Stock Purchase Agreement among Xedar Corporation and Atlantic Systems Corporation, a Virginia corporation and Don W. Rakestraw, Jeffrey R. Grime, and J.O. McFalls, III Constituting All of The Shareholders of Atlantic Systems Corporation, a Virginia...
Exhibit
10.1
among
Xedar
Corporation
and
Atlantic
Systems Corporation,
a
Virginia corporation
and
Constituting
All of The Shareholders of
Atlantic
Systems Corporation,
a
Virginia corporation
Effective
as of March 22,
2007
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This
Stock Purchase Agreement (this "Agreement") is entered
into effective as of March 22, 2007, (the
"Effective Date"), by and among Xedar Corporation., a
____________Colorado corporation
("Buyer"), Xxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxx, and
X.X. XxXxxxx, III (each individually a "Shareholder"
and collectively the "Shareholders"), constituting all
of the Shareholders of Atlantic Systems Corporation, a Virginia corporation
(the
"Company"), and the Company.
RECITALS
A. Xxx
X. Xxxxxxxxx owns 23,000 shares of the common stock of the
Company ("Shares"), Xxxxxxx X. Xxxxx owns 17,000
Shares, and X.X. XxXxxxx, III owns 4,444 Shares, and together the Shareholders
own one hundred percent (100%) of the issued and outstanding capital stock
of
the Company.
B. The
Shareholders desire and intend to sell the Shares, constituting 100% of the
issued and outstanding capital stock of the Company, to Buyer at the price
and
on the terms and subject to the conditions set forth below.
C. Buyer
desires and intends to purchase the Shares, constituting 100% of the issued
and
outstanding capital stock of the Company, from the Shareholders at the price
and
on the terms and subject to the conditions set forth below.
AGREEMENT
In
consideration of the terms hereof, the parties agree as follows:
ARTICLE
I – DEFINITIONS
1.1 Definitions
Capitalized
terms shall have the
meanings set forth herein.
ARTICLE
II - PURCHASE AND SALE OF SHARES
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2.1
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Purchase
and Sale of Shares
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On
the
terms and subject to the conditions of this Agreement, Buyer agrees to purchase
the Shares, constituting 100% of the issued and outstanding capital stock
of the
Company, from the Shareholders, and the Shareholders agree to sell the Shares,
constituting 100% of the issued and outstanding capital stock of the Company,
to
Buyer. Schedule 2.1 lists personal items owned by the Sellers,
which items are excluded from the sale hereunder, but may be located on the
business premises of the Company.
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2.2
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Consideration
for Shares
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The
aggregate purchase price (the "Purchase Price") for
the Shares shall be payable in two installments:
(a) The
first installment (the "Closing Payment")
shall consist of three million (3,000,000) shares, no par value per share,
of
the common stock (the "Stock") of Buyer, payable as
set forth in Section 2.2.1.
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(b) The
second installment (the "Post Closing Payment") shall
consist of that number of shares of Stock equal to five million one hundred
eight thousand six hundred ninety six dollars ($5,108,696) worth of Stock,
valued at a price per share ("Post Closing Payment Price Per
Share") equal to the average closing price of the Stock, as quoted
on the OTC Bulletin Board, for the 10 days before and 10 days after such
Stock
is registered pursuant to a registration statement declared effective by
the
United States Securities and Exchange Commission (the
"SEC"), payable as set forth in Section
2.2.1.
Unless
and until the Stock is registered, all Stock constituting a portion of the
Purchase Price shall be "restricted stock" as that term is define in Rule
144
promulgated under the Securities Act of 1933, as amended (the
"Act").
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2.2.1
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Payment
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(a) First
installment: At Closing (as defined below) Buyer shall pay the
Closing Payment by directing its transfer agent, Computershare Trust Company,
Inc. (the "Transfer Agent"), to (a) issue to Xxx X.
Xxxxxxxxx 1,554,000 shares of Stock; (b) issue to Xxxxxxx X. Xxxxx 1,146,000
shares of Stock; and (c) issue to X.X. XxXxxxx, III 300,000 shares of
Stock.
(b) Second
Installment: Not later than five (5) days after the determination of
Post Closing Payment Price Per Share, Buyer shall pay the Post Closing Payment
by directing its Transfer Agent to issue to each Xxx X. Xxxxxxxxx and Xxxxxxx
X.
Xxxxx their pro rata share (in accordance with their percentage ownership
of the
issued and outstanding capital stock of the Company) of the number of shares
of
Stock required to be issued by Buyer pursuant to Section 2.2(b)
hereof.
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2.2.2
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Registration
Rights and Lock-Up Agreement; Adjustment to Purchase
Price
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(a) At
or prior to Closing, Xxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxx, and X.X. XxXxxxx,
III
shall each execute a registration rights and lock-up agreement
("Registration and Lock-Up Agreement") in
substantially the form attached hereto as Exhibit
2.2.2. The Registration and Lock-Up Agreement, shall
provide, among other things, that Buyer shall use its best commercial efforts
to
file, with the SEC, a registration statement with respect to the Stock within
90
days of the Closing and that Buyer shall use its best commercial efforts
to
cause such registration statement to be declared effective within 180 days
of
the Closing. The Registration and Lock-Up Agreement shall further
provide, among other things, that the Shareholders shall be prohibited from
selling the Stock for a period of one year after the Closing, subject to
waiver
by Buyer, and the following conditions: (i) Buyer shall waive the
lock-up with respect to an aggregate of $5,108,696 worth of Stock held by
the
Shareholders (on a pro rata basis) immediately after the effective date of
the
registration statement pursuant to which the Stock is registered; (ii) Buyer
shall waive the lock-up with respect to one half of the remaining Stock held
by
the Shareholders on a pro rata basis with the waiver or expiration of certain
other lock up agreements to which certain other shareholders of Buyer are
subject; and (iii) Buyer shall waive the lock-up with respect to all remaining
Stock held by the Shareholders upon: (A) the waiver or expiration of all
other
lock up agreements to which all other shareholders of Buyer are subject;
and (B)
such other shareholders are afforded a reasonable opportunity and period
of time
to sell their Stock. Pursuant to the Registration and Lock-Up
Agreement, Buyer shall further covenant that it shall include all Stock to
be
delivered as a portion of the Purchase Price in the first registration statement
filed by Buyer with the SEC after the Closing Date (as defined
below). It is the intent of Buyer to file the registration statement
required to be filed pursuant to this Section 2.2.2 no later than March 31,
2007.
