UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of
1934
Report for Event: May 16, 1996
INDENET, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-18034 68-0158367
(State of other (Commission (IRS Employer
jurisdiction of File No. Identification
incorporation) No.)
1640 N. Gower Street, Los Angeles, CA 90028
(Address of principal executive offices) Zip Code)
Registrant's telephone number, including area code:
(213) 466-6388
Not applicable
(Former name and address)
This Report Consists of __ Pages
Item 1. Changes in Control of Registrant.
Not applicable.
Item 2. Acquisition or Disposition of Assets.
On May 16, 1996 IndeNet, Inc. ("the Company") completed the
acquisition of Cable Computerized Management Systems ("CCMS") for
a purchase price of $4,800,000. The acquisition was effected
through the merger of CCMS into a newly-formed wholly-owned
subsidiary of the Company. The purchase price was paid at the
closing by the Company paying $1,036,522 in cash and by the
Company issuing 587,612 unregistered shares of the Company's
common stock to the CCMS shareholders. The number of shares
issued to the CCMS shareholders was based on the trading price of
the Company's common stock, approximately $6.40 per share. The
amount of the purchase price was based on a multiple of CCMS's
earnings before interest, taxes, depreciation and amortization.
The cash portion of the purchase price was paid from the
Company's existing working capital reserves.
CCMS is a designer and distributor of "traffic and billing"
software that is used by the cable television industry to manage
the airing and invoicing of TV commercials. The principal assets
acquired by the Company consisted of CCMS's software, cash and
accounts receivable. Although the Company intends to continue
CCMS's operations, the Company may integrate CCMS with the
Company's other complimentary businesses in the future.
Item 3. Bankruptcy or Receivership
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
Not applicable
Item 5. Other Events.
Not applicable
Item 6. Resignations of Registrant's Directors.
Not applicable
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
Audited financial statements of CCMS are not readily
available and none of the conditions in Item 310(c)(2) of
Regulation SB exceeds 20%. In addition, unaudited financial
statements as contemplated in Item 310(c)(3)(ii) are not
available. The following other financial information was
prepared by CCMS:
Two Months Twelve Months
Ended Ended
February 29, December 31,
1996 1995
Revenue $ 472,699 $1,805,153
Cost of Sales 25,662 301,167
Gross Profit 447,037 1,503,986
Operating Expenses:
S, G and A 141,579 885,318
Depreciation and
Amortization 3,761 44,940
Operating income 301,698 573,728
Other income (expense) 2,779 20,551
Net income - pre-tax $ 304,477 $ 594,279
Balance Sheet Balance Sheet
February 29, December 31,
1996 1995
Current assets:
Cash and cash
equivalents $ 429,785 $ 121,156
Total current assets 429,785 121,156
Property and equipment,
net 54,301 56,041
Goodwill 3,000 3,000
TOTAL ASSETS $ 487,086 $ 180,197
Current liabilities:
Accounts payable
and accrued
expenses 3,573 -
Note payable 5,557 6,718
Total current liabilities 9,130 6,718
Total liabilities 9,130 6,718
Stockholders' equity 477,956 173,479
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 487,086 $ 180,197
Note: The above summary financial information is unaudited, was
prepared on a cash basis, and includes pro forma adjustment
related to CCMS's profit sharing plan.
In addition, pro forma financial information will be filed not
later than 60 days after the filing date.
(b) Exhibits
99. Agreement and Plan of Merger, dated May 8, 1996.
Item 8. Change in Fiscal Year.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
INDENET, INC.
Date: May 31, 1996 /s/ Richard J. Parent
Richard J. Parent
Its: Chief Financial Officer
and Secretary
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of May 8, 1996,
between Cable Computerized Management Systems, Inc. and IndeNet
Subsidiary, Inc., and is joined in by IndeNet, Inc., and by S.
Michael Ross, Judith K. Thome and John W. Sorensen.
IndeNet, Inc. ("IndeNet") is a Delaware corporation
with its principal executive offices located at 1640 North Gower
Street, Los Angeles, California 90028.
Cable Computerized Management Systems, Inc. ("CCMS" or
the "Company") is a Michigan corporation with its principal place
of business located at 1853 R.W. Berends Drive, S.W., Grand
Rapids, Michigan 49509. CCMS has three shareholders, S. Michael
Ross, Judith K. Thome and John W. Sorensen (each a "Shareholder"
and collectively the "Shareholders").
IndeNet Subsidiary, Inc. ("IndeNet Sub") is a newly
incorporated Michigan corporation and a wholly-owned subsidiary
of IndeNet.
IndeNet and CCMS desire that CCMS become affiliated
with IndeNet. The affiliation would be effected through the
merger of CCMS with and into IndeNet Sub, the wholly-owned
subsidiary of IndeNet. The merger would be effected in
accordance with this Agreement and in accordance with the
Michigan Business Corporation Act. The transactions contemplated
by and described in this Agreement are referred to as the
"Merger".
IndeNet, IndeNet Sub, CCMS and the Shareholders have
executed this Agreement and Plan of Merger ("Agreement")
intending to be legally bound hereby.
ARTICLE I
THE MERGER TRANSACTION
1.1 Execution of Certificate of Merger. Subject to the
conditions of this Agreement, IndeNet Sub and CCMS shall cause a
Certificate of Merger in substantially the form of Exhibit A
attached hereto (the "Certificate of Merger") to be executed and
filed in accordance with the Michigan Business Corporation Act.
Execution shall occur at a time and place reason- ably designated
by IndeNet Sub. It is the intention of the parties that the
execution and filing of the Certificate of Merger will occur on
or before May 31, 1996.
1.2 Date of Merger. The effective date and time of the
Merger shall be the time and date the Certificate of Merger is
filed with the State of Michigan, or such other time and date as
may be set forth in the Certificate of Merger ("Merger Date").
As of the Merger Date, CCMS shall be merged with and into IndeNet
Sub, which shall be the surviving corporation pursuant to this
Agreement. IndeNet Sub, in its capacity as the surviving
corporation, is sometimes herein called the "Surviving
Corporation".
1.3 Effect of the Merger. On the Merger Date, the separate
existence of CCMS shall cease, and the Surviving Corporation
shall succeed to and possess all the rights, privileges,
immunities and powers, public or private, and be subject to all
the debts, liabilities, obligations and duties of CCMS and
IndeNet Sub all without further act or deed, as provided in
Section 724 of the Michigan Business Corporation Act.
1.4 Articles of Incorporation, Bylaws, Directors and
Officers. The Articles of Incorporation and Bylaws of IndeNet
Sub which are in effect on the Merger Date shall be, from and
after the Merger Date, the Articles of Incorporation and Bylaws
of the Surviving Corpo- ration until they are amended. The
directors and officers of IndeNet Sub shall be, from and after
the Merger Date, the directors and officers of the Surviving
Corporation until their successors are duly elected or appointed.
1.5 Further Documents or Necessary Action. IndeNet,
IndeNet Sub, CCMS and the Shareholders, respectively, shall take
all such action as may be necessary or appropriate in order to
effectuate the transactions contemplated hereby. On or after the
Merger Date, if any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the
Surviving Corporation with full title to all properties, assets,
rights, approvals, immunities and powers of CCMS or IndeNet Sub,
the officers and directors of such corporation, at the expense of
the Surviving Corporation shall take all such necessary or
appropriate action.
1.6 Closing. A closing shall be held at the time and place
reasonably designated by IndeNet Sub for execution of the
Certificate of Merger pursuant to Section 1.1 of this Agreement,
for delivery of any opinions, certificates or other documents
which may then be required to satisfy the conditions of this
Agreement and for payment of the Purchase Price (the "Closing").
The Closing shall occur on the Merger Date immediately prior to
the time the Merger becomes effective.
1.7 Continuation and Conversion of Securities.
(a) Continuation of IndeNet Sub Common Stock. On the
Merger Date, the shares of IndeNet Sub Common Stock which are
outstanding immediately prior to the Merger Date shall remain
issued and outstanding shares of $0.01 par value common stock of
the Surviving Corporation, which shall represent all of the
issued and outstanding shares of the common stock of the
Surviving Corporation.
(b) Conversion of CCMS Common Stock. On the Merger
Date, all shares of CCMS Common Stock held by the Shareholders of
CCMS shall, without further act or action, cease to exist as such
and shall be converted into a right to receive the aggregate
consideration from IndeNet and IndeNet Sub as set forth in
Section 1.8 below.
1.8 Purchase Price. The aggregate consideration for the
Merger (the "Purchase Price") shall be $4,800,000. Upon the
surrender by the Shareholders to IndeNet of the stock
certificates representing all of the issued and outstanding
shares of capital stock of CCMS, IndeNet shall pay the Purchase
Price. The Purchase Price shall be paid by IndeNet to the
Shareholders at the Closing, as follows:
(a) IndeNet shall deliver to the Shareholders the sum
of $1,036,521 by bank wire transfer in immediately available
funds to accounts established for the benefit of the Shareholders
at a bank or banks which shall be designated in writing by the
Shareholders not less than two business days before the Merger
Date. The amount of cash payable to each Shareholder under this
Section 1.8(a) is set forth on Exhibit B hereto.
