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EXHIBIT 10.11
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into as of
April 21, 2000, by and among ViaSource Communications, Inc., a New Jersey
corporation, together with its wholly-owned subsidiary, Acquisition Sub (as
defined below) ("ViaSource"); DSC Acquisition, Inc., a Delaware corporation
("Acquisition Sub"); DS Cable TV Contractor, Inc., a Missouri corporation (the
"Company"); Xxxxxx X. Xxxxxxx and Xxxx Xxxxxxx (each a "Shareholder" and
collectively, the "Shareholders"). Certain other capitalized terms used herein
are defined in Article VIII and throughout this Agreement.
RECITALS
A. The Company is engaged in the business of cable television and
telephone installation and construction services (the "Business").
B. The Shareholders are the owners of all of the issued and
outstanding capital stock of the Company.
C. The Company wishes to sell and ViaSource wishes to buy, the
assets relating to the Business (as defined in Section 1.1 below) on the terms
and subject to the conditions hereinafter set forth (the "Asset Purchase").
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF
ASSETS; PURCHASE PRICE; CLOSING
1.1 PURCHASED ASSETS. The Company agrees to and hereby sells,
conveys, transfers, assigns and delivers to ViaSource concurrently herewith on
the terms and subject to the conditions set forth in this Agreement, all of its
assets, properties, trade and business names, goodwill and business of every
kind and description, whether real, personal or mixed, tangible or intangible,
wherever located (except those assets of the Company which are specifically
excluded as provided in Section 1.2 hereof) as exists as of the date hereof
(collectively, the "Purchased Assets"). Without limiting the generality of the
foregoing, the Purchased Assets shall include the following:
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(a) all machinery, equipment, tools, supplies, leasehold
improvements, furniture and fixtures of the Company and other tangible personal
property used by, or located on the premises of, the Company (the "Fixed
Assets") ;
(b) all inventories of the Company;
(c) all receivables, and work in process, of whatsoever
kind or nature of the Company;
(d) all of the interests, rights and benefits accruing to
the Company under any licenses, service agreements, maintenance and support
agreements, real estate leases, equipment leases, franchise contracts, sales
orders, sales contracts, supply contracts, service agreements, insurance
policies, purchase orders, purchase commitments and Material Contracts (as
defined herein) made by the Company in the ordinary course of business, all
other agreements to which the Company is a party or by which it is bound in the
ordinary course of business and all choses in action, causes of action and other
rights of every kind of the Company;
(e) all operating data and records of the Company,
including all customer lists;
(f) all cash and cash equivalents of the Company;
provided, however, that the cash shall be reduced by (i) an amount equal to
$243,472 which represents the tax liability of the Shareholders for the fiscal
year ended December 31, 1999, and which shall be distributed to the Shareholders
by the Company on or before the Closing Date (as defined below), and (ii) an
amount, if any, to reflect the increase in the Net Worth (as defined below) of
the Company for the period beginning on January 1, 2000 and ending on the
Closing Date as determined in accordance with Section 4.14 hereof (both such
adjustments shall be deemed to be adjustments to the Purchase Price (as defined
below));
(g) all intangibles of the Company, including but not
limited to all patents (and applications therefor), licenses, trademarks (and
applications therefor), service marks, tradenames (whether registered or
unregistered), domain names (and any derivations thereof), copyrights (and
applications therefor), proprietary computer software, proprietary inventions,
proprietary technology, technical information, discoveries, designs, proprietary
rights and non-public information, trade secrets, and know-how, in each case
whether or not patentable (including, without limitation, the rights and
properties listed on Schedule 1.1(g) hereto) (collectively, the "Intellectual
Property"); and
(h) all prepaid expenses.
1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary set
forth in Section 1.1, the Purchased Assets shall exclude the following assets of
the Company: (i) the Purchase Price (as defined in Section 1.5) and other rights
of the Company under this Agreement; (ii) the shares of
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capital stock of the Company which are owned and held by the Company as treasury
shares; (iii) the corporate minute books and stock records of the Company; and
(iv) those Assets set forth on Schedule 1.2.
1.3 INSTRUMENTS OF TRANSFER. On the date hereof, the Company will
deliver to ViaSource, or will cause to be delivered to ViaSource, duly executed
instruments of transfer and assignment in form and substance reasonably
satisfactory to ViaSource and its counsel, sufficient to vest in ViaSource good
and valid title to, and all of the Company's right, title and interest in and
to, the Purchased Assets, including, without limitation, one or more of each of
the following:
(a) a xxxx of sale and assignment;
(b) instruments of transfer and assignment of the
Intellectual Property;
(c) assignments by the Company of its rights under all
leases pertaining to leased assets; and
(d) such other instruments of transfer and assignment as
may be reasonably necessary to transfer and assign the Purchased Assets to
ViaSource.
1.4 ASSIGNMENT OF CONTRACTS. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an assignment of
any claim, contract, or other right or benefit if an attempted assignment
thereof, without the consent of a third party thereto, would constitute a breach
thereof or in any way adversely affect the rights of ViaSource thereunder. If
any attempt at an assignment thereof would be ineffective so that ViaSource
would not in fact receive all such rights, the Company shall cooperate with
ViaSource to the extent necessary to provide for ViaSource the benefits under
such claim, contract, or other right or benefit.
1.5 PURCHASE PRICE. Subject to the terms and conditions as set
forth herein, the Company agrees to sell and ViaSource agrees to purchase from
the Company the Purchased Assets for (a) $1.5 million in immediately available
funds (of which $91,000 shall be deemed to be paid in the form of an assignment
of a debt owed to the Company by a former shareholder of the Company to the
Shareholders), (b) 659,149 shares of ViaSource common stock, no par value (the
"ViaSource Shares"), allocated to the Shareholders as provided in Schedule 1.5
hereto and (c) a $750,000 subordinated promissory note (the "Note") payable to
the Company in the form attached hereto as Exhibit A (the "Purchase Price"). Of
the 659,149 ViaSource Shares referred to above, ViaSource shall retain a total
of 147,733 shares, taken pro rata from the amounts payable to the Shareholders
on Schedule 1.5 hereto, to be held in accordance with Section 5.3 hereof as the
held back amount ("Held Back Amount").
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1.6 ASSUMED LIABILITIES. ViaSource hereby agrees to assume, pay,
discharge and perform when lawfully required all of the obligations, duties and
liabilities of the Company set forth on Schedule 1.6 (the "Assumed
Liabilities").
1.7 EXCLUDED LIABILITIES. Notwithstanding anything else to the
contrary contained in this Agreement, the parties expressly agree that ViaSource
does not assume or otherwise become liable for, and the Company and/or the
Shareholders shall remain unconditionally liable for the following obligations
and liabilities of the Company or the Shareholders (collectively, the "Excluded
Liabilities"):
(a) any liability or obligation, absolute or contingent,
known or unknown, not expressly set forth on Schedule 1.6;
(b) any and all professional fees and expenses incurred
by the Company or the Shareholders related to the transactions contemplated by
this Agreement;
(c) any Taxes or liabilities therefor imposed on the
Company or any of the Shareholders with respect to taxable years or periods
ending on, prior to or following the date hereof or with respect to or in
connection with the consummation of the transactions contemplated in this
Agreement;
(d) any liability, obligation, claim, cost, damage and
expense with respect to employees of the Company (whether arising before, on or
after the date hereof) relating to, arising out of, or in connection with their
employment by the Company at any time on or before the date hereof, including,
without limitation, all rights and benefits under any contract, document, policy
or understanding with any such employee, all pension, death benefit, retirement,
medical, retiree, insurance, vacation, workers' compensation and other
liabilities and obligations with respect to such employee;
(e) all claims for severance, other employee benefits or
other moneys or damages (including, without limitation, claims under the Worker
Adjustment and Retraining Notification Act of 1988) from or on behalf of any of
the employees of the Company who are employed by the Company at any time on or
prior to the date hereof (or from any federal, state or local governmental
agency or authority on behalf of such employees or relating to such claims)
involving an alleged employment loss or termination, including, without
limitation, those which are based upon or arise out of the execution and
delivery of this Agreement or any of the transactions contemplated hereby
(whether or not such employees are hired by ViaSource);
(f) any and all expenses, costs, damages, liabilities, or
obligations (including, without limitation, fees and expenses of counsel)
incurred in connection with any breach of contract, breach of warranty, tort,
violation of law, action, suit, or other legal or administrative proceeding or
governmental investigation arising as a result of events occurring or facts or
circumstances arising
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or existing on or prior to the date hereof (whether or not in the ordinary
course of business, and whether filed or made before, on or after the date
hereof); and
(g) any liability or obligation resulting from the
Company's failure to provide satisfactory services or products prior to Closing
with respect to each obligation set forth on Schedule 3.22(b) hereto.
1.8 NO EXPANSION OF THIRD-PARTY RIGHTS. The assumption by
ViaSource of the Assumed Liabilities, the transfer thereof by the Company, and
the limitations of such transfer shall in no way expand the rights or remedies
of any third party against ViaSource or the Company as compared to the rights
and remedies which such third party would have had against the Company had
ViaSource not assumed such liabilities. Without limiting the generality of the
preceding sentence, the assumption by ViaSource of the Assumed Liabilities shall
not create any third-party beneficiary rights.
1.9 TAX TREATMENT. The parties hereto acknowledge and agree that
the transactions contemplated hereby are intended to be treated for tax purposes
as taxable transactions under the Internal Revenue Code of 1986, as amended (the
"Code"). The parties agree that the allocation of the Purchase Price among the
Purchased Assets to be transferred pursuant to this Agreement shall be as set
forth on Schedule 1.9 and has been allocated among such assets in a manner
consistent with the requirements set forth in Section 1060 of the Code and the
Treasury regulations promulgated thereunder. In addition, it is agreed that such
allocation will be binding on both parties for federal income tax purposes in
connection with this purchase and sale of the Purchased Assets, and will be
consistently reflected by each party on their respective federal income tax
returns. The parties agree to prepare and timely file all applicable Internal
Revenue Service forms, including Form 8594 (Asset Acquisition Statement), and
other governmental forms, to cooperate with each other in the preparation of
such forms and to furnish each other with a copy of such forms prepared in
draft, within a reasonable period prior to the filing due date thereof.
1.10 CLOSING. Subject to the provisions of Article VII hereof, the
closing (the "Closing") of the sale and purchase of the Assets shall take place
on April 21, 2000, Eastern time, at the offices of ViaSource's counsel or such
other time, place or date as the parties may mutually agree (the "Closing
Date"), with the Closing to be effective as of the close of business on the
Closing Date. Failure to consummate the transactions provided for in this
Agreement on the date and time selected pursuant to this Section 1.10 shall not,
except as permitted by Section 1.10 hereof, result in the termination of this
Agreement and shall not relieve any party to this Agreement of any obligation
hereunder.
1.11 OPTIONS. In connection with the transactions contemplated
hereby, ViaSource hereby agrees to allocate 85,000 options to purchase Common
Stock of ViaSource under ViaSource's 1999 Stock Incentive Plan to employees of
the Company as directed by the Company in accordance with Schedule 1.11 hereto.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF VIASOURCE
As a material inducement to the Company and the Shareholders to enter
into this Agreement and to consummate the transactions contemplated hereby,
ViaSource makes the following representations and warranties to the Company and
the Shareholders:
2.1 CORPORATE STATUS. ViaSource is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite power and authority to own or lease its
properties and to carry on its business as presently conducted.
2.2 CORPORATE POWER AND AUTHORITY. ViaSource has the corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
ViaSource has taken all corporate action necessary to authorize its execution
and delivery of this Agreement, the performance of its obligations hereunder and
the consummation of the transactions contemplated hereby.
2.3 ENFORCEABILITY. This Agreement has been duly executed and
delivered by ViaSource and constitutes a legal, valid and binding obligation of
ViaSource, enforceable against ViaSource in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.
2.4 VIASOURCE COMMON STOCK. Upon consummation of the transactions
contemplated hereby and the issuance and delivery of certificates representing
the ViaSource Shares to the Company, the ViaSource Shares will be validly
issued, fully paid and non-assessable shares of ViaSource Common Stock.
