AGREEMENT AND PLAN OF MERGER
BY AND AMONG
SYNC RESEARCH, INC.,
A DELAWARE CORPORATION
MERGER CO,
A DELAWARE CORPORATION
OSICOM TECHNOLOGIES, INC. ,
A NEW JERSEY CORPORATION
AND
OSICOM TECHNOLOGIES, INC. ,
A DELAWARE CORPORATION
DATED AS OF
APRIL 10, 2000
TABLE OF CONTENTS
PAGE
Article I THE MERGER............................................................................................1
1.1 The Merger.....................................................................................1
1.2 Closing........................................................................................1
1.3 Effective Time.................................................................................2
1.4 Certificate of Incorporation; By-laws..........................................................2
1.5 Officers and Directors.........................................................................2
1.6 Sync...........................................................................................2
1.7 Additional Matters.............................................................................2
1.8 Lucent.........................................................................................2
Article II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS............................3
2.1 Effect on Capital Stock........................................................................3
2.2 Exchange Procedures............................................................................3
2.3 Stock Transfer Books...........................................................................4
Article III REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER AND OSICOM........................................4
3.1 Corporate Organization.........................................................................4
3.2 Capitalization.................................................................................5
3.3 Authorization, Etc.............................................................................5
3.4 Financial Statements...........................................................................6
3.5 No Undisclosed Liabilities.....................................................................6
3.6 No Approvals or Conflicts......................................................................6
3.7 Compliance with Law; Governmental Authorizations...............................................7
3.8 Litigation.....................................................................................7
3.9 Assets.........................................................................................7
3.10 Absence of Certain Changes.....................................................................8
3.11 Taxes..........................................................................................8
3.12 Employee Benefits.............................................................................10
3.13 Labor Relations...............................................................................11
3.14 Patents, Trademarks, Trade Names, Etc.........................................................11
3.15 Contracts.....................................................................................12
3.16 Environmental Matters.........................................................................13
3.17 Insurance.....................................................................................14
3.18 Material Customers and Suppliers..............................................................14
3.19 Real Property.................................................................................14
3.20 Investment Company Act Status.................................................................16
3.21 Product Liability.............................................................................16
3.22 Books and Records.............................................................................16
3.23 No Brokers' or Other Fees.....................................................................16
Article IV REPRESENTATIONS AND WARRANTIES OF SYNC..............................................................16
4.1 Corporate Organization........................................................................16
4.2 Capitalization................................................................................17
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TABLE OF CONTENTS
(CONTINUED)
PAGE
4.3 Authorization, Etc............................................................................18
4.4 Financial Statements..........................................................................18
4.5 No Undisclosed Liabilities....................................................................18
4.6 No Approvals or Conflicts.....................................................................18
4.7 Compliance with Law; Governmental Authorizations..............................................19
4.8 Litigation....................................................................................19
4.9 Assets........................................................................................19
4.10 Absence of Certain Changes....................................................................20
4.11 Taxes.........................................................................................20
4.12 Employee Benefits.............................................................................21
4.13 Labor Relations...............................................................................22
4.14 Patents, Trademarks, Trade Names, Etc.........................................................23
4.15 Contracts.....................................................................................23
4.16 Environmental Matters.........................................................................24
4.17 Insurance.....................................................................................25
4.18 Material Customers and Suppliers..............................................................25
4.19 Real Property.................................................................................25
4.20 Investment Company Act Status.................................................................26
4.21 Product Liability.............................................................................27
4.22 Books and Records.............................................................................27
4.23 No Brokers' or Other Fees.....................................................................27
4.24 Sync Reports..................................................................................27
4.25 NASDAQ........................................................................................27
Article V COVENANTS AND AGREEMENTS.............................................................................27
5.1 Conduct of Business by Osicom.................................................................27
5.2 Conduct of Business by Sync...................................................................29
5.3 Access to Books and Records; Cooperation......................................................31
5.4 Filings and Consents..........................................................................31
5.5 No Solicitation...............................................................................32
5.6 Proxy; Registration Statement.................................................................33
5.7 Shareholders' Meeting.........................................................................33
5.8 Listing.......................................................................................33
5.9 Covenant to Satisfy Conditions................................................................33
5.10 Best Efforts and Further Assurances...........................................................33
Article VI CONDITIONS TO OSICOM'S OBLIGATIONS..................................................................34
6.1 Representations and Warranties................................................................34
6.2 Performance...................................................................................34
6.3 Officer's Certificate.........................................................................34
6.4 HSR Act.......................................................................................34
6.5 Shareholder Approval..........................................................................34
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TABLE OF CONTENTS
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PAGE
6.6 Registration Statement........................................................................34
6.7 Nasdaq........................................................................................34
6.8 Injunctions...................................................................................34
6.9 Consents......................................................................................34
6.10 Non-Competition Agreement.....................................................................35
Article VII CONDITIONS TO SYNC'S OBLIGATION....................................................................35
7.1 Representations and Warranties................................................................35
7.2 Performance...................................................................................35
7.3 Officer's Certificate.........................................................................35
7.4 HSR Act.......................................................................................35
7.5 Shareholder Approval..........................................................................35
7.6 Registration Statement........................................................................35
7.7 Injunctions...................................................................................35
7.8 Consents......................................................................................35
7.9 Non-Competition Agreement.....................................................................36
Article VIII TERMINATION.......................................................................................36
8.1 Termination...................................................................................36
8.2 Procedure and Effect of Termination...........................................................36
Article IX INDEMNIFICATION.....................................................................................37
9.1 Indemnification...............................................................................37
Article X MISCELLANEOUS........................................................................................39
10.1 Survival of Representations, Warranties and Agreements........................................39
10.2 Fees and Expenses.............................................................................39
10.3 Governing Law.................................................................................40
10.4 Amendment.....................................................................................40
10.5 No Assignment.................................................................................40
10.6 Waiver........................................................................................40
10.7 Notices.......................................................................................40
10.8 Complete Agreement............................................................................42
10.9 Counterparts..................................................................................42
10.10 Publicity.....................................................................................42
10.11 Headings......................................................................................42
10.12 Severability..................................................................................42
10.13 Third Parties.................................................................................42
10.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS................................................42
10.15 WAIVER OF JURY TRIAL..........................................................................43
10.16 Definitions...................................................................................44
10.17 Effective Date................................................................................45
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as
of April 10, 2000 and effective when indicated in Section 10.17 below, is
entered into by and among Sync Research, Inc., a Delaware corporation ("Sync"),
Merger Co, a Delaware corporation and a wholly owned Subsidiary of Sync ("Merger
Co"), Osicom Technologies, Inc., a New Jersey corporation (the "Shareholder")
and Osicom Technologies, Inc., a Delaware corporation and a wholly owned
Subsidiary of the Shareholder ("Osicom").
R E C I T A L S :
WHEREAS, the respective Boards of Directors of Sync, Osicom,
the Shareholder and Merger Co have approved the merger of Merger Co into Osicom
(the "Merger"), subject to the terms and conditions of this Agreement, whereby
each outstanding share of common stock, $1.00 par value per share (the "Osicom
Common Stock") of Osicom will be converted into the right to receive shares of
common stock, par value $.001 per share, of Sync (the "Sync Common Stock") as
provided herein;
WHEREAS, Sync, Merger Co, the Shareholder and Osicom desire to
make certain representations, warranties, covenants and agreements in connection
with the Merger and also to prescribe various conditions to the Merger; and
WHEREAS, for Federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual
provisions, agreements and covenants contained herein, the parties hereto agree
as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions of this Agreement,
and in accordance with the Delaware General Corporation Law (the
"DGCL"), Merger Co shall be merged with and into Osicom at the
Effective Time (as hereinafter defined). Following the Merger, the
separate corporate existence of Merger Co shall cease and Osicom shall
continue as the surviving corporation (the "Surviving Corporation") and
shall succeed to all rights, privileges, powers, franchises, assets,
liabilities and obligations of Osicom and Merger Co in accordance with
the provisions of the DGCL.
1.2 CLOSING. Unless this Agreement shall have been terminated and the
transactions contemplated herein shall have been abandoned pursuant to
the provisions of Article VIII, the closing of the Merger (the
"Closing") shall take place at 10:00 a.m., on a date to be specified by
the parties, which date shall be no later than the second business day
after the satisfaction or waiver of the conditions set forth in
Articles VI and VII (the "Closing Date"), at the offices of Greenbaum,
Rowe, Xxxxx, Xxxxx, Xxxxx & Xxxxxx LLP, 99 Wood Avenue South,
Woodbridge, New Jersey, or such other place, time and date as the
parties may agree. Subject to the provisions of this Agreement, a
certificate of merger shall be duly prepared, executed and acknowledged
by the Surviving Corporation and thereafter delivered for filing and
recordation with the Secretary of State of the State of Delaware in
accordance with the DGCL on the Closing Date.
1.3 EFFECTIVE TIME. The Merger shall become effective at the time of the filing
of the Certificate of Merger with the Secretary of State of the State
of Delaware (or at such later time as shall be agreed by Osicom and
Sync and as shall be set forth in such certificate) in accordance with
the DGCL (the date and time the Merger becomes effective being the
"Effective Time").
1.4 CERTIFICATE OF INCORPORATION; BY-LAWS. At the Effective Time and without
any further action on the part of Osicom and Merger Co, (i) the
certificate of incorporation of Osicom as in effect immediately prior
to the Effective Time shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law, (ii) the by-laws of Osicom shall be the
by-laws of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law and (iii) the Merger
shall, from and after the Effective Time, have all the effects provided
by applicable law, including the DGCL.
1.5 OFFICERS AND DIRECTORS. The officers and directors of Osicom at the
Effective Time shall be the officers and directors of the Surviving
Corporation, each to hold office in accordance with the certificate of
incorporation and by-laws of the Surviving Corporation.
1.6 SYNC. At the Closing, the name of Sync will be changed to Entrada Networks,
Inc., or such other name as Sync and the Shareholder may mutually
agree, and the Board of Directors of Sync will consist of the Chief
Executive Officer of Sync, Xxxx Xxxxx and three (3) individuals
selected by the mutual agreement of Sync and the Shareholder.
1.7 ADDITIONAL MATTERS. At the Closing, (a) any indebtedness owed by Osicom to
the Shareholder, or any other affiliates of the Shareholder, will be
contributed to the capital of Osicom; (b) the Shareholder shall agree
to indemnify and hold Osicom, Sync, Merger Co and the Surviving
Corporation harmless against any liability arising after the Effective
Date from (i) the early termination by Osicom of its real estate lease
for property located in Aurora, Illinois (ii) the termination of the
Case Defined Benefit Plan previously maintained by Osicom and (iii) the
late filing of Osicom's tax returns; (c) Osicom will use its best
efforts to cause those employees of Osicom listed on Section 1.7 of the
Disclosure Schedule to enter into employment agreements with the
Surviving Corporation having such terms and conditions as are mutually
agreed upon by Osicom and Sync; and (d) the Shareholder will enter into
an agreement with Sync and the Surviving Corporation, in such form and
substance as Sync and the Shareholder may mutually agree.
1.8 LUCENT. The Shareholder agrees to be responsible for and pay any royalties
or similar payments due from Osicom to Lucent Technologies, Inc. and
its Affiliates for all periods prior to the Closing Date up to an
aggregate of $500,000. Any additional royalties or similar payments due
to Lucent in excess of $500,000 shall be paid by the Surviving
Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
2.1 EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of the Merger
and without any action on the part of the holder of any shares of
Osicom Common Stock or any shares of common stock, par value $.01 per
share ("Merger Co Common Stock"), of Merger Co:
(a) CAPITAL STOCK OF MERGER CO. Each share of Merger Co Common
Stock outstanding immediately prior to the Effective Time
shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of Surviving Corporation
Common Stock. Each stock certificate of Merger Co evidencing
shares of Merger Co Common Stock shall thereafter evidence
ownership of shares of Surviving Corporation Common Stock.
(b) CANCELLATION OF TREASURY STOCK. Each share of Osicom Common
Stock that is owned by Osicom or any Subsidiary (as defined in
Section 10.16) of Osicom shall automatically be canceled and
retired and shall cease to exist, and no Sync Common Stock,
Surviving Corporation Common Stock or other consideration
shall be delivered or deliverable in exchange therefor.
(c) CONVERSION OF OSICOM COMMON STOCK. Other than shares to be
canceled pursuant to Section 2.1(b), the outstanding shares of
Osicom Common Stock shall be converted into the right to
receive that number of validly issued, fully paid and
nonassessable shares of Sync Common Stock that is equal to the
number of shares of Sync Common Stock outstanding on the
Closing Date (the "Merger Consideration"). The parties intend
that immediately following the Merger, the Shareholder will
own fifty percent (50%) of the outstanding Sync Common Stock.
In addition, Sync, promptly after the Effective Time, shall
issue options to purchase its Common Stock to Osicom employees
in an amount equal to the number of shares of Sync Common
Stock issuable pursuant to the stock options and convertible
and exchangeable securities listed on Schedule 4.2(a) of the
Disclosure Schedule, which Schedule shall be updated as of the
Closing Date for purposes of this computation. Such options
will not affect the Merger Consideration calculation.
2.2 EXCHANGE PROCEDURES. At the Closing, the Shareholder shall surrender to Sync
the share certificate(s) (the "Osicom Certificate") representing all of
the outstanding shares of Osicom Common Stock. The Osicom Certificate
so surrendered shall forthwith be canceled. As soon as reasonably
practicable after the Effective Time, the Shareholder shall, upon
surrender to Sync of the Osicom Certificate, together with such other
documents as may be reasonably required by Sync, be entitled to a share
certificate(s) representing the number of shares of Sync Common Stock
into which the aggregate number of shares of Osicom Common Stock shall
have been converted pursuant to this Agreement. Each such share
certificate of Sync Common Stock issued to each holder will bear the
following legend on the face thereof:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY BE MADE EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT
EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER.
2.3 STOCK TRANSFER BOOKS. At the close of business, eastern standard time, on
the day the Effective Time occurs, the stock transfer books of Osicom
shall be transferred to Sync and there shall be no further registration
of transfers of shares by Osicom of Osicom Common Stock thereafter on
the records of Osicom. From and after the Effective Time, the
Shareholder shall cease to have any rights with respect to such shares
of Osicom Common Stock formerly represented by the Osicom Certificate
surrendered pursuant to Section 2.2, except as otherwise provided
herein or by law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDER AND OSICOM
The Shareholder and Osicom hereby represent and warrant to
Sync as follows:
3.1 CORPORATE ORGANIZATION. Osicom, and each Subsidiary of Osicom, is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware. Osicom and each of its Subsidiaries
has full corporate power and authority to own their respective assets
and to carry on their respective businesses as now being conducted and
are duly qualified or licensed to do business as foreign corporations
in good standing in the jurisdictions in which the ownership of their
respective property or the conduct of their respective businesses
requires such qualification or license, except jurisdictions in which
the failure to be so qualified or licensed would not, individually or
in the aggregate, have a Material Adverse Effect (as defined in Section
10.16) on Osicom. Section 3.1 of the Disclosure Scheduleattached hereto
lists by name each of Osicom and the Subsidiaries of Osicom, each
jurisdiction in which each entity is qualified or authorized to do
business and its capitalization (including the identity of each
stockholder and the number of shares held by each). Osicom has
delivered to Sync complete and correct copies of the certificate of
incorporation and all amendments thereto, the by-laws as presently in
effect, and the minute books and stock transfer records of Osicom and
each of its Subsidiaries.