(b) The balance of the Purchase Price (which balance
of the Purchase Price is hereinafter referred to as the "Stock
Payment") shall be paid to the Shareholders in 587,612
unregistered shares of IndeNet's $0.001 par value common stock
(the "Common Stock"). Delivery of the Common Stock shall be
effected by delivery of separate stock certificates to each of
the Shareholders representing the Common Stock. The number of
shares of Common Stock issuable to each of the Shareholders under
this Section 1.8(b) is set forth on Exhibit B hereto. The number
of shares of Common Stock issuable to the Shareholders was
calculated based upon the approximate trading price of the Common
Stock on the date of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
CONCERNING THE SHAREHOLDERS
Each of the Shareholders hereby severally represents and
warrants to, and covenants and agrees with, IndeNet that:
2.1 Ownership of Shares. Such Shareholder owns of record
the number of shares of capital stock of the Company set forth
opposite such Shareholder's name on Exhibit B hereto, and shall,
on the Merger Date, own of record the number of shares set forth
opposite the name of such Shareholder on Exhibit B, subject to
written amendment, if any, by such Shareholder immediately prior
to the Closing. Such Shareholder has and will have on the Merger
Date, good and marketable title to such capital stock set forth
on Exhibit B, in each case, free and clear of all liens, security
interests, claims, encumbrances or other legal or equitable
encumbrances, limitations or restrictions ("Liens").
2.2 Delivery of Good Title. All consents, approvals,
authorizations and orders necessary for the delivery of the
shares to be surrendered by such Shareholder hereunder will have
been obtained, and such Shareholder has, and immediately prior to
the Closing such Shareholder will have, full right, power,
authority and capacity to surrender and deliver such shares
pursuant to this Agreement. Upon delivery of the shares to be
surrendered by such Shareholder hereunder and delivery of the
Purchase Price therefor pursuant to this Agreement, such shares
shall be terminated in accordance with this Agreement.
2.3 Execution and Delivery. All consents, approvals,
authorizations and orders necessary for the execution, delivery
and performance by such Shareholder of this Agreement (including,
without limitation, the surrender of the shares held by such
Shareholder) have been duly and lawfully obtained, and such
Shareholder has, and at the Closing will have, full right, power,
authority and capacity to execute, deliver and perform this
Agreement. This Agreement has been duly executed and delivered
by such Shareholder, or by such Shareholder's attorneys- in-fact
and agents, and constitutes a legal, valid and binding agreement
of such Shareholder enforceable against such Shareholder in
accordance with its terms, except as such enforcement is limited
by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally, and by general
equitable principles.
2.4 No Conflicts. The execution, delivery and performance
of this Agreement by such Shareholder, and the consummation by
such Shareholder of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any term or
provision of, or (with or without notice or passage of time, or
both) constitute a default under, any indenture, mortgage, deed
of trust, trust (constructive or other), loan agreement or other
agreement or instrument to which such Shareholder is a party or
by which such Shareholder or such Shareholder's shares are bound,
or violate any statute, law, ordinance, rule, permit, writ,
judgment or award applicable to or binding upon such Shareholder.
2.5 Qualification as a Stockholder of IndeNet.
(a) The Shareholder hereby represents and warrants
that he or she, individually or with such Shareholder's advisors,
has the requisite knowledge and experience in financial and
business matters to assess the relative merits and risks of an
investment in the shares of Common Stock to be received as part
of the Purchase Price hereunder. The Shareholder has had the
full opportunity to seek the advice of independent counsel
respecting this investment and the tax risks and implications of
the transactions consummated in connection with this Agreement.
(b) The Shareholder has received certain information
concerning IndeNet and has had the opportunity to obtain
additional information as desired in order to evaluate the merits
and risks of holding the Common Stock, and is able to bear the
economic risks and lack of liquidity inherent in holding
unregistered shares of Common Stock.
2.6 Investment Intent. The Common Stock being acquired by
the Shareholder hereunder is being acquired for such
Shareholder's own account and not with a view to, or for resale
in connection with, any distribution other than resales made in
compliance with the registration and prospectus delivery
requirements of the U.S. Securities Act of 1933, as amended (the
"Act"). The Shareholder understands that the shares of Common
Stock received in connection with the Merger have not been
registered under the Act by reason of available exemptions from
the registration and prospectus delivery requirements of the Act,
and that such Common Stock must be held indefinitely unless the
shares of Common Stock are registered under the Act or until any
transfer is exempt from registration, and the reliance of IndeNet
upon these exemptions is predicated in part by these
representations and warranties by the Shareholder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY
The Shareholders hereby jointly and severally represent,
warrant and agree as follows:
3.1 Corporate Organization. CCMS is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Michigan, and has all requisite corporate power
and authority to own its properties and assets and to conduct its
business as now conducted. The Company is duly qualified to do
business as a foreign corporation and is in good standing in
every jurisdiction where the character of the properties owned or
leased by it or the nature of the business conducted by it makes
such qualification necessary. Copies of the Articles of
Incorporation and Bylaws of the Company, with all amendments
thereto to the date hereof, have been furnished to IndeNet or its
representatives, and such copies are accurate and
complete as of the date hereof.
3.2 Capitalization of the Company; Title to the Shares.
The authorized capital stock of the Company consists of 50,000
shares of $1.00 par value common stock, of which 11,679 shares
are currently outstanding (the "Shares"). As of the Merger Date,
the Shares shall have been duly authorized and validly issued,
and all such Shares shall be fully paid and nonassessable, with
no personal liability attached to the ownership thereof. The
Shares shall be the sole outstanding shares of capital stock of
the Company, and except as specifically provided in this
Agreement there shall be no outstanding options, warrants,
agreements, conversion rights, preemptive rights, or other rights
to subscribe for, purchase or otherwise acquire any of the Shares
or any unissued or treasury shares of capital stock of the
Company. The Shareholders have, and will have on the Merger
Date, valid and marketable title to all the Shares, free and
clear of any Liens.
3.3 No Subsidiaries. The Company does not own any capital
stock or any equivalent interest in any other corporation,
partnership or other organization or enterprise.
3.4 Authorization and Validity of Agreements. The Company
has the corporate power to enter into this Agreement and to carry
out its obligations hereunder. The execution and delivery of
this Agreement and the performance of the Company's obligations
hereunder have been duly authorized by the Board of Directors and
shareholders of the Company, and no other corporate proceedings
on the part of the Company are necessary to authorize such
execution, delivery and performance. This Agreement has been
duly executed by the Company and is the valid and legally binding
obligation of the Company, except as the enforcement thereof may
be limited by bankruptcy, reorganization, moratorium, insolvency
and other laws of general applicability relating to or affecting
creditors' rights or general principles of equity.
3.5 No Conflict or Violation. The execution, delivery and
performance by the Company and the Shareholders of this Agreement
does not and will not violate or conflict with any provision of
the Articles of Incorporation or Bylaws of the Company and does
not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or
regulatory authority, nor violate or result in a breach of or
constitute (with due notice or lapse of time or both) a default
under any contract, lease, loan agreement, mortgage, security
agreement, trust indenture or other agreement or instrument to
which the Company is a party or by which any of its properties or
assets is subject, nor will result in the creation or imposition
of any lien, charge or encumbrance of any kind whatsoever upon
any of the properties or assets of the Company, nor will result
in the cancellation, modification, revocation or suspension of
any of the licenses, franchises, permits, authorizations or
approvals referred to in Section 3.14 hereof.
3.6 Consents and Approvals. Schedule 3.6 hereto sets forth
a true and complete list of each consent, waiver, authorization,
or approval of any governmental or regulatory authority, domestic
or foreign, or of any other person, firm or corporation, and each
declaration to or filing or registration with any such
governmental or regulatory authority, that is required in
connection with the execution and delivery of this Agreement by
the Shareholders or the performance by the Shareholders of their
obligations hereunder.
3.7 Financial Statements. The Company has heretofore
furnished to IndeNet (i) copies of its unaudited balance sheet as
of December 31, 1995, together with the related unaudited
statement of income for such fiscal year, certified by the chief
financial officer of the Company (the "1995 Financial
Statements") and (ii) copies of the unaudited balance sheet of
the Company as at February 29, 1996, together with the related
unaudited statement of income (the "Interim Financial
Statements"), certified by the chief financial officer of the
Company; (the 1995 Financial Statements and the Interim Financial
Statements being hereinafter collectively referred to as the
"Financial Statements") . The Financial Statements, including the
notes thereto, (a) present fairly the consolidated financial
position, results of operations and changes in financial position
of the Company as of such dates and for the periods then ended
(subject, in the case of the unaudited Interim Financial
Statements, to normal year-end audit adjustments consistent with
prior periods); (b) are complete, correct and in accordance with
the books of account and records of the Company; and (c) can be
legitimately reconciled with the financial statements and the
financial records maintained and the accounting methods applied
by the Company for all of its income tax purposes.
3.8 Absence of Certain Changes or Events. Since December
31, 1995, to and including the date hereof, the Company has
operated in the ordinary course of business consistent with past
practice, except as anticipated in this Agreement or consented to
by IndeNet in connection with the Merger, and there has not been
any material adverse change in the assets, properties, business,
operations, prospects, net income or financial condition of the
Company. The Shareholders know of no existing or reasonably
foreseeable event, condition or circumstance that threatens to
have a material adverse effect on the assets, operations,
prospects, net income or financial condition of the Company.
Since February 29, 1996, the Company has not taken any actions of
a type referred to in Section 5.1(b) hereof that would have
required the consent of IndeNet if such action were to have been
taken during the period between the date hereof and the Merger
Date.
3.9 Tax Matters.
(a) To the Shareholders' knowledge, the Company has
filed, or caused to be filed, within the manner prescribed by
law, all federal, state, and local tax and information returns
required to have been filed (either separately or as part of a
consolidated group) with all federal, state, local or other
taxing authorities of United States and every other foreign
jurisdiction in which such tax or information returns are
required to be filed. Such returns and reports reflect
accurately taxable income and all liability for all taxes of the
Company for the periods covered thereby. Except as reflected on
the Financial Statements or in Schedule 3.9, all federal, state,
local and foreign income, profits, franchise, sales, use,
property, gross receipts, occupancy, excise, payroll, accumulated
earnings tax and other taxes and assessments ("Taxes") payable
by, or due from the Company have been fully paid or adequately
disclosed and fully provided for in the Financial Statements, and
no other tax of any nature whatsoever, interest or penalty, will
be payable by the Company with respect to the periods ended on or
before January 1, 1996 and to the Shareholders' knowledge, except
as reflected on the Financial Statements or in Schedule 3.9, all
Taxes payable by, or due from the Company have been fully paid or
adequately disclosed and fully provided for in the Financial
Statements, and no other tax of any nature whatsoever, interest
or penalty, will be payable by the Company with respect to the
period beginning January 1, 1996 and ending on the Merger Date.
