entity: (i) a Termination for Default (as provided in 48 C.F.R.

Ch.1 ss.52.249-8, 52.249-9 or similar sections), (ii) a Termination for

Convenience (as provided in 48 C.F.R. Ch.1 ss.52.241-1, 52.249-2 or similar

sections), or a Stop Work Order (as provided in 48 C.F.R. Ch.1 ss.52.212-13 or

similar sections); and the Seller has no reason to believe that funding may not

be provided under any contract or subcontract with any Governmental Entity in

the upcoming federal fiscal year.

2.31 Securities Representations.

(a) The Seller is an "accredited investor" as defined in Rule 501(a)

under the Securities Act. The Seller has not been organized, reorganized or

recapitalized specifically for the purpose of acquiring the Shares.

(b) The Seller is acquiring the Shares for its own account for

investment only, and not with a view to, or for sale in connection with, any

distribution of the Shares in violation of the Securities Act, or any rule or

regulation under the Securities Act.

(c) The Seller has had adequate opportunity to obtain from

representatives of the Buyer such information about the Buyer as is necessary

for the undersigned to evaluate the merits and risks of its acquisition of the

Shares.

(d) The Seller has sufficient expertise in business and financial

matters to be able to evaluate the risks involved in the acquisition of the

Shares and to make an informed investment decision with respect to such

acquisition.

 

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<PAGE>

(e) The Seller understands that the Shares have not been registered

under the Securities Act and are "restricted securities" within the meaning of

Rule 144 under the Securities Act; and the Shares cannot be sold, transferred or

otherwise disposed of unless they are subsequently registered under the

Securities Act or an exemption from registration is then available.

(f) A legend substantially in the following form will be placed on

the certificate(s) representing the Shares:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED OR

OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT

UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION TO THE

EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED."

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Seller that the statements

contained in this Article III are true and correct as of the date of this

Agreement and will be true and correct as of the Closing as though made as of

the Closing.

3.1 Organization and Corporate Power. The Buyer is a corporation duly

organized, validly existing and in good standing under the laws of the State of

Indiana. The Buyer has all requisite corporate power and authority to carry on

the business in which it is engaged and to own and use the properties owned and

used by it.

3.2 Authorization of the Transaction. The Buyer has all requisite power

and authority to execute and deliver this Agreement, the Secured Promissory Note

and the Ancillary Agreements and to perform its obligations hereunder and

thereunder. The execution and delivery by the Buyer of this Agreement, the

Secured Promissory Note and the Ancillary Agreements and the performance by the

Buyer of this Agreement and the Ancillary Agreements and the consummation by the

Buyer of the transactions contemplated hereby and thereby have been duly and

validly authorized by all necessary action on the part of the Buyer. This

Agreement has been duly and validly executed and delivered by the Buyer and

constitutes, and each of the Secured Promissory Note and the Ancillary

Agreements, upon its execution and delivery by the Buyer will constitute, a

valid and binding obligation of the Buyer, enforceable against it in accordance

with its terms, except as enforceability may be limited by bankruptcy,

insolvency, reorganization, moratorium, arrangement or other similar laws from

time to time in effect.

3.3 Noncontravention. Neither the execution and delivery by the Buyer of

this Agreement, the Secured Promissory Note or the Ancillary Agreements, nor the

consummation by the Buyer of the transactions contemplated hereby or thereby,

will (a) conflict with or violate any provision of the Articles of Incorporation

or by-laws of the Buyer, (b) require on the part of the

 

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<PAGE>

Buyer any notice to or filing with, or permit, authorization, consent or

approval of, any Governmental Entity, (c) conflict with, result in breach of,

constitute (with or without due notice or lapse of time or both) a default

under, result in the acceleration of obligations under, create in any party any

right to terminate, modify or cancel, or require any notice, consent or waiver

under, any contract or instrument to which the Buyer is a party or by which it

is bound or to which any of its assets is subject, or (d) violate any order,

writ, injunction, decree, statute, rule or regulation applicable to the Buyer or

any of its properties or assets.