2.5 NO COMMISSIONS. ViaSource has not incurred any obligation for
any finder's or broker's or agent's fees or commissions or similar compensation
in connection with the transactions contemplated hereby.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE SHAREHOLDERS
As a material inducement to ViaSource to enter into this Agreement and
to consummate the transactions contemplated hereby, the Company and each of the
Shareholders, jointly and severally, make the following representations and
warranties to ViaSource:
3.1 CORPORATE STATUS. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Missouri
and has the requisite power and authority to own or lease its properties and to
carry on its business as now being conducted. The Company is legally qualified
to do business as a foreign corporation in each of the jurisdictions where the
nature of its properties and the conduct of its business requires such
qualification (all of which jurisdictions are set forth in Schedule 3.1), which
represent all jurisdictions where the nature of its properties and the conduct
of its business requires such qualification, and is in good standing in each of
the jurisdictions in which it is so qualified. The Company has fully complied
with all of the requirements of any statute governing the use and registration
of fictitious names, and has the legal right to use the names under which it
operates its businesses. There is no pending or threatened proceeding for the
dissolution, liquidation, insolvency or rehabilitation of the Company. All names
under which the Company does business as of the date hereof are specified on
Schedule 3.1. Except as otherwise disclosed in Schedule 3.1, the Company has not
changed its name or used any assumed or fictitious name, or been the surviving
entity in a merger, acquired any business or changed its principal place of
business or chief executive office, within the past three years.
3.2 POWER AND AUTHORITY. The Company has the corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The Company
has taken all corporate action necessary to authorize the execution and delivery
of this Agreement, the performance of its obligations hereunder and the
consummation of the transactions contemplated hereby. Each of the Shareholders
has the requisite competence and authority to execute and deliver this
Agreement, to perform their respective obligations hereunder and to consummate
the transactions contemplated hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Company and each of the Shareholders, and constitutes the
legal, valid and binding obligation of each of them, enforceable against each of
them in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity. The delivery of the instruments of transfer set
forth in Section 1.3 of this Agreement will grant ViaSource good and marketable
or merchantable title in the Purchased Assets free and clear of all Liens,
except as set forth on Schedule 3.3.
3.4 SHAREHOLDERS, OFFICERS AND DIRECTORS OF THE COMPANY. Schedule
3.4 sets forth, with respect to the Company, (a) the name, address and federal
taxpayer identification/social security number of, and the number of outstanding
shares of each class of its capital stock owned by, each
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shareholder of record as of the close of business on the date of this Agreement;
(b) the name, address and federal taxpayer identification number of, and number
of shares of each class of its capital stock beneficially owned by, each
beneficial owner of outstanding shares of capital stock (to the extent that
record and beneficial ownership of any such shares are different); and (c) the
name and title of each officer and director of the Company.
3.5 NO VIOLATION; CONSENTS AND APPROVALS. Except for any approvals
or consents required under the Material Contracts (as defined in Section 3.22)
identified in Schedule 3.22 as requiring the consent of third parties, the
execution and delivery of this Agreement by the Company and the Shareholders,
the performance by the Company and the Shareholders of their obligations
hereunder and the consummation by them of the transactions contemplated by this
Agreement will not (a) contravene any provision of the Articles of Incorporation
or Bylaws of the Company, (b) violate or conflict with any law, statute,
ordinance, rule, regulation, decree, writ, injunction, judgment or order of any
Governmental Authority or of any arbitration award which is either applicable
to, binding upon or enforceable against the Company or any of the Shareholders,
(c) conflict with, result in any breach of, or constitute a default (or an event
which would, with the passage of time or the giving of notice or both,
constitute a default) under, or give rise to a right of payment or right to
terminate, amend, modify, abandon or accelerate, any Contract which is
applicable to, binding upon or enforceable against the Company or the
Shareholders, (d) result in or require the creation or imposition of any Lien
upon or with respect to any of the properties or assets of the Company, (e)
except as set forth on Schedule 3.5, give to any individual or entity a right or
claim against the Company or the Shareholders or (f) require the consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority, any court or tribunal or any other Person, except any
applicable filings required under the HSR Act and any filings required to be
made by ViaSource.
3.6 RECORDS OF THE COMPANY. The copies of the Articles of
Incorporation, Bylaws, and other documents and agreements of the Company which
were provided to ViaSource are true, accurate and complete and reflect all
amendments made through the date of this Agreement. The minute books for the
Company made available to ViaSource for review were correct and complete in all
material respects as of the date of such review, no further entries have been
made through the date of this Agreement, such minute books contain the true
signatures of the persons purporting to have signed them, and such minute books
contain an accurate record of all material corporate actions of the shareholders
and directors (and any committees thereof) of the Company taken by written
consent or at a meeting since incorporation. All material corporate actions
taken by the Company have been duly authorized or ratified. All accounts, books,
ledgers and official and other records of the Company are substantially complete
and fairly, fully and accurately reflect all matters contained therein. The
stock ledgers of the Company, as previously made available to ViaSource, contain
accurate and complete records of all issuances, transfers and cancellations of
shares of the capital stock of the Company.
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3.7 FINANCIAL STATEMENTS. The Company has delivered to ViaSource
the financial statements of the Company for the years ended December 31, 1998
and 1999, including the notes thereto, (collectively, the "Financial
Statements"), copies of which are attached hereto as Schedule 3.7. The balance
sheet dated as of December 31, 1999 of the Company included in the Financial
Statements is referred to herein as the "Current Balance Sheet." The Financial
Statements have been audited by Xxxxxx Xxxxxxxx, LLP, have been prepared in
accordance with generally accepted accounting principles ("GAAP"), and fairly
present the financial position of the Company at each of the balance sheet dates
and the results of operations for the periods covered thereby. The books and
records of the Company fully and fairly reflect all material transactions,
properties, assets and liabilities of the Company. There are no material special
or non-recurring items of income or expense during the periods covered by the
Financial Statements, and the Current Balance Sheet does not reflect any writeup
or revaluation increasing the book value of any assets, except as specifically
disclosed in the notes thereto. The Financial Statements reflect all adjustments
necessary for a fair presentation of the financial information contained
therein.
3.8 SUBSIDIARIES. The Company does not own, directly or
indirectly, any outstanding voting securities of or other interests in, or have
any control over, any other corporation, partnership, joint venture or other
business entity.
3.9 LIABILITIES OF THE COMPANY. The Company does not have any
liabilities or obligations, whether accrued, absolute, contingent or otherwise,
except as set forth on Schedule 1.6. Schedule 1.6 includes all indebtedness owed
by the Company as of the date hereof to a bank or any other Person, including,
without limitation, indebtedness for borrowed money (including principal and
accrued but unpaid interest) and remaining payments on capitalized equipment
leases, of the Company. Schedule 1.6 also includes all contingent liabilities of
the Company (and the amount of such liabilities) including without limitation,
those resulting from deposits, fees or any other form of payments, in cash or
kind, previously received by the Company for the establishment of customer
websites or other services which have not been completed or otherwise provided.
3.10 LITIGATION. Except as set forth on Schedule 3.10, there is no
action, suit, or other legal or administrative proceeding or governmental
investigation pending, threatened, anticipated or contemplated against, by or
affecting the Company or the Shareholders, or any of the Company's properties or
assets, or which question the validity or enforceability of this Agreement or
the transactions contemplated hereby, and there is no basis for any of the
foregoing. There are no outstanding orders, decrees or stipulations issued by
any Governmental Authority in any proceeding to which the Company is or was a
party which have not been complied with in full or which continue to impose any
material obligations on the Company.
3.11 ENVIRONMENTAL MATTERS.
(a) (i) All Permits required under Environmental Laws
that are necessary for the operations of the Business ("Environmental Permits")
have been obtained and are in full force and
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effect, and the Company is unaware of any basis for revocation or suspension of
any such Environmental Permits; (ii) no Environmental Laws impose any obligation
upon ViaSource, the Shareholders, the Company or the Company's Affiliates, as a
result of any transaction contemplated hereby, to provide any prior notification
to any governmental entity of the transactions contemplated hereby; and (iii)
the Business has at all times been operated in full compliance with all such
Environmental Permits and within the production levels or emission levels
specified in such Environmental Permits.
(b) The Shareholders (with respect to the Business),
Company and its subsidiaries have at all times complied with all applicable
Environmental Laws.
(c) There are no existing, pending or, to the knowledge
of the Company, threatened actions, suits, claims, investigations, inquiries or
proceedings by or before any Governmental Body directed against the Company or
any of its subsidiaries, and none of the Company or any of its subsidiaries is
subject to any orders, judgments, decrees or settlements, and none of the
Stockholders, the Company or any of its subsidiaries has received or is
otherwise aware of any notices, claims or other communications alleging any
potential liability of the Company or any of its subsidiaries, which pertain or
relate to Environmental Laws, including, without limitation, (i) any remedial
obligations at any location under any Environmental Law, (ii) violations of any
Environmental Law at any location, (iii) personal injury or property damage
claims relating to a Release of Hazardous Materials at any location, or (iv)
Environmental Remediation Costs.
(d) There has been no Release of any Hazardous Materials
by the Company or the Company's subsidiaries or, to the knowledge of the
Company, any other Person, on, to, from or underlying any real property owned or
leased by the Company.
(e) To the knowledge of the Company or the Shareholders,
no asbestos-containing materials or polychlorinated biphenyls are present in, on
or underlying any real property owned or leased by the Company.
(f) Neither the Company nor any of its subsidiaries have
owned or operated, nor to the knowledge of the Company has any other Person
owned or operated, any underground storage tanks, sumps or septic fields, active
or abandoned, at any real property owned or leased by the Company.
(g) ViaSource has been provided with all engineering,
geologic, environmental reports and other documents in the possession or control
of the Company, any Shareholder or any of the Company's subsidiaries relating to
any real property owned or leased by the Company, including, without limitation,
those relating to (i) any Environmental Conditions existing on any real property
owned or leased by the Company and (ii) any violations of any Environmental
Laws.
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(h) To the knowledge of the Company, all Hazardous
Materials generated, used, stored, transported, treated, disposed of or
otherwise handled by or on behalf of the Company or any of its subsidiaries have
been generated, used, stored, transported, treated, disposed of and otherwise
handled in compliance with all applicable Environmental Laws.
(i) None of the Shareholders (with respect to the Business) or
the Company or any of the Company's subsidiaries has any current liability, nor
is there any liability on the part of the Shareholders (with respect to the
Business), the Company, any of the Company's subsidiaries or ViaSource which may
be reasonably anticipated, for Environmental Remediation Costs at any location.
(j) None of the Shareholders (with respect to the
Business) or the Company or any of its subsidiaries has any current liability,
nor is there any liability on the part of the Shareholders (with respect to the
Business), the Company, any of the Company's subsidiaries or ViaSource which may
be reasonably anticipated, under Environmental Laws (including, without
limitation, for the violation of any Environmental Law or Environmental
Remediation Costs) in connection with any businesses or properties previously
owned, leased, operated or otherwise used by the Company or any of its current
or former subsidiaries or any of their predecessors.
(k) Neither of the Company nor any of its subsidiaries
has ever performed or authorized the performance of vehicle fueling, maintenance
, or, except as performed in compliance with Environmental Law, washing at any
location owned, leased, or operated by any of them.
3.12 REAL ESTATE
(a) The Company does not own any real property or any
interest therein (including without limitation any option or other right or
obligation to purchase any real property or any interest therein). The
Shareholders do not own any real property (or any interest therein, including
leasehold interests) used by the Company.
(b) Schedule 3.12(b) sets forth a list of all leases,
licenses or similar agreements ("Leases") to which the Company is a party, which
are for the use or occupancy of real estate owned by a third party (copies of
which have previously been furnished to ViaSource), in each case, setting forth
(A) the lessor and lessee thereof and the commencement date, term and renewal
rights of each of the Leases, and (B) the street address or legal description of
each property covered thereby (the "Leased Premises").
(c) Neither the Company nor any of the other parties to
any Lease, is in default under any of the Leases and no amount due under the
Leases remains unpaid. No material controversy, claim, dispute or disagreement
exists between the Company and any other party to the Leases, nor does there
exist any event or condition which, with notice or lapse of time or both, would
constitute a default or event of default by the Company as lessee.
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3.13 GOOD TITLE TO AND CONDITION OF ASSETS.
(a) Except as set forth on Schedule 3.13(d) the Company
is the true and lawful owner of the Purchased Assets free and clear of all
Liens.
(b) The Fixed Assets currently in use or necessary for
the conduct of the business and operations of the Company are in adequate
operating condition, normal wear and tear excepted, and have been maintained
substantially in accordance with the Company's standard maintenance practices.
(c) The Purchased Assets constitute all the properties,
assets and rights forming a part of, used, held or intended to be used in, and
all such properties, assets and rights as are necessary in the conduct of the
Business of the Company.
(d) The Company has the complete and unrestricted power
and unqualified right to sell, assign, transfer, convey and deliver the
Purchased Assets to ViaSource without penalty or other adverse consequences free
and clear of all liens except those set forth on Schedule 3.13(d).
