STOCK PURCHASE AGREEMENT
Agreement
entered into effective December 1, 2007, by and among RemoteMDx, Inc., a Utah
corporation (the "Buyer"), and Xxxxx
X.
Xxxxxxxx, an individual residing in the State of Mississippi (the "Seller"). The
Buyer and the Seller are referred to collectively herein as the "Parties."
The
Seller owns all of the outstanding capital stock of Court Programs, Inc., a
Mississippi corporation ("CPI"), Court
Programs
of Northern Florida, Inc., a Florida corporation (“CPNF”), and Court
Programs of Florida, Inc., a Florida corporation (“CPF”). CPI, CPNF,
and
CPF are sometimes referred to individually as a “CP Entity” and
collectively in this Agreement as the “CP
Entities”.
This
Agreement contemplates a transaction in which the Buyer will purchase from
the
Seller, and the Seller will sell to the Buyer, a minimum of 51% and up to 100%
of the outstanding capital stock of the CP Entities in return for cash and
shares of Buyer’s common stock or a combination thereof.
Now,
therefore, in consideration of the premises and the mutual promises herein
made,
and in consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows.
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"Accredited
Investor"
has the meaning set forth in Regulation D promulgated under the Securities
Act.
"Adverse
Consequences"
means all actions, suits, proceedings, hearings, investigations, charges,
complaints, claims, demands, injunctions, judgments, orders, decrees, rulings,
damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities,
obligations, Taxes, liens, losses, expenses, and fees, including court costs
and
reasonable attorneys' fees and expenses.
"Affiliate"
has the
meaning set forth in Rule 12b-2 of the regulations promulgated under the
Securities Exchange Act.
"Affiliated
Group"
means any affiliated group within the meaning of Code §1504(a) or any similar
group defined under a similar provision of state, local or foreign
law.
“Auditor”
means
the
independent registered public accounting firm selected by Buyer.
"Basis"
means any past
or present fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act, or transaction that
forms or could form the basis for any specified consequence.
"Buyer"
has the
meaning set forth in the preface above.
"Closing"
has the
meaning set forth in Section 2(c) below.
"Closing
Date" has the
meaning set forth in Section 2(c) below.
"COBRA"
means the
requirements of Part 6 of Subtitle B of Title I of ERISA and Code §4980B and of
any similar state law.
"Code"
means the
Internal Revenue Code of 1986, as amended.
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"Confidential
Information" means any information concerning the businesses and affairs
of the CP Entities that is not already generally available to the
public.
"Controlled
Group" has
the meaning set forth in Code §1563.
"Deferred
Intercompany
Transaction" has the meaning set forth in
Reg. §1.1502-13.
"Disclosure
Schedule"
has the meaning set forth in Section 4 below.
"Employee
Benefit
Plan" means any "employee benefit plan" (as such term is defined in ERISA
§3(3)) and any other material employee benefit plan, program or arrangement
of
any kind.
"Employee
Pension Benefit
Plan" has the meaning set forth in ERISA §3(2).
"Employee
Welfare Benefit
Plan" has the meaning set forth in ERISA §3(1).
"Environmental,
Health, and
Safety Requirements" shall mean all federal, state, local and foreign
statutes, regulations, ordinances and other provisions having the force or
effect of law, all judicial and administrative orders and determinations, all
contractual obligations and all common law concerning public health and safety,
worker health and safety, and pollution or protection of the environment,
including without limitation all those relating to the presence, use,
production, generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise or radiation, each as amended and as now or hereafter in
effect.
"ERISA"
means the
Employee Retirement Income Security Act of 1974, as amended.
"ERISA
Affiliate"
means each entity which is treated as a single employer with any of the CP
Entities for purposes of Code §414.
"Excess
Loss Account"
has the meaning set forth in Reg. §1.1502-19.
"Fiduciary"
has the
meaning set forth in ERISA §3(21).
"Financial
Statement"
has the meaning set forth in Section 4(g) below.
"GAAP"
means United
States generally accepted accounting principles as in effect from time to
time.
"Indemnified
Party"
has the meaning set forth in Section 8(d) below.
"Indemnifying
Party"
has the meaning set forth in Section 8(d) below.
"Intellectual
Property" means (a) all inventions (whether patentable or unpatentable
and whether or not reduced to practice), all improvements thereto, and all
patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and
all
applications, registrations, and renewals in connection therewith, (e) all
trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies
and
tangible embodiments thereof (in whatever form or medium).
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"Knowledge"
means
actual knowledge after reasonable investigation.
"Liability"
means any
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any liability for
Taxes.
"Most
Recent Balance
Sheet" means the balance sheet contained within the Most Recent Financial
Statements.
"Most
Recent Financial
Statements" has the meaning set forth in Section 4(g) below.
"Most
Recent Fiscal Month
End" has the meaning set forth in Section 4(g) below.
"Most
Recent Fiscal Year
End" has the meaning set forth in Section 4(g) below.
"Multiemployer
Plan"
has the meaning set forth in ERISA §3(37).
“Net
Revenues” means
gross revenues less returns and allowances determined in accordance with
GAAP.
"Ordinary
Course of
Business" means the ordinary course of business consistent with past
custom and practice (including with respect to quantity and
frequency).
"Party"
has the
meaning set forth in the preface above.
"PBGC"
means the
Pension Benefit Guaranty Corporation.
"Person"
means an
individual, a partnership, a corporation, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization, or a governmental
entity (or any department, agency, or political subdivision
thereof).
"Process
Agent" has
the meaning set forth in Section 10(p) below.
"Prohibited
Transaction" has the meaning set forth in ERISA §406 and Code
§4975.
"Purchase
Price" has
the meaning set forth in Section 2(b) below.
