Exhibit 10.1

 

EXECUTION COPY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET PURCHASE AGREEMENT

 

BY AND AMONG

 

HWN, INC.,

 

ADEX CORPORATION,

 

AND

 

INTERCLOUD SYSTEMS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page No. ARTICLE 1 ACQUISITION OF THE BUSINESS 1 Section 1.1. Sale and
Transfer of Certain Assets of the Business 1 Section 1.2. Excluded Assets 2
Section 1.3. Liabilities 2 Section 1.4. Employees 3 Section 1.5. Purchase Price
for the Business 3 ARTICLE 2 DUE DILIGENCE 5 Section 2.1. Due Diligence
Deliveries 5 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PURCHASER 6 Section
3.1. Organization 6 Section 3.2. Authority; Enforceability 6 Section 3.3. No
Conflicts 6 Section 3.4. Consents 6 Section 3.5. Brokers or Finders 6 ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER 7 Section 4.1. Organization 7 Section
4.2. Authority; Enforceability 7 Section 4.3. Consents 7 Section 4.4. No
Conflicts 8 Section 4.5. Claims 8 Section 4.6. Ownership 8 Section 4.7.
Financial Statements 8 Section 4.8. Key Employees 8 Section 4.9. No Material
Adverse Change 8 Section 4.10. Brokers or Finders 8 Section 4.11. Solvency 9
Section 4.12. Tax Matters 9 Section 4.13. Employee Benefits 9 Section 4.14.
Absence of Undisclosed Liabilities and Encumbrances 11 Section 4.15. Litigation
11 Section 4.16. Intellectual Property 11 ARTICLE 5 CONDITIONS PRECEDENT TO
PURCHASER’S OBLIGATION TO CLOSE 11 Section 5.1. Satisfaction of Due Diligence 11
Section 5.2. Key Employees 11 Section 5.3. Accuracy of Representations 11
Section 5.4. Seller’s Performance 11 Section 5.5. No Proceedings and No Material
Adverse Changes 12 Section 5.6. Transition Assistance 12 Section 5.7. Additional
Documentation 12 Section 5.8. Lender Approval 12 Section 5.9. Stop Orders 12
Section 5.10. Schedule of Liabilities Known to Seller 12

 

 

 

 

ARTICLE 6 CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS TO CLOSE 12 Section 6.1.
Accuracy of Representations 12 Section 6.2. Purchaser’s Performance 12 Section
6.3. Schedule of Liabilities Known to Purchaser 13 Section 6.4. Additional
Documentation 13 ARTICLE 7 CLOSING AND CLOSING DELIVERIES 13 Section 7.1.
Closing Date 13 Section 7.2. Closing Deliveries 13 ARTICLE 8 PRE-CLOSING
COVENANTS OF SELLER 13 Section 8.1. No Transfer of the Purchased Assets 13
Section 8.2. Maintenance of Status 13 Section 8.3. Operation of Business 13
Section 8.4. Actions Before the Closing Date 14 Section 8.5. Access; Cooperation
14 Section 8.6. Notification of Certain Matters 14 Section 8.7. Exclusivity 14
ARTICLE 9 PRE-CLOSING COVENANTS OF PURCHASER 14 Section 9.1. Maintenance of
Status 14 Section 9.2. Actions Before the Closing Date 15 Section 9.3.
Confidentiality 15 Section 9.4. Additional Notices and Covenants 15 Section 9.5.
Notification of Certain Matters 15 ARTICLE 10 POST-CLOSING COVENANTS 15 Section
10.1. Agreement Not to Compete 15 Section 10.2. Agreement Not to Solicit 16
ARTICLE 11 DISPUTE RESOLUTIONS 16 Section 11.1. Arbitration 16 Section 11.2.
Injunctive Relief 16 ARTICLE 12 SURVIVAL; INDEMNIFICATION; TERMINATION 17
Section 12.1. Survival of Representations and Warranties Until Closing 17
Section 12.2. Indemnification by Seller 17 Section 12.3. Indemnification by
Purchaser 17 Section 12.4. Inter-Party Claims 17 Section 12.5. Third Party
Claims 18 Section 12.6. Indemnification Not Exclusive Remedy 18 Section 12.7.
Events of Termination 18 Section 12.8. Effect of Termination 19 Section 12.9.
Limitation on Liability 19 ARTICLE 13 MISCELLANEOUS 19 Section 13.1. Notices 19
Section 13.2. Binding Effect 20 Section 13.3. Headings 20 Section 13.4.
Schedules and Exhibits 20 Section 13.5. Counterparts 20 Section 13.6. Governing
Law; Jurisdiction 20 Section 13.7. Waivers 20 Section 13.8. Pronouns 21 Section
13.9. No Strict Construction 21 Section 13.10. Modification 21 Section 13.11.
Miscellaneous Covenants 21 Section 13.12. Further Assurances 21 Section 13.13.
Public Announcements 21 Section 13.14. Entire Agreement 21

 

 

 

 

ASSET PURCHASE AGREEMENT
BY AND AMONG
HWN, INC.,
ADEX CORP.
AND
INTERCLOUD SYSTEMS, INC.

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of February 28,
2017, and is made effective as of February 1, 2017, and is made and entered into
by and among HWN, INC., a Delaware corporation (the “Purchaser”), ADEX CORP., a
New York corporation (“ADEX”), INTERCLOUD SYSTEMS, INC., a Delaware corporation
(“InterCloud,” and together with ADEX, the “Seller”).

 

RECITALS:

 

A.       ADEX is a wholly-owned subsidiary of InterCloud. ADEX, through its High
Wire division, is in the business of contracting with telecommunications
infrastructure manufacturers to install the manufacturers’ products for
end-users (the “Business”). Seller desires to sell, and Purchaser desires to
purchase, Seller’s assets related to the Business, subject to the terms and
conditions set forth herein.

 

B.       Subject to the terms and conditions hereof (i) Purchaser will purchase
the Business; (ii) Purchaser will agree to hire certain of Seller’s employees;
and (iii) Seller will agree not to compete with the Business being sold to
Purchaser, and not to solicit the Business clients being transferred to
Purchaser in connection with this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter contained, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:

 

ARTICLE 1

ACQUISITION OF THE BUSINESS

 

Section 1.1.       Sale and Transfer of Certain Assets of the Business. Subject
to the terms and conditions of this Agreement, Seller agrees to transfer, and
Purchaser agrees to acquire certain assets of the Business. Seller agrees that
all conditions precedent related to the transfer of the Business to Purchaser
will have been completed by the Closing Date. In connection with such transfer,
Seller agrees to transfer and assign to Purchaser any and all right, title and
interest currently owned or licensed by Seller in connection with the Business,
and described herein (the “Transferred Assets”) free and clear of all liens and
encumbrances, which shall be sold pursuant to and in accordance with the Bill of
Sale, substantially in the form attached hereto as Exhibit 1.1.

 

(a)       Accounts receivable listed on Schedule 1.1(a) attached hereto;

 

 

 

 

(b)       All inventory and other assets of the Seller related to the Business,
including all contracts, equipment and other fixed assets, software,
intellectual property and licenses and other assets related to the Business
listed on Schedule 1.1(b).