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(b) "Actual
Net Equity" shall mean the Company's total assets less total
liabilities (for purposes of this definition, total assets and total liabilities
shall be determined in conformity with GAAP and in a manner consistent with
that
used to prepare the Financial Statements (as defined below)). No
later than the Closing Date (as defined below), the Company shall prepare
and
deliver to Buyer a balance sheet (the "Closing Balance
Sheet"), prepared in conformity with GAAP and in a manner
consistent with that used to prepare the Financial Statements (as defined
in
Section 3.6). Schedule 2.2.2(b) sets forth a complete and
accurate list of all material accounts receivable and accounts payable of
Seller
as of the date of the Closing Balance Sheet, and the Shareholders and the
Company hereby jointly and severally represent and warrant that each such
account receivable and payable is valid, enforceable and represents amounts
due
for services performed or sales actually made in the ordinary course of business
and properly reflect the amounts due or payable.
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2.3
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Closing
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The
closing of the transactions contemplated herein (the
"Closing") shall occur at 3:00 p.m. on Thursday, March
22, 2007, and shall be held at the offices of Buyer,
or at such other time, place and
date as Buyer and the Company shall agree (the "Closing
Date"). At the Closing Buyer and the Shareholders shall
take all such action and deliver all such documents, instruments, certificates
and other items as may be required, under this Agreement or otherwise, in
order
to perform or fulfill all covenants, conditions and agreements on its part
to be
performed or fulfilled at or before the Closing Date and to cause all conditions
precedent to the other parties' obligations under this Agreement to be satisfied
in full.
ARTICLE
III - REPRESENTATIONS AND WARRANTIES
OF
THE SHAREHOLDERS AND THE COMPANY
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3.1
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Shareholder
Representations and
Warranties
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To
induce
the Buyer to enter into and perform this Agreement, the Shareholders and
the
Company represent and warrant to Buyer, as of the Effective Date and as of
the
Closing, as follows in this Article III.
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3.1.1
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Good
Title
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Each
Shareholder represents with respect to itself, and the Company represents
with
respect to itself and each Shareholder, as follows in this Section 3.1: Pursuant
to the Company's Articles of Incorporation, the capital stock of the Company
consists of a single class of common stock and the Company is authorized
to
issued up to 100,000 shares of common stock. There are currently
issued and outstanding forty four thousand four hundred forty four (44,444)
shares of the Company's common stock. Xxx X. Xxxxxxxxx
owns 23,000 Shares, constituting fifty one point eight percent (51.8%) of
the
issued and outstanding Shares of the Company, Xxxxxxx X.
Xxxxx owns 17,000 Shares, constituting thirty eight point two percent (38.2%)
of
the issued and outstanding Shares of the Company, and X.X. XxXxxxx, III owns
4,444 Shares, constituting ten percent (10%) of the issued and outstanding
Shares of the Company; and together the Shareholders own one hundred percent
(100%) of the issued and outstanding capital stock of the
Company. Such Shares are owned free and clear of any lien,
encumbrance, adverse claim, restriction on sale, transfer or voting (other
than
restrictions imposed by applicable securities laws), preemptive right, option
or
other right to purchase, and upon the consummation of the sale of such Shares
as
contemplated hereby, Buyer will have good title to such Shares, free and
clear
of any lien, encumbrance, adverse claim, restriction on sale, transfer or
voting
(other than restrictions imposed by applicable securities laws), preemptive
right, option or other right to purchase.
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3.1.2
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Authority
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Each
Shareholder has all requisite power, right and authority to enter into this
Agreement, including the exhibits and schedules hereto, and each other agreement
or document (collectively the "Transaction Documents")
entered into in connection with this Agreement to which it is a party, to
consummate the transactions contemplated hereby and thereby, and to sell
and
transfer the Shares without the consent or approval of any other person or
entity. Such Shareholder has taken, or will take prior to the
Closing, all actions necessary for the authorization, execution, delivery
and
performance of this Agreement and the other Transaction Documents.
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3.1.3
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Enforceability
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This
Agreement has been, and the other Transaction Documents to which each
Shareholder is a party on the Closing will be, duly executed and delivered
by
such Shareholder, and this Agreement is, and each of the other Transaction
Documents to which a Shareholder is a party on the Closing will be, the legal,
valid and binding obligation of such Shareholder, enforceable against such
Shareholder in accordance with its terms.
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3.1.4
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No
Approvals or Notices Required; No
Conflicts
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The
execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company and each Shareholder, and the consummation of the
transactions contemplated hereby and thereby, will not (a) constitute a
violation (with or without the giving of notice or lapse of time, or both)
of
any provision of any law or any judgment, decree, order, regulation or rule
of
any court, agency or other governmental authority applicable to the Company
or
such Shareholder, (b) require any consent, approval or authorization of, or
declaration, filing or registration with, any person or entity, (c) result
in a default (with or without the giving of notice or lapse of time, or both)
under, acceleration or termination of, or the creation in any party of the
right
to accelerate, terminate, modify or cancel, any agreement, lease, note or
other
restriction, encumbrance, obligation or liability to which the Company is
a
party or by which it is bound or to which any assets of the Company are subject,
or (d) result in the creation of any lien or encumbrance upon the assets
of the Company or upon the Shares.
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3.1.5
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Securities
Representations
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(a) Each
Shareholder is familiar with the term "accredited investor" and its use in
connection with private placements of securities under applicable U.S. federal
and state laws. Each Shareholder represents and warrants that such
Shareholder is an accredited investor as such term is defined in Rule 501(a)
promulgated under the Securities Act of 1933, as amended (the
"Act").
(b) Each
Shareholder (i) is aware of the Buyer's business affairs and financial
condition, has reviewed the most recent current, quarterly, and annual reports
of Buyer filed with the SEC pursuant to the requirements of the Securities
Exchange Act of 1934 Act, as amended (the "Exchange
Act"); and (ii) has acquired sufficient information about Buyer
to
reach an informed and knowledgeable decision to acquire the
Stock. Each Shareholder has such knowledge and experience in
financial and business matters as to make such Shareholder capable of utilizing
said information to evaluate the risks of the prospective investment and
to make
an informed investment decision. Each Shareholder has been furnished
with all information which such Shareholder deems necessary to evaluate the
merits and risks of the purchase of the Stock, and such Shareholder has had
the
opportunity to ask questions and receive answers concerning the Stock and
Buyer
from the officers and directors of Buyer, and to obtain any additional
information concerning the Stock or Buyer necessary to verify the accuracy
of
the information furnished or made available to such Shareholder in connection
herewith. Each Shareholder is able to bear the economic risk of such
Shareholder's investment in the Stock. Each Shareholder is purchasing
the Stock for investment for his or her own account only and not with a view
to,
or for resale in connection with, any "distribution" thereof within the meaning
of the Act.
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(c) Each
Shareholder understands that the Stock has not been registered under the
Act by
reason of a specific exemption therefrom, which exemption depends upon, among
other things, the bona fide nature of such Shareholder's investment intent
as
expressed herein.