"Reportable
Event" has
the meaning set forth in ERISA §4043.
"Securities
Act" means
the Securities Act of 1933, as amended.
"Securities
Exchange
Act" means the Securities Exchange Act of 1934, as amended.
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"Security
Interest"
means any mortgage, pledge, lien, encumbrance, charge, or other security
interest, other than (a) mechanic's, materialmen's, and similar liens, (b)
liens
for Taxes not yet due and payable or for Taxes that the taxpayer is contesting
in good faith through appropriate proceedings, (c) purchase money liens and
liens securing rental payments under capital lease arrangements, and (d) other
liens arising in the Ordinary Course of Business and not incurred in connection
with the borrowing of money.
"Seller"
has the
meaning set forth in the preface above.
"Subsidiary"
means any
corporation with respect to which a specified Person (or a Subsidiary thereof)
owns a majority of the common stock or has the power to vote or direct the
voting of sufficient securities to elect a majority of the
directors.
"Tax"
means any
federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code §59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
"Tax
Return" means any
return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto,
and
including any amendment thereof.
"Third
Party Claim"
has the meaning set forth in Section 8(d) below.
(c) The
Closing. The closing of the transaction contemplated by this
Agreement (the "Closing") shall
take
place at the offices of Durham Xxxxx & Xxxxxxx in Salt Lake City, Utah,
commencing at 10:00 a.m. local time on or before December 31, 2007, or such
other date as the Parties may mutually determine, but in any event no later
than
January 20, 2007 (the "Closing
Date");
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(iii)
Resolution of Personal
Obligations. Seller has personally guaranteed certain
obligations of the CP Entities (the “Seller Guarantees”).
Upon the exercise and closing of the Buyer’s Option granted above, the CP
Entities shall undertake to obtain the release of Seller under any and all
Seller Guarantees to relieve Seller of his personal liability
thereunder.
(ii)
Noncontravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the Seller
is subject or (B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Seller is a party or by which he is bound or to which any of his assets
is
subject.
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(iv)
Investment. The
Seller (A) understands that the Buyer Shares have not been registered under
the
Securities Act, or under any state securities laws, and are being offered and
sold in reliance upon federal and state exemptions for transactions not
involving any public offering, (B) is acquiring the Buyer Shares solely for
his
own account for investment purposes, and not with a view to the distribution
thereof, (C) is a sophisticated investor with knowledge and experience in
business and financial matters, (D) has received certain information concerning
the Buyer and has had the opportunity to obtain additional information as
desired in order to evaluate the merits and the risks inherent in holding the
Buyer Shares, (E) is able to bear the economic risk and lack of liquidity
inherent in holding the Buyer Shares, and (F) is an Accredited
Investor.
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(i) No
CP Entity has sold, leased, transferred, or assigned any of its assets, tangible
or intangible, other than for a fair consideration in the Ordinary Course of
Business;
(ii) No
CP Entity has entered into any agreement, contract, lease, or license (or series
of related agreements, contracts, leases, and licenses) either involving more
than $10,000 or outside the Ordinary Course of Business;
(iii) No
party (including any CP Entity) has accelerated, terminated, modified, or
cancelled any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than $10,000 to
which any CP Entity is a party or by which any of them is bound;
(iv) No
CP Entity has imposed any Security Interest upon any of its assets, tangible
or
intangible;
(v) No
CP Entity has made any capital expenditure (or series of related capital
expenditures) either involving more than $10,000 or outside the Ordinary Course
of Business;
(vi) No
CP Entity has made any capital investment in, any loan to, or any acquisition
of
the securities or assets of, any other Person (or series of related capital
investments, loans, and acquisitions) either involving more than $10,000 or
outside the Ordinary Course of Business;
(vii)
No CP Entity has issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation either involving more than $10,000 singly or
$10,000 in the aggregate;
(viii) No
CP Entity has delayed or postponed the payment of accounts payable and other
Liabilities outside the Ordinary Course of Business;
(ix)
No CP Entity has cancelled, compromised, waived, or released any right or claim
(or series of related rights and claims) either involving more than $10,000
or
outside the Ordinary Course of Business;
(x) No
CP Entity has granted any license or sublicense of any rights under or with
respect to any Intellectual Property;
(xi) There
has been no change made or authorized in the charter or bylaws of any CP
Entity;
(xii) No
CP Entity has issued, sold, or otherwise disposed of any of its capital stock,
or granted any options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any of its capital
stock;
(xiii) No
CP Entity has declared, set aside, or paid any dividend or made any distribution
with respect to its capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock;
(xiv) No
CP Entity has experienced any damage, destruction, or loss (whether or not
covered by insurance) to its property;
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(xv) No
CP Entity has made any loan to, or entered into any other transaction with,
any
of its directors, officers, and employees outside the Ordinary Course of
Business;
(xvi) No
CP Entity has entered into any employment contract or collective bargaining
agreement, written or oral, or modified the terms of any existing such contract
or agreement;
(xvii) No
CP Entity has granted any increase in the base compensation of any of its
directors, officers, and employees outside the Ordinary Course of
Business;
(xviii) No
CP Entity has adopted, amended, modified, or terminated any bonus,
profit-sharing, incentive, severance, or other plan, contract, or commitment
for
the benefit of any of its directors, officers, and employees (or taken any
such
action with respect to any other Employee Benefit Plan);
(xix) No
CP Entity has made any other change in employment terms for any of its
directors, officers, and employees outside the Ordinary Course of
Business;
(xx) No
CP Entity has made or pledged to make any charitable or other capital
contribution outside the Ordinary Course of Business;
(xxi) There
has not been any other material occurrence, event, incident, action, failure
to
act, or transaction outside the Ordinary Course of Business involving any CP
Entity; and
(xxii) No
CP Entity has committed to any of the foregoing.