 

(c)       All files related to the Business, including, specifically, complete
client files related to the Business, including contracts, purchase orders,
service contracts, licensing agreements, billing records, correspondence, and
any other reasonable information that would assist or benefit Purchaser in
connection with the ongoing support, sales, and service of the Business;

 

(d)       Any pre-paid contracts, deposits or service or maintenance renewal
fees related to any period of time from the Closing Date onward;

 

(e)       The right to the name “High Wire Networks” and derivatives thereof;

 

(f)       All trademarks, trade, brand, assumed and domain names and websites of
Seller associated with the Business listed on Schedule 1.1(f);

 

(g)       All rights in, to and under the assigned contracts listed in Schedule
1.1(g) (the “Assigned Contracts”);

 

(h)       All work in progress of the Business listed on Schedule 1.1(h); and

 

(i)       All cash and cash equivalents and deposit accounts related to the
Business.

 

Section 1.2.       Excluded Assets. Purchaser is purchasing only the Transferred
Assets, and will not be purchasing any other assets of Seller, which shall be
excluded from the Transferred Assets, including, but not limited to, the assets
listed below (the “Excluded Assets”):

 

(a)       All financial statements, tax returns and related financial
information of the Seller;

 

(b)       All insurance policies owned or maintained by Seller and all rights
thereunder;

 

(c)       All claims for refunds of taxes or governmental charges; and

 

(d)       Interest on and principal amounts due and owing to Seller by any of
its affiliates.

 

Section 1.3.       Liabilities. The parties hereto agree as follows:

 

(a)       At the Closing, Purchaser shall assume and agree to discharge only the
following specifically enumerated liabilities of Seller (the “Assumed
Liabilities”):

 

(i)       those liabilities arising under accounts payable set forth on Schedule
1.3(a)(i);

 

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(ii)      those liabilities relating to the Business for future payment or
performance under the Assigned Contracts, including customer deposits and
deferred revenue which (A) initially accrue or arise after the Closing Date; (B)
were incurred in the ordinary course of business; and (C) are not the result of
or caused by any breach, failure to perform, improper performance or default of,
Seller thereunder on or prior to the Closing Date;

 

(iii)     except as otherwise set forth herein, any and all liabilities arising
out of or related to the ownership of the Transferred Assets or the operation of
the Business arising or accruing from and after the Closing Date;

 

(iv)     all obligations to complete work-in-progress; and

 

(v)      accrued commissions and other unpaid accrued expenses as set forth in
Schedule 1.3(a)(v).

 

(b)       All other liabilities of the Seller that are not Assumed Liabilities,
whether existing as of the Closing Date or incurred thereafter, and whether
direct or indirect, known or unknown, shall constitute excluded liabilities (the
“Excluded Liabilities”) All Excluded Liabilities remain the sole obligation of
Seller and Purchaser shall not assume, and shall not agree to assume, or pay or
perform, or in any way be responsible for, any of the Excluded Liabilities. The
Seller shall pay and satisfy in due course all Excluded Liabilities which the
Seller is obligated to pay and satisfy.

 

Section 1.4.       Employees. Purchaser and Seller also agree that Purchaser
shall offer current employment opportunities to certain key employees (“Key
Employees”) who are identified and listed on Schedule 1.4 effective as of
Closing. Schedule 1.4 shall also include their current wages or salaries, and
other benefits. Purchaser shall have no obligation to match such wages, salaries
or benefits. Seller will pay to the Key Employees the amount of any accrued
vacation time existing as of the date of Closing. Seller will make available to
Purchaser, to the extent allowed under law, a copy of all employment files
related to the Key Employees who agree to work for Purchaser. Seller shall
remain liable for any and all obligations related to the Key Employees for
periods prior to Closing, and will indemnify and hold Purchaser harmless from
same. Purchaser will be liable for any and all obligations related to the Key
Employees who agree to work for Purchaser for periods on or after Closing, and
will agree to indemnify and hold Seller harmless from same. As further described
in Section 5.6 hereof, the parties contemplate entering into a Services
Agreement for transition services from the Closing Date until August 28, 2017,
unless extended by mutual agreement of the parties pursuant to the terms of the
Services Agreement.

 

Section 1.5.       Purchase Price for the Business.

 

(a)       The aggregate consideration (the “Purchase Price”) to be paid by
Purchaser to Seller for the Transferred Assets shall be an amount equal to the
sum of: (a) Four Million Dollars ($4,000,000) (the “Base Payment”); (b) plus the
Adjusted Net Working Capital Amount.

 

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(b)       The Base Payment shall be paid at Closing to the Seller in cash in
immediately available funds in accordance with the payment statement, attached
hereto as Exhibit 1.5(b)(i) (the “Payment Statement”).

 

(c)       No sooner than five (5) days and no later than two (2) days prior to
the Closing Date, Seller shall prepare and deliver to the Purchaser the
calculation of the Closing Net Working Capital Amount, along with detailed
supporting schedules and records for the Seller’s calculation of the Closing Net
Working Capital Amount. The Seller’s calculation of the Closing Net Working
Capital Amount shall be subject to approval by the Purchaser (which approval
shall not be unreasonably withheld), and the Seller shall provide the Purchaser
with access to all books, records and personnel requested by Purchaser to verify
and approve the Closing Net Working Capital Amount. As used herein “Closing Net
Working Capital Amount” shall mean the current assets of the Seller (excluding
cash on hand) to be received by the Purchaser at Closing less the current
liabilities of Seller to be assumed by Purchaser at Closing, prepared in
conformity with generally accepted accounting principles in effect from time to
time, consistently applied (“GAAP”).

 

(d)       Six (6) months following the Closing Date, Purchaser shall prepare and
deliver to the Seller a statement setting forth Purchaser’s calculation of the
Adjusted Net Working Capital Amount. As used herein, “Adjusted Net Working
Capital Amount” shall mean the Closing Net Working Capital Amount, less any
adjustments for (a) unrecorded liabilities related to pre-paid service
agreements as of the Closing Date, for which Seller has already received payment
from the applicable customer as invoiced but not collected accounts receivable
related to prepaid services between January 10, 2017 and the Closing Date; (b)
any commissions incorrectly estimated, either over or under-estimated, on the
Closing Date paid by Purchaser to sales staff for transactions completed and
invoiced prior to the Closing Date; (c) any funds collected in error by
Purchaser or Seller and not returned; and (d) any fees, taxes, costs or
penalties incurred by Seller and paid by Purchaser deemed essential to business
continuity relating to the period up to the Closing Date and arising from
Seller’s errors or omissions. Within thirty (30) days after delivery of
Purchaser’s calculation of the Adjusted Net Working Capital Amount (the
“Objection Period”), the Seller shall notify Purchaser in writing of any
objections to the calculations contained therein, specifying in detail each
objection and the basis for each objection (an “Objection Notice”). If the
Seller fails to deliver an Objection Notice to Purchaser within the Objection
Period, then Purchaser’s calculation of the Adjusted Net Working Capital Amount
shall be deemed final, binding and conclusive for all purposes hereunder. If the
Seller delivers an Objection Notice to Purchaser within the Objection Period,
then Purchaser and the Seller shall use good faith efforts to resolve the
disputed items during the thirty (30) day period after the Objection Notice has
been delivered to Purchaser (or within such extended time period as is mutually
agreed by the Purchaser and the Seller). Any disputed items resolved in writing
between the Purchaser and the Seller within such thirty (30) day period (or
within such extended time period as is mutually agreed by the Purchaser and the
Seller) shall be final and binding with respect to such items. Any items which
the Purchaser and the Seller are unable to so resolve shall be submitted for
final determination to an independent accounting firm acceptable to Purchaser
and the Seller (the “Independent Accountant”).