3.14 COMPLIANCE WITH LAWS. Each of the Company, the Shareholders
and any Affiliate of the Company is and has been in compliance with all laws,
regulations and orders applicable to it, its business and operations (as
conducted by it now and in the past), the Purchased Assets and the Leased
Premises and any other properties and assets (in each case owned or used by it
now or in the past). The Company has not been cited, fined or otherwise notified
of any asserted past or present failure to comply with any laws, regulations or
orders and no proceeding with respect to any such violation is pending or
threatened. Neither the Company, the Shareholders nor any of their respective
employees or agents, has made any payment of funds in connection with their
business which is prohibited by law, and no funds have been set aside to be used
in connection with their business for any payment prohibited by law. Neither the
Company nor the Shareholders is subject to any Contract, decree or injunction in
which it is a party which restricts the continued operation of any business or
the expansion thereof to other geographical areas, customers and suppliers or
lines of business.
3.15 LABOR AND EMPLOYMENT MATTERS. Schedule 3.15 sets forth the
name, address, social security number and current rate of compensation of each
of the employees of the Company. The Company is not a party to or bound by any
collective bargaining agreement or any other agreement with a labor union, and
there has been no effort by any labor union during the twenty-four (24) months
prior to the date hereof to organize any employees of the Company into one or
more collective bargaining units. There is no pending or threatened labor
dispute, strike or work stoppage which affects or which may affect the business
of the Company or which may interfere with its continued operations. Neither the
Company nor any agent, representative or employee thereof has within the last
twenty-four (24) months committed any unfair labor practice as defined in the
National Labor Relations Act, as amended, and there is no pending or threatened
charge or complaint
13
against the Company by or with the National Labor Relations Board or any
representative thereof. There has been no strike, walkout or work stoppage
involving any of the employees of the Company during the twenty-four (24) months
prior to the date hereof. None of the Shareholders is aware that any executive
or key employee or group of employees has any plans to terminate his, her or
their employment with the Company as a result of the Asset Purchase or
otherwise. Schedule 3.15 contains detailed information about each contract,
agreement or plan of the following nature, whether formal or informal, and
whether or not in writing, to which the Company is a party or under which it has
an obligation: (i) employment agreements, (ii) employee handbooks, policy
statements and similar plans, (iii) noncompetition agreements and (iv)
consulting agreements. The Company has complied with applicable laws, rules and
regulations relating to employment, civil rights and equal employment
opportunities, including but not limited to, the Civil Rights Act of 1964, the
Fair Labor Standards Act, and the Americans with Disabilities Act, as amended.
3.16 EMPLOYEE BENEFIT PLANS.
(a) Employee Benefit Plans. Except as set forth on
Schedule 3.16, the Company has no employee benefit plans or arrangements,
including but not limited to employee pension benefit plans, as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), multiemployer plans, as defined in Section 3(37) of ERISA, employee
welfare benefit plans, as defined in Section 3(1) of ERISA, deferred
compensation plans, stock option plans, bonus plans, stock purchase plans,
hospitalization, disability and other insurance plans, severance or termination
pay plans and policies, whether or not described in Section 3(3) of ERISA, in
which employees, their spouses or dependents, of the Company participate
("Employee Benefit Plans").
(b) Controlled Group Liability. Neither the Company, nor
any entity that would be aggregated with it under Code Section 414(b), (c), (m)
or (o): (i) has ever terminated or withdrawn from an employee benefit plan under
circumstances resulting (or expected to result) in liability to the Pension
Benefit Guaranty Corporation ("PBGC"), the fund by which the employee benefit
plan is funded, or any employee or beneficiary for whose benefit the plan is or
was maintained (other than routine claims for benefits); (ii) has any assets
subject to (or expected to be subject to) a lien for unpaid contributions to any
employee benefit plan; (iii) has failed to pay premiums to the PBGC when due;
(iv) is subject to (or expected to be subject to) an excise tax under Code
Section 4971; (v) has engaged in any transaction which would give rise to
liability under Section 4069 or Section 4212(c) of ERISA; or (vi) has violated
Code Section 4980B or Section 601 through 608 of ERISA.
(c) Other Liabilities. (i) The Company is not under any
obligation to pay separation, severance, termination or similar benefits solely
as a result of any transaction contemplated by this Agreement or solely as a
result of a "change of control" (as such term is defined in Section 280G of the
Code) and (ii) all required or discretionary (in accordance with historical
14
practices) payments, premiums, contributions or reimbursements for all periods
ending prior to or as of the date hereof shall have been made.
(d) Termination of Employment. Except as may be required
under applicable law, the Company is not obligated under any Employee Benefit
Plan to provide medical or death benefits with respect to any employee or former
employee of the Company or its predecessors after termination of employment. The
Company has complied with the notice and continuation of coverage requirements
of Section 4980B of the Code, and the regulations thereunder, and Part 6 of
Title I of ERISA ("COBRA") and has complied with the Health Insurance
Portability and Accountability Act of 1996 ("HIPAA") with respect to any group
health plan within the meaning of Section 5000(b)(1) of the Code.
(e) Compliance. Each Employee Benefit Plan is in
compliance with all applicable laws and regulations and has been operated in
accordance with its terms and provisions. With respect to each employee benefit
plan there are no actions claims or disputes pending by any third party and no
audits, proceedings, claims or demands pending by any governmental authority.
All amendments required to bring any employee benefit plan into conformity with
any applicable provisions of ERISA and the Code have been duly adopted.
3.17 TAX MATTERS.
(a) All Tax Returns required to be filed by, on behalf of
or with respect to the Company, each of its subsidiaries or any Affiliated Group
of which the Company or any of its subsidiaries is or was a member have been
prepared in the manner required by applicable law and duly and timely filed with
the appropriate taxing authorities in all jurisdictions in which such Tax
Returns are required to be filed (after giving effect to any valid extensions of
time in which to make such filings), and all such Tax Returns were true,
complete and correct in all material respects. Except as set forth on Schedule
3.17, no such Tax Returns have been audited or are currently being audited.
(b) All Taxes payable, whether or not shown (or required
to be shown) on a Tax Return, by, on behalf of or with respect to the Company,
each of its subsidiaries or any Affiliated Group of which the Company or any of
its subsidiaries is or was a member, or in respect of their income, assets or
operations (including interest and penalties) have been fully and timely paid,
and adequate reserves or accruals for Taxes (without regard to deferred Tax
assets and liabilities) have been provided in the Financial Statements with
respect to any Taxable Period for which Tax Returns have not yet been filed or
for which Taxes are not yet due and owing (the "Tax Reserve"). The Company and
each of its subsidiaries have made all required estimated tax payments for the
fiscal year ended December 31, 1999 to avoid any underpayment penalty.
(c) Neither the Company nor any of its subsidiaries has
executed or filed with any taxing authority any agreement, waiver or other
document or arrangement extending or having
15
the effect of extending the period for assessment or collection of Taxes
(including, but not limited to, any applicable statute of limitation), and no
power of attorney with respect to any Tax matter is currently in force.
(d) The Company and each of its subsidiaries has complied
in all material respects with all applicable laws, rules and regulations
relating to the payment and withholding of Taxes, including, without limitation,
the withholding and reporting requirements under Sections 1441 through 1464,
3401 through 3406 and 6041 through 6049 of the Code, and has duly and timely
withheld from employee salaries, wages and other compensation and has paid over
to the appropriate taxing authorities all amounts required to be so withheld and
paid over for all periods under all applicable laws.
(e) The Company has made available to ViaSource true and
complete copies of (i) all U.S. federal, state, local and foreign income or
franchise Tax Returns of the Company and each of its subsidiaries relating to
the taxable periods since January 1, 1995 and (ii) any audit report issued
within the last three years relating to Taxes due from or with respect to the
Company and any of its subsidiaries, or their income, assets or operations. All
income and franchise Tax Returns filed by, on behalf of or with respect to the
Company and each of its subsidiaries for the taxable years ended on the
respective dates set forth on the Disclosure Schedule have been examined by the
relevant taxing authority or the statute of limitations with respect to such Tax
Returns have expired.
(f) The Disclosure Schedule lists all material types of
Taxes paid and material types of Tax Returns filed by, on behalf of or with
respect to the Company and each of its subsidiaries and indicates those Taxes
with respect to which the Company and each of its subsidiaries is or has been a
member of an Affiliated Group for any Tax purpose. No claim has been made by a
taxing authority in a jurisdiction where the Company or any of its subsidiaries
does not file Tax Returns such that it is or may be subject to taxation by that
jurisdiction.
(g) All deficiencies asserted or assessments made as a
result of examinations by any taxing authority of the Tax Returns of or covering
or including the Company or any of its subsidiaries have been fully paid, and
there are no other audits or investigations by any taxing authority or
proceedings in progress, nor have the Shareholders, the Company or any of its
subsidiaries received any notice from any taxing authority that it intends to
conduct such an audit or investigation. No issue has been raised in writing by a
U.S. federal, state, local or foreign taxing authority in any current or prior
examination which, by application of the same or similar principles, could
reasonably be expected to result in a proposed adjustment or deficiency for any
subsequent Taxable Period. The results of any settlement and the necessary
adjustments resulting therefrom are properly reflected in the Financial
Statements.
(h) Neither the Company, its subsidiaries or any other
Person (including any of the Shareholders) on behalf of the Company or its
subsidiaries has (i) filed a consent pursuant to Section 341 (f) of the Code or
agreed to have Section 341 (f)(2) of the Code apply to any disposition
16
of a subsection (f) asset (as such term is defined in Section 341 (f)(4) of the
Code) owned by the Company or any of its subsidiaries, (ii) agreed to or is
required to make any adjustments pursuant to Section 48 1 (a) or Section 482 of
the Code or any similar provision of state, local or foreign law by reason of a
change in accounting method initiated by the Company or any of its subsidiaries
or otherwise or has any knowledge that the Internal Revenue Service has proposed
any such adjustment or change in accounting method, or has any application
pending with any taxing authority requesting permission for any changes in
accounting methods that relate to the business or operations of the Company or
its subsidiaries, or has otherwise taken any action that would have the effect
of deferring any liability for Taxes from any Taxable Period ending on or before
the Closing Date to any Taxable Period ending thereafter, (iii) executed or
entered into a closing agreement pursuant to Section 7121 of the Code or any
predecessor provision thereof or any similar provision of state, local or
foreign law with respect to the Company or any of its subsidiaries, or (iv)
requested any extension of time within which to file any Tax Return, which Tax
Return has since not been filed.
(i) No property owned by the Company or any of its
subsidiaries (i) is property required to be treated as being owned by another
Person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue
Code of 1954, as amended and in effect immediately prior to the enactment of the
Tax Reform Act of 1986, (ii) constitutes "tax-exempt use property" within the
meaning of Section 168(h)(1) of the Code or (iii) is "tax-exempt bond financed
property" within the meaning of Section 168(g) of the Code.
(j) Neither the Company nor any of its subsidiaries is a
party to any tax sharing or similar agreement or arrangement (whether or not
written) relating to allocating or sharing the payment of, or liability for,
Taxes with respect to any Taxable Period.
(k) There is no contract, agreement, plan or arrangement
covering any person that, individually or collectively, or when taken together
with any payment that may be made under this Agreement or any agreements
contemplated hereby, could give rise to the payment of any amount that would not
be deductible by the Company or any of its Affiliates by reason of Section 280G
of the Code, or would constitute compensation in excess of the limitation set
forth in Section 162(m) of the Code.
(l) The Company and each of its subsidiaries has
substantial authority for the treatment of or has disclosed (in accordance with
Section 6662(d)(2)(B)(ii) of the Code) on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income tax within the meaning of Section 6662(d) of the Code.
(m) Neither the Company nor any of its subsidiaries is
subject to any private letter ruling of the Internal Revenue Service or
comparable rulings of other taxing authorities.
(n) There are no security interests or liens as a result
of any unpaid Taxes upon any of the assets of the Company or any of its
subsidiaries.
17
(o) All material Tax elections of the Company and each of
its subsidiaries are clearly set forth in the Tax Returns described in Section
3.17(e). Neither the Company nor any of its subsidiaries has elections in effect
for U.S. federal income tax purposes under Sections 108, 168, 338, 441, 463,
473, 1017, 1033 or 4977 of the Code.
(p) Except as otherwise set forth in the Disclosure
Schedule, neither the Company nor any of its subsidiaries has ever been a member
of any Affiliated Group of corporations for any Tax purposes, other than the
Affiliated Group of which the Company is the parent. Neither the Company nor any
of its subsidiaries has any liability for Taxes of any person (other than the
Company and its subsidiaries) under Section 1. 1502-6 of the Treasury
regulations under the Code (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract or otherwise. Except as
otherwise set forth in the Disclosure Schedule, neither the Company nor any of
its subsidiaries own any interest in any entity that is treated as a partnership
for U.S. federal income tax purposes or could be treated as a pass-through or
transparent entity for any Tax purpose.