(i) Each
CP Entity has filed all Tax Returns that it was required to file. All such
Tax
Returns were correct and complete in all respects. All Taxes owed by any CP
Entity (whether or not shown on any Tax Return) have been paid. No CP Entity
currently is the beneficiary of any extension of time within which to file
any
Tax Return. No claim has ever been made by an authority in a jurisdiction where
any CP Entity does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction. There are no Security Interests on any of the assets
of
any CP Entity that arose in connection with any failure (or alleged failure)
to
pay any Tax.
(ii)
Each CP Entity has withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
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(iii) No
Seller or director or officer (or employee responsible for Tax matters) of
any
CP Entity expects any authority to assess any additional Taxes for any period
for which Tax Returns have been filed. There is no dispute or claim concerning
any Tax Liability of any CP Entity either (A) claimed or raised by any authority
in writing or (B) as to which Seller and the directors and officers (and
employees responsible for Tax matters) of the CP Entity has Knowledge based
upon
personal contact with any agent of such authority. Section 4(k) of the
Disclosure Schedule lists all federal, state, local, and foreign income Tax
Returns filed with respect to any CP Entity for taxable periods ended on or
after December 31, 2000, indicates those Tax Returns that have been audited,
and
indicates those Tax Returns that currently are the subject of audit. The Seller
has delivered to the Buyer correct and complete copies of all federal income
Tax
Returns, examination reports, and statements of deficiencies assessed against
or
agreed to by any CP Entity since December 31, 2000.
(iv) No
CP Entity has waived any statute of limitations in respect of Taxes or agreed
to
any extension of time with respect to a Tax assessment or
deficiency.
(v)
No CP Entity has filed a consent under Code §341(f) concerning collapsible
corporations. No CP Entity has made any payments, is obligated to
make any payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be deductible
under Code §280G. No CP Entity has been a United States real property
holding corporation within the meaning of Code §897(c)(2) during the applicable
period specified in Code §897(c)(1)(A)(ii). No CP Entity is a party
to any Tax allocation or sharing agreement. No CP Entity (A) has been
a member of an Affiliated Group filing a consolidated federal income Tax Return
(other than a group the common parent of which was one of the CP Entities)
or
(B) has any Liability for the Taxes of any Person (other than any CP Entity)
under Reg. §1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or
otherwise.
(vi) Section
4(k) of the Disclosure Schedule sets forth the following information with
respect to each CP Entity (or, in the case of clause (B) below, with respect
to
each of the Subsidiaries) as of the most recent practicable date: (A) the basis
of the CP Entities or any Subsidiary in its assets; (B) the basis of the
stockholder(s) of the Subsidiary in its stock (or the amount of any Excess
Loss
Account); (C) the amount of any net operating loss, net capital loss, unused
investment or other credit, unused foreign tax, or excess charitable
contribution allocable to the CP Entities or a Subsidiary; and (D) the amount
of
any deferred gain or loss allocable to the CP Entities or a Subsidiary arising
out of any Deferred Intercompany Transaction.
(vii) The
unpaid Taxes of the CP Entities (A) did not, as of the Most Recent Fiscal Month
End, exceed the reserve for Tax Liability (rather than any reserve for deferred
Taxes established to reflect timing differences between book and Tax income)
set
forth on the face of the Most Recent Balance Sheet (rather than in any notes
thereto) and (B) do not exceed that reserve as adjusted for the passage of
time
through the Closing Date in accordance with the past custom and practice of
the
CP Entities in filing their Tax Returns.
(i) Section
4(l)(i) of the Disclosure Schedule lists and describes briefly all real property
that any CP Entity owns. With respect to each such parcel of owned real
property:
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(A) The
identified owner has good and marketable title to the parcel of real property,
free and clear of any Security Interest, easement, covenant, or other
restriction, except for installments of special assessments not yet delinquent
and recorded easements, covenants, and other restrictions which do not impair
the current use, occupancy, or value, or the marketability of title, of the
property subject thereto;
(B) There
are no pending or threatened condemnation proceedings, lawsuits, or
administrative actions relating to the property or other matters affecting
materially and adversely the current use, occupancy, or value
thereof;
(C) The
legal description for the parcel contained in the deed thereof describes such
parcel fully and adequately, the buildings and improvements are located within
the boundary lines of the described parcels of land, are not in violation of
applicable setback requirements, zoning laws, and ordinances (and none of the
properties or buildings or improvements thereon are subject to "permitted
non-conforming use" or "permitted non-conforming structure" classifications),
and do not encroach on any easement which may burden the land, and the land
does
not serve any adjoining property for any purpose inconsistent with the use
of
the land, and the property is not located within any flood plain or subject
to
any similar type restriction for which any permits or licenses necessary to
the
use thereof have not been obtained;
(D) All
facilities have received all approvals of governmental authorities (including
licenses and permits) required in connection with the ownership or operation
thereof and have been operated and maintained in accordance with applicable
laws, rules, and regulations;
(E) There
are no leases, subleases, licenses, concessions, or other agreements, written
or
oral, granting to any party or parties the right of use or occupancy of any
portion of the parcel of real property;
(F) There
are no outstanding options or rights of first refusal to purchase the parcel
of
real property, or any portion thereof or interest therein;
(G) There
are no parties (other than the CP Entities) in possession of the parcel of
real
property, other than tenants under any leases disclosed in Section 4(l)(i)
of
the Disclosure Schedule who are in possession of space to which they are
entitled;
(H) All
facilities located on the parcel of real property are supplied with utilities
and other services necessary for the operation of such facilities, including
gas, electricity, water, telephone, sanitary sewer, and storm sewer, all of
which services are adequate in accordance with all applicable laws, ordinances,
rules, and regulations and are provided via public roads or via permanent,
irrevocable, appurtenant easements benefitting the parcel of real property;
and
(I) Each
parcel of real property abuts on and has direct vehicular access to a public
road, or has access to a public road via a permanent, irrevocable, appurtenant
easement benefitting the parcel of real property, and access to the property
is
provided by paved public right-of-way with adequate curb cuts
available.