(d) Each
Shareholder understands that the Stock is a "restricted security" under
applicable U.S. federal and state securities laws and that, pursuant to
these laws, each Shareholder must hold the Stock indefinitely unless and
until
the Stock is registered (as required by Section 2.2.2 hereof) with the SEC
and
qualified by state authorities or an exemption from such registration and
qualification requirements is available. Each Shareholder further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Stock,
and
requirements relating to Buyer which are outside of the Shareholder's control
and which the Buyer is under no obligation to, and may not be able to,
satisfy.
(e) Each
Shareholder understands that such Shareholder may suffer adverse tax
consequences as a result of such Shareholder's purchase or disposition of
the
Stock. Each Shareholder represents that such Shareholder has
consulted any tax consultants such Shareholder deems advisable in connection
with the purchase or disposition of the Stock and that such Shareholder is
not
relying on Buyer for any tax advice.
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3.2
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Company
Organization; Good Standing; Corporate Authority;
Enforceability
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The
Company and each Shareholder represents and warrants to Buyer as
follows: The Company is a corporation validly existing and in good
standing under the laws of the state of Virginia. The Company is duly
qualified to do business, and is in good standing in each state where such
qualification is required due to (a) the ownership or leasing of real or
personal property for use in the operation of the Company's business or
(b) the nature of the business conducted by the Company. The
Company has all requisite power, right and authority to own, operate and
lease
its properties and assets, to carry on its business as now conducted and
as
represented to Buyer by the Company to be conducted, to execute, deliver
and
perform its obligations under this Agreement and the other Transaction Documents
to which it is a party, and to carry out the transactions contemplated hereby
and thereby.
All
actions on the part of the Company and its Shareholders necessary for the
authorization, execution, delivery and performance of this Agreement and
the
other Transaction Documents, the consummation of the transactions contemplated
hereby and thereby, and the performance of all of the Company's and
Shareholders' obligations under this Agreement and the other Transaction
Documents have been taken or will be taken at or prior to the
Closing. This Agreement has been, and the other Transaction Documents
to which the Company and/or a Shareholder is a party on the Closing will
be,
duly executed and delivered by the Company and/or such Shareholder(s), and
this
Agreement is, and each of the other Transaction Documents to which the Company
and/or a Shareholder is a party on the Closing will be, a legal, valid and
binding obligation of the Company and such Shareholder(s), enforceable against
the Company and such Shareholder(s) in accordance with its terms.
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3.3
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Capitalization
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The
Company and each Shareholder represents and warrants to Buyer as
follows:
(a) Pursuant
to the Company's Articles of Incorporation, the capital stock of the Company
consists of a single class of common stock and the Company is authorized
to
issued up to 100,000 shares of common stock. There are currently
issued and outstanding forty four thousand for hundred forty four (44,444)
shares of the Company's common stock.
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(b) Xxx
X. Xxxxxxxxx owns 23,000 Shares, constituting fifty one point eight percent
(51.8%) of the issued and outstanding Shares of the
Company, Xxxxxxx X. Xxxxx owns 17,000 Shares, constituting thirty eight point
two percent (38.2%) of the issued and outstanding Shares of the Company,
and
X.X. XxXxxxx, III owns 4,444 Shares, constituting ten percent (10%) of the
issued and outstanding Shares of the Company; and together the Shareholders
own
one hundred percent (100%) of the issued and outstanding capital stock of
the
Company. Except for the Shareholders, who together hold one hundred
percent (100%) of the issued and outstanding capital stock of the Company,
no
person or entity holds any interest in or to any capital stock of the
Company.
(c) There
are no outstanding rights of first refusal, preemptive rights, options,
warrants, conversion rights or other agreements, either directly or indirectly,
for the purchase or acquisition from the Company of any capital stock or
other
rights (economic or otherwise) of the Company.
(d) The
Company is not a party or subject to any agreement or understanding, and
there
is no agreement or understanding between any person or entity, that affects
or
relates to the voting or giving of written consents with respect to any capital
stock of the Company or the voting by any Shareholder of the
Company.
(e) The
Shares are certificated and at Closing each Shareholder party hereto shall
deliver to Buyer a certificate, duly endorsed, representing the Shares owned
by
such Shareholder, such that upon Closing Buyer shall possess certificates,
duly
endorsed, representing 100% of the issued and outstanding Shares and
constituting 100% of the issued and outstanding capital stock of the
Company.-
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3.4
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Subsidiaries
and Affiliates
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The
Company and each Shareholder represents and warrants to Buyer as
follows: Except for Point One, L.L.C., a Virginia limited liability
company in good standing, and wholly owned subsidiary of the Company, the
Company does not have, and has never had, any subsidiaries and the Company
does
not own, directly or indirectly, any ownership, equity, profits or voting
interest in, or otherwise control, any corporation, partnership, limited
liability company, joint venture or other entity, and has no agreement or
commitment to purchase any such interest. Herein, references to the
Company or the conduct of its business, except as otherwise required by the
context thereof, shall refer to both Atlantic Systems Corporation, a Virginia
corporation, and its wholly owned subsidiary, Point One, L.L.C., a Virginia
limited liability company.
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3.5
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No
Approvals or Notices Required; No
Conflicts
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The
Company and each Shareholder represents and warrants to Buyer as follows:
The
execution, delivery and performance of this Agreement and the other Transaction
Documents, and the consummation of the transactions contemplated hereby and
thereby, will not (a) constitute a violation (with or without the giving of
notice or lapse of time, or both) of any provision of any law or any judgment,
decree, order, regulation or rule of any court, agency or other governmental
authority applicable to the Company, (b) require any consent, approval or
authorization of, or declaration, filing or registration with, any person
or
entity, (c) result in a default (with or without the giving of notice or
lapse of time, or both) under, acceleration or termination of, or the creation
in any party of the right to accelerate, terminate, modify or cancel, any
agreement, lease, note or other restriction, encumbrance, obligation or
liability to which the Company is a party or by which it is bound or to which
any assets of the Company are subject, (d) result in the creation of any
lien or encumbrance upon the assets of the Company, or upon any Shares or
other
securities of the Company, (e) conflict with or result in a breach of or
constitute a default under any provision of the ____________Articles of Incorporation
or ____________Bylaws of the
Company, or (f) invalidate or
adversely affect any permit, license, authorization or status used in the
conduct of the business of the Company.