3.2 CAPITALIZATION.
(a) The authorized capital stock of Osicom consists of 50,000
shares of Class A Common Stock, par value $1.00 per share (the
"Osicom Common Stock") of which 1,000 shares are issued and
outstanding as of the date hereof and 9,000 shares of Class B
Common Stock, none of which are outstanding as of the date
hereof. The Shareholder owns all of the shares of Osicom
Common Stock issued and outstanding as of the date hereof. No
other shares of any other class or series of capital stock of
Osicom or securities exercisable or convertible into or
exchangeable for capital stock of Osicom ("Osicom Capital
Stock Equivalents") were authorized, issued or outstanding as
of January 31, 2000. Since January 31, 2000, there have been
no issuances of Osicom Common Stock or Osicom Capital Stock
Equivalents. There are no subscriptions, options, warrants,
calls, rights, contracts, commitments, understandings,
restrictions or arrangements relating to the issuance, sale,
transfer or voting of any shares, whether issued or unissued,
of capital stock of Osicom or Osicom Capital Stock
Equivalents, including any rights of issuance, conversion or
exchange under any outstanding securities or other
instruments, other than restrictions imposed by Federal and
state securities laws. All of the shares of Osicom Common
Stock are duly authorized, validly issued and outstanding and
fully paid, nonassessable and free and clear of all pledges,
mortgages, claims, options, rights of first refusal, liens,
charges,
encumbrances, security interests and limitations of voting
rights of any kind or nature whatsoever ("Encumbrances").
Neither Osicom nor any of its Subsidiaries has any outstanding
debt securities or other indebtedness or guarantees, except as
specifically disclosed in the Osicom Financial Statements (as
defined in Section 3.4).
(b) Section 3.2(b) of the Disclosure Schedule contains a complete
and correct list of all direct or indirect Subsidiaries of
Osicom and the amount of capital stock or other equity
interests owned by Osicom and its Subsidiaries in such
Subsidiaries. All the outstanding shares of capital stock of
each of the Subsidiaries of Osicom have been duly authorized,
validly issued and are fully paid and non-assessable and,
except as set forth in Section 3.2(b) of the Disclosure
Schedule, are owned (of record and beneficially) by Osicom
designed in Section 3.2(b) of the Disclosure Schedule, free
and clear of all Encumbrances. Except for the Subsidiaries set
forth in Section 3.2(b) of the Disclosure Schedule, neither
Osicom nor any of its Subsidiaries owns or has any option or
right to acquire, directly or indirectly, any capital stock or
other equity securities of, or has any direct or indirect
equity or ownership interest or debt investment in, any
corporation, association, partnership, joint venture or other
business.
3.3 AUTHORIZATION, ETC. Each of the Shareholder and Osicom has full power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part
of the Shareholder and of Osicom and no other corporate proceedings on
the part of Osicom, the Shareholder or their respective stockholders
are necessary to authorize this Agreement or to consummate the
transactions so contemplated (other than, with respect to the Merger,
the filing of the Certificate of Merger as required by the DGCL). This
Agreement has been duly and validly executed by Osicom and the
Shareholder and, assuming this Agreement constitutes the legal, valid
and binding agreement of the other parties hereto, constitutes a legal,
valid and binding agreement of Osicom and the Shareholder, enforceable
against each of them in accordance with its terms, except that (i) the
enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
3.4 FINANCIAL STATEMENTS. Osicom has previously delivered to Sync (i) the
audited balance sheet of Osicom and its Subsidiaries as of January 31,
2000 (the "Osicom Balance Sheet") and the related audited statements of
income, stockholders' equity and cash flows for the fiscal year then
ended, and the notes thereto, and the related unaudited statements of
income, stockholders' equity and cash flows for the year then ended,
and the notes thereto (collectively the "Osicom Financial Statements").
The Osicom Financial Statements present fairly the assets, liabilities,
financial position, results of operations and cash flows
of Osicom and its Subsidiaries as of the dates and for the periods
indicated, and have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") consistently applied
by Osicom.
3.5 NO UNDISCLOSED LIABILITIES. Except as disclosed in Section 3.5 of the
Disclosure Schedule, neither Osicom nor any of its Subsidiaries has any
liabilities or obligations of any nature (whether known or unknown and
whether absolute, accrued, contingent or otherwise) except for
liabilities or obligations reflected on or reserved against the Osicom
Balance Sheet or the Osicom Interim Balance Sheet and current
liabilities incurred in the ordinary course of business and consistent
with past practice since the respective dates thereof.
3.6 NO APPROVALS OR CONFLICTS. Except as set forth in Section 3.6 of the
Disclosure Schedule, the execution, delivery and performance by Osicom
and the Shareholder of this Agreement and the consummation by Osicom
and the Shareholder of the transactions contemplated hereby will not
(i) violate, conflict with or result in a breach by Osicom of any
provision of the certificate of incorporation or by-laws of Osicom or
any of its Subsidiaries, (ii) violate, conflict with or result in a
breach of any provision of, or constitute a default by Osicom or any of
its Subsidiaries (or an event which, with notice or lapse of time or
both, would constitute a default) or give rise to any right of
termination, cancellation or acceleration under, or result in the
creation of any Encumbrance upon any of the properties of Osicom or any
of its Subsidiaries under, any Osicom Contract (as defined in Section
3.15), (iii) violate or result in a breach of any order, injunction,
judgment, ruling, law or regulation of any court or governmental
authority applicable to Osicom, any of its Subsidiaries, or any of
their respective properties or except for those required under or in
relation to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder (the
"HSR Act"), require any order, consent, approval or authorization of,
or notice to, or declaration, filing, application, qualification or
registration with, any governmental or regulatory authority, excluding
from the foregoing clauses (ii) and (iii) above, such violations,
conflicts and breaches which, individually or in the aggregate, would
not have a Material Adverse Effect on Osicom or prevent or delay the
consummation of the transactions contemplated hereby.
3.7 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. Neither Osicom nor any of
its Subsidiaries is in violation of any order, injunction, judgment,
ruling, law or regulation of any court or governmental authority
applicable to the property or business of Osicom or any such
Subsidiary. Osicom and each of its Subsidiaries have all material
licenses, permits and other governmental authorizations reasonably
necessary to conduct their respective businesses as currently conducted
and such licenses, permits and authorizations are valid and in full
force and effect.
3.8 LITIGATION. Except as set forth in Section 3.8 of the Disclosure Schedule,
there are no claims, suits, actions, proceedings or investigations
(collectively, "Claims") pending or, to the best knowledge of Osicom or
the Shareholder, threatened against Osicom, any of its Subsidiaries, or
the transactions contemplated by this Agreement before any arbitrator,
court or governmental or regulatory authority or body, which, if
decided unfavorably to
Osicom or such Subsidiary, would have a Material Adverse Effect on
Osicom. Except as set forth in Section 3.8 of the Disclosure Schedule,
neither Osicom nor any of its Subsidiaries nor any of their respective
assets is subject to any decree, order or judgment which would have a
Material Adverse Effect on Osicom.
3.9 ASSETS.
(a) Except as set forth in Section 3.6(a) of the Disclosure
Schedule, on January 31, 2000, Osicom and each of its
Subsidiaries had and, except with respect to assets disposed
of or acquired in the ordinary course of business and
consistent with past practice since such date, Osicom and each
of its Subsidiaries now has, good and valid title to, or holds
by valid and existing lease or license, all the assets
reflected as assets of Osicom and its Subsidiaries on the
Osicom Balance Sheet or which would have been reflected on the
Osicom Balance Sheet if acquired prior to such date, free and
clear of all Encumbrances except for: Encumbrances which
secure indebtedness or obligations which are properly
reflected on the Osicom Balance Sheet and Permitted Liens (as
defined in Section 10.16). Except as set forth in Section
3.9(a) of the Disclosure Schedule, Osicom and its Subsidiaries
own, or have valid leasehold interests in, all material
assets, tangible and intangible, necessary for the operation
or conduct of Osicom's and such Subsidiary's business as
conducted prior to and through the Closing Date (the "Osicom
Assets"), and all such assets are in reasonably good
maintenance, operating condition and repair, normal wear and
tear excepted, other than machinery and equipment under repair
or out of service in the ordinary course of Osicom's or such
Subsidiary's business. The Osicom Assets include, without
limitation, all right, title and interest to the hubs,
switches, LAN adapters, FDDI, VME boards, stand alone print
servers, Nethopper and all other network access business
assets, and all associated know-how and proprietary
information related thereto, that (i) are necessary for Sync
to operate Osicom's business in the manner in which Osicom has
operated the same, and (ii) were owned by the Shareholder or
any of its Subsidiaries as of January 31, 2000.
(b) Except as set forth in Section 3.9 of the Disclosure Schedule,
no licenses or other consents from, or payments to, any other
person, entity or governmental authority are or will be
necessary for Sync to operate Osicom's business and use the
Osicom Assets in the manner in which Osicom has operated the
same, and no such person, entity or authority has made any
claim to the contrary. No person or entity other than Osicom
and its Subsidiaries has any right or interest in the Osicom
Assets, including the right to grant interests in the Osicom
Assets to third parties, except as set forth in Section 3.9(b)
of the Disclosure Schedule, and there exists no restriction on
the use or transfer of the Osicom Assets.
(c) Except as provided in Section 3.9(c) of the Disclosure
Schedule, no restrictions will exist on Sync's right to sell,
resell, license or sublicense any of the Osicom Assets or
engage in Osicom's business, nor will any such restrictions be
imposed
on Sync as a consequence of the transactions contemplated by
this Agreement or by any agreement referenced in this
Agreement.
3.10 ABSENCE OF CERTAIN CHANGES. Except as disclosed in Section 3.10 of the
Disclosure Schedule, since January 31, 2000, the business of Osicom and
each of its Subsidiaries has been conducted only in the ordinary course
and consistent with past practice in all material respects, there has
not been any event or development prior to the date hereof which, if it
had occurred or existed after the date hereof, would be a violation of
Section 5.1(c), and there has not been any change, event or development
which, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect on Osicom.
3.11 TAXES. Except as disclosed on the Disclosure Schedule, Osicom and each
of its Subsidiaries has filed or caused to be filed all Tax Returns
(including estimated Tax Returns) required to be filed by Osicom and
each such Subsidiary. Except as disclosed on the Disclosure Schedule,
All Tax Returns are complete and accurate in all material respects and
all Taxes required to be shown on such Tax Returns or otherwise due or
payable and all additional assessments of any such Taxes received prior
to the date hereof have been paid in full on the due date for payment
thereof. Neither Osicom nor any of its Subsidiaries is required to file
any income or franchise tax returns in any jurisdiction other than the
United States and the States of Arizona, California, Colorado,
Connecticut, Denver, Delaware, Florida, Illinois, Kansas, Maryland,
Massachusetts, Michigan, Minnesota, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and
Washington and the City of Denver and the District of Columbia. The
amounts set up as accruals for Taxes on the Osicom Financial Statements
are sufficient for the payment of all Taxes of Osicom and each of its
Subsidiaries, whether or not disputed, for all periods ended on and
prior to the respective dates thereof. In addition, the amounts set up
as accruals for Taxes on the financial books of Osicom and each of its
Subsidiaries on the date hereof are and will be sufficient for the
payment of all Taxes of Osicom and each such Subsidiary, whether or not
disputed, for all periods ended on and prior to the Closing Date.
Except as disclosed in Section 3.11 of the Disclosure Schedule, the
United States Federal, state and local income tax returns of Osicom and
each of its Subsidiaries have been audited by the Internal Revenue
Service or other Tax Authority or are closed and there are no
proceedings or claims relating thereto or any facts that could give
rise to the reopening thereof. Except as disclosed on the Disclosure
Schedule, no deficiency in the payment of Taxes by Osicom or any of its
Subsidiaries for any period has been asserted or, to the best knowledge
of Osicom or the Shareholder, threatened against Osicom or any of its
Subsidiaries by any Tax Authority and remains unsettled as of the date
of this Agreement. Except as disclosed on the Disclosure Schedule, all
Taxes required to be withheld, collected or deposited by Osicom or any
of its Subsidiaries have been timely withheld, collected or deposited
and, to the extent required, have been paid to the relevant Tax
Authorities. Except as disclosed on the Disclosure Schedule, neither
Osicom nor any of its Subsidiaries owe any amount pursuant to any
written or unwritten Tax sharing agreement or arrangement, or will have
any liability after the date hereof in respect of any written or
unwritten Tax sharing
agreement or arrangement executed or agreed prior to the date hereof.
Except as disclosed on the Disclosure Schedule, there are no Tax liens
on any of the assets of Osicom or any of its Subsidiaries, other than
liens for current Taxes which are not yet due or payable. Except as set
forth in Section 3.11 of the Disclosure Schedule, neither Osicom nor
any of its Subsidiaries has made any agreement, waiver or other
arrangement providing for an extension of time with respect to the
assessment or collection of any Tax against Osicom or any such
Subsidiary. Neither Osicom nor any of its Subsidiaries has been, or
will be, subject to Tax under Section 1374 or Section 1375 of the Code
for any taxable year ending on or prior to the Closing Date. Neither
Osicom nor any of its Subsidiaries has filed a consent with the
Internal Revenue Service pursuant to Section 341(f) of the Code or with
any other Tax Authority to any similar effect or made an election under
Section 338 of the Code other than as provided for in the terms of this
Agreement.
For purposes of this Agreement, the term "Tax" or "Taxes" shall mean
all taxes, charges, fees, levies, penalties or other assessments
imposed by any United States Federal, state, local or foreign Tax
Authority, including, but not limited to, income, service, leasing,
occupation, excise, property, sales and use, transfer, franchise,
payroll, withholding, social security or other taxes, including any
interest, penalties or additions attributable thereto.
For purposes of this Agreement, the term "Tax Return" shall mean any
return, report, information return or other document (including any
related or supporting information) filed or required to be filed with
any Tax Authority with respect to Taxes.
For purposes of this Agreement, the term "Tax Authority" shall mean the
Internal Revenue Service and any similar state, local or foreign
authority having jurisdiction over Taxes.
3.12 EMPLOYEE BENEFITS.
(a) Section 3.12 of the Disclosure Schedule contains a true and
complete list of each "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), including, without
limitation, multi-employer plans within the meaning of ERISA
section 3(37)), stock purchase, stock option, stock bonus,
severance, employment, change-in-control, fringe benefit,
collective bargaining, bonus, incentive, deferred compensation
and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect
or required in the future as a result of the transaction
contemplated by this Agreement or otherwise), whether formal
or informal, oral or written, legally binding or not, under
which any employee or former employee of Osicom or any of its
Subsidiaries has any present or future right to benefits and
under which Osicom or any of its Subsidiaries may have any
present or future liability. All such plans, agreements,
programs, policies and arrangements shall be collectively
referred to as the "Osicom Plans."