 

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The Independent Accountant shall make a written determination as to each issue
remaining in dispute and the amount of the Adjusted Net Working Capital Amount
and the effect thereof on the Purchase Price, which determination of the
Independent Accountant shall be final and binding upon the parties for all
purposes hereunder. The Purchaser and the Seller shall use their commercially
reasonable efforts to cause the Independent Accountant to render a written
decision resolving the matters submitted to it within thirty (30) days following
the submission thereof. The Independent Accountant shall be authorized to
resolve only those issues remaining in dispute between the Purchaser and the
Seller submitted to it in accordance with this Section. The Purchaser and the
Seller shall instruct the Independent Accountant not to, and the Independent
Accountant shall not, assign a value to any item in dispute greater than the
greatest value for such item assigned by Purchaser, on the one hand, or the
Seller, on the other hand, or less than the smallest value for such item
assigned by Purchaser, on the one hand, or the Seller, on the other hand. The
Purchaser and the Seller shall also instruct the Independent Accountant to make
its determination based solely on presentations by the parties which are in
accordance with the guidelines and procedures set forth in this Agreement, and
not on the basis of any independent review by the Independent Accountant. The
Purchaser and the Seller agree that judgment may be entered upon the written
determination of the Independent Accountant in any court referred to in this
Agreement. The fees and expenses of the Independent Accountant shall be borne by
the parties in inverse proportion as they may prevail on the issues resolved by
the Independent Accountant, which proportionate allocation shall be calculated
on an aggregate basis based on the relative dollar values of the amounts in
dispute and shall be determined by the Independent Accountant at the time the
Independent Accountant renders its determination on the merits of the matters
submitted thereto.

 

(e)       Within five (5) Business Days following the date on which the
calculation of the Adjusted Net Working Capital Amount become final and binding
pursuant to this Agreement, Purchaser shall pay to Seller (by wire transfer of
immediately available funds pursuant to instructions provided by the Seller) an
amount equal to the Adjusted Net Working Capital Amount.

 

(f)       Allocation of Purchase Price. The Purchase Price shall be allocated to
the Transferred Assets using the methodology described on Exhibit 1.5(f) hereto.

 

ARTICLE 2

DUE DILIGENCE

 

Section 2.1.       Due Diligence Deliveries. Prior to the Closing Date, Seller
shall deliver to Purchaser information concerning Seller’s Business, including
client information, financial statements, and UCC lien, tax lien and judgment
searches for the Seller and all of the Transferred Assets in a form and content
satisfactory to Purchaser obtained from a third party service company.

 

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Seller, that as of the date hereof, and as
of the Closing Date, as follows:

 

Section 3.1.       Organization. Purchaser is a Delaware corporation duly
organized and existing under the laws of the state of Delaware with full
corporate and other power and authority to carry on its business as it is now
being conducted.

 

Section 3.2.       Authority; Enforceability. Purchaser has full power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. All requisite actions to approve, execute,
deliver and perform this Agreement and each other agreement and document
delivered or to be delivered by it in connection herewith has been or will be
taken by it. A copy of Purchaser’s Resolutions approving this transaction are
attached hereto as Exhibit 3.2. This Agreement and each other agreement and
document delivered by Purchaser in connection herewith have been or will be duly
executed and delivered by it and constitute or will constitute the legal, valid
and binding obligations of it enforceable in accordance with their respective
terms.

 

Section 3.3.       No Conflicts. No action taken by or on behalf of Purchaser in
connection herewith, including, but not limited to, the execution, delivery and
performance of this Agreement:

 

(a)       contravenes, conflicts with or results in a violation or breach of any
contract to which Purchaser is a party;

 

(b)       contravenes, conflicts with or violates: (i) any law or (ii) any
order, arbitration award, judgment, decree or other similar restriction to which
Purchaser or its respective assets is subject; or

 

(c)       constitutes an event which, after notice or lapse of time or both,
would result in any of the foregoing.

 

Section 3.4.       Consents. Except for the ratification and approval of this
Agreement by Purchaser’s board of directors, no approval or consent is required
to be made by it in connection with the transactions contemplated hereby or the
execution, delivery or performance by it of this Agreement or any other
agreement or document delivered by or on behalf of it in connection herewith.

 

Section 3.5.       Brokers or Finders. Purchaser has not incurred any obligation
or liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with the transactions
contemplated hereunder.

 

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Purchaser that as of the date hereof, and as
of the Closing Date, as follows:

 

Section 4.1.       Organization. ADEX is a corporation duly organized, existing
and in good standing under the laws of the State of New York. InterCloud
Systems, Inc. is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware. Each Seller has full control and other
power and authority to carry on its business as it is now being conducted. Each
Seller is duly qualified or authorized to do business and is in current status
or good standing, as applicable, under the laws of each jurisdiction in which
the conduct of its business requires such qualification or authorization.

 

Section 4.2.       Authority; Enforceability.

 

(a)       Each Seller has full power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
All requisite actions to approve, execute, deliver and perform this Agreement
and each other agreement and document delivered or to be delivered by each
Seller in connection herewith has been or will be taken by each Seller. A copy
of Seller’s Resolutions approving this transaction are attached hereto as
Exhibit 4.2. This Agreement and each other agreement and document delivered by
Seller in connection herewith have been or will be duly executed and delivered
by Seller and constitute or will constitute the legal, valid and binding
obligations of Seller enforceable in accordance with their respective terms.

 

(b)       Each Seller has full capacity, power and authority to execute, deliver
and perform this Agreement and to consummate the transactions contemplated
hereby. This Agreement and each other agreement and document delivered by Seller
in connection herewith have been or will be duly executed and delivered by them
and constitute or will constitute the legal, valid and binding obligations of
each Seller enforceable in accordance with their respective terms.

 

Section 4.3.       Consents. Except for the ratification and approval of this
Agreement by Seller’s board of directors, and except as set forth on Schedule
4.3, no approval or consent is required to be obtained by Seller in connection
with the transactions contemplated hereby or the execution, delivery or
performance by Seller of this Agreement. . If the consent or approval of any
third party is necessary for the assignment or other transfer to Purchaser of
any contract identified as an Assumed Contract, and such consent or approval has
not been obtained prior to Closing, then such Contract shall not be assigned to
Purchaser and shall not be an Assumed Contract, unless otherwise agreed to by
the Purchaser. Following Closing, the parties shall use commercially reasonable
efforts to obtain such consents or approvals. If any such consent or approval
cannot be obtained, the parties will cooperate in any reasonable arrangement
designed to obtain for Purchaser all benefits and privileges of the applicable
contract.

 

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Section 4.4.       No Conflicts. No action taken by or on behalf of Seller in
connection herewith, including, but not limited to, the execution, delivery and
performance of this Agreement:

 

(a)       contravenes, conflicts with or results in a violation or breach of any
contract to which Seller is a party;

 

(b)       contravenes, conflicts with or violates: (i) any law or (ii) any
order, arbitration award, judgment, decree or other similar restriction to which
Seller or its respective assets is subject; or

 

(c)       constitutes an event which, after notice or lapse of time or both,
would result in any of the foregoing.