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3.6
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Financial
Statements; Obligations
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The
Company and each Shareholder represents and warrants to Buyer as follows:
The
Company has delivered to Buyer (a) balance sheets and statements of
operations, Shareholder' equity and cash flows of the Company at and for
the
fiscal years ended 2005 and 2006, and
accompanying notes, and (b) unaudited balance sheets and unaudited
statements of operations and cash flows of the Company at and for the one
(1) month ended January 31, 2007. All the foregoing
financial statements (including the notes thereto) are referred to as the
"Financial Statements". The Financial
Statements have been prepared in conformity with GAAP consistently applied
throughout the periods covered, except as may be indicated in the notes thereto,
and present fairly the financial position, results of operations and changes
in
financial position of the Company at the dates and for the periods indicated,
subject, in the case of the unaudited financial statements, to normal recurring
period-end adjustments. The Company has no liabilities or obligations
of any nature (absolute, accrued or contingent) that are not fully reflected
or
reserved against in the Closing Balance Sheet, as prescribed by GAAP and
the
Financial Accounting Standards Board, except liabilities or obligations incurred
since the date of the Closing Balance Sheet in the ordinary course of business
and consistent with past practice. The Company maintains and will
continue to maintain standard systems of accounting established and administered
in accordance with GAAP. The Company is not a guarantor, indemnitor,
surety or other obligor of any indebtedness of any other person or
entity. Disclosure Schedule 3.6 sets forth all promissory
notes, loans, lines of credits or similar obligations pursuant to which the
Company is an obligor, together with all the amounts owed by the Company
under
such obligations, as of the Closing, and all liabilities under real property
and
equipment leases of the Company (the "Operating
Liabilities").
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3.7
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Absence
of Certain Changes or
Events
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The
Company and each Shareholder represents and warrants to Buyer as follows:
Except
(a) as and to the extent reflected or reserved against in the Closing
Balance Sheet and (b) for liabilities and obligations incurred in the
ordinary course of business since the Closing Balance Sheet, which are not
material in amount, there are no liabilities or obligations of any nature
relating to the Company, due or to become due, known or unknown, accrued,
absolute, contingent or otherwise, that would be required to be included
in a
balance sheet prepared in accordance with GAAP. The Company has not
entered into or agreed to enter into any transaction, agreement or commitment,
suffered the occurrence of any event or events or experienced any change
in
financial condition, business, results of operations or otherwise that, in
the
aggregate, has (i) interfered with the normal and usual operations of the
business or business prospects of the business or (ii) resulted in a
material adverse change in the business, assets, operations, prospects or
condition (financial or other) or could reasonably be expected to have such
material adverse effect.
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3.8
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Taxes
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The
Company and each Shareholder represents and warrants to Buyer as
follows:
(a) For
purposes of this Agreement, the term "Taxes," means
(i) any and all federal, state, local and foreign taxes, assessments and
other governmental charges, duties, impositions and liabilities, including,
without limitation, taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts; (ii) any liability for the payment of any amounts of the
type described in clause (i) as a result of being or ceasing to be a member
of an affiliated, consolidated, combined or unitary group for any period
(including, without limitation, any liability under Treasury Regulation
Section 1.1502-6 or any comparable provision of foreign, state or local
law); and (iii) any liability for the payment of any amounts of the type
described in clause (i) or (ii) as a result of any express or implied
obligation to indemnify any other Person or as a result of any obligations
under
any agreements or arrangements with any other Person with respect to such
amounts and including any liability for taxes of a predecessor entity; and
the
term "Tax" means any one of the foregoing Taxes.
(b) The
Company has filed on a timely basis all reports, returns, declarations, claims
for refund, information returns, statements or other similar documents,
including any schedules or attachments thereto, and including any amendment
thereof with respect to any Taxes ("Tax Returns") that
the Company was required to file. All such Tax Returns were correct
and complete in all respects and have been prepared and completed in accordance
with applicable law, including all and were prepared in accordance with the
applicable statutes, rules and regulations. No such Tax Returns are
currently the subject of audit or examination nor has the Company been notified
in writing, or otherwise, of any request for an audit or
examination. All Taxes owed by the Company (whether or not shown on
any Tax Return) were paid in full when due or are being contested in good
faith
and are supported by adequate reserves on the Financial
Statements. The Company has provided adequate reserves on its
Financial Statements for the payment of any Taxes accrued but not yet due
and
payable. The Company is not currently the beneficiary of any
extension of time within which to file any Tax Return, and the Company has
not
waived any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to any Tax assessment or deficiency. The Company
has duly and timely withheld from employee salaries, or wages or other
compensation (whether or not paid in cash) and other amounts paid to creditors,
independent contractors and other third parties and paid over to the appropriate
governmental authority all amounts required to be so withheld and paid over
for
all periods under all applicable Tax or other laws. No amounts have
been or would be required to be withheld with respect to the lapse of
restrictions on the Shares. The Tax Returns of the Company do not
contain a disclosure under Section 6662 of the Internal Revenue Code of
1986, as amended (the "Code") (or any predecessor
provision or comparable provision of state, local or foreign
law). The Company does not do business in or derive income from any
state, local or foreign jurisdiction other than those jurisdictions for which
Tax Returns have been duly filed by the Company.
(c) There
is no dispute, claim or proposed adjustment concerning any Tax liability
of the
Company either (A) claimed or raised by any authority in writing or
(B) based upon personal contact with any agent of such
authority. The Company is not a party to nor has it been notified in
writing or, otherwise, that it is the subject of any pending, proposed or
threatened action, investigation, proceeding, audit, claim or assessment
by or
before the IRS or any other governmental authority, and no claim for assessment,
deficiency or collection of Taxes, or proposed assessment, deficiency or
collection from the IRS or any other governmental authority which has not
been
satisfied, nor does the Company have any reason to believe that any such
notice
will be received in the future. The IRS has never audited any Tax
Return of the Company. The Company has not filed any requests for
rulings with the IRS. No power of attorney has been granted by the
Company, its Shareholders or their affiliates with respect to any matter
relating to Taxes of the Company. There are no Tax liens of any kind
upon any property or assets of the Company, except for inchoate liens for
Taxes
not yet due and payable.
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3.9
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Property
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The
Company and each Shareholder represents and warrants to Buyer as
follows:
(a) Disclosure
Schedule 3.9(a) contains a complete and accurate list of all real
property that is owned, leased, rented or used by the Company (the
"Real Property"). The Company has delivered
to Buyer true and complete copies of all leases, subleases, rental agreements,
contracts of sale, tenancies or licenses relating to the Real
Property.
(b) Disclosure
Schedule 3.9(b) contains a complete and accurate list of each item of
personal property having a book value in excess of $2,000 that is owned,
leased,
rented or used by the Company (the "Personal
Property"); and the Company has delivered to Buyer true and
complete copies of all leases, subleases, rental agreements, contracts of
sale,
tenancies or licenses relating to the Personal Property.
