AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
SYNC RESEARCH, INC.,
A DELAWARE CORPORATION
AND
OSICOM TECHNOLOGIES, INC.,
A NEW JERSEY CORPORATION
DATED AS OF
AUGUST 1, 2000
TABLE OF CONTENTS
PAGE
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ARTICLE I THE MERGER.................................................. A-1
1.1 The Merger.................................................. A-1
1.2 Closing..................................................... A-1
1.3 Effective Time.............................................. A-1
1.4 Certificate of Incorporation; By-laws....................... A-2
1.5 Officers and Directors...................................... A-2
1.6 Sync........................................................ A-2
1.7 Additional Matters.......................................... A-2
1.8 Lucent...................................................... A-2
1.9 Capitalization of Entrada................................... A-2
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS................................................ A-3
2.1 Effect on Capital Stock..................................... A-3
2.2 Exchange Procedures......................................... A-3
2.3 Stock Transfer Books........................................ A-4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER AND
ENTRADA..................................................... A-4
3.1 Corporate Organization...................................... A-4
3.2 Capitalization.............................................. A-4
3.3 Authorization, Etc.......................................... A-5
3.4 Financial Statements........................................ A-5
3.5 No Undisclosed Liabilities.................................. A-5
3.6 No Approvals or Conflicts................................... A-6
3.7 Compliance with Law; Governmental Authorizations............ A-6
3.8 Litigation.................................................. A-6
3.9 Assets...................................................... A-6
3.10 Absence of Certain Changes.................................. A-7
3.11 Taxes....................................................... A-7
3.12 Employee Benefits........................................... A-8
3.13 Labor Relations............................................. A-9
3.14 Patents, Trademarks, Trade Names, Etc....................... A-10
3.15 Contracts................................................... A-10
3.16 Environmental Matters....................................... A-11
3.17 Insurance................................................... A-11
3.18 Material Customers and Suppliers............................ A-12
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3.19 Real Property............................................... A-12
3.20 Investment Company Act Status............................... A-13
3.21 Product Liability........................................... A-13
3.22 Books and Records........................................... A-13
3.23 No Brokers' or Other Fees................................... A-13
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SYNC...................... A-14
4.1 Corporate Organization...................................... A-14
4.2 Capitalization.............................................. A-15
4.3 Authorization, Etc.......................................... A-15
4.4 Financial Statements........................................ A-15
4.5 No Undisclosed Liabilities.................................. A-15
4.6 No Approvals or Conflicts................................... A-15
4.7 Compliance with Law; Governmental Authorizations............ A-15
4.8 Litigation.................................................. A-16
4.9 Assets...................................................... A-16
4.10 Absence of Certain Changes.................................. A-16
4.11 Taxes....................................................... A-16
4.12 Employee Benefits........................................... A-17
4.13 Labor Relations............................................. A-18
4.14 Patents, Trademarks, Trade Names, Etc....................... A-18
4.15 Contracts................................................... A-19
4.16 Environmental Matters....................................... A-19
4.17 Insurance................................................... A-20
4.18 Material Customers and Suppliers............................ A-20
4.19 Real Property............................................... A-20
4.20 Investment Company Act Status............................... A-21
4.21 Product Liability........................................... A-21
4.22 Books and Records........................................... A-22
4.23 No Brokers' or Other Fees................................... A-22
4.24 Sync Reports................................................ A-22
4.25 NASDAQ...................................................... A-22
ARTICLE V COVENANTS AND AGREEMENTS.................................... A-22
5.1 Conduct of Business by Entrada.............................. A-22
5.2 Conduct of Business by Sync................................. A-23
5.3 Access to Books and Records; Cooperation.................... A-25
5.4 Filings and Consents........................................ A-25
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5.5 No Solicitation............................................. A-25
5.6 Proxy; Registration Statement............................... A-26
5.7 Shareholders' Meeting....................................... A-27
5.8 Listing..................................................... A-27
5.9 Covenant to Satisfy Conditions.............................. A-27
5.10 Best Efforts and Other Assurances........................... A-27
ARTICLE VI CONDITIONS TO THE SHAREHOLDER'S OBLIGATIONS................. A-27
6.1 Representations and Warranties.............................. A-27
6.2 Performance................................................. A-27
6.3 Officer's Certificate....................................... A-27
6.4 HSR Act..................................................... A-27
6.5 Shareholder Approval........................................ A-27
6.6 Registration Statement...................................... A-27
6.7 Nasdaq...................................................... A-27
6.8 Injunctions................................................. A-28
6.9 Consents.................................................... A-28
6.10 Non-Competition Agreement................................... A-28
ARTICLE VII CONDITIONS TO SYNC'S OBLIGATION............................. A-28
7.1 Representations and Warranties.............................. A-28
7.2 Performance................................................. A-28
7.3 Officer's Certificate....................................... A-28
7.4 HSR Act..................................................... A-28
7.5 Shareholder Approval........................................ A-28
7.6 Registration Statement...................................... A-28
7.7 Injunctions................................................. A-28
7.8 Consents.................................................... A-28
7.9 Non-Competition Agreement................................... A-29
ARTICLE VIII TERMINATION................................................. A-29
8.1 Termination................................................. A-29
8.2 Procedure and Effect of Termination......................... A-29
ARTICLE IX INDEMNIFICATION............................................. A-29
9.1 Indemnification by the Shareholder of Sync.................. A-29
9.2 Indemnification by Sync of the Shareholder.................. A-30
9.3 Notice and Opportunity to Defend............................ A-30
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9.4 Payment..................................................... A-31
9.5 Minimum Liability........................................... A-31
ARTICLE X MISCELLANEOUS............................................... A-31
10.1 Survival of Representations, Warranties and Agreements...... A-31
10.2 Fees and Expenses........................................... A-31
10.3 Governing Law............................................... A-32
10.4 Amendment................................................... A-32
10.5 No Assignment............................................... A-32
10.6 Waiver...................................................... A-32
10.7 Notices..................................................... A-32
10.8 Complete Agreement.......................................... A-33
10.9 Counterparts................................................ A-33
10.10 Publicity................................................... A-33
10.11 Headings.................................................... A-33
10.12 Severability................................................ A-33
10.13 Third Parties............................................... A-34
10.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.............. A-34
10.15 WAIVER OF JURY TRIAL........................................ A-34
10.16 Definitions................................................. A-35
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
This Amended and Restated Agreement and Plan of Merger (this "Agreement"),
dated as of August 1, 2000, is entered into by and among Sync Research, Inc., a
Delaware corporation ("Sync"), and Osicom Technologies, Inc., a New Jersey
corporation (the "Shareholder") and amends and restates in its entirety that
certain Agreement and Plan of Merger dated as of April 10, 2000 by and among
Sync, Merger Co, a Delaware corporation and wholly-owned subsidiary of Sync
("Merger Co"), the Shareholder and Osicom Technologies, Inc., a Delaware
corporation and an indirect wholly-owned subsidiary of the Shareholder
("Entrada").
R E C I T A L S:
WHEREAS, the respective Boards of Directors of Sync and the Shareholder have
approved the merger (the "Merger") of Merger Co into Entrada subject to the
terms and conditions of this Agreement, whereby each outstanding share of common
stock, $1.00 par value per share (the "Entrada Common Stock") of Entrada will be
converted into the right to receive shares of common stock, par value $.001 per
share, of Sync (the "Sync Common Stock") as provided herein;
WHEREAS, Sync and the Shareholder desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger; and
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
provisions, agreements and covenants contained herein, the parties hereto agree
as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions of this
Agreement, and in accordance with the Delaware General Corporation Law (the
"DGCL") Sync and the Shareholder will cause Merger Co to be merged with and into
Entrada at the Effective Time (as hereinafter defined). Following the Merger,
the separate corporate existence of Merger Co shall cease and Entrada shall
continue as the surviving corporation (the "Surviving Corporation") and shall
succeed to all rights, privileges, powers, franchises, assets, liabilities and
obligations of Entrada and Merger Co in accordance with the provisions of the
DGCL.
1.2 CLOSING. Unless this Agreement shall have been terminated and the
transactions contemplated herein shall have been abandoned pursuant to the
provisions of Article VIII, the closing of the Merger (the "Closing") shall take
place at 10:00 a.m., on a date to be specified by the parties, which date shall
be no later than the second business day after the satisfaction or waiver of the
conditions set forth in Articles VI and VII (the "Closing Date"), at the offices
of Greenbaum, Rowe, Xxxxx, Xxxxx, Xxxxx & Xxxxxx LLP, 99 Wood Avenue South,
Woodbridge, New Jersey, or such other place, time and date as the parties may
agree. Subject to the provisions of this Agreement, a certificate of merger
shall be duly prepared, executed and acknowledged by the Surviving Corporation
and thereafter delivered for filing and recordation with the Secretary of State
of the State of Delaware in accordance with the DGCL on the Closing Date.
1.3 EFFECTIVE TIME. The Merger shall become effective at the time of the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware (or at such later time as shall be agreed
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by the Shareholder and Sync and as shall be set forth in such certificate) in
accordance with the DGCL (the date and time the Merger becomes effective being
the "Effective Time").
1.4 CERTIFICATE OF INCORPORATION; BY-LAWS. At the Effective Time and
without any further action on the part of Entrada and Merger Co, (i) the
certificate of incorporation of Entrada as in effect immediately prior to the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law, (ii) the by-laws of Entrada shall be the by-laws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law and (iii) the Merger shall, from and after the Effective Time,
have all the effects provided by applicable law, including the DGCL.
1.5 OFFICERS AND DIRECTORS. The officers and directors of Entrada at the
Effective Time shall be the officers and directors of the Surviving Corporation,
each to hold office in accordance with the certificate of incorporation and
by-laws of the Surviving Corporation.
1.6 SYNC. At the Closing, the name of Sync will be changed to Entrada
Networks, Inc., or such other name as Sync and the Shareholder may mutually
agree, and the Board of Directors of Sync will consist of Xxxxxxxx Xxxxx,
Xxxxxxx X. Xxxxxxxx and three (3) individuals selected by the mutual agreement
of Sync and the Shareholder.
1.7 ADDITIONAL MATTERS. At the Closing, (a) any indebtedness owed by
Entrada to the Shareholder, or any other affiliates of the Shareholder, will be
canceled or contributed (in the Shareholder's sole discretion) to the capital of
Entrada; (b) the Shareholder shall agree to indemnify and hold Entrada, Sync,
Merger Co and the Surviving Corporation harmless against any liability arising
after the Effective Date from (i) the early termination by the Shareholder of
its real estate lease for property located in Aurora, Illinois (ii) the
termination of the Case Defined Benefit Plan previously maintained by Entrada
and (iii) the late filing of the Shareholder's tax returns; and (c) the
Shareholder will enter into a non-competition agreement with Sync and the
Surviving Corporation, in such form and substance as Sync and the Shareholder
may mutually agree.
1.8 LUCENT. The Shareholder agrees to be responsible for and pay any
royalties or similar payments due from Entrada to Lucent Technologies, Inc. and
its Affiliates for all periods prior to the Closing Date up to an aggregate of
$500,000. Any additional royalties or similar payments due to Lucent in excess
of $500,000 shall be paid by the Surviving Corporation.
1.9 CAPITALIZATION OF ENTRADA.
(a) As used in this Section 1.9, "Adjusted Net Current Assets" means the
current assets of Entrada less all current liabilities of Entrada, excluding
any intercompany payables, and otherwise computed in accordance with
generally accepted accounting principles, consistently applied, and the
"Share Price" means the greater of (i) the average closing price per share
of Sync's common stock as reported by Nasdaq for the five (5) trading days
immediately preceding the Closing Date, and (ii) $3.30. At or prior to the
Closing, the Shareholder will contribute cash to the capital of Entrada such
that the Adjusted Net Current Assets of Entrada at the Closing are not less
than (iii) the Adjusted Net Current Assets as of May 31, 2000 ($150,000, or
the "Baseline Amount") plus (iv) the Share Price multiplied by One Million
(1,000,000). In it sole discretion, the Shareholder may contribute more cash
to the capital of Entrada in an amount not to exceed the Share Price
multiplied by Three Million (3,000,000). As used herein, the "Contribution"
means the Adjusted Net Current Assets as of the Closing Date less the
Baseline Amount.
(b) In consideration of the Contribution to be made by the Shareholder
to Entrada pursuant to paragraph 1.9(a) of this Agreement, at the Closing
Sync will issue to Entrada that number of shares of its common stock equal
to (i) the aggregate amount of the Contribution divided by (ii) the Share
Price (the "Contribution Shares"). All of the Contribution Shares shall be
included in, and registered under, the registration statement to be filed
with the Securities and Exchange
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Commission pursuant to Section 5.6 of this Agreement. The Contribution
Shares shall not be deemed outstanding for purposes of computing the Merger
Consideration pursuant to Section 2.1(c) of this Agreement.
ARTICLE II
EFFECT OF MERGER ON CAPITAL STOCK
OF CONSTITUENT CORPORATIONS
2.1 EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of Entrada
Common Stock or any shares of common stock, par value $.01 per share ("Merger Co
Common Stock"), of Merger Co:
(a) CAPITAL STOCK OF MERGER CO. Each share of Merger Co Common Stock
outstanding immediately prior to the Effective Time shall be converted into
and exchanged for one validly issued, fully paid and nonassessable share of
Surviving Corporation Common Stock. Each stock certificate of Merger Co
evidencing shares of Merger Co Common Stock shall thereafter evidence
ownership of shares of Surviving Corporation Common Stock.
(b) CANCELLATION OF TREASURY STOCK. Each share of Entrada Common Stock
that is owned by Entrada or any Subsidiary (as defined in Section 10.16) of
Entrada shall automatically be canceled and retired and shall cease to
exist, and no Sync Common Stock, Surviving Corporation Common Stock or other
consideration shall be delivered or deliverable in exchange therefor.
(c) CONVERSION OF ENTRADA COMMON STOCK. Other than shares to be
canceled pursuant to Section 2.1(b), the outstanding shares of Entrada
Common Stock shall be converted into the right to receive that number of
validly issued, fully paid and nonassessable shares of Sync Common Stock
that is equal to the sum of (i) the number of shares of Sync Common Stock
outstanding on the Closing Date plus (ii) the number of shares of Sync
Common Stock that is issuable upon conversion of Sync's Series A Preferred
Stock (the "Sync Preferred Stock") outstanding on the Closing Date (the
"Merger Consideration"). For the purpose of this calculation, the
Contribution Shares shall not be deemed to be outstanding on the Closing
Date. No later than five (5) business days prior to the Closing, the
Shareholder shall have the right to direct that all or a portion of the
Merger Consideration be delivered directly to the shareholders of the
Shareholder, in which event the Shareholder and Sync will cause their
respective stock transfer agents to cooperate in effecting such
distributions to such shareholders. The costs of this distribution by the
Shareholder will be paid by the Shareholder. The parties intend that in
connection with the Merger, the Shareholder and its shareholders
collectively will be issued that number of shares of Sync Common Stock that
is equal to the number of outstanding shares of Sync Common Stock
immediately prior to the Merger. As used in the previous sentence, the
number of outstanding shares of Sync Common Stock immediately prior to the
Merger includes the Sync Common Stock issuable upon conversion of the
outstanding Sync Preferred Stock and excludes the Contribution Shares. In
addition, Sync, promptly after the Effective Time, shall issue options to
purchase its Common Stock to Entrada employees in an amount equal to the
number of shares of Sync Common Stock issuable pursuant to the stock options
and convertible and exchangeable securities listed on Schedule 4.2(a) of the
Disclosure Schedule, which Schedule shall be updated as of the Closing Date
for purposes of this computation. Such options will not affect the Merger
Consideration calculation.