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(ii) Section
4(l)(ii) of the Disclosure Schedule lists and describes briefly all real
property leased or subleased to any CP Entity. Seller has delivered to the
Buyer
correct and complete copies of the leases and subleases listed in Section
4(l)(ii) of the Disclosure Schedule (as amended to date). With respect to each
lease and sublease listed in Section 4(l)(ii) of the Disclosure
Schedule:
(A) The
lease or sublease is legal, valid, binding, enforceable, and in full force
and
effect;
(B) The
lease or sublease will continue to be legal, valid, binding, enforceable, and
in
full force and effect on identical terms following the consummation of the
transactions contemplated hereby;
(C) no
party to the lease or sublease is in breach or default, and no event has
occurred which, with notice or lapse of time, would constitute a breach or
default or permit termination, modification, or acceleration
thereunder;
(D) No
party to the lease or sublease has repudiated any provision
thereof;
(E) There
are no disputes, oral agreements, or forbearance programs in effect as to the
lease or sublease;
(F) With
respect to each sublease, the representations and warranties set forth in
subsections (A) through (E) above are true and correct with respect to the
underlying lease;
(G) No
CP Entity has assigned, transferred, conveyed, mortgaged, deeded in trust,
or
encumbered any interest in the leasehold or subleasehold;
(H) All
facilities leased or subleased thereunder have received all approvals of
governmental authorities (including licenses and permits) required in connection
with the operation thereof and have been operated and maintained in accordance
with applicable laws, rules, and regulations;
(I) All
facilities leased or subleased thereunder are supplied with utilities and other
services necessary for the operation of said facilities; and
(J) the
owner of the facility leased or subleased has good and marketable title to
the
parcel of real property, free and clear of any Security Interest, easement,
covenant, or other restriction, except for installments of special easements
not
yet delinquent and recorded easements, covenants, and other restrictions which
do not impair the current use, occupancy, or value, or the marketability of
title, of the property subject thereto.
(i) the
CP Entities own or have the right to use pursuant to license, sublicense,
agreement, or permission all Intellectual Property necessary for the operation
of the businesses of the CP Entities as presently conducted and as presently
proposed to be conducted. Each item of Intellectual Property owned or used
by
any CP Entity immediately prior to the Closing hereunder will be owned or
available for use by the CP Entities or the Subsidiary on identical terms and
conditions immediately subsequent to the Closing hereunder. Each CP Entity
has
taken all necessary action to maintain and protect each item of Intellectual
Property that it owns or uses.
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(ii)
No CP Entity has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of third parties,
and
none of the Seller and the directors and officers (and employees with
responsibility for Intellectual Property matters) of the CP Entities has ever
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any claim
that any CP Entity must license or refrain from using any Intellectual Property
rights of any third party). To the Knowledge of the Seller, no third party
has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of any CP Entity.
(iii) Section
4(m)(iii) of the Disclosure Schedule identifies each patent or registration
which has been issued to any CP Entity with respect to any of its Intellectual
Property, identifies each pending patent application or application for
registration which any CP Entity has made with respect to any of its
Intellectual Property, and identifies each license, agreement, or other
permission which any CP Entity has granted to any third party with respect
to
any of its Intellectual Property (together with any exceptions). The Seller
has
delivered to the Buyer correct and complete copies of all such patents,
registrations, applications, licenses, agreements, and permissions (as amended
to date). Section 4(m)(iii) of the Disclosure Schedule also identifies each
trade name or unregistered trademark used by any CP Entity in connection with
any of its businesses. With respect to each item of Intellectual Property
required to be identified in Section 4(m)(iii) of the Disclosure
Schedule:
(A) The
CP Entities possess all right, title, and interest in and to the item, free
and
clear of any Security Interest, license, or other restriction;
(B)
The item is not subject to any outstanding injunction, judgment, order, decree,
ruling, or charge;
(C) No
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
or
demand is pending or is threatened which challenges the legality, validity,
enforceability, use, or ownership of the item; and
(D) No
CP Entity has ever agreed to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict with respect
to
the item.
(iv) Section
4(m)(iv) of the Disclosure Schedule identifies each item of Intellectual
Property that any third party owns and that any CP Entity uses pursuant to
license, sublicense, agreement, or permission. The Seller has delivered to
the
Buyer correct and complete copies of all such licenses, sublicenses, agreements,
and permissions (as amended to date). With respect to each item of Intellectual
Property required to be identified in Section 4(m)(iv) of the Disclosure
Schedule:
(A)
the license, sublicense, agreement, or permission covering the item is legal,
valid, binding, enforceable, and in full force and effect;
(B)
the license, sublicense, agreement, or permission will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby (including
the assignments and assumptions referred to in Section 2 above);
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(C) no
party to the license, sublicense, agreement, or permission is in breach or
default, and no event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination, modification, or
acceleration thereunder;
(D) no
party to the license, sublicense, agreement, or permission has repudiated any
provision thereof;
(E) with
respect to each sublicense, the representations and warranties set forth in
subsections (A) through (D) above are true and correct with respect to the
underlying license;
(F) the
underlying item of Intellectual Property is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(G) no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
or
demand is pending or is threatened which challenges the legality, validity,
or
enforceability of the underlying item of Intellectual Property; and
(H) no
CP Entity has granted any sublicense or similar right with respect to the
license, sublicense, agreement, or permission.