(c) The
Real Property and the Personal Property include all properties and assets
(whether real, personal or mixed, tangible or intangible) reflected in the
Balance Sheet and all the properties and assets purchased by the Company
since
the date of the Balance Sheet (except for such properties or assets sold
since
the date of the Balance Sheet in the ordinary course of business and consistent
with past practice). The Real Property and the Personal Property
include all property used in the business of the Company.
(d) The
Company's title to or leasehold interest in, as applicable, each parcel of
the
Real Property is free and clear of all liens, mortgages, pledges, deeds of
trust, security interests, charges, encumbrances, institutional controls
and
other adverse claims or interests of any kind.
(e) The
Company's offices, manufacturing and production facilities and other structures
and the Company's Personal Property are adequate for the uses to which they
are
being put and there are no applicable adverse zoning, building or land use
codes
or rules, ordinances, regulations or other restrictions relating to zoning
or
land use that currently or may prospectively prevent, or cause the imposition
of
material fines or penalties as the result of, the use of all or any portion
of
the Real Property for the conduct of the business as presently
conducted. The Company has received all necessary approvals with
regard to occupancy and maintenance of the Real Property.
(g) Each
lease of any portion of the Real Property and each lease, license, rental
agreement, contract of sale or other agreement to which the Personal Property
is
subject is valid, binding and enforceable in accordance with its terms against
the parties thereto; the Company has performed all obligations imposed upon
it
thereunder; and the Company is not in default thereunder, nor is there any
event
that with notice or lapse of time, or both, would constitute a default
thereunder. No consent is required from any Person under any lease or
other agreement or instrument relating to the Real Property or Personal Property
in connection with the consummation of the transactions contemplated by this
Agreement, and the Company has not received notice that any party to any
such
lease or other agreement or instrument intends to cancel, terminate or refuse
to
renew the same or to exercise or decline to exercise any option or other
right
thereunder. The Company has not granted any lease, sublease, tenancy
or license of any portion of the Real Property or Personal
Property.
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9
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3.10
|
Contracts
|
The
Company and each Shareholder represents and warrants to Buyer as follows:
Disclosure Schedule 3.10 contains a complete and accurate list as of all
material contracts, agreements, arrangements and understandings, oral or
written, to which the Company is a party or by which the Company is bound,
including, without limitation, all security agreements, intellectual property
licenses and other license agreements, credit agreements, instruments relating
to the borrowing of money, purchase contracts, sale contracts, research
contracts and scientific collaboration or cooperation agreements. All
such material contracts set forth on such Schedule 3.10 are valid,
binding and enforceable in accordance with their terms against each party
thereto and are in full force and effect; the Company has performed all
obligations imposed upon it thereunder; and the Company is not in default
thereunder; nor is there any event that with notice or lapse of time, or
both,
would constitute a default thereunder. Furthermore, no breach or
default by any other party to any such contract of any provision thereof,
nor
any condition or event that, with notice or lapse of time or both, would
constitute such a breach or default, has occurred. True and complete
copies of each such contract have been delivered to Buyer. No consent
is required from any person or entity under any contract, agreement, arrangement
or understanding set forth on Disclosure Schedule 3.10 in connection
with the consummation of the transactions contemplated by this Agreement,
and
the Company has not received notice, and is not otherwise aware, that any
party
to any such contract, agreement, arrangement or understanding intends to
cancel,
terminate or refuse to renew such contract, agreement, arrangement or
understanding or to exercise or decline to exercise any option or right
thereunder.
|
3.11
|
Customers
and Suppliers
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: Disclosure Schedule 3.11 sets
forth: (a) a complete and accurate list of the customers of the
Company accounting for 2% or more of the Company's revenues during the last
fiscal year and (b) a complete and accurate list of the suppliers of the
Company from whom the Company has purchased 5% or more of the goods or services
purchased by the Company in the last fiscal year. The Company has not
received any notice from its customers or suppliers that would cause it,
in its
reasonable judgment, to expect any material modification to its relationship
with any customers or suppliers named on such
Schedule 3.11.
|
3.12
|
Claims
and Legal Proceedings
|
Except
as
disclosed on Schedule 3.12, the Company and each Shareholder represents
and warrants to Buyer as follows: There are no claims, actions,
suits, arbitrations, criminal or civil investigations or proceedings pending
or
involving or, to the knowledge of the Shareholder, threatened against the
Company before or by any court or governmental or nongovernmental department,
commission, board, bureau, agency or instrumentality, or any other
Person. To the knowledge of the Shareholder, there is no valid basis
for any claim, action, suit, arbitration, investigation or proceeding that
could
reasonably be expected to be materially adverse to the business, assets,
operations, prospects or condition (financial or other) of the Company before
or
by any person or entity. There are no outstanding or unsatisfied
judgments, orders, decrees or stipulations to which the Company is a party
that
involve the transactions contemplated herein or that would have a material
adverse effect on the business, assets, operations, prospects or condition
(financial or other) of the Company.
3.11 Intentionally
Omitted
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3.14
|
Labor
Matters
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: There are no labor disputes, employee grievances or
disciplinary actions pending or, to the knowledge of the Shareholder, threatened
against or involving the Company or any present or former employee of the
Company. The Company has complied with all provisions of law relating to
employment and employment practices, terms and conditions of employment,
wages
and hours including, without limitation, equal opportunity, workplace safety,
workers' compensation and other similar laws. The Company is not
engaged in any unfair labor practice and does not have any liability for
any
arrears of wages or Taxes or penalties for failure to comply with any such
provisions of law. There is no labor strike, dispute, slowdown or
stoppage pending or threatened against or affecting the Company, and the
Company
has not experienced any work stoppage or similar concerted employee
activities. No collective bargaining agreement is binding on the
Company. The Company does not have any knowledge of any
organizational efforts presently being made or threatened by or on behalf
of any
labor union with respect to employees of the Company, and the Company has
not
been requested by any group of employees or others to enter into any collective
bargaining agreement or other agreement with any labor union or other employee
organization.
|
3.15
|
Employee
Benefit Plans
|
The
Company and each Shareholder represents and warrants to Buyer as
follows:
(a) Employee
Benefit Plan Listing. Disclosure Schedule 3.15
contains a complete and accurate list of all benefit plans and arrangements
("Employee Benefit Plans"). The Company
does not have any agreement, arrangement, commitment or obligation, whether
formal or informal, whether written or unwritten and whether legally binding
or
not, to create, enter into or contribute to any additional Employee Benefit
Plan, or to modify or amend any existing Employee Benefit Plan. There
has been no amendment, interpretation or other announcement (written or oral)
by
the Company or any other Person relating to, or change in participation or
coverage under, any Employee Benefit Plan that, either alone or together
with
other such items or events, could Materially increase the expense of maintaining
such Employee Benefit Plan (or the Employee Benefit Plans taken as a whole)
above the level of expense incurred with respect thereto for the most recent
fiscal year included in the Financial Statements. The terms of each
Employee Benefit Plan permit the Company to amend or terminate such Employee
Benefit Plan at any time and for any reason without penalty and without Material
liability or expense. None of the rights of the Company under any
Employee Benefit Plan will be impaired in any way by this Agreement or the
consummation of the transactions contemplated by this Agreement.