2.2 EXCHANGE PROCEDURES. At the Closing, the Shareholder shall surrender
to Sync the share certificate(s) (the "Entrada Certificate") representing all of
the outstanding shares of Entrada Common Stock. The Entrada Certificate so
surrendered shall forthwith be canceled. As soon as reasonably practicable after
the Effective Time, the Shareholder and its shareholders collectively shall,
upon surrender to Sync of the Entrada Certificate, together with such other
documents as may be reasonably required by Sync, be entitled to share
certificates representing the Merger Consideration. Each such
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share certificate of Sync Common Stock issued to the Shareholder and any of its
shareholders who are deemed to be affiliates of Sync within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") will bear the
following legend on the face thereof:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO A
REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER.
2.3 STOCK TRANSFER BOOKS. At the close of business, eastern standard time,
on the day the Effective Time occurs, the stock transfer books of Entrada shall
be transferred to Sync and there shall be no further registration of transfers
of shares by Entrada of Entrada Common Stock thereafter on the records of
Entrada. From and after the Effective Time, the Shareholder shall cease to have
any rights with respect to such shares of Entrada Common Stock formerly
represented by the Entrada Certificate surrendered pursuant to Section 2.2,
except as otherwise provided herein or by law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDER
The Shareholder hereby represents and warrants to Sync as of April 10, 2000
as follows:
3.1 CORPORATE ORGANIZATION. Entrada, and each Subsidiary of Entrada, is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Entrada and each of its Subsidiaries has full
corporate power and authority to own their respective assets and to carry on
their respective businesses as now being conducted and are duly qualified or
licensed to do business as foreign corporations in good standing in the
jurisdictions in which the ownership of their respective property or the conduct
of their respective businesses requires such qualification or license, except
jurisdictions in which the failure to be so qualified or licensed would not,
individually or in the aggregate, have a Material Adverse Effect (as defined in
Section 10.16) on Entrada. Section 3.1 of the Disclosure Schedule attached
hereto lists by name each of Entrada and the Subsidiaries of Entrada, each
jurisdiction in which each entity is qualified or authorized to do business and
its capitalization (including the identity of each stockholder and the number of
shares held by each). Entrada has delivered to Sync complete and correct copies
of the certificate of incorporation and all amendments thereto, the by-laws as
presently in effect, and the minute books and stock transfer records of Entrada
and each of its Subsidiaries.
3.2 CAPITALIZATION.
(a) The authorized capital stock of Entrada consists of 50,000 shares of
Class A Common Stock, par value $1.00 per share (the "Entrada Common Stock")
of which 1,000 shares are issued and outstanding as of the date hereof and
9,000 shares of Class B Common Stock, none of which are outstanding as of
the date hereof. The Shareholder owns all of the shares of Entrada Common
Stock issued and outstanding as of the date hereof. No other shares of any
other class or series of capital stock of Entrada or securities exercisable
or convertible into or exchangeable for capital stock of Entrada ("Entrada
Capital Stock Equivalents") were authorized, issued or outstanding as of
January 31, 2000. Since January 31, 2000, there have been no issuances of
Entrada Common Stock or Entrada Capital Stock Equivalents. There are no
subscriptions, options, warrants, calls, rights, contracts, commitments,
understandings, restrictions or arrangements relating to the issuance, sale,
transfer or voting of any shares, whether issued or unissued, of capital
stock of
A-4
Entrada or Entrada Capital Stock Equivalents, including any rights of
issuance, conversion or exchange under any outstanding securities or other
instruments, other than restrictions imposed by Federal and state securities
laws. All of the shares of Entrada Common Stock are duly authorized, validly
issued and outstanding and fully paid, nonassessable and free and clear of
all pledges, mortgages, claims, options, rights of first refusal, liens,
charges, encumbrances, security interests and limitations of voting rights
of any kind or nature whatsoever ("Encumbrances"). Neither Entrada nor any
of its Subsidiaries has any outstanding debt securities or other
indebtedness or guarantees, except as specifically disclosed in the Entrada
Financial Statements (as defined in Section 3.4).
(b) Section 3.2(b) of the Disclosure Schedule contains a complete and
correct list of all direct or indirect Subsidiaries of Entrada and the
amount of capital stock or other equity interests owned by Entrada and its
Subsidiaries in such Subsidiaries. All the outstanding shares of capital
stock of each of the Subsidiaries of Entrada have been duly authorized,
validly issued and are fully paid and non-assessable and, except as set
forth in Section 3.2(b) of the Disclosure Schedule, are owned (of record and
beneficially) by Entrada designed in Section 3.2(b) of the Disclosure
Schedule, free and clear of all Encumbrances. Except for the Subsidiaries
set forth in Section 3.2(b) of the Disclosure Schedule, neither Entrada nor
any of its Subsidiaries owns or has any option or right to acquire, directly
or indirectly, any capital stock or other equity securities of, or has any
direct or indirect equity or ownership interest or debt investment in, any
corporation, association, partnership, joint venture or other business.
3.3 AUTHORIZATION, ETC. Each of the Shareholder and Entrada has full power
and authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Shareholder and
of Entrada and no other corporate proceedings on the part of Entrada, the
Shareholder or their respective stockholders are necessary to authorize this
Agreement or to consummate the transactions so contemplated (other than, with
respect to the Merger, the filing of the Certificate of Merger as required by
the DGCL). This Agreement has been duly and validly executed by Entrada and the
Shareholder and, assuming this Agreement constitutes the legal, valid and
binding agreement of the other parties hereto, constitutes a legal, valid and
binding agreement of Entrada and the Shareholder, enforceable against each of
them in accordance with its terms, except that (i) the enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
3.4 FINANCIAL STATEMENTS. Entrada has previously delivered to Sync
(i) the audited balance sheet of Entrada and its Subsidiaries as of January 31,
2000 (the "Entrada Balance Sheet") and the related audited statements of income,
stockholders' equity and cash flows for the fiscal year then ended, and the
notes thereto, and the related unaudited statements of income, stockholders'
equity and cash flows for the year then ended, and the notes thereto
(collectively the "Entrada Financial Statements"). The Entrada Financial
Statements present fairly the assets, liabilities, financial position, results
of operations and cash flows of Entrada and its Subsidiaries as of the dates and
for the periods indicated, and have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") consistently applied by
Entrada.
3.5 NO UNDISCLOSED LIABILITIES. Except as disclosed in Section 3.5 of the
Disclosure Schedule, neither Entrada nor any of its Subsidiaries has any
liabilities or obligations of any nature (whether known or unknown and whether
absolute, accrued, contingent or otherwise) except for liabilities or
obligations reflected on or reserved against the Entrada Balance Sheet or the
Entrada Interim Balance
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Sheet and current liabilities incurred in the ordinary course of business and
consistent with past practice since the respective dates thereof.
3.6 NO APPROVALS OR CONFLICTS. Except as set forth in Section 3.6 of the
Disclosure Schedule, the execution, delivery and performance by Entrada and the
Shareholder of this Agreement and the consummation by Entrada and the
Shareholder of the transactions contemplated hereby will not (i) violate,
conflict with or result in a breach by Entrada of any provision of the
certificate of incorporation or by-laws of Entrada or any of its Subsidiaries,
(ii) violate, conflict with or result in a breach of any provision of, or
constitute a default by Entrada or any of its Subsidiaries (or an event which,
with notice or lapse of time or both, would constitute a default) or give rise
to any right of termination, cancellation or acceleration under, or result in
the creation of any Encumbrance upon any of the properties of Entrada or any of
its Subsidiaries under, any Entrada Contract (as defined in Section 3.15),
(iii) violate or result in a breach of any order, injunction, judgment, ruling,
law or regulation of any court or governmental authority applicable to Entrada,
any of its Subsidiaries, or any of their respective properties or except for
those required under or in relation to the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR Act"), require any order, consent, approval or
authorization of, or notice to, or declaration, filing, application,
qualification or registration with, any governmental or regulatory authority,
excluding from the foregoing clauses (ii) and (iii) above, such violations,
conflicts and breaches which, individually or in the aggregate, would not have a
Material Adverse Effect on Entrada or prevent or delay the consummation of the
transactions contemplated hereby.
3.7 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. Neither Entrada nor
any of its Subsidiaries is in violation of any order, injunction, judgment,
ruling, law or regulation of any court or governmental authority applicable to
the property or business of Entrada or any such Subsidiary. Entrada and each of
its Subsidiaries have all material licenses, permits and other governmental
authorizations reasonably necessary to conduct their respective businesses as
currently conducted and such licenses, permits and authorizations are valid and
in full force and effect.
3.8 LITIGATION. Except as set forth in Section 3.8 of the Disclosure
Schedule, there are no claims, suits, actions, proceedings or investigations
(collectively, "Claims") pending or, to the best knowledge of Entrada or the
Shareholder, threatened against Entrada, any of its Subsidiaries, or the
transactions contemplated by this Agreement before any arbitrator, court or
governmental or regulatory authority or body, which, if decided unfavorably to
Entrada or such Subsidiary, would have a Material Adverse Effect on Entrada.
Except as set forth in Section 3.8 of the Disclosure Schedule, neither Entrada
nor any of its Subsidiaries nor any of their respective assets is subject to any
decree, order or judgment which would have a Material Adverse Effect on Entrada.
3.9 ASSETS.
(a) Except as set forth in Section 3.6(a) of the Disclosure Schedule, on
January 31, 2000, Entrada and each of its Subsidiaries had and, except with
respect to assets disposed of or acquired in the ordinary course of business
and consistent with past practice since such date, Entrada and each of its
Subsidiaries now has, good and valid title to, or holds by valid and
existing lease or license, all the assets reflected as assets of Entrada and
its Subsidiaries on the Entrada Balance Sheet or which would have been
reflected on the Entrada Balance Sheet if acquired prior to such date, free
and clear of all Encumbrances except for: Encumbrances which secure
indebtedness or obligations which are properly reflected on the Entrada
Balance Sheet and Permitted Liens (as defined in Section 10.16). Except as
set forth in Section 3.9(a) of the Disclosure Schedule, Entrada and its
Subsidiaries own, or have valid leasehold interests in, all material assets,
tangible and intangible, necessary for the operation or conduct of Entrada's
and such Subsidiary's business as conducted prior to and through the Closing
Date (the "Entrada Assets"), and all such assets are in reasonably good
maintenance, operating condition and repair, normal wear and tear excepted,
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other than machinery and equipment under repair or out of service in the
ordinary course of Entrada's or such Subsidiary's business. The Entrada
Assets include, without limitation, all right, title and interest to the
hubs, switches, LAN adapters, FDDI, VME boards, stand alone print servers,
Nethopper and all other network access business assets, and all associated
know-how and proprietary information related thereto, that (i) are necessary
for Sync to operate Entrada's business in the manner in which Entrada has
operated the same, and (ii) were owned by the Shareholder or any of its
Subsidiaries as of January 31, 2000.
(b) Except as set forth in Section 3.9 of the Disclosure Schedule, no
licenses or other consents from, or payments to, any other person, entity or
governmental authority are or will be necessary for Sync to operate
Entrada's business and use the Entrada Assets in the manner in which Entrada
has operated the same, and no such person, entity or authority has made any
claim to the contrary. No person or entity other than Entrada and its
Subsidiaries has any right or interest in the Entrada Assets, including the
right to grant interests in the Entrada Assets to third parties, except as
set forth in Section 3.9(b) of the Disclosure Schedule, and there exists no
restriction on the use or transfer of the Entrada Assets.
(c) Except as provided in Section 3.9(c) of the Disclosure Schedule, no
restrictions will exist on Sync's right to sell, resell, license or
sublicense any of the Entrada Assets or engage in Entrada's business, nor
will any such restrictions be imposed on Sync as a consequence of the
transactions contemplated by this Agreement or by any agreement referenced
in this Agreement.
3.10 ABSENCE OF CERTAIN CHANGES. Except as disclosed in Section 3.10 of
the Disclosure Schedule, since January 31, 2000, the business of Entrada and
each of its Subsidiaries has been conducted only in the ordinary course and
consistent with past practice in all material respects, there has not been any
event or development prior to the date hereof which, if it had occurred or
existed after the date hereof, would be a violation of Section 5.1(c), and there
has not been any change, event or development which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on
Entrada.
3.11 TAXES. Except as disclosed on the Disclosure Schedule, Entrada and
each of its Subsidiaries has filed or caused to be filed all Tax Returns
(including estimated Tax Returns) required to be filed by Entrada and each such
Subsidiary. Except as disclosed on the Disclosure Schedule, All Tax Returns are
complete and accurate in all material respects and all Taxes required to be
shown on such Tax Returns or otherwise due or payable and all additional
assessments of any such Taxes received prior to the date hereof have been paid
in full on the due date for payment thereof. Neither Entrada nor any of its
Subsidiaries is required to file any income or franchise tax returns in any
jurisdiction other than the United States and the States of Arizona, California,
Colorado, Connecticut, Denver, Delaware, Florida, Illinois, Kansas, Maryland,
Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio,
Pennsylvania, South Carolina, Texas, Virginia and Washington and the City of
Denver and the District of Columbia. The amounts set up as accruals for Taxes on
the Entrada Financial Statements are sufficient for the payment of all Taxes of
Entrada and each of its Subsidiaries, whether or not disputed, for all periods
ended on and prior to the respective dates thereof. In addition, the amounts set
up as accruals for Taxes on the financial books of Entrada and each of its
Subsidiaries on the date hereof are and will be sufficient for the payment of
all Taxes of Entrada and each such Subsidiary, whether or not disputed, for all
periods ended on and prior to the Closing Date. Except as disclosed in Section
3.11 of the Disclosure Schedule, the United States Federal, state and local
income tax returns of Entrada and each of its Subsidiaries have been audited by
the Internal Revenue Service or other Tax Authority or are closed and there are
no proceedings or claims relating thereto or any facts that could give rise to
the reopening thereof. Except as disclosed on the Disclosure Schedule, no
deficiency in the payment of Taxes by Entrada or any of its Subsidiaries for any
period has been asserted or, to the best knowledge of Entrada or the
Shareholder, threatened against Entrada or any of its Subsidiaries by any Tax
Authority and remains unsettled as of the date of this Agreement. Except as
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disclosed on the Disclosure Schedule, all Taxes required to be withheld,
collected or deposited by Entrada or any of its Subsidiaries have been timely
withheld, collected or deposited and, to the extent required, have been paid to
the relevant Tax Authorities. Except as disclosed on the Disclosure Schedule,
neither Entrada nor any of its Subsidiaries owe any amount pursuant to any
written or unwritten Tax sharing agreement or arrangement, or will have any
liability after the date hereof in respect of any written or unwritten Tax
sharing agreement or arrangement executed or agreed prior to the date hereof.
