STOCK PURCHASE AGREEMENT
AMONG
HADRON, INC.
AND
VAIL RESEARCH AND TECHNOLOGY CORPORATION
AND
XXXXXXXX XXXXX
DATED AS OF DECEMBER 18, 1998
TABLE OF CONTENTS
Page
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II
PURCHASE AND SALE OF SHARES. . . . . . . . . . . . . . . . . . .
2.1 Purchase and Sale of Shares . . . . . . . . . . . . . . . .3
2.2 Purchase Price. . . . . . . . . . . . . . . . . . . . . . .3
2.3 The Closing . . . . . . . . . . . . . . . . . . . . . . . .3
2.4 Purchase Price Adjustment . . . . . . . . . . . . . . . . .4
ARTICLE III
EMPLOYMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . .
3.1 Employment Agreement. . . . . . . . . . . . . . . . . . . .5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLER . .
4.1 Organization of Seller. . . . . . . . . . . . . . . . . . .5
4.2 Authority Relative to this Agreement. . . . . . . . . . . .5
4.3 Qualification of the Company. . . . . . . . . . . . . . . .6
4.4 Capitalization of the Company; Validity of Shares . . . . .6
4.5 No Violation. . . . . . . . . . . . . . . . . . . . . . . .6
4.6 Consents and Approvals. . . . . . . . . . . . . . . . . . .6
4.7 Compliance with Laws. . . . . . . . . . . . . . . . . . . .6
4.8 Licenses and Permits. . . . . . . . . . . . . . . . . . . .7
4.9 Environmental Matters . . . . . . . . . . . . . . . . . . .7
4.10 Financial Statements. . . . . . . . . . . . . . . . . . . .7
4.11 Absence of Change . . . . . . . . . . . . . . . . . . . . .7
4.12 Undisclosed Liabilities . . . . . . . . . . . . . . . . . .8
4.13 Current Information . . . . . . . . . . . . . . . . . . . .8
4.14 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . .9
4.15 Labor and Employment Matters. . . . . . . . . . . . . . . .9
4.16 Litigation. . . . . . . . . . . . . . . . . . . . . . . . .9
4.17 Title to Properties . . . . . . . . . . . . . . . . . . . .9
4.18 Leases. . . . . . . . . . . . . . . . . . . . . . . . . . .9
4.19 Material Contracts. . . . . . . . . . . . . . . . . . . . 10
4.20 Intellectual Property . . . . . . . . . . . . . . . . . . 11
4.21 Accounts Receivable . . . . . . . . . . . . . . . . . . . 11
4.22 Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . 11
4.23 Maintenance of Tangible Personal Property . . . . . . . . 12
4.24 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 12
4.25 Employee Benefit Plans. . . . . . . . . . . . . . . . . . 12
4.26 Insider Interests . . . . . . . . . . . . . . . . . . . . 13
4.27 Certain Practices . . . . . . . . . . . . . . . . . . . . 13
4.28 Full Disclosure . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . .
5.1 Organization; Authority Relative to this Agreement. . . . 13
5.2 No Violation. . . . . . . . . . . . . . . . . . . . . . . 14
5.3 Consents and Approvals. . . . . . . . . . . . . . . . . . 14
5.4 Litigation. . . . . . . . . . . . . . . . . . . . . . . . 14
5.6 Finders . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.7 Full Disclosure . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI
ADDITIONAL COVENANTS . . . . . . . . . . . . . . . . . . . . . .
6.1 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Public Announcements. . . . . . . . . . . . . . . . . . . 15
6.3 Further Assurances. . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII
EMPLOYEES AND EMPLOYEE MATTERS . . . . . . . . . . . . . . . . .
7.1 Company Employees . . . . . . . . . . . . . . . . . . . . 15
7.2 Employee Benefit Plans. . . . . . . . . . . . . . . . . . 15
7.3 Administration. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF BUYER . . . . . . . . . . . . . . .
8.1 Representations and Warranties. . . . . . . . . . . . . . 16
8.2 Performance of this Agreement . . . . . . . . . . . . . . 16
8.4 Consents and Approvals. . . . . . . . . . . . . . . . . . 16
8.5 Injunction, Litigation, etc . . . . . . . . . . . . . . . 16
8.6 Legislation . . . . . . . . . . . . . . . . . . . . . . . 17
8.7 Estoppel Certificates, etc. . . . . . . . . . . . . . . . 17
8.8 Resignations. . . . . . . . . . . . . . . . . . . . . . . 17
8.9 Opinion of Counsel for Seller . . . . . . . . . . . . . . 17
8.10 Repayment of Loan by Xxxxxxxx Xxxxx . . . . . . . . . . . 17
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF SELLER. . . . . . . . . . . . . . .
9.1 Representations and Warranties. . . . . . . . . . . . . . 17
9.2 Performance of this Agreement . . . . . . . . . . . . . . 17
9.3 Corporate Authorization . . . . . . . . . . . . . . . . . 18
9.4 Injunction, Litigation, etc . . . . . . . . . . . . . . . 18
9.5 Legislation . . . . . . . . . . . . . . . . . . . . . . . 18
9.6 Opinion of Counsel for Buyer. . . . . . . . . . . . . . . 18
ARTICLE X
CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.1 Time and Place of Closing . . . . . . . . . . . . . . . . 18
10.2 Deliveries by Seller. . . . . . . . . . . . . . . . . . . 18
10.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . 19
10.4 Deliveries by Seller and Buyer. . . . . . . . . . . . . . 19
ARTICLE XI
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . .
11.1 Indemnification by Seller . . . . . . . . . . . . . . . . 19
11.2 Indemnification by Buyer. . . . . . . . . . . . . . . . . 20
11.3 Third Party Claims. . . . . . . . . . . . . . . . . . . . 20
11.4 Survival; Investigation . . . . . . . . . . . . . . . . . 21
11.5 Maximum Liability . . . . . . . . . . . . . . . . . . . . 22
11.6 Indemnification Offset. . . . . . . . . . . . . . . . . . 22
ARTICLE XII
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . .
12.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 22
12.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . 23
12.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . 23
12.5 No Third Party Beneficiaries. . . . . . . . . . . . . . . 23
12.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 23
12.7 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 23
EXHIBITS
Exhibit A-1 Accounts Receivable Note
Exhibit A-2 Contingent Liability Note
Exhibit B Employment Agreement for Xxxxxxxx Xxxxx
Exhibit C Articles of Incorporation and Bylaws of
Vail Research & Technology Corporation
Exhibit D Opinion of Counsel of Seller
Exhibit E Opinion of Counsel of Buyer
Exhibit F Financial Statements of Vail
SCHEDULES
Seller's Disclosure Schedule
Schedule 4.8 Licenses and Permits
Schedule 4.15 Employment Agreement
Schedule 4.18 Lease Agreements
Schedule 4.19 Material Contracts
Schedule 4.20 Intellectual Property
Schedule 4.21 Accounts Receivable
Schedule 4.24 Insurance Policies
Schedule 4.25 Employee Benefit Plans
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT ("Agreement"), dated as of
December 18, 1998, is made among Xxxxxxxx Xxxxx the sole
stockholder of VAIL RESEARCH AND TECHNOLOGY CORPORATION ("Seller"),
HADRON, INC., a New York corporation ("Buyer") and VAIL RESEARCH
AND TECHNOLOGY CORPORATION, a Maryland corporation (the "Company").
INTRODUCTION
A. Seller owns all of the issued and outstanding shares (the
"Shares") of common stock of the Company.
B. Seller desires to sell and Buyer desires to purchase the
Shares on the terms and for the consideration hereinafter set
forth.
NOW THEREFORE, in consideration of the foregoing and the
representations, warranties and agreements herein contained, the
parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have
the following meanings:
"Accounts Receivable" has the meaning set forth in Section
4.21.
"Accounts Receivable Note" has the meaning set forth in
Section 2.3.
"Anniversary Date" has the meaning set forth in Section 2.3(b).
"Audited Company Financial Statements" has the meaning set
forth in Section 4.10.
"Closing" has the meaning set forth in Section 2.3.
"Closing Date" has the meaning set forth in Section 10.1.
"Company" means Vail Research and Technology Corporation.
"Company's Auditors" means Xxxxxx & XxXxxxxx Chartered
Certified Public Accountant.
"Company Employees" has the meaning set forth in Section 7.1.
"Contingent Liability Note" has the meaning set forth in
Section 2.3.
"Employment Agreement" has the meaning set forth in
Article III.
"Encumbrances" means liens, mortgages, charges, security
interests and other defects in title generally considered to be
encumbrances. When referring to the Shares, Encumbrances also means
any preemptive rights or rights of first refusal.
"Environmental Permits" has the meaning set forth in
Section 4.9(a).
"ERISA" means the Employment Retirement Income Security Act of
1974, as amended.
"Excess Collections" has the meaning set forth in Section 2.3.
"Intellectual Property" has the meaning set forth in
Section 4.20.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended.
"Inventory" has the meaning set forth in Section 4.22.
"Leases" has the meaning set forth in Section 4.18.
"Legal Action" has the meaning set forth in
Subsection 11.2(ii).
"Licenses and Permits" has the meaning set forth in
Section 4.8.
"Material Contracts" has the meaning set forth in
Section 4.19.
"Note and Notes" have the meaning set forth in Section 2.3.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plans" has the meaning set forth in Section 4.25(a).
"Person" means an individual, a corporation, a partnership, an
association, a labor union, a trust or any other entity or
organization, including a government, a governmental body, a
political subdivision or an agency of instrumentality thereof.
"Purchase Price" has the meaning set forth in Section 2.2.
"Reserve" has the meaning set forth in Section 2.3.
"Seller Disclosure Schedule" means the disclosure schedule
delivered by Seller to Buyer simultaneously with the execution and
delivery of this Agreement, which schedule contains certain
information constituting an integral part of this Agreement.
"Shares" has the meaning set forth in the Introduction.
"Shortfall" has the meaning set forth in Section 2.3.
"Stockholder Receivable" has the meaning set forth in Section
8.2.
"Subsidiary" with respect to any party to this Agreement,
means any corporation or other business entity, whether or not
incorporated, of which at least 50% of the securities or interests
having, by their terms, ordinary voting power to elect members of
the Board of Directors, or other persons performing similar
functions with respect to such entity, is held directly or
indirectly by such party.
"Survival Date" has the meaning set forth in Section 11.4(a).
"to the knowledge of Seller/Company" means to the knowledge of
either the Company or the Seller.
"Welfare Plans" has the meaning set forth in Section 4.25(a).
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale of Shares. Upon the terms and
conditions of this Agreement, at the Closing, Seller shall sell to
Buyer and Buyer shall purchase from Seller the Shares owned by
Seller for the consideration hereinafter set forth.
2.2 Purchase Price. The purchase price to be paid for the
Shares (the "Purchase Price") is One Million Five Hundred Ninety
Three Thousand Six Hundred and Sixty One Dollars and No/ 100
($1,593,661) (based upon the net worth of the Company as of
September 30, 1998 plus Two Hundred Thousand and No/100
($200,000)), subject to post-Closing adjustments for earnings from
September 30, 1998 through the Closing Date pursuant to Sections
2.3 and 2.4.
2.3 The Closing. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Shares shall take place at
a closing (the "Closing"), pursuant to Section 10.1. On the terms
and subject to the conditions of this Agreement, at Closing, Buyer
will pay to Seller:
(a) One Million One Hundred Ninety Three Thousand Six Hundred
and Sixty One Dollars and No/100 ($1,193,661) by
certified bank check;
(b) Three Hundred Thousand Dollars and No/100 ($300,000) by
means of Buyer's non-interest bearing promissory note
(the "Accounts Receivable Note") payable to the order of
Seller, in the form of the note attached as Exhibit A-1,
which note shall be payable each month in the amount of
Twenty-Five Thousand Dollars and No/100 ($25,000).
However, if in any month in which there remains an
outstanding balance on the Accounts Receivable Note, the
Buyer has received from the Accounts Receivable
collections in excess of the amount of the total monthly
payments made under the Accounts Receivable Note ( the
"Excess Collections"), the Buyer will pay to the Seller,
within ten (10) days of the end of each month, the
difference between the Excess Collections and the total
monthly payments then made under the Accounts Receivable
Note, up to the balance due under the Accounts Receivable
Note.