(v) To
the Knowledge of Seller, no CP Entity will interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any Intellectual Property
rights of third parties as a result of the continued operation of its businesses
as presently conducted and as presently proposed to be conducted.
(i) any
agreement (or group of related agreements) for the lease of personal property
to
or from any Person providing for lease payments in excess of $10,000 per
annum;
(ii)
any agreement (or group of related agreements) for the purchase or sale of
raw
materials, commodities, supplies, products, or other personal property, or
for
the furnishing or receipt of services, the performance of which will extend
over
a period of more than one year, result in a material loss to any CP Entity,
or
involve consideration in excess of $10,000;
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15
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(iii)
any agreement concerning a partnership or joint venture;
(iv)
any agreement (or group of related agreements) under which it has created,
incurred, assumed, or guaranteed any indebtedness for borrowed money, or any
capitalized lease obligation, in excess of $10,000 or under which it has imposed
a Security Interest on any of its assets, tangible or intangible;
(v) any
agreement concerning confidentiality or noncompetition;
(vi)
any agreement with any of the Seller and his Affiliates (other than the CP
Entities);
(vii) any
profit sharing, stock option, stock purchase, stock appreciation, deferred
compensation, severance, or other material plan or arrangement for the benefit
of its current or former directors, officers, and employees;
(viii) any
collective bargaining agreement;
(ix) any
agreement for the employment of any individual on a full-time, part-time,
consulting, or other basis providing annual compensation in excess of $50,000
or
providing severance benefits;
(x) any
agreement under which it has advanced or loaned any amount to any of its
directors, officers, and employees outside the Ordinary Course of
Business;
(xi) any
agreement under which the consequences of a default or termination could have
a
material adverse effect on the business, financial condition, operations,
results of operations, or future prospects of any CP Entity; or
(xii) any
other agreement (or group of related agreements) the performance of which
involves consideration in excess of $10,000.
The
Seller has delivered to the Buyer a correct and complete copy of each written
agreement listed in Section 4(p) of the Disclosure Schedule (as amended to
date)
and a written summary setting forth the terms and conditions of each oral
agreement referred to in Section 4(p) of the Disclosure
Schedule. With respect to each such agreement: (A) the agreement is
legal, valid, binding, enforceable, and in full force and effect; (B) the
agreement will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby; (C) no party is in breach or default, and
no
event has occurred which with notice or lapse of time would constitute a breach
or default, or permit termination, modification, or acceleration, under the
agreement; and (D) no party has repudiated any provision of the
agreement.
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16
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(s)
Insurance. Section
4(s) of the Disclosure Schedule sets forth the following information with
respect to each insurance policy (including policies providing property,
casualty, Liability, and workers' compensation coverage and bond and surety
arrangements) to which any CP Entity has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past 10
years:
(i) the
name, address, and telephone number of the agent;
(ii) the
name of the insurer, the name of the policyholder, and the name of each covered
insured;
(iii) the
policy number and the period of coverage;
(iv) the
scope (including an indication of whether the coverage was on a claims made,
occurrence, or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage;
and
(v) a
description of any retroactive premium adjustments or other loss-sharing
arrangements.
With
respect to each such insurance policy: (A) the policy is legal, valid, binding,
enforceable, and in full force and effect; (B) the policy will continue to
be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby; (C)
neither any CP Entity nor any other party to the policy is in breach or default
(including with respect to the payment of premiums or the giving of notices),
and no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination, modification, or
acceleration, under the policy; and (D) no party to the policy has repudiated
any provision thereof. Each CP Entity has been covered during the
past 10 years by insurance in scope and amount customary and reasonable for
the
businesses in which it has engaged during the aforementioned
period. Section 4(s) of the Disclosure Schedule describes any
self-insurance arrangements affecting any CP Entity.
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17
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(i) Section
4(x) of the Disclosure Schedule lists each Employee Benefit Plan that any CP
Entity maintains, to which any CP Entity contributes or has any obligation
to
contribute, or with respect to which any CP Entity has any material Liability
or
potential Liability.
(A) Each
such Employee Benefit Plan (and each related trust, insurance contract, or
fund)
has been maintained, funded and administered in accordance with the terms of
such Employee Benefit Plan and complies in form and in operation in all material
respects with the applicable requirements of ERISA, the Code, and other
applicable laws.
(B)
All required reports and descriptions (including annual reports (IRS Form 5500),
summary annual reports, and summary plan descriptions) have been timely filed
and/or distributed in accordance with the applicable requirements of ERISA
and
the Code with respect to each such Employee Benefit Plan. The requirements
of
COBRA have been met with respect to each such Employee Benefit Plan which is
an
Employee Welfare Benefit Plan subject to COBRA.
(C) All
contributions (including all employer contributions and employee salary
reduction contributions) which are due have been made within the time period
prescribed by ERISA to each such Employee Benefit Plan which is an Employee
Pension Benefit Plan and all contributions for any period ending on or before
the Closing Date which are not yet due have been made to each such Employee
Pension Benefit Plan or accrued in accordance with the past custom and practice
of the CP Entities. All premiums or other payments for all periods ending on
or
before the Closing Date have been paid with respect to each such Employee
Benefit Plan which is an Employee Welfare Benefit Plan.
(D) Each
such Employee Benefit Plan which is intended to meet the requirements of a
"qualified plan" under Code §401(a) has received a determination from the
Internal Revenue Service that such Employee Benefit Plan is so qualified, and
nothing has occurred since the date of such determination that could adversely
affect the qualified status of any such Employee Benefit Plan.