Except as disclosed on the Disclosure Schedule, there are no Tax liens on any of
the assets of Entrada or any of its Subsidiaries, other than liens for current
Taxes which are not yet due or payable. Except as set forth in Section 3.11 of
the Disclosure Schedule, neither Entrada nor any of its Subsidiaries has made
any agreement, waiver or other arrangement providing for an extension of time
with respect to the assessment or collection of any Tax against Entrada or any
such Subsidiary. Neither Entrada nor any of its Subsidiaries has been, or will
be, subject to Tax under Section 1374 or Section 1375 of the Code for any
taxable year ending on or prior to the Closing Date. Neither Entrada nor any of
its Subsidiaries has filed a consent with the Internal Revenue Service pursuant
to Section 341(f) of the Code or with any other Tax Authority to any similar
effect or made an election under Section 338 of the Code other than as provided
for in the terms of this Agreement.
For purposes of this Agreement, the term "Tax" or "Taxes" shall mean all
taxes, charges, fees, levies, penalties or other assessments imposed by any
United States Federal, state, local or foreign Tax Authority, including, but not
limited to, income, service, leasing, occupation, excise, property, sales and
use, transfer, franchise, payroll, withholding, social security or other taxes,
including any interest, penalties or additions attributable thereto.
For purposes of this Agreement, the term "Tax Return" shall mean any return,
report, information return or other document (including any related or
supporting information) filed or required to be filed with any Tax Authority
with respect to Taxes.
For purposes of this Agreement, the term "Tax Authority" shall mean the
Internal Revenue Service and any similar state, local or foreign authority
having jurisdiction over Taxes.
3.12 EMPLOYEE BENEFITS.
(a) Section 3.12 of the Disclosure Schedule contains a true and complete
list of each "employee benefit plan" (within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
including, without limitation, multi-employer plans within the meaning of
ERISA section 3(37)), stock purchase, stock option, stock bonus, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject
to ERISA (including any funding mechanism therefor now in effect or required
in the future as a result of the transaction contemplated by this Agreement
or otherwise), whether formal or informal, oral or written, legally binding
or not, under which any employee or former employee of Entrada or any of its
Subsidiaries has any present or future right to benefits and under which
Entrada or any of its Subsidiaries may have any present or future liability.
All such plans, agreements, programs, policies and arrangements shall be
collectively referred to as the "Entrada Plans."
(b) With respect to each Entrada Plan, Entrada has delivered to Sync a
current, accurate and complete copy (or, to the extent no such copy exists,
an accurate written description) thereof and, to the extent applicable: Any
related trust agreement or other funding instrument; the most recent
determination letter, if the Entrada Plan is intended to qualify under Code
Section 401(a); any summary plan description and other written
communications (or a written description of any oral communications) by
Entrada or any of its Subsidiaries to their respective employees concerning
the extent of the benefits provided under an Entrada Plan; and, for the
three most recent years,
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(1) the Form 5500 and attached schedules, (2) audited financial statements,
(3) actuarial valuation reports and (4) attorney's responses to an auditors'
requests for information.
(c) No Entrada Plan is subject to Title IV of ERISA, and neither Entrada
nor any member of its Controlled Group has ever contributed to, sponsored ,
or been obligated to contribute to any plan subject to Title IV of ERISA.
(d) (i) Each Entrada Plan has been established and administered in
accordance with its terms and with the applicable provisions of ERISA, the
Code and other applicable laws, rules and regulations; (ii) no event has
occurred and no condition exists that would subject Entrada or its
Subsidiaries either directly or by reason of its affiliation with any member
of its "Controlled Group" (defined as any organization which is a member of
a controlled group of organizations within the meaning of Code Sections
414(b), (c), (m) or (o)), to any Tax, fine, lien or penalty imposed by
ERISA, the Code or other applicable laws, rules and regulations; (iii) each
Entrada Plan which is intended to be qualified within the meaning of Code
Section 401(a) is so qualified and has received a favorable determination
letter pursuant to the Tax Reform Act of 1986 and subsequent legislation as
to its qualification, and nothing has occurred, whether by action or failure
to act, that could reasonably be expected to cause the loss of such
qualification; (iv) for each Entrada Plan with respect to which a Form 5500
has been filed, no material change has occurred with respect to the matters
covered by the most recent Form 5500 since the date thereof; (v) no Entrada
Plan provides retiree welfare benefits and neither Entrada nor any of its
Subsidiaries have any obligation to provide any retiree welfare benefits
other than as required by Section 4980B of the Code; and (vi) neither
Entrada nor any member of its Controlled Group has engaged in, or is a
successor or parent corporation to an entity that has engaged in, a
transaction described in Sections 4069 or 4212(c) of ERISA.
(e) With respect to any Entrada Plan, (i) no actions, suits or claims
(other than routine claims for benefits in the ordinary course) are pending
or, to the best knowledge of Entrada or the Shareholder, threatened, and
(ii) no facts or circumstances exist that could reasonably be expected to
give rise to any such actions, suits or claims.
(f) Except as set forth in Section 3.12 of the Disclosure Schedule, no
Entrada Plan exists that could result in the payment to any present or
former employee of Entrada or any of its Subsidiaries of any money or other
property or accelerate or provide any other rights or benefits to any
present or former employee or other service provider of Entrada or any of
its Subsidiaries as a result of the transactions contemplated by this
Agreement. There is no contract, plan or arrangement (written or otherwise)
covering any employee or other service provider or former employee or
service provider of Entrada or any of its Subsidiaries that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible pursuant to the terms of the Code.
3.13 LABOR RELATIONS. Since January 1, 1998, neither Entrada nor any of
its Subsidiaries has been or is a party to any collective bargaining or other
labor agreement. Except as set forth in Section 3.13 of the Disclosure Schedule,
there is no unfair labor practice charge or complaint pending or, to the best
knowledge of Entrada or the Shareholder, threatened against or otherwise
affecting Entrada or any of its Subsidiaries which, if adversely determined,
would reasonably be likely to result in a liability having a Material Adverse
Effect on Entrada; there is no labor strike, slowdown, work stoppage, or lockout
in effect, or, to the best knowledge of Entrada and the Shareholder, threatened
against or otherwise affecting Entrada or any of its Subsidiaries, and neither
Entrada nor any of its Subsidiaries has experienced any such labor controversy
within the past three years; neither Entrada nor any of its Subsidiaries is a
party to, or otherwise bound by, any consent decree with, or citation by, any
governmental authority relating to employees or employment practices; and
Entrada and each of its Subsidiaries is in compliance with their obligations
pursuant to the Worker Adjustment and Retraining
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Notification Act of 1988 ("WARN Act"), and all other notification and bargaining
obligations arising under any collective bargaining agreement, statute or
otherwise. To the best knowledge of Entrada and the Shareholder, there is no
effort to organize employees of Entrada or any of its Subsidiaries which is
pending or threatened.
3.14 PATENTS, TRADEMARKS, TRADE NAMES, ETC. Section 3.14 of the Disclosure
Schedule contains a true and complete list of all patents, trademarks, trade
names, copyrights and pending applications therefor (collectively, the "Entrada
Intellectual Property") used or owned by Entrada and each of its Subsidiaries
and a list of all licenses and other agreements (collectively, the "Entrada
License Agreements") relating thereto. Except as set forth in Section 3.14 of
the Disclosure Schedule, (i) the consummation of the transactions contemplated
by this Agreement will not materially impair any right to use the Entrada
Intellectual Property or the Entrada License Agreements, (ii) all Entrada
Intellectual Property and Entrada License Agreements are valid, in good standing
and free and clear of liens or other security interests, (iii) neither Entrada
nor any of its Subsidiaries has received written or, to the best knowledge of
Entrada or the Shareholder, oral, notice of any claims by any person to the use
of any such Entrada Intellectual Property, or challenging or questioning the
validity or effectiveness of any such Entrada License Agreement, and (iv) to the
knowledge of Entrada and the Shareholder, no other person is interfering with,
infringing upon, misappropriating or otherwise coming into conflict with any of
the Entrada Intellectual Property.
3.15 CONTRACTS. The contracts and agreements listed in Section 3.15 of the
Disclosure Schedule constitute each contract, instrument, lease, deed or
agreement which is material to the business or operations of Entrada and each of
its Subsidiaries (the "Entrada Contracts"). Complete copies (or, if oral,
written summaries) of each Entrada Contract have been made available to Sync,
including, without limitation, all of the following Entrada Contracts: (i) any
indenture, note, mortgage, installment obligation, or other instrument for or
relating to any borrowing of money; (ii) any guaranty of any obligation;
(iii) any agreement, contract, commitment or arrangement containing any covenant
limiting the ability of Entrada or any of its Subsidiaries to engage in any line
of business or to compete with any business or person; (iv) any agreement,
contract, commitment or arrangement relating to capital expenditures with
respect to Entrada or any of its Subsidiaries and involving future payments
which exceed $25,000 in any 12-month period; (v) any agreement, contract,
commitment or arrangement relating to the acquisition of assets or any capital
stock of any business enterprise which has not been consummated; (vi) any real
property lease; (vii) any contract, commitment, agreement or arrangement which
requires payments in excess of $25,000 in any 12-month period, to the extent
such contract, commitment, agreement or arrangement is not terminable within 30
days without payment of premium or penalty; (viii) any license agreement;
(ix) any joint venture, partnership or other agreement for the joint performance
of work or services; (x) each power of attorney that is effective and
outstanding; (xi) any agreement entered into other than in the ordinary course
of business containing or providing for an express undertaking by Entrada or any
of its Subsidiaries to be responsible for consequential damages and (xii) any
contract, commitment, agreement or arrangement with any director, stockholder or
Affiliate (as defined in Section 10.16) of Entrada or any of its Subsidiaries.
Each Entrada Contract is in full force and effect, and is a legal, valid and
binding obligation of Entrada or such Subsidiary and each of the other parties
thereto, enforceable in accordance with its terms, except that (x) enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (y) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought. No condition
exists or event has occurred which (whether with or without notice or lapse of
time or both, or the happening or occurrence of any other event) would
constitute a default by Entrada, any of its Subsidiaries, or, to the best
knowledge of Entrada and the Shareholder, any other party thereto under, or
result in a right in termination of, any Entrada Contract, by any other party
thereto. To the best knowledge of Entrada and the Shareholder, no party to any
Entrada Contract intends (x) to terminate such Entrada Contract or materially
amend
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the terms thereof, (y) to refuse to renew such Entrada Contract upon expiration
thereof or (z) to renew such Entrada Contract upon expiration thereof on terms
and conditions which are materially more onerous to Entrada or such Subsidiary
than those pertaining to such existing Entrada Contract.
3.16 ENVIRONMENTAL MATTERS. Except as to matters which would not be
expected to result, individually or in the aggregate, in a Material Adverse
Effect on Entrada, or as set forth in Section 3.16 of the Disclosure Schedule,
(i) neither Entrada nor any of its Subsidiaries has received any notice alleging
the material violation of, or any material actual or potential liability
relating to, any applicable foreign, federal, state or local statutes, laws,
regulations, rules, decrees, orders, judgments, ordinances, or common law
related to the protection of human health or the environment, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, the Emergency Planning and Community Right-To-Know Act, the Solid Waste
Disposal Act, the Resource Conservation and Recovery Act, the Clean Air Act, the
Water Pollution Control Act, the Toxic Substances Control Act, the Hazardous
Materials Transportation Act, and the Occupational Safety and Health Act, each
as amended and supplemented, and any regulations promulgated pursuant to such
laws, and any similar state or local statutes or regulations but excluding
workers compensation or similar laws ("Environmental Laws"), which violation has
not been resolved and, to the best knowledge of Entrada and the Shareholder, no
such notice is threatened or otherwise expected, (ii) to the best knowledge of
Entrada and the Shareholder, Entrada and each of its Subsidiaries is and has
been in material compliance with all applicable Environmental Laws and there is
no condition that could prevent or materially interfere with such compliance in
the future, (iii) Entrada and each of its Subsidiaries has obtained and is and
has been in material compliance with all required governmental environmental
permits, registrations and authorizations with respect to the business of
Entrada and each of its Subsidiaries as currently conducted, (iv) to the best
knowledge of Entrada and the Shareholder, no hazardous waste, substance,
material, or chemical, including, without limitation, petroleum and petroleum
products, polychlorinated biphenyls, asbestos and any other material regulated
under, or that can result in liability under, applicable Environmental Laws
("Hazardous Material"), has been transported, stored, treated, arranged to be
disposed of or disposed of by Entrada or any of its Subsidiaries on or from the
real estate owned, operated or otherwise used by Entrada or any of its
Subsidiaries or at any other location, except in compliance with, or as
otherwise would not result in material liability under all applicable
Environmental Laws, (v) except for successor liability as an owner of real
property, neither Entrada nor any of its Subsidiaries has assumed, contractually
or by operation of law, any liabilities, potential liabilities or obligations of
any other person or entity under any applicable Environmental Laws,
(vi) neither Entrada nor any of its Subsidiaries has entered into, agreed to, or
is subject to any judgment, decree, order or other similar requirement of any
governmental authority under any Environmental Laws, (vii) to the best knowledge
of Entrada and the Shareholder, there are no (w) underground or aboveground
storage tanks, (x) surface impoundments, (y) landfills or (z) sewer or septic
systems currently or formerly present at or about any of the properties or
facilities currently or formerly owned, operated or otherwise used by Entrada or
any of its Subsidiaries that could result in material liability to Entrada or
any such Subsidiary under any applicable Environmental Laws, and (viii) to the
best knowledge of Entrada and the Shareholder, there are no actions, activities,
events, conditions or circumstances occurring or existing, including without
limitation the release, threatened release, emission, discharge, generation,
treatment, storage or disposal of Hazardous Materials, that can reasonably be
expected to result in any material liability or obligation of Entrada or any of
its Subsidiaries under or relating to any Environmental Laws.
3.17 INSURANCE. Section 3.17 of the Disclosure Schedule lists all
insurance policies of Entrada and each of its Subsidiaries covering the assets,
employees and operations of Entrada and each of its Subsidiaries as of the date
hereof and any pending claims under such policies. All such policies are in full
force and effect, all premiums due thereon have been paid by Entrada or such
Subsidiary and Entrada and each of its Subsidiaries has complied in all material
respects with the provisions of such policies and has not received any notice
from any of its insurance brokers or carriers that any insurance
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policy is no longer in full force or effect or that such broker or carrier will
not be willing or able to renew their existing coverage and perform its
obligations thereunder. All such policies shall continue in full force and
effect following the consummation of the transactions contemplated by this
Agreement.
3.18 MATERIAL CUSTOMERS AND SUPPLIERS. Section 3.18 of the Disclosure
Schedule sets forth the names of the ten suppliers of Entrada and its
Subsidiaries whom Entrada and its Subsidiaries paid the greatest sum of money in
respect of products, services and materials sold to Entrada and its Subsidiaries
and the ten customers of Entrada and its Subsidiaries from whom Entrada and its
Subsidiaries received the greatest sum of money in respect of products or
services provided by Entrada and its Subsidiaries between February 1, 1999 and
January 31, 2000.
3.19 REAL PROPERTY.
(a) The real property listed in Section 3.19(a) of the Disclosure
Schedule constitutes all of the real property that any of Entrada and its
Subsidiaries owns as of the date hereof (the "Entrada Owned Real Property").