(b) With respect to each Osicom Plan, Osicom has delivered to Sync
a current, accurate and complete copy (or, to the extent no
such copy exists, an accurate written description) thereof
and, to the extent applicable: Any related trust agreement or
other funding instrument; the most recent determination
letter, if the Osicom Plan is intended to qualify under Code
Section 401(a); any summary plan description and other written
communications (or a written description of any oral
communications) by Osicom or any of its Subsidiaries to their
respective employees concerning the extent of the benefits
provided under an Osicom Plan; and, for the three most recent
years, (1) the Form 5500 and attached schedules, (2) audited
financial statements, (3) actuarial valuation reports and (4)
attorney's responses to an auditors' requests for information.
(c) No Osicom Plan is subject to Title IV of ERISA, and neither
Osicom nor any member of its Controlled Group has ever
contributed to, sponsored, or been obligated to contribute to
any plan subject to Title IV of ERISA.
(d) (i) Each Osicom Plan has been established and administered in
accordance with its terms and with the applicable provisions
of ERISA, the Code and other applicable laws, rules and
regulations; (ii) no event has occurred and no condition
exists that would subject Osicom or its Subsidiaries either
directly or by reason of its affiliation with any member of
its "Controlled Group" (defined as any organization which is a
member of a controlled group of organizations within the
meaning of Code Sections 414(b), (c), (m) or (o)), to any Tax,
fine, lien or penalty imposed by ERISA, the Code or other
applicable laws, rules and regulations; (iii) each Osicom Plan
which is intended to be qualified within the meaning of Code
Section 401(a) is so qualified and has received a favorable
determination letter pursuant to the Tax Reform Act of 1986
and subsequent legislation as to its qualification, and
nothing has occurred, whether by action or failure to act,
that could reasonably be expected to cause the loss of such
qualification; (iv) for each Osicom Plan with respect to which
a Form 5500 has been filed, no material change has occurred
with respect to the matters covered by the most recent Form
5500 since the date thereof; (v) no Osicom Plan provides
retiree welfare benefits and neither Osicom nor any of its
Subsidiaries have any obligation to provide any retiree
welfare benefits other than as required by Section 4980B of
the Code; and (vi) neither Osicom nor any member of its
Controlled Group has engaged in, or is a successor or parent
corporation to an entity that has engaged in, a transaction
described in Sections 4069 or 4212(c) of ERISA.
(e) With respect to any Osicom Plan, (i) no actions, suits or
claims (other than routine claims for benefits in the ordinary
course) are pending or, to the best knowledge of Osicom or the
Shareholder, threatened, and (ii) no facts or circumstances
exist that could reasonably be expected to give rise to any
such actions, suits or claims.
(f) Except as set forth in Section 3.12 of the Disclosure
Schedule, no Osicom Plan exists that could result in the
payment to any present or former employee of Osicom or any of
its Subsidiaries of any money or other property or accelerate
or provide any other rights or benefits to any present or
former employee or other service provider of Osicom or any of
its Subsidiaries as a result of the transactions contemplated
by this Agreement. There is no contract, plan or arrangement
(written or otherwise) covering any employee or other service
provider or former employee or service provider of Osicom or
any of its Subsidiaries that, individually or collectively,
could give rise to the payment of any amount that would not be
deductible pursuant to the terms of the Code.
3.13 LABOR RELATIONS. Since January 1, 1998, neither Osicom nor any of its
Subsidiaries has been or is a party to any collective bargaining or
other labor agreement. Except as set forth in Section 3.13 of the
Disclosure Schedule, there is no unfair labor practice charge or
complaint pending or, to the best knowledge of Osicom or the
Shareholder, threatened against or otherwise affecting Osicom or any of
its Subsidiaries which, if adversely determined, would reasonably be
likely to result in a liability having a Material Adverse Effect on
Osicom; there is no labor strike, slowdown, work stoppage, or lockout
in effect, or, to the best knowledge of Osicom and the Shareholder,
threatened against or otherwise affecting Osicom or any of its
Subsidiaries, and neither Osicom nor any of its Subsidiaries has
experienced any such labor controversy within the past three years;
neither Osicom nor any of its Subsidiaries is a party to, or otherwise
bound by, any consent decree with, or citation by, any governmental
authority relating to employees or employment practices; and Osicom and
each of its Subsidiaries is in compliance with their obligations
pursuant to the Worker Adjustment and Retraining Notification Act of
1988 ("WARN Act"), and all other notification and bargaining
obligations arising under any collective bargaining agreement, statute
or otherwise. To the best knowledge of Osicom and the Shareholder,
there is no effort to organize employees of Osicom or any of its
Subsidiaries which is pending or threatened.
3.14 PATENTS, TRADEMARKS, TRADE NAMES, ETC. Section 3.14 of the Disclosure
Schedule contains a true and complete list of all patents, trademarks,
trade names, copyrights and pending applications therefor
(collectively, the "Osicom Intellectual Property") used or owned by
Osicom and each of its Subsidiaries and a list of all licenses and
other agreements (collectively, the "Osicom License Agreements")
relating thereto. Except as set forth in Section 3.14 of the Disclosure
Schedule, (i) the consummation of the transactions contemplated by this
Agreement will not materially impair any right to use the Osicom
Intellectual Property or the Osicom License Agreements, (ii) all Osicom
Intellectual Property and Osicom License Agreements are valid, in good
standing and free and clear of liens or other security interests, (iii)
neither Osicom nor any of its Subsidiaries has received written or, to
the best knowledge of Osicom or the Shareholder, oral, notice of any
claims by any person to the use of any such Osicom Intellectual
Property, or challenging or questioning the validity or effectiveness
of any such Osicom License Agreement, and (iv) to the knowledge of
Osicom and the Shareholder, no other
person is interfering with, infringing upon, misappropriating or
otherwise coming into conflict with any of the Osicom Intellectual
Property.
3.15 CONTRACTS. The contracts and agreements listed in Section 3.15 of the
Disclosure Schedule constitute each contract, instrument, lease, deed
or agreement which is material to the business or operations of Osicom
and each of its Subsidiaries (the "Osicom Contracts"). Complete copies
(or, if oral, written summaries) of each Osicom Contract have been made
available to Sync, including, without limitation, all of the following
Osicom Contracts: (i) any indenture, note, mortgage, installment
obligation, or other instrument for or relating to any borrowing of
money; (ii) any guaranty of any obligation; (iii) any agreement,
contract, commitment or arrangement containing any covenant limiting
the ability of Osicom or any of its Subsidiaries to engage in any line
of business or to compete with any business or person; (iv) any
agreement, contract, commitment or arrangement relating to capital
expenditures with respect to Osicom or any of its Subsidiaries and
involving future payments which exceed $25,000 in any 12-month period;
(v) any agreement, contract, commitment or arrangement relating to the
acquisition of assets or any capital stock of any business enterprise
which has not been consummated; (vi) any real property lease; (vii) any
contract, commitment, agreement or arrangement which requires payments
in excess of $25,000 in any 12-month period, to the extent such
contract, commitment, agreement or arrangement is not terminable within
30 days without payment of premium or penalty; (viii) any license
agreement; (ix) any joint venture, partnership or other agreement for
the joint performance of work or services; (x) each power of attorney
that is effective and outstanding; (xi) any agreement entered into
other than in the ordinary course of business containing or providing
for an express undertaking by Osicom or any of its Subsidiaries to be
responsible for consequential damages and (xii) any contract,
commitment, agreement or arrangement with any director, stockholder or
Affiliate (as defined in Section 10.16) of Osicom or any of its
Subsidiaries. Each Osicom Contract is in full force and effect, and is
a legal, valid and binding obligation of Osicom or such Subsidiary and
each of the other parties thereto, enforceable in accordance with its
terms, except that (x) enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (y) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. No condition exists or event has occurred which (whether with
or without notice or lapse of time or both, or the happening or
occurrence of any other event) would constitute a default by Osicom,
any of its Subsidiaries, or, to the best knowledge of Osicom and the
Shareholder, any other party thereto under, or result in a right in
termination of, any Osicom Contract, by any other party thereto. To the
best knowledge of Osicom and the Shareholder, no party to any Osicom
Contract intends (x) to terminate such Osicom Contract or materially
amend the terms thereof, (y) to refuse to renew such Osicom Contract
upon expiration thereof or (z) to renew such Osicom Contract upon
expiration thereof on terms and conditions which are materially more
onerous to Osicom or such Subsidiary than those pertaining to such
existing Osicom Contract.
3.16 ENVIRONMENTAL MATTERS. Except as to matters which would not be expected
to result, individually or in the aggregate, in a Material Adverse
Effect on Osicom, or as set forth in Section 3.16 of the Disclosure
Schedule, (i) neither Osicom nor any of its Subsidiaries has received
any notice alleging the material violation of, or any material actual
or potential liability relating to, any applicable foreign, federal,
state or local statutes, laws, regulations, rules, decrees, orders,
judgments, ordinances, or common law related to the protection of human
health or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act,
the Emergency Planning and Community Right-To-Know Act, the Solid Waste
Disposal Act, the Resource Conservation and Recovery Act, the Clean Air
Act, the Water Pollution Control Act, the Toxic Substances Control Act,
the Hazardous Materials Transportation Act, and the Occupational Safety
and Health Act, each as amended and supplemented, and any regulations
promulgated pursuant to such laws, and any similar state or local
statutes or regulations but excluding workers compensation or similar
laws ("Environmental Laws"), which violation has not been resolved and,
to the best knowledge of Osicom and the Shareholder, no such notice is
threatened or otherwise expected, (ii) to the best knowledge of Osicom
and the Shareholder, Osicom and each of its Subsidiaries is and has
been in material compliance with all applicable Environmental Laws and
there is no condition that could prevent or materially interfere with
such compliance in the future, (iii) Osicom and each of its
Subsidiaries has obtained and is and has been in material compliance
with all required governmental environmental permits, registrations and
authorizations with respect to the business of Osicom and each of its
Subsidiaries as currently conducted, (iv) to the best knowledge of
Osicom and the Shareholder, no hazardous waste, substance, material, or
chemical, including, without limitation, petroleum and petroleum
products, polychlorinated biphenyls, asbestos and any other material
regulated under, or that can result in liability under, applicable
Environmental Laws ("Hazardous Material"), has been transported,
stored, treated, arranged to be disposed of or disposed of by Osicom or
any of its Subsidiaries on or from the real estate owned, operated or
otherwise used by Osicom or any of its Subsidiaries or at any other
location, except in compliance with, or as otherwise would not result
in material liability under all applicable Environmental Laws, (v)
except for successor liability as an owner of real property, neither
Osicom nor any of its Subsidiaries has assumed, contractually or by
operation of law, any liabilities, potential liabilities or obligations
of any other person or entity under any applicable Environmental Laws,
(vi) neither Osicom nor any of its Subsidiaries has entered into,
agreed to, or is subject to any judgment, decree, order or other
similar requirement of any governmental authority under any
Environmental Laws, (vii) to the best knowledge of Osicom and the
Shareholder, there are no (w) underground or aboveground storage tanks,
(x) surface impoundments, (y) landfills or (z) sewer or septic systems
currently or formerly present at or about any of the properties or
facilities currently or formerly owned, operated or otherwise used by
Osicom or any of its Subsidiaries that could result in material
liability to Osicom or any such Subsidiary under any applicable
Environmental Laws, and (viii) to the best knowledge of Osicom and the
Shareholder, there are no actions, activities, events, conditions or
circumstances occurring or existing, including without limitation the
release, threatened release, emission, discharge, generation,
treatment, storage or disposal
of Hazardous Materials, that can reasonably be expected to result in
any material liability or obligation of Osicom or any of its
Subsidiaries under or relating to any Environmental Laws.
3.17 INSURANCE. Section 3.17 of the Disclosure Schedule lists all insurance
policies of Osicom and each of its Subsidiaries covering the assets,
employees and operations of Osicom and each of its Subsidiaries as of
the date hereof and any pending claims under such policies. All such
policies are in full force and effect, all premiums due thereon have
been paid by Osicom or such Subsidiary and Osicom and each of its
Subsidiaries has complied in all material respects with the provisions
of such policies and has not received any notice from any of its
insurance brokers or carriers that any insurance policy is no longer in
full force or effect or that such broker or carrier will not be willing
or able to renew their existing coverage and perform its obligations
thereunder. All such policies shall continue in full force and effect
following the consummation of the transactions contemplated by this
Agreement.
3.18 MATERIAL CUSTOMERS AND SUPPLIERS. Section 3.18 of the Disclosure
Schedule sets forth the names of the ten suppliers of Osicom and its
Subsidiaries whom Osicom and its Subsidiaries paid the greatest sum of
money in respect of products, services and materials sold to Osicom and
its Subsidiaries and the ten customers of Osicom and its Subsidiaries
from whom Osicom and its Subsidiaries received the greatest sum of
money in respect of products or services provided by Osicom and its
Subsidiaries between February 1, 1999 and January 31, 2000.
3.19 REAL PROPERTY.
(a) The real property listed in Section 3.19(a) of the Disclosure
Schedule constitutes all of the real property that any of
Osicom and its Subsidiaries owns as of the date hereof (the
"Osicom Owned Real Property"). Except as set forth in Section
3.19(a) of the Disclosure Schedule, with respect to each such
parcel of Osicom Owned Real Property the identified owner has
good and marketable fee simple title to the parcel of real
property, free and clear of any Encumbrance (other than
Permitted Liens).
(b) The leases listed in Section 3.15 of the Disclosure Schedule
constitute all the real property leases which are used in the
conduct of the business of Osicom and its Subsidiaries as it
is presently being conducted and/or to which Osicom or its
Subsidiaries is a party (the "Osicom Leases" and, such
property, "Osicom Leased Property"; the Osicom Leased
Property, together with the Osicom Owned Real Property, the
"Osicom Real Property"). The Osicom Real Property is all of
the real property which is used for the conduct of the
business of Osicom and its Subsidiaries as is presently
conducted.
(c) Since January 31, 2000, neither Osicom nor any of its
Subsidiaries has sold, assigned, transferred or otherwise
disposed of, or granted any security interest in or lien on,
any Osicom Owned Real Property or any Osicom Lease. With
respect
to each Osicom Lease, all accrued and payable rents required
by each Osicom Lease to be paid by Osicom or any of its
Subsidiaries have been paid or adequate provision for such
payment has been made, no written notice of default or
termination has been given or received by Osicom or any of its
Subsidiaries, and no material event of default has occurred,
no condition exists and no event has occurred that, with the
giving of notice or the lapse of time, would become a material
default or permit early termination, under any Osicom Lease,
and (iii) Osicom has, and immediately after the Closing, will
have, good, valid and enforceable title to the leasehold
estate in the Osicom Leased Property, free and clear of any
Encumbrance (other than Permitted Liens). Except as set forth
in Section 3.19(c) of the Disclosure Schedule, no third party
consent or approval under any Osicom Lease is required for the
consummation of the transactions contemplated herein.
(d) Osicom has obtained all easements and rights of way required
from all governmental jurisdictions or from private parties
for the normal use and operation of the business on the Osicom
Owned Real Property as heretofore conducted.
(e) There is no pending or, to Osicom's knowledge, threatened
condemnation, expropriation, eminent domain or similar
proceeding affecting any of the Osicom Real Property and
Osicom has not received any written notice of any of the same.