No examination of any return of the Company by any taxing
authority is currently in progress and the Company has not
received notice of any proposed audit or examination. No consent
extending any statute of limitations has been filed by the
Company with respect to any tax liability for any year. The
Company is not a party to any agreement with respect to sharing
or allocation of taxes or tax costs.
(b) Since its incorporation, the Company has at all
times been, and until the Merger, will be, an "S Corporation"
within the meaning of Section 1361 et seq. of the Internal
Revenue Code and under the laws of all of the states in which it
operates. The Shareholders acknowledge that they have relied
upon their own tax advisors as to the tax treatment of the Merger
and that IndeNet has not made any representation or warranty with
respect to the tax consequences of the Merger.
3.10 Absence of Undisclosed Liabilities. At the close of
business on February 29, 1996, the Company had no indebtedness or
liability, absolute or contingent, known or unknown, which is not
shown or provided for on the balance sheet of the Company as of
that date included in the Interim Financial Statements. Except
as shown in such balance sheet or in the notes to the Interim
Financial Statements, the Company is not directly or indirectly
liable upon or with respect to (by discount, repurchase
agreements or otherwise), or obligated in any other way to
provide funds in respect of, or to guarantee or assume, any debt,
obligation or dividend of any person, except endorsements in the
ordinary course of business in connection with the deposit of
items for collection.
3.11 Interests in Real Property. Schedule 3.11 hereto sets
forth a true and complete list, by deed reference or otherwise,
of all real properties owned, leased or used by the Company,
including a brief description of the operating facilities,
offices and other structures located thereon and, as to all such
properties not owned by the Company, the annual rental payable
with respect thereto and the notice and other provisions with
respect to termination of rights to the use thereof. Except as
set forth in Schedule 3.11, the Company has good and marketable
title in fee simple to all real properties shown in Schedule 3.11
as owned and valid leaseholds in all real estate shown in
Schedule 3.11, in each case under valid and enforceable leases.
Except as disclosed in Schedule 3.11, none of the real properties
owned by the Company is subject to any liens (other than the lien
of current property taxes and assessments not in default),
mortgages or encumbrances; and none of such real properties is
subject to any easements, rights of way, licenses, grants,
building or use restrictions, exceptions, reservations,
limitations or other impediments which adversely affect the value
thereof or which interfere with or impair the present and
continued use thereof in the usual and normal conduct of the
business of the Company. To the Shareholders' knowledge, all
improvements on such real properties and the operations therein
conducted conform in all material respects to all applicable
health, fire, environmental, safety, zoning and building laws,
ordinances and administrative regulations, except for possible
nonconforming uses or violations which do not interfere with the
present use, operation or maintenance thereof by the Company as
now used, operated or maintained or access thereto, and which do
not affect the value thereof. To the Shareholders' knowledge,
all buildings, structures, improvements and fixtures owned,
leased or used by the Company in the conduct of its business
conform in all material respects to all applicable codes and
rules adopted by national and local associations and boards of
insurance underwriters; and all such buildings, structures,
improvements and fixtures are in good operating condition and
repair.
3.12 Personal Property. Schedule 3.12 hereto sets forth a
true and complete list of each item of machinery, equipment,
furniture, fixtures and other tangible personal property owned,
leased or used by the Company having an original purchase cost or
aggregate lease cost to such Company exceeding $25,000 (the
"Machinery and Equipment"). Except as set forth in Schedule
3.12, the Company owns outright and has good title, free and
clear of all title defects, security interests, liens, charges
and encumbrances of any nature whatsoever (other than the lien of
current property taxes and assessments not in default, if any) to
the Machinery and Equipment shown on Schedule 3.12 as owned by it
and to all the machinery, equipment, furniture, fixtures,
inventory, receivables and other tangible or intangible personal
property reflected on the balance sheets included in the 1995
Financial Statements and all such property acquired since the
date thereof, except for sales and dispositions in the ordinary
course of business since such date. None of the title defects,
security interests, liens, charges or encumbrances (if any)
listed on Schedule 3.12 adversely affects the value of any of the
items of personal property to which it relates or interferes with
its use in the conduct of business of the Company. Except as set
forth in Schedule 3.12, the Company holds good and transferable
leaseholds in all of the Machinery and Equipment shown on
Schedule 3.12 as leased by it, in each case under valid and
enforceable leases. The Company is not in default with respect
to any item of Machinery and Equipment purported to be leased by
it, and no event has occurred which constitutes or with due
notice or lapse of time or both may constitute a default under
any lease thereof. The Machinery and Equipment and other
personal property now owned, leased or used by the Company is
sufficient and adequate to carry on the Company's business as
presently conducted and all items thereof are, to the
Shareholders' knowledge, in good operating condition and repair,
normal wear and tear excepted. The Company does not hold any
personal property of any other person, firm or corporation
pursuant to any consignment or similar arrangement.
3.13 Copyrights, Trademarks, Trade Names and Know-How.
Schedule 3.13 hereto sets forth a true and complete list of (i)
all patents, patent rights, copyrights, trademarks, service
marks, trade names, trade secrets and proprietary know how
(either registered, applied for, or common law) owned by,
registered in the name of, licensed to, or used in the business
of the Company (the "Intangible Assets"), (ii) all jurisdictions
in which the rights of the Company in and to the Intangible
Assets have been registered, authorized or otherwise officially
recognized or protected. Such list includes a summary
description of each such item and specifies, where applicable,
the date on which any permit, patent, license, or other
authorization was granted or applied for, the expiration date and
the current status thereof. There is no restriction affecting
the Company's use of any of the Intangible Assets, and no license
has been granted by the Company with respect thereto other than
pursuant to license agreements and customer service and support
agreements entered between CCMS and customers in the ordinary
courses of business. To the Shareholders' knowledge, each of the
Intangible Assets is valid and in good standing, is not currently
being challenged, is not involved in any pending or threatened
administrative or judicial proceeding, and does not conflict with
any rights of any other person, firm or corporation. To the
Shareholders' knowledge, none of the products or operations of
the Company involves any infringement of any proprietary right of
any other person, firm or corporation.
3.14 Licenses, Permits and Governmental Approvals. Schedule
3.14 hereto sets forth a true and complete list of all material
licenses, permits, franchises, authorizations and approvals
issued or granted to the Company by any national, state or local
government, or any department, agency, board, commission, bureau
or instrumentality of any of the foregoing (the "Licenses"), and
all pending applications therefor. Such list contains a summary
description of each such item and where applicable, specifies the
date issued, granted or applied for, the expiration date and the
current status thereof. Each License has been duly obtained, is
valid and in full force and effect, and is not subject to any
pending or threatened administrative or judicial proceeding to
revoke, cancel or declare such License invalid in any respect.
To the Shareholders' knowledge, the Licenses are sufficient in
all respects to permit the continued lawful conduct of the
Company's business in the manner now conducted, and none of the
Company's operations are being conducted in a manner which
violates any of the terms or conditions under which any License
was granted.
3.15 Compliance with Law; Licenses. To the Shareholders'
knowledge, the operations of the Company have been conducted in
accordance with all applicable laws, regulations, orders and
other requirements of all courts and other governmental or
regulatory authorities having jurisdiction over the Company and
its respective assets, properties and operations, including,
without limitations all such laws, regulations, orders and
requirements promulgated by or relating to consumer protection,
currency exchange, equal opportunity, health, environmental
protection, architectural barriers to the handicapped, fire,
zoning and building, occupation safety, and pension matters,
except where the failure to so comply would not individually or
in the aggregate have a material adverse effect on the assets or
the businesses of the Company, taken as a whole. The Company
has not received notice of any violation of any such law,
regulation, order or other legal requirement, nor is it in
default with respect to any order, writ, judgment, award,
injunction or decree of any federal, state or local court or
governmental or regulatory authority or arbitrator, domestic or
foreign, applicable to the Company or any of its respective
assets, properties or operations. The Shareholders have no
knowledge of any proposed change in any such laws, rules or
regulations (other than laws of general applicability) which
would materially affect the transactions contemplated by this
Agreement or all or a material part of the assets or the
businesses of the Company. To the Shareholders' knowledge, the
Company has all licenses, franchises, permits, authorizations or
approvals from all governmental or regulatory authorities
required for the conduct of its businesses and the ownership,
occupancy and operation of its properties for their present uses,
and are not in violation of any such license, permit, order or
approval. No such licenses, franchises, permits, authorizations
and approvals will in any way be affected by, or terminate or
lapse by reason of, the transactions contemplated by this
Agreement.
3.16 Litigation. Schedule 3.16 hereto sets forth a list and
a summary description of certain pending actions, suits,
proceedings, disputes or investigations. Except as set forth in
Schedule 3.16, there are no claims, actions, suits, proceedings,
labor disputes or investigations pending or, to the best of the
Shareholders' knowledge, threatened before any federal, state or
local court or governmental or regulatory authority of any
country, or before any arbitrator of any nature, brought by or
against the Company or any of its officers, directors, employees,
agents or affiliates involving, affecting or relating to any
assets, properties or operations of the Company or the
transactions contemplated by this Agreement. Neither the Company
nor any of its assets or properties is subject to any order,
writ, judgment, award, injunction or decree of any federal, state
or local court or governmental or regulatory authority or
arbitrator, which affects or might affect its assets, properties,
operations, prospects, net income or financial condition or which
would or might interfere with the transactions contemplated by
this Agreement.