3.4 Capitalization. The authorized capital stock of the Buyer consists of

20,000,000 shares of Buyer Common Stock, of which 3,937,500 shares were issued

and outstanding, and options, warrants or other rights (the "Equity Rights") to

acquire 865,000 shares of Buyer Common Stock were outstanding, in each case, as

of October __, 2007. As of October __, 2007, there are no outstanding options,

warrants or similar rights relating to the Buyer or its equity other than the

Convertible Promissory Notes of the Buyer dated July 16, 2007 convertible into

an aggregate of up to 833,333 shares of Buyer Common Stock and the Equity

Rights. The rights and privileges of each class of the Buyer's capital stock are

set forth in the Buyer's Articles of Incorporation, a copy of which has been

made available to the Seller. All of the issued and outstanding shares of Buyer

Common Stock have been duly authorized and validly issued and are fully paid and

nonassessable. The Shares will be, when issued on the terms and conditions of

this Agreement, duly authorized, validly issued, fully paid and nonassessable

and not subject to or issued in violation of any purchase option, call option,

right of first refusal, preemptive right, subscription right or any similar

right under any provision of the Buyer's Articles of Incorporation or Bylaws or

any agreement to which the Buyer is a party or is otherwise bound.

3.5 No Prior Activities. As of the date of this Agreement, the Buyer has

not engaged in any business operations.

3.6 Litigation. As of the date of this Agreement, there is no Legal

Proceeding which is pending or, to the Buyer's knowledge, threatened against the

Buyer or any subsidiary of the Buyer which, if determined adversely to the Buyer

or such subsidiary, could have, individually or in the aggregate, a material

adverse effect on the business, assets, liabilities, capitalization, prospects,

condition (financial or other), or results of operations of the Seller.

3.7 Ownership and Management. (a) Schedule 3.7(a) attached hereto

accurately sets forth the directors and officers of the Buyer as of the date of

this Agreement.

(b) Schedule 3.7(b) attached hereto accurately sets forth the

ownership and ownership percentages of the Buyer as of the date of this

Agreement and a pro forma of the ownership and ownership percentages of the

Buyer immediately after Closing after giving effect to the other transactions

that the Buyer Currently contemplates; provided that, except to the extent set

forth otherwise herein, the Buyer makes no representation or warranty that all

or any such transactions will be consummated on the terms and assumptions

underlying such pro forma, or at all..

 

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<PAGE>

(c) Except as set forth on Schedule 3.7(c) attached hereto, Buyer

has not acquired, contracted to acquire or negotiated to acquire any other

business, either through a purchase of assets or a purchase of equity ownership.

ARTICLE IV

PRE-CLOSING COVENANTS

4.1 Closing Efforts. Each of the Parties shall use its Reasonable Best

Efforts to take all actions and to do all things necessary, proper or advisable

to consummate the transactions contemplated by this Agreement, including using

its Reasonable Best Efforts to cause (i) its representations and warranties to

remain true and correct in all material respects through the Closing Date and

(ii) the conditions to the obligations of the other Party to consummate the

transactions contemplated by this Agreement to be satisfied.

4.2 Governmental and Third-Party Notices and Consents.

(a) Each Party shall use its Reasonable Best Efforts to obtain, at

its expense, all waivers, permits, consents, approvals or other authorizations

from Governmental Entities, and to effect all registrations, filings and notices

with or to Governmental Entities, as may be required for such Party to

consummate the transactions contemplated by this Agreement and to otherwise

comply with all applicable laws and regulations in connection with the

consummation of the transactions contemplated by this Agreement.

(b) The Seller shall use their Reasonable Best Efforts to obtain, at

the Buyer's, all such waivers, consents or approvals from third parties, and to

give all such notices to third parties, as listed or are required to be listed

in the Disclosure Schedule. The Buyer shall reasonably cooperate with the Seller

in the Seller's efforts to obtain such waivers, consents and approvals.