(f) Each Osicom Owned Real Property and, to Osicom's knowledge,
each Osicom Leased Property and all buildings, structures,
fixtures and improvements on each Osicom Owned Real Property
and, to Osicom's knowledge, each Osicom Leased Property, and
all use of any thereof by Osicom or its subsidiaries, conform
with all applicable building, zoning, subdivision, land use,
fire and other laws pertaining to or affecting real property,
except where the failure to so conform would not have a
Material Adverse Effect on Osicom. Each occupied Osicom Owned
Real Property and, to Osicom's knowledge, each occupied Osicom
Leased Property is occupied under a valid and existing
certificate of occupancy for such Osicom Real Property. Osicom
has taken all corrective action indicated in all written
notices or orders to Osicom to correct violations of laws
issued by any governmental authority having jurisdiction
against or affecting the Osicom Real Property. The Osicom Real
Property is not in violation of any restrictive covenant,
condition, restriction or limitation which would have a
Material Adverse Effect on Osicom or a material adverse effect
on the use thereof as currently utilized.
(g) No Osicom Owned Real Property is subject to any contract or
other restriction of any nature whatsoever (recorded or
unrecorded) preventing or limiting the right of Osicom to
convey or use it as currently operated.
(h) All Osicom Real Property and the improvements thereon are
supplied with the utilities necessary for the operation of
such facilities as currently operated.
(i) Osicom has not received written notice of any special
assessment relating to any Osicom Real Property or any portion
thereof, and, to Osicom's knowledge, there are no pending or
threatened special assessments.
(j) Osicom has furnished Sync with all non-privileged
environmental, engineering or other studies or reports
prepared for Osicom or its subsidiaries since January 1, 1995
which primarily deal with the ownership, operation,
maintenance or management of the Osicom Real Property.
3.20 INVESTMENT COMPANY ACT STATUS. Neither Osicom nor any of its
Subsidiaries is an "investment company," or a company "controlled" by
an "investment company," within the meaning of the Investment Company
Act of 1940.
3.21 PRODUCT LIABILITY. Except as set forth in Section 3.21 of the
Disclosure Schedule, neither Osicom nor any of its Subsidiaries has
received written notice of any claim or threatened claim against Osicom
or any such Subsidiary for product liability, nor, to the best
knowledge of Osicom and the Shareholder, has Osicom or any of its
Subsidiaries received oral notice of any claim or threatened claim
against Osicom or any of its Subsidiaries for product liability.
3.22 BOOKS AND RECORDS. The financial books and records pertaining to the
business of Osicom and its Subsidiaries are complete and correct in all
material respects, have been maintained in accordance with good
business practice, and reflect the basis for the financial condition
and results of operations of Osicom set forth in the Osicom Financial
Statements referred to in Section 3.4 hereto.
3.23 NO BROKERS' OR OTHER FEES. No broker, finder or investment banker is
entitled to any fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the
Shareholder or Osicom or any of its Subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SYNC
Sync hereby represents and warrants to Osicom as follows:
4.1 CORPORATE ORGANIZATION. Sync, and each Subsidiary of Sync, is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation. Sync and each of its Subsidiaries
has full corporate power and authority to own their respective assets
and to carry on their respective businesses as now being conducted and
are duly qualified or licensed to do business as foreign corporations in
good standing in the jurisdictions in which the ownership of their
respective property or
the conduct of their respective businesses requires such qualification
or license, except jurisdictions in which the failure to be so
qualified or licensed would not, individually or in the aggregate, have
a Material Adverse Effect on Sync. Sync has delivered to Osicom
complete and correct copies of the certificate of incorporation and all
amendments thereto, the by-laws as presently in effect, and the minute
books and stock transfer records of Sync and each of its Subsidiaries.
4.2 CAPITALIZATION.
(a) The authorized capital stock of Sync consists of 50,000,000
shares of Sync Common Stock, of which 3,531,007 shares of Sync
Common Stock (the "Sync Shares") were outstanding as of March
31, 2000, and 754,280 shares of Sync Common Stock were
reserved for issuance upon exercise of options outstanding as
of March 31, 2000, and 2,000,000 shares of Sync Preferred
Stock, par value $.001 per share, of which no shares were
outstanding as of March 31, 2000. No other shares of any other
class or series of capital stock of Sync or securities
exercisable or convertible into or exchangeable for capital
stock of Sync ("Sync Capital Stock Equivalents") were
authorized, issued or outstanding as of March 31, 2000. Since
March 31, 2000, there have been no issuances of Sync Common
Stock or Sync Capital Stock Equivalents other than (i)
issuances of shares of Sync Common Stock upon exercise of
options outstanding on March 31, 2000 and (ii) issuance of
shares of Sync Common Stock under Sync's Employee Stock
Purchase Plan. Except as set forth in Section 4.2(a) of the
Disclosure Schedule, there are no subscriptions, options,
warrants, calls, rights, contracts, commitments,
understandings, restrictions or arrangements relating to the
issuance, sale, transfer or voting of any shares, whether
issued or unissued, of capital stock of Sync or Sync Capital
Stock Equivalents, including any rights of issuance,
conversion or exchange under any outstanding securities or
other instruments, other than restrictions imposed by Federal
and state securities laws. All of the Sync Shares are, and any
shares of Sync Common Stock to be issued upon exercise of
outstanding options will be, duly authorized, validly issued
and outstanding and fully paid, nonassessable and free and
clear of all Encumbrances. Neither Sync nor any of its
Subsidiaries has any outstanding debt securities or other
indebtedness or guarantees, except as specifically disclosed
in the Sync Financial Statements (as defined in Section 4.4).
(b) Section 4.2(b) of the Disclosure Schedule contains a complete
and correct list of all direct or indirect Subsidiaries of
Sync and the amount of capital stock or other equity interests
owned by Sync and its Subsidiaries in such Subsidiaries. All
the outstanding shares of capital stock of each of the
Subsidiaries of Sync have been duly authorized, validly issued
and are fully paid and non-assessable and, except as set forth
in Section 4.2(b) of the Disclosure Schedule, are owned (of
record and beneficially) by Sync or by another Subsidiary of
Sync, free and clear of all Encumbrances. Except for the
Subsidiaries set forth in Section 4.2(b) of the Disclosure
Schedule, neither Sync nor any of its Subsidiaries owns or has
any
option or right to acquire, directly or indirectly, any
capital stock or other equity securities of, or has any direct
or indirect equity or ownership interest or debt investment
in, any corporation, association, partnership, joint venture
or other business.
4.3 AUTHORIZATION, ETC. Each of Sync and Merger Co has full power and authority
to execute and deliver this Agreement and to carry out the transactions
contemplated hereby. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Sync and
Merger Co (other than the approval of this Agreement by the holders of a
majority of the outstanding shares of Sync Common Stock) and no other
corporate proceedings on the part of Sync, Merger Co or their respective
stockholders are necessary to authorize this Agreement or to consummate
the transactions so contemplated (other than, with respect to the
Merger, the filing of the Certificate of Merger as required by the
DGCL). This Agreement has been duly and validly executed by each of Sync
and Merger Co and, assuming this Agreement constitutes the legal, valid
and binding agreement of the other parties hereto , constitutes a legal,
valid and binding agreement of each of Sync and Merger Co, enforceable
against each of Sync and Merger Co in accordance with its terms, except
that (i) the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
4.4 FINANCIAL STATEMENTS. Sync has previously delivered to Osicom (i) the
audited balance sheet of Sync and its Subsidiaries as of December 31,
1999 and the related audited statements of income, stockholders' equity
and cash flows for the fiscal year then ended, and the notes thereto
(the "Sync Financial Statements"). The Sync Financial Statements present
fairly the assets, liabilities, financial position, results of
operations and cash flows of Sync and its Subsidiaries as of the dates
and for the periods indicated, and have been prepared in accordance with
GAAP consistently applied by Sync.
4.5 NO UNDISCLOSED LIABILITIES. Except as disclosed in Section 4.5 of the
Disclosure Schedule, neither Sync nor any of its Subsidiaries has any
liabilities or obligations, whether accrued, absolute, contingent,
matured or unmatured, that are required to be reflected, accrued or
reserved for in an audited balance sheet of Sync or such Subsidiary or
the notes thereto prepared in accordance with GAAP, other than (i)
liabilities and obligations that are reflected, accrued or reserved for
in the balance sheet as of December 31, 1999 included in the Sync
Financial Statements (the "Sync Balance Sheet"), (ii) liabilities and
obligations incurred in the ordinary course of business and consistent
with past practice since the date of the Sync Balance Sheet and (iii)
liabilities and obligations which in the aggregate would not have a
Material Adverse Effect on Sync.
4.6 NO APPROVALS OR CONFLICTS. Except as set forth in Section 4.6 of the
Disclosure Schedule, the execution, delivery and performance by Sync and
Merger Co of this Agreement and the consummation by Sync and Merger Co
of the transactions contemplated hereby will not violate, conflict with
or result in a breach by Sync or any of its Subsidiaries of any
provision of the certificate of incorporation or by-laws of Sync or any
of its Subsidiaries, violate, conflict with or result in a breach of any
provision of, or constitute a default by Sync or any of its Subsidiaries
(or an event which, with notice or lapse of time or both, would
constitute a default) or give rise to any right of termination,
cancellation or acceleration under, or result in the creation of any
Encumbrance upon any of the properties of Sync or any of its
Subsidiaries under, any Sync Contract (as defined in Section 4.15),
violate or result in a breach of any order, injunction, judgment,
ruling, law or regulation of any court or governmental authority
applicable to Sync, any of its Subsidiaries, or any of their respective
properties or except for those required under or in relation to the HSR
Act, require any order, consent, approval or authorization of, or notice
to, or declaration, filing, application, qualification or registration
with, any governmental or regulatory authority, excluding such
violations, conflicts and breaches which, individually or in the
aggregate, would not have a Material Adverse Effect on Sync or prevent
or delay the consummation of the transactions contemplated hereby.
4.7 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. Neither Sync nor any of
its Subsidiaries is in violation of any order, injunction, judgment,
ruling, law or regulation of any court or governmental authority
applicable to the property or business of Sync or any such Subsidiary.
Sync and each of its Subsidiaries have all material licenses, permits
and other governmental authorizations reasonably necessary to conduct
their respective businesses as currently conducted and such licenses,
permits and authorizations are valid and in full force and effect.
4.8 LITIGATION. Except as set forth in Section 4.8 of the Disclosure Schedule,
there are no Claims pending or, to the best knowledge of Sync,
threatened against Sync, any of its Subsidiaries, or the transactions
contemplated by this Agreement before any arbitrator, court or
governmental or regulatory authority or body, which, if decided
unfavorably to Sync or such Subsidiary, would have a Material Adverse
Effect on Sync. Except as set forth in Section 4.8 of the Disclosure
Schedule, neither Sync nor any of its Subsidiaries nor any of their
respective assets is subject to any decree, order or judgment which
would have a Material Adverse Effect on Sync.
4.9 ASSETS. Except as set forth in Section 4.9 of the Disclosure Schedule, on
December 31, 1999, Sync and each of its Subsidiaries had and, except
with respect to assets disposed of or acquired in the ordinary course of
business and consistent with past practice since such date, Sync and
each of its Subsidiaries now has, good and valid title to, or holds by
valid and existing lease or license, all the assets reflected as assets
of Sync and its Subsidiaries on the balance sheet as of December 31,
1999 included in the Sync Financial Statements (the "1999 Sync Balance
Sheet") or which would have been reflected on the 1999 Sync Balance
Sheet if acquired prior to such date, free and clear of Encumbrances
except for: Encumbrances which secure indebtedness or obligations which
are properly reflected on
the 1999 Sync Balance Sheet and Permitted Liens. Except as set forth in
Section 4.9 of the Disclosure Schedule, Sync and its Subsidiaries own,
or have valid leasehold interests in, all material tangible assets
necessary for the operation or conduct of Sync's or such Subsidiary's
business as currently conducted and all such assets are in reasonably
good maintenance, operating condition and repair, normal wear and tear
excepted, other than machinery and equipment under repair or out of
service in the ordinary course of Sync's or such Subsidiary's business.
4.10 ABSENCE OF CERTAIN CHANGES. Except as disclosed in Section 4.10 of the
Disclosure Schedule, since December 31, 1999, the business of Sync and
each of its Subsidiaries has been conducted only in the ordinary course
and consistent with past practice in all material respects, there has
not been any event or development prior to the date hereof which, if it
had occurred or existed after the date hereof, would be a violation of
Section 5.2(c), and there has not been any change, event or development
which, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect on Sync.
4.11 TAXES. Sync and each of its Subsidiaries has filed or caused to be
filed all Tax Returns (including estimated Tax Returns) required to be
filed by Sync and each such Subsidiary. To the best knowledge of Sync,
all Tax Returns are complete and accurate in all material respects. All
Taxes required to be shown on such Tax Returns or otherwise due or
payable and all additional assessments of any such Taxes received prior
to the date hereof have been paid in full on the due date for payment
thereof. Neither Sync nor any of its Subsidiaries is required to file
any income or franchise tax returns in any jurisdiction other than the
United States and the States of Arizona, Delaware, Colorado,
Connecticut, Florida, Georgia, Illinois, California, Maryland,
Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York,
Ohio, Oklahoma, Pennsylvania, Rhode Island, Texas and Virginia. The
amounts set up as accruals for Taxes on the Sync Financial Statements
are sufficient for the payment of all Taxes of Sync and each of its
Subsidiaries, whether or not disputed, for all periods ended on and
prior to the respective dates thereof. In addition, the amounts set up
as accruals for Taxes on the financial books of Sync and each of its
Subsidiaries on the date hereof are and will be sufficient for the
payment of all Taxes of Sync and each such Subsidiary, whether or not
disputed, for all periods ended on and prior to the Closing Date.
Except as disclosed in Section 4.11 of the Disclosure Schedule, the
United States Federal, California and Massachusetts income tax returns
of Sync and each of its Subsidiaries have been audited by the Internal
Revenue Service or other Tax Authority or are closed and, to the best
knowledge of Sync, there are no proceedings or claims relating thereto
or any facts that could give rise to the reopening thereof or in
connection with any other state or local income tax returns. No
deficiency in the payment of Taxes by Sync or any of its Subsidiaries
for any period has been asserted or, to the best knowledge of Sync,
threatened against Sync or any of its Subsidiaries by any Tax Authority
and remains unsettled as of the date of this Agreement. All Taxes
required to be withheld, collected or deposited by Sync or any of its
Subsidiaries have been timely withheld, collected or deposited and, to
the extent required, have been paid to the relevant Tax Authorities.
Neither Sync nor any of its Subsidiaries
owe any amount pursuant to any written or unwritten Tax sharing
agreement or arrangement, or will have any liability after the date
hereof in respect of any written or unwritten Tax sharing agreement or
arrangement executed or agreed prior to the date hereof. There are no
Tax liens on any of the assets of Sync or any of its Subsidiaries,
other than liens for current Taxes which are not yet due or payable.