3.17 Contracts. Schedule 3.17 hereto sets forth a true and
complete list of all material contracts, agreements and other
instruments to which the Company is a party or otherwise relating
to or affecting any of its respective assets, properties or
operations (except items listed in other Schedules to this
Agreement and, with respect to clauses (ii), (iii) and (iv)
below, any of the foregoing calling for payments of less than
$25,000 or terminable by the Company upon not more than three
months' written notice), including, without limitation, all
written or oral, express or implied, (i) contracts, agreements,
commitments and license agreements and customer service and
support agreements; (ii) purchase and supply contracts; (iii)
contracts, loan agreements, repurchase agreements, mortgages,
security agreements, trust indentures, promissory notes and other
documents or arrangements relating to the borrowing of money or
for lines of credit; (iv) leases and subleases of real or
personal property; (v) agreements and other arrangements for the
sale of any assets other than in the ordinary course of business
or for the grant of any options or preferential rights to
purchase any assets, property or rights; (vi) documents granting
any power of attorney with respect to the affairs of the Company;
(vii) suretyship contracts, working capital maintenance or other
form of guaranty agreements; (viii) contracts or commitments
limiting or restraining the Company from engaging or competing in
any lines of business or with any person, firm, or corporation;
(ix) partnership and joint venture agreements; and (x) all
amendments, modifications, extensions or renewals of any of the
foregoing (the foregoing contracts, agreements and documents are
hereinafter referred to collectively as the "Commitments" and
individually as a "Commitment"). Each Commitment is valid,
binding and enforceable against the parties thereto in accordance
with its terms, and in full force and effect on the date hereof.
The Company has performed all obligations required to be
performed by it to date under, and is not in default in respect
of, any Commitment, and no event has occurred which, with due
notice or lapse of time or both, would constitute such a default.
To the best of the Shareholders' knowledge, no other party to any
Commitment is in default in respect thereof, and no event has
occurred which, with due notice or lapse of time or both, would
constitute such a default. The Company has made available to
IndeNet all Commitments for review and the Company has delivered
to IndeNet or its representatives true and complete copies of all
Commitments of which IndeNet has requested copies.
3.18 Accounts Receivable. Except as set forth in Schedule
3.18, all notes and accounts receivable payable to or for the
benefit of the Company reflected on the balance sheets of the
Company included in the Financial Statements, or acquired by the
Company after the date thereof and before the Merger Date,
represent or will represent valid obligations arising from sales
actually made or services actually performed, and are not subject
to any counterclaims or set-offs.
3.19 Inventories. The inventories of the Company reflected
on the latest balance sheets of the Company included in the
Financial Statements, or acquired by the Company after the date
thereof and before the Merger Date, are carried at not in excess
of the lower of cost or net realizable value, and do not include
any inventory which is obsolete, surplus or not usable or
saleable in the lawful and ordinary course of business of the
Company as heretofore conducted, in each case net of reserves
provided therefor on such balance sheets. As used herein,
"obsolete inventory" is inventory which, at the balance sheet
date, was not usable or saleable, because of legal restrictions,
failure to meet specifications, loss of market, damage, physical
deterioration or for any other cause; and "surplus inventory" is
inventory which, at the balance sheet date, exceeded known or
anticipated requirements in the reasonable business judgment of
the Company.
3.20 Employee Plans.
(a) Schedule 3.20 hereto sets forth a true and
complete list and summary description of all bonus, pension,
stock option, stock purchase, benefit, welfare, profit sharing,
retirement, disability, vacation, severance, hospitalization,
insurance, incentive, deferred compensation and other similar
fringe or employee benefit plans, funds, programs or
arrangements, all employment contracts or executive compensation
agreements, written or oral, and all collective bargaining
agreements in each of the foregoing cases which cover, are
maintained for the benefit of, or relate to any or all employees
of the Company (the "Employee Plans").
(b) To the Shareholders' knowledge, each of the
Employee Plans is in compliance with the requirements provided by
any and all applicable statutes, orders or governmental rules or
regulations currently in effect.
(c) Except as set forth on Schedule 3.20, with respect
to the Employee Plans, all applicable contributions and payments
required to be made by the Company to, or in connection with such
Employee Plans, for all periods ending before the Merger Date
have been made in full. Subject only to normal retrospective
adjustments in the ordinary course, all insurance premiums
required to be paid by the Company have been paid in full with
regard to such Employee Plan for policy years or other applicable
policy periods ending on or before the Merger Date.
(d) Schedule 3.20 hereto also sets forth a true and
complete list of all manuals, brochures or publications or
similar documents of the Company regarding office administration,
personnel matters and hiring, evaluation, supervision, training,
termination and promotion of employees of the Company.
(e) Schedule 3.20 hereto sets forth a true and
complete list of all agreements now in effect between the Company
and any labor organization. The Company has not breached or
otherwise failed to comply in any material respect with any
provisions of any such agreement and there are no grievances
outstanding against any of them under any such agreement. No
unfair labor practice complaints are pending or threatened
against the Company before any labor relations board or similar
agency, and no current union representation questions involving
employees of the Company are outstanding. No activity or
proceeding of any labor organization (or representative thereof)
to organize any unorganized employees of the Company, and no
strike, slowdown, work stoppage, lockout or other collective
labor action by or with respect to any employees of the Company
has occurred within the past three years or is now in progress
or, to the best of the Shareholders' knowledge, has been
threatened.
3.21 Customers. Schedule 3.21 hereto sets forth a true and
complete list of all customers from whom the Company derived 1%
or more of its gross revenues during the Company's last full
fiscal year. To the best of the Shareholders' knowledge, none of
such customers has, or intends to terminate or change
significantly its relationship with the Company on or after
December 31, 1995. Except as disclosed in Schedule 3.21, the
Company has not granted any unusual credit or other sales terms
to customers or others.
3.22 Insurance. Schedule 3.22 hereto sets forth a true and
complete list of all insurance policies in force at the date of
this Agreement, with respect to the assets, properties or
operations of the Company, together with a summary description of
the premiums currently paid thereon, the hazards insured against
and the amount of coverage, in the local currency (indicating
deductibles, if any). True and complete copies of all such
insurance policies have been made available to IndeNet and copies
have been furnished upon request to IndeNet by the Company. All
such insurance is of like character and amount as is carried by
like businesses similarly situated and is held by the Company or
shall be transferred to it on or before the Merger Date.
3.23 Transactions with Directors, Officers and Affiliates.
Except as set forth in Schedule 3.23, since December 31, 1995,
there have been no transactions between the Company and the
Shareholders, or any director, officer, employee, stockholder or
affiliate, as defined in Rule 405 under the Act (an "Affiliate"),
of the Shareholders, or the Company. To the best of the
Shareholders' knowledge after reasonable inquiry, during the past
three years none of the officers, directors or employees of the
Company, or any spouse or relative of any of such persons, has
been a director or officer of, or has had any direct or indirect
interest in, any firm, corporation, association or business
enterprise which during such period has been a supplier, customer
or sales agent of the Company or has competed with or been
engaged in any business of the kind being conducted by the
Company.
3.24 Propriety of Past Payments. No funds or assets of the
Company have been used for illegal purposes; no unrecorded funds
or assets of the Company have been established for any purpose;
no accumulation or use of the Company's corporate funds or assets
has been made without being properly accounted for in the
respective books and records of such Company; all payments by or
on behalf the Company have been duly and properly recorded and
accounted for in its books and records; no false or artificial
entry has been made in the books and records of the Company for
any reason; no payment has been made by or on behalf of the
Company with the understanding that any part of such payment is
to be used for any purpose other than that described in the
documents supporting such payment; and the Company has not made,
directly or indirectly, any illegal contributions to any
political party or candidate, either domestic or foreign.
3.25 Change in Ownership. The consummation of the
transactions contemplated by this Agreement will not, to the best
of the Shareholders' knowledge, result in any material adverse
change in the business operations of the Company nor result in
any material customer loss.
3.26 Environmental Matters. To the Shareholders' knowledge,
the Company has obtained all permits, licenses and other
authorizations which are required with respect to its assets,
properties and operations under all applicable laws, regulations
and other requirements of governmental or regulatory authorities
relating to pollution or protection of the environment
(collectively, the "Environmental Laws"). The Company is in
compliance with: (i) all terms and conditions of such required
permits, licenses and authorizations, (ii) all terms and
conditions of the Environmental Laws, and (iii) all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in
the Environmental Laws or in any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered,
promulgated or approved thereunder, except where the failure to
so comply would not affect the functioning of the Company or
require the expenditure of any money to cure such noncompliance.
The Company has not received notice of, any past, present or
future events, conditions, circumstances, activities, practices,
incidents, actions or plans with respect to the assets,
properties or operations of the Company which may interfere with
or prevent continued compliance, or which may give rise to any
common law or legal liability, or otherwise form the basis of any
claim, action, suit, proceeding, hearing or investigation under
any Environmental Law, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant,
contaminant, or hazardous or toxic material or waste. To the
Shareholders' knowledge, there are no hazardous wastes or toxic
substances located on any real property owned, leased or used by
the Company and no such real property has been used for the
storage of any oils, petroleum by-products or other hazardous
materials (other than, in each case referred to in this sentence,
those generally used or generated in the normal operations of the
Company in conformity with applicable law which has not had and
will not have an adverse effect on such real property or the
operations of the Company). No pollutants, in excess of those
deemed acceptable under Environmental Laws, are discharged from
any such real property by the Company, directly or indirectly
into any body of water.