On the two year anniversary of the Closing Date (the
"Anniversary Date"), Buyer will make an accounting of all
Accounts Receivable collected to date. Any Accounts
Receivable uncollected by the Anniversary Date (the
"Shortfall")shall be satisfied in full first, in the
Buyer's discretion, by deducting such amount from either
the Contingent Liability Note or the Accounts Receivable
Note or both, or if such notes are no longer outstanding
or are insufficient to fully satisfy the Shortfall,
Seller shall be personally liable for immediately paying
to the Buyer the remaining amount of the Shortfall, if
any, subject to the limitation in Section 11.5 and 11.6.
(c) One Hundred Thousand Dollars and No/100 ($100,000) by
means of Buyer's non-interest bearing promissory note
the ("Contingent Liability Note") payable to the order of
Seller in the form of the note attached as Exhibit A-2,
which note shall be due and payable on the Anniversary
Date, less permitted deductions taken for contingent
liabilities.
2.4 Purchase Price Adjustment. On or before February 1,
1999, the net worth of the Company shall be determined as of
December 31, 1998, and the financials will be prepared consistent
with past practices. This net worth shall then be pro rated to
December 18, 1998, (the "Closing Value") and the Closing Value
shall be compared to the net worth of the Company as represented on
the Company's financial statements as of September 30, 1998.
("Preliminary Value"), attached as Exhibit F.
To the extent the Closing Value shall be less than the
Preliminary Value, the Purchase Price shall be reduced to the
extent of such difference. Such difference shall be immediately
paid by the Seller to Buyer by certified bank check. To the extent
the Closing Value shall be greater than the Preliminary Value, the
Purchase Price shall be increased to the extent of such
difference. Such difference shall be immediately paid by the Buyer
to Seller by certified bank check.
ARTICLE III
EMPLOYMENT AGREEMENT
3.1 Employment Agreement. In connection with the sale and
purchase of the Shares contemplated by this Agreement Seller and
Buyer will enter into the following employment agreement:
(a) The employment agreement in substantially the form
attached hereto as Exhibit B. The foregoing agreement is
hereinafter referred to as the "Employment Agreement."
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLER
The Company and the Seller, jointly and severally, represent
and warrant to Buyer, except as set forth in the attached Seller
Disclosure Schedule, the following:
4.1 Organization of Seller. The Company is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Maryland. The Company's Articles of
Incorporation and Bylaws, as currently in effect, are attached as
Exhibit C. All all of the books and records (whether or not
computerized) of the Company, tax returns and any associated
software and documentation relating to its business or employees
will become the property of Buyer upon Closing and Seller and
Company will make such items immediately available at the main
office of the Company.
4.2 Authority Relative to this Agreement. The Company has
corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The
execution and delivery by the Company of this Agreement, and the
consummation by it of the transactions contemplated hereby, have
been duly authorized by the Board of Directors of the Company, and
no other corporate proceedings on the part of the Company are
necessary with respect thereto. This Agreement has been duly
executed and delivered by Seller and Seller has authority to
consummate the transactions contemplated hereby. This Agreement,
and the transactions contemplated hereby, constitute valid and
binding obligations of Seller, enforceable against Seller in
accordance with its terms except as its terms may be limited by (i)
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or (ii) general principles of equity, whether considered
in a proceeding in equity or at law.
4.3 Qualification of the Company. The Company has corporate
power and authority to own all of its properties and assets and to
carry on its business as now being conducted. The Company is duly
qualified and in good standing to do business in each jurisdiction
in which the property owned or leased by it, or the nature of the
business conducted by it, makes such qualification necessary. The
Company is not a party to nor does it have the obligation to enter
into any joint venture or partnership and it has no subsidiaries.
4.4 Capitalization of the Company; Validity of Shares. The
authorized capital of the Company consists of 10,000 shares of
common stock, $.10 par value, and the Shares, all of which are
owned by Seller free of Encumbrances, are the only Shares issued
and outstanding. All of the Shares are validly issued and
outstanding, fully paid and nonassessable. The Company has no
commitment to issue or sell any shares of its capital stock or any
securities or obligations convertible into or exchangeable for, or
giving any Person any right to acquire from it, any shares of its
capital stock or options or warrants for capital stock and no such
securities or obligations are issued or outstanding. Upon delivery
to Buyer of certificates duly endorsed by Seller evidencing the
Shares pursuant to this Agreement, Buyer will have good title to
the Shares, free of Encumbrances and will own one hundred percent
of the equity of the Company.
4.5 No Violation. The execution and delivery by the Company
of this Agreement will not (i) violate or result in a breach of any
provision of the Articles of Incorporation or Bylaws of the
Company, (ii) result in a default or give rise to any right of
termination, modification or acceleration under the provisions of
any agreement or other instrument or obligation to which Seller or
the Company is a party or by which Seller, the Company or the
Shares may be bound, or (iii) violate any law or regulation, or any
judgment, order or decree of any court, governmental body,
commission, agency or arbitrator applicable to Seller, the Company
or the Shares.
4.6 Consents and Approvals. There is no requirement
applicable to Seller or the Company to make any filing with, or
obtain the consent or approval of, any Person as a condition to the
consummation of the transactions contemplated by this Agreement.
4.7 Compliance with Laws. The business of the Company has,
in all material respects, been operated in compliance with all laws
and regulations, federal, state or local, domestic or foreign,
applicable to its business including, without limitation, those
related to (i) antitrust and trade matters, (ii) civil rights,
(iii) zoning and building codes, (iv) public health and safety, (v)
worker health and safety and (vi) labor and employment and
discrimination in employment.
4.8 Licenses and Permits. The term "Licenses and Permits" as
used herein means governmental licenses, permits, approvals and
authorizations, whether federal, state and local, domestic or
foreign, other than Environmental Permits. The Company has all of
the Licenses and Permits required to conduct its business as it is
presently being conducted. Schedule 4.8 contains a complete list
of all such Licenses and Permits, all of which are in full force
and effect. The business of the Company has been operated in
compliance with all of the terms and conditions set forth in such
Licenses and Permits. No notice of a violation of any such License
or Permit has been received by Seller or the Company, or to the
knowledge of Seller, recorded or published, and no proceeding is
pending or, to the knowledge of Seller, threatened, to revoke any
of them.