Except as set forth in Section 3.19(a) of the Disclosure Schedule, with
respect to each such parcel of Entrada Owned Real Property the identified
owner has good and marketable fee simple title to the parcel of real
property, free and clear of any Encumbrance (other than Permitted Liens).
(b) The leases listed in Section 3.15 of the Disclosure Schedule
constitute all the real property leases which are used in the conduct of the
business of Entrada and its Subsidiaries as it is presently being conducted
and/or to which Entrada or its Subsidiaries is a party (the "Entrada Leases"
and, such property, "Entrada Leased Property"; the Entrada Leased Property,
together with the Entrada Owned Real Property, the "Entrada Real Property").
The Entrada Real Property is all of the real property which is used for the
conduct of the business of Entrada and its Subsidiaries as is presently
conducted.
(c) Since January 31, 2000, neither Entrada nor any of its Subsidiaries
has sold, assigned, transferred or otherwise disposed of, or granted any
security interest in or lien on, any Entrada Owned Real Property or any
Entrada Lease. With respect to each Entrada Lease, all accrued and payable
rents required by each Entrada Lease to be paid by Entrada or any of its
Subsidiaries have been paid or adequate provision for such payment has been
made, no written notice of default or termination has been given or received
by Entrada or any of its Subsidiaries, and no material event of default has
occurred, no condition exists and no event has occurred that, with the
giving of notice or the lapse of time, would become a material default or
permit early termination, under any Entrada Lease, and (iii) Entrada has,
and immediately after the Closing, will have, good, valid and enforceable
title to the leasehold estate in the Entrada Leased Property, free and clear
of any Encumbrance (other than Permitted Liens). Except as set forth in
Section 3.19(c) of the Disclosure Schedule, no third party consent or
approval under any Entrada Lease is required for the consummation of the
transactions contemplated herein.
(d) Entrada has obtained all easements and rights of way required from
all governmental jurisdictions or from private parties for the normal use
and operation of the business on the Entrada Owned Real Property as
heretofore conducted.
(e) There is no pending or, to Entrada's knowledge, threatened
condemnation, expropriation, eminent domain or similar proceeding affecting
any of the Entrada Real Property and Entrada has not received any written
notice of any of the same.
(f) Each Entrada Owned Real Property and, to Entrada's knowledge, each
Entrada Leased Property and all buildings, structures, fixtures and
improvements on each Entrada Owned Real Property and, to Entrada's
knowledge, each Entrada Leased Property, and all use of any thereof by
Entrada or its subsidiaries, conform with all applicable building, zoning,
subdivision, land use, fire and other laws pertaining to or affecting real
property, except where the failure to so conform
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would not have a Material Adverse Effect on Entrada. Each occupied Entrada
Owned Real Property and, to Entrada's knowledge, each occupied Entrada
Leased Property is occupied under a valid and existing certificate of
occupancy for such Entrada Real Property. Entrada has taken all corrective
action indicated in all written notices or orders to Entrada to correct
violations of laws issued by any governmental authority having jurisdiction
against or affecting the Entrada Real Property. The Entrada Real Property is
not in violation of any restrictive covenant, condition, restriction or
limitation which would have a Material Adverse Effect on Entrada or a
material adverse effect on the use thereof as currently utilized.
(g) No Entrada Owned Real Property is subject to any contract or other
restriction of any nature whatsoever (recorded or unrecorded) preventing or
limiting the right of Entrada to convey or use it as currently operated.
(h) All Entrada Real Property and the improvements thereon are supplied
with the utilities necessary for the operation of such facilities as
currently operated.
(i) Entrada has not received written notice of any special assessment
relating to any Entrada Real Property or any portion thereof, and, to
Entrada's knowledge, there are no pending or threatened special assessments.
(j) Entrada has furnished Sync with all non-privileged environmental,
engineering or other studies or reports prepared for Entrada or its
subsidiaries since January 1, 1995 which primarily deal with the ownership,
operation, maintenance or management of the Entrada Real Property.
3.20 INVESTMENT COMPANY ACT STATUS. Neither Entrada nor any of its
Subsidiaries is an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940.
3.21 PRODUCT LIABILITY. Except as set forth in Section 3.21 of the
Disclosure Schedule, neither Entrada nor any of its Subsidiaries has received
written notice of any claim or threatened claim against Entrada or any such
Subsidiary for product liability, nor, to the best knowledge of Entrada and the
Shareholder, has Entrada or any of its Subsidiaries received oral notice of any
claim or threatened claim against Entrada or any of its Subsidiaries for product
liability.
3.22 BOOKS AND RECORDS. The financial books and records pertaining to the
business of Entrada and its Subsidiaries are complete and correct in all
material respects, have been maintained in accordance with good business
practice, and reflect the basis for the financial condition and results of
operations of Entrada set forth in the Entrada Financial Statements referred to
in Section 3.4 hereto.
3.23 NO BROKERS' OR OTHER FEES. No broker, finder or investment banker is
entitled to any fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the
Shareholder or Entrada or any of its Subsidiaries.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SYNC
Sync hereby represents and warrants to Entrada as follows as of April 10,
2000:
4.1 CORPORATE ORGANIZATION. Sync, and each Subsidiary of Sync, is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. Sync and each of its Subsidiaries has
full corporate power and authority to own their respective assets and to carry
on their respective businesses as now being conducted and are duly qualified or
licensed to do business as foreign corporations in good standing in the
jurisdictions in which the ownership of their respective property or the conduct
of their respective businesses requires such qualification or license, except
jurisdictions in which the failure to be so qualified or licensed would not,
individually or in the aggregate, have a Material Adverse Effect on Sync. Sync
has delivered to Entrada complete and correct copies of the certificate of
incorporation and all amendments thereto, the by-laws as presently in effect,
and the minute books and stock transfer records of Sync and each of its
Subsidiaries.
4.2 CAPITALIZATION.
(a) The authorized capital stock of Sync consists of 50,000,000 shares
of Sync Common Stock, of which 3,531,007 shares of Sync Common Stock (the
"Sync Shares") were outstanding as of March 31, 2000, and 754,280 shares of
Sync Common Stock were reserved for issuance upon exercise of options
outstanding as of March 31, 2000, and 2,000,000 shares of Sync Preferred
Stock, par value $.001 per share, none of which shares were outstanding as
of March 31, 2000. No other shares of any other class or series of capital
stock of Sync or securities exercisable or convertible into or exchangeable
for capital stock of Sync ("Sync Capital Stock Equivalents") were
authorized, issued or outstanding as of March 31, 2000. Since March 31,
2000, there have been no issuances of Sync Common Stock or Sync Capital
Stock Equivalents other than (i) issuances of shares of Sync Common Stock
upon exercise of options outstanding on Xxxxx 00, 0000, (xx) issuance of
shares of Sync Common Stock under Sync's Employee Stock Purchase Plan and
(iii) and 700,000 shares of Series A Preferred Stock were outstanding as of
the date of this Agreement. Except as set forth in Section 4.2(a) of the
Disclosure Schedule, there are no subscriptions, options, warrants, calls,
rights, contracts, commitments, understandings, restrictions or arrangements
relating to the issuance, sale, transfer or voting of any shares, whether
issued or unissued, of capital stock of Sync or Sync Capital Stock
Equivalents, including any rights of issuance, conversion or exchange under
any outstanding securities or other instruments, other than restrictions
imposed by Federal and state securities laws. All of the Sync Shares are,
and any shares of Sync Common Stock to be issued upon exercise of
outstanding options will be, duly authorized, validly issued and outstanding
and fully paid, nonassessable and free and clear of all Encumbrances.
Neither Sync nor any of its Subsidiaries has any outstanding debt securities
or other indebtedness or guarantees, except as specifically disclosed in the
Sync Financial Statements (as defined in Section 4.4).
(b) Section 4.2(b) of the Disclosure Schedule contains a complete and
correct list of all direct or indirect Subsidiaries of Sync and the amount
of capital stock or other equity interests owned by Sync and its
Subsidiaries in such Subsidiaries. All the outstanding shares of capital
stock of each of the Subsidiaries of Sync have been duly authorized, validly
issued and are fully paid and non-assessable and, except as set forth in
Section 4.2(b) of the Disclosure Schedule, are owned (of record and
beneficially) by Sync or by another Subsidiary of Sync, free and clear of
all Encumbrances. Except for the Subsidiaries set forth in Section
4.2(b) of the Disclosure Schedule, neither Sync nor any of its Subsidiaries
owns or has any option or right to acquire, directly or indirectly, any
capital stock or other equity securities of, or has any direct or indirect
equity or ownership interest or debt investment in, any corporation,
association, partnership, joint venture or other business.
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4.3 AUTHORIZATION, ETC. Each of Sync and Merger Co has full power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Sync and Merger Co
(other than the approval of this Agreement by the holders of a majority of the
outstanding shares of Sync Common Stock) and no other corporate proceedings on
the part of Sync, Merger Co or their respective stockholders are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than, with respect to the Merger, the filing of the Certificate of Merger
as required by the DGCL). This Agreement has been duly and validly executed by
each of Sync and Merger Co and, assuming this Agreement constitutes the legal,
valid and binding agreement of the other parties hereto , constitutes a legal,
valid and binding agreement of each of Sync and Merger Co, enforceable against
each of Sync and Merger Co in accordance with its terms, except that (i) the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
4.4 FINANCIAL STATEMENTS. Sync has previously delivered to Entrada
(i) the audited balance sheet of Sync and its Subsidiaries as of December 31,
1999 and the related audited statements of income, stockholders' equity and cash
flows for the fiscal year then ended, and the notes thereto (the "Sync Financial
Statements"). The Sync Financial Statements present fairly the assets,
liabilities, financial position, results of operations and cash flows of Sync
and its Subsidiaries as of the dates and for the periods indicated, and have
been prepared in accordance with GAAP consistently applied by Sync.
4.5 NO UNDISCLOSED LIABILITIES. Except as disclosed in Section 4.5 of the
Disclosure Schedule, neither Sync nor any of its Subsidiaries has any
liabilities or obligations, whether accrued, absolute, contingent, matured or
unmatured, that are required to be reflected, accrued or reserved for in an
audited balance sheet of Sync or such Subsidiary or the notes thereto prepared
in accordance with GAAP, other than (i) liabilities and obligations that are
reflected, accrued or reserved for in the balance sheet as of December 31, 1999
included in the Sync Financial Statements (the "Sync Balance Sheet"), (ii)
liabilities and obligations incurred in the ordinary course of business and
consistent with past practice since the date of the Sync Balance Sheet and (iii)
liabilities and obligations which in the aggregate would not have a Material
Adverse Effect on Sync.
4.6 NO APPROVALS OR CONFLICTS. Except as set forth in Section 4.6 of the
Disclosure Schedule, the execution, delivery and performance by Sync and Merger
Co of this Agreement and the consummation by Sync and Merger Co of the
transactions contemplated hereby will not violate, conflict with or result in a
breach by Sync or any of its Subsidiaries of any provision of the certificate of
incorporation or by-laws of Sync or any of its Subsidiaries, violate, conflict
with or result in a breach of any provision of, or constitute a default by Sync
or any of its Subsidiaries (or an event which, with notice or lapse of time or
both, would constitute a default) or give rise to any right of termination,
cancellation or acceleration under, or result in the creation of any Encumbrance
upon any of the properties of Sync or any of its Subsidiaries under, any Sync
Contract (as defined in Section 4.15), violate or result in a breach of any
order, injunction, judgment, ruling, law or regulation of any court or
governmental authority applicable to Sync, any of its Subsidiaries, or any of
their respective properties or except for those required under or in relation to
the HSR Act, require any order, consent, approval or authorization of, or notice
to, or declaration, filing, application, qualification or registration with, any
governmental or regulatory authority, excluding such violations, conflicts and
breaches which, individually or in the aggregate, would not have a Material
Adverse Effect on Sync or prevent or delay the consummation of the transactions
contemplated hereby.
4.7 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. Neither Sync nor any
of its Subsidiaries is in violation of any order, injunction, judgment, ruling,
law or regulation of any court or governmental
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authority applicable to the property or business of Sync or any such Subsidiary.
Sync and each of its Subsidiaries have all material licenses, permits and other
governmental authorizations reasonably necessary to conduct their respective
businesses as currently conducted and such licenses, permits and authorizations
are valid and in full force and effect.
4.8 LITIGATION. Except as set forth in Section 4.8 of the Disclosure
Schedule, there are no Claims pending or, to the best knowledge of Sync,
threatened against Sync, any of its Subsidiaries, or the transactions
contemplated by this Agreement before any arbitrator, court or governmental or
regulatory authority or body, which, if decided unfavorably to Sync or such
Subsidiary, would have a Material Adverse Effect on Sync. Except as set forth in
Section 4.8 of the Disclosure Schedule, neither Sync nor any of its Subsidiaries
nor any of their respective assets is subject to any decree, order or judgment
which would have a Material Adverse Effect on Sync.
4.9 ASSETS. Except as set forth in Section 4.9 of the Disclosure Schedule,
on December 31, 1999, Sync and each of its Subsidiaries had and, except with
respect to assets disposed of or acquired in the ordinary course of business and
consistent with past practice since such date, Sync and each of its Subsidiaries
now has, good and valid title to, or holds by valid and existing lease or
license, all the assets reflected as assets of Sync and its Subsidiaries on the
balance sheet as of December 31, 1999 included in the Sync Financial Statements
(the "1999 Sync Balance Sheet") or which would have been reflected on the 1999
Sync Balance Sheet if acquired prior to such date, free and clear of
Encumbrances except for: Encumbrances which secure indebtedness or obligations
which are properly reflected on the 1999 Sync Balance Sheet and Permitted Liens.
Except as set forth in Section 4.9 of the Disclosure Schedule, Sync and its
Subsidiaries own, or have valid leasehold interests in, all material tangible
assets necessary for the operation or conduct of Sync's or such Subsidiary's
business as currently conducted and all such assets are in reasonably good
maintenance, operating condition and repair, normal wear and tear excepted,
other than machinery and equipment under repair or out of service in the
ordinary course of Sync's or such Subsidiary's business.
4.10 ABSENCE OF CERTAIN CHANGES. Except as disclosed in Section 4.10 of
the Disclosure Schedule, since December 31, 1999, the business of Sync and each
of its Subsidiaries has been conducted only in the ordinary course and
consistent with past practice in all material respects, there has not been any
event or development prior to the date hereof which, if it had occurred or
existed after the date hereof, would be a violation of Section 5.2(c), and there
has not been any change, event or development which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on
Sync.