(q) None of the Shareholders is a foreign person within
the meaning of Section 1445 of the Code.
(r) Neither the Company nor any of its subsidiaries has
filed an election pursuant to Revenue Procedure 95-11, 1995-1 C.B. 505 or under
Treasury regulation Section 1. 1 502-75(c) or any similar provision of foreign,
national, international, state or local law.
(s) Since December 31, 1999, neither the Company nor any
of its subsidiaries has incurred any liability for Taxes outside of the ordinary
course of business.
(t) Neither the Company nor any of its subsidiaries has
any deferred income reportable for a period ending after the Closing Date but
that is attributable to a transaction (e.g., an installment sale) occurring in,
or resulting from a change of accounting method for, a period ending on or prior
to the Closing Date.
(u) Neither the Company nor any of its subsidiaries has
distributed the stock of any corporation in a transaction satisfying the
requirements of Section 355 of the Code since April 16, 1997. The stock of
neither the Company nor any of its subsidiaries has been distributed in a
transaction satisfying the requirements of Section 355 of the Code since April
16, 1997.
(v) There are no outstanding options, warrants,
securities convertible into stock, or other contractual obligations that might
be treated for U.S. federal income tax purposes as stock or another equity
interest in the Company or any of its subsidiaries.
18
(w) None of the indebtedness of the Company or any of its
subsidiaries constitutes "corporate acquisition indebtedness" (as defined in
Section 279(b) of the Code) with respect to which any interest deductions may be
disallowed under Section 279 of the Code.
3.18 INSURANCE. The Company is covered by valid, outstanding and
enforceable policies of insurance issued to it by reputable insurers covering
its properties, assets and businesses against risks of the nature normally
insured against by corporations in the same or similar lines of business and in
coverage amounts typically and reasonably carried by such corporations (the
"Insurance Policies"). Such Insurance Policies are in full force and effect, and
all premiums due thereon have been paid. As of the Effective Time, each of the
Insurance Policies will be in full force and effect. None of the Insurance
Policies will lapse or terminate as a result of the transactions contemplated by
this Agreement. The Company has complied with the provisions of such Insurance
Policies. Schedule 3.18 contains (i) a complete and correct list of all
Insurance Policies and all amendments and riders thereto (copies of which have
been provided to ViaSource) and (ii) a detailed description of each pending
claim under any of the Insurance Policies for an amount in excess of $5,000 that
relates to loss or damage to the properties, assets or businesses of the
Company. The Company has not failed to give, in a timely manner, any notice
required under any of the Insurance Policies to preserve its rights thereunder.
3.19 RECEIVABLES. All of the Receivables (as hereinafter defined)
are valid and legally binding, represent bona fide transactions and arose in the
ordinary course of business of the Company. All of the Receivables are good and
collectible receivables, and will be collected in full in accordance with the
terms of such receivables (and in any event within three months following the
date hereof) without setoff or COUNTERCLAIMS, subject to the allowance for
doubtful accounts set forth on Schedule 3.19. For purposes of this Agreement,
the term "Receivables" means all receivables of the Company, including, without
limitation, all trade account receivables arising from the provision of goods
and/or services, notes receivable and insurance proceeds receivable. There is no
contest, claim or right of set-off under any Contract with any obligor of any
Receivable of the Company relating to the amount or validity of such Receivable.
3.20 LICENSES AND PERMITS. The Company possesses all licenses,
approvals, permits or authorizations from governmental authorities
(collectively, the "Permits") for the operation of the business and Schedule
3.20 sets forth a true, complete and accurate list of all such Permits and all
applications for Permits. All such Permits are valid and in full force and
effect, the Company is in full compliance with the respective requirements
thereof, and no proceeding is pending or threatened to revoke or amend any of
them.
3.21 INTELLECTUAL PROPERTY.
(a) Schedule 1.1(g) contains a true and complete list of
the Company's patents, patent applications, trademarks, trademark applications,
trade names, service marks, service xxxx applications, Internet domain names,
Internet domain name applications, copyrights and copyright
19
registrations and applications and other filings and formal actions made or
taken pursuant to federal, state, local and foreign laws by the Company to
protect its interests in the Intellectual Property.
(b) The Intellectual Property consists solely of items
and rights which are: (i) owned Intellectual Property or (ii) in the public
domain. The Purchased Assets include all rights in Intellectual Property
necessary to conduct the Business, including without limitation, to the extent
required to make, use, reproduce, modify, adopt, create derivative works based
on, translate, distribute (directly and indirectly), transmit, display and
perform publicly, license, rent and lease and assign and sell, the Intellectual
Property. No payments are required for the continued use of the Intellectual
Property.
(c) The Company's reproduction, manufacturing,
distribution, licensing, sublicensing, sale or the exercise of any other rights
in any Intellectual Property or product, work, technology or process as now used
in the conduct of the Business or offered or proposed for use in the conduct of
the Business, does not infringe on any copyright, trade secret, trademark,
service xxxx, trade name, trade dress, firm name, Internet domain name, logo,
trade dress of any person or the patent of any person. No claims have been
asserted or are threatened by any person, nor are there any valid grounds for
any bona fide claim (i) challenging the validity, effectiveness or ownership by
the Company of any of the Intellectual Property, or (ii) to the effect that the
Company's use, distribution, licensing, sublicensing, sale or any other exercise
of rights in any product, work, technology or process as now used or offered or
proposed for use in the conduct of the Business, infringes or will infringe on
any intellectual property or other proprietary right of any person . All
registered, granted or issued patents, trademarks, Internet domain names and
copyrights held by the Company are enforceable and subsisting. There is no
unauthorized use, infringement or misappropriation of any of the Intellectual
Property owned by the Company by any third party, employee or former employee.
(d) All personnel, including employees, agents,
consultants and contractors, who have contributed to or participated in the
conception and development of the Intellectual Property owned by the Company on
behalf of the Company (i) have been a party to a "work-for-hire" arrangement or
agreements with the Company in accordance with applicable national and state law
that has accorded the Company full, effective, exclusive and original ownership
of all tangible and intangible property thereby arising, or (ii) have executed
appropriate instruments of assignment in favor or the Company as assignee that
have conveyed to the Company effective and exclusive ownership of all tangible
and intangible property thereby arising.
(e) The Company is not, nor as a result of the execution
or delivery of this Agreement or performance of the Company's obligations
hereunder, will the Company be, in violation of any license, sublicense,
agreement or instrument to which the Company is a party or otherwise bound, nor
will execution or delivery of this Agreement, or performance of the Company's
obligations hereunder, cause the diminution, termination or forfeiture of any
Intellectual Property.
20
(f) Schedule 3.21(f) contains a true and complete list of
all of the Company's software programs (the "Software Programs"). The Company
owns full and unencumbered right and good, valid and marketable title to such
Software Programs free and clear of all mortgages, pledges, liens, security
interests, conditional sales agreements, encumbrances or charges of any kind.
(g) The source code and system documentation relating to
the Software Programs (i) have at all times been maintained in strict
confidence, (ii) have been disclosed by the Company only to employees who have a
"need to know" the contents thereof in connection with the performance of their
duties to the Company and who have executed the nondisclosure agreements
referred to in Section 3.21(d), and (iii) have not been disclosed to any third
party.
(h) All software sold or licensed by the Company to end
users, or used by the Company, has been duly licensed by the owner of such
software and is set forth on Schedule 3.21(h).
3.22 CONTRACTS. Schedule 3.22 sets forth a list of each Material
Contract (as defined below), true, correct and complete copies of which have
been provided to ViaSource. Schedule 3.22 identifies certain Material Contracts
identified therein that require the Consents of third parties to the
transactions contemplated hereby. All consents set forth on Schedule 3.22 have
been obtained. The copy of each Material Contract furnished to ViaSource is a
true, correct and complete copy of the document it purports to represent and
reflects all amendments thereto made through the date of this Agreement. The
Company has not violated any of the terms or conditions of any Material Contract
or any term or condition which would permit termination or material modification
of any material Contract, all of the covenants to be performed by any other
party thereto have been fully performed, and there are no claims for breach or
indemnification or notice of default or termination under any Material Contract.
No event has occurred which constitutes, or after notice or the passage of time,
or both, would constitute, a default by the company or any other party under any
material Contract. The Company is not subject to any liability or payment
resulting from renegotiation of amounts paid under any Material Contract. As
used in this Section 3.22 "Material Contracts" shall mean formal or informal,
written or oral, (a) loan agreements, indentures, mortgages, pledges,
hypothecations, deeds of trust, conditional sale or title retention agreements,
security agreements, equipment financing obligations or guaranties, or other
sources of contingent liability in respect of any indebtedness or obligation to
any other Person, or letters of intent or commitment letters with respect to
same; (b) contracts obligating the Company to provide or obtain products or
services; (c) leases of real property; (d) leases of personal property; (e)
distribution, sales agency or franchise or similar agreements; (f) agreements
providing for an independent contractor's services; (g) employment agreements,
management service agreements, consulting agreements, confidentiality
agreements, non-competition agreements, employee handbooks, policy statements
and any other agreements relating to any employee, officer or director of the
Company; (h) licenses, assignments or transfers of trademarks, trade names,
service marks, patents, copyrights, trade secrets or know how, or other
agreements regarding proprietary rights or intellectual property; (i) contracts
relating to pending capital expenditures by the Company; (j) non-competition
agreements restricting the Company or any Shareholder in any manner, (k) any
contracts obligating the Company to make
21
payments in excess of $5,000, in the aggregate, over the remaining term of such
contract; and (l) all other Contracts or understandings which are material to
the Company, or the Business, assets or properties, irrespective of subject
matter and whether or not in writing. Except as set forth on Schedule 3.22, the
continuation, validity and effectiveness of all the Material Contracts will not
be effected by their transfer to ViaSource under this Agreement.
3.23 INVESTMENT INTENT; ACCREDITED INVESTOR STATUS; SECURITIES
DOCUMENTS. The Company and each of the Shareholders is acquiring the ViaSource
Shares hereunder for his, her or its own account for investment and not with a
view to, or for the sale in connection with, any distribution of any of the
ViaSource Shares, except in compliance with applicable state and federal
securities laws. Each of the Shareholders has had the opportunity to discuss the
transactions contemplated hereby with ViaSource and has had the opportunity to
obtain such information pertaining to ViaSource as has been requested. Each of
the Shareholders is an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act, and has such knowledge and experience in
business or financial matters that he/she is capable of evaluating the merits
and risks of an investment in the ViaSource Shares. Each of the Shareholders
hereby represents that he/she can bear the economic risk of losing his/her
investment in the ViaSource Shares and has adequate means for providing for
his/her current financial needs and contingencies.
3.24 NO COMMISSIONS. Neither the Company nor the Shareholders have
incurred any obligation for any finder's or broker's or agent's fees or
commissions or similar compensation in connection with the transactions
contemplated hereby.
3.25 BANK ACCOUNTS; BUSINESS LOCATIONS. Schedule 3.25(a) sets forth
all accounts of the Company with any bank, broker or other depository
institution, and the names of all persons authorized to withdraw funds from each
such account. As of the date hereof, the Company has no office or place of
business other than as identified on Schedule 3.25(b) and the Company's
principal places of business and chief executive offices are indicated on
Schedule 3.25(b). All locations where the equipment, inventory, chattel paper
and books and records of the Company are located as of the date hereof are fully
identified on Schedule 3.25(b).
3.26 ACCURACY OF INFORMATION FURNISHED. No representation,
statement or information made or provided by the Company and/or any of the
Shareholders contained in this Agreement (including, without limitation, the
various Schedules attached hereto) or any agreement executed in connection
herewith or in any certificate delivered pursuant hereto or thereto, contains or
shall contain any untrue statement of a material fact or omits or shall omit any
material fact necessary to make the information contained therein not
misleading. The Company has provided ViaSource with true, accurate and complete
copies of all documents listed or described in the various Schedules attached
hereto.