4.9 Environmental Matters.
(a) The Company has, in all material respects, operated
its business in compliance with all laws and regulations relating
to pollution control and environmental contamination and the
provisions of its Environmental Permits, except for such violations
thereof as do not and cannot reasonably be expected to have an
adverse effect on the Company. Environmental Permits means
governmental permits, approvals and authorizations, which relate to
the environment or to public health and safety or worker health and
safety, as they may be affected by the environment.
(b) The Company is not obligated, by itself or jointly
with others, to clean up, remedy or otherwise restore to its former
condition any building, contaminated surface water, ground water,
soil or any natural resource associated therewith.
4.10 Financial Statements. The Company has previously
furnished Buyer with true and complete copies of its audited
consolidated financial statements for the years ending June 30,
1997 and 1998,(the "Audited Company Financial Statements") together
with the reports on such statements of the Company's Auditors.
Such financial statements present fairly the financial position of
the Company as of such dates and the results of their operations
and changes in financial position for such periods and have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis.
4.11 Absence of Change. Since September 30, 1998 there has
not been:
(i) any material change, or development involving
a prospective change, including, without limitation, any
damage, destruction or loss (whether or not covered by
insurance);
(ii) any obligation or liability involving more than
Fifty Thousand Dollars and no/100 ($50,000) (whether matured,
absolute, accrued, contingent, or otherwise) incurred by the
Company;
(iii) any general uniform increase in the
compensation of the employees of the Company including,
without limitation, those required by law or collective
bargaining agreements or undertaking of an obligation to do so
in the future;
(iv) any material increase in the compensation
payable to any officer of the Company;
(v) any material amendment to any employment
agreement to which any employee of the Company is a party;
(vi) any sale of assets of the Company other than in
the ordinary course of business;
(vii) any material deterioration of relations
between the Company and its suppliers or customers;
(viii) any direct or indirect redemption,
purchase or other acquisition of any shares of the capital
stock of the Company or undertaking of an obligation to do so
in the future;
(ix) any declaration, setting aside or payment of
any dividend (whether in cash, capital stock or property) with
respect to the Shares; or
(x) any issuance by the Company of any shares of
its capital stock, or any securities or obligations
convertible into or exchangeable for, or giving any person the
right to acquire from it, any shares of its capital stock.
Since September 30, 1998 the business of the Company has operated
its business only in the ordinary and usual course and in a manner
consistent with past practices.
4.12 Undisclosed Liabilities. The Company has not incurred
any liabilities or obligations which are not reflected in the
Audited Company Financial Statements, other than those incurred
subsequent to such date in the ordinary course of business and
consistent with past practices.
4.13 Current Information. Seller has previously delivered to
Buyer non-public information relating to the business and affairs
of the Company and will continue to furnish similar information
until the Closing. At the time of delivery thereof none of such
information contained, or will contain, any untrue statement of a
material fact or omitted, or will omit, to state a fact necessary
in order to make such statements made therein, in light of the
circumstances in which they were made, not misleading.
4.14 Tax Matters. The Company has filed, in a timely manner,
all federal, state, local and foreign tax returns, reports and
declarations required of it by applicable law and has paid or made
provision for the payment of all taxes (including, without
limitation, income, sales, use, occupation, property, excise and
employment taxes, and interest and penalties thereon) which have or
may become due on account of such filings. The federal tax returns
for the Company have been filed with the Internal Revenue Service
through 1997. The Company has not received any assessment for
unpaid taxes, does not know of any reason why any such assessment
might be made and has not agreed to any extension of time for the
assessment of any taxes. Adequate provisions have been made for
the payment of all current taxes.
4.15 Labor and Employment Matters. Schedule 4.15 sets forth
a complete and correct list of each employment agreement to which
the Company is a party. There are no controversies, claims or
grievances pending or, to the knowledge of Seller, threatened
between Seller or the Company and Company Employees, or a labor
union representing Company Employees. Copies of each of the
aforementioned agreements have been delivered to Buyer.
4.16 Litigation. There are no actions, suits, claims,
investigations or proceedings pending or, to the knowledge of the
Company or Seller, threatened against Seller or the Company, before
any court, governmental body, commission, agency or arbitrator,
domestic or foreign, which have or can reasonably be expected to
have a material adverse effect on the Company or which seek (i) to
prevent, restrict or delay the consummation of the transactions
contemplated by this Agreement or (ii) to limit, in any manner, the
right of Buyer to control the business of the Company after the
consummation of the transactions contemplated by this Agreement.
Furthermore, there are no judgments, orders or decrees of any such
court, governmental body, commission, agency or arbitrator which
have or can reasonably be expected to have any such effect.
4.17 Title to Properties.
(a) Except as set forth in Section 4.18, the Company
does not have any interest in real property.
(b) The Company has good title to all of the personal
property, tangible or intangible, owned by it, free and clear of
Encumbrances.
4.18 Leases. Schedule 4.18 sets forth a complete list of each
agreement into which the Company has entered, whether as lessor or
lessee, which relates to either real or personal property, other
than monthly leases of personal property which may be canceled upon
not more than thirty days notice and require the payment of not
more than $ 250.00 per month. The leases listed in Schedule 4.18
are referred to herein as "Leases." The Company has complied in
all material respects with its obligations under all of the Leases
and, to the knowledge of Seller and the Company, no event has
occurred or condition exists which constitutes or can reasonably be
expected to constitute a breach of the provisions of any Lease by
any party thereto. Complete copies of all of the Leases have been
delivered to Buyer.
4.19 Material Contracts. Schedule 4.19 sets forth a complete
and correct list of each contract, agreement or commitment of the
Company, other than Leases:
(i) upon which any substantial part of the business
of the Company is dependent or which, if breached, could
reasonably be expected to have a material adverse effect
on the Company;
(ii) which provides for aggregate future payments by
or to the Company of more than $25,000, except for
purchase orders or sales orders arising in the ordinary
and usual course of business, in which case they are
listed only if any party thereto is obligated to make
future payments aggregating more than $ 50,000 in any
year;
(iii) which extends more than one year from the date
hereof and is not cancelable by either party on 30 days
notice;
(iv) which provides for the sale, lease or other
transfer, after the date hereof and other than in the
ordinary course of business, of any of the assets of the
Company;
(v) which relates to the employment, retirement or
termination of the services of any officer or former
officer of the Company, unless listed in Schedule 4.15;
or
(vi) which contains covenants pursuant to which any
Person has agreed not to compete with any business
conducted by the Company or not disclose to others
information concerning the Company unless listed in
Schedule 4.15.