(b) Intentionally
Omitted.
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11
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(c) Compliance. With
respect to each Employee Benefit Plan: (i) such Employee Benefit
Plan is, and at all times since inception has been, maintained, administered,
operated and funded in all respects in accordance with its terms and in
compliance with all applicable requirements of all applicable laws, statutes,
orders, rules and regulations, including, without limitation, ERISA, COBRA,
HIPAA and the Code; (ii) the Company and all other persons or entities
(including, without limitation, all fiduciaries) have, at all times, properly
performed all of their duties and obligations (whether arising by operation
of
law or by contract) under or with respect to such Employee Benefit Plan,
including, without limitation, all reporting, disclosure and notification
obligations; (iii) all Returns and other information relating to such
Employee Benefit Plan required to be filed with any governmental entity or
agency have been accurately completed and timely and properly filed;
(iv) all notices, statements, reports and other disclosure (including,
without limitation, all summary plan descriptions and summaries of material
modifications) required to be given or made to participants in such Employee
Benefit Plan or their beneficiaries have been accurately completed and timely
and properly disclosed or provided; (v) neither the Company nor any
fiduciary of such Employee Benefit Plan has engaged in any transaction or
acted
or failed to act in a manner that violates the fiduciary requirements of
ERISA
or any other applicable law; (vi) no transaction or event has occurred or
is threatened or about to occur (including any of the transactions contemplated
in or by this Agreement) that constitutes or could constitute a prohibited
transaction under Section 406 or 407 of ERISA or under Section 4975 of
the Code for which an exemption is not available; and (vii) the Company has
not incurred, and there exists no condition or set of circumstances in
connection with which the Company or Buyer could incur, directly or indirectly,
any Material liability or expense (except for routine contributions and benefit
payments) under ERISA, the Code or any other applicable law, statute, order,
rule or regulation, or pursuant to any indemnification or similar agreement,
with respect to such Employee Benefit Plan.
(e) Contributions,
Premiums and Other Payments. All contributions, premiums and
other payments due or required to be paid to (or with respect to) each Employee
Benefit Plan have been timely paid, or, if not yet due, have been accrued
as a
liability on the Financial Statements. All income taxes and wage
taxes that are required by law to be withheld from benefits derived under
the
Employee Benefit Plans have been properly withheld and remitted to the proper
depository.
(f) Post-Employment
Benefits. Neither the Company nor any Employee Benefit Plan
provides or has any obligation to provide (or contribute toward the cost
of)
post-employment or post-termination benefits of any kind, including, without
limitation, death and medical benefits, with respect to any current or former
Shareholder, employee, agent, or independent contractor of the Company, other
than (i) continuation coverage mandated by Sections 601 through 608 of
ERISA and Section 4980B(f) of the Code, (ii) retirement benefits under
any Employee Benefit Plan that is qualified under Section 401(a) of the
Code, and (iii) deferred compensation that is accrued as a current
liability on the Financial Statements.
(g) Suits,
Claims and Investigations. There are no actions, suits or claims
(other than routine claims for benefits) pending or, to the knowledge of
the
Shareholders, threatened with respect to (or against the assets of) any Employee
Benefit Plan, nor, to the knowledge of the Shareholders is there a basis
for any
such action, suit or claim. No Employee Benefit Plan is currently
under investigation, audit or review, directly or indirectly, by the IRS,
the
DOL or any other governmental entity or agency, and, to the knowledge of
the
Shareholders, no such action is contemplated or under consideration by the
IRS,
the DOL or any other governmental entity or agency.
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12
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(h) Effect
of Transaction. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated by this
Agreement, will (i) entitle any individual to severance pay, unemployment
compensation or any other payment from the Company, Buyer or any Employee
Benefit Plan, (ii) otherwise increase the amount of compensation due to any
individual or forgive indebtedness owed by any individual, (iii) result in
any benefit or right becoming established or increased, or accelerate the
time
of payment or vesting of any benefit, under any Employee Benefit Plan,
(iv) require the Company or Buyer to transfer or set aside any assets to
fund or otherwise provide for any benefits for any individual, and (v) all
Employee Benefit Plans in effect prior to the Closing shall be terminated
or
otherwise discontinued such that Buyer shall have no obligation to contribute,
maintain, transfer or set aside any assets to fund or otherwise provide for
any
benefits for any individual under any such Employee Benefit Plan.
|
3.16
|
Intentionally
Omitted
|
|
3.17
|
Intellectual
Property
|
The
Company and each Shareholder represents and warrants to Buyer as
follows:
|
|
3.17.1
|
Technology
|
Except
for the Third Party Technologies (as defined in Section 3.17.2), the
Company owns all right, title and interest in and to the following
(collectively, the "Technology"), free and clear of
all Encumbrances: (a) all products, computer programs,
specifications, source code, object code, graphics, devices, techniques,
algorithms, methods, technology, processes, procedures, packaging, trade
dress,
formulae, drawings, designs, concepts, user interfaces, "look and feel,"
software or development tools and content that are now or during the two
(2)
years prior to the date of this Agreement have been, or are currently proposed
to be, developed, produced, used, marketed and/or sold in the Company's
business; (b) any and all updates, enhancements, corrections,
modifications, improvements and new releases related to the items set forth
in
(a), above; (c) any and all technology and work in progress related to the
items set forth in (a) and (b), above; and (d) all inventions, discoveries,
processes, designs, trade secrets, know-how and other confidential or
proprietary information related to the items set forth in (a), (b) and (c),
above. The Technology, excluding the Third Party Technologies, is
sometimes referred to as the "Company
Technology."
|
|
3.17.2
|
Third
Party Technology
|
Disclosure
Schedule 3.17.2 sets forth a list of all Technology used in the
Company's business for which the Company does not own all right, title and
interest (collectively, the "Third Party
Technologies"), and all license agreements or other contracts
pursuant to which the Company has the right to use (in the manner used by
the
Company, or intended or necessary for use with the Company Technology) the
Third
Party Technologies (the "Third Party Licenses"),
indicating, with respect to each of the Third Party Technologies listed,
the
owner and the Third Party License. The Company has the lawful right
to use (free of any material restriction) (a) all Third Party Technology
that is incorporated in or used in the development or production of the Company
Technology, and (b) all other Third Party Technology necessary for the
conduct of the Company's business as now conducted and as proposed to be
conducted. All Third Party Licenses are valid, binding and in full
force and effect, the Company and, to the knowledge of the Shareholders,
each
other party thereto have performed in all material respects their obligations
thereunder, and neither the Company nor, to the knowledge of the Shareholders,
any other party thereto is in default thereunder, nor, to the knowledge of
the
Shareholders, has there occurred any event or circumstance which with notice
or
lapse of time or both would constitute a default or event of default, on
the
part of the Company or, to the knowledge of the Shareholders, any other party
thereto or give to any other party thereto the right to terminate or modify
any
Third Party License. The Company has not received notice that any
party to any Third Party License intends to cancel, terminate or refuse to
renew
(if renewable) such Third Party License or to exercise or decline to exercise
any option or right thereunder.