22
3.27 YEAR 2000 COMPLIANCE.
(a) All computer hardware, software, systems and
equipment utilized by the Company shall, as currently designed, fully operate
before, during and after the calendar year 2000. Without limiting the foregoing,
such computer hardware and software shall before during and after the calendar
year 2000:
(i) Operate without error relative to date or
time data;
(ii) Record, store, process, and present calendar
dates falling on or after January 1, 2000, in the same manner,
and with the same functionality as on or before December 31,
1999;
(iii) Maintain functionality with respect to the
introduction of records containing dates falling on or after
January 1, 2000;
(iv) Maintain functionality with respect to date
and time date handling, including but not limited to date and
time data century recognition, calculations which accommodate
same century, single-century, and multi-century formulas and
data values, and date and time data interface values that
reflect century;
(v) Include the indication of century in all
date-related interface functions and data fields;
(vi) Include the appropriate logic for leap year
determination;
(vii) Be interoperable with other product(s) used
by Company.
3.28 RELATED PARTY TRANSACTIONS. No officer, director, shareholder,
employee or former employee of the Company, and no affiliate or relative of any
of them:
(a) owns, directly or indirectly, any interest
in (excepting not more than five percent share holdings for
investment purposes in securities of publicly held and traded
companies), or is in an officer, partner, director, employee
or consultant of, or otherwise receives remuneration in excess
of $5,000 from, any person which is, or is engaged in business
as, a competitor, lessor, lessee, customer or supplier of the
Company;
(b) owns, directly or indirectly, in whole or in
part, any tangible or intangible property, the use of which is
necessary for the conduct of the Business; or
23
(c) except as set forth on Schedule 3.28, owes
any amount to the Company, or has any cause of action or other
claim against the Company.
3.29 CHANGES SINCE DECEMBER 31, 1999. Except as set forth on
Schedule 3.29, since December 31, 1999, the Company has not (a) declared, set
aside, made or paid any dividend or other distribution payable in cash, stock,
property or otherwise of or with respect to its capital stock, or other
securities, or reclassified, combined, split, subdivided or redeemed, purchased
or otherwise acquired, directly or indirectly, any of its capital stock, or
other securities; (b) paid any bonus to or increased the rate of compensation of
any of its officers, partners, or employees, or amended any other terms of
employment or engagement of such persons; (c) sold, leased or transferred any of
its properties or assets or acquired any properties or assets; (d) entered into
any transaction with the Shareholder or any Affiliate of the Company or the
Shareholder; (f) entered into any employment agreement that is not terminable at
will without any liability or obligation; (g) made or pledged any charitable
contributions; (h) borrowed any amounts from or against any credit facility or
other line of credit existing with respect to the Company; or (i) agreed to do
or authorized any of the foregoing.
3.30 SUPPLIERS AND CUSTOMERS.
(a) Schedule 3.30 lists (i) all suppliers to which the
Company made payments during the year ended December 31, 1999, in excess of five
percent (5%) of the cost of sales as reflected on the Company's statement of
operations for the year ended December 31, 1999 and (ii) all customers that paid
the Company during the year ended December 31, 1999, more than five percent (5%)
of the Company's sales revenues as reflected on its statement of operations for
the year ended December 31, 1999 ("Customers").
(b) None of the customers or suppliers listed on Schedule
3.30 has terminated or discontinued their business with the Company and the
Company has no knowledge which might reasonably indicate that any of the
customers or suppliers listed on Schedule 3.30 intend to cease purchasing from,
selling to, or dealing with, the Company, nor has any information been brought
to the Shareholders' attention which might reasonably lead them to believe any
such customer or supplier intends to alter in any material respect the amount of
such purchases, sales or the extent of dealings with the Company or would alter
in any material respect such purchases, sales or dealings in the event of the
consummation of the transactions contemplated by this Agreement. The Company has
no knowledge which might reasonably indicate, nor has any information been
brought to the Shareholders' attention which might reasonably lead them to
believe that, (i) any supplier will not be able to fulfill outstanding or
currently anticipated purchase orders placed by the Company, or (ii) any
customer will cancel outstanding or currently anticipated purchase orders placed
with the Company.
3.31 ORDINARY COURSE. Since December 31, 1999, except as set forth
in Schedule 3.31, the Company has conducted its business only in the ordinary
course and consistently with its prior practices.
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3.32 EQUIPMENT. As of the date hereof and on the Closing Date, all
equipment owned or leased by the Company and used in connection with the
operation of the Business shall be in good condition and working order, subject
to such routine maintenance and repairs thereto as may be required in the
ordinary course of the business of the Company, except as would not have,
individually or in the aggregate, a Material Adverse Change on the Business.
3.33 DISCLOSURE. No information furnished by or on behalf of either
of the Shareholders or the Company to ViaSource contains any untrue statement of
a material fact or omits to state any fact necessary to make the information
disclosed not misleading.
3.34 NO ILLEGAL OR IMPROPER TRANSACTIONS. Neither the Company or
any of its subsidiaries nor any shareholder, officer, director, employee, agent
or Affiliate of any of them has offered, paid or agreed to pay to any Person
(including any governmental official) or solicited, received or agreed to
receive from any Person, directly or indirectly, any money or thing of value for
the purpose or with the intent of (a) obtaining or maintaining business for the
Company and its subsidiaries, (b) facilitating the purchase or sale of any
product or service, or (c) avoiding the imposition of any fine or penalty, in
any such case in any manner which is in violation of any applicable ordinance,
regulation or law; and there have been no false or fictitious entries made in
the books or records of the Company and its subsidiaries.
3.35 MBE/DBE STATUS. Except as set forth on Schedule 3.35, no
Material Contract was awarded to the Company because of the Company's status as
a minority-owned business enterprise ("MBE") or a disadvantaged business
enterprise ("DBE"); and except as set forth on Schedule 3.35, no Material
Contract is subject to termination and no Business conducted by the Company is
subject to being rescinded or terminated as a result of the Company's loss of
status as a certified minority-owned business enterprise or a disadvantaged
business enterprise pursuant to this Agreement and the transactions contemplated
thereby.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby,
including, but not limited to, all such further deeds, bills of sale,
assignments, transfers, conveyances, powers of attorney and assurances as may be
required or appropriate to convey and transfer to and vest in ViaSource and
protect its right, title and interest in all of the Purchased Assets.
25
4.2 COMPLIANCE WITH COVENANTS. The Shareholders shall cause the
Company to comply with all of the covenants of the Company under this Agreement.
4.3 CONFIDENTIALITY; PUBLICITY. Except as may be required by law
or as otherwise permitted or expressly contemplated herein, no party hereto or
their respective Affiliates, employees, agents and representatives shall
disclose to any third party this Agreement, the subject matter or terms hereof
or any confidential information or other proprietary knowledge concerning the
business or affairs of the other party which it may have acquired from such
party in the course of pursuing the transactions contemplated by this Agreement
without the prior consent of the other party hereto; provided, that any
information that is otherwise publicly available, or has been obtained from a
third party, without breach of this provision, shall not be deemed confidential
information. No press release or other public announcement related to this
Agreement or the transactions contemplated hereby shall be issued by the Company
or the Shareholders without the prior approval of ViaSource.
4.4 RESTRICTIVE COVENANT. In order to assure that ViaSource will
realize the benefits of this transaction, the Company and each of the
Shareholders agree with ViaSource that he, she or it will not:
(a) for a period of three (3) years from the date hereof,
directly or indirectly, alone or as a partner, joint venturer, officer,
director, member, employee, consultant, agent, independent contractor or
shareholder of, or lender to, any company or business, engage in any Competitive
Activity. As used herein"Competitive Activity" shall consist of the sale,
solicitation for sale, marketing, licensing, servicing, distributing of, or
other business activity of whatsoever kind or nature relating to the Business,
which competes, directly or indirectly, with the business, technology, products
or services of ViaSource and its Affiliates in the United States.
(b) for a period of three (3) years from the date hereof,
directly or indirectly (i) induce any Person which is a customer of ViaSource or
any Affiliate of ViaSource to patronize any business directly or indirectly
engaged in any Competitive Activity; (ii) canvass, solicit or accept from any
Person which is a customer of ViaSource or any Affiliate of ViaSource any
Competitive Business; or (iii) request or advise any Person which is a customer
or supplier of ViaSource or any Affiliate of ViaSource to withdraw, curtail or
cancel any such customer's or supplier's business with ViaSource or any
Affiliate of ViaSource, or its or their successors;
(c) for a period of three (3) years from the date hereof,
directly or indirectly employ, or knowingly permit any company or business
directly or indirectly controlled by him, to employ, any person who was employed
by ViaSource or any Affiliate of ViaSource at or within the six (6) month period
immediately preceding the date of such employment, or in any manner seek to
induce any such person to leave his or her employment;
(d) at any time following the date hereof, directly or
indirectly, in any way utilize, disclose, copy, reproduce or retain in his/her
possession ViaSource's or any ViaSource
26
Affiliates' proprietary rights or records, including, but not limited to, any of
its or their customer lists.
The Company and the Shareholders agree and acknowledge that the restrictions
contained in this Section 4.4 are reasonable in scope and duration and are
necessary to protect ViaSource after the date hereof. If any provision of this
Section 4.4 as applied to any party or to any circumstance is adjudged by a
court to be invalid or unenforceable, the same will in no way affect any other
circumstance or the validity or enforceability of this Agreement. If any such
provision, or any part thereof, is held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court making such determination shall have the power to reduce the duration
and/or area of such provision, and/or to delete specific words or phrases, and
in its reduced form, such provision shall then be enforceable and shall be
enforced. The parties agree and acknowledge that the breach of this Section 4.4
will cause irreparable damage to ViaSource and upon breach of any provision of
this Section 4.4, ViaSource shall be entitled to injunctive relief, specific
performance or other equitable relief; provided, however, that, this shall in no
way limit any other remedies which ViaSource may have (including, without
limitation, the right to seek monetary damages).
4.5 TAX MATTERS.
(a) Tax Returns. The Shareholders shall duly prepare, or
cause to be prepared, and file, or cause to be filed, and pay or cause to be
paid, on a timely basis, all Tax Returns and taxes due for or by the Company for
any period ending on or before the date hereof. All other tax returns shall be
prepared and submitted by ViaSource. The Shareholders shall not file any amended
Tax Returns with respect to the Company without the prior written consent of
ViaSource.
(b) Tax Cooperation. The Shareholders and ViaSource shall
provide the other party with such information and records and access to such of
its officers, directors, employees and agents as may be reasonably required by
the other party in connection with the preparation of any tax return or any
audit or other proceeding relating to the Company.
4.6 DELIVERY OF PROPERTY RECEIVED BY THE COMPANY AFTER CLOSING.
From and after the date hereof, ViaSource shall have the right and authority to
collect, for the account of ViaSource, all receivables and other items which
shall be transferred or are intended to be transferred to ViaSource as part of
the Purchased Assets as provided in this Agreement, and to endorse with the name
of the Company any checks or drafts received on account of any such receivables
or other items of the Purchased Assets. The Company and the Shareholders agree
that they will transfer or deliver to ViaSource, promptly after the receipt
thereof, any cash or other property which the Company and the Shareholders
receive after the date hereof in respect of any claims, contracts, licenses,
leases, commitments, sales orders, purchase orders, receivables of any character
or any other items transferred or intended to be transferred to ViaSource as
part of the Purchased Assets under this Agreement.
27
4.7 VIASOURCE APPOINTED ATTORNEY FOR THE COMPANY. The Company
hereby constitutes and appoints ViaSource, and ViaSource's successors and
assigns, its true and lawful attorney, in the name of either ViaSource or the
Company (as ViaSource shall determine in its sole discretion) but for the
benefit and at the expense of ViaSource (except as otherwise herein provided),
(a) to institute and prosecute all proceedings which ViaSource may deem proper
in order to collect, assert or enforce any claim, right or title of any kind in
or to the Purchased Assets as provided for in this Agreement; (b) to defend or
compromise any and all actions, suits or proceedings in respect of any of the
Purchased Assets, and to do all such acts and things in relation thereto as
ViaSource shall deem advisable; and (c) to take all action which ViaSource may
reasonably deem proper in order to provide for ViaSource the benefits under any
of the Purchased Assets where any required consent of another party to the sale
or assignment thereof to ViaSource pursuant to this Agreement shall not have
been obtained. The Company acknowledges that the foregoing powers are coupled
with an interest and shall be irrevocable. ViaSource shall be entitled to retain
for its own account any amounts collected pursuant to the foregoing powers,
including any amounts payable as interest in respect thereof.
4.8 EMPLOYMENT AND NON-COMPETITION AGREEMENT. Xxxxxx Xxxxxxx shall
enter into an Employment and Non-Competition Agreement with ViaSource in the
form set forth on Schedule 4.8.
4.9 SHAREHOLDER AND DIRECTOR VOTE. Each of the Shareholders, in
executing the Agreement, consents as a director and/or shareholder (as
applicable) of the Company to the Asset Purchase and waives notice of any
meeting in connection therewith.