Each of the foregoing is referred to in this Agreement as a
"Material Contract." The Company has complied in all material
respects with its obligations under all of the Material Contracts
and, to the knowledge of Seller, no event has occurred or condition
exists which constitutes or can reasonably be expected to
constitute a breach of any such contract by any party thereto.
Access to all the Material Contracts has been provided to Buyer.
4.20 Intellectual Property. The term "Intellectual Property"
as used herein means trade names, trademarks and service marks,
patents, patent rights and copyrights, whether domestic or foreign,
(as well as applications, registrations or certificates for any of
the foregoing), inventions, trade secrets, proprietary processes
and formulae, software and other property rights generally
considered to be intellectual property other than general know how.
The Company owns, or has the right to use, all of its Intellectual
Property. Schedule 4.20 contains a complete and correct list of
all such Intellectual Property. There is no claim pending or, to
the knowledge of Seller or the Company, threatened against the
Company alleging that its use of any Intellectual Property
infringes upon the rights of any Person and, no Person is
infringing upon the rights of the Company in its Intellectual
Property. All letters, patents, registrations and certificates
issued by any governmental agency relating to the Intellectual
Property are valid and subsisting and have been properly
maintained. Complete copies of all documents pursuant to which the
Company has acquired the right to use its Intellectual Property, or
has licensed or otherwise permitted any other Person to use any of
such Intellectual Property, have been delivered to Buyer.
4.21 Accounts Receivable. The Accounts Receivable for the
Company, as of September 30, 1998, are reflected in Schedule 4.21.
Such Accounts Receivable and those acquired by the Company
subsequent to the 30th day of September, 1998 but prior to the
Closing (and not collected prior to Closing), have or will have
arisen in the ordinary course of business and will have been
collected or be collectible in amounts not less than the aggregate
amount thereof carried on the books of the Company, except for
Sixty Thousand Dollars ($60,000) which the Seller represents is an
accounting adjustment to the June 30, 1998 financial statements
carried forward that was not noted. Each of such Accounts
Receivable, and those acquired after September 30, 1998, but prior
to the Closing, is not the subject of a pledge or assignment, and
is free of Encumbrances and has not been placed for collection with
any attorney, collection agency or similar individual or firm.
4.22 Year 2000. The Company has taken all action necessary to
ensure that it and all property sold to the Buyer are "Year 2000
Ready." Year 2000 Ready shall mean that (i) all mission-critical
date-affected technology (hardware, software and firmware) used by
the Company in its business operations are able to correctly and
effectively receive, transmit and process date data from, into and
between the twentieth and twenty-first centuries (including but not
limited to Year 2000 leap year calculations) and otherwise continue
to function properly and unimpaired; and (ii) all mechanical
systems which rely upon embedded microchips utilized in the
operation of the Company's business will continue to function
properly and unimpaired from, into and between the twentieth and
twenty-first centuries (including but not limited to Year 2000 leap
year calculations). If requested by the Buyer, Seller will provide
evidence of such actions to ensure that the Company is Year 2000
Ready.
4.23 Maintenance of Tangible Personal Property. The tangible
personal property is in good condition, ordinary wear and tear
excepted, and is usable in the ordinary course of the business of
the Company as it is presently being conducted.
4.24 Insurance. Schedule 4.24 sets forth a list of insurance
policies maintained by the Company. The Company is not in default
in any respect under any provision of any such policy nor has it
failed to give notice or present any claim thereunder in a timely
manner so as to bar recovery of any valid claim.
4.25 Employee Benefit Plans.
(a) Schedule 4.25 lists all of the employee benefit
plans and programs (except the unfunded deferred compensation plans
which are listed in Schedule 4.19), including, without limitation,
all retirement, savings and other pension plans ("Pension Plans"),
all health, severance, insurance, disability and other employee
welfare plans ("Welfare Plans") and all incentive, vacation and
other similar plans that are maintained by the Company on behalf of
the Company Employees.
(b) As to each of the Pension Plans, the Company has
complied, in all material respects, with all applicable laws and
regulations in administering such plans, including specifically the
provisions of ERISA and the qualification provisions of Section 401
of the Internal Revenue Code. No prohibited transaction, as
defined in Section 4975 of the Internal Revenue Code, has occurred
with respect to any of the Pension Plans and none of the Pension
Plans has incurred any accumulated funding deficiency, as defined
in Section 412 of the Internal Revenue Code, whether or not waived.
There has not been, with regard to any such plan, any reportable
event, as defined in Section 4043(b) of ERISA, that is required to
be reported to the PBGC by law or regulation. The fair market
value of the assets of each of the Pension Plans equals or exceeds
the present value of all benefits accrued under such plan, whether
or not vested, based on the actuarial assumptions that would be
used by the PBGC if the plan were terminated as of the date of this
Agreement and as of the Closing.
(c) As to each of the Welfare Plans and other employee
benefit plans and programs (including without limitation the plans
listed on Schedule 4.19),the Company has complied, in all
respects, with all applicable laws and regulations in the
administration thereof including, without limitation, the
provisions of ERISA when applicable.
(d) The Company has not terminated any Pension Plan or
incurred any liability to the PBGC under Section 4001, et seq. of
ERISA and, to the knowledge of Seller or the Company, no condition
exists that could reasonably be expected to cause Buyer to incur
any such liability. All premiums payable to the PBGC have been
paid when due.
(e) No compensation or benefit that is or will be
payable as a result of the transactions contemplated by this
Agreement will be characterized as an "excess parachute payment"
within the meaning of Section 280G of the Internal Revenue Code.
4.26 Insider Interests. Neither the Seller nor any officer or
director (i) competes with, is involved with or has any direct or
indirect interest in any business entity which competes with the
business conducted by the Company, (ii) has any agreement of any
type with the Company other than any employment agreement listed on
Schedule 4.15, or (iii) has any interest, direct or indirect, in
any property, real or personal, tangible or intangible, including,
without limitation, Intellectual Property, used in or pertaining to
the business conducted by the Company, except as a stockholder or
employee of the Company.