(c) If (i) any of the Assigned Contracts or other assets or rights

constituting Acquired Assets may not be assigned and transferred by the Seller

to the Buyer (as a result of either the provisions thereof or applicable law)

without the consent or approval of a third party, (ii) the Seller, after using

their Reasonable Best Efforts, are unable to obtain such consent or approval

prior to the Closing and (iii) the Closing occurs nevertheless, then (A) such

Assigned Contracts and/or other assets or rights shall not be assigned and

transferred by the Seller to the Buyer at the Closing and, the Buyer shall not

assume the Seller's future liabilities or future obligations with respect

thereto at the Closing until such approval or consent is obtained and assignment

occurs, at which time Buyer will assume all such liabilities and obligations

following the date of such approval or consent, (B) the Seller shall continue to

use its Reasonable Best Efforts for a reasonable period of time after the

Closing, and in any case not less than nine (9) months, to obtain the necessary

consent or approval as soon as practicable after the Closing, (C) upon the

obtaining of such consent or approval, the Buyer and the Seller shall execute

such further instruments of conveyance (in substantially the form executed at

the Closing) as may be necessary to assign and transfer such Assigned Contracts

and/or other assets or rights (and the associated liabilities and obligations of

the Seller) to the Buyer, and (D) from and after the Closing until the

assignment or termination (at the end of any fixed term thereof or by the Buyer

 

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<PAGE>

after nine (9) months from the date hereof) of each such Assigned Contract

pursuant to clause (C) above, the Buyer shall perform and fulfill, on a

subcontractor basis, the obligations of the Seller or the applicable Subsidiary

to be performed under such Assigned Contract, and the Seller or such Subsidiary

shall promptly remit to the Buyer all payments received by it under such

Assigned Contract for services performed during such period, net of associated

cost of sales and expenses. If the assignment of an Assigned Contract is

approved by the carrier after, rather than before or concurrent with, the

Closing, as between Seller and Buyer the date of Closing shall be the effective

date of the sale and purchase of the rights under the Assigned Contract and

Buyer's assumption of obligations under the Assigned Contract, it being the

intent that all residuals collected after the Closing Date under the Assigned

Contracts shall belong to Buyer.

4.3 Exclusivity.

(a) Neither the Seller nor the Members shall, directly or

indirectly, (i) initiate, solicit, encourage or otherwise facilitate any

inquiry, proposal, offer or discussion with any party (other than the Buyer)

concerning any merger, reorganization, consolidation, recapitalization, business

combination, liquidation, dissolution, share exchange, sale of shares, sale of

material assets or similar business transaction involving the Seller, (ii)

furnish any non-public information concerning the business, properties or assets

of the Seller to any party (other than the Buyer), (iii) engage in discussions

or negotiations with any party (other than the Buyer) concerning any such

transaction, (iv) vote any shares of the Seller in favor of any such transaction

with any party (other than the Buyer), or (v) enter into any agreement with any

party (other than the Buyer) concerning any such transaction.

(b) The Seller and each Member shall immediately notify any party

with which discussions or negotiations of the nature described in paragraph (a)

above were pending that the Seller or the Member, as applicable, is terminating

such discussions or negotiations. If the Seller or a Member receives any

inquiry, proposal or offer of the nature described in paragraph (a) above, the

Seller or Member, as applicable, shall, within one business day after such

receipt, notify the Buyer of such inquiry, proposal or offer, including the

identity of the other party and the terms of such inquiry, proposal or offer.

4.4 Operation of Business. Except as contemplated by this Agreement,

during the period from the date of this Agreement to the Closing, the Seller

shall conduct its operations in the Ordinary Course of Business and in material

compliance with all applicable laws and regulations and, to the extent

consistent therewith, use its Reasonable Best Efforts to preserve intact its

current business organization, keep its physical assets in good working

condition, keep available the services of its current officers and employees and

preserve its relationships with customers, suppliers and others having business

dealings with it to the end that its goodwill and ongoing business shall not be

impaired in any material respect. Without limiting the generality of the

foregoing, prior to the Closing, the Seller shall not, without the written

consent of the Buyer:

(a) issue or sell any shares or other securities of the Seller or

any options, warrants or other rights to acquire any such shares or other

securities (except pursuant to the conversion or exercise of options, warrants

or other convertible securities outstanding on the date hereof);

 