4.11 TAXES. Sync and each of its Subsidiaries has filed or caused to be
filed all Tax Returns (including estimated Tax Returns) required to be filed by
Sync and each such Subsidiary. To the best knowledge of Sync, all Tax Returns
are complete and accurate in all material respects. All Taxes required to be
shown on such Tax Returns or otherwise due or payable and all additional
assessments of any such Taxes received prior to the date hereof have been paid
in full on the due date for payment thereof. Neither Sync nor any of its
Subsidiaries is required to file any income or franchise tax returns in any
jurisdiction other than the United States and the States of Arizona, Delaware,
Colorado, Connecticut, Florida, Georgia, Illinois, California, Maryland,
Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, Ohio,
Oklahoma, Pennsylvania, Rhode Island, Texas and Virginia. The amounts set up as
accruals for Taxes on the Sync Financial Statements are sufficient for the
payment of all Taxes of Sync and each of its Subsidiaries, whether or not
disputed, for all periods ended on and prior to the respective dates thereof. In
addition, the amounts set up as accruals for Taxes on the financial books of
Sync and each of its Subsidiaries on the date hereof are and will be sufficient
for the payment of all Taxes of Sync and each such Subsidiary, whether or not
disputed, for all periods ended on and prior to the Closing Date. Except as
disclosed in Section 4.11 of the Disclosure Schedule, the United States Federal,
California and Massachusetts income tax returns of Sync and each of its
Subsidiaries have been audited by the Internal Revenue Service or other Tax
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Authority or are closed and, to the best knowledge of Sync, there are no
proceedings or claims relating thereto or any facts that could give rise to the
reopening thereof or in connection with any other state or local income tax
returns. No deficiency in the payment of Taxes by Sync or any of its
Subsidiaries for any period has been asserted or, to the best knowledge of Sync,
threatened against Sync or any of its Subsidiaries by any Tax Authority and
remains unsettled as of the date of this Agreement. All Taxes required to be
withheld, collected or deposited by Sync or any of its Subsidiaries have been
timely withheld, collected or deposited and, to the extent required, have been
paid to the relevant Tax Authorities. Neither Sync nor any of its Subsidiaries
owe any amount pursuant to any written or unwritten Tax sharing agreement or
arrangement, or will have any liability after the date hereof in respect of any
written or unwritten Tax sharing agreement or arrangement executed or agreed
prior to the date hereof. There are no Tax liens on any of the assets of Sync or
any of its Subsidiaries, other than liens for current Taxes which are not yet
due or payable. Except as set forth in Section 4.11 of the Disclosure Schedule,
neither Sync nor any of its Subsidiaries has made any agreement, waiver or other
arrangement providing for an extension of time with respect to the assessment or
collection of any Tax against Sync or any such Subsidiary. Neither Sync nor any
of its Subsidiaries has been, or will be, subject to Tax under Section 1374 or
Section 1375 of the Code for any taxable year ending on or prior to the Closing
Date. Neither Sync nor any of its Subsidiaries has filed a consent with the
Internal Revenue Service pursuant to Section 341(f) of the Code or with any
other Tax Authority to any similar effect or made an election under Section 338
of the Code other than as provided for in the terms of this Agreement.
4.12 EMPLOYEE BENEFITS.
(a) Section 4.12 of the Disclosure Schedule contains a true and complete
list of each "employee benefit plan" (within the meaning of section 3(3) of
ERISA, including, without limitation, multiemployer plans within the meaning
of ERISA section 3(37)), stock purchase, stock option, stock bonus,
severance, employment, change-in-control, fringe benefit, collective
bargaining, bonus, incentive, deferred compensation and all other employee
benefit plans, agreements, programs, policies or other arrangements, whether
or not subject to ERISA (including any funding mechanism therefor now in
effect or required in the future as a result of the transaction contemplated
by this Agreement or otherwise), whether formal or informal, oral or
written, legally binding or not, under which any employee or former employee
of Sync or any of its Subsidiaries has any present or future right to
benefits and under which Sync or any of its Subsidiaries may have any
present or future liability. All such plans, agreements, programs, policies
and arrangements shall be collectively referred to as the "Sync Plans."
(b) With respect to each Sync Plan, Sync has delivered to Entrada a
current, accurate and complete copy (or, to the extent no such copy exists,
an accurate description) thereof and, to the extent applicable: any related
trust agreement or other funding instrument; the most recent determination
letter, if the Sync Plan is intended to qualify under Code Section 401(a);
any summary plan description and other written communications (or a
description of any oral communications) by Sync or any of its Subsidiaries
to their respective employees concerning the extent of the benefits provided
under a Sync Plan; and, for the three most recent years, (A) the Form 5500
and attached schedules, (B) audited financial statements, (C) actuarial
valuation reports and (D) attorney's response to an auditor's request for
information.
(c) No Sync Plan is subject to Title IV of ERISA, and neither Sync nor
any member of its Controlled Group has ever contributed to, sponsored , or
been obligated to contribute to any plan subject to Title IV of ERISA.
(d) (i) Each Sync Plan has been established and administered in
accordance with its terms, and in compliance with the applicable provisions
of ERISA, the Code and other applicable laws, rules and regulations;
(ii) no event has occurred and no condition exists that would subject Sync
or
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its Subsidiaries either directly or by reason of its affiliation with any
member of its "Controlled Group" (defined as any organization which is a
member of a controlled group of organizations within the meaning of Code
sections 414(b), (c), (m) or (o)), to any Tax, fine, lien or penalty imposed
by ERISA, the Code or other applicable laws, rules and regulations;
(iii) each Sync Plan which is intended to be qualified within the meaning of
Code section 401(a) is so qualified and has received a favorable
determination letter pursuant to the Tax Reform Act of 1986 and subsequent
legislation as to its qualification, and nothing has occurred, whether by
action or failure to act, that could reasonably be expected to cause the
loss of such qualification; (iv) for each Sync Plan with respect to which a
Form 5500 has been filed, no material change has occurred with respect to
the matters covered by the most recent Form 5500 since the date thereof;
(v) except as set forth on Section 4.12 of the Disclosure Schedule, no Sync
Plan provides retiree welfare benefits and neither Sync nor any of its
Subsidiaries have any obligation to provide any retiree welfare benefits
other than as required by Section 4980B of the Code; and (vi) neither Sync
nor any member of its Controlled Group has engaged in, or is a successor or
parent corporation to an entity that has engaged in, a transaction described
in Sections 4069 or 4212(c) of ERISA.
(e) With respect to any Sync Plan, (i) no actions, suits or claims
(other than routine claims for benefits in the ordinary course) are pending
or, to the knowledge of Sync, threatened, and (ii) no facts or circumstances
exist that could reasonably be expected to give rise to any such actions,
suits or claims.
(f) Except as set forth in Section 4.12 of the Disclosure Schedule, no
Sync Plan exists that could result in the payment to any present or former
employee of Sync or any of its Subsidiaries of any money or other property
or accelerate or provide any other rights or benefits to any present or
former employee or other service provider of Sync or any of its Subsidiaries
as a result of the transactions contemplated by this Agreement. There is no
contract, plan or arrangement (written or otherwise) covering any employee
or other service provider or former employee or other service provider of
Sync or any of its Subsidiaries that, individually or collectively, could
give rise to the payment of any amount that would not be deductible pursuant
to the terms of Section 280G of the Code.
4.13 LABOR RELATIONS. Except as set forth in Section 4.13 of the
Disclosure Schedule, there is no unfair labor practice charge or complaint
pending or, to the best knowledge of Sync, threatened against or otherwise
affecting Sync or any of its Subsidiaries which, if adversely determined, would
reasonably be likely to result in a liability having a Material Adverse Effect
on Sync; there is no labor strike, slowdown, work stoppage, or lockout in
effect, or, to the best knowledge of Sync, threatened against or otherwise
affecting Sync or any of its Subsidiaries, and neither Sync nor any of its
Subsidiaries has experienced any such labor controversy within the past three
years; neither Sync nor any of its Subsidiaries is a party to, or otherwise
bound by, any consent decree with, or citation by, any governmental authority
relating to employees or employment practices; and Sync and each of its
Subsidiaries is in compliance with their obligations pursuant to the WARN Act,
and all other notification and bargaining obligations arising under any
collective bargaining agreement, statute or otherwise. To the best knowledge of
Sync, there is no effort to organize employees of Sync or any of its
Subsidiaries which is pending or threatened.
4.14 PATENTS, TRADEMARKS, TRADE NAMES, ETC. Section 4.14 of the Disclosure
Schedule contains a true and complete list of all patents, trademarks, trade
names, copyrights and pending applications therefor (collectively, the "Sync
Intellectual Property") used or owned by Sync and each of its Subsidiaries and a
list of all licenses and other agreements (collectively, the "Sync License
Agreements") relating thereto. Except as set forth in Section 4.14 of the
Disclosure Schedule, (i) the consummation of the transactions contemplated by
this Agreement will not materially impair any right to use the Sync Intellectual
Property or the Sync License Agreements, (ii) all Sync Intellectual Property and
Sync License Agreements are valid, in good standing and free and clear of liens
or other security
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interests, (iii) neither Sync nor any of its Subsidiaries has received written
or, to the best knowledge of Sync, oral, notice of any claims by any person to
the use of any such Sync Intellectual Property, or challenging or questioning
the validity or effectiveness of any such Sync License Agreement, and (iv) to
the knowledge of Sync, no other person is interfering with, infringing upon,
misappropriating or otherwise coming into conflict with any of the Sync
Intellectual Property.
4.15 CONTRACTS. The contracts and agreements listed in Section 4.15 of the
Disclosure Schedule constitute each contract, instrument, lease, deed or
agreement which is material to the business or operations of Sync and each of
its Subsidiaries (the "Sync Contracts"). Complete copies (or, if oral, written
summaries) of each Sync Contract have been made available to Entrada, including
all of the following Sync Contracts: (i) any indenture, note, mortgage,
installment obligation, or other instrument for or relating to any borrowing of
money; (ii) any guaranty of any obligation; (iii) any agreement, contract,
commitment or arrangement containing any covenant limiting the ability of Sync
or any of its Subsidiaries to engage in any line of business or to compete with
any business or person; (iv) any agreement, contract, commitment or arrangement
relating to capital expenditures with respect to Sync or any of its Subsidiaries
and involving future payments which exceed $25,000 in any 12-month period;
(v) any agreement, contract, commitment or arrangement relating to the
acquisition of assets or any capital stock of any business enterprise which has
not been consummated; (vi) any real property lease; (vii) any contract,
commitment, agreement or arrangement which requires payments in excess of
$25,000 in any 12-month period, to the extent such contract, commitment,
agreement or arrangement is not terminable within 30 days without payment of
premium or penalty; (viii) any license agreement; (ix) any joint venture,
partnership or other agreement for the joint performance of work or services;
(x) each power of attorney that is effective and outstanding; (xi) any agreement
entered into other than in the ordinary course of business containing or
providing for an express undertaking by Sync or its Subsidiaries to be
responsible for consequential damages and (xii) any contract, commitment,
agreement or arrangement with any director, stockholder or Affiliate of Sync or
any of its Subsidiaries. Each Sync Contract is in full force and effect, and is
a legal, valid and binding obligation of Sync or such Subsidiary and, to the
best knowledge of Sync, each of the other parties thereto, enforceable in
accordance with its terms, except that (x) enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (y) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. No condition exists or event has
occurred which (whether with or without notice or lapse of time or both, or the
happening or occurrence of any other event) would constitute a default by Sync,
any of its Subsidiaries, or, to the best knowledge of Sync, any other party
thereto under, or result in a right in termination of, any Sync Contract, by any
other party thereto. To the best knowledge of Sync, no party to any Sync
Contract intends (x) to terminate such Sync Contract or materially amend the
terms thereof, (y) to refuse to renew such Sync Contract upon expiration thereof
or (z) to renew such Sync Contract upon expiration thereof on terms and
conditions which are materially more onerous to Sync or such Subsidiary than
those pertaining to such existing Sync Contract.
4.16 ENVIRONMENTAL MATTERS. Except as to matters which would not be
expected to result, individually or in the aggregate, in a Material Adverse
Effect on Sync, or as set forth in Section 4.16 of the Disclosure Schedule,
(i) neither Sync nor any of its Subsidiaries has received any notice alleging
the material violation of, or any material actual or potential liability
relating to, any applicable Environmental Laws which violation has not been
resolved and, to the best knowledge of Sync, no such notice is threatened or
otherwise expected, (ii) to the best knowledge of Sync, Sync and each of its
Subsidiaries is and has been in material compliance with all applicable
Environmental Laws and, to the best knowledge of Sync, there is no condition
that could prevent or materially interfere with such compliance in the future,
(iii) Sync and each of its Subsidiaries has obtained and is and has been in
material compliance with all required governmental environmental permits,
registrations and
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authorizations with respect to the business of Sync and each of its Subsidiaries
as currently conducted, (iv) to the best knowledge of Sync, no Hazardous
Material has been transported, stored, treated, arranged to be disposed of or
disposed of by Sync or any of its Subsidiaries on or from the real estate owned,
operated or otherwise used by Sync or any of its Subsidiaries or at any other
location, except in compliance with or as otherwise would not result in material
liability under any applicable Environmental Laws, (v) except for successor
liability as owner of real property, neither Sync nor any of its Subsidiaries
has assumed, contractually or by operation of law, any liabilities, potential
liabilities or obligations of any other person or entity under any applicable
Environmental Laws, (vi) neither Sync nor any of its Subsidiaries has entered
into, agreed to, or is subject to any judgment, decree, order or other similar
requirement of any governmental authority under any Environmental Laws,
(vii) to the best knowledge of Sync, there are no (w) underground or aboveground
storage tanks, (x) surface impoundments, (y) landfills or (z) sewer or septic
systems currently or formerly present at or about any of the properties or
facilities currently or, to the best knowledge of Sync, formerly owned, operated
or otherwise used by Sync or any of its Subsidiaries that could result in
material liability to Sync or any such Subsidiary under any applicable
Environmental Laws, and (viii) to the best knowledge of Sync, there are no
actions, activities, events, conditions or circumstances occurring or existing,
including without limitation the release, threatened release, emission,
discharge, generation, treatment, storage or disposal of Hazardous Materials,
that can reasonably expected to result in any material liability or obligation
of Sync or any of its Subsidiaries under or relating to any Environmental Laws.
4.17 INSURANCE. Section 4.17 of the Disclosure Schedule lists all
insurance policies of Sync and each of its Subsidiaries covering the assets,
employees and operations of Sync and each of its Subsidiaries as of the date
hereof and any pending claim under such policies. All such policies are in full
force and effect, all premiums due thereon have been paid by Sync or such
Subsidiary and Sync and each of its Subsidiaries has complied in all material
respects with the provisions of such policies and has not received any notice
from any of its insurance brokers or carriers that such broker or carrier will
not be willing or able to renew their existing coverage.
4.18 MATERIAL CUSTOMERS AND SUPPLIERS. Section 4.18 of the Disclosure
Schedule sets forth the names of the ten suppliers of Sync and its Subsidiaries
whom Sync and its Subsidiaries paid the greatest sum of money in respect of
products, services and materials sold to Sync and its Subsidiaries and the ten
customers of Sync and its Subsidiaries from whom Sync and its Subsidiaries
received the greatest sum of money in respect of products or services provided
by Sync and its Subsidiaries between January 1, 1999 and December 31, 1999.
4.19 REAL PROPERTY.
(a) The real property listed in Section 4.19(a) of the Disclosure
Schedule constitutes all of the real property that any of Sync and its
Subsidiaries owns as of the date hereof (the "Sync Owned Real Property").
Except as set forth in Section 4.19(a) of the Disclosure Schedule, with
respect to each such parcel of Sync Owned Real Property the identified owner
has good and marketable fee simple title to the parcel of real property,
free and clear of any Encumbrance (other than Permitted Liens).