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18
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(E) The
market value of assets under each such Employee Benefit Plan which is an
Employee Pension Benefit Plan (other than any Multiemployer Plan) equals or
exceeds the present value of all vested and nonvested Liabilities thereunder
determined in accordance with PBGC methods, factors, and assumptions applicable
to an Employee Pension Benefit Plan terminating on the date for
determination.
(F) The
Seller has delivered to the Buyer correct and complete copies of the plan
documents and summary plan descriptions, the most recent determination letter
received from the Internal Revenue Service, the most recent annual report (IRS
Form 5500, with all applicable attachments), and all related trust agreements,
insurance contracts, and other funding arrangements which implement each such
Employee Benefit Plan.
(ii) With
respect to each Employee Benefit Plan that any of the CP Entities, their
Subsidiaries, and any ERISA Affiliate maintains, to which any of them
contributes or has any obligation to contribute, or with respect to which any
of
them has any material Liability or potential Liability:
(A) No
such Employee Benefit Plan which is an Employee Pension Benefit Plan (other
than
any Multiemployer Plan) has been completely or partially terminated or been
the
subject of a Reportable Event. No proceeding by the PBGC to terminate any such
Employee Pension Benefit Plan (other than any Multiemployer Plan) has been
instituted or threatened.
(B)
There have been no Prohibited Transactions with respect to any such Employee
Benefit Plan. No Fiduciary has any Liability for breach of fiduciary duty or
any
other failure to act or comply in connection with the administration or
investment of the assets of any such Employee Benefit Plan. No action, suit,
proceeding, hearing, or investigation with respect to the administration or
the
investment of the assets of any such Employee Benefit Plan (other than routine
claims for benefits) is pending or threatened. None of the Seller and the
directors and officers (and employees with responsibility for employee benefits
matters) of the CP Entities has any Knowledge of any Basis for any such action,
suit, proceeding, hearing, or investigation.
(C) No
CP Entity has incurred, and none of the Seller and the directors and officers
(and employees with responsibility for employee benefits matters) of the CP
Entities has any reason to expect that any CP Entity will incur, any Liability
to the PBGC (other than with respect to PBGC premium payments not yet due)
or
otherwise under Title IV of ERISA (including any withdrawal liability as defined
in ERISA §4201) or under the Code with respect to any such Employee Benefit Plan
which is an Employee Pension Benefit Plan, or under COBRA with respect to any
such Employee Benefit Plan which is an Employee Welfare Benefit
Plan.
(iii) None
of the CP Entities, their Subsidiaries, and any ERISA Affiliate contributes
to,
has any obligation to contribute to, or has any Liability (including withdrawal
liability as defined in ERISA §4201) under or with respect to any Multiemployer
Plan.
(iv) No
CP Entity maintains, contributes to or has an obligation to contribute to,
or
has any material Liability or potential Liability with respect to, any Employee
Welfare Benefit Plan providing medical, health, or life insurance or other
welfare-type benefits for current or future retired or terminated employees,
their spouses, or their dependents (other than in accordance with
COBRA).
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19
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(i) Each
of the CP Entities, their Subsidiaries, and their respective predecessors and
Affiliates has complied and is in compliance with all Environmental, Health,
and
Safety Requirements.
(ii) Without
limiting the generality of the foregoing, each of the CP Entities, their
Subsidiaries and their respective Affiliates has obtained and complied with,
and
is in compliance with, all permits, licenses and other authorizations that
are required pursuant to Environmental, Health, and Safety Requirements for
the
occupation of its facilities and the operation of its business; a list of all
such permits, licenses and other authorizations is set forth on the attached
"Environmental and
Safety Permits Schedule."
(iii)
Neither the CP Entities, their Subsidiaries, nor their respective predecessors
or Affiliates has received any written or oral notice, report or other
information regarding any actual or alleged violation of Environmental, Health,
and Safety Requirements, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating to any of them
or
its facilities arising under Environmental, Health, and Safety
Requirements.
(iv) None
of the following exists at any property or facility owned or operated by the
CP
Entities or their Subsidiaries: (1) underground storage tanks, (2)
asbestos-containing material in any form or condition, (3) materials or
equipment containing polychlorinated biphenyls, or (4) landfills, surface
impoundments, or disposal areas.
(v) None
of the CP Entities, their Subsidiaries, or their respective predecessors or
Affiliates has treated, stored, disposed of, arranged for or permitted the
disposal of, transported, handled, or released any substance, including without
limitation any hazardous substance, or owned or operated any property or
facility (and no such property or facility is contaminated by any such
substance) in a manner that has given or would give rise to liabilities,
including any Liability for response costs, corrective action costs, personal
injury, property damage, natural resources damages or attorney fees, pursuant
to
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Solid
Waste Disposal Act, as amended ("SWDA") or any
other
Environmental, Health, and Safety Requirements.
(vi) Neither
this Agreement nor the consummation of the transaction that is the subject
of
this Agreement will result in any obligations for site investigation or cleanup,
or notification to or consent of government agencies or third parties, pursuant
to any of the so-called "transaction-triggered" or "responsible property
transfer" Environmental, Health, and Safety Requirements.
(vii) Neither
the CP Entities, their Subsidiaries, nor any of their respective predecessors
or
Affiliates has, either expressly or by operation of law, assumed or undertaken
any Liability, including without limitation any obligation for corrective or
remedial action, of any other Person relating to Environmental, Health, and
Safety Requirements.
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20
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(viii) No
facts, events or conditions relating to the past or present facilities,
properties or operations of the CP Entities, their Subsidiaries, or any of
their
respective predecessors or Affiliates will prevent, hinder or limit continued
compliance with Environmental, Health, and Safety Requirements, give rise to
any
investigatory, remedial or corrective obligations pursuant to Environmental,
Health, and Safety Requirements, or give rise to any other liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise) pursuant to
Environmental, Health, and Safety Requirements, including without limitation
any
relating to onsite or offsite releases or threatened releases of hazardous
materials, substances or wastes, personal injury, property damage or natural
resources damage.