Except as set forth in Section 4.11 of the Disclosure Schedule, neither
Sync nor any of its Subsidiaries has made any agreement, waiver or
other arrangement providing for an extension of time with respect to
the assessment or collection of any Tax against Sync or any such
Subsidiary. Neither Sync nor any of its Subsidiaries has been, or will
be, subject to Tax under Section 1374 or Section 1375 of the Code for
any taxable year ending on or prior to the Closing Date. Neither Sync
nor any of its Subsidiaries has filed a consent with the Internal
Revenue Service pursuant to Section 341(f) of the Code or with any
other Tax Authority to any similar effect or made an election under
Section 338 of the Code other than as provided for in the terms of this
Agreement.
4.12 EMPLOYEE BENEFITS.
(a) Section 4.12 of the Disclosure Schedule contains a true and
complete list of each "employee benefit plan" (within the
meaning of section 3(3) of ERISA, including, without
limitation, multiemployer plans within the meaning of ERISA
section 3(37)), stock purchase, stock option, stock bonus,
severance, employment, change-in-control, fringe benefit,
collective bargaining, bonus, incentive, deferred compensation
and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect
or required in the future as a result of the transaction
contemplated by this Agreement or otherwise), whether formal
or informal, oral or written, legally binding or not, under
which any employee or former employee of Sync or any of its
Subsidiaries has any present or future right to benefits and
under which Sync or any of its Subsidiaries may have any
present or future liability. All such plans, agreements,
programs, policies and arrangements shall be collectively
referred to as the "Sync Plans."
(b) With respect to each Sync Plan, Sync has delivered to Osicom a
current, accurate and complete copy (or, to the extent no such
copy exists, an accurate description) thereof and, to the
extent applicable: any related trust agreement or other
funding instrument; the most recent determination letter, if
the Sync Plan is intended to qualify under Code Section
401(a); any summary plan description and other written
communications (or a description of any oral communications)
by Sync or any of its Subsidiaries to their respective
employees concerning the extent of the benefits provided under
a Sync Plan; and, for the three most recent years, (A) the
Form 5500 and attached schedules, (B) audited financial
statements, (C) actuarial valuation reports and (D) attorney's
response to an auditor's request for information.
(c) No Sync Plan is subject to Title IV of ERISA, and neither Sync
nor any member of its Controlled Group has ever contributed
to, sponsored , or been obligated to contribute to any plan
subject to Title IV of ERISA.
(d) (i) Each Sync Plan has been established and administered in
accordance with its terms, and in compliance with the
applicable provisions of ERISA, the Code and other applicable
laws, rules and regulations; (ii) no event has occurred and no
condition exists that would subject Sync or its Subsidiaries
either directly or by reason of its affiliation with any
member of its "Controlled Group" (defined as any organization
which is a member of a controlled group of organizations
within the meaning of Code sections 414(b), (c), (m) or (o)),
to any Tax, fine, lien or penalty imposed by ERISA, the Code
or other applicable laws, rules and regulations; (iii) each
Sync Plan which is intended to be qualified within the meaning
of Code section 401(a) is so qualified and has received a
favorable determination letter pursuant to the Tax Reform Act
of 1986 and subsequent legislation as to its qualification,
and nothing has occurred, whether by action or failure to act,
that could reasonably be expected to cause the loss of such
qualification; (iv) for each Sync Plan with respect to which a
Form 5500 has been filed, no material change has occurred with
respect to the matters covered by the most recent Form 5500
since the date thereof; (v) except as set forth on Section
4.12 of the Disclosure Schedule, no Sync Plan provides retiree
welfare benefits and neither Sync nor any of its Subsidiaries
have any obligation to provide any retiree welfare benefits
other than as required by Section 4980B of the Code; and (vi)
neither Sync nor any member of its Controlled Group has
engaged in, or is a successor or parent corporation to an
entity that has engaged in, a transaction described in
Sections 4069 or 4212(c) of ERISA.
(e) With respect to any Sync Plan, (i) no actions, suits or claims
(other than routine claims for benefits in the ordinary
course) are pending or, to the knowledge of Sync, threatened,
and (ii) no facts or circumstances exist that could reasonably
be expected to give rise to any such actions, suits or claims.
(f) Except as set forth in Section 4.12 of the Disclosure
Schedule, no Sync Plan exists that could result in the payment
to any present or former employee of Sync or any of its
Subsidiaries of any money or other property or accelerate or
provide any other rights or benefits to any present or former
employee or other service provider of Sync or any of its
Subsidiaries as a result of the transactions contemplated by
this Agreement. There is no contract, plan or arrangement
(written or otherwise) covering any employee or other service
provider or former employee or other service provider of Sync
or any of its Subsidiaries that, individually or collectively,
could give rise to the payment of any amount that would not be
deductible pursuant to the terms of Section 280G of the Code.
4.13 LABOR RELATIONS. Except as set forth in Section 4.13 of the Disclosure
Schedule, there is no unfair labor practice charge or complaint pending
or, to the best knowledge of Sync,
threatened against or otherwise affecting Sync or any of its
Subsidiaries which, if adversely determined, would reasonably be likely
to result in a liability having a Material Adverse Effect on Sync;
there is no labor strike, slowdown, work stoppage, or lockout in
effect, or, to the best knowledge of Sync, threatened against or
otherwise affecting Sync or any of its Subsidiaries, and neither Sync
nor any of its Subsidiaries has experienced any such labor controversy
within the past three years; neither Sync nor any of its Subsidiaries
is a party to, or otherwise bound by, any consent decree with, or
citation by, any governmental authority relating to employees or
employment practices; and Sync and each of its Subsidiaries is in
compliance with their obligations pursuant to the WARN Act, and all
other notification and bargaining obligations arising under any
collective bargaining agreement, statute or otherwise. To the best
knowledge of Sync, there is no effort to organize employees of Sync or
any of its Subsidiaries which is pending or threatened.
4.14 PATENTS, TRADEMARKS, TRADE NAMES, ETC. Section 4.14 of the Disclosure
Schedule contains a true and complete list of all patents, trademarks,
trade names, copyrights and pending applications therefor
(collectively, the "Sync Intellectual Property") used or owned by Sync
and each of its Subsidiaries and a list of all licenses and other
agreements (collectively, the "Sync License Agreements") relating
thereto. Except as set forth in Section 4.14 of the Disclosure
Schedule, (i) the consummation of the transactions contemplated by this
Agreement will not materially impair any right to use the Sync
Intellectual Property or the Sync License Agreements, (ii) all Sync
Intellectual Property and Sync License Agreements are valid, in good
standing and free and clear of liens or other security interests, (iii)
neither Sync nor any of its Subsidiaries has received written or, to
the best knowledge of Sync, oral, notice of any claims by any person to
the use of any such Sync Intellectual Property, or challenging or
questioning the validity or effectiveness of any such Sync License
Agreement, and (iv) to the knowledge of Sync, no other person is
interfering with, infringing upon, misappropriating or otherwise coming
into conflict with any of the Sync Intellectual Property.
4.15 CONTRACTS. The contracts and agreements listed in Section 4.15 of the
Disclosure Schedule constitute each contract, instrument, lease, deed
or agreement which is material to the business or operations of Sync
and each of its Subsidiaries (the "Sync Contracts"). Complete copies
(or, if oral, written summaries) of each Sync Contract have been made
available to Osicom, including all of the following Sync Contracts: (i)
any indenture, note, mortgage, installment obligation, or other
instrument for or relating to any borrowing of money; (ii) any guaranty
of any obligation; (iii) any agreement, contract, commitment or
arrangement containing any covenant limiting the ability of Sync or any
of its Subsidiaries to engage in any line of business or to compete
with any business or person; (iv) any agreement, contract, commitment
or arrangement relating to capital expenditures with respect to Sync or
any of its Subsidiaries and involving future payments which exceed
$25,000 in any 12-month period; (v) any agreement, contract, commitment
or arrangement relating to the acquisition of assets or any capital
stock of any business enterprise which has not been consummated; (vi)
any real property lease; (vii) any contract, commitment, agreement or
arrangement which requires payments in
excess of $25,000 in any 12-month period, to the extent such contract,
commitment, agreement or arrangement is not terminable within 30 days
without payment of premium or penalty; (viii) any license agreement;
(ix) any joint venture, partnership or other agreement for the joint
performance of work or services; (x) each power of attorney that is
effective and outstanding; (xi) any agreement entered into other than
in the ordinary course of business containing or providing for an
express undertaking by Sync or its Subsidiaries to be responsible for
consequential damages and (xii) any contract, commitment, agreement or
arrangement with any director, stockholder or Affiliate of Sync or any
of its Subsidiaries. Each Sync Contract is in full force and effect,
and is a legal, valid and binding obligation of Sync or such Subsidiary
and, to the best knowledge of Sync, each of the other parties thereto,
enforceable in accordance with its terms, except that (x) enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally and (y) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. No condition exists or event has
occurred which (whether with or without notice or lapse of time or
both, or the happening or occurrence of any other event) would
constitute a default by Sync, any of its Subsidiaries, or, to the best
knowledge of Sync, any other party thereto under, or result in a right
in termination of, any Sync Contract, by any other party thereto. To
the best knowledge of Sync, no party to any Sync Contract intends (x)
to terminate such Sync Contract or materially amend the terms thereof,
(y) to refuse to renew such Sync Contract upon expiration thereof or
(z) to renew such Sync Contract upon expiration thereof on terms and
conditions which are materially more onerous to Sync or such Subsidiary
than those pertaining to such existing Sync Contract.
4.16 ENVIRONMENTAL MATTERS. Except as to matters which would not be expected
to result, individually or in the aggregate, in a Material Adverse
Effect on Sync, or as set forth in Section 4.16 of the Disclosure
Schedule, (i) neither Sync nor any of its Subsidiaries has received any
notice alleging the material violation of, or any material actual or
potential liability relating to, any applicable Environmental Laws
which violation has not been resolved and, to the best knowledge of
Sync, no such notice is threatened or otherwise expected, (ii) to the
best knowledge of Sync, Sync and each of its Subsidiaries is and has
been in material compliance with all applicable Environmental Laws and,
to the best knowledge of Sync, there is no condition that could prevent
or materially interfere with such compliance in the future, (iii) Sync
and each of its Subsidiaries has obtained and is and has been in
material compliance with all required governmental environmental
permits, registrations and authorizations with respect to the business
of Sync and each of its Subsidiaries as currently conducted, (iv) to
the best knowledge of Sync, no Hazardous Material has been transported,
stored, treated, arranged to be disposed of or disposed of by Sync or
any of its Subsidiaries on or from the real estate owned, operated or
otherwise used by Sync or any of its Subsidiaries or at any other
location, except in compliance with or as otherwise would not result in
material liability under any applicable Environmental Laws, (v) except
for successor liability as owner of real property, neither Sync nor any
of its Subsidiaries has assumed, contractually or by operation of law,
any
liabilities, potential liabilities or obligations of any other person
or entity under any applicable Environmental Laws, (vi) neither Sync
nor any of its Subsidiaries has entered into, agreed to, or is subject
to any judgment, decree, order or other similar requirement of any
governmental authority under any Environmental Laws, (vii) to the best
knowledge of Sync, there are no (w) underground or aboveground storage
tanks, (x) surface impoundments, (y) landfills or (z) sewer or septic
systems currently or formerly present at or about any of the properties
or facilities currently or, to the best knowledge of Sync, formerly
owned, operated or otherwise used by Sync or any of its Subsidiaries
that could result in material liability to Sync or any such Subsidiary
under any applicable Environmental Laws, and (viii) to the best
knowledge of Sync, there are no actions, activities, events, conditions
or circumstances occurring or existing, including without limitation
the release, threatened release, emission, discharge, generation,
treatment, storage or disposal of Hazardous Materials, that can
reasonably expected to result in any material liability or obligation
of Sync or any of its Subsidiaries under or relating to any
Environmental Laws.
4.17 INSURANCE. Section 4.17 of the Disclosure Schedule lists all insurance
policies of Sync and each of its Subsidiaries covering the assets,
employees and operations of Sync and each of its Subsidiaries as of the
date hereof and any pending claim under such policies. All such
policies are in full force and effect, all premiums due thereon have
been paid by Sync or such Subsidiary and Sync and each of its
Subsidiaries has complied in all material respects with the provisions
of such policies and has not received any notice from any of its
insurance brokers or carriers that such broker or carrier will not be
willing or able to renew their existing coverage.
4.18 MATERIAL CUSTOMERS AND SUPPLIERS. Section 4.18 of the Disclosure
Schedule sets forth the names of the ten suppliers of Sync and its
Subsidiaries whom Sync and its Subsidiaries paid the greatest sum of
money in respect of products, services and materials sold to Sync and
its Subsidiaries and the ten customers of Sync and its Subsidiaries
from whom Sync and its Subsidiaries received the greatest sum of money
in respect of products or services provided by Sync and its
Subsidiaries between January 1, 1999 and December 31, 1999.
4.19 REAL PROPERTY.
(a) The real property listed in Section 4.19(a) of the Disclosure
Schedule constitutes all of the real property that any of Sync
and its Subsidiaries owns as of the date hereof (the "Sync
Owned Real Property"). Except as set forth in Section 4.19(a)
of the Disclosure Schedule, with respect to each such parcel
of Sync Owned Real Property the identified owner has good and
marketable fee simple title to the parcel of real property,
free and clear of any Encumbrance (other than Permitted
Liens).
(b) The leases listed in Section 4.15 of the Disclosure Schedule
constitute all the real property leases which are used in the
conduct of the business of Sync and its Subsidiaries as it is
presently being conducted and/or to which Sync or its
Subsidiaries is a party (the "Sync Leases," and such property,
"Sync Leased Property"; the Sync Leased Property, together
with the Sync Owned Real Property, the "Sync Real Property").
The Sync Owned Real Property and the Sync Leased Property is
all of the real property which is used for the conduct of the
business of Sync and its Subsidiaries as is presently
conducted.
(c) Since December 31, 1999, neither Sync nor any of its
Subsidiaries has sold, assigned, transferred or otherwise
disposed of, or granted any security interest in or lien on,
any Sync Lease. With respect to each Sync Lease, all accrued
and payable rents required by each Sync Lease to be paid by
Sync or any of its Subsidiaries have been paid or adequate
provision for such payment has been made, no written notice of
default or termination has been given or received by Sync or
any of its Subsidiaries, and, to the best knowledge of Sync,
no material event of default has occurred, no condition exists
and no event has occurred that, with the giving of notice or
the lapse of time, would become a material default or permit
early termination, under any Sync Lease, and (iii) Sync has,
and immediately after the Closing, Osicom will have, good,
valid and enforceable title to the leasehold estate in the
Sync Leased Property, free and clear of any Encumbrance (other
than Permitted Liens). Except as set forth in Section 4.19(c)
of the Disclosure Schedule, no third party consent or approval
under any Sync Lease is required for the consummation of the
transactions contemplated herein.
(d) Sync has obtained all easements and rights of way required
from all governmental jurisdictions or from private parties
for the normal use and operation of the business on the Sync
Owned Real Property as heretofore conducted.
(e) There is no pending or, to Sync's knowledge, threatened
condemnation, expropriation, eminent domain or similar
proceeding affecting any of the Sync Real Property and Sync
has not received any written notice of any of the same.