(b) The leases listed in Section 4.15 of the Disclosure Schedule
constitute all the real property leases which are used in the conduct of the
business of Sync and its Subsidiaries as it is presently being conducted
and/or to which Sync or its Subsidiaries is a party (the "Sync Leases," and
such property, "Sync Leased Property"; the Sync Leased Property, together
with the Sync Owned Real Property, the "Sync Real Property"). The Sync Owned
Real Property and the Sync Leased Property is all of the real property which
is used for the conduct of the business of Sync and its Subsidiaries as is
presently conducted.
(c) Since December 31, 1999, neither Sync nor any of its Subsidiaries
has sold, assigned, transferred or otherwise disposed of, or granted any
security interest in or lien on, any Sync Lease.
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With respect to each Sync Lease, all accrued and payable rents required by
each Sync Lease to be paid by Sync or any of its Subsidiaries have been paid
or adequate provision for such payment has been made, no written notice of
default or termination has been given or received by Sync or any of its
Subsidiaries, and, to the best knowledge of Sync, no material event of
default has occurred, no condition exists and no event has occurred that,
with the giving of notice or the lapse of time, would become a material
default or permit early termination, under any Sync Lease, and (iii) Sync
has, and immediately after the Closing, Entrada will have, good, valid and
enforceable title to the leasehold estate in the Sync Leased Property, free
and clear of any Encumbrance (other than Permitted Liens). Except as set
forth in Section 4.19(c) of the Disclosure Schedule, no third party consent
or approval under any Sync Lease is required for the consummation of the
transactions contemplated herein.
(d) Sync has obtained all easements and rights of way required from all
governmental jurisdictions or from private parties for the normal use and
operation of the business on the Sync Owned Real Property as heretofore
conducted.
(e) There is no pending or, to Sync's knowledge, threatened
condemnation, expropriation, eminent domain or similar proceeding affecting
any of the Sync Real Property and Sync has not received any written notice
of any of the same.
(f) Each Sync Owned Real Property and, to Sync's knowledge, each Sync
Leased Property and all buildings, structures, fixtures and improvements on
each Sync Owned Real Property and, to Sync's knowledge, each Sync Leased
Property, and all use of any thereof by Sync, conform with all applicable
building, zoning, subdivision, land use, fire and other laws pertaining to
or affecting real property, except where the failure to so conform would not
have a Material Adverse Effect on Sync. Each occupied Sync Owned Real
Property and, to Sync's knowledge, each occupied Sync Leased Property is
occupied under a valid and existing certificate of occupancy for such Sync
Real Property. Sync has taken all corrective action indicated in all written
notices or orders to Sync to correct violations of laws issued by any
governmental authority having jurisdiction against or affecting the Sync
Real Property. The Sync Real Property is not in violation of any restrictive
covenant, condition, restriction or limitation which would have a Material
Adverse Effect on Sync or a material adverse effect on the use thereof as
currently utilized.
(g) No Sync Owned Real Property is subject to any contract or other
restriction of any nature whatsoever (recorded or unrecorded) preventing or
limiting the right of Sync to convey or use it as currently operated.
(h) All Sync Real Property and the improvements thereon are supplied
with the utilities necessary for the operation of such facilities as
currently operated.
(i) Sync has not received written notice of any special assessment
relating to any Sync Real Property or any portion thereof, and, to Sync's
knowledge, there are no pending or threatened special assessments.
(j) Sync has not obtained any environmental, engineering or other
studies or reports prepared for Sync since January 1, 1995 which primarily
deal with the ownership, operation, maintenance or management of the Sync
Real Property.
4.20 INVESTMENT COMPANY ACT STATUS. Neither Sync nor any of its
Subsidiaries is an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940.
4.21 PRODUCT LIABILITY. Except as set forth in Section 4.21 of the
Disclosure Schedule, neither Sync nor any of its Subsidiaries has received
written notice of any claim or threatened claim against Sync or any such
Subsidiary for product liability, nor, to the best knowledge of Sync, has Sync
or any of
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its Subsidiaries received oral notice of any claim or threatened claim against
Sync or any of its Subsidiaries for product liability.
4.22 BOOKS AND RECORDS. The financial books and records pertaining to the
business of Sync and its Subsidiaries are complete and correct in all material
respects, have been maintained in accordance with good business practice, and
reflect the basis for the financial condition and results of operations of Sync
set forth in the Sync Financial Statements referred to in Section 4.4 hereto.
4.23 NO BROKERS' OR OTHER FEES. No broker, finder or investment banker
(other than Alliant Partners) is entitled to any fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of Sync or any of its Subsidiaries.
4.24 SYNC REPORTS. Since January 1997, Sync has filed all forms, reports
and documents with the Commission required to be filed by it pursuant to the
federal securities laws and the Commission rules and regulations thereunder (the
"Sync Commission Filings"), and all such forms, reports and documents filed with
the Commission have complied in all material respects with all applicable
requirements of the federal securities laws and the Commission rules and
regulations promulgated thereunder. Sync has made available to Entrada true and
complete copies of all Sync Commission Filings filed by Sync with the Commission
since January 1, 1997. As of their respective dates, the Sync Commission Filings
did not contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
4.25 NASDAQ. Sync's Common Stock is currently trading on the NASDAQ
National Market and Sync currently satisfies the "maintenance criteria" for
continued trading thereon. Except as set forth in Section 4.25 of the Disclosure
Schedule, Sync has received no notice from NASDAQ of a potential revocation of
its National Market listing, nor is Sync aware of any facts that would form the
basis of such a notice.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 CONDUCT OF BUSINESS BY ENTRADA. The Shareholder covenants that, except
(i) as otherwise expressly contemplated by this Agreement or (ii) as consented
to by Sync in writing, from and after April 10, 2000 and until the Effective
Time, the Shareholder shall cause Entrada to, and Entrada shall and shall cause
each of its Subsidiaries to:
(a) use all reasonable efforts consistent with good business judgment to
(i) preserve intact the present business organization of Entrada and its
Subsidiaries and pay payables and collect receivables in a manner consistent
with past practice and otherwise operate Entrada and its Subsidiaries in the
ordinary and regular course of business consistent with past practice; (ii)
maintain Entrada's and its Subsidiaries' books and records in accordance
with past practices; (iii) keep available the services of Entrada's and its
Subsidiaries' officers and employees; and (iv) maintain satisfactory
relationships with licensors, suppliers, creditors, distributors, customers
and others having material business relationships with Entrada and its
Subsidiaries;
(b) notify Sync of any change in the normal course of business or
operations of Entrada or its Subsidiaries and of any governmental
complaints, investigations or hearings of which Entrada or its Subsidiaries
is notified (or communications received by Entrada or its Subsidiaries
indicating that the same may be contemplated), or the institution or
settlement of litigation or any claim, in each case involving Entrada or its
Subsidiaries, and to keep Sync informed of such events;
(c) not (i) cause to be issued or sold any shares of capital stock or
debt or equity securities of Entrada or its Subsidiaries or Entrada Capital
Stock Equivalents or issue, grant or enter into
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any options, warrants, rights, subscription agreements or commitments of any
kind with respect thereto; (ii) directly or indirectly cause to be
purchased, redeemed or otherwise acquired or disposed of any shares of
capital stock of Entrada or its Subsidiaries; (iii) declare, set aside or
pay any dividend or other distribution; (iv) reclassify, combine, split,
subdivide or redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital stock or any Entrada Capital Stock Equivalents, other
than pursuant to Entrada Plans in accordance with their terms as in effect
on the date hereof; (v) permit or allow Entrada or its Subsidiaries to
borrow or agree to borrow any funds or incur, whether directly or by way of
guarantee, any obligation for borrowed money, other than in the ordinary
course of business and consistent with past practice; (vi) subject any of
the assets of Entrada or any of its Subsidiaries (real, personal or mixed,
tangible or intangible) to any Encumbrance or otherwise permit or allow the
sale, lease, transfer or disposition of any assets of Entrada or its
Subsidiaries (real, personal or mixed, tangible or intangible), other than
in the ordinary course of business and consistent with past practice; (vii)
assume, guarantee, or otherwise become responsible for the obligations of,
or make any loans or advances to, any other individual, firm or corporation;
(viii) waive or release any rights of material value, or cancel, compromise,
release or assign any material indebtedness owed to Entrada or its
Subsidiaries or any material claims held by Entrada or its Subsidiaries;
(ix) except for capital expenditures not to exceed $5,000, make any
investment or expenditure of a capital nature either by purchase of stock or
securities, contributions to capital, property transfer or otherwise; (x)
enter into any new material line of business; (xi) cancel or terminate any
insurance policy naming Entrada or its Subsidiaries as a beneficiary or a
loss payable payee; (xii) enter into any collective bargaining agreements;
(xiii) increase the compensation or fringe benefits of any of the officers
or directors of Entrada or any of its Subsidiaries or, other than in
accordance with past practice, effect any material general increase in the
compensation or fringe benefits of the employees of Entrada or any of its
Subsidiaries or pay or agree to pay any pension, retirement allowance, or
other benefit not required by any existing employee benefit plan or any
bonus to any such officers or employees, commit Entrada or any of its
Subsidiaries to any employment agreement or employee benefit plan with or
for the benefit of any of Entrada's or its Subsidiaries' officers or
employees or any other person, or alter, amend, terminate in whole or in
part, or curtail or permanently discontinue contributions to, any pension
plan or any other employee benefit plan; (xiv) except as may be required as
a result of a change in law or in GAAP, change any of the accounting
practices or principles used by Entrada or its Subsidiaries; (xv) enter into
or terminate any license, distributorship, dealer, sales representative,
joint venture, credit or similar agreement, or any contract, agreement or
transaction involving a total remaining commitment of at least $25,000;
(xvi) except as may be required by law, make any material Tax election, make
or change any method of accounting with respect to Taxes, file any amended
Tax Returns that may have a Material Adverse Effect on the Tax position of
Entrada or any of its Subsidiaries or settle or compromise any material
Federal, state, local or foreign Tax liability; (xvii) enter into any "non-
compete" or similar agreement; (xviii) amend the certificate of
incorporation or by-laws of Entrada or any of its Subsidiaries; (xix) take
any action with knowledge that such action would reasonably be expected to
result in any of the conditions contained in Article VII not being
satisfied; (xx) or agree to do any of the foregoing; and
(d) comply in all material respects with all applicable laws, including,
without limitation, applicable Environmental Laws.
5.2 CONDUCT OF BUSINESS BY SYNC. Sync covenants that, except (i) as
otherwise expressly contemplated by this Agreement or (ii) as consented to by
the Shareholder in writing, from and after April 10, 2000 and until the
Effective Time Sync shall, and shall cause each of its Subsidiaries to:
(a) use all reasonable efforts consistent with good business judgment to
(i) preserve intact the present business organization of Sync and its
Subsidiaries and pay payables and collect receivables
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in a manner consistent with past practice and otherwise operate Sync and its
Subsidiaries in the ordinary and regular course of business consistent with
past practice; (ii) maintain Sync's and its Subsidiaries' books and records
in accordance with past practices; (iii) keep available the services of
Sync's and its Subsidiaries' officers and employees; and (iv) maintain
satisfactory relationships with licensors, suppliers, creditors,
distributors, customers and others having material business relationships
with Sync and its Subsidiaries;
(b) notify Entrada of any change in the normal course of business or
operations of Sync or its Subsidiaries and of any governmental complaints,
investigations or hearings of which Sync or its Subsidiaries is notified (or
communications received by Sync or its Subsidiaries indicating that the same
may be contemplated), or the institution or settlement of litigation or any
Claim, in each case involving Sync or its Subsidiaries, and to keep Entrada
informed of such events;
(c) not (i) cause to be issued or sold any shares of capital stock or
debt or equity securities of Sync or its Subsidiaries or Sync Capital Stock
Equivalents, except for (x) the exercise of outstanding stock options, or
issue, grant or enter into any options, warrants, rights, subscription
agreements or commitments of any kind with respect thereto, except in the
ordinary course to non-executive employees of Sync, (y) the issuance of the
Contribution Shares and (z) the sale of 700,000 shares of Sync's Series A
Preferred Stock to Entrada Holdings, LLC (which occurred on May 12, 2000),
(ii) directly or indirectly cause to be purchased, redeemed or otherwise
acquired or disposed of any shares of capital stock of Sync or its
Subsidiaries; (iii) declare, set aside or pay any dividend or other
distribution; (iv) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock or
any Sync Capital Stock Equivalents, other than pursuant to Sync Plans in
accordance with their terms as in effect on the date hereof; (v) permit or
allow Sync or its Subsidiaries to borrow or agree to borrow any funds or
incur, whether directly or by way of guarantee, any obligation for borrowed
money, other than in the ordinary course of business and consistent with
past practice; (vi) subject any of the assets of Sync or any of its
Subsidiaries (real, personal or mixed, tangible or intangible) to any
Encumbrance or otherwise permit or allow the sale, lease, transfer or
disposition of any assets of Sync or its Subsidiaries (real, personal or
mixed, tangible or intangible), other than in the ordinary course of
business and consistent with past practice; (vii) assume, guarantee, or
otherwise become responsible for the obligations of, or make any loans or
advances to, any other individual, firm or corporation; (viii) waive or
release any rights of material value, or cancel, compromise, release or
assign any material indebtedness owed to Sync or its Subsidiaries or any
material claims held by Sync or its Subsidiaries; (ix) except for (A)
capital expenditures in the ordinary course of business and (B) capital
expenditures not to exceed $5,000, make any investment or expenditure of a
capital nature either by purchase of stock or securities, contributions to
capital, property transfer or otherwise; (x) enter into any new material
line of business; (xi) cancel or terminate any insurance policy naming Sync
or its Subsidiaries as a beneficiary or a loss payable payee; (xii) enter
into any collective bargaining agreements; (xiii) increase the compensation
or fringe benefits of any of the officers or directors of Sync or any of its
Subsidiaries or, other than in accordance with past practice, effect any
material general increase in the compensation or fringe benefits of the
employees of Sync or any of its Subsidiaries or pay or agree to pay any
pension, retirement allowance, or other benefit not required by any existing
employee benefit plan to any such officers or employees, commit Sync or any
of its Subsidiaries to any employment agreement or employee benefit plan
with or for the benefit of any of Sync's or its Subsidiaries' officers or
employees or any other person, or alter, amend, terminate in whole or in
part, or curtail or permanently discontinue contributions to, any pension
plan or any other employee benefit plan; (xiv) except as may be required as
a result of a change in law or in GAAP, change any of the accounting
practices or principles used by Sync or its Subsidiaries; (xv) enter into or
terminate any license, distributorship, dealer, sales representative, joint
venture, credit or similar agreement, or any contract, agreement or
transaction involving a total remaining commitment of at least $25,000;
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(xvi) except as may be required by law, make any material Tax election, make
or change any method of accounting with respect to Taxes, file any amended
Tax Returns that may have a Material Adverse Effect on the Tax position of
Sync or any of its Subsidiaries or settle or compromise any material
Federal, state, local or foreign Tax liability; (xvii) enter into any "non-
compete" or similar agreement; (xviii) amend the certificate of
incorporation or by-laws of Sync or any of its Subsidiaries; (xix) take any
action with knowledge that such action would reasonably be expected to
result in any of the conditions contained in Article VI not being satisfied;
or (xx) agree to do any of the foregoing; and
(d) comply in all material respects with all applicable laws, including,
without limitation, applicable Environmental Laws.