 

Section 4.5.       Claims. There is no litigation, claim, governmental or other
proceeding or investigation pending or, to the knowledge of Seller, threatened
against Seller which if adversely determined would have a material adverse
effect on the Business.

 

Section 4.6.       Ownership. On the Closing Date, Seller will sell the
Transferred Assets free and clear of all liens and encumbrances.

 

Section 4.7.       Financial Statements. The financial statements delivered to
Purchaser (the “Financial Statements”) and which are attached as Schedule 4.7
fairly present the financial condition and the results of operations of the
Business as at the respective dates of and for the periods referred to in such
Financial Statements, all in accordance with GAAP. The Financial Statements
referred to in this Section 4.7 reflect the consistent application of such
accounting principles throughout the periods involved, and have been prepared
from the books and records of Seller and are in accordance with the accounting
records of Seller.

 

Section 4.8.       Key Employees. None of the Key Employees have written
employment agreements or letter agreements that are intended to serve as
employment agreements or contracts, or post-employment restrictive covenants.

 

Section 4.9.       No Material Adverse Change. Since the date of the Financial
Statements, there has not been any material adverse change in the business,
operations, prospects, assets, results of operations or condition (financial or
other) of the Business, and no event has occurred or circumstance exists that
may result in such a material adverse change.

 

Section 4.10.       Brokers or Finders. Seller has not incurred any obligation
or liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or other similar payments in connection with the transactions
contemplated hereunder.

 

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Section 4.11.       Solvency. Seller hereby warrants and represents that neither
its execution of this Agreement nor consummation of the transactions
contemplated by this Agreement shall constitute a fraudulent transfer of
Seller’s property, as defined in the Uniform Fraudulent Transfer Act, as
promulgated in the State of Illinois at 740 ILCS 160/1, et seq., as may be
amended or supplemented from time to time (the “Act”). In this regard, Seller
specifically warrants and represents that:

 

(a)       Seller has been for the one (1) year period ending on the date of this
Agreement, and is on the date of this Agreement, solvent;

 

(b)       Seller will not be made insolvent by its execution of this Agreement
or its consummation of the transactions contemplated by this Agreement;

 

(c)       Purchaser has given Seller, and Seller has received, property of a
present value reasonably equivalent to the value of the present property
transferred to Purchaser; and

 

(d)       The transfers of property contemplated in this Agreement, individually
and collectively, are not fraudulent as to any one or more of Seller’s
creditors, regardless of whether the claims of such creditors arose before or
arise after the consummation of such transfers.

 

Section 4.12.       Tax Matters. With respect to the Business: (i) Seller has
filed or caused to be filed on a timely basis all tax returns and all reports
with respect to taxes that are or were required to be filed pursuant to
applicable Law; (ii) to Seller’s knowledge, all positions taken on such tax
returns and reports filed by Seller relating to the Business are true, correct
and complete in all respects and were prepared in compliance with all applicable
laws and regulations; (iii) Seller has paid, or shall pay all filed or required
to be filed taxes that have or may have become due for all periods covered by
all tax returns filed or required to be filed or otherwise, or pursuant to any
assessment received by Seller, including, without limitation, a tax liability to
the State of Illinois in the amount of $21,970.76; (iv) Seller has made all
withholding of taxes required to be made under all applicable Laws including,
without limitation, withholding with respect to sales and use taxes and
compensation paid to employees, and the amounts withheld have been properly paid
over to the appropriate tax authorities; (v) no claim has ever been made or
could reasonably be made by any governmental entity in a jurisdiction where
Seller does not file tax returns with respect to the Business that it is or may
be subject to taxation by that jurisdiction in connection with the Business;
(vii) there are no encumbrances on any of the Transferred Assets that arose in
connection with any failure (or alleged failure) to pay any tax and no basis
exists for assertion of any claims attributable to taxes which, if adversely
determined, would result in any such encumbrance; (viii) Seller is not a
“foreign person” within the meaning of Section 1445(f)(3) of the Code; and (ix)
the transactions contemplated by this Agreement are not subject to the tax
withholding provisions of Section 3406 of the Code or of Sub-Chapter A or
Chapter 3 of the Code, or of any other comparable provision of Law.

 

Section 4.13.       Employee Benefits.

 

(a)       Schedule 4.13(a) set forth a complete list of all material benefit
plans operated by Seller that cover the Key Employees (the “Company Benefit
Plans”). Apart from the Company Benefit Plans, there are no other benefit plans
pertaining to the Business. Seller is in compliance with its obligations under
the Company Benefit Plans and has made all deposits required to be made with
respect to the Company Benefit Plans as of the Closing Date.

 

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(b)       Schedule 4.13(b) sets forth the job titles, salaries, age and dates of
commencement of continuous service for each Key Employee and the amount of any
bonuses due and payable. As of the date hereof, there are no proposals to change
the terms, schemes, arrangements or policies relating to Key Employees.

 

(c)       Benefits Matters.

 

(i)       None of Seller or any ERISA Affiliate thereof contributes or has been
required to contribute (on a contingent basis or otherwise), to any
multiemployer plan pertaining to the Business within the meaning of Section
3(37) of ERISA. No Company Benefit Plan has ever been subject to Title IV of
ERISA and no event (including any action or any failure to take any action) has
occurred with respect to any Company Benefit Plan currently maintained by QAA or
any ERISA Affiliate thereof that would subject QAA to any liability under Title
IV of ERISA.

 

(ii)       The Company Benefit Plans have been maintained, in all material
respects, in accordance with their terms and with all provisions of ERISA, the
Code and other applicable federal and state laws, and no Seller nor, to the
Knowledge of the Seller, any other “party in interest” or “disqualified person”
with respect to the Company Benefit Plans has engaged in a non-exempt
“prohibited transactional” within the meaning of Section 4975 of the Code or
Section 406 of ERISA. No fiduciary who is an employee or director of the Seller,
and no other fiduciary has any liability for breach of fiduciary duty or any
other failure to act or comply in connection with the administration or
investment of the assets of any Company Benefit Plan.

 

(iii)       The Company Benefit Plans intended to qualify under Section 401 of
the Code are so qualified and the trusts maintained pursuant thereto are exempt
from federal income taxation under Section 501 of the Code, and nothing has
occurred with respect to the operation of such plans which could cause the loss
of such qualification or exemption or the imposition of any liability, penalty
or tax under ERISA or the Code, except for insignificant operational errors
which are eligible for self-correction under the terms of the IRS’s Employee
Plans Compliance Resolution System program.

 

(iv)       There are no pending actions, claims or lawsuits which have been
asserted or instituted against the Company Benefit Plans, the assets of any of
the trusts under such plans or the plan sponsor or the plan administrator; or
against any fiduciary of the Company Benefit Plans with respect to the operation
of such plans (other than routine benefit claims), nor are there any facts which
could form the basis for any such claim or lawsuit.

 

 - 10 - 

 

 

Section 4.14.       Absence of Undisclosed Liabilities and Encumbrances. The
Transferred Assets shall be conveyed to Purchaser pursuant to this Agreement
free and clear of all encumbrances, and except for the Assumed Liabilities,
Purchaser shall not incur any liability as a result of its acquisition of the
Transferred Assets. Seller has no indebtedness, obligation or liability relating
to the Business (in any case, whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated or due
or to become due) which is not shown on the face of the most recent audited
balance sheets of Seller (or in the notes to the corresponding audited financial
statements) and would reasonably be expected to have a material adverse effect
on the Business and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
Seller or the Business or otherwise affecting the Transferred Assets giving rise
to any such indebtedness, obligation or liability.