3.27 Labor Matters. Except as set forth in Schedule 3.27,
(i) the Company is not a party to any outstanding employment
agreements or contracts with officers or employees that are not
terminable at will, or that provide for the payment of any bonus
or commission; (ii) the Company is not a party to any agreement,
policy or practice that requires it to pay termination or
severance pay to salaried, non-exempt or hourly employees (other
than is required by law);(iii) the Company is not a party to any
collective bargaining agreement or other labor union contract
applicable to persons employed by the Company nor does the
Company know of any activities or proceedings of any labor union
to organize its employees.
3.28 Accuracy of Information. None of the Shareholders'
representations, warranties or statements contained in this
Agreement, or in the exhibits hereto, contains any untrue
statement of a material fact or omits to state any material fact
necessary in order to make any of such representations,
warranties or statements in light of the circumstances under
which they were made not misleading. All information relating to
the Company which is known or would on reasonable inquiry be
known to the Shareholders and which may be material to a
purchaser for value of the capital stock of the Company has been
disclosed in writing to IndeNet and any such information arising
on or before the Merger Date will forthwith be disclosed in
writing to IndeNet.
3.29 Survival. Each of the representations and warranties
made by the Shareholders in this Article III shall be deemed
represented and made on the Merger Date as if made at such time
and shall survive the Closing and Merger for a period terminating
two years after the Merger Date, except with respect to the
representations and warranties (i) in Section 3.9 hereof, which
shall survive for six years following the due date (including
extensions) of the income tax returns of the Company for the
first taxable year which will end after the Merger Date and (ii)
in Section 3.26 hereof, which shall survive forever.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INDENET
IndeNet hereby represents, warrants and agrees as follows:
4.1 Corporate Organization of IndeNet. IndeNet is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has all requisite
power and authority (corporate and other) to own its properties
and assets and to conduct its business as now conducted.
Complete and correct copies of IndeNet's Certificate of
Incorporation and Bylaws have been delivered to the Shareholders.
4.2 Corporate Organization of IndeNet Sub. IndeNet Sub is
a corporation duly organized, validly existing and in good
standing under the laws of the State of Michigan, and has all
requisite power and authority (corporate and other) to own its
properties and assets and to conduct its business as now
conducted. Complete and correct copies of IndeNet Sub's Articles
of Incorporation and Bylaws have been delivered to the
Shareholders.
4.3 Authorization and Validity of Agreements. Indent and
IndeNet Sub have the corporate power to enter into this Agreement
and to carry out their respective obligations hereunder. The
execution and delivery of this Agreement, and the performance of
IndeNet's and IndeNet Sub's respective obligations hereunder,
have been duly authorized by the Board of Directors of each and
by the shareholder of IndeNet Sub, and no other corporate
proceedings on the part of either are necessary to authorize such
execution, delivery and performance. This Agreement has been
duly executed by IndeNet and IndeNet Sub and is the valid and
legally binding obligations of IndeNet and IndeNet Sub,
enforceable against IndeNet and IndeNet Sub in accordance with
its terms except as the enforcement thereof may be limited by
bankruptcy, reorganization, moratorium, insolvency and other laws
of general applicability relating to or affecting creditors'
rights or general principles of equity.
4.4 No Conflict or Violation. The execution, delivery and
performance by IndeNet and IndeNet Sub of this Agreement do not
and will not violate or conflict with any provision of the
charter documents or by-laws of IndeNet or IndeNet Sub, and do
not and will not violate any provision of any agreement or
instrument to which IndeNet or IndeNet Sub is a party or by which
either is bound, or of any order, judgment or decree of any court
or other governmental or regulatory authority to which IndeNet or
IndeNet Sub is subject.
4.5 Capitalization. The authorized capital stock of
IndeNet consists solely of (i) 100,000,000 shares of Common
Stock, of which approximately 12,000,000 shares are issued and
outstanding as of the date of this Agreement, and (ii) 40,000,000
shares of $.0001 par value preferred stock, of which 1,200 shares
have been designated as Series A Preferred Stock, and 250,000
shares have been designated as Series B Preferred Stock. As of
the date hereof, 1,200 shares of Series A Preferred Stock are
outstanding, and 216,667 shares of Series B Preferred Stock are
outstanding. All of the outstanding shares of common stock and
preferred stock have been duly authorized and validly issued and
are fully paid and non-assessable, and have not been issued in
violation of any preemptive rights of stockholders. Except as
set forth in Schedule 4.5, there are no outstanding options,
warrants, rights, calls, commitments, conversion rights, rights
of exchange, plans or other agreements of any character providing
for the purchase, issuance or sale of any shares of the capital
stock of IndeNet. No other class of capital stock of IndeNet is
authorized or outstanding. All shares of IndeNet's Common Stock
issued to the Shareholders pursuant to this Agreement will be
duly authorized, validly issued and outstanding, fully paid and
nonassessable. The authorized capital stock of IndeNet Sub
consists solely of 60,000 shares of Common Stock, of which 100
shares are issued and outstanding as of the date of this
Agreement and are owned of record and beneficially by IndeNet.
4.6 SEC Filings. Since January 1, 1995, IndeNet has timely
filed and, as required by Section 13 of the Securities Exchange
Act of 1934, will continue to timely file, all the required
forms, reports and other documents with the Securities and
Exchange Commission (the "SEC"). As of the date hereof, and at
the Merger Date, all reports, forms and other documents so filed:
(i) complied in all material respects with all of the statutes,
rules and regulations enforced or promulgated by the SEC, and
(ii) do not, and will not, contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. IndeNet has delivered to the Shareholders a copy of
all reports filed by IndeNet with the SEC since January 1, 1995.
4.7 Financial Statements. IndeNet has or will deliver to
the Shareholders copies of the unaudited consolidated balance
sheet of IndeNet as of December 31, 1995 and the related
unaudited consolidated statements of operations, changes in
stockholders' equity and cash flows for the nine-month period
then ended (the "IndeNet Financials"). The IndeNet Financials
were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods
involved (except as may otherwise be indicated in the notes
thereto, and subject to normal year-end audit adjustments
consistent with prior periods) and fairly present the financial
position of IndeNet as of the dates thereof and the results of
operations and changes in financial position of IndeNet as of the
dates thereof and the results of operations and changes in
financial position for the periods then ended. Except as may be
disclosed in the SEC filings described in Section 4.6 above,
since December 31, 1995, there has not been any material adverse
change in the assets or liabilities, or in the business or
financial condition, the results of operations or prospects of
IndeNet.
4.8 Tax Treatment. IndeNet will treat the transactions
contemplated in this Agreement as a tax-free reorganization
within the meaning of Sections 368(a)(1)(A) and/or 368(a)(2)(D)
of the Internal Revenue Code, and will take no action contrary to
such treatment. Notwithstanding the foregoing, neither IndeNet
nor IndeNet Sub represents or warrants that the Merger will
qualify as a tax-free reorganization within the meaning of the
foregoing sections of the Internal Revenue Code.
4.9 Survival. Each of the representations and warranties
made by IndeNet in this Article IV shall be deemed represented
and made by IndeNet on the Merger Date as if made at such time
and shall survive the Closing and Merger for a period
terminating two years after the Merger Date.
4.10 Accuracy of Information. None of the representations,
warranties or statements of IndeNet contained in this Agreement,
or in the exhibits hereto, contains any untrue statement of a
material fact or omits to state any material fact necessary in
order to make any such representations, warranties or statements
in light of the circumstances under which they were made, not
misleading. All information relating to IndeNet or IndeNet Sub
which is known or would on reasonable inquiry be known to IndeNet
and which may be material to a purchaser for value of the capital
stock of IndeNet has been disclosed in writing to the
Shareholders and any such information arising on or before the
Merger Date will forthwith be disclosed in writing to the
Shareholders.
4.11 Surviving Corporation. IndeNet has no plan or
intention to liquidate the Surviving Corporation, to merge the
Surviving Corporation with or into another corporation, to sell
or otherwise dispose of the stock of the Surviving Corporation or
to cause the Surviving Corporation to sell or otherwise dispose
of any of its assets or of any of the assets acquired from CCMS
except for dispositions made in the ordinary course of
business.