4.10 RELEASE BY THE COMPANY AND THE SHAREHOLDERS. Each of the
Company and the Shareholders do hereby each, for themselves and for their
respective heirs, personal representatives, successors and assigns
(collectively, the "Releasors") release, remise and forever discharge ViaSource
and its subsidiaries, affiliates, officers, directors, trustees, shareholders,
agents, representatives, employees, consultants, attorneys, accountants,
successors and assigns (collectively, the "Releasees"), from any and all debts,
sums of money, accounts, claims, actions, causes of action, suits, damages,
judgments, losses, contracts, demands, expenses (including attorneys' fees and
costs) and/or liabilities of any kind which any of the Releasors ever had, now
have or which they can, shall or may have for, upon or by reason of any matter,
cause or thing whatsoever, from the beginning of the world to the day of this
Agreement, against the Releasees. Notwithstanding anything contained herein to
the contrary, this Agreement shall not apply to any obligations, commitments or
liabilities arising out of and/or relating to the performance by the Releasees
pursuant to this Agreement.
4.11 USE OF THE INTELLECTUAL PROPERTY. Neither the Company nor the
Shareholders shall use any of the Intellectual Property after the date hereof,
except in connection with employment by ViaSource.
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4.12 CONDUCT AND PRESERVATION OF BUSINESS. The Company and each of
the Shareholders covenant that, except as contemplated by this Agreement, during
the period from the date of this Agreement to the Closing Date, the Company
shall (i) conduct its business in the usual manner and not enter into any
transactions outside the ordinary course of business; (ii) use its best efforts
to maintain, preserve and protect its properties and assets and the Business,
including, without limitation, to preserve its relationship with its employees,
independent contractors, suppliers and customers and to preserve its goodwill;
(iii) comply with all laws, ordinances, rules, regulations and orders applicable
to its business; (iv) continue to maintain and service the physical assets used
in the conduct of the Business in the same manner as has been its consistent
past practice; (v) not declare; set aside or pay any dividend or make any
distribution on any shares of its capital stock (whether in cash or in kind), or
redeem, purchase or otherwise acquire any shares of its capital stock; (vi) not
take any action or omit to take any action which would result in the inaccuracy
of any of the Company's or the Shareholders' representations and warranties set
forth herein if such representations or warranties were to be made immediately
after the occurrence of such act or omission; (vii) properly maintain and repair
all real and personal property owned or leased by the Company or the
Shareholders and used in the business of the Company, so that such property at
Closing is in the same condition as normally maintained by the Company; (viii)
use its prudent business efforts to have in effect and maintain at all times all
insurance of the kind, in the amount and with the insurers set forth on the
Disclosure Schedule hereto or equivalent insurance; (ix) refrain from granting
any irrevocable powers of attorney or comparable delegations of authority; (x)
refrain from taking any action that would constitute, or fail to take any action
that would prevent, a breach of or a default under any agreement, contract or
understanding to which the Company is a party; (xi) use its prudent business
efforts to preserve all Permits; (xii) perform all obligations required to be
performed by it under any Contracts; and (xiii) not enter into any collective
bargaining agreement or other contract or agreement (or any amendment or
modification thereto) with any labor union without the prior written consent of
ViaSource. Without limiting the foregoing, the Company and each of the
Shareholders covenant that until the Closing Date or termination of this
Agreement, except as set forth on the Disclosure Schedule, the Company will not
change the compensation of any of its respective directors, officers, employees,
independent contractors or consultants, or enter into any employment, severance
or other agreement with any of such persons, except in the ordinary course of
business.
4.13 NO SHOPPING.
(a) The Company and each of the Shareholders covenant,
jointly and severally, that, from and after the date hereof until the
termination of this Agreement without the express written consent of ViaSource,
neither the Company nor any of the Shareholders shall, directly or indirectly,
(i) solicit, initiate discussions or engage in negotiations with any Person
(other than ViaSource or its Affiliates or their representatives) relating to
the possible acquisition, whether by way of merger, reorganization, purchase of
shares of capital stock, purchase of assets, management agreement, license or
distribution agreement or otherwise (any such acquisition or other transaction
or agreement being referred to herein as an "Acquisition Transaction"), of any
interest in the Company
29
(other than inventory or obsolete, damaged or worn assets sold or otherwise
disposed of in the ordinary course of the Business and consistent with past
practice), (ii) provide information with respect to the Company to any Person
(other than ViaSource or its Affiliates or their representatives) in connection
with a possible Acquisition Transaction or (iii) enter into an agreement with
any Person (other than ViaSource or its Affiliates) concerning a possible
Acquisition Transaction. Prior to the termination of this Agreement, if the
Company or any of the Shareholders receives an unsolicited offer or proposal
relating to a possible Acquisition Transaction, the Company or the Shareholders,
as the case may be, shall immediately notify ViaSource and provide information
to ViaSource as to the identity of the party making any such offer or proposal
and the specific terms of such offer or proposal (including, without limitation,
the proposed price and financing therefor).
(b) The parties recognize and acknowledge that a breach by the
Company and each of the Shareholders of this Section 4.13 will cause irreparable
and material loss and damage to ViaSource as to which it will not have an
adequate remedy at law or in damages. Accordingly, each Party acknowledges and
agrees that the issuance of an injunction or other equitable remedy is an
appropriate remedy for any such breach. In addition, in the event of any breach
of the foregoing which results in the acquisition by a Person other than
ViaSource or its Affiliates of a majority of the assets of the Business
(measured by fair market value) or of the capital stock of the Company, the
Company and the Shareholders shall promptly reimburse ViaSource for all fees and
expenses (including, without limitation, out-of-pocket expenses, fees and
expenses of accountants, counsel and other advisors, and the like) incurred by
them in connection with the transactions contemplated by this Agreement.
4.14 POST-CLOSING PURCHASE PRICE ADJUSTMENT.
(a) In order to compensate the Company for the increase,
if any, in the Net Worth of the Company for the period beginning January 1, 2000
and ending on the Closing Date, ViaSource agrees that it shall, on or before
that date which is 120 days after the Closing Date, determine the Net Worth of
the Company on the Closing Date. In the event that the Net Worth of the Company
on the Closing Date exceeds the Net Worth of the Company on December 31, 1999,
as set forth in Schedule 3.7 hereto, by more than the amount of the Shareholders
tax liabilities as set forth in Section 1.1(f)(i) hereof, ViaSource will make
payment to the Company of fifty percent (50%) of such excess in immediately
available funds on or before that date which is 150 days after the Closing Date.
In the event that the Net Worth of the Company on the Closing Date is less than
the Net Worth of the Company of December 31, 1999, no adjustment to the Purchase
Price shall be required and no additional payments from ViaSource to the Company
shall be made. For purposes of this Section 4.14, "Net Worth" shall be defined
as the Total Assets of the Company less its Total Liabilities (which shall
include a determination of the Shareholders' tax liability for such period
determined in a manner consistent with the Shareholders' prior years tax
determination) as reflected on the Company's balance sheet as of the applicable
date, as determined in accordance with GAAP. In addition to the amount otherwise
payable to the Shareholder's pursuant to this Section 4.14(a), ViaSource shall
distribute to the Shareholders simultaneously with such other payments, if any,
the
30
amount of Shareholders' tax liability for the period beginning on January 1,
2000 and ending as of the Closing Date, as determined in accordance with this
Section 4.14(a).
(b) In the event that the Company disagrees with the Net
Worth determination in Section 4.14(a) above, then it shall provide notice of
such disagreement and its proposed Net Worth determination to ViaSource in
writing in accordance with the notice provisions of this Agreement within ten
(10) days of receipt of the Net Worth determination (the "Notice of Objection").
In the event of a disagreement between ViaSource and the Company with respect to
the calculation of the Net Worth determination, which is not resolved within
thirty (30) days from the date of delivery of the Company's Notice of Objection,
then such disagreement shall be referred to a "big five" accounting firm (the
"Settlement Accountants"), and the determination of the Net Worth by the
Settlement Accountants shall be final and shall not be subject to further
review, challenge or adjustment absent fraud. The Settlement Accountants shall
use their best efforts to reach a determination not more than thirty (30) days
after such referral. The costs and expenses of the services of the Settlement
Accountants shall be paid equally by the Company and ViaSource.
ARTICLE V
INDEMNIFICATION
5.1 AGREEMENT BY THE COMPANY AND THE SHAREHOLDERS FOR
INDEMNIFICATION. The Company and the Shareholders jointly and severally agree to
indemnify and hold ViaSource and its stockholders, directors, officers,
employees, attorneys and Affiliates (collectively, for purposes of this Article
V, the "ViaSource Indemnitees") harmless from and against, and, at the ViaSource
Indemnitees' election, in its sole discretion, the ViaSource Indemnitees shall
be entitled to recover by set off against the Held Back Shares in accordance
with Section 5.3, the aggregate of all expenses, losses, costs, deficiencies,
liabilities and damages (including, without limitation, related counsel and
paralegal fees and expenses) incurred or suffered by the ViaSource Indemnitees
arising out of or resulting from (i) any breach of a representation or warranty
made by the Company or the Shareholders in or pursuant to this Agreement, (ii)
any breach of the covenants or agreements made by the Company or the
Shareholders in or pursuant to this Agreement or (iii) any inaccuracy in any
certificate, instrument or other document delivered by the Company or the
Shareholders as required by this Agreement, (iv) any Excluded Liabilities, (v)
the failure to obtain the consent of any landlord to the assignment of the
Company's real estate leases if such consent is required pursuant to the terms
of such leases, (vi) any transfer taxes that may be due and owing to any
Governmental Authority and (vii) any loss of a Material Contract or Business as
a result of the Company no longer qualifying as a minority-owned business
enterprise or a disadvantaged business enterprise (collectively, "Indemnifiable
Damages"). The Indemnifiable Damages of the Company shall not exceed the
Purchase Price.
5.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Company and the Shareholders shall
survive the Closing or termination of
31
this Agreement and shall remain in full force and effect for a period of two (2)
years from the Closing Date; provided, however, that the representations and
warranties and rights of indemnification with respect to breaches thereof set
forth in Sections 3.11, 3.14, 3.15, 3.16, 3.17, 3.20 and 3.21 shall remain in
full force and effect until the expiration of the applicable statute of
limitations (including any extension thereof). Notwithstanding any knowledge of
facts determined or determinable by any party by investigation, each party shall
have the right to fully rely on the representations, warranties, covenants and
agreements of the other parties hereto contained in this Agreement or in any
other documents or papers delivered in connection herewith. Each representation,
warranty, covenant and agreement contained in this Agreement is independent of
each other representation, warranty, covenant and agreement. The representations
and warranties made by ViaSource shall expire upon the Closing.
5.3 SECURITY FOR INDEMNIFICATION OBLIGATION. As security for the
indemnification obligations contained in this Article V, ViaSource shall hereby
set aside and hold, and the Company and the Shareholders hereby grant a security
interest in (i) the shares represented by, the certificates representing the
Held Back Shares issued pursuant to this Agreement and (ii) the Note. The
ViaSource Indemnitees may set off against the Held Back Shares and/or the Note,
as determined by the ViaSource Indemnitees in their sole and absolute
discretion, the Indemnifiable Damages for which the Company or the Shareholders
may be responsible pursuant to this Agreement subject, however, to the following
terms and conditions:
(a) The ViaSource Indemnitees shall give written notice
to the Company of any claim for Indemnifiable Damages which notice shall set
forth (i) the amount of Indemnifiable Damages which the ViaSource Indemnitees
claims to have sustained by reason thereof, and (ii) the basis of such claim;
(b) Such set off shall be effected on the later to occur
on the expiration of 10 days from the date of such notice (the "Notice of
Contest Period") or, if such claim is contested, the date the dispute is
resolved, and such set off, if taken with respect to the Held Back Shares, shall
be charged proportionally against the shares set aside; and
(c) For purposes of any set off against the Held Back
Shares pursuant to this Article V, the shares of ViaSource Common Stock shall be
valued at $2.75 per share.
(d) The Company, in its sole discretion, may elect to
satisfy its obligations for Indemnifiable Damages by making payments to
ViaSource in immediately available funds in accordance with this Section 5.3.
5.4 SECURITY FOR SECTION 5.1(VII) INDEMNIFICATION OBLIGATION. As
specifically designated security for the indemnification obligation contained in
Section 5.1(vii), in addition to the security provided in Section 5.3 above,
ViaSource shall hereby set aside and hold, and the Company and the Shareholders
hereby grant a security interest in a total of 147,733 shares, taken
32
pro rata from the amounts payable to the Shareholders on Schedule 1.5 hereto
(the "Additional Held Back Shares"). The ViaSource Indemnitees may set off
against the Additional Held Back Shares, the Indemnifiable Damages for which the
Company or the Shareholder may be responsible pursuant to this Agreement
subject, however, to the following terms and conditions:
(a) In the event that the Company or the Shareholders are
able to obtain a waiver with respect to services provided to the City of St.