4.27 Certain Practices. To the knowledge of Seller and the
Company, no stockholder, director, officer, employee or agent of
the Company has, directly or indirectly, made or agreed to make,
any unlawful or illegal payment, gift or political contribution to,
or taken any other unlawful or illegal action, for the benefit of
any customer, supplier, governmental employee or other Person who
is or may be in a position to assist or hinder the business of the
Company.
4.28 Full Disclosure. None of the representations and
warranties of the Company or the Seller made in this Article
contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
To the knowledge of Seller, no event has occurred or condition
exists regarding the Company which can reasonably be expected to
have a material adverse effect on the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller the following:
5.1 Organization; Authority Relative to this Agreement.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York and has corporate
power and authority to execute and deliver this Agreement, the
Employment Agreement and the Notes to which it is a party and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery by Buyer of this Agreement, the Employment
Agreement and the Notes to which it is a party, and the
consummation of the transactions contemplated hereby and thereby,
have been duly authorized by the Board of Directors of Buyer and no
other corporate proceedings on the part of Buyer are necessary with
respect thereto. This Agreement has been duly executed and
delivered by Buyer. This Agreement, the Employment Agreement and
the Notes when executed and delivered by Buyer will constitute,
valid obligations of Buyer, enforceable against Buyer in accordance
with their terms except as their terms may be limited by (i)
bankruptcy, insolvency or similar laws affecting to creditors'
rights generally or (ii) general principles of equity, whether
considered in a proceeding in equity or at law.
5.2 No Violation. The execution and delivery by Buyer of
this Agreement, the Notes and the Employment Agreement to which it
is a party do not, and the consummation of the transactions
contemplated hereby and thereby, will not violate or result in a
breach of any provision of the Articles of Incorporation or Bylaws
of Buyer.
5.3 Consents and Approvals. There is no requirement
applicable to Buyer to make any filing with, or to obtain the
consent or approval of any Person as a condition to the
consummation of the transactions contemplated by this Agreement.
5.4 Litigation. There are no actions, suits, claims,
investigations or proceedings pending or, to the knowledge of the
Buyer, threatened against Buyer, before any court, governmental
body, commission, agency or arbitrator, domestic or foreign, which
have or can reasonably be expected to have an material adverse
effect on the Buyer or which seek (i) to prevent, restrict or delay
the consummation of the transactions contemplated by this Agreement
or (ii) to limit, in any manner, the right of Buyer to control the
business of the Company after the consummation of the transactions
contemplated by this Agreement.
5.5 Financing. Buyer has received a firm commitment from
Century National Bank to lend it a sufficient sum to meet its
obligations under this Agreement.
5.6 Finders. Xxxx X. Xxxxxxx ("Xxxxxxx") is entitled to a
fee of $25,000 for services rendered on behalf of Buyer in
connection with the transactions contemplated by this Agreement.
Buyer is solely responsible for the fee to be paid to Xxxxxxx.
5.7 Full Disclosure. None of the representations and
warranties of the Buyer made in this Article contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. To the
knowledge of Buyer, no event has occurred or condition exists
regarding the Buyer which can reasonably be expected to have a
material adverse effect on the Buyer.
ARTICLE VI
ADDITIONAL COVENANTS
6.1 Expenses. Except as otherwise provided in this
Agreement, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby will be paid by
the party incurring such costs and expenses.
6.2 Public Announcements. The parties will consult with one
another before issuing any press releases or otherwise making any
public statements with respect to this Agreement and the
transactions contemplated hereby and will not issue any such press
release or make any such public statement without the consent of
the other unless such action is required by law.
6.3 Further Assurances. Seller and Buyer will use reasonable
efforts to implement the provisions of this Agreement, and for such
purpose, at the request and expense of Buyer or Seller as the case
may be, will, at or after the Closing, without further
consideration, promptly execute and deliver, or cause to be
executed and delivered, such additional documents as may be
necessary to implement any provision of this Agreement or the
Notes.
ARTICLE VII
EMPLOYEES AND EMPLOYEE MATTERS
7.1 Company Employees. Seller has delivered to Buyer a list
of all of the employees of the Company ("Company Employees").
7.2 Employee Benefit Plans.
(a) Buyer will permit each Company Employee to
participate, on the same basis that its employees and the employees
of its Subsidiaries participate, in the employee benefit plans and
programs regularly made available to the employees of Buyer and its
Subsidiaries who hold similar positions. The eligibility to
participate, accrual of benefits and vesting by Company Employees
under plans and programs covering employees of Buyer shall be based
on their service with the Company, and Buyer will promptly amend
its plans and programs to so provide.
(b) No assets or liabilities with respect to Company
Employees shall be transferred as a result of this Agreement from
any employee benefit plan maintained by the Company to any plan
maintained or established by Buyer, and the Company shall retain
all obligations to fund or otherwise provide benefits accrued by
Company Employees under its benefit plans prior to the Closing.
Benefits under the plans retained by the Company shall be payable
to Company Employees pursuant to the terms of such plans.
7.3 Administration. Seller and Buyer shall each make its
appropriate employees available to the other at such reasonable
times as may be necessary for the proper administration by the
other of any and all matters relating to Company Employees. If, as
a result of the transactions contemplated by this Agreement,
reports are required to be filed with respect to any of the
Company's benefit plans, Seller will file such reports.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF BUYER
The obligation of Buyer to consummate the transactions
contemplated by this Agreement shall be subject, to the extent not
waived, to the following conditions.
8.1 Representations and Warranties. Except for changes
expressly contemplated by this Agreement, each of the
representations and warranties of Company and of Seller contained
in this Agreement, which representations and warranties include the
information in the schedules corresponding thereto, shall be true
and correct in all material respects as of the date of Closing and
Seller shall have delivered to Buyer a certificate to that effect
signed by Seller as sole stockholder and a certificate to that
effect signed by an officer of the Company.
8.2 Performance of this Agreement. Seller shall have, and
shall have caused the Company to have, performed in all material
respects all of its obligations to be performed before or at
Closing under this Agreement and shall have delivered to Buyer a
certificate to that effect signed by its Chairman or President.
8.3 Corporate Authorization. All corporate action required
to be taken by the Company in connection with the transactions
contemplated hereby shall have been taken, all documents incident
thereto shall be reasonably satisfactory in substance and form to
Buyer and Buyer shall have received such originals or copies of
such documents as it may reasonably request.