(aa) Certain
Business
Relationships with the CP Entities and Their
Subsidiaries. None of the Seller and his Affiliates has been
involved in any business arrangement or relationship with any CP Entity within
the past 12 months, and none of the Seller and his
Affiliates
owns any asset, tangible or intangible, which is used in the business of any
CP
Entity.
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21
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22
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(a)
Conditions to
Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) The
representations and warranties set forth in Section 3(a) and Section 4 above
shall be true and correct in all material respects at and as of the Closing
Date;
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23
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(ii) The
Seller shall have performed and complied with all of their covenants hereunder
in all material respects through the Closing;
(iii) the
CP Entities shall have procured all of the third party consents specified in
Section 5(b) above;
(iv) No
action, suit, or proceeding shall be pending or threatened before any court
or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation of
any
of the transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (C) affect adversely the right of the Buyer to own Shares and
to
control the CP Entities, or (D) affect adversely the right of any CP Entity
to
own its assets and to operate its businesses (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
(v) The
Seller shall have delivered to the Buyer a certificate to the effect that each
of the conditions specified above in Section 7(a)(i)-(iv) is satisfied in all
respects;
(vi) The
Buyer shall have received from counsel to the Seller an opinion in form and
substance as set forth in Exhibit B attached hereto, addressed to the Buyer,
and
dated as of the Closing Date;
(vii) All
actions to be taken by the Seller in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby
will
be reasonably satisfactory in form and substance to the Buyer.
The
Buyer
may waive any condition specified in this Section 7(a) if it executes a writing
so stating at or prior to the Closing.
(i) The
representations and warranties set forth in Section 3(b) above shall be true
and
correct in all material respects at and as of the Closing Date;
(ii)
The Buyer shall have performed and complied with all of its covenants hereunder
in all material respects through the Closing;
(iii) No
action, suit, or proceeding shall be pending or threatened before any court
or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation of
any
of the transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
(iv) The
Buyer shall have delivered to the Seller a certificate to the effect that each
of the conditions specified above in Section 7(b)(i)-(iii) is satisfied in
all
respects;
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24
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(v)
The Seller shall have received from counsel to the Buyer an opinion in form
and
substance as set forth in Exhibit C attached hereto, addressed to the Seller,
and dated as of the Closing Date; and
(vi) All
actions to be taken by the Buyer in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby
will
be reasonably satisfactory in form and substance to the Seller.
The
Seller may waive any condition specified in this Section 7(b) if he executes
a
writing so stating at or prior to the Closing.
(i) In
the event Seller breaches (or in the event any third party alleges facts that,
if true, would mean the Seller has breached) any of his representations,
warranties, and covenants contained herein (other than the covenants in Section
2(a) above and the representations and warranties in Section 3(a) above), and,
if there is an applicable survival period pursuant to Section 8(a) above,
provided that the Buyer makes a written claim for indemnification against the
Seller pursuant to Section 11(g) below within such survival period, then the
Seller agrees to indemnify the Buyer from and against the entirety of any
Adverse Consequences the Buyer may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences the Buyer may
suffer after the end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the alleged
breach).
(ii) In
the event Seller breaches (or in the event any third party alleges facts that,
if true, would mean the Seller has breached) any of his covenants in Section
2(a) above or any of his representations and warranties in Section 3(a) above,
and, if there is an applicable survival period pursuant to Section 8(a) above,
provided that the Buyer makes a written claim for indemnification against the
Seller pursuant to Section 11(g) below within such survival period, then the
Seller agrees to indemnify the Buyer from and against the entirety of any
Adverse Consequences the Buyer may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences the Buyer may
suffer after the end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the alleged
breach).
(iii) Seller
agrees to indemnify the Buyer from and against the entirety of any Adverse
Consequences the Buyer may suffer resulting from, arising out of, relating
to,
in the nature of, or caused by any Liability of any CP Entity (x) for any Taxes
of the CP Entities with respect to any Tax year or portion thereof ending on
or
before the Closing Date (or for any Tax year beginning before and ending after
the Closing Date to the extent allocable (determined in a manner consistent
with
Section 9(c)) to the portion of such period beginning before and ending on
the
Closing Date), to the extent such Taxes are not reflected in the reserve for
Tax
Liability (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) shown on the face of the Closing
Balance Sheet, and (y) for the unpaid Taxes of any Person (other than any CP
Entity) under Reg. §1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or
otherwise.
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25
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(iv) Seller
agrees to indemnify the Buyer from and against the entirety of any Adverse
Consequences the Buyer may suffer resulting from, arising out of, relating
to,
in the nature of, or caused by Seller’s conduct of the business of the CP
Entities both before and after the Closing.
(i) If
any third party shall notify any Party (the "Indemnified Party")
with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any other Party
(the
"Indemnifying
Party") under this Section 8, then the Indemnified Party shall promptly
notify each Indemnifying Party thereof in writing; provided, however,
that no delay on the part of the Indemnified Party in notifying any Indemnifying
Party shall relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is
prejudiced.
(ii) Any
Indemnifying Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified
Party in writing within 15 days after the Indemnified Party has given notice
of
the Third Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the nature
of,
or caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder,
(C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith judgment of
the
Indemnified Party, likely to establish a precedential custom or practice
materially adverse to the continuing business interests of the Indemnified
Party, and (E) the Indemnifying Party conducts the defense of the Third Party
Claim actively and diligently.