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13
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|
|
3.17.3
|
Trademarks
|
Disclosure
Schedule 3.17.3 list(s) all trademarks, trade names, brand names,
service marks, logos or other identifiers used by the Company in its business
(the "Marks"). The Company has full legal
and beneficial ownership, free and clear of any Encumbrances, of all rights
conferred by use of the Marks in the Company's business and, as to those
Marks
that have been registered in the United States Patent and Trademark Office,
by
federal registration of the Marks.
|
|
3.17.4
|
Intellectual
Property Rights
|
Disclosure
Schedule 3.17.4 sets forth all patents, patent applications,
copyright registrations (and applications therefore) and trademark registrations
(and applications therefore) (collectively, the "IP
Registrations") associated with the Company Technology and the
Marks. The Company owns all right, title and interest, free and clear
of any Encumbrances, in and to the IP Registrations, together with any other
rights in or to any copyrights (registered or unregistered), rights in the
Marks
(registered or unregistered), trade secret rights and other intellectual
property rights (including, without limitation, rights of enforcement)
associated with the Company Technology and the Marks (collectively, the
"IP Rights").
|
|
3.17.5
|
Maintenance
of Rights
|
The
Company has not conducted its business, and has not used or enforced (or
failed
to use or enforce) the IP Rights, in a manner that would result in the
abandonment, cancellation or unenforceability of any item of the IP Rights
or
the IP Registrations, and the Company has not taken (or failed to take) any
action that would result in the forfeiture or relinquishment of any IP Rights
or
IP Registrations. The Company has not granted to any third party any
rights or permissions to use any of the Technology or the IP
Rights. To the knowledge of the Shareholders, except pursuant to
reasonably prudent safeguards, (a) no third party has received any
confidential information relating to the Technology or the IP Rights and
(b) the Company is not under any contractual or other obligation to
disclose to any third party any Company Technology.
|
|
3.17.6
|
Third
Party Infringement
|
The
Company has not received any notice or claim (whether written, oral or
otherwise) challenging the Company's ownership or rights in the Company
Technology or the IP Rights or claiming that any other person or entity has
any
legal or beneficial ownership with respect thereto; all IP Rights are legally
valid and enforceable without any material qualification, limitation or
restriction on their use, and the Company has not received any notice or
claim
(whether written, oral or otherwise) challenging the validity or enforceability
of any IP Rights; and to the knowledge of the Shareholders, no other person
or
entity is infringing or misappropriating any part of the IP Rights or otherwise
making any unauthorized use of the Company Technology.
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14
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|
|
3.17.7
|
Infringement
by the Company
|
The
use
of any of the Technology in the Company's business does not and will not,
to the
knowledge of the Shareholders, conflict with, infringe, violate or interfere
with or constitute an appropriation of any right, title or interest (including,
without limitation, any patent, copyright or trade secret right) held by
any
other person or entity, and there have been no claims made with respect thereto;
the use of any of the Marks and other IP Rights in the Company's business
will
not conflict with, infringe, violate or interfere with or constitute an
appropriation of any right, title or interest (including, without limitation,
any patent, copyright, trademark or trade secret right) held by any other
person
or entity, and there have been no claims made with respect thereto; and the
Company has not received any notice or claim (whether written, oral or
otherwise) regarding any infringement, misappropriation, misuse, abuse or
other
interference with any third party intellectual property or proprietary rights
(including, without limitation, infringement of any patent, copyright, trademark
or trade secret right of any third party) by the Company, the Technology
or the
Marks or other IP Rights or claiming that any other entity has any claim
of
infringement with respect thereto.
|
|
3.17.8
|
Domain
Names
|
Disclosure
Schedule 3.17.8 lists all Internet domain names used by the Company
in its business (collectively, the "Domain
Names"). The Company has a valid registration and all
material rights (free of any material restriction) in and to the Domain Names,
including without limitation all rights necessary to continue to conduct
the
Company's business as it is currently conducted.
|
|
3.17.9
|
Indemnification
|
The
Company has not entered into any agreement or offered to indemnify any person
or
entity against any charge of infringement by the Technology or IP Rights,
or any
other intellectual property or right. The Company has not entered
into any agreement granting any Person the right to bring any infringement
action with respect to, or otherwise to enforce, any of the Technology or
IP
Rights.
|
3.18
|
Accounts
Receivable
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: All accounts receivable of the Company reflected on
Schedule 2.2.2(b) and existing at the time of Closing
("Accounts") represent amounts due for services
performed or sales actually made in the ordinary course of business and properly
reflect the amounts due. The bad debt reserves and allowances
reflected in the Balance Sheet are adequate. All Accounts existing
and remaining unpaid at the time of Closing will be collectible by and accrue
to
the benefit of Buyer. All Accounts for services performed, rendered,
contracted, due or sales actually made after the Closing will be collectible
by
and accrue to the benefit of Buyer.
|
3.19
|
Corporate
Books and Records
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: The Company has furnished to Buyer true and complete copies
of the corporate records of the Company since the Company's inception, and
such
records (including minutes, resolutions and consents, if any) accurately
reflect
the events of and actions taken at the meetings of the Shareholders and board
of
directors of the Company. The stock transfer records accurately
reflect all issuances and transfers of the capital stock of the Company since
its inception.
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15
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|
3.20
|
Licenses,
Permits, Authorizations,
etc.
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: The Company has received all required governmental
approvals, authorizations, consents, licenses, orders, registrations and
permits
of all agencies, whether federal, state, local or foreign (the
"Permits"), the failure to obtain of which would have
a material adverse effect on its business, assets, operations, prospects
or
condition (financial or other) of the Company. Disclosure
Schedule 3.20 contains a list of all Permits with expiration dates,
if any. The Company is in compliance with the terms of all Permits,
and all Permits are valid and in full force and effect, and no proceeding
is
pending or, to the knowledge of the Shareholder, threatened, the object of
which
is to revoke, limit or otherwise affect any Permit. The Company has
not received any notifications of any asserted failure to obtain any
Permit.
|
3.21
|
Compliance
With Laws; Environmental Health and Safety
Matters
|
The
Company and each Shareholder represents and warrants to Buyer as
follows:
(a) The
Company is and has been in compliance with all federal, state, local and
foreign
laws, rules, regulations, ordinances, decrees and orders applicable to the
operation of its business, to its employees, or to its property, including,
without limitation, all such laws, rules, ordinances, decrees and orders
relating to antitrust, consumer protection, currency exchange, environmental
protection, equal opportunity, health, occupational safety, good laboratory
practices, pension, securities and trading-with-the-enemy
matters. The Company has not received any notification of any
asserted present or past unremedied failure by the Company to comply with
any of
such laws, rules, ordinances, decrees or orders.