8.4 Consents and Approvals. The consents and approvals of
all Persons which Seller is required to obtain in order to be able
to transfer the Shares to Buyer, shall have been obtained.
8.5 Injunction, Litigation, etc. No order of any court or
governmental agency shall be in effect which restrains or prohibits
the consummation of the transactions contemplated by this Agreement
or which would limit or affect the ability of Buyer to own and
control the Company, and there shall not have been threatened, nor
shall there be pending, any action or proceeding by or before any
such court or governmental agency seeking to prohibit or delay or
challenging the validity of the transactions contemplated by this
Agreement.
8.6 Legislation. No statute, rule or regulation shall have
been proposed or enacted which prohibits or might prohibit,
restrict or delay the consummation of the transactions contemplated
by this Agreement.
8.7 Estoppel Certificates, etc. Seller shall have obtained
and delivered to Buyer executed estoppel certificates satisfactory
in form and substance to Buyer, and such other information with
respect to the Leases as Buyer may reasonably request.
8.8 Resignations. All directors of the Company, other than
Seller, shall have resigned as of the Closing.
8.9 Opinion of Counsel for Seller. Buyer shall have received
an opinion from Holland & Knight LLP, Counsel for Seller and the
Company, in substantially the form attached hereto as Exhibit D.
8.10 Repayment of Loan by Xxxxxxxx Xxxxx. Seller shall have
delivered at Closing a personal check in the amount of One Hundred
and Eighty Thousand Dollars and No/100 ($180,000), plus all accrued
interest thereon to the Closing Date at the rate specified in the
note evidencing such indebtedness made payable to Buyer to satisfy
a loan by the Company to Seller in such amount (the "Stockholder
Receivable").
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF SELLER
The obligation of Seller to consummate the transactions
contemplated by this Agreement shall be subject, to the extent not
waived, to the satisfaction of each of the following conditions.
9.1 Representations and Warranties. Except for changes
expressly contemplated by this Agreement, each of the
representations and warranties of Buyer contained in this Agreement
shall be true and correct in all material respects as of the date
of Closing, and Buyer shall have delivered to Seller a certificate
to that effect signed by its Chairman or President.
9.2 Performance of this Agreement. Buyer shall have
performed in all material respects with all of its obligations
under this Agreement and shall have delivered to Seller a
certificate to that effect signed by its Chairman or President.
9.3 Corporate Authorization. All corporate action required
to be taken by Buyer in connection with the transactions
contemplated in this Agreement shall have been taken, all documents
incident thereto shall be reasonably satisfactory in substance and
form to Seller, and Seller shall have received all such originals
or copies of such documents as it may reasonably request.
9.4 Injunction, Litigation, etc. No order of any court or
governmental agency shall be in effect which restrains or prohibits
the consummation of the transactions contemplated by this Agreement
and there shall not have been threatened, nor shall there be
pending, any action or proceeding by or before any such court or
governmental agency seeking to prohibit or delay or challenging the
validity of any of the transactions contemplated by this Agreement.
9.5 Legislation. No statute, rule or regulation shall have
been proposed or enacted which prohibits or might prohibit,
restrict or delay the consummation of the transactions contemplated
hereby.
9.6 Opinion of Counsel for Buyer. Seller and the Company
shall have received an opinion from McGuire, Woods, Battle &
Xxxxxx, LLP, Counsel for Buyer, in substantially the form attached
hereto as Exhibit E.
ARTICLE X
CLOSING
10.1 Time and Place of Closing. The Closing shall take place
at the offices of McGuire, Woods, Battle & Xxxxxx, LLP in McLean,
Virginia, at 3 p.m. local time on the 18th day of December, 1998
(the "Closing Date").
10.2 Deliveries by Seller. At the Closing Seller shall
deliver to Buyer the following:
(i) the certificates representing the Shares
duly endorsed or with stock powers attached thereto duly
signed;
(ii) the Company's minute book and stockholder
records;
(iii) the certificates required by Sections 8.1
and 8.2;
(iv) evidence that the corporate action
described in Section 8.3 has been taken;
(v) copies of the consents required by
Section 8.4;
(vi) the estoppel certificates required by
Section 8.7;
(vii) the resignations required by Section 8.8;
(viii) the Opinion of Counsel required by
Section 8.9;
(ix) a check in the amount of One Hundred
and Eighty Thousand Dollars and No/100 ($180,000), plus all
interest accrued thereon to the Closing Date payable to the
Company, or evidence satisfactory to the Buyer that the Company has
received such check, as full satisfaction of repayment of a loan to
Xxxxxxxx Xxxxx by the Company; and
(x) such additional documents as Buyer may
reasonably request.
10.3 Deliveries by Buyer. At the Closing Buyer shall deliver
to Seller the following:
(i) a certified bank check in the amount of
$1,193,661.00 payable to Xxxxxxxx Xxxxx;
(ii) the Accounts Receivable Note;
(iii) the Contingent Liability Note;
(iv) the certificates required by Sections 9.1 and
9.2;
(v) evidence that the corporate action described in
Section 9.3 has been taken;
(vi) the Opinion of Counsel required by Section 9.6; and
(vii) such additional documents as Seller may
reasonably request.
10.4 Deliveries by Seller and Buyer. At the Closing Buyer and
Seller shall execute and deliver to each other a copy of the
Employment Agreement to which they are a party.
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification by Seller. Subject to the limitations
contained in this Article, Seller will indemnify and hold Buyer
harmless from any damage, loss, liability or expense including,
without limitation, reasonable expenses of investigation and
reasonable attorneys' fees arising out of:
(i) any breach of a representation and warranty
made by Seller in this Agreement;
(ii) the breach of any agreement of Seller contained
in this Agreement; or
(iii) any undisclosed liability or obligation of the
Company, whether civil or criminal in nature arising out
of actions that occurred prior to the Closing Date.
11.2 Indemnification by Buyer. Subject to the limitations
contained in this Article, Buyer will indemnify and hold Seller
harmless from any damage, loss, liability or expense including
without limitation, reasonable expenses of investigation and
reasonable attorneys' fees arising out of:
(i) any breach of a representation and warranty
made by Buyer in this Agreement; or
(ii) the breach of any agreement of Buyer
contained in this Agreement.
11.3 Third Party Claims. The obligation of Seller to
indemnify Buyer under the provisions of this Article with respect
to claims resulting from the assertion of liability by Persons not
parties to this Agreement (including governmental claims for
penalties, fines and assessments) shall be subject to the following
terms and conditions:
(i) Buyer shall give prompt written notice to
Seller of any assertion of liability by a third party
which might give rise to a claim for indemnification
based on the foregoing provisions of this Article, which
notice shall state the nature and basis of the assertion
and the amount thereof, to the extent known, provided,
however, that no delay on the part of Buyer in giving
notice shall relieve Seller of any obligation to
indemnify unless (and then solely to the extent that)
Seller is prejudiced by such delay.
(ii) If any action, suit or proceeding (a "Legal
Action") is brought against Buyer with respect to which
Seller may have liability under the foregoing provisions
of this Article, the Legal Action shall be defended by
Seller and such defense shall include all proceedings for
appeal or review which counsel for Buyer reasonably shall
deem appropriate.
(iii) Notwithstanding the provisions of the
previous subsection of this Agreement, until Seller shall
have assumed the defense of any such Legal Action, the
defense shall be handled by Buyer. Furthermore, (A) if
Seller fails to provide Buyer with evidence acceptable to
Buyer that Seller has sufficient financial resources to
defend and fulfill its indemnification obligation with
respect to the Legal Action; or (B) if the Legal Action
involves other than money damages and seeks injunctive or
other equitable relief; Seller shall not be entitled to
assume the defense of the Legal Action and the defense
shall be handled by Buyer. If the defense of the Legal
Action is handled by Buyer under the provisions of this
subsection, Seller shall pay all legal and other expenses
reasonably incurred by Buyer in conducting such defense.
(iv) In any Legal Action initiated by a third party
and defended by the indemnifying party (A) the
indemnified party shall have the right to be represented
by advisory counsel and accountants, at its own expense,
(B) the indemnifying party shall keep the indemnified
party fully informed as to the status of such Legal
Action at all stages thereof, whether or not the
indemnified party is represented by its own counsel, (C)
the indemnifying party shall make available to the
indemnified party, and its attorneys, accountants and
other representatives, all books and records of the
indemnifying party relating to such Legal Action and (D)
the parties shall render to each other such assistance as
may be reasonably required in order to ensure the proper
and adequate defense of such Legal Action.
(v) In any Legal Action initiated by a third party
and defended by the indemnifying party, the indemnifying
party shall not make any settlement of any claim without
the written consent of the indemnified party, which
consent shall not be unreasonably withheld. Without
limiting the generality of the foregoing, it shall not be
deemed unreasonable to withhold consent to a settlement
involving injunctive or other equitable relief against
the indemnified party or its assets, employees or
business, or relief which the indemnified party
reasonably believes could establish a custom or precedent
which will be materially adverse to the best interests of
its continuing business.
11.4 Survival; Investigation. The representations and
warranties of Seller contained in this Agreement shall survive any
investigation by Buyer and shall not terminate until the third
anniversary of the Closing (the "Survival Date") at which time they
shall lapse.
11.5 Maximum Liability. Notwithstanding any provision in this
Article to the contrary, the maximum amount of Seller's and Buyer's
obligation to the other under this Article is Three Hundred
Thousand Dollars ($300,000). Such obligation shall be determined on
a semi-annual basis.
11.6 Indemnification Offset. Notwithstanding any other
provision in this Article to the contrary, if Seller returns part
of the Purchase Price to Buyer by reason of a net worth adjustment
under Section 2.4 attributable to the amount of the Company's
Accounts Receivable being less than the amount set forth in
Schedule 4.21, Seller's obligation to indemnify Buyer under this
Article as a result of the breach of the representation in Section
4.21 relating to the amount of the Accounts Receivable shall be
reduced by the amount of the Purchase Price returned to Buyer by
reason of such net worth adjustment.
ARTICLE XII
GENERAL PROVISIONS
12.1 Notices. All notices and other communications given
hereunder shall be in writing. Notices shall be effective when
delivered, if delivered personally. Otherwise, they shall be
effective when sent to the parties at the addresses or numbers
listed below, as follows: (i) on the business day delivered (or the
next business day following delivery if not delivered on a business
day) if sent by a local or long distance courier, prepaid telegram,
telefax or other facsimile means, or (ii) three days after mailing
if mailed by registered or certified U.S. mail, postage prepaid and
return receipt requested.
If to Seller to:
Vail Research and Technology Corporation
0000 Xxxxxx Xxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx, President
Telefax No.:000-000-0000
with a copy, which shall not constitute notice, to:
Holland & Knight LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxxx, Esquire
Telefax : 000-000-0000
If to Buyer to:
HADRON, Inc.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: X.X. Xxxxxxx
Telefax No.:000-000-0000
with a copy, which shall not constitute notice, to:
McGuire, Woods, Battle & Xxxxxx, LLP
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxx Xxxxxxx, Esquire
Telefax No.:000-000-0000
Any Person may change the address or number to which notices are to
be delivered to him, her or it by giving the other Persons named
above notice of the change in the manner set forth above.
12.2 Governing Law. This Agreement shall be governed in all
respects by the laws of the Commonwealth of Virginia without regard
to its choice of law rules.
12.3 Schedules. The information contained in any schedule
which is referred to in any section of this Agreement shall be
deemed to have been disclosed in connection with, and to be
incorporated into, that particular section only, and shall not be
deemed a part of any other section.
12.4 Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or
interpretation of the Agreement.
12.5 No Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement.
12.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
12.7 Miscellaneous. This Agreement (i) constitutes the entire
agreement and supersedes all other prior agreements and
understandings, both written and oral, between the parties with
respect to the subject matter hereof; (ii) is not intended to and
shall not confer upon any Person, other than the parties hereto,
any rights or remedies, and (iii) shall not be assigned by
operation of law or otherwise, except that Buyer may assign its
rights hereunder to another of its Subsidiaries, if any.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed and attested by their duly authorized
officers.
SELLER:
/S/ XXXXXXXX XXXXX
Xxxxxxxx Xxxxx
VAIL RESEARCH AND TECHNOLOGY CORPORATION
By: /S/ XXXXXXXX XXXXX
Title: President
BUYER:
HADRON, INC.
By: /S/ X.X. XXXXXXX
Title: Chief Executive Officer