5.3 ACCESS TO BOOKS AND RECORDS; COOPERATION.
(a) ENTRADA. During the period commencing on the date hereof and
ending on the Closing Date, Entrada will afford to Sync and its counsel,
accountants and other authorized representatives access, at all reasonable
times upon reasonable advance notice, to the officers, directors, employees,
accountants and other advisors and agents, properties, books, records and
contracts of Entrada and its Subsidiaries, and the right to make copies and
extracts from such books, records and contracts, and to furnish Sync with
all financial, operating and other data and information concerning Entrada
and its Subsidiaries as Sync and its advisors may reasonably request. Sync
will hold, and will use its best efforts to cause its representatives to
hold, any such information which is non-public in confidence to the extent
required by, and in accordance with, the provisions of the confidentiality
agreement dated April 19, 1999 between Sync and Entrada (the
"Confidentiality Agreement").
(b) SYNC. During the period commencing on the date hereof and ending
on the Closing Date, Sync will afford to Entrada and its counsel,
accountants and other authorized representatives access, at all reasonable
times upon reasonable advance notice, to the officers, directors, employees,
accountants and other advisors and agents, books, records and contracts of
Sync and its Subsidiaries, and the right to make copies and extracts from
such books, records and contracts, and to furnish Entrada with all
financial, operating and other data and information concerning Sync and its
Subsidiaries as Entrada may reasonably request. Entrada will hold, and will
use its best efforts to cause its representatives to hold, any such
information which is non-public in confidence to the extent required by, and
in accordance with, the provisions of the Confidentiality Agreement.
5.4 FILINGS AND CONSENTS. Sync and Entrada shall use all reasonable
efforts to obtain and to cooperate in obtaining any consent, approval,
authorization or order of, and in making any registration or filing with, any
governmental agency or body or other third party required in connection with the
execution, delivery or performance of this Agreement. The parties made all
appropriate filings under the HSR Act and obtained early termination of the
waiting period under such act.
5.5 NO SOLICITATION.
(a) Sync, the Shareholder and its Subsidiaries, and the officers,
directors, employees or other agents of Sync, the Shareholder and its
Subsidiaries, will not, directly or indirectly, (i) take any action to
solicit, initiate or encourage any Takeover Proposal (as defined below) or
(ii) subject to the terms of Section 5.5(b), engage in negotiations with, or
disclose any nonpublic information relating to Sync or Entrada (as
applicable) to, or afford access to the properties, books or records of Sync
or Entrada (as applicable) to, any person that has advised Sync, the
Shareholder or Entrada that it may be considering making, or that has made,
a Takeover Proposal. Each of Sync and the Shareholder will promptly notify
the other after receipt of any Takeover Proposal or any notice that any
person is considering making a Takeover Proposal or any request for
nonpublic
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information relating to Sync or Entrada, as applicable, or for access to the
properties, books or records of Sync or Entrada, as applicable, by any
person that has advised Sync or the Shareholder, as applicable, that it may
be considering making, or that has made, a Takeover Proposal and will keep
the Shareholder or Sync, as applicable, fully informed of the status and
details of any such Takeover Proposal notice or request. For purposes of
this Agreement, "TAKEOVER PROPOSAL" means any offer or proposal for, or any
indication of interest in, a merger or other business combination involving
Sync or Entrada, or the acquisition of any significant equity interest in,
or a significant portion of the assets of, Sync or Entrada, other than the
transactions contemplated by this Agreement.
(b) Notwithstanding Section 5.5(a), if an unsolicited Takeover Proposal,
or an unsolicited written expression of interest that can reasonably be
expected to lead to a Takeover Proposal, shall be received by the Board of
Directors of Sync or the Shareholder, then, to the extent the Board of
Directors of Sync or the Shareholder, as applicable, believes in good faith
(after consultation with its financial advisor) that such Takeover Proposal
would, if consummated, result in a transaction more favorable to Sync's or
the Shareholder's stockholders, as applicable, from a financial point of
view than the transaction contemplated by this Agreement (any such more
favorable Takeover Proposal being referred to in this Agreement as a
"SUPERIOR PROPOSAL"), and the Board of Directors of Sync or the Shareholder,
as applicable, determines in good faith after consultation with outside
legal counsel that it is necessary for such Board of Directors to evaluate
the Superior Proposal in order to comply with its fiduciary duties to
stockholders under applicable law, Sync or the Shareholder, as applicable,
and its officers, directors, employees, investment bankers, financial
advisors, attorneys, accountants and other representatives retained by it
may furnish in connection therewith information and take such other actions
as are consistent with the fiduciary obligations of its Board of Directors,
and such actions shall not be considered a breach of this Section 5.5 or any
other provisions of this Agreement; PROVIDED, HOWEVER, that Sync and the
Shareholder shall not, and shall not permit any of their respective
officers, directors, employees or other representatives to, agree to or
endorse any Takeover Proposal regarding Sync or Entrada, as applicable,
unless Sync or the Shareholder, as applicable, shall have (i) terminated
this Agreement pursuant to Section 8.1(e), and (ii) agreed to pay, without
interest, to the Shareholder or Sync, as applicable, the sum of $1,000,000
(the "Break-up Fee") no later than thirty (30) days after the closing of the
transaction resulting from the Superior Proposal.
5.6 PROXY; REGISTRATION STATEMENT. As soon as practicable after the date
hereof, Sync shall prepare and file with the Commission an amendment to its
pending Registration Statement on Form S-4 (Commission Registration Number
333-37510) with respect to the shares of Sync Common Stock to be issued
constituting the Merger Consideration and the Contribution Shares and a proxy
statement and related materials to be furnished by the Company to the holders of
Sync Common Stock in connection with the Merger and the name change referred to
in Section 1.6 of this Agreement (the "Proxy Statement"). As soon as practicable
following receipt of final comments from the staff of the Commission on the
Proxy Statement and the Registration Statement (or advice that such staff will
not review such filing), Sync shall use its best efforts to have the
Registration Statement declared effective by the Commission and to maintain the
effectiveness of such Registration Statement until completion of the Merger.
Promptly after the effectiveness of the Registration Statement, Sync shall mail
the Proxy Statement to all holders of Sync Common Stock. Sync, the Shareholder
and Entrada shall cooperate with each other in the preparation of the Proxy
Statement and the Registration Statement and shall advise the other in writing
if, at any time prior to the Sync Meeting, any such party shall obtain knowledge
of any facts that might make it necessary or appropriate to amend or supplement
the Proxy Statement or the Registration Statement in order to make the
statements contained or incorporated by reference therein not misleading or to
comply with applicable law. Notwithstanding the foregoing, each party shall be
responsible for the information and disclosures which it makes or incorporates
by reference in all regulatory filings, the Proxy Statement and the Registration
Statement.
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5.7 SHAREHOLDERS' MEETING. Sync shall take all action necessary, in
accordance with applicable law and its Certificate of Incorporation and By-Laws,
to convene a meeting of the holders of the Sync Common Stock (the "Sync
Meeting") as promptly as practicable for the purpose of considering and taking
action required by this Agreement. Except to the extent legally required for the
discharge by the Board of Directors of its fiduciary duties, the Board of
Directors of Sync shall recommend that the holders of the Sync Common Stock vote
in favor of and approve the Merger and adopt this Agreement at the Sync Meeting.
5.8 LISTING. Sync shall use its best efforts to list on the Nasdaq
National Market upon official notice of issuance the Sync Common Stock to be
issued in the Merger and the Contribution Shares.
5.9 COVENANT TO SATISFY CONDITIONS. Each party hereto agrees to use all
reasonable efforts to insure that the conditions set forth in Article VI and
Article VII, respectively hereof are satisfied, insofar as such matters are
within the control of such party.
5.10 BEST EFFORTS AND FURTHER ASSURANCES. Each of the parties to this
Agreement shall use its best efforts to effectuate the transactions contemplated
hereby and to fulfill and cause to be fulfilled the conditions to closing under
this Agreement. Each party hereto, at the reasonable request of another party
hereto, shall at any time execute and deliver such other instruments and do and
perform such other acts and things as may be necessary or desirable, including
without limitation the transfer to Entrada of all right, title and interest in
the Entrada Assets, for effecting completely the consummation of this Agreement
and the transactions contemplated hereby.
ARTICLE VI
CONDITIONS TO THE SHAREHOLDER'S OBLIGATIONS
The obligation of the Shareholder to effect the Closing under this Agreement
is subject to the satisfaction, at or prior to the Closing, of each of the
following conditions, unless validly waived in writing by the Shareholder.
6.1 REPRESENTATIONS AND WARRANTIES. (a) Each of the representations and
warranties of Sync set forth in this Agreement shall be true and correct as of
April 10, 2000 and as of the Closing Date as if made at and as of the Closing
Date (except, in each case, for those representations and warranties which
address matters only as of a particular date, in which case they shall be true
and correct, or true and correct in all material respects, as applicable, as of
such date).
6.2 PERFORMANCE. Sync shall have performed and complied in all material
respects with all agreements and obligations required by this Agreement to be so
performed or complied with by it prior to the Closing.
6.3 OFFICER'S CERTIFICATE. Sync shall have delivered to the Shareholder a
certificate, dated as of the Closing Date and executed by the President or a
Senior Vice President of Sync, certifying to the fulfillment of the conditions
specified in Sections 6.1 and 6.2 hereof.
6.4 HSR ACT. All applicable waiting periods under the HSR Act with respect
to the transactions contemplated hereby shall have expired or been terminated.
6.5 SHAREHOLDER APPROVAL. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of shareholders of Sync.
6.6 REGISTRATION STATEMENT. The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act and no stop
order suspending the effectiveness of the Registration Statement shall have been
issued by the Commission and remain in effect.
6.7 NASDAQ. The Sync Common Stock issuable pursuant to the Merger shall
have been designated for inclusion in the Nasdaq National Market (the "Nasdaq").
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6.8 INJUNCTIONS. On the Closing Date there shall be no injunction, writ,
preliminary restraining order or other order in effect of any nature issued by a
United States Federal or state court or governmental authority of competent
jurisdiction directing that the transactions provided for herein not be
consummated as provided herein.
6.9 CONSENTS. All material orders, consents, approvals, permits,
authorizations, notices, declarations, filings, applications, qualifications and
registrations identified in Section 4.6 of the Disclosure Schedule and necessary
to effect the Closing or continue the business of Entrada after the Closing
shall have been obtained.
6.10 NON-COMPETITION AGREEMENT. Prior to the Closing, pursuant to Section
1.7(d), Sync shall have entered into a Non-Competition Agreement with the
Shareholder in such form and substance as Sync and the Shareholder may mutually
agree.
ARTICLE VII
CONDITIONS TO SYNC'S OBLIGATION
The obligation of Sync to effect the Closing under this Agreement is subject
to the satisfaction, at or prior to the Closing, of each of the following
conditions, unless validly waived in writing by Sync.
7.1 REPRESENTATIONS AND WARRANTIES. (a) Each of the representations and
warranties of the Shareholder set forth in this Agreement that shall be true and
correct as of April 10, 2000 and as of the Closing Date as if made at and as of
the Closing Date, (except, in each case, for those representations and
warranties which address matters only as of a particular date, in which case
they shall be true and correct, or true and correct in all material respects, as
applicable, as of such date).
7.2 PERFORMANCE. The Shareholder and Entrada shall have performed and
complied in all material respects with all agreements and obligations required
by this Agreement to be so performed or complied with by the Shareholder and
Entrada prior to the Closing.
7.3 OFFICER'S CERTIFICATE. The Shareholder and Entrada shall have
delivered to Sync a certificate, dated as of the Closing Date and executed by
the President or a Senior Vice President each of the Shareholder and Entrada,
certifying to the fulfillment of the conditions specified in Sections 7.1 and
7.2 hereof.
7.4 HSR ACT. All applicable waiting periods under the HSR Act with respect
to the transactions contemplated hereby shall have expired or been terminated.
7.5 SHAREHOLDER APPROVAL. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of shareholders of Sync.
7.6 REGISTRATION STATEMENT. The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act and no stop
order suspending the effectiveness of the Registration Statement shall have been
issued by the Commission and remain in effect.
7.7 INJUNCTIONS. On the Closing Date there shall be no injunction, writ,
preliminary restraining order or other order in effect of any nature issued by a
United States Federal or state court or governmental authority of competent
jurisdiction directing that the transactions provided for herein not be
consummated as provided herein.
7.8 CONSENTS. All material orders, consents, approvals, permits,
authorizations, notices, declarations, filings, applications, qualifications and
registrations identified in Section 3.6 of the Disclosure Schedule and necessary
to effect the Closing or continue the business of Entrada after the Closing
shall have been obtained. Without limiting the foregoing, Coast Business
Credit, Inc. shall have agreed to continue to provide financing to the Surviving
Corporation in the same amount and on the
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same terms and conditions as it has provided such financing to Entrada prior to
the date of this Agreement.
7.9 NON-COMPETITION AGREEMENT. Prior to the Closing, pursuant to Section
1.7(d), Sync shall have entered into a Non-Competition Agreement with the
Shareholder in such form and substance as Sync and the Shareholder may mutually
agree.
ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Effective Time:
(a) by the mutual consent of Sync and the Shareholder;
(b) by Sync, if the Closing has not occurred on or before September 15,
2000, unless the failure of such consummation shall be due to any materially
false, inaccurate or misleading representations and warranties of Sync
contained herein or the breach or failure of Sync to comply in all material
respects with the agreements and covenants contained herein to be performed
by Sync on or before September 15, 2000;
(c) by the Shareholder, if the Closing has not occurred on or before
September 15, 2000, unless the failure of such consummation shall be due to
any materially false, inaccurate or misleading representations and
warranties of the Shareholder contained herein or the breach or failure of
the Shareholder to comply in all material respects with the agreements and
covenants contained herein to be performed by the Shareholder on or before
September 15, 2000;
(d) by either Sync or the Shareholder, if any court or governmental
authority of competent jurisdiction shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby and such order, decree or
ruling or other action shall have become final and nonappealable;
(e) by either Sync or the Shareholder, upon (i) receipt of an
unsolicited proposal that constitutes a Superior Proposal and
(ii) agreement to pay the Break-up Fee; or
(f) by Sync in the event its Shareholders vote not to approve this
Agreement, provided that Sync shall then pay to Entrada a fee of Two Hundred
Fifty Thousand Dollars ($250,000.00) within thirty (30) days of such
shareholder vote.
8.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of the termination
of this Agreement and the abandonment of the transactions contemplated hereby by
Sync or the Shareholder pursuant to Section 8.1 hereof, written notice thereof
shall forthwith be given to the other parties. If this Agreement is terminated
and the transactions contemplated by this Agreement are abandoned as provided
herein, no party to this Agreement will have any liability under this Agreement
to any other except (i) that nothing herein shall relieve any party from any
liability for making any false, inaccurate or misleading representations or
warranties, or the breach of any covenants and agreements set forth in this
Agreement and (ii) as contemplated by Section 9.1 and (iii) if applicable,
payment of the Break-up Fee pursuant to Section 5.5(b) or the $250,000.00 fee
pursuant to Section 8.1(f).