ARTICLE V
ADDITIONAL COVENANTS
5.1 Conduct of Business. During the period commencing on
the effective date of this Agreement and ending on the Merger
Date or the earlier termination of this Agreement pursuant to
Article VIII:
(a) The Shareholders shall cause the Company to
continue to conduct its business in the ordinary course in
substantially the same manner as heretofore conducted, except as
may specifically be authorized by IndeNet or as is contemplated
in this Agreement, and to use its reasonable best efforts to
preserve intact the business organization of the Company, to keep
available the services of its present officers and key employees,
and to preserve the goodwill of those having business
relationships with the Company; and
(b) Except for transactions expressly contemplated by
this Agreement or with the specific prior written consent of
IndeNet, the Shareholders shall not permit the Company to:
(i) Amend its charter document or by-laws;
(ii) Declare, set aside or pay any dividend or
make any distribution on or with respect to shares of its capital
stock other than a distribution on or before the Merger to the
Shareholders of an aggregate of $163,479;
(iii)Issue, grant, sell or pledge any shares of,
or rights of any kind to acquire any shares of, the capital stock
of the Company, or purchase, redeem or otherwise acquire any
shares of such capital stock;
(iv) Acquire any assets or properties, except in
the ordinary course of business consistent with past practice;
(v) Sell, lease, transfer, dispose of, encumber
or mortgage any assets or properties, except in the ordinary
course of business consistent with past practice;
(vi) Enter into any merger, consolidation,
recapitalization or other business combination or reorganization;
(vii)Create, incur or assume any indebtedness for
borrowed money except in the ordinary course of business
consistent with past practice, or prepay any part of the
principal or interest of any existing indebtedness before the due
date thereof;
(viii)Assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person or entity;
(ix) Make any loans, advances or capital
contributions to or investments in any person or entity;
(x) Cause or permit any of its current insurance
(or reinsurance) policies to be canceled or terminated or any of
the coverage thereunder to lapse, unless forthwith upon notice of
such termination, cancellation or lapse, the Company uses its
reasonable best efforts to obtain commercially reasonable
replacement policies from the same or comparable insurers
providing coverage which is the same as or comparable to that
provided under the canceled, terminated or lapsed policies;
(xi) Sell, transfer, license or otherwise dispose
of any of the Intangible Assets, except for the licensing of
software in the ordinary course of business;
(xii)Waive, release, grant or transfer any rights
of value or modify or change in any material respect any existing
license, lease, contract or other document, other than in the
ordinary course of business consistent with past practice;
(xiii)Make aggregate capital expenditures and
commitments therefor, which, when taken together with all other
capital expenditures and commitments of the Company existing or
made during such period, would exceed $25,000;
(xiv)Make any change in any method of accounting
or accounting practice, except as may be required by law or by
generally accepted accounting principles and after written notice
to IndeNet;
(xv) Increase the compensation payable or to
become payable by it to any of its employees except for normal
periodic increases in the ordinary course of business that are
made in accordance with established compensation policies of the
Company;
(xvi)Make any payment or provision with respect to
any Employee Plan, except in the ordinary course of the
administration of such plans consistent with the established
compensation policies of the Company;
(xvii)Grant any stock options, restricted stock
grants, stock appreciation rights or similar instruments or
rights;
(xviii)Enter into any employment agreement or
other contract or arrangement with respect to the performance of
personal services which is not terminable without liability by
the Company on not more than 30 days' notice;
(xix)Except in the ordinary course of business
consistent with past practice, make any loan to, or enter into
any written contract, lease or commitment with, any officer or
director of the Company;
(xx) Enter into any agreement or transaction with
any Affiliate upon terms and conditions less favorable to the
Company than could be obtained on an arm's-length basis;
(xxi)Adopt any new employee benefit plan or
program or amend to increase materially the compensation or
benefits payable under any of the Employee Plans, or grant any
severance or termination pay or benefit otherwise than pursuant
to policies of the Company in effect on the date of this
Agreement; or
(xxii)Enter into any oral or written agreement,
contract, commitment, arrangement or understanding with respect
to any of the foregoing.
5.2 Access to Properties and Records. The Company shall
afford to IndeNet and IndeNet's accountants, counsel and
representatives full access during normal business hours
throughout the period prior to the Merger Date (or the earlier
termination of this Agreement pursuant to Article VIII) to all
the Company's properties, books, contracts, commitments and
records (including, but not limited to, tax returns) and, during
such period, shall furnish promptly to IndeNet all information
concerning the Company's business, properties and personnel as
IndeNet may reasonably request, provided that no investigation or
receipt of information pursuant to this Section 5.2 shall affect
any representation or warranty of the Shareholders or the
conditions to the obligations of IndeNet.
5.3 Negotiations. From and after the date hereof, neither
the Shareholders, the Company, its officers or directors nor
anyone acting on behalf of the Company or such persons shall,
directly or indirectly, encourage, solicit, engage in discussions
or negotiations with, or provide any information to, any person,
firm, or other entity or group (other than IndeNet, IndeNet Sub
or their respective representatives) concerning any merger, sale
of substantial assets, purchase or sale of shares or similar
transaction involving the Company or any division thereof. The
Shareholders shall promptly communicate to IndeNet any inquiries
or communications concerning any such transaction which it may
receive or of which it may become aware.
5.4 Consents and Approvals. The Company (i) shall use its
best efforts to obtain all necessary consents, waivers,
authorizations and approvals of all governmental and regulatory
authorities, in the United States, and all other applicable
jurisdictions, and of all other persons, firms or corporations
required in connection with the execution, delivery and
performance by it of this Agreement, and (ii) shall diligently
assist and cooperate with IndeNet in preparing and filing all
documents required to be submitted by IndeNet to any governmental
or regulatory authority, domestic or foreign, in connection with
such transactions and in obtaining any governmental consents,
waivers, authorizations or approvals which may be required to be
obtained by IndeNet in connection with such transactions (which
assistance and cooperation shall include, without limitation,
timely furnishing to IndeNet all information concerning the
Shareholders and the Company which counsel to IndeNet determines
is required to be included in such documents or would be helpful
in obtaining any such required consent, waiver, authorization or
approval).
5.5 Further Assurances. Upon the request of IndeNet at any
time after the Merger Date, the Shareholders will forthwith
execute and deliver such further instruments of assignment,
transfer, conveyance, endorsement, direction or authorization and
other documents as IndeNet or its counsel may request in order to
perfect title of IndeNet and its successors and assigns to the
property and assets of CCMS or otherwise to effectuate the
purposes of this Agreement.
5.6 Best Efforts. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto shall
use its reasonable best efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary,
proper or advisable consistent with applicable law to consummate
and make effective in the most expeditious manner practicable the
transactions contemplated hereby.
5.7 Intended Tax Treatment. The parties intend that the
transactions contemplated by this Agreement constitute a
"reorganization" within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(D) of the Internal Revenue Code of 1986, as amended.
The parties agree to take all actions as may be reasonably
necessary to qualify and maintain such transactions as a
"reorganization" for federal income tax purposes and to file all
tax returns and information associated therewith consistent with
such tax treatment.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF INDENET
The obligations of IndeNet and IndeNet Sub to consummate the
transactions contemplated by this Agreement are subject to the
fulfillment, on or before the Merger Date, of the following
conditions, any one or more of which may be waived by IndeNet in
its sole discretion:
6.1 Representations and Warranties of the Shareholders.
Except as otherwise permitted in this Agreement, all
representations and warranties made in Article II and Article III
of this Agreement shall be true and correct on and as of the
Merger Date as if again made on and as of such date, and IndeNet
shall have received a certificate dated the Merger Date and
signed by the Shareholders to that effect.
6.2 Performance of the Shareholders' Obligations. The
Shareholders and the Company shall have performed in all respects
all obligations required under this Agreement to be performed by
them on or before the Merger Date, and IndeNet shall have
received a certificate dated the Merger Date and signed by the
Shareholders to that effect.
6.3 Consents and Approvals. Except as set forth in
Schedule 3.6, all consents, waivers, authorizations and approvals
of any governmental or regulatory authority in the United States,
or elsewhere, and of any other person, firm or corporation,
required in connection with the execution, delivery and
performance of this Agreement, shall have been duly obtained and
shall be in full force and effect on the Merger Date.
6.4 No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or governmental or
regulatory authority, domestic or foreign, nor any statute, rule,
regulation, decree or executive order promulgated or enacted by
any government or governmental or regulatory authority, which
declares this Agreement invalid in any respect or prevents the
consummation of the transactions contemplated hereby, or which
materially and adversely affects the assets, properties,
operations, prospects, net income or financial condition of the
Company shall be in effect; and no action or proceeding before
any court or governmental or regulatory authority, domestic or
foreign, shall have been instituted or threatened by any
government or governmental or regulatory authority, domestic or
foreign, or by any other person, or entity which seeks to prevent
or delay the consummation of the transactions contemplated by
this Agreement or which challenges the validity or enforceability
of this Agreement.
6.5 No Material Adverse Change. During the period from
February 29, 1996 to the Merger Date, there shall not have been
any material adverse change in the assets, properties, business,
operations, prospects, net income or financial condition of the
Company.
6.6 Employment Agreement. IndeNet shall have received a
copy of the Employment Agreements, in the form attached hereto as
Exhibit C, duly executed and delivered by each of the
Shareholders.
6.7 Registration Rights and Lock-Up Agreement. IndeNet
shall have received a copy of the Registration Rights and Lock-up
Agreement, in the form attached hereto as Exhibit D, duly
executed and delivered by each of the Shareholders.
6.8 Opinion of Counsel. IndeNet shall have received from
Warner Norcross & Judd LLP, counsel to the Shareholders and the
Company, a written opinion dated the Merger Date and addressed to
IndeNet, substantially in the form set forth in Exhibit E.
6.9 Other Closing Documents. IndeNet shall have received
such other certificates, instruments and documents in
confirmation of the representations and warranties of the
Shareholders or in furtherance of the transactions contemplated
by this Agreement as IndeNet or its counsel may reasonably
request.
6.10 Legal Matters. All certificates, instruments, opinions
and other documents required to be executed or delivered by or on
behalf of the Shareholders under the provisions of this
Agreement, and all other actions and proceedings required
to be taken by or on behalf of the Shareholders in furtherance of
the transactions contemplated hereby, shall be reasonably
satisfactory in form and substance to counsel to IndeNet.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS
The obligations of the Shareholders and CCMS to consummate
the transactions contemplated by this Agreement are subject to
the fulfillment, on or before the Merger Date, of the following
conditions, any one or more of which may be waived by the
Shareholders in their sole discretion:
7.1 Representations and Warranties of IndeNet. All
representations and warranties made by IndeNet in this Agreement
shall be true and correct on and as of the Merger Date as if
again made by IndeNet on and as of such date, and the
Shareholders shall have received a certificate dated the Merger
Date and signed by an authorized officer of IndeNet to that
effect.
7.2 Performance of IndeNet's Obligations. IndeNet and
IndeNet Sub shall have performed in all respects all obligations
required under this Agreement to be performed by them on or
before the Merger Date, and the Shareholders shall have received
a certificate dated the Merger Date and signed an authorized
officer of IndeNet to that effect.