 

Section 4.15.       Litigation. Other than those actions or proceedings
previously disclosed by the parties (a) there are no investigations, inquiries,
audits or proceedings pending or overtly threatened against or affecting the
Business or any of the Transferred Assets, (b) there are no unsatisfied
judgments of any kind against Seller, the Business or any of the Transferred
Assets, and (c) Seller is not subject to any judgment, order or decree of any
court or governmental entity.

 

Section 4.16.       Intellectual Property. Seller is the owner or a licensee of
all right, title and interest in and to each of the Transferred Assets relating
to intellectual property which shall be transferred to the Purchaser on the
Closing Date free and clear of all encumbrances.

 

ARTICLE 5

CONDITIONS PRECEDENT TO PURCHASER’S OBLIGATION TO CLOSE

 

Purchaser’s obligation to take the actions required to be taken by them at
Closing is subject to the satisfaction, at or prior to Closing, of each of the
following conditions (any of which may be waived by Purchaser, in whole or in
part):

 

Section 5.1.       Satisfaction of Due Diligence. Purchaser shall have
completed, and shall be satisfied with, in its sole discretion, its due
diligence review of the business and assets of Seller, provided, however, that
Purchaser shall have completed its due diligence review no later than the
Closing Date. In connection therewith, Purchaser shall have access to such
information, books, records, facilities, personnel and certain clients of Seller
as Purchaser may reasonably request.

 

Section 5.2.       Key Employees. Each of the Key Employees has agreed to be
employed by the Purchaser.

 

Section 5.3.       Accuracy of Representations. Seller’s representations and
warranties in this Agreement (considered collectively), and each of such
representations and warranties (considered individually), shall have been
accurate in all material respects as of the date of this Agreement, and shall be
accurate in all material respects as of the time of the Closing as if then made.

 

Section 5.4.       Seller’s Performance. All of the covenants and obligations
that Seller are required to perform or to comply with pursuant to this Agreement
at or prior to the Closing (to the extent such matters can be done prior to
Closing, and if not, within a reasonable period of time after Closing), and each
of such covenants and obligations (considered individually), shall have been
duly performed and complied with in all material respects.

 

 - 11 - 

 

 

Section 5.5.       No Proceedings and No Material Adverse Changes. As of the
Closing Date, there shall not have been commenced or threatened against Seller
any proceeding (a) involving any challenge to, or seeking damages or other
relief in connection with, any of the transactions contemplated herein or (b)
that may have the effect of preventing, delaying, making illegal, imposing
limitations or conditions or otherwise interfering with any of the transactions
contemplated herein. Likewise, there shall not be any material adverse change in
the Business of Seller, its relationships with its clients, its business
prospects, its employees, its board, or other third parties with whom it
conducts business, which would, in a material respect, negatively and adversely
impact or affect the Business on a go forward basis.

 

Section 5.6.       Transition Assistance. The parties shall enter into a
Services Agreement to provide for the transition of certain services.

 

Section 5.7.       Additional Documentation. Such other documents as Purchaser
may reasonably request from Seller for the purpose of facilitating the
consummation or performance of any of the transactions contemplated hereunder.

 

Section 5.8.       Lender Approval. Purchaser shall have received an executed
letter from the Seller’s senior secured lender reasonably satisfactory to
Purchaser confirming that all liens upon any of the Transferred Assets in favor
of such lender have been released prior to the Closing Date, or will be released
on the Closing Date.

 

Section 5.9.       Stop Orders. Seller shall have delivered to Purchaser Stop
Orders, Releases or Clearance Letters, as the case may be, from the Illinois
Department of Revenue and the Illinois Department of Employment Security, and
any other applicable jurisdictions, with respect to the transactions
contemplated hereunder.

 

Section 5.10.       Schedule of Liabilities Known to Seller. Seller shall have
provided Purchaser with a schedule of all liabilities related to the Business,
whether such liabilities will be Assumed Liabilities or not, detailing all known
and contingent liabilities related to the Business. Seller shall certify that
such schedule has been prepared to the best of its knowledge, and is a material
inducement to Purchaser entering into this Agreement.

 

ARTICLE 6

CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS TO CLOSE

 

Seller’s obligation to take the actions required to be taken by them at Closing
is subject to the satisfaction, at or prior to Closing, of each of the following
conditions (any of which may be waived by Seller, in whole or in part):

 

Section 6.1.       Accuracy of Representations. All of Purchaser’s
representations and warranties in this Agreement (considered collectively), and
each of such representations and warranties (considered individually), shall
have been accurate in all material respects as of the date of this Agreement,
and shall be accurate in all material respects as of the time of the Closing as
if then made.

 

Section 6.2.       Purchaser’s Performance. All of the covenants and obligations
that Purchaser is required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively), and each of such
covenants and obligations (considered individually), shall have been duly
performed and complied with in all material respects.

 

 - 12 - 

 

 

Section 6.3.       Schedule of Liabilities Known to Purchaser. Purchaser shall
have provided Seller with a schedule of all liabilities related to the Business,
whether such liabilities will be Assumed Liabilities or not, detailing all known
and contingent liabilities related to the Business. Purchaser shall certify that
such schedule has been prepared to the best of its knowledge, and is a material
inducement to Seller entering into this Agreement.

 

Section 6.4.       Additional Documentation. Such other documents as Seller may
reasonably request from Purchaser for the purpose of facilitating the
consummation or performance of any of the transactions contemplated hereunder,
including the Services Agreement.

 

ARTICLE 7

CLOSING AND CLOSING DELIVERIES

 

Section 7.1.       Closing Date. Subject to the terms and conditions hereof,
consummation of the transactions contemplated hereby (the “Closing”) shall take
place on February 28, 2017, and is effective as of February 1, 2017 (the
“Closing Date”), or such other date upon which all conditions to Closing shall
be satisfied. The Closing shall take place by the electronic exchange of
documents.

 

Section 7.2.       Closing Deliveries. At Closing, each party will sign, execute
and deliver any and all necessary approvals, consents, bills of sale,
assignments, or other documents reasonably required to complete the transactions
called for by this Agreement.

 

ARTICLE 8

PRE-CLOSING COVENANTS OF SELLER

 

Seller covenants and agrees to comply with each of the following provisions
between the date hereof and the Closing Date:

 

Section 8.1.       No Transfer of the Purchased Assets. Seller shall not enter
and has not entered into any agreement, arrangement, commitment or understanding
to sell, transfer, assign, convey, pledge or otherwise dispose of any interest
in, or assets of, the Business except in the ordinary course of business.

 

Section 8.2.       Maintenance of Status. Each Seller will be maintained at all
times as a duly organized corporation validly existing and in good standing
under the laws of the State of Delaware.

 

Section 8.3.       Operation of Business. Seller’s Business will operate and has
operated its business diligently and in the usual, regular and ordinary course
and manner as it has been previously operated, and (a) Seller will preserve
Seller’s present business organization with respect to the Business intact; (b)
preserve Seller’s relationships with employees, owners, customers, clients,
suppliers, and others having business dealings with the Business (except as
related to ordinary turnover); and (c) continue to provide the same kind,
quality, frequency and timeliness of service to each Business customer or client
in a manner consistent with Seller’s past practices.