(b) The
Company is not in violation of, and has not violated, in connection with
the
ownership, use, maintenance or operation of the Real Property or the Personal
Property or the conduct of its business, any applicable foreign, federal,
state,
county and local statutes, laws, regulations, guidances, rules, ordinances,
codes, licenses, permits, judgments, writs, decrees, injunctions or orders
of
any governmental entity relating to environmental (air, water, groundwater,
soil, natural resource, noise and odor) matters, including, by way of
illustration and not by way of limitation, the Clean Air Act, 42 U.S.C.
Section 7401, et seq., as amended; the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251, et seq., as amended; the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901,
et seq., as amended; the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601, et
seq., as amended; the Toxic Substances Control Act, 15 U.S.C.
Section 2601, et seq., as amended; the Oil Pollution Act of 1990,
33 U.S.C. Section 2701, et seq.; and other comparable
federal, state and local laws, and the regulations issued thereunder
(collectively, "Environmental Laws").
(c) The
Company has not transported, stored, treated, recycled, handled or disposed
of,
or allowed or arranged for any third party to transport, store, treat, recycle,
handle or dispose of (i) any flammable substances, explosives, radioactive
materials, hazardous substances, hazardous wastes, toxic substances, pollutants,
contaminants or any wastes, materials or substances identified in or regulated
by any Environmental Laws; (ii) asbestos, polychlorinated biphenyls, urea
formaldehyde, nuclear fuel or material, chemical waste, carcinogens and radon,
all to the extent regulated by any Environmental Laws; and (iii) gasoline,
oil and other petroleum products (all of the foregoing collectively,
"Regulated Substances"), to or at any location in
violation of any Environmental Laws.
(d) No
part of the Real Property, including, but not limited to, all surface and
subsurface soil, sediments, groundwater and surface water located on, in
or
under the Real Property, was or is contaminated with any Regulated Substances
or
constituents thereof, which contamination has given or may give rise to any
obligation of the Company under any applicable Environmental Laws, the common
law or otherwise. To the knowledge of the Shareholders, no real
property adjacent to or adjoining the Real Property has been or is being
so
contaminated.
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16
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(e) The
Company has reported, recorded or filed, and has provided to Buyer, true,
accurate and complete copies of all reports with respect to any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
migrating, leaching, dumping or disposing into the environment (including
the
abandonment or discarding of drums, barrels, containers or other closed
receptacles) (any of the foregoing, a "Release"),
required by applicable Environmental Laws to be reported by the Company to
any
government authority. The Company has maintained all environmental
and operating documents and records in the manner and for the time periods
required by applicable Environmental Laws.
(f) The
Company has not caused or permitted the Release of any Regulated Substances
or
constituents thereof on, from or off-site of its Real Property, or of any
Release from any facility owned or operated by third parties but with respect
to
which the Company is alleged to have liability, including, but not limited
to,
liability for personal injury, cleanup or restoration, which Release caused
or
could reasonably be Expected to cause a material loss to the
Company.
|
3.22
|
Insurance
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: The Company maintains (a) insurance on all of its
property (including leased premises) that insures against loss or damage
by fire
or other casualty (including extended coverage) and (b) insurance against
liabilities, claims and risks of a nature and in such amounts as are normal
and
customary in the Company's industry. All insurance policies of the
Company are described on Disclosure Schedule 3.22 hereto, and are in full
force and effect, all premiums covering all periods up to and including the
Closing have been paid, and no notice of cancellation or termination has
been
received with respect to any such policy or binder. Such policies or
binders are sufficient for compliance with all requirements of law currently
applicable to the Company and of all agreements to which the Company is a
party,
will remain in full force and effect through the respective expiration dates
of
such policies or binders without the payment of additional premiums, and
will
not in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement. The Company has not been
refused any insurance with respect to its respective assets or operations,
nor
has its coverage been limited, by any insurance carrier to which it has applied
for any such insurance or with which it has carried insurance.
|
3.23
|
Brokers
or Finders
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: The Company has not incurred, and will not incur, directly
or indirectly, as a result of any action taken by or on behalf of the Company,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.
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17
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|
3.24
|
Government
Contracts
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: The Company has never been, nor as a result of the
consummation of the transactions contemplated by this Agreement will it be,
suspended or debarred from bidding on contracts or subcontracts for any agency
of the United States government or any foreign government, nor to the knowledge
of the Shareholder has such suspension or debarment been
threatened or action for suspension or debarment been commenced. The
Company has not been nor is it currently being audited, except in the ordinary
course of business or as is customary in the industry or as provided by the
Federal Acquisition Regulations or, to the knowledge of the Shareholder,
investigated by the United States Government Accounting Office, the United
States Department of Justice, the United States Department of Defense or
any of
its agencies, the Defense Contract Audit Agency or the inspector general
or
other authorities of any agency of the United States government, or any foreign
government, nor, to the knowledge of the Shareholder, has such audit or
investigation been threatened. There is no valid basis for the
Company's suspension or debarment from bidding on contracts or subcontracts
for
any agency of the United States government or any foreign government and
there
is no valid basis for a claim pursuant to an audit or investigation by the
United States Government Accounting Office, the United States Department
of
Justice, the United States Department of Defense or any of its agencies,
the
Defense Contract Audit Agency or other authorities of any agency of the United
States government or any foreign government, or any prime contractor with
any
such governmental body. The Company has not had a contract or
subcontract terminated for default by the Company and has not been determined
to
be nonresponsible by any agency of the United States government or any foreign
government.
|
3.25
|
Absence
of Questionable Payments
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: Neither the Company nor any of its Shareholders, or to the
knowledge of the Shareholders, any agents, employees or other person acting
on
behalf of the Company, has used any funds of the Company for improper or
unlawful contributions, payments, gifts or entertainment, or made any improper
or unlawful expenditures relating to political activity to government officials
or others. The Company has not received notice that any transaction
was improper or unlawful within the meaning of this
Section 3.25. The Company has adequate financial controls to
prevent such improper or unlawful contributions, payments, gifts, entertainment
or expenditures. Neither the Company nor any of its current directors
or officers, agents, employees or any other Person acting on behalf of the