7.3 Consents and Approvals. All consents, waivers,
authorizations and approvals of any governmental or regulatory
authority in the United States, or elsewhere, and of any other
person, firm or corporation, required in connection with the
execution, delivery and performance of this Agreement, shall have
been duly obtained and shall be in full force and effect on the
Merger Date.
7.4 No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or other
governmental or regulatory authority, domestic or foreign, nor
any statute, rule, regulation, decree or executive order
promulgated or enacted by any government or governmental or
regulatory authority, domestic or foreign, which declares this
Agreement invalid or unenforceable in any respect or which
prevents the consummation of the transactions contemplated hereby
shall be in effect; and no action or proceeding before any court
or regulatory authority, domestic or foreign, shall have been
instituted or threatened by any government or governmental or
regulatory authority, domestic or foreign, or by any other person
or entity, which seeks to prevent or delay the consummation of
the transactions contemplated by this Agreement or which
challenges the validity or enforceability of this Agreement.
7.5 Opinion of Counsel. The Shareholders shall have
received from Cohen Brame & Smith, counsel to IndeNet and IndeNet
Sub, a written opinion dated the Merger Date and addressed to the
Shareholders, substantially in the form attached hereto as
Exhibit F.
7.6 Registration Rights and Lock-Up Agreement. The
Shareholders shall have received a copy of the Registration
Rights and Lock-Up Agreement, the form of which is attached
hereto as Exhibit D, duly executed by IndeNet.
7.7 Employment Agreements. IndeNet shall have executed and
delivered an Employment Agreement, in the form attached hereto as
Exhibit C, for each of the Shareholders.
7.8 Other Closing Documents. The Shareholders shall have
received such other certificates, instruments and documents in
confirmation of the representations and warranties of IndeNet or
in furtherance of the transactions contemplated by this Agreement
as the Shareholders or its counsel may reasonably request.
7.9 Legal Matters. All certificates, instruments, opinions
and other documents required to be executed or delivered by or on
behalf of IndeNet and IndeNet Sub under the provisions of this
Agreement, and all other actions and proceedings required to be
taken by or on behalf of IndeNet and IndeNet Sub in furtherance
of the transactions contemplated hereby, shall be reasonably
satisfactory in form and substance to counsel for the
Shareholders.
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1 Methods of Termination; Upset Date. This Agreement may
be terminated and the transactions contemplated hereby may be
abandoned at any time before the Closing:
(a) By the mutual written consent of the Shareholders
and IndeNet;
(b) By IndeNet, if all the conditions set forth in
Article VI of this Agreement shall not have been satisfied or
waived on or before the Closing;
(c) By the Shareholders, if all the conditions set
forth in Article VII of this Agreement shall not have been
satisfied or waived on or before the Closing;
(d) By either the Shareholders or IndeNet if the other
party hereto fails to comply in any material respect with any of
its covenants or agreements contained herein, or breaches its
representations and warranties in any material way;
(e) By either the Shareholders or IndeNet if a court
of competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an order,
decree or ruling or taken any other action (which order, decree
or ruling the parties hereto shall use their best efforts to
lift), which permanently restrains, enjoins or otherwise
prohibits the transactions contemplated by this Agreement; or
(f) By either the Shareholders or IndeNet at any time
after May 31, 1996.
8.2 Procedure Upon Termination. In the event of
termination and abandonment of this Agreement by the Shareholders
or IndeNet pursuant to Section 8.1 hereof, written notice thereof
shall forthwith be given to the other party and this Agreement
shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by the Shareholders or IndeNet.
If this Agreement is terminated as provided herein:
(a) Each party shall redeliver all documents, work
papers and other material of any other party relating to the
transactions contemplated by this Agreement, whether so obtained
before or after the execution hereof, to the party furnishing the
same;
(b) All information received by any party to this
Agreement with respect to the business of any other party or its
subsidiaries (other than information which is a matter of public
knowledge, has heretofore been or is hereafter published in any
form for public distribution, is obtainable from independent
sources, or has been filed as public information with or
otherwise required to be disclosed by or to any governmental or
regulatory authority), shall not at any time be used for the
advantage of, or disclosed to third parties by, such party to the
detriment of the party furnishing such information; and
(c) No party to this Agreement shall have any
liability or further obligation to any other party to this
Agreement except as provided in this Section 8.2 and in Sections
10.2, 10.4 and 10.5 hereof; provided, however, that no
termination of this Agreement pursuant to this Article VIII shall
relieve any party of liability for a breach of any provision of
this Agreement occurring before such termination.
ARTICLE IX
INDEMNIFICATION
9.1 Obligation of Shareholders to Indemnify.
(a) Notwithstanding the Closing and Merger and
regardless of any investigation at any time made by or on behalf
of IndeNet or of any knowledge or information that IndeNet may
have, subject to Section 9.1(b) below, the Shareholders shall
indemnify and hereby agree to, jointly and severally, fully
defend, save and hold IndeNet, and any Affiliate of IndeNet,
harmless in the event that IndeNet, the Surviving Corporation or
any other Affiliate of IndeNet, shall at any time or from time to
time suffer any damage, liability, loss, cost, expense (including
all reasonable attorneys' fees), claim or cause of action arising
out of or resulting from, or shall pay or become obligated to pay
any sum on account of, any and all Events of Breach. As used
herein, "Event of Breach" shall be and mean any one or more of
the following: (i) any untruth or inaccuracy in any
representation of the Shareholders or the breach of any warranty
of the Shareholders; (ii) any failure of the Shareholders duly to
perform or observe any term, provision, covenant, agreement or
condition on the part of the Shareholders to be performed or
observed; (iii) any material misrepresentation in, any
certificate, schedule, exhibit, annex or other document furnished
pursuant to this Agreement by the Shareholders (or any
representative of the Shareholders) to IndeNet (or any
representative of IndeNet) and any material misrepresentation in
or omission from any document furnished to IndeNet in connection
with the Closing; and (iv) any and all liabilities of or claims
against IndeNet or the Surviving Corporation (or any Affiliate of
IndeNet) arising out of any action, suit, proceeding, dispute or
investigation or order, writ, judgment, award, injunction or
decree of the character described in Section 3.16 hereof arising
from events occurring prior to the Merger or out of any liability
or obligation of CCMS arising prior to the Merger under any
contract, lease, agreement, covenant, license, instrument or
commitment of the Company, written or oral, in any such case to
the extent not set forth in any of the Schedules; provided,
however, that the Shareholders shall have no obligation under
this Section 9.1 to make any payment to IndeNet (i) unless the
aggregate amount to which IndeNet is entitled by reason of all
claims under this Section 9.1 exceeds $60,000, and then only for
the amount by which such claims exceed $60,000; or (ii) with
respect to any claim arising out of any misrepresentation or
incorrect warranty or failure to perform or observe any term,
provision, covenant, agreement or condition required to be
performed or observed on or before the Merger Date, notice of
which is not given by IndeNet to the Shareholders within two
years after the Merger Date (six years in the case of an Event of
Breach relating to any representation as to tax matters). In
addition, the Shareholders shall have no liability to IndeNet,
the Surviving Corporation or any other Affiliate under this
Agreement for any amounts exceeding, in the aggregate, the
Purchase Price.
(b) Any claim of indemnification made by IndeNet
pursuant to this Section 9.1 with respect to a breach by any
Shareholder of such Shareholder's representations, warranties or
agreements contained in Article II shall be made only against the
breaching Shareholder, and IndeNet shall not be entitled to make
a claim against or otherwise pursue any other Shareholder.
9.2 Obligation of IndeNet to Indemnify. Notwithstanding
the Closing and Merger and regardless of any knowledge or
information that the Shareholders may have, IndeNet agrees to
indemnify, fully defend, save and hold harmless the Shareholders
and their successors and assigns from and against any and all
losses, liabilities, damages, costs and expenses (including
reasonable attorneys' fees) claim or cause of action based upon,
arising out of or otherwise in respect of any inaccuracy in or
any breach of any representation, warranty, covenant or agreement
of IndeNet or IndeNet Sub contained in this Agreement or in any
document or other papers delivered by IndeNet to the Shareholders
in connection with this Agreement.
9.3 Notice and Opportunity to Defend.
(a) Promptly after receipt by any party hereto (the
"Indemnitee") of notice of any demand, claim or circumstances
which, with the lapse of time, would or might give rise to a
claim or the commencement (or threatened commencement) of any
action, proceeding or investigation (an "Asserted Liability")
that may result in any claim of indemnification, the Indemnitee
shall promptly give notice thereof (the "Claims Notice") to any
other party obligated to provide indemnification pursuant to
Section 9.1 or 9.2 (the "Indemnifying Party"). The Claims Notice
shall describe the Asserted Liability in reasonable detail, and
shall indicate the amount (estimated, if necessary and to the
extent feasible) of the losses, liabilities or damages that have
been or may be suffered by the Indemnitee.
(b) The Indemnifying Party may elect to compromise or
defend, at its own expense and by its own counsel, any Asserted
Liability. If the Indemnifying Party elects to compromise or
defend such Asserted Liability, it shall within thirty (30) days
(or sooner, if the nature of the Asserted Liability so requires)
notify the Indemnitee of its intent to do so, and the Indemnitee
shall cooperate, at the expense of the Indemnifying Party, in the
compromise of, or defense against, such Asserted Liability. If
the Indemnifying Party elects not to compromise or defend the
Asserted Liability, fails to notify the Indemnitee of its
election as herein provided, or contests its obligation to
indemnify under this Agreement, the Indemnitee may pay,
compromise or defend such Asserted Liability at the expense of
the Indemnifying Party. Subject to the limitations contained in
Section 9.4 on the obligations of the Indemnifying Party in
respect of proposed settlements, the Indemnitee shall have the
right to employ its own counsel with respect to any Asserted
Liability, but the fees and expenses of such counsel shall be at
the expense of such Indemnitee unless (a) the employment of such
counsel shall have been authorized in writing by the Indemnifying
Party in connection with the defense of such action, or (b) such
Indemnifying Party shall not have, as provided above, promptly
employed counsel reasonably satisfactory to such Indemnitee to
take charge of the defense of such action, or (c) such Indemnitee
shall have reasonably concluded based on an opinion of counsel
that there may be one or more legal defenses available to it
which are different from or additional to those available to such
Indemnifying Party, in any of which events such reasonable fees
and expenses shall be borne by the Indemnifying Party and the
Indemnifying Party shall not have the right to direct the defense
of such action on behalf of the Indemnitee in respect of such
different or additional defenses. If the Indemnifying Party
chooses to defend any claim, the Indemnitee shall make available
to the Indemnifying Party any books, records or other documents
within its control that are necessary or appropriate for such
defense.