Louis (the "Waiver"), which such Waiver would waive the obligation of the
Company or any other entity with which the Company has contracted or otherwise
agreed to provide services to be qualified as or utilize a MBE or DBE in
providing such services to the City of St. Louis, and which would provide that
the Company would not lose Business with such waiving party as the result of the
Company no longer qualifying as a MBE or a DBE, ViaSource shall promptly, and in
no event later than five (5) Business Days after receipt of such Waiver (which
shall be in the form and substance reasonably acceptable to ViaSource in its
sole discretion) deliver the Additional Held Back Shares to the Shareholders, in
accordance with Schedule 1.5 hereto.
(b) In the event that the Company or the Shareholders are
unable to obtain the Waiver, ViaSource shall, within ninety (90) days of its
fiscal year ended December 31, 2000, determine the Company's gross revenues for
such fiscal year, with such determination to be made in accordance with GAAP. If
the gross revenues of the Company for the year ended December 31, 2000 equal or
exceed one-hundred percent (100%) of the Company's gross revenues for the year
ended December 31, 1999 (which such amount shall also be determined in
accordance with GAAP), ViaSource shall promptly, and in no event later than five
(5) Business Days after such determination, deliver the Additional Held Back
Shares to the Shareholders in accordance with Schedule 1.5 hereto. If the gross
revenues of the Company for the year ended December 31, 2000 do not equal or
exceed one-hundred (100%) of the Company's revenues for the year ended December
31, 1999, ViaSource shall be entitled to recover any and all Indemnifiable
Damages resulting from the Company's indemnification obligation contained in
Section 5.1(vii), including but not limited to the retention of all or a portion
of the Additional Held Back Shares, as appropriate, in accordance with the
provisions of Section 5.3.
5.5 VOTING OF AND DIVIDENDS ON THE HELD BACK SHARES. Except with
respect to shares transferred pursuant to the foregoing right of set off (and in
the case of such shares, until the same are transferred), all Held Back Shares
shall be deemed to be owned by the Company and the Company shall be entitled to
vote the Held Back Shares; provided, however, that, there shall also be
deposited with ViaSource subject to the terms of this Article V, all shares of
ViaSource Common Stock issued to the Company as a result of any stock dividend
or stock split and all cash issuable to the Company as a result of any cash
dividend, with respect to the Held Back Shares. All stock and cash issued or
paid upon Held Back Shares shall be distributed to the person or entity entitled
to receive such Held Back Shares together with such Held Back Shares.
33
5.6 DELIVERY OF HELD BACK SHARES. ViaSource agrees to deliver to
the Company no later than twelve (12) months after the date hereof any Held Back
Shares then held by it unless there then remains unresolved any claim for
Indemnifiable Damages as to which notice has been given, in which event any Held
Back Shares remaining on deposit after such claim shall have been satisfied
shall be returned to the Company promptly after the time of satisfaction.
5.7 ADJUSTMENT TO PURCHASE PRICE. All payments for Indemnifiable
Damages made pursuant to this Article V shall be treated as adjustments to the
Purchase Price.
5.8 NO BAR. If the Held Back Shares are insufficient to set off
any claim for Indemnifiable Damages made hereunder (or have been delivered to
the Company prior to the making or resolution of such claim), then the ViaSource
Indemnitees may take any action or exercise any remedy available to it by
appropriate legal proceedings to collect the Indemnifiable Damages.
5.9 REMEDIES CUMULATIVE. The remedies provided herein shall be
cumulative and shall not preclude the ViaSource Indemnitees from asserting any
other right, or seeking any other remedies against the Shareholders or the
Company.
5.10 LIMITATIONS. The indemnification obligations with respect to
representations and warranties of the Company and the Shareholders in Article
III and all covenants of the Company and the Shareholders in this Agreement are
joint and several obligations. This means that each of the Company and the
Shareholders will be responsible to the extent provided in this Article V for
the entirety of any indemnification to which the ViaSource Indemnitees may be
entitled under this Article V.
5.11 GROSS-UP. If any indemnification payment is determined to be
taxable to the party receiving such payment by any taxing authority, the paying
party shall also indemnify the party receiving such payment for any Taxes
incurred by reason of the receipt or accrual of such payment (taking into
account any actual reduction in tax liability to the receiving party) and any
costs and expenses (including reasonable attorneys' fees) incurred by the party
receiving such payment in connection with such Taxes (or any asserted
deficiency, claim, demand, dispute, action, suit, proceeding, judgment or
assessment, including the defense or settlement thereof, relating to such
Taxes). The amount recoverable by a ViaSource Indemnitee shall take into account
the value of any insurance recoveries or actual reduction in Tax liability
realized by such ViaSource Indemnitee, and arising from the same incident or set
of facts or circumstances giving rise to the claim for indemnity.
34
ARTICLE VI
SECURITIES LAW MATTERS
The parties agree as follows with respect to the sale or other
disposition after the date hereof of the ViaSource Shares:
6.1 DISPOSITION OF SHARES.
(a) Neither the Company nor any Shareholder may, directly
or indirectly, offer, sell, contract to sell, pledge, purchase or sell any put
or call options, or participate in any derivative transaction relating to, or
otherwise dispose of the ViaSource Shares received from the Company in
connection with the Asset Purchase prior to a date that is twelve months from
the date hereof; provided, however, the Company may distribute the ViaSource
shares to its shareholders.
(b) The Company and the Shareholders represent and
warrant that the shares of ViaSource Common Stock hereafter acquired by them are
being acquired for their own respective accounts and will not be sold or
otherwise disposed of, except pursuant to (i) an exemption from the registration
requirements under the Securities Act, (ii) in accordance with Rule 145(d) under
the Securities Act, or (iii) an effective registration statement filed by
ViaSource with the SEC under the Securities Act. To the extent ViaSource or the
Shareholders complies with the provisions of Rule 145(d) under the Securities
Act in effecting sales of the ViaSource Shares, ViaSource agrees to provide its
transfer agent with appropriate instructions and/or opinions of counsel in order
for them to sell, transfer and/or dispose of the ViaSource Shares in accordance
with Rule 145(d).
6.2 LEGEND. The certificates representing the ViaSource Shares
shall bear the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS
NOT REQUIRED BY SAID ACT OR STATE LAWS.
ViaSource may, unless a registration statement is in effect covering such
shares, place stop transfer orders with its transfer agents with respect to such
certificates in accordance with federal securities laws.
6.3 NO REGISTRATION. The Company and the Shareholders acknowledge
that the ViaSource Shares being delivered hereunder are not registered shares
and that ViaSource has no obligation to register the ViaSource Shares at any
time.
35
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS
OF VIASOURCE
The obligation of ViaSource to effect the transactions contemplated
hereby, shall be subject to the fulfillment at or prior to the date hereof of
the following conditions, any or all of which may be waived in whole or in part
by ViaSource:
7.1 CERTIFICATE. The Shareholders shall have delivered to
ViaSource (i) copies of the Articles of Incorporation and Bylaws of the Company
as in effect immediately prior to the date hereof, (ii) copies of resolutions
adopted by the Board of Directors and shareholders of the Company authorizing
the transactions contemplated by this Agreement, and (iii) a certificate of good
standing of the Company issued by the Secretary of State of Missouri and each
other state in which it is qualified to do business as of a date not more than
thirty days prior to the date hereof, certified in each case as of the date
hereof by the Secretary of the Company as being true, correct and complete.
7.2 OPINION OF COUNSEL. ViaSource shall have received an opinion,
dated as of the date hereof, from counsel for the Company and the Shareholders
acceptable to ViaSource, in form and substance acceptable to ViaSource, to the
effect that:
(a) the Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Missouri
and is authorized to carry on the business now conducted by it and to own or
lease the properties now owned or leased by it;
(b) the Company has obtained all necessary authorizations
and consents of its Board of Directors and shareholders to effect the
transactions contemplated hereby;
(c) all issued and outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid and nonassessable;
(d) such counsel does not know of any litigation,
proceeding or investigation pending or threatened which could reasonably be
expected to have Material Adverse Effect on the Company, or which questions the
validity of this Agreement;
(e) such counsel does not know of any event that has
occurred or state of facts that exists which would constitute a breach of any of
the representations and warranties made by the Company and the Shareholders
pursuant to Article III of this Agreement;
(f) this Agreement is a valid and binding obligation of
the Company and the Shareholders, enforceable against each of them in accordance
with its terms, except as enforcement
36
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting the enforcement of creditors' rights generally or general
equitable principles;
(g) this Agreement and the transactions contemplated
thereby are in compliance with all applicable bulk sale laws; and
(h) to the knowledge of such counsel, the execution and
delivery of this Agreement by the Company and the Shareholders, the performance
by the Company and the Shareholders of their obligations hereunder and the
consummation by them of the transactions contemplated by this Agreement will not
(a) contravene any provision of the Articles of Incorporation or Bylaws of the
Company, (b) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against the Company or the Shareholders, (c) conflict with,
result in any breach of, or constitute a default (or an event which would, with
the passage of time or the giving of notice or both, constitute a default)
under, or give rise to a right of payment or right to terminate, amend, modify,
abandon or accelerate, any Contract which is applicable to, binding upon or
enforceable against the Company or the Shareholders, (d) result in or require
the creation or imposition of any Lien upon or with respect to any of the
properties or assets of the Company, (e) give to any individual or entity a
right or claim against the Company or the Shareholders or (f) require the
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Authority, any court or tribunal or any other Person.
7.3 CONSENTS. The Company and ViaSource shall have received
consents to the transactions contemplated hereby and waivers of rights to
terminate or modify any material rights or obligations of the Company from any
person from whom such consent or waiver is required under any Contract.
7.4 EMPLOYMENT AND NON-COMPETITION AGREEMENT. Xxxxxx Xxxxxxx shall
enter into an Employment and Non-Competition Agreement with ViaSource in the
form set forth on Schedule 4.8.
7.5 RELEASE. At the Closing, each of the Shareholders, and such of
their Affiliates as may be designated by ViaSource, shall deliver to ViaSource a
release (collectively, the "Releases") in such form as is satisfactory to
ViaSource, releasing all claims of any nature against ViaSource and the Company,
including, without limitation, and claims arising out of the Asset Purchase and
the other transactions contemplated by this Agreement, except for claims and
obligations set forth in the express terms of this Agreement.
7.6 STOCK POWERS. At the Closing, the Company shall have delivered
to ViaSource, for use in connection with the Held Back Shares, ten stock powers
executed in blank, with signatures medallion guaranteed.
37
7.7 BOARD APPROVAL. The Board of Directors of ViaSource shall have
authorized and approved this Agreement, the Asset Purchase and transactions
contemplated hereby.
7.8 NO MATERIAL ADVERSE CHANGE. There shall not have occurred any
events that have had or are reasonably likely to have a Material Adverse Change.
7.9 LEGAL PROHIBITION. On the Closing Date, no injunction, decree
or order shall be in effect prohibiting consummation of the transactions
contemplated hereby or which would make the consummation of such transactions
unlawful and no action, suit or proceeding shall have been instituted and remain
pending before a court, governmental body or regulatory authority to restrain or
prohibit the transactions contemplated by this Agreement and no adverse decision
shall have been made by any such court, governmental body or regulatory
authority which constitutes, or could be reasonably anticipated to constitute, a
Material Adverse Change. Between the date hereof and the Closing Date, no
federal, state or local statute, rule or regulation shall have been enacted or
deemed applicable by any government or governmental or administrative agency or
court the effect of which would be to prohibit, restrict, impair or delay the
consummation of the transactions contemplated hereby or restrict or impair the
ability of' ViaSource to own the Assets.
7.10 FILING OF UCC TERMINATION STATEMENTS. On or before the Closing
Date all required or necessary UCC termination statements relating to the
Purchased Assets shall have been filed, and all security interests in the
Purchased Assets shall have been terminated.
7.11 STOCKHOLDERS AGREEMENT. On or prior to the Closing Date, each
Shareholder shall have executed the restated and amended stockholders agreement
of ViaSource substantially in the form of Exhibit B hereto. (the "Stockholders
Agreement").
ARTICLE VIII
DEFINITIONS
8.1 DEFINED TERMS. As used herein, the following terms shall have
the following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on
the date hereof.