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<PAGE>

(b) declare, set aside or pay any dividend or other distribution

(whether in cash, stock or property or any combination thereof) in respect of

its shares;

(c) create, incur or assume any indebtedness (including obligations

in respect of capital leases); assume, guarantee, endorse or otherwise become

liable or responsible (whether directly, contingently or otherwise) for the

obligations of any other person or entity; or make any loans, advances or

capital contributions to, or investments in, any other person or entity;

(d) enter into, adopt or amend any Employee Benefit Plan or any

employment or severance agreement or arrangement of the type described in

Section 2.20 or (except for normal increases in the Ordinary Course of Business

for employees who are not Affiliates) increase in any manner the compensation or

fringe benefits of, or materially modify the employment terms of, its managers,

officers or employees, generally or individually, or pay any bonus or other

benefit to its managers, officers or employees or hire any new officers or

(except in the Ordinary Course of Business) any new employees;

(e) acquire, sell, lease, license or dispose of any assets or

property, other than purchases and sales of assets in the Ordinary Course of

Business;

(f) mortgage or pledge any of its property or assets or subject any

such property or assets to any Security Interest;

(g) discharge or satisfy any Security Interest or pay any obligation

or liability other than in the Ordinary Course of Business without prior written

notice to Buyer;

(h) amend its Articles of Organization, Operating Agreement or other

organizational documents in a manner that could have an adverse effect on the

transactions contemplated by this Agreement;

(i) change its accounting methods, principles or practices, except

insofar as may be required by law or regulatory accounting requirements or make

any new elections, or changes to any current elections, with respect to Taxes

that affect the Acquired Assets;

(j) enter into, amend, terminate, take or omit to take any action

that would constitute a violation of or default under, or waive any rights

under, any contract or agreement of a nature listed or required to be listed in

Section 2.14 of the Disclosure Schedule;

(k) make or commit to make any capital expenditure in excess of

$5,000 per item or $10,000 in the aggregate;

(l) institute any Legal Proceeding;

(m) take any action or fail to take any action permitted by this

Agreement with the knowledge that such action or failure to take action would

result in (i) any of the representations and warranties of the Seller set forth

in this Agreement not being true and correct at the Closing or (ii) any of the

conditions to the Closing set forth in Article V not being satisfied; or

 

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<PAGE>

(n) agree in writing or otherwise to take any of the foregoing

actions.

4.5 Access to Information.

(a) The Seller shall permit representatives of the Buyer to have

full access (at all reasonable times, and in a manner so as not to interfere

with the normal business operations of the Seller) to all premises, properties,

financial, tax and accounting records (including the work papers of the Seller's

independent accountants), contracts, other records and documents, and personnel,

of or pertaining to the Seller, and contacts at Seller's principal suppliers and

customers, for the purpose of performing such inspections and tests as the Buyer

deems necessary or appropriate.

(b) If the Closing has not occurred by September 30, 2007, within 15

days after the end of each month ending prior to the Closing, beginning with

September 30, 2007, the Seller shall furnish to the Buyer an unaudited income

statement for such month and a balance sheet as of the end of such month,

prepared on a basis consistent with the Financial Statements. Such financial

statements shall present fairly the financial condition and results of

operations of the Seller as of the dates thereof and for the periods covered

thereby, and shall be consistent with the books and records of the Seller.

4.6 Notice of Breaches.

(a) From the date of this Agreement until the Closing, the Seller

shall promptly deliver to the Buyer supplemental information concerning material

events or circumstances occurring subsequent to the date hereof which would

render any representation, warranty or statement in this Agreement or the

Disclosure Schedule inaccurate or incomplete at any time after the date of this

Agreement until the Closing. No such supplemental information shall be deemed to

avoid or cure any misrepresentation or breach of warranty or constitute an

amendment of any representation, warranty or statement in this Agreement or the

Disclosure Schedule.

(b) From the date of this Agreement until the Closing, the Buyer

shall promptly deliver to the Seller supplemental information concerning

material events or circumstances occurring subsequent to the date hereof which

would render any representation or warranty in this Agreement inaccurate or

incomplete at any time after the date of this Agreement until the Closing. No

such supplemental i


 
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