(f) Each Sync Owned Real Property and, to Sync's knowledge, each
Sync Leased Property and all buildings, structures, fixtures
and improvements on each Sync Owned Real Property and, to
Sync's knowledge, each Sync Leased Property, and all use of
any thereof by Sync, conform with all applicable building,
zoning, subdivision, land use, fire and other laws pertaining
to or affecting real property, except where the failure to so
conform would not have a Material Adverse Effect on Sync. Each
occupied Sync Owned Real Property and, to Sync's knowledge,
each occupied Sync Leased Property is occupied under a valid
and existing certificate of occupancy for such Sync Real
Property. Sync has taken all corrective action indicated in
all written notices or orders to Sync to correct violations of
laws issued by any governmental authority having jurisdiction
against or affecting the Sync Real Property. The Sync Real
Property is not in violation of any restrictive covenant,
condition, restriction or limitation which would have a
Material Adverse Effect on Sync or a material adverse effect
on the use thereof as currently utilized.
(g) No Sync Owned Real Property is subject to any contract or
other restriction of any nature whatsoever (recorded or
unrecorded) preventing or limiting the right of Sync to convey
or use it as currently operated.
(h) All Sync Real Property and the improvements thereon are
supplied with the utilities necessary for the operation of
such facilities as currently operated.
(i) Sync has not received written notice of any special assessment
relating to any Sync Real Property or any portion thereof,
and, to Sync's knowledge, there are no pending or threatened
special assessments.
(j) Sync has not obtained any environmental, engineering or other
studies or reports prepared for Sync since January 1, 1995
which primarily deal with the ownership, operation,
maintenance or management of the Sync Real Property.
4.20 INVESTMENT COMPANY ACT STATUS. Neither Sync nor any of its Subsidiaries
is an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940.
4.21 PRODUCT LIABILITY. Except as set forth in Section 4.21 of the
Disclosure Schedule, neither Sync nor any of its Subsidiaries has
received written notice of any claim or threatened claim against Sync
or any such Subsidiary for product liability, nor, to the best
knowledge of Sync, has Sync or any of its Subsidiaries received oral
notice of any claim or threatened claim against Sync or any of its
Subsidiaries for product liability.
4.22 BOOKS AND RECORDS. The financial books and records pertaining to the
business of Sync and its Subsidiaries are complete and correct in all
material respects, have been maintained in accordance with good
business practice, and reflect the basis for the financial condition
and results of operations of Sync set forth in the Sync Financial
Statements referred to in Section 4.4 hereto.
4.23 NO BROKERS' OR OTHER FEES. No broker, finder or investment banker
(other than Alliant Partners) is entitled to any fee or commission in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of Sync or any of its Subsidiaries.
4.24 SYNC REPORTS. Since January 1997, Sync has filed all forms, reports and
documents with the Commission required to be filed by it pursuant to
the federal securities laws and the Commission rules and regulations
thereunder (the "Sync Commission Filings"), and all such forms, reports
and documents filed with the Commission have complied in all material
respects with all applicable requirements of the federal securities
laws and the Commission rules and regulations promulgated thereunder.
Sync has made available to Osicom true and complete copies of all Sync
Commission Filings filed by Sync with the Commission since January 1,
1997. As of their respective dates, the Sync Commission Filings did not
contain any untrue statement of material fact or omit to state a
material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
4.25 NASDAQ. Sync's Common Stock is currently trading on the NASDAQ National
Market and Sync currently satisfies the "maintenance criteria" for
continued trading thereon. Except as set forth in Section 4.25 of the
Disclosure Schedule, Sync has received no notice from NASDAQ of a
potential revocation of its National Market listing, nor is Sync aware
of any facts that would form the basis of such a notice.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 CONDUCT OF BUSINESS BY OSICOM. The Shareholder and Osicom covenant that,
except (i) as otherwise expressly contemplated by this Agreement or
(ii) as consented to by Sync in writing, from and after the date of
this Agreement and until the Effective Time Osicom shall, and shall
cause each of its Subsidiaries to:
(a) use all reasonable efforts consistent with good business
judgment to (i) preserve intact the present business
organization of Osicom and its Subsidiaries and pay payables
and collect receivables in a manner consistent with past
practice and otherwise operate Osicom and its Subsidiaries in
the ordinary and regular course of business consistent with
past practice; (ii) maintain Osicom's and its Subsidiaries'
books and records in accordance with past practices; (iii)
keep available the services of Osicom's and its Subsidiaries'
officers and employees; and (iv) maintain satisfactory
relationships with licensors, suppliers, creditors,
distributors, customers and others having material business
relationships with Osicom and its Subsidiaries;
(b) notify Sync of any change in the normal course of business or
operations of Osicom or its Subsidiaries and of any
governmental complaints, investigations or hearings of which
Osicom or its Subsidiaries is notified (or communications
received by Osicom or its Subsidiaries indicating that the
same may be contemplated), or the institution or settlement of
litigation or any claim, in each case involving Osicom or its
Subsidiaries, and to keep Sync informed of such events;
(c) not (i) cause to be issued or sold any shares of capital stock
or debt or equity securities of Osicom or its Subsidiaries or
Osicom Capital Stock Equivalents or issue, grant or enter into
any options, warrants, rights, subscription agreements or
commitments of any kind with respect thereto; (ii) directly or
indirectly cause to be purchased, redeemed or otherwise
acquired or disposed of any shares of capital stock of Osicom
or its Subsidiaries; (iii) declare, set aside or pay any
dividend or other distribution; (iv) reclassify, combine,
split, subdivide or redeem, purchase or otherwise acquire,
directly or indirectly, any of its capital stock or any Osicom
Capital Stock Equivalents, other than pursuant to Osicom Plans
in accordance
with their terms as in effect on the date hereof; (v) permit
or allow Osicom or its Subsidiaries to borrow or agree to
borrow any funds or incur, whether directly or by way of
guarantee, any obligation for borrowed money, other than in
the ordinary course of business and consistent with past
practice; (vi) subject any of the assets of Osicom or any of
its Subsidiaries (real, personal or mixed, tangible or
intangible) to any Encumbrance or otherwise permit or allow
the sale, lease, transfer or disposition of any assets of
Osicom or its Subsidiaries (real, personal or mixed, tangible
or intangible), other than in the ordinary course of business
and consistent with past practice; (vii) assume, guarantee, or
otherwise become responsible for the obligations of, or make
any loans or advances to, any other individual, firm or
corporation; (viii) waive or release any rights of material
value, or cancel, compromise, release or assign any material
indebtedness owed to Osicom or its Subsidiaries or any
material claims held by Osicom or its Subsidiaries; (ix)
except for capital expenditures not to exceed $5,000, make any
investment or expenditure of a capital nature either by
purchase of stock or securities, contributions to capital,
property transfer or otherwise; (x) enter into any new
material line of business; (xi) cancel or terminate any
insurance policy naming Osicom or its Subsidiaries as a
beneficiary or a loss payable payee; (xii) enter into any
collective bargaining agreements; (xiii) increase the
compensation or fringe benefits of any of the officers or
directors of Osicom or any of its Subsidiaries or, other than
in accordance with past practice, effect any material general
increase in the compensation or fringe benefits of the
employees of Osicom or any of its Subsidiaries or pay or agree
to pay any pension, retirement allowance, or other benefit not
required by any existing employee benefit plan or any bonus to
any such officers or employees, commit Osicom or any of its
Subsidiaries to any employment agreement or employee benefit
plan with or for the benefit of any of Osicom's or its
Subsidiaries' officers or employees or any other person, or
alter, amend, terminate in whole or in part, or curtail or
permanently discontinue contributions to, any pension plan or
any other employee benefit plan; (xiv) except as may be
required as a result of a change in law or in GAAP, change any
of the accounting practices or principles used by Osicom or
its Subsidiaries; (xv) enter into or terminate any license,
distributorship, dealer, sales representative, joint venture,
credit or similar agreement, or any contract, agreement or
transaction involving a total remaining commitment of at least
$25,000; (xvi) except as may be required by law, make any
material Tax election, make or change any method of accounting
with respect to Taxes, file any amended Tax Returns that may
have a Material Adverse Effect on the Tax position of Osicom
or any of its Subsidiaries or settle or compromise any
material Federal, state, local or foreign Tax liability;
(xvii) enter into any "non-compete" or similar agreement;
(xviii) amend the certificate of incorporation or by-laws of
Osicom or any of its Subsidiaries; (xix) take any action with
knowledge that such action would reasonably be expected to
result in any of the conditions contained in Article VII not
being satisfied; (xx) or agree to do any of the foregoing; and
(d) comply in all material respects with all applicable laws,
including, without limitation, applicable Environmental Laws.
5.2 CONDUCT OF BUSINESS BY SYNC. Sync covenants that, except (i) as otherwise
expressly contemplated by this Agreement or (ii) as consented to by
Osicom in writing, from and after the date of this Agreement and until
the Effective Time Sync shall, and shall cause each of its Subsidiaries
to:
(a) use all reasonable efforts consistent with good business
judgment to (i) preserve intact the present business
organization of Sync and its Subsidiaries and pay payables and
collect receivables in a manner consistent with past practice
and otherwise operate Sync and its Subsidiaries in the
ordinary and regular course of business consistent with past
practice; (ii) maintain Sync's and its Subsidiaries' books and
records in accordance with past practices; (iii) keep
available the services of Sync's and its Subsidiaries'
officers and employees; and (iv) maintain satisfactory
relationships with licensors, suppliers, creditors,
distributors, customers and others having material business
relationships with Sync and its Subsidiaries;
(b) notify Osicom of any change in the normal course of business
or operations of Sync or its Subsidiaries and of any
governmental complaints, investigations or hearings of which
Sync or its Subsidiaries is notified (or communications
received by Sync or its Subsidiaries indicating that the same
may be contemplated), or the institution or settlement of
litigation or any Claim, in each case involving Sync or its
Subsidiaries, and to keep Osicom informed of such events;
(c) not (i) cause to be issued or sold any shares of capital stock
or debt or equity securities of Sync or its Subsidiaries or
Sync Capital Stock Equivalents, except for the exercise of
outstanding stock options, or issue, grant or enter into any
options, warrants, rights, subscription agreements or
commitments of any kind with respect thereto, except in the
ordinary course to non-executive employees of Sync; (ii)
directly or indirectly cause to be purchased, redeemed or
otherwise acquired or disposed of any shares of capital stock
of Sync or its Subsidiaries; (iii) declare, set aside or pay
any dividend or other distribution; (iv) reclassify, combine,
split, subdivide or redeem, purchase or otherwise acquire,
directly or indirectly, any of its capital stock or any Sync
Capital Stock Equivalents, other than pursuant to Sync Plans
in accordance with their terms as in effect on the date
hereof; (v) permit or allow Sync or its Subsidiaries to borrow
or agree to borrow any funds or incur, whether directly or by
way of guarantee, any obligation for borrowed money, other
than in the ordinary course of business and consistent with
past practice; (vi) subject any of the assets of Sync or any
of its Subsidiaries (real, personal or mixed, tangible or
intangible) to any Encumbrance or otherwise permit or allow
the sale, lease, transfer or disposition of any assets of Sync
or its Subsidiaries (real, personal or mixed, tangible or
intangible), other than in the ordinary course of business and
consistent with past practice; (vii) assume,
guarantee, or otherwise become responsible for the obligations
of, or make any loans or advances to, any other individual,
firm or corporation; (viii) waive or release any rights of
material value, or cancel, compromise, release or assign any
material indebtedness owed to Sync or its Subsidiaries or any
material claims held by Sync or its Subsidiaries; (ix) except
for (A) capital expenditures in the ordinary course of
business and (B) capital expenditures not to exceed $5,000,
make any investment or expenditure of a capital nature either
by purchase of stock or securities, contributions to capital,
property transfer or otherwise; (x) enter into any new
material line of business; (xi) cancel or terminate any
insurance policy naming Sync or its Subsidiaries as a
beneficiary or a loss payable payee; (xii) enter into any
collective bargaining agreements; (xiii) increase the
compensation or fringe benefits of any of the officers or
directors of Sync or any of its Subsidiaries or, other than in
accordance with past practice, effect any material general
increase in the compensation or fringe benefits of the
employees of Sync or any of its Subsidiaries or pay or agree
to pay any pension, retirement allowance, or other benefit not
required by any existing employee benefit plan to any such
officers or employees, commit Sync or any of its Subsidiaries
to any employment agreement or employee benefit plan with or
for the benefit of any of Sync's or its Subsidiaries' officers
or employees or any other person, or alter, amend, terminate
in whole or in part, or curtail or permanently discontinue
contributions to, any pension plan or any other employee
benefit plan; (xiv) except as may be required as a result of a
change in law or in GAAP, change any of the accounting
practices or principles used by Sync or its Subsidiaries; (xv)
enter into or terminate any license, distributorship, dealer,
sales representative, joint venture, credit or similar
agreement, or any contract, agreement or transaction involving
a total remaining commitment of at least $25,000; (xvi) except
as may be required by law, make any material Tax election,
make or change any method of accounting with respect to Taxes,
file any amended Tax Returns that may have a Material Adverse
Effect on the Tax position of Sync or any of its Subsidiaries
or settle or compromise any material Federal, state, local or
foreign Tax liability; (xvii) enter into any "non-compete" or
similar agreement; (xviii) amend the certificate of
incorporation or by-laws of Sync or any of its Subsidiaries;
(xix) take any action with knowledge that such action would
reasonably be expected to result in any of the conditions
contained in Article VI not being satisfied; or (xx) agree to
do any of the foregoing; and
(d) comply in all material respects with all applicable laws,
including, without limitation, applicable Environmental Laws.
5.3 ACCESS TO BOOKS AND RECORDS; COOPERATION. (a) OSICOM. During the period
commencing on the date hereof and ending on the Closing Date, Osicom
will afford to Sync and its counsel, accountants and other authorized
representatives access, at all reasonable times upon reasonable advance
notice, to the officers, directors, employees, accountants and other
advisors and agents, properties, books, records and contracts of Osicom
and its Subsidiaries, and the right to make copies and extracts from
such books, records and
contracts, and to furnish Sync with all financial, operating and other
data and information concerning Osicom and its Subsidiaries as Sync and
its advisors may reasonably request. Sync will hold, and will use its
best efforts to cause its representatives to hold, any such information
which is non-public in confidence to the extent required by, and in
accordance with, the provisions of the confidentiality agreement dated
April 19, 1999 between Sync and Osicom (the "Confidentiality
Agreement").
(a) SYNC. During the period commencing on the date hereof and
ending on the Closing Date, Sync will afford to Osicom and its
counsel, accountants and other authorized representatives
access, at all reasonable times upon reasonable advance
notice, to the officers, directors, employees, accountants and
other advisors and agents, books, records and contracts of
Sync and its Subsidiaries, and the right to make copies and
extracts from such books, records and contracts, and to
furnish Osicom with all financial, operating and other data
and information concerning Sync and its Subsidiaries as Osicom
may reasonably request. Osicom will hold, and will use its
best efforts to cause its representatives to hold, any such
information which is non-public in confidence to the extent
required by, and in accordance with, the provisions of the
Confidentiality Agreement.
5.4 FILINGS AND CONSENTS. Sync and Osicom shall use all reasonable efforts to
obtain and to cooperate in obtaining any consent, approval,
authorization or order of, and in making any registration or filing
with, any governmental agency or body or other third party required in
connection with the execution, delivery or performance of this
Agreement. The parties agree to cause to be made all appropriate
filings under the HSR Act within three business days of the date of
this Agreement and to diligently pursue early termination of the
waiting period under such act.