"Closing" means the consummation of the transactions contemplated
hereby.
"Contaminated Site List" means any list, registry or other compilation
established by any Governmental Body of facilities or sites that
require
38
or potentially require investigation, removal actions, remedial actions
or any other response under any Environmental Laws.
"Contract" means any agreement, contract, lease, note, mortgage,
indenture, loan agreement, franchise agreement, covenant, employment
agreement, license, instrument, purchase and sales order, commitment,
undertaking, obligation, whether written or oral, express or implied.
"Effective Time" means the time when the transactions contemplated by
this Agreement are consummated.
"Environmental Conditions" means any pollution, contamination,
degradation, damage or injury caused by, related to or arising from or
in connection with the generation, handling, use, treatment, storage,
transportation, disposal, discharge, Release or emission of any
Hazardous Materials.
"Environmental Laws" means all laws, treatises, compacts, settlement or
consent agreements, orders, writs, injunctions, judgments, rules,
regulations, statutes, ordinances, common law principles, decrees or
orders or other binding requirements with or of any national,
international, provincial, federal, state, municipal, local or foreign
Governmental Body relating to the environment (including, without
limitation, natural resources) or the health of humans or other living
organisms, including, without limitation, (a) the control, Release or
remediation of any Hazardous Material or potential Hazardous Material
or protection of the air, water or land, (b) generation, handling,
treatment, storage, disposal or transportation of any Hazardous
Material, or (c) exposure to hazardous, toxic or other substances
alleged to be harmful, and (d) final and binding requirements related
to the foregoing imposed by (i) the terms and conditions of any
license, permit, approval or other authorization by any Governmental
Body, and (ii) applicable judicial, administrative or other regulatory
decrees, judgments and orders of any such Governmental Body. The term
"Environmental Laws" shall include, but not be limited to, the
following statutes and the regulations promulgated thereunder, as
currently in effect or as subsequently amended: the Clean Air Act, 42
U.S.C. ss. 7401 et seq.; the Clean Water Act, 33 U.S.C. ss. 1251 et
seq.; the Resource Conservation Recovery Act, 42 U.S.C. ss. 6901 et
seq.; the Superfund Amendments and Reauthorization Act, 42 U.S.C. ss. I
10 11 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et
seq.; the Water Pollution Control Act, 33 U.S.C. ss. 125 1, et seq.;
the Safe Drinking Water Act, 42 U.S.C. ss. 300 et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. ss. 9601 et seq.; and any similar state, federal, foreign or
local statute or ordinance.
"Environmental Remediation Costs" means all costs and expenses of any
Person of actions or activities to (a) clean up or remove or remediate
Hazardous Materials, (b) prevent or minimize the movement, leaching or
migration of Hazardous Materials, (c) prevent,
39
minimize or mitigate or otherwise respond to the Release or threatened
Release of Hazardous Materials, or injury or damage from such Release,
or (d) comply with the requirements of any Environmental Laws.
Environmental Remediation Costs include, without limitation, costs and
expenses payable in connection with the foregoing for reasonable legal,
engineering or other consultant services, for investigation, testing,
sampling and monitoring (including, without limitation, medical
monitoring), for boring, excavation and construction, for removal,
modification or replacement of equipment or facilities, for labor and
material, and for proper storage, treatment and disposal of Hazardous
Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in effect in the
United States of America from time to time.
"Governmental Authority" means any nation or government, any state,
regional, local or other political subdivision thereof, and any entity
or official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Hazardous Materials" means any (a) toxic or hazardous materials or
substances; (b) solid, liquid or gaseous wastes, including asbestos,
buried contaminants, chemicals, flammable or explosive materials; (c)
radioactive materials; (d) petroleum wastes and Releases of petroleum
products; and (e) any other chemical, pollutant, contaminant, waste or
other substance (including, without limitation, any product) that is
regulated by or pursuant to any Environmental Law.
"Lien" means any mortgage, pledge, security interest, collateral
assignment, preemptive or refused right, equity of any kind
encumbrance, lien or charge of any kind (including, but not limited to,
any conditional sale or other title retention agreement, any lease in
the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code or comparable law
or any jurisdiction in connection with such mortgage, pledge, security
interest, encumbrance, lien or charge).
"Material Adverse Change (or Effect)" means a change (or effect), in
the condition (financial or otherwise), properties, assets, prospects,
liabilities, rights, obligations, operations, or business which change
(or effect) individually or in the aggregate, is materially adverse to
such condition, properties, assets, liabilities, rights, obligations,
operations, or business.
"Person" means an individual, partnership, corporation, business trust,
joint stock Company, estate, trust, unincorporated association, joint
venture, Governmental Authority or other entity, of whatever nature.
40
"Register", "registered" and "registration" refer to a registration of
the offering and sale of securities effected by preparing and filing a
registration statement in compliance with the Securities Act and the
declaration or ordering of the effectiveness of such registration
statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax Return" means any tax return, filing or information statement
required to be filed in connection with or with respect to any Tax.
"Taxes" means all taxes, fees or other assessments, including, but not
limited to, income, excise, property, sales, franchise, intangible,
payroll, withholding, social security and unemployment taxes imposed by
any federal, state, local or foreign governmental agency, and any
interest or penalties related thereto, whenever they may be assessed.
8.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the
defined meanings when used in any certificates, reports or other documents made
or delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection
with this Agreement and the transactions contemplated hereby shall be determined
in accordance with GAAP applied on a basis consistent with prior periods, where
applicable.
(d) As used herein, the neuter gender shall also denote
the masculine and feminine, and the masculine gender shall also denote the
neuter and feminine, where the context so permits.
ARTICLE IX
TERMINATION
9.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
41
(a) by mutual written consent of all of the parties
hereto at any time prior to the Closing; or
(b) by ViaSource in the event of a material breach by the
Company of any provision of this Agreement, including but not limited to the
provisions of Article VII hereto; or
(c) by ViaSource or the Company if the Closing shall not
have occurred by April 26, 2000.
9.2 EFFECT OF TERMINATION. Except as provided in Article V and for
the provisions of Section 4.3, in the event of termination of this Agreement
pursuant to Section 9.1, this Agreement shall forthwith become void; provided,
however, that nothing herein shall relieve any party from liability for the
willful breach of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
ARTICLE X
MISCELLANEOUS
10.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall designate
in writing to the other party):
IF TO VIASOURCE:
0000 Xxxx Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, President
Facsimile Number: (000) 000-0000
WITH A COPY TO:
Akerman, Senterfitt & Xxxxxx, P.A.
One X.X. 0xx Xxxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
42
Facsimile Number: (000) 000-0000
IF TO THE COMPANY TO:
DS Cable TV Contractor, Inc.
c/o Xxxxxx X. Xxxxxxx
000 Xxxxxxx Xxxxxx Xx.
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile Number: (000) 000-0000
with a copy to:
Baylard, Xxxxxxxxxx & Xxxxxxx, P.C.
00 X. XxXxxxxx
X.X. Xxx 000
Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile Number: (000) 000-0000
10.2 ENTIRE AGREEMENT. This Agreement (including the Schedules
attached hereto) and other documents delivered concurrently herewith, contains
the entire understanding of the parties in respect of its subject matter and
supersedes all prior agreements and understandings (oral or written) between or
among the parties with respect to such subject matter. The Schedules constitute
a part hereof as though set forth in full above.
10.3 EXPENSES; SALES TAX. Except as otherwise provided herein, the
parties shall pay their own fees and expenses, including their own counsel fees,
incurred in connection with this Agreement or any transaction contemplated
hereby. The parties agree that the Company shall pay all sales, transfer or
similar taxes required to be paid by reason of the transfer by the Company of
the Purchased Assets pursuant to this Agreement.
10.4 AMENDMENT; WAIVER. This Agreement may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by all parties. No failure to exercise, and no delay in exercising, any
right, power or privilege under this Agreement shall operate as a waiver, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision, nor shall any waiver be
implied from any course of dealing between the parties. No extension of time for
performance of any obligations or other acts hereunder or under any other
agreement shall be deemed to be an extension of the time for performance of any
other obligations
43
or any other acts. The rights and remedies of the parties under this Agreement
are in addition to all other rights and remedies, at law or equity, that they
may have against each other.
10.5 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein shall be
construed to give any other person any legal or equitable rights hereunder.
Except as expressly provided herein, the rights and obligations of this
Agreement may not be assigned or delegated by the Company without the prior
written consent of ViaSource. ViaSource may assign all or any portion of its
rights hereunder.
10.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
10.7 INTERPRETATION. When a reference is made in this Agreement to
an article, section, paragraph, clause, schedule or exhibit, such reference
shall be deemed to be to this Agreement unless otherwise indicated. The headings
contained herein and on the schedules are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement or the
schedules. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." Time shall be of the essence in this Agreement.
10.8 GOVERNING LAW; INTERPRETATION. This Agreement shall be
construed in accordance with and governed for all purposes by the laws of the
State of Florida applicable to contracts executed and to be wholly performed
within such State, without regard to conflict of laws principles.
44
10.9 JURISDICTION.
(a) Any suit, action or proceeding against the Company or
the Shareholders arising out of, or with respect to, this Agreement or any
judgment entered by any court in respect thereof may be brought in the courts of
Broward County, Florida, or in the U.S. District Court for the Southern District
of Florida, as ViaSource (in its sole discretion) may elect, and the Company and
the Shareholders hereby irrevocably accept and consent to the nonexclusive
personal jurisdiction of those courts for the purpose of any suit, action or
proceeding. In addition, each of the Company and the Shareholders hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any judgment entered
by any court in respect thereof brought in Broward County, Florida, or the U.S.
District Court for the Southern District of Florida, as selected by ViaSource,
and hereby further irrevocably waives any claim that any suit, action or
proceedings brought in Broward County, Florida, or in such District Court has
been brought in an inconvenient forum.
(b) Any suit, action or proceeding against ViaSource
arising out of, or with respect to, this Agreement or any judgment entered by
any court in respect thereof may be brought in the courts of the City of St.
Louis, Missouri, or in the U.S. District Court for the Eastern District of
Missouri, as the Company and the Shareholders (in their sole discretion) may
elect, and ViaSource hereby irrevocably accepts and consents to the nonexclusive
personal jurisdiction of those courts for the purpose of any suit, action or
proceeding. In addition, ViaSource hereby irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any judgment entered by any court in respect thereof brought
in the City of St. Louis, Missouri, or the U.S. District Court for the Eastern
District of Missouri, as selected by the Company and the Shareholders, and
hereby further irrevocably waives any claim that any suit, action or proceeding
brought in the City of St. Louis, Missouri, or in such District Court has been
brought in an inconvenient forum.
10.10 ARM'S LENGTH NEGOTIATIONS. Each party herein expressly
represents and warrants to all other parties hereto that (a) before executing
this Agreement, said party has fully informed itself of the terms, contents,
conditions and effects of this Agreement; (b) said party has relied solely and
completely upon its own judgment in executing this Agreement; (c) said party has
had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) said party has acted voluntarily and of its own
free will in executing this Agreement; (e) said party is not acting under
duress, whether economic or physical, in executing this Agreement; and (f) this
Agreement is the result of arm's length negotiations conducted by and among the
parties and their respective counsel.
10.11 SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid,
45
illegal or unenforceable in any respect, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement or any other such instrument.
10.12 ANCILLARY AGREEMENTS. To the extent any agreement ancillary to
this Agreement contains any representation or warranty that provides for
different or conflicting rights, duties or obligations from those
representations and warranties contained herein, the provisions of this
Agreement will control.
10.13 ANNOUNCEMENTS. All press releases, notices to customers and
suppliers and other announcements with respect to this Agreement and the
transactions contemplated by this Agreement shall be approved by both ViaSource
and the Company prior to the issuance thereof; provided, that either party may
make any public disclosure it believes in good faith is required by law or
regulation (in which case the disclosing party will advise the other party prior
to making such disclosure and provide the other party a reasonable opportunity
to review the proposed disclosure).
10.14 BULK SALES LAWS. The parties hereto hereby waive compliance
with the provisions of any applicable bulk sales laws, including Article 6 of
the Uniform Commercial Code as it may be in effect in any applicable
jurisdiction. This provision shall not be deemed to in any way limit the
indemnity provided for in Article V hereof.
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
VIASOURCE COMMUNICATIONS, INC.
a New Jersey corporation
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
DSC ACQUISITION, INC.
a Delaware corporation
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
DS CABLE TV CONTRACTORS, INC.
a Missouri corporation
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-------------------------------------------
Xxxxxx X. Xxxxxxx, individually
-------------------------------------------
Xxxx Xxxxxxx, individually