 

 - 13 - 

 

 

Section 8.4.       Actions Before the Closing Date. Seller will not take and has
not taken any action or permit any action to occur which shall cause Seller to
be in breach of any representation, warranty, covenant or agreement contained in
this Agreement or cause Seller to be unable to perform in any material respect
Seller’s obligations hereunder and shall use commercially reasonable best
efforts (subject to any conditions set forth in this Agreement) to perform and
satisfy all conditions to Closing to be performed or satisfied by Seller under
this Agreement or any other agreement entered into in connection herewith,
including action necessary to obtain all consents and approvals of any person
required to be obtained by him or it to effect the transactions contemplated by
this Agreement, or any other agreement entered into in connection herewith.

 

Section 8.5.       Access; Cooperation. Seller will provide and has provided
Purchaser and their accountants, attorneys and other authorized representatives,
the right, upon reasonable notice and during normal business hours, to enter
Seller’s offices in order to inspect Seller’s records and business operations
with respect to the Business and to consult with the Seller officers and its
legal and accounting advisors. Seller shall generally cooperate with Purchaser
and their officers, managers, employees, attorneys, accountants and other agents
and, generally, do such other acts and things in good faith as may be reasonable
to timely effectuate the purposes of this Agreement and the consummation of the
transactions contemplated herein in accordance with the provisions of this
Agreement.

 

Section 8.6.       Notification of Certain Matters. Seller shall give prompt
notice to Purchaser of:

 

(a)       the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representations or warranties contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Closing Date, and

 

(b)       any failure to comply with or satisfy in any respect any covenant,
condition or agreement to be complied with or satisfied by it hereunder.

 

Section 8.7.       Exclusivity. Seller shall not entertain, promote, seek,
obtain, encourage, or solicit any other third party to make a proposal or
ascertain their interest in acquiring the assets, business, or client contacts
or information concerning the Business.

 

ARTICLE 9

PRE-CLOSING COVENANTS OF PURCHASER

 

Purchaser covenants and agrees to comply with each of the following provisions
between the date hereof and the Closing Date:

 

Section 9.1.       Maintenance of Status. Purchaser will maintain or has
maintained itself, at all times as a duly organized corporation, validly
existing under the laws of the State of Delaware.

 

 - 14 - 

 

 

Section 9.2.       Actions Before the Closing Date. Purchaser will not take and
has not taken any action or permit any action to occur which shall cause it to
be in breach of any representation, warranty, covenant or agreement contained in
this Agreement or cause it to be unable to perform in any material respect its
obligations hereunder and shall use commercially reasonable best efforts
(subject to any conditions set forth in this Agreement) to perform and satisfy
all conditions to Closing to be performed or satisfied by it under this
Agreement or any other agreement entered into in connection herewith, including
action necessary to obtain all consents and approvals of any Person required to
be obtained by it to effect the transactions contemplated by this Agreement, or
any other agreement entered into in connection herewith.

 

Section 9.3.       Confidentiality. Other than to Purchaser’s representatives to
whom disclosure is necessary in order for Purchaser to enter into this
Agreement, such Purchaser has maintained, following the Closing will maintain,
the confidentiality of all disclosures made to it in connection with the
transactions contemplated by this Agreement.

 

Section 9.4.       Additional Notices and Covenants. Purchaser will give and has
given all notices to any governmental authority and other third parties required
to be given by it in connection with the transactions contemplated by this
Agreement.

 

Section 9.5.       Notification of Certain Matters. Purchaser will give and has
given prompt notice to Seller of:

 

(a)       the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any of its representations or warranties
contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date hereof to the Closing Date, and

 

(b)       any failure of it to comply with or satisfy in any respect any
covenant, condition or agreement to be complied with or satisfied by it
hereunder. It shall use its commercially reasonable efforts to remedy promptly
any such failure.

 

ARTICLE 10

POST-CLOSING COVENANTS

 

Section 10.1.       Agreement Not to Compete. Seller and Purchaser acknowledge
that there are certain business overlaps between the Business and other
partially or wholly-owned subsidiaries of Seller. Notwithstanding these existing
customer overlaps defined below, for a period of two (2) years from the Closing
Date, Seller and Purchaser each agree that it will not knowingly solicit, offer,
perform or sell any of the identical products or services that are currently
sold directly to any existing active client of such other party in the
continental United States (the “Restricted Territory”). With regard to customers
within the Defined Customer Overlap, Purchaser will not expand its current array
of services being performed for the overlapped customers in a way which would
compete with the current business of the Seller, or its partially or
wholly-owned subsidiaries. Additionally, with regard to customers within the
Defined Customer Overlap, Seller will not expand its current array of services
being performed for the overlapped customers in a way which would compete with
the Business. For purposes hereof, “Defined Customer Overlap” shall include
AT&T, Juniper Networks, any and all clients of SDN Essentials and any wholesale
client of TNS, and Uline. Seller acknowledges that certain shareholders of
Purchaser are also shareholders of Carousel Industries of North America, Inc., a
provider of telecommunication products and services. Seller acknowledges that
the restrictions in this Section shall not apply to any individual employee,
shareholder, officer, director, affiliate or agent of the Seller that is not a
Key Employee.

 

 - 15 - 

 

 

Section 10.2.       Agreement Not to Solicit. For a period of two (2) years from
the Closing Date, neither Seller nor Purchaser shall, directly or indirectly,
solicit for employment or attempt to solicit otherwise, endeavor to entice away,
hire or retain any person who is an employee of such other party; further, if an
employee of Seller or any partially or wholly-owned subsidiary of Seller
responds to a general solicitation or approaches Purchaser seeking employment
without solicitation, then Purchaser shall notify Seller within one business
day, and not hire such person without Seller’s express written consent. Seller
acknowledges that certain shareholders of Purchaser are also shareholders of
Carousel Industries of North America, Inc., a provider of telecommunication
products and services. Seller acknowledges that the restrictions in this Section
shall not apply to any individual employee, shareholder, officer, director,
affiliate or agent of the Seller that is not a Key Employee.

 

Section 10.3. Purchaser shall instruct all Key Employees to immediately return
all customer lists and any other information related to the Business which may
have been gathered during the time that Seller has owned the Business, other
than the Transferred Assets. Further, Purchaser shall instruct all such Key
Employees to maintain the confidentiality of all such information, and not share
such information with any other person. Such covenant is a material inducement
to Seller entering into the transactions contemplated by this Agreement.

 

ARTICLE 11

DISPUTE RESOLUTIONS

 

Section 11.1.       Arbitration. Except as hereinafter set forth in Section 11.2
below, if a dispute between the parties arises out of or is related to this
Agreement, or the breach of this Agreement, and if the dispute cannot be settled
through direct discussions, the parties agree to first endeavor to settle the
dispute in an amicable manner by mediation under the Commercial Mediation Rules
of the American Arbitration Association. Thereafter, either party shall have the
right to request arbitration by giving written notice thereof to the other
party, and in such event such arbitration shall be conducted by one arbitrator
in accordance with the rules of the American Arbitration Association. The
arbitrator selected shall be a competent person experienced in the subject
matter of the issue in dispute to make such determination. The reasonable
compensation of the arbitrator and the cost of arbitration shall be borne
equally by the parties. During arbitration, and as a condition to such
arbitration, the parties shall have limited discovery rights as directed by the
arbitrator. Any award or determination made by the arbitrator may, upon
application of either party to any court of competent jurisdiction, be reduced
to judgment by such court. The location of any such arbitration hearing shall be
in Chicago, Illinois.

 

Section 11.2.       Injunctive Relief. Notwithstanding the agreement to resolve
disputes and controversies by arbitration, as set forth and described in Section
11.1 above, Purchaser and Seller also agree that they shall each have the right
to seek injunctive relief in the event they believe they are about to suffer or
incur irreparable harm where money damages alone would be insufficient. In the
event injunctive relief is sought and not obtained, then the party who sought
injunctive relief shall be obligated to reimburse the other party for any costs
or expenses incurred by them, including reasonable attorney fees and court
costs, in defending against such action.

 

 - 16 - 

 

 

ARTICLE 12

SURVIVAL; INDEMNIFICATION; TERMINATION

 

Section 12.1.       Survival of Representations and Warranties Until Closing.
The representations and warranties of the parties in this Agreement shall
terminate two (2) years after Closing.

 

Section 12.2.       Indemnification by Seller. Seller agrees to indemnify and
hold Purchaser and their respective officers, managers, members, partners,
employees, agents, successors and assigns, harmless against and in respect of
any and all damages, which Purchaser or any such indemnitee may suffer, incur or
become subject to arising out of, based upon or otherwise in respect of: (a) any
inaccuracy in or breach of any representation or warranty of Seller made in or
pursuant to this Agreement or any other agreement, certificate or document
entered into in connection with the transactions contemplated hereunder; (b) any
breach or nonfulfillment of any covenant or obligation of Seller contained in
this Agreement or any other agreement, certificate or document entered into in
connection with the transactions contemplated hereunder; (c) any liability of
Seller not expressly assumed by Purchaser hereunder, including liabilities which
are due by Seller to vendors or suppliers which are critical to the continued
business and success of the Business or (d) any liability relating to the UCC
filings naming Bank Leumi as secured party and either Seller as debtor,
including, without limitation, all costs and expenses associated with releasing
such filings.

 

Section 12.3.       Indemnification by Purchaser. Purchaser shall indemnify and
hold each Seller and each of their officers, directors, shareholders, agents,
successors, and assigns harmless against and in respect of any and all damages
which Seller or any such indemnitee may suffer, incur or become subject to
arising out of, based upon or otherwise in respect of: (a) any inaccuracy in or
breach of any representation or warranty of Purchaser made in or pursuant to
this Agreement or any other agreement, certificate or document entered into in
connection with the transactions contemplated hereunder, and (b) any breach or
nonfulfillment of any covenant or obligation of Purchaser contained in this
Agreement or any other agreement, certificate or document entered into in
connection with the transactions contemplated hereunder.

 

Section 12.4.       Inter-Party Claims. Any party seeking indemnification
pursuant to this Section (the “Indemnified Party”) shall promptly notify in
writing the other party or parties from whom such indemnification is sought (the
“Indemnifying Party”) of the Indemnified Party’s assertion of such claim for
indemnification, specifying the basis of such claim. The Indemnified Party shall
thereupon give the Indemnifying Party reasonable access to the books, records
and assets of the Indemnified Party which evidence or support such claim or the
act, omission or occurrence giving rise to such claim and the right, upon prior
notice during normal business hours, to interview any appropriate personnel of
the Indemnified Party related thereto.

 

 - 17 - 

 

 

Section 12.5.       Third Party Claims.

 

(a)       Each Indemnified Party shall promptly notify the Indemnifying Party of
the assertion by any third party of any claim with respect to which the
indemnification set forth in this Section relates. The Indemnifying Party shall
have the right, upon notice to the Indemnified Party within twenty (20) business
days after the receipt of any such notice, to undertake the defense of such
claim with counsel reasonably acceptable to the Indemnified Party, or, with the
consent of the Indemnified Party (which consent shall not unreasonably be
withheld), to settle or compromise such claim. The failure of the Indemnifying
Party to give such notice and to undertake the defense of or to settle or
compromise such a claim shall constitute a waiver of the Indemnifying Party’s
rights under this Section 12.5(a) and shall preclude the Indemnifying Party from
disputing the manner in which the Indemnified Party may conduct the defense of
such claim or the reasonableness of any amount paid by the Indemnified Party in
satisfaction of such claim.

 

(b)       The election by the Indemnifying Party, pursuant to Section 12.5(a),
to undertake the defense of a third-party claim shall not preclude the party
against which such claim has been made also from participating or continuing to
participate in such defense, so long as such party bears its own legal fees and
expenses for so doing.

 

Section 12.6.       Indemnification Not Exclusive Remedy. The indemnification
obligations of the parties contained herein are not intended to waive or
preclude any other claims, rights or remedies which may exist at law (whether
statutory or otherwise) or in equity with respect to the matters covered by the
indemnifications. Purchaser specifically reserves the right to set off against
any amounts due to Seller for any indemnification claim Purchaser may have
against Seller.

 

Section 12.7.       Events of Termination. This Agreement may, by notice given
in the manner hereinafter provided, be terminated and abandoned at any time
prior to completion of the Closing, as follows:

 

(a)       by Purchaser, if there has been a material misrepresentation or a
material default or breach by Seller with respect to Seller’s representations
and warranties in Article 4 of this Agreement or the due and timely performance
of any of the covenants or agreements of Seller contained in this Agreement, and
in the case of a covenant or agreement default or breach, such default or breach
shall not have been cured within thirty (30) days after receipt by Seller of
notice specifying particularly such default or breach;

 

(b)       by Seller if there has been a material misrepresentation or a material
default or breach by Purchaser with respect to Purchaser’s representations and
warranties in Article 3 of this Agreement or the due and timely performance of
any of the covenants or agreements of Purchaser contained in this Agreement, and
in the case of a covenant or agreement default or breach, such default or breach
shall not have been cured within thirty (30) days after receipt by Purchaser of
notice specifying particularly such default or breach;

 

 - 18 - 

 

 

(c)       by either party at any time after February 28, 2017, if the Closing
has not occurred and the party seeking to terminate this Agreement is not in
material breach or default of any provisions of this Agreement; or

 

(d)       by unanimous agreement of both parties.

 

This Agreement may not be terminated after completion of the Closing.

 

Section 12.8.       Effect of Termination. In the event this Agreement is
terminated pursuant to Section 12.7 of this Agreement, all obligations of the
parties shall terminate without any liability of a party.

 

Section 12.9.       Limitation on Liability. Notwithstanding anything to the
contrary contained herein, except as hereinafter provided, the aggregate
liability of Purchaser for indemnification of losses and expenses pursuant to
Section 12.3 shall not exceed an amount equal to the Purchase Price actually
paid through the date an indemnification claim arises. Notwithstanding anything
to the contrary contained herein, and except as hereinafter provided, the
aggregate liability of Seller for indemnification of losses and expenses
pursuant to Section 12.2 shall not exceed an amount equal to the Purchase Price
actually paid through the date an indemnification claim arises. No limitation
shall exist for any party for any claims based on fraud. Likewise, no limitation
shall exist for any party for any claims resulting from bad faith breaches of
this Agreement. Finally, no limitation shall apply for any breach of
confidentiality or privacy issues.