5.5 NO SOLICITATION. (a) Sync, the Shareholder and its Subsidiaries, and the
officers, directors, employees or other agents of Sync, the Shareholder
and its Subsidiaries, will not, directly or indirectly, (i) take any
action to solicit, initiate or encourage any Takeover Proposal (as
defined below) or (ii) subject to the terms of Section 5.5(b), engage
in negotiations with, or disclose any nonpublic information relating to
Sync or Osicom (as applicable) to, or afford access to the properties,
books or records of Sync or Osicom (as applicable) to, any person that
has advised Sync, the Shareholder or Osicom that it may be considering
making, or that has made, a Takeover Proposal. Each of Sync and the
Shareholder will promptly notify the other after receipt of any
Takeover Proposal or any notice that any person is considering making a
Takeover Proposal or any request for nonpublic information relating to
Sync or Osicom, as applicable, or for access to the properties, books
or records of Sync or Osicom, as applicable, by any person that has
advised Sync or the Shareholder, as applicable, that it may be
considering making, or that has made, a Takeover Proposal and will keep
the Shareholder or Sync, as applicable, fully informed of the status
and details of any such Takeover Proposal notice or request. For
purposes of this Agreement, "TAKEOVER PROPOSAL" means any offer or
proposal for, or any indication of interest in, a merger or other
business combination involving Sync or Osicom, or the
acquisition of any significant equity interest in, or a significant
portion of the assets of, Sync or Osicom, other than the transactions
contemplated by this Agreement.
(a) Notwithstanding Section 5.5(a), if an unsolicited Takeover
Proposal, or an unsolicited written expression of interest
that can reasonably be expected to lead to a Takeover
Proposal, shall be received by the Board of Directors of Sync
or the Shareholder, then, to the extent the Board of Directors
of Sync or the Shareholder, as applicable, believes in good
faith (after consultation with its financial advisor) that
such Takeover Proposal would, if consummated, result in a
transaction more favorable to Sync's or the Shareholder's
stockholders, as applicable, from a financial point of view
than the transaction contemplated by this Agreement (any such
more favorable Takeover Proposal being referred to in this
Agreement as a "Superior Proposal"), and the Board of
Directors of Sync or the Shareholder, as applicable,
determines in good faith after consultation with outside legal
counsel that it is necessary for such Board of Directors to
evaluate the Superior Proposal in order to comply with its
fiduciary duties to stockholders under applicable law, Sync or
the Shareholder, as applicable, and its officers, directors,
employees, investment bankers, financial advisors, attorneys,
accountants and other representatives retained by it may
furnish in connection therewith information and take such
other actions as are consistent with the fiduciary obligations
of its Board of Directors, and such actions shall not be
considered a breach of this Section 5.5 or any other
provisions of this Agreement; provided, however, that Sync and
the Shareholder shall not, and shall not permit any of their
respective officers, directors, employees or other
representatives to, agree to or endorse any Takeover Proposal
regarding Sync or Osicom, as applicable, unless Sync or the
Shareholder, as applicable, shall have (i) terminated this
Agreement pursuant to Section 8.1(e), and (ii) agreed to pay,
without interest, to the Shareholder or Sync, as applicable,
the sum of $1,000,000 (the "Break-up Fee") no later than
thirty (30) days after the closing of the transaction
resulting from the Superior Proposal.
5.6 PROXY; REGISTRATION STATEMENT. As soon as practicable after the date hereof
Sync shall prepare and file with the Commission a proxy statement and
related materials to be furnished by the Company to the holders of Sync
Common Stock in connection with the Merger and the matter referred to
in Section 1.6 of this Agreement (the "Proxy Statement") and a
Registration Statement on Form S-4 with respect to the shares of Sync
Common Stock to be issued to the Shareholder. As soon as practicable
following receipt of final comments from the staff of the Commission on
the Proxy Statement and the Registration Statement (or advice that such
staff will not review such filing), Sync shall use its best efforts to
have the Registration Statement declared effective by the Commission
and to maintain the effectiveness of such Registration Statement until
completion of the Merger. Promptly after the effectiveness of the
Registration Statement, Sync shall mail the Proxy Statement to all
holders of Sync Common Stock. Sync, the Shareholder and Osicom shall
cooperate with each other in the preparation of the Proxy Statement and
the Registration Statement and shall advise the other in writing if, at
any time prior to the Sync Meeting, any such party shall obtain
knowledge of any facts that
might make it necessary or appropriate to amend or supplement the Proxy
Statement or the Registration Statement in order to make the statements
contained or incorporated by reference therein not misleading or to
comply with applicable law. Notwithstanding the foregoing, each party
shall be responsible for the information and disclosures which it makes
or incorporates by reference in all regulatory filings, the Proxy
Statement and the Registration Statement.
5.7 SHAREHOLDERS' MEETING. Sync shall take all action necessary, in accordance
with applicable law and its Certificate of Incorporation and By-Laws,
to convene a meeting of the holders of the Sync Common Stock (the "Sync
Meeting") as promptly as practicable for the purpose of considering and
taking action required by this Agreement. Except to the extent legally
required for the discharge by the Board of Directors of its fiduciary
duties, the Board of Directors of Sync shall recommend that the holders
of the Sync Common Stock vote in favor of and approve the Merger and
adopt this Agreement at the Sync Meeting.
5.8 LISTING. Sync shall use its best efforts to list on the Nasdaq National
Market upon official notice of issuance the Sync Common Stock to be
issued in the Merger.
5.9 COVENANT TO SATISFY CONDITIONS. Each party hereto agrees to use all
reasonable efforts to insure that the conditions set forth in Article
VI and Article VII, respectively hereof are satisfied, insofar as such
matters are within the control of such party.
5.10 BEST EFFORTS AND FURTHER ASSURANCES. Each of the parties to this
Agreement shall use its best efforts to effectuate the transactions
contemplated hereby and to fulfill and cause to be fulfilled the
conditions to closing under this Agreement. Each party hereto, at the
reasonable request of another party hereto, shall at any time execute
and deliver such other instruments and do and perform such other acts
and things as may be necessary or desirable, including without
limitation the transfer to Osicom of all right, title and interest in
the Osicom Assets, for effecting completely the consummation of this
Agreement and the transactions contemplated hereby.
ARTICLE VI
CONDITIONS TO OSICOM'S OBLIGATIONS
The obligation of Osicom to effect the Closing under this
Agreement is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions, unless validly waived in writing by Osicom.
6.1 REPRESENTATIONS AND WARRANTIES. (a) Each of the representations and
warranties of Sync set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Closing Date as
if made at and as of the Closing Date (except, in each case, for those
representations and warranties which address matters only as of a
particular date, in
which case they shall be true and correct, or true and correct in all
material respects, as applicable, as of such date).
6.2 PERFORMANCE. Sync shall have performed and complied in all material
respects with all agreements and obligations required by this Agreement
to be so performed or complied with by it prior to the Closing.
6.3 OFFICER'S CERTIFICATE. Sync shall have delivered to Osicom a certificate,
dated as of the Closing Date and executed by the President or a Senior
Vice President of Sync, certifying to the fulfillment of the conditions
specified in Sections 6.1 and 6.2 hereof.
6.4 HSR ACT. All applicable waiting periods under the HSR Act with respect to
the transactions contemplated hereby shall have expired or been
terminated.
6.5 SHAREHOLDER APPROVAL. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of shareholders of Sync.
6.6 REGISTRATION STATEMENT. The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act and
no stop order suspending the effectiveness of the Registration
Statement shall have been issued by the Commission and remain in
effect.
6.7 NASDAQ. The Sync Common Stock issuable pursuant to the Merger shall have
been designated for inclusion in the Nasdaq National Market (the
"Nasdaq").
6.8 INJUNCTIONS. On the Closing Date there shall be no injunction, writ,
preliminary restraining order or other order in effect of any nature
issued by a United States Federal or state court or governmental
authority of competent jurisdiction directing that the transactions
provided for herein not be consummated as provided herein.
6.9 CONSENTS. All material orders, consents, approvals, permits, authorizations,
notices, declarations, filings, applications, qualifications and
registrations identified in Section 4.6 of the Disclosure Schedule and
necessary to effect the Closing or continue the business of Osicom
after the Closing shall have been obtained.
6.10 NON-COMPETITION AGREEMENT. Prior to the Closing, pursuant to Section
1.7(d), Sync shall have entered into a Non-Competition Agreement with
the Shareholder in such form and substance as Sync and the Shareholder
may mutually agree.
ARTICLE VII
CONDITIONS TO SYNC'S OBLIGATION
The obligation of Sync to effect the Closing under this
Agreement is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions, unless validly waived
in writing by Sync.
7.1 REPRESENTATIONS AND WARRANTIES. (a) Each of the representations and
warranties of the Shareholder and Osicom set forth in this Agreement
that shall be true and correct as of the date of this Agreement and as
of the Closing Date as if made at and as of the Closing Date, (except,
in each case, for those representations and warranties which address
matters only as of a particular date, in which case they shall be true
and correct, or true and correct in all material respects, as
applicable, as of such date).
7.2 PERFORMANCE. The Shareholder and Osicom shall have performed and complied
in all material respects with all agreements and obligations required
by this Agreement to be so performed or complied with by the
Shareholder and Osicom prior to the Closing.
7.3 OFFICER'S CERTIFICATE. The Shareholder and Osicom shall have delivered to
Sync a certificate, dated as of the Closing Date and executed by the
President or a Senior Vice President each of Osicom, certifying to the
fulfillment of the conditions specified in Sections 7.1 and 7.2 hereof.
7.4 HSR ACT. All applicable waiting periods under the HSR Act with respect to
the transactions contemplated hereby shall have expired or been
terminated.
7.5 SHAREHOLDER APPROVAL. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of shareholders of Sync.
7.6 REGISTRATION STATEMENT. The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act and
no stop order suspending the effectiveness of the Registration
Statement shall have been issued by the Commission and remain in
effect.
7.7 INJUNCTIONS. On the Closing Date there shall be no injunction, writ,
preliminary restraining order or other order in effect of any nature
issued by a United States Federal or state court or governmental
authority of competent jurisdiction directing that the transactions
provided for herein not be consummated as provided herein.
7.8 CONSENTS. All material orders, consents, approvals, permits, authorizations,
notices, declarations, filings, applications, qualifications and
registrations identified in Section 3.6 of the Disclosure Schedule and
necessary to effect the Closing or continue the business of Osicom
after the Closing shall have been obtained. Without limiting the
foregoing, Coast Business Credit, Inc. shall have agreed to continue to
provide financing to the Surviving Corporation in the same amount and
on the same terms and conditions as it has provided such financing to
Osicom prior to the date of this Agreement.
7.9 NON-COMPETITION AGREEMENT. Prior to the Closing, pursuant to Section 1.7(d),
Sync shall have entered into a Non-Competition Agreement with the
Shareholder in such form and substance as Sync and the Shareholder may
mutually agree.
ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Effective
Time:
(a) by the mutual consent of Sync and the Shareholder;
(b) by Sync, if the Closing has not occurred on or before August
31, 2000, unless the failure of such consummation shall be due
to any materially false, inaccurate or misleading
representations and warranties of Sync contained herein or the
breach or failure of Sync to comply in all material respects
with the agreements and covenants contained herein to be
performed by Sync on or before August 31, 2000;
(c) by the Shareholder, if the Closing has not occurred on or
before August 31, 2000, unless the failure of such
consummation shall be due to any materially false, inaccurate
or misleading representations and warranties of the
Shareholder or Osicom contained herein or the breach or
failure of the Shareholder or Osicom to comply in all material
respects with the agreements and covenants contained herein to
be performed by the Shareholder or Osicom on or before August
31, 2000;
(d) by either Sync or the Shareholder, if any court or
governmental authority of competent jurisdiction shall have
issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby and such order, decree or
ruling or other action shall have become final and
nonappealable;
(e) by either Sync or the Shareholder, upon (i) receipt of an
unsolicited proposal that constitutes a Superior Proposal and
(ii) agreement to pay the Break-up Fee; or
(f) by Sync in the event its Shareholders vote not to approve this
Agreement, provided that Sync shall then pay to Osicom a fee
of Two Hundred Fifty Thousand Dollars ($250,000.00) within
thirty (30) days of such shareholder vote.
8.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of the termination of this
Agreement and the abandonment of the transactions contemplated hereby
by Sync or the Shareholder pursuant to Section 8.1 hereof, written
notice thereof shall forthwith be given to the other parties. If this
Agreement is terminated and the transactions contemplated by this
Agreement are abandoned as provided herein, no party to this Agreement
will have any liability under this Agreement to any other except (i)
that nothing herein shall relieve any party from any liability for
making any false, inaccurate or misleading representations or
warranties, or the breach of any covenants and agreements set forth in
this Agreement and
(ii) as contemplated by Section 9.1 and (iii) if applicable, payment of
the Break-up Fee pursuant to Section 5.5(b) or the $250,000.00 fee
pursuant to Section 8.1(f).
ARTICLE IX
INDEMNIFICATION
9.1 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE SHAREHOLDER OF SYNC. Subject to the
limits set forth in this Section 9.1, the Shareholder agrees
that from and after the date hereof the Shareholder shall,
indemnify, defend and hold Sync, its Subsidiaries (including,
without limitation, Osicom after the Effective Date) and their
respective officers, directors, partners, stockholders,
employees, agents and representatives (collectively, the "Sync
Indemnified Persons") harmless from and in respect of any and
all losses, damages, costs and reasonable expenses (including,
without limitation, reasonable fees and expenses of counsel)
(collectively, "Losses"), that such Sync Indemnified Persons
or Sync or its Subsidiaries may incur arising out of or due to
(i) any false, inaccurate, or misleading representation or
warranty or the breach of any covenant by the Shareholder or
Osicom in the Agreement, (ii) the termination of the Case
Defined Benefit Plan; (iii) the early termination by Osicom of
its real estate lease for property located in Aurora,
Illinois; and (iv) the failure of Osicom to pay any owed Taxes
and to file all required Tax Returns, and all fines and
penalties associated therewith. The matters referred to in
clause (i) of this paragraph (a) shall be subject to
indemnification only as to claims made within the period
ending twenty-four (24) months following the Effective Date
(except as to matters referred to in Section 3.16, for which
the time limit is the applicable statute of limitations).
(b) INDEMNIFICATION BY SYNC OF THE SHAREHOLDER. Subject to the
limits set forth in this Section 9.1, Sync agrees that from
and after the date hereof Sync shall, for claims made within
the period ending twenty-four (24) months following the
Effective Date (except as to matters referred to in Section
4.16, for which the time limit is the applicable statute of
limitations) indemnify, defend and hold the Shareholder and
its officers, directors, partners, stockholders, employees,
agents and representatives (collectively, the "Osicom
Indemnified Persons" and, together with the Sync Indemnified
Persons, the "Indemnified Persons") harmless from and in
respect of any and all Losses that such Osicom Indemnified
Persons may incur arising out of or due to any false,
inaccurate, or misleading representation or warranty or the
breach of any covenant by Sync in the Agreement. The matters
referred to this paragraph (b) shall be subject to
indemnification only as to claims made within the period
ending twenty-four (24) months following the Effective Date
(except as to matters referred to in Section 3.16, for which
the time limit is the applicable statute of limitations).