9.4 Settlement. Notwithstanding the provisions of Section
9.3, neither the Indemnifying Party nor the Indemnitee may settle
or compromise any claim for which indemnification has been sought
and is available hereunder, over the objection of the other;
provided, however, that consent to settlement or compromise shall
not be unreasonably withheld or delayed. If, however, the
Indemnitee refuses to consent to a bona fide offer of settlement
which the Indemnifying Party wishes to accept, the Indemnitee may
continue to pursue such matter, free of any participation by the
Indemnifying Party, at the sole expense of the Indemnitee. In
such event, the obligation of the Indemnifying Party to the
Indemnitee shall be equal to the lesser of (i) the amount of the
offer of settlement which the Indemnitee refused to accept plus
the costs and expenses of the Indemnitee prior to the date the
Indemnifying Party notified the Indemnitee or the Indemnitee
learned of the offer of settlement, and (ii) the actual
out-of-pocket amount the Indemnitee is obligated to pay as a
result of the Indemnitee continuing to pursue such matter.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Survival of Provisions. The respective
representations, warranties, covenants and agreements of each of
the parties to this Agreement (except covenants and agreements
which are expressly required to be performed and are performed in
full on or before the Merger Date) shall survive the Merger Date
and the consummation of the transactions contemplated by this
Agreement, subject to Article IX. In the event of a breach of
any of such representations, warranties or covenants, the party
to whom such representations, warranties or covenants have been
made shall have all rights and remedies for such breach available
to it under the provisions of this Agreement or otherwise,
whether at law or in equity, regardless of any disclosure to, or
investigation made by or on behalf of such party on or before the
Merger Date.
10.2 Publicity. Neither the Company and the Shareholders on
the one hand, nor IndeNet on the other, shall, or shall permit
any of its subsidiaries to, issue or cause the publication of any
press release or other announcement with respect to this
Agreement or the transactions contemplated hereby without the
consent of the other party, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, in the
event any such press release or announcement is required by law
to be made by the party proposing to issue the same, such party
shall use its best efforts to consult in good faith with the
other party prior to the issuance of any such press release or
announcement.
10.3 Successors and Assigns; No Third-Party Beneficiaries.
This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors and
assigns; provided, however, that neither party shall assign or
delegate any of the obligations created under this Agreement
without the prior written consent of the other party.
Notwithstanding the foregoing, IndeNet shall have the
unrestricted right to assign this Agreement and to delegate all
or any part of its obligations hereunder to any Affiliate of
IndeNet, but in such event IndeNet shall remain fully liable for
the performance of all of such obligations in the manner
prescribed in this Agreement. Nothing in this Agreement shall
confer upon any person or entity not a party to this Agreement,
or the legal representatives of such person or entity, any rights
or remedies of any nature or kind whatsoever under or by reason
of this Agreement.
10.4 Brokers and Finders.
(a) The Shareholders and the Company represent and
warrant to IndeNet that they have not employed the services of a
broker or finder in connection with this Agreement or any of the
transactions contemplated hereby. The Shareholders indemnify and
agree to defend and hold IndeNet harmless against and in respect
of all claims, losses, liabilities and expenses which may be
asserted against IndeNet (or any Affiliate of IndeNet) by any
broker or other person who claims to be entitled to a broker's,
finder's or similar fee or commission in respect of the execution
of this Agreement, or the consummation of the transactions
contemplated hereby, by reason of his acting at the request of
the Shareholders or of the Company.
(b) IndeNet represents and warrants to the
Shareholders that it has not employed the services of a broker or
finder in connection with this Agreement or any of the
transactions contemplated hereby. IndeNet indemnifies and agrees
to save and hold the Shareholders harmless against and in respect
of all claims, losses, liabilities and expenses which may be
asserted against them by any broker or other person who claims to
be entitled to a broker's, finder's or similar fee or commission
in respect of the execution of this Agreement or the consummation
of the transactions contemplated hereby, by reason of his acting
at the request of IndeNet.
10.5 Fees and Expenses. Except as otherwise expressly
provided in this Agreement, all legal and other fees, costs and
expenses incurred by IndeNet or IndeNet Sub in connection with
this Agreement and the transactions contemplated hereby shall be
paid by IndeNet. All reasonable legal and other fees, costs and
expenses incurred by the Shareholders or CCMS in connection with
this Agreement and the transactions contemplated hereby shall be
paid by CCMS.
10.6 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to
have been given or made if in writing and delivered personally or
sent by registered or certified mail or overnight courier service
(postage prepaid, return receipt requested) to the parties at the
following addresses:
(a) If to IndeNet, to:
IndeNet, Inc.
640 North Gower Street
Los Angeles, California 90028
Attention: Robert W. Lautz, Jr.
with a copy to:
Troy & Gould
1801 Century Park East
Suite 1600
Los Angeles, California 90067
Attention: Istvan Benko, Esq.
(b) If to the Shareholders, to:
Cable Computerized Management Systems, Inc.
1853 R. W. Berends Drive, S.W.
Grand Rapids, Michigan 49509
Attention: S. Michael Ross, Judith K. Thome and John W.
Sorensen
with a copy to:
Warner Norcross & Judd LLP
900 Old Kent Building
111 Lyon Street, N.W.
Grand Rapids, Michigan 49503
Attention: Jeffrey Battershall, Esq.
or to such other persons or at such other addresses as shall be
furnished by either party by like notice to the other, and such
notice or communication shall be deemed to have been given or
made as of the earlier of the date so delivered or five calendar
days after so mailed. No change in any of such addresses shall
be effective insofar as notices under this Section 10.6 are
concerned unless such change shall have been given to such other
party hereto as provided in this Section 10.6.
10.7 Entire Agreement. This Agreement, together with the
exhibits and schedules hereto, represents the entire agreement
and understanding of the parties with reference to the
transactions set forth herein and no representations or
warranties have been made in connection with this Agreement other
than those expressly set forth herein or in the exhibits,
schedules, certificates and other documents delivered in
accordance herewith. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications,
understandings and agreements between the parties relating to the
subject matter of this Agreement and all prior drafts of this
Agreement, all of which are merged into this Agreement. No prior
drafts of this Agreement and no words or phrases from any such
prior drafts shall be admissible into evidence in any action or
suit involving this Agreement.
10.8 Waivers and Amendments. Each of the Shareholders and
IndeNet may by written notice to the other (a) extend the time
for the performance of any of the obligations or other actions of
the other; (b) waive any inaccuracies in the representations or
warranties of the other contained in this Agreement; (c) waive
compliance with any of the covenants of the other contained in
this Agreement; (d) waive performance of any of the obligations
of the other created under this Agreement; or (e) waive
fulfillment of any of the conditions to its own obligations under
this Agreement. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach, whether or not similar.
This Agreement may be amended, modified or supplemented only by a
written instrument executed by the parties hereto.
10.9 Severability. This Agreement shall be deemed
severable, and the invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability
of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto intend that there shall be added as
a part of this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be
valid and enforceable.
10.10Titles and Headings. The Article and Section headings,
the Table of Contents and the Index to Defined Terms contained in
this Agreement are solely for convenience of reference and shall
not affect the meaning or interpretation of this Agreement or of
any term or provision hereof.
10.11Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and
all of which together shall be considered one and the same
agreement.
10.12Enforcement of the Agreement. The parties hereto agree
that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereto, this
being in addition to any other remedy to which they are entitled
at law or in equity.
10.13Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State
of Delaware without giving effect to the choice-of-law provisions
thereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
"SHAREHOLDERS"
S. Michael Ross
Judith K. Thome
John W. Sorensen
"INDENET" INDENET, INC., a Delaware
corporation
By:
Its:
"CCMS" CABLE COMPUTERIZED
MANAGEMENT SYSTEMS, INC.,
a Michigan corporation
By:
Its:
"INDENET SUB" INDENET SUBSIDIARY, INC., a
Michigan corporation
By:
Its:
INDEX
TO
SCHEDULES/EXHIBITS
Exhibits
A Certificate of Merger
B Capital Stock of the Shareholders and Division of the
Purchase Price
C Employment Agreements
D Registration Rights and Lock-Up Agreement
E Opinion of Counsel to the Shareholders
F Opinion of Counsel to IndeNet and IndeNet Sub
Schedules
3.1 Articles of Incorporation & Bylaws
3.6 Consents and Approvals
3.7 Financial Statements
3.8 Absence of Certain Changes or Events
3.9 Tax Matters
3.10 Absence of Undisclosed Liabilities
3.11 Interests in Real Property
3.12 Personal Property
3.13 Copyrights, Trademarks, Trade Names and Know-How
3.14 Licenses, Permits and Governmental Approvals
3.16 Litigation
3.17 Contracts
3.18 Accounts Receivable
3.20 Employee Plans
3.21 Customers
3.22 Insurance
3.23 Transactions with Directors, Officers and Affiliates
3.27 Labor Matters
4.5 Capitalization