(iii) So
long as the Indemnifying Party is conducting the defense of the Third Party
Claim in accordance with Section 8(d)(ii) above, (A) the Indemnified Party
may
retain separate co-counsel at its sole cost and expense and participate in
the
defense of the Third Party Claim, (B) the Indemnified Party will not consent
to
the entry of any judgment or enter into any settlement with respect to the
Third
Party Claim without the prior written consent of the Indemnifying Party (not
to
be withheld unreasonably), and (C) the Indemnifying Party will not consent
to
the entry of any judgment or enter into any settlement with respect to the
Third
Party Claim without the prior written consent of the Indemnified Party (not
to
be withheld unreasonably).
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26
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(iv) In
the event any of the conditions in Section 8(d)(ii) above is or becomes
unsatisfied, however, (A) the Indemnified Party may defend against, and consent
to the entry of any judgment or enter into any settlement with respect to,
the
Third Party Claim in any manner it reasonably may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (B) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable attorneys' fees
and expenses), and (C) the Indemnifying Parties will remain responsible for
any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to
the
fullest extent provided in this Section 8.
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27
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(i) Buyer,
the CP Entities and Seller shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing of Tax
Returns pursuant to this Section and any audit, litigation or other proceeding
with respect to Taxes. Such cooperation shall include the retention and (upon
the other party's request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. the CP Entities
and Seller agree (A) to retain all books and records with respect to Tax matters
pertinent to the CP Entities relating to any taxable period beginning before
the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Buyer or Seller, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (B) to give the other party reasonable written
notice prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, the CP Entities or Seller, as
the
case may be, shall allow the other party to take possession of such books and
records.
(ii) Buyer
and Seller further agree, upon request, to use their best efforts to obtain
any
certificate or other document from any governmental authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed (including, but not limited to, with respect to the transactions
contemplated hereby).
(iii) Buyer
and Seller further agree, upon request, to provide the other party with all
information that either party may be required to report pursuant to Section
6043
of the Code and all Treasury Department Regulations promulgated
thereunder.
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28
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10.
Termination.
(a) Termination
of
Agreement. Certain of the Parties may terminate this Agreement
as provided below:
(i) The
Buyer and the Seller may terminate this Agreement by mutual written consent
at
any time prior to the Closing;
(ii) The
Buyer may terminate this Agreement by giving written notice to the Seller on
or
before the 30th day following the date of this Agreement if the Buyer is not
reasonably satisfied with the results of its continuing business, legal,
environmental, and accounting due diligence regarding the CP
Entities;
(iii) The
Buyer may terminate this Agreement by giving written notice to the Seller at
any
time prior to the Closing (A) in the event the Seller has breached any material
representation, warranty, or covenant contained in this Agreement in any
material respect, the Buyer has notified the Seller of the breach, and the
breach has continued without cure for a period of 15 days after the notice
of
breach or (B) if the Closing shall not have occurred on or before January 20,
2008, by reason of the failure of any condition precedent under Section 7(a)
hereof unless the failure results primarily from the Buyer itself breaching
any
representation, warranty, or covenant contained in this Agreement);
and
(iv) The
Seller may terminate this Agreement by giving written notice to the Buyer at
any
time prior to the Closing (A) in the event the Buyer has breached any material
representation, warranty, or covenant contained in this Agreement in any
material respect, Seller has notified the Buyer of the breach, and the breach
has continued without cure for a period of 15 days after the notice of breach
or
(B) if the Closing shall not have occurred on or before January 20, 2008, by
reason of the failure of any condition precedent under Section 7(b) hereof
(unless the failure results primarily from Seller themselves breaching any
representation, warranty, or covenant contained in this Agreement).
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29
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If
to the Seller:
|
||
Xxxxx
X. Xxxxxxxx
|
||
c/o
Court Programs
|
||
0000
000xx
Xxxxx X.
|
||
Xxxx
Xxxx Xxxxx, XX 00000-0000
|
||
Copy
to:
|
||
n/a
|
||
__________________________
|
||
__________________________
|
||
If
to the Buyer:
|
||
RemoteMDx,
Inc.
|
||
000
Xxxx Xxxxx Xxxxxx Xxxxx
|
||
Xxxxx
000
|
||
Xxxxx,
Xxxx 00000
|
||
Copy
to:
|
||
Durham
Xxxxx & Xxxxxxx, PC
|
||
Attn:
Xxxxx X. Xxxxxxx, Esq.
|
||
000
Xxxx Xxxxxxxx, Xxxxx 000
|
||
Xxxx
Xxxx Xxxx, Xxxx 00000
|
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30
-
Any
Party
may send any notice, request, demand, claim, or other communication hereunder
to
the intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless
and
until it actually is received by the intended recipient. Any Party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(h) Governing
Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Utah without giving effect
to
any choice or conflict of law provision or rule (whether of the State of Utah
or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Utah.
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(o) Submission
to
Jurisdiction. Each of the Parties submits to the jurisdiction
of any state or federal court sitting in Salt Lake City, Utah, in any action
or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in
any
such court. Each of the Parties waives any defense of inconvenient
forum to the maintenance of any action or proceeding so brought and waives
any
bond, surety, or other security that might be required of any other Party with
respect thereto. Nothing in this Section 10(o), however, shall affect
the right of any Party to bring any action or proceeding arising out of or
relating to this Agreement in any other court or to serve legal process in
any
other manner permitted by law or at equity. Each Party agrees that a
final judgment in any action or proceeding so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by
law
or at equity.
*****
[Signatures
appear on following page.]
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32
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REMOTEMDX,
INC.
By: Xxxxxxx
X.
Xxxxx
Title: Chief
Financial Officer
Xxxxx
X.
Xxxxxxxx
Xxxxx
X.
Xxxxxxxx, (an individual)
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