(c) NOTICE AND OPPORTUNITY TO DEFEND. If there occurs an event
which a party asserts is an indemnifiable event pursuant to
Section 9.1(a) or 9.1(b), then Sync or the Shareholder as
applicable, shall promptly notify the Shareholder or Sync,
respectively (the "Indemnifying Party"). If such event
involves any claim, or the commencement of any action or
proceeding, by a third person against any of the Indemnified
Persons, the Indemnified Person will give the Indemnifying
Party prompt written notice of such claim or the commencement
of such action or proceeding; provided, however, that the
failure to provide prompt notice as provided herein will
relieve the Indemnifying Party of its obligations hereunder
only to the extent that such failure prejudices the
Indemnifying Party hereunder. In case any such action shall be
brought against any party seeking indemnification and the
Indemnified Person shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled
to participate therein or, following the delivery by the
Indemnifying Party to the Indemnified Person of Indemnified
Party's acknowledgment in writing that the relevant Loss is an
indemnified liability hereunder and that the Indemnifying
Party, in its good faith judgment, will be able to pay any
award of money damages against the Indemnified Person in
connection with such action, to assume the defense thereof,
with legal counsel reasonably satisfactory to such Indemnified
Person and, after notice from the Indemnified Person to such
Indemnified Person of such election so to assume the defense
thereof, the Indemnifying Party shall not be liable to the
party or parties seeking indemnification hereunder for any
legal expenses of other counsel or any other expenses
subsequently incurred by such party or parties in connection
with the defense thereof. The Indemnifying Party and the
Indemnified Person agree to cooperate fully with each other
and their respective legal counsel in connection with the
defense, negotiation or settlement of any such action or
asserted liability. The Indemnified Person shall have the
right to participate at his own expense in the defense of such
action or asserted liability. If the Indemnifying Party
assumes the defense of an action (a) no settlement or
compromise thereof may be effected (i) by the Indemnifying
Party without the written consent of the Indemnified Person
(which consent shall not be unreasonably withheld or delayed)
unless (x) there is no finding or admission of any violation
of law or any violation of the rights of any person by any
Indemnified Person and no adverse effect on any other claims
that may be made against any Indemnified Person and (y) all
relief provided is paid or satisfied in full by the
Indemnifying Party or (ii) by the Indemnified Person without
the written consent of Indemnifying Party (which consent shall
not be unreasonably withheld or delayed) and (b) the
Indemnified Person may subsequently assume the defense of such
action if a court of competent jurisdiction determines that
the Indemnifying Party is not vigorously defending such action
and the Indemnifying Party shall bear all costs and expenses
incurred by the Indemnified Party in its defense of such
action, including without limitation, fees and expenses of
legal counsel. In no event shall the Indemnifying Party be
liable for any settlement effected without its written consent
(d) PAYMENT. On each occasion that any Indemnified Person shall be
entitled to indemnification or reimbursement under this
Section 9.1, the Indemnifying Party shall, at each such time,
promptly pay by wire transfer, to the Indemnified Person the
aggregate amount of such Loss. To the extent the Indemnified
Person is the Shareholder and/or Osicom and Sync makes a
payment to a third party or incurs defense costs subsequent to
the Effective Date with respect to a matter subject to
indemnification hereunder, then the Loss payable to the
Shareholder shall equal the amount of such payment and costs,
which the Surviving Corporation shall pay to the Shareholder.
To the extent that the Indemnified Person is a Sync
Indemnified Person, and Sync makes a payment to a third party
or incurs defense costs subsequent to the Effective Date with
respect to a matter subject to indemnification hereunder by
the Shareholder, then the Loss payable to Sync shall equal the
amount of such payment and costs, which the Shareholder shall
pay to Sync. If any Indemnified Person shall be entitled to
indemnification under this Section 9.1, the Indemnifying Party
shall reimburse in cash the Indemnified Person's actual
out-of-pocket expenses, if any, arising as a result of
defending against any such claim, action or proceeding.
(e) MINIMUM LIABILITY. Neither party shall have any liability to
the other under this Article IX unless such party's aggregate
Losses exceed $250,000, in which event the Indemnifying Party
shall be liable only for all such Losses above that amount.
Neither party shall have any liability under this Article IX
in an amount greater that Sync's market capitalization as of
the date of this Agreement..
ARTICLE X
MISCELLANEOUS
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations, warranties, covenants and other agreements in this
Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants and other agreements, shall survive the Effective
Time for a period of two (2) years, except for (a) those covenants and
agreements contained herein and therein that by their terms apply or
are to be performed in whole or in part prior to or at the Effective
Time, and (b) those representations concerning Taxes, which will
survive for the statute of limitations period applicable to the payment
of such taxes, and (c) those representations concerning matters under
or relating to any Environmental Laws, which will survive for the
statute of limitations period applicable to such matters.
10.2 FEES AND EXPENSES. Except as otherwise provided in this Agreement,
Osicom and Shareholder shall bear their own expenses and the expenses
of their Affiliates and Sync shall bear its own expenses and the
expenses of its Affiliates in connection with the preparation and
negotiation of this Agreement and the consummation of the transactions
contemplated by this Agreement. Each of Osicom. Shareholder and Sync
shall bear the
fees and expenses of any broker or finder retained by such party or
parties and their respective Affiliates (including, in the case of
Sync, Merger Co) in connection with the transactions contemplated
herein.
10.3 GOVERNING LAW. This Agreement shall be construed under and governed by
the laws of the State of California applicable to contracts made and to
be performed therein.
10.4 AMENDMENT. This Agreement may not be amended, modified or supplemented
except upon the execution and delivery of a written agreement executed
by Sync, the Shareholder, Osicom and Merger Co.
10.5 NO ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any party hereto without
the prior written consent of Osicom, in the case of assignment by Sync,
and Sync, in the case of any assignment by Osicom or the Shareholder.
Notwithstanding the foregoing, Merger Co may assign, in its sole
discretion, any or all of its rights, interests and obligations under
this Agreement to any direct wholly owned Subsidiary of Sync without
the consent of Osicom, but no such assignment shall relieve Sync or
Merger Co of any of its obligations under this Agreement. Subject to
the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective
successors and assigns.
10.6 WAIVER. Any of the terms or conditions of this Agreement which may be
lawfully waived may be waived in writing at any time by each party
which is entitled to the benefits thereof. Any waiver of any of the
provisions of this Agreement by any party hereto shall be binding only
if set forth in an instrument in writing signed on behalf of such
party. No failure to enforce any provision of this Agreement shall be
deemed to or shall constitute a waiver of such provision and no waiver
of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
10.7 NOTICES. Any notice, demand, or communication required or permitted to
be given by any provision of this Agreement shall be deemed to have
been sufficiently given or served for all purposes if (a) personally
delivered, (b) mailed by registered or certified first-class mail,
prepaid with return receipt requested, (c) sent by a nationally
recognized overnight courier service, to the recipient at the address
below indicated or (d) delivered by facsimile which is confirmed in
writing by sending a copy of such facsimile to the recipient thereof
pursuant to clause (a) or (c) above:
If to Sync or Merger Co:
Sync Research, Inc.
00 Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, President
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
With copies to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
Venture Law Group
2775 and 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
If to the Shareholder or Osicom:
Osicom Technologies, Inc.
0000 00xx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: President
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
With copies to:
Greenbaum, Rowe, Xxxxx, Xxxxx, Xxxxx & Xxxxxx, LLP
Metro Corporate Campus I
00 Xxxx Xxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: W. Xxxxxxx Xxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
or to such other address as any party hereto may, from time to time,
designate in a written notice given in like manner.
Except as otherwise provided herein, any notice under this Agreement
will be deemed to have been given (x) on the date such notice is
personally delivered or delivered by facsimile, (y) four days after the
date of mailing if sent by certified or registered mail or (z) the next
succeeding business day after the date such notice is delivered to the
overnight courier service if sent by overnight courier; provided that
in each case notices received after 4:00 p.m. (local time of the
recipient) shall be deemed to have been duly given on the next business
day.
10.8 COMPLETE AGREEMENT. This Agreement and the other documents and writings
referred to herein or delivered pursuant hereto contain the entire
understanding of the parties with respect to the subject matter hereof
and thereof and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject
matter hereof and thereof. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
10.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
10.10 PUBLICITY. Sync and Osicom will consult with each other and will
mutually agree upon any publication or press release of any nature with
respect to this Agreement or the transactions contemplated hereby and
shall not issue any such publication or press release prior to such
consultation and agreement except as may be required by applicable law
or by obligations pursuant to any listing agreement with any securities
exchange or any securities exchange regulation, in which case the party
proposing to issue such publication or press release shall make all
reasonable efforts to consult in good faith with the other party or
parties before issuing any such publication or press release and shall
provide a copy thereof to the other party or parties prior to such
issuance.
10.11 HEADINGS. The headings contained in this Agreement are for reference
only and shall not affect in any way the meaning or interpretation of
this Agreement.
10.12 SEVERABILITY. Any provision of this Agreement which is invalid, illegal
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions
hereof in such jurisdiction or rendering that or any other provision of
this Agreement invalid, illegal or unenforceable in any other
jurisdiction.
10.13 THIRD PARTIES. Except as specifically set forth or referred to herein,
nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person or corporation, other than the
parties hereto and their permitted successors or assigns, any rights or
remedies under or by reason of this Agreement.
10.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. THE PARTIES HERETO
HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE AREA ENCOMPASSED BY THE SOUTHERN DISTRICT OF THE
STATE OF CALIFORNIA AND IRREVOCABLY AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE
LITIGATED IN SUCH COURTS. THE PARTIES HERETO EACH ACCEPT FOR ITSELF AND
HIMSELF, AS THE CASE MAY BE, AND IN CONNECTION WITH ITS OR HIS, AS THE
CASE MAY BE, RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION AND VENUE OF THE AFORESAID COURTS AND WAIVE ANY
DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND BY
ANY NON-APPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. OSICOM DESIGNATES XXX XXXXXXXX AT HIS BUSINESS ADDRESS, 0000
XXXXXXXX XXXXX, XXXXXXXXX XXXXXXXX, XXXXXXXX 00000 AND SUCH OTHER
PERSON AS MAY HEREINAFTER BE SELECTED BY OSICOM WHO IRREVOCABLY AGREES
IN WRITING TO SO SERVE AS AGENT FOR OSICOM TO RECEIVE ALL PROCESS IN
ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY THE PARTIES HERETO TO BE EFFECTIVE AND BINDING SERVICE
IN EVERY RESPECT. SYNC DESIGNATES XXXXXXX X. XXXXXX AT HIS BUSINESS
ADDRESS SET FORTH IN SECTION 10.7 AND SUCH OTHER PERSON AS MAY
HEREINAFTER BE SELECTED BY SYNC WHO IRREVOCABLY AGREES IN WRITING TO SO
SERVE AS AGENT FOR SYNC TO RECEIVE ALL PROCESS IN ANY SUCH PROCEEDINGS
IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE
PARTIES HERETO TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A
COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL
TO THE PARTIES HERETO, AS PROVIDED HEREIN, EXCEPT THAT UNLESS OTHERWISE
PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE VALIDITY OF SERVICE OF PROCESS.
10.15 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER
OF THIS TRANSACTION. THE PARTIES HERETO ALSO WAIVE ANY BOND OR SURETY
OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF ANY OF THE OTHER PARTIES. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THE PARTIES HERETO ACKNOWLEDGE THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING
INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. THE PARTIES HERETO FURTHER WARRANT
AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS OR HIS, AS
THE CASE MAY BE, LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS OR HIS, AS THE CASE MAY BE, JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
10.16 DEFINITIONS. As used in this Agreement:
"AFFILIATE" of a person means a person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is
under common control with, the first mentioned person;
"BEST KNOWLEDGE" means the knowledge of Osicom's or Sync's, as the case
may be, officers, as such knowledge has been obtained in the normal
course of its business or in connection with the preparation of the
Disclosure Schedule and the furnishing of information to Sync or Osicom
as contemplated by this agreement, after having made a reasonable
investigation of the accuracy of the representations and warranties
made by Osicom or Sync in this Agreement or in any document,
certificate or other writing furnished by Osicom or Sync to the other
pursuant hereto or in connection therewith.
"MATERIAL ADVERSE EFFECT" means, with respect to any entity, to the
extent not reflected on such entity's Balance Sheet, any liability,
obligation, impairment, restriction, lien, cost, expense, loss,
compensation, payment, reimbursement, damage, judgment or settlement
to, of, by or on the business (including on assets that has such effect
on the business), operations, cash flow, property, assets, prospects or
condition (financial or otherwise) of such entity and its Subsidiaries
taken as a whole in the amount of $250,000 or more for an individual
occurrence or $500,000 or more in the aggregate for multiple
occurrences, arising outside the ordinary course of business. "Material
Adverse Effect" includes, without limitation, any effect that impairs
the ability of any of the parties hereto to consummate any transaction
contemplated hereby.
"PERMITTED LIENS" means (a) any mechanic's, materialman's or other
liens arising by operation of law in the ordinary course of business
consistent with past practice, (b) liens for Taxes, assessments and
other governmental charges not yet due and payable or which
the taxpayer is contesting in good faith through appropriate
proceedings and for which any required reserves have been established,
(c) purchase money liens and liens securing rental payments under
capital lease arrangements, (d) liens arising as a matter of law in the
ordinary course of business, provided that the obligations secured by
such liens are not delinquent or are being contested in good faith, and
(e) Encumbrances which, individually and in the aggregate, do not
materially impair the current use or continued use (in the same manner
as they are being used on the date hereof) of the asset to which they
attach.
"SUBSIDIARY" when used with respect to any party means any corporation
or other organization, whether incorporated or unincorporated, of which
such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which
held by such party or any Subsidiary of such party do not have a
majority of the voting interests in such partnership) or at least a
majority of the securities or other interests of which having by their
terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or
controlled by such party or by any one or more of its Subsidiaries, or
by such party and one or more of its Subsidiaries.
10.17 EFFECTIVE DATE. Notwithstanding anything to the contrary herein, this
Agreement shall become effective only upon the preparation and public
release of a press release, agreed upon by Sync and the Shareholder,
announcing the merger transaction contemplated by this Agreement.
IN WITNESS WHEREOF, each of Sync, Merger Co, the Shareholder
and Osicom has caused this Agreement to be executed by its duly authorized
officer, in each case as of the day and year first above written.
SYNC RESEARCH, INC., a Delaware
Corporation
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Title: Chief Executive Officer
----------------------------------
MERGER CO, a Delaware Corporation
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Title: Chief Executive Officer
----------------------------------
OSICOM TECHNOLOGIES, INC. a New Jersey
corporation
By: /s/ XXXXXXXXXXX X. XXX
-------------------------------------
Name: Xxxxxxxxxxx X. Xxx
-----------------------------------
Title: VP of Finance
----------------------------------
OSICOM TECHNOLOGIES, INC. a Delaware
corporation
By: /s/ XXXXXXXXXXX X. XXX
-------------------------------------
Name: Xxxxxxxxxxx X. Xxx
-----------------------------------
Title: Treasurer, Secretary
----------------------------------