 

ARTICLE 13

MISCELLANEOUS

 

Section 13.1.       Notices. All notices shall be in writing and shall be
delivered personally, sent by e-mail transmission or sent by certified,
registered or express mail, postage prepaid as follows:

 

  If to Purchaser: HWN, Inc.           Attn: Mark Porter     30 N. Lincoln St.
Suite G     Batavia, IL 60510         with a copy to: Daniel Coman, Esq.     Ice
Miller, LLP     2300 Cabot Drive, Ste. 455     Lisle, IL 60532    
Daniel.Coman@icemiller.com         If to Seller: InterCloud Systems, Inc.    
1030 Broad Street, Suite 102
Shrewsbury, NJ 07702     Attn.: Tim Larkin     E-mail: tlarkin@InterCloudsys.com

 

 - 19 - 

 

 

  with a copy to: Pryor Cashman LLP     7 Times Square     New York, NY 10036  
  Attn.: M. Ali Panjwani, Esq.     E-mail: ali.panjwani@pryorcashman.com

 

or to such other address as may have been designated in a prior notice. Notices
sent by registered or certified mail, postage prepaid, return receipt requested,
shall be deemed to have been given two (2) business days after being mailed, and
otherwise notices shall be deemed to have been given when received by the Person
to whom the notice is addressed or any other Person with apparent authority to
accept notices on behalf of the Person to whom the notice is addressed.

 

Section 13.2.      Binding Effect. Except as may be otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. Nothing in this Agreement is
intended or shall be construed to confer on any Person other than the parties
any rights or benefits hereunder.

 

Section 13.3.      Headings. The headings in this Agreement are intended solely
for convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.

 

Section 13.4.      Schedules and Exhibits. The Schedules and Exhibits referred
to in this Agreement shall be deemed to be a part of this Agreement.

 

Section 13.5.      Counterparts. This Agreement may be executed in multiple

 

counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same document.

 

Section 13.6.      Governing Law; Jurisdiction. This Agreement shall be governed
by and construed under Illinois law, without regard to conflict of laws
principles. Except for injunctive relief, all disputes shall be resolved by
arbitration as provided in Section 11.1. In the event a party should seek
injunctive relief or the enforcement of an arbitrator’s award, each of the
parties agrees that any such action may be commenced in the state courts located
in DuPage County, Illinois, or if there exists a basis for federal jurisdiction,
the United States District Court for the Northern District of Illinois, and such
court shall have the sole and exclusive jurisdiction over any such proceeding.
Any of these courts shall be proper venue for any such lawsuit or judicial
proceeding and the parties waive any objection to such venue. The parties
consent to and agree to submit to the jurisdiction of any of the courts
specified herein and agree to accept service of process to vest personal
jurisdiction over them in any of these courts.

 

Section 13.7.      Waivers. Compliance with the provisions of this Agreement may
be waived only by a written instrument specifically referring to this Agreement
and signed by the party waiving compliance. No course of dealing, nor any
failure or delay in exercising any right, shall be construed as a waiver, and no
single or partial exercise of a right shall preclude any other or further
exercise of that or any other right.

 

 - 20 - 

 

 

Section 13.8.      Pronouns. The use of a particular pronoun herein shall not be
restrictive as to gender or number but shall be interpreted in all cases as the
context may require.

 

Section 13.9.      No Strict Construction. The language used in this Agreement
has been negotiated by the parties and shall not be construed against either
party.

 

Section 13.10.      Modification. No supplement, modification or amendment of
this Agreement shall be binding unless made in a written instrument which is
signed by all of the parties and which specifically refers to this Agreement.
Further, this Agreement may be restated in its entirety if mutually agreed by
all Parties.

 

Section 13.11.      Miscellaneous Covenants.

 

(a)       Expenses. Each party shall pay all of its own expenses incident to the
transactions contemplated by this Agreement.

 

(b)       No Assignment. No assignment by any party of this Agreement or any
right or obligation hereunder may be made without the prior written consent of
the other party and any assignment attempted without that consent will be void.

 

Section 13.12.      Further Assurances. The parties shall cooperate reasonably
with each other in connection with any steps required to be taken as part of
their respective obligations under this Agreement, and shall (a) furnish upon
request to each other such further information; (b) execute and deliver to each
other such other documents; and (c) do such other acts and things, all as the
other party may reasonably request for the purpose of carrying out the intent of
this Agreement and the transactions contemplated hereunder.

 

Section 13.13.      Public Announcements. Other than as may be required by
federal securities laws, any public announcement, press release or similar
publicity with respect to this Agreement or the transactions contemplated
hereunder will be issued, if at all, at such time and in such manner as
Purchaser and Seller determine. The parties will consult with each other
concerning and mutually agree upon the means by which Seller’s employees,
customers, suppliers and others having dealings with Seller will be infointed of
the transactions contemplated hereunder.

 

Section 13.14.      Entire Agreement. This Agreement and the agreements and
documents referred to in this Agreement or delivered hereunder are the exclusive
statement of the agreement among the parties concerning the subject matter
hereof. All negotiations among the parties are merged into this Agreement, and
there are no representations, warranties, covenants, understandings or
agreements, oral or otherwise, in relation thereto among the parties other than
those incorporated herein and to be delivered hereunder.

 

 - 21 - 

 

 

INTENDING TO BE LEGALLY BOUND, the parties have signed this Agreement as of the
date first above written.

 

HWN, INC.   ADEX CORPORATION           By: /s/ Mark W. Porter   By:
               Name Mark W. Porter   Name   Title: President and CEO   Title:  
                INTERCLOUD SYSTEMS, INC.                 By:         Name      
  Title:  

 

Asset Purchase Agreement
High Wire Networks, Inc.

 

 

 

 

INTENDING TO BE LEGALLY BOUND, the parties have signed this Agreement as of the
date first above written.

 

HWN, INC.   ADEX CORPORATION           By:                   By: /s/ Daniel
Sullivan Name     Name Daniel Sullivan Title:     Title: Chief Financial Officer
                INTERCLOUD SYSTEMS, INC.                 By: /s/ Daniel Sullivan
      Name Daniel Sullivan       Title: Chief Accounting Officer

 

Asset Purchase Agreement
High Wire Networks, Inc.

 

 

 

 

SCHEDULES AND EXHIBITS

 

EXHIBITS:           Exhibit 1.1 - Bill of Sale       Exhibit 1.5(b)(i) - Payment
Statement       Exhibit 1.5(f) - Purchase Price Allocation       Exhibit 3.2 -
Purchaser Resolutions       Exhibit 4.2 - Seller Resolutions       SCHEDULES:  
        Schedule 1.1(a) - Accounts Receivable       Schedule 1.1(b) -
Transferred Assets       Schedule 1.1(f) - Intellectual Property       Schedule
1.1(g) - Assigned Contracts       Schedule 1.1(h) - Work-In-Progress      
Schedule 1.3(a)(i) - Accounts Payable       Schedule 1.3(a)(v) - Accrued
Commissions and Other Unpaid Accrued Expenses       Schedule 1.4 - Listing of
Key Employees       Schedule 4.3 - Consents       Schedule 4.7 - Financial
Statements of Seller       Schedule 5.9 - Seller’s Schedule of Liabilities      
Schedule 6.3 - Purchaser’s Schedule of Liabilities