ARTICLE IX
INDEMNIFICATION
9.1 INDEMNIFICATION BY THE SHAREHOLDER OF SYNC. Subject to the limits set
forth in this Section 9.1, the Shareholder agrees that from and after the date
hereof the Shareholder shall, indemnify, defend
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and hold Sync, its Subsidiaries (including, without limitation, Entrada after
the Effective Date) and their respective officers, directors, partners,
stockholders, employees, agents and representatives (collectively, the "Sync
Indemnified Persons") harmless from and in respect of any and all losses,
damages, costs and reasonable expenses (including, without limitation,
reasonable fees and expenses of counsel) (collectively, "Losses"), that such
Sync Indemnified Persons or Sync or its Subsidiaries may incur arising out of or
due to (i) any false, inaccurate, or misleading representation or warranty or
the breach of any covenant by the Shareholder or Entrada in the Agreement,
(ii) the termination of the Case Defined Benefit Plan; (iii) the early
termination by Entrada of its real estate lease for property located in Aurora,
Illinois; and (iv) the failure of Entrada to pay any owed Taxes and to file all
required Tax Returns, and all fines and penalties associated therewith. The
matters referred to in clause (i) of this paragraph (a) shall be subject to
indemnification only as to claims made within the period ending twenty-four (24)
months following the Effective Date (except as to matters referred to in Section
3.16, for which the time limit is the applicable statute of limitations).
9.2 INDEMNIFICATION BY SYNC OF THE SHAREHOLDER. Subject to the limits set
forth in this Section 9.1, Sync agrees that from and after the date hereof Sync
shall, for claims made within the period ending twenty-four (24) months
following the Effective Date (except as to matters referred to in Section 4.16,
for which the time limit is the applicable statute of limitations) indemnify,
defend and hold the Shareholder and its officers, directors, partners,
stockholders, employees, agents and representatives (collectively, the "Entrada
Indemnified Persons" and, together with the Sync Indemnified Persons, the
"Indemnified Persons") harmless from and in respect of any and all Losses that
such Entrada Indemnified Persons may incur arising out of or due to any false,
inaccurate, or misleading representation or warranty or the breach of any
covenant by Sync in the Agreement. The matters referred to in this paragraph
(b) shall be subject to indemnification only as to claims made within the period
ending twenty-four (24) months following the Effective Date (except as to
matters referred to in Section 3.16, for which the time limit is the applicable
statute of limitations).
9.3 NOTICE AND OPPORTUNITY TO DEFEND. If there occurs an event which a
party asserts is an indemnifiable event pursuant to Section 9.1(a) or 9.1(b),
then Sync or the Shareholder as applicable, shall promptly notify the
Shareholder or Sync, respectively (the "Indemnifying Party"). If such event
involves any claim, or the commencement of any action or proceeding, by a third
person against any of the Indemnified Persons, the Indemnified Person will give
the Indemnifying Party prompt written notice of such claim or the commencement
of such action or proceeding; PROVIDED, HOWEVER, that the failure to provide
prompt notice as provided herein will relieve the Indemnifying Party of its
obligations hereunder only to the extent that such failure prejudices the
Indemnifying Party hereunder. In case any such action shall be brought against
any party seeking indemnification and the Indemnified Person shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate therein or, following the delivery by the Indemnifying
Party to the Indemnified Person of Indemnified Party's acknowledgment in writing
that the relevant Loss is an indemnified liability hereunder and that the
Indemnifying Party, in its good faith judgment, will be able to pay any award of
money damages against the Indemnified Person in connection with such action, to
assume the defense thereof, with legal counsel reasonably satisfactory to such
Indemnified Person and, after notice from the Indemnified Person to such
Indemnified Person of such election so to assume the defense thereof, the
Indemnifying Party shall not be liable to the party or parties seeking
indemnification hereunder for any legal expenses of other counsel or any other
expenses subsequently incurred by such party or parties in connection with the
defense thereof. The Indemnifying Party and the Indemnified Person agree to
cooperate fully with each other and their respective legal counsel in connection
with the defense, negotiation or settlement of any such action or asserted
liability. The Indemnified Person shall have the right to participate at his own
expense in the defense of such action or asserted liability. If the Indemnifying
Party assumes the defense of an action (a) no settlement or compromise thereof
may be effected (i) by the Indemnifying Party without the written consent of the
Indemnified Person (which consent shall not be unreasonably withheld or delayed)
unless (x) there is no finding or admission of
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any violation of law or any violation of the rights of any person by any
Indemnified Person and no adverse effect on any other claims that may be made
against any Indemnified Person and (y) all relief provided is paid or satisfied
in full by the Indemnifying Party or (ii) by the Indemnified Person without the
written consent of Indemnifying Party (which consent shall not be unreasonably
withheld or delayed) and (b) the Indemnified Person may subsequently assume the
defense of such action if a court of competent jurisdiction determines that the
Indemnifying Party is not vigorously defending such action and the Indemnifying
Party shall bear all costs and expenses incurred by the Indemnified Party in its
defense of such action, including without limitation, fees and expenses of legal
counsel. In no event shall the Indemnifying Party be liable for any settlement
effected without its written consent
9.4 PAYMENT. On each occasion that any Indemnified Person shall be
entitled to indemnification or reimbursement under this Section 9.1, the
Indemnifying Party shall, at each such time, promptly pay by wire transfer, to
the Indemnified Person the aggregate amount of such Loss. To the extent the
Indemnified Person is the Shareholder and/or Entrada and Sync makes a payment to
a third party or incurs defense costs subsequent to the Effective Date with
respect to a matter subject to indemnification hereunder, then the Loss payable
to the Shareholder shall equal the amount of such payment and costs, which the
Surviving Corporation shall pay to the Shareholder. To the extent that the
Indemnified Person is a Sync Indemnified Person, and Sync makes a payment to a
third party or incurs defense costs subsequent to the Effective Date with
respect to a matter subject to indemnification hereunder by the Shareholder,
then the Loss payable to Sync shall equal the amount of such payment and costs,
which the Shareholder shall pay to Sync. If any Indemnified Person shall be
entitled to indemnification under this Section 9.1, the Indemnifying Party shall
reimburse in cash the Indemnified Person's actual out-of-pocket expenses, if
any, arising as a result of defending against any such claim, action or
proceeding.
9.5 MINIMUM LIABILITY. Neither party shall have any liability to the other
under this Article IX unless such party's aggregate Losses exceed $250,000, in
which event the Indemnifying Party shall be liable only for all such Losses
above that amount. Neither party shall have any liability under this Article IX
in an amount greater that Sync's market capitalization as of the date of this
Agreement.
ARTICLE X
MISCELLANEOUS
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations, warranties, covenants and other agreements in this Agreement or
in any instrument delivered pursuant to this Agreement, including any rights
arising out of any breach of such representations, warranties, covenants and
other agreements, shall survive the Effective Time for a period of two (2)
years, except for (a) those covenants and agreements contained herein and
therein that by their terms apply or are to be performed in whole or in part
prior to or at the Effective Time, and (b) those representations concerning
Taxes, which will survive for the statute of limitations period applicable to
the payment of such taxes, and (c) those representations concerning matters
under or relating to any Environmental Laws, which will survive for the statute
of limitations period applicable to such matters.
10.2 FEES AND EXPENSES. Except as otherwise provided in this Agreement,
Entrada and Shareholder shall bear their own expenses and the expenses of their
Affiliates and Sync shall bear its own expenses and the expenses of its
Affiliates in connection with the preparation and negotiation of this Agreement
and the consummation of the transactions contemplated by this Agreement. Each of
Entrada. Shareholder and Sync shall bear the fees and expenses of any broker or
finder retained by such party or parties and their respective Affiliates
(including, in the case of Sync, Merger Co) in connection with the transactions
contemplated herein.
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10.3 GOVERNING LAW. This Agreement shall be construed under and governed
by the laws of the State of California applicable to contracts made and to be
performed therein.
10.4 AMENDMENT. This Agreement may not be amended, modified or
supplemented except upon the execution and delivery of a written agreement
executed by Sync, the Shareholder.
10.5 NO ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto without
the prior written consent of the Shareholder, in the case of assignment by Sync,
and Sync, in the case of any assignment by the Shareholder. This Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
10.6 WAIVER. Any of the terms or conditions of this Agreement which may be
lawfully waived may be waived in writing at any time by each party which is
entitled to the benefits thereof. Any waiver of any of the provisions of this
Agreement by any party hereto shall be binding only if set forth in an
instrument in writing signed on behalf of such party. No failure to enforce any
provision of this Agreement shall be deemed to or shall constitute a waiver of
such provision and no waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
10.7 NOTICES. Any notice, demand, or communication required or permitted
to be given by any provision of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if (a) personally delivered, (b)
mailed by registered or certified first-class mail, prepaid with return receipt
requested, (c) sent by a nationally recognized overnight courier service, to the
recipient at the address below indicated or (d) delivered by facsimile which is
confirmed in writing by sending a copy of such facsimile to the recipient
thereof pursuant to clause (a) or (c) above:
If to Sync:
Sync Research, Inc.
00 Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, President
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
With copies to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
Venture Law Group
2775 and 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
If to the Shareholder:
Osicom Technologies, Inc.
0000 00xx Xxxxxx
X-00
Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: President
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
With copies to:
Greenbaum, Rowe, Xxxxx, Xxxxx, Xxxxx & Xxxxxx, LLP
Metro Corporate Campus I
00 Xxxx Xxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: W. Xxxxxxx Xxxxxx
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner.
Except as otherwise provided herein, any notice under this Agreement will be
deemed to have been given (x) on the date such notice is personally delivered or
delivered by facsimile, (y) four days after the date of mailing if sent by
certified or registered mail or (z) the next succeeding business day after the
date such notice is delivered to the overnight courier service if sent by
overnight courier; provided that in each case notices received after 4:00 p.m.
(local time of the recipient) shall be deemed to have been duly given on the
next business day.
10.8 COMPLETE AGREEMENT. This Agreement and the other documents and
writings referred to herein or delivered pursuant hereto contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and thereof.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
10.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
10.10 PUBLICITY. Sync and the Shareholder will consult with each other and
will mutually agree upon any publication or press release of any nature with
respect to this Agreement or the transactions contemplated hereby and shall not
issue any such publication or press release prior to such consultation and
agreement except as may be required by applicable law or by obligations pursuant
to any listing agreement with any securities exchange or any securities exchange
regulation, in which case the party proposing to issue such publication or press
release shall make all reasonable efforts to consult in good faith with the
other party or parties before issuing any such publication or press release and
shall provide a copy thereof to the other party or parties prior to such
issuance.
10.11 HEADINGS. The headings contained in this Agreement are for reference
only and shall not affect in any way the meaning or interpretation of this
Agreement.
10.12 SEVERABILITY. Any provision of this Agreement which is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
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10.13 THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or corporation, other than the parties hereto
and their permitted successors or assigns, any rights or remedies under or by
reason of this Agreement.
10.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. THE PARTIES HERETO
HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN
THE AREA ENCOMPASSED BY THE SOUTHERN DISTRICT OF THE STATE OF CALIFORNIA AND
IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. THE PARTIES HERETO EACH ACCEPT
FOR ITSELF AND HIMSELF, AS THE CASE MAY BE, AND IN CONNECTION WITH ITS OR HIS,
AS THE CASE MAY BE, RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION AND VENUE OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE
OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY NON-APPEALABLE
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. THE SHAREHOLDER
DESIGNATES XXX XXXXXXX AT HER BUSINESS ADDRESS, 0000 XXXX XXX XXXX, XXX XXXXX,
XXXXXXXXXX 00000 AND SUCH OTHER PERSON AS MAY HEREINAFTER BE SELECTED BY THE
SHAREHOLDER WHO IRREVOCABLY AGREES IN WRITING TO SO SERVE AS AGENT FOR THE
SHAREHOLDER TO RECEIVE ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE PARTIES HERETO TO BE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. SYNC DESIGNATES XXXXXXX X. XXXXXX AT HIS
BUSINESS ADDRESS SET FORTH IN SECTION 10.7 AND SUCH OTHER PERSON AS MAY
HEREINAFTER BE SELECTED BY SYNC WHO IRREVOCABLY AGREES IN WRITING TO SO SERVE AS
AGENT FOR SYNC TO RECEIVE ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE PARTIES HERETO TO BE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE
MAILED BY REGISTERED MAIL TO THE PARTIES HERETO, AS PROVIDED HEREIN, EXCEPT THAT
UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL
NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS.
10.15 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE PARTIES
HERETO ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT
FOR THIS WAIVER, BE REQUIRED OF ANY OF THE OTHER PARTIES. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES HERETO
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS OR HIS, AS THE CASE MAY BE, LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS OR HIS, AS THE CASE MAY BE, JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
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WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
10.16 DEFINITIONS. As used in this Agreement:
"AFFILIATE" of a person means a person that, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person;
"BEST KNOWLEDGE" means the knowledge of the Shareholder's or Sync's, as the
case may be, officers, as such knowledge has been obtained in the normal course
of its business or in connection with the preparation of the Disclosure Schedule
and the furnishing of information to Sync or the Shareholder as contemplated by
this agreement, after having made a reasonable investigation of the accuracy of
the representations and warranties made by the Shareholder or Sync in this
Agreement or in any document, certificate or other writing furnished by Entrada
or Sync to the other pursuant hereto or in connection therewith.
"MATERIAL ADVERSE EFFECT" means, with respect to any entity, to the extent
not reflected on such entity's Balance Sheet, any liability, obligation,
impairment, restriction, lien, cost, expense, loss, compensation, payment,
reimbursement, damage, judgment or settlement to, of, by or on the business
(including on assets that has such effect on the business), operations, cash
flow, property, assets, prospects or condition (financial or otherwise) of such
entity and its Subsidiaries taken as a whole in the amount of $250,000 or more
for an individual occurrence or $500,000 or more in the aggregate for multiple
occurrences, arising outside the ordinary course of business. "Material Adverse
Effect" includes, without limitation, any effect that impairs the ability of any
of the parties hereto to consummate any transaction contemplated hereby.
"PERMITTED LIENS" means (a) any mechanic's, materialman's or other liens
arising by operation of law in the ordinary course of business consistent with
past practice, (b) liens for Taxes, assessments and other governmental charges
not yet due and payable or which the taxpayer is contesting in good faith
through appropriate proceedings and for which any required reserves have been
established, (c) purchase money liens and liens securing rental payments under
capital lease arrangements, (d) liens arising as a matter of law in the ordinary
course of business, provided that the obligations secured by such liens are not
delinquent or are being contested in good faith, and (e) Encumbrances which,
individually and in the aggregate, do not materially impair the current use or
continued use (in the same manner as they are being used on the date hereof) of
the asset to which they attach.
"SUBSIDIARY" when used with respect to any party means any corporation or
other organization, whether incorporated or unincorporated, of which such party
or any other Subsidiary of such party is a general partner (excluding
partnerships, the general partnership interests of which held by such party or
any Subsidiary of such party do not have a majority of the voting interests in
such partnership) or at least a majority of the securities or other interests of
which having by their terms ordinary voting power to elect a majority of the
Board of Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its Subsidiaries, or by such party and
one or more of its Subsidiaries.
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IN WITNESS WHEREOF, Sync and the Shareholder has caused this Agreement to be
executed by its duly authorized officer, in both cases as of the day and year
first above written.
SYNC RESEARCH, INC., a Delaware
Corporation
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
OSICOM TECHNOLOGIES, INC. a New Jersey
corporation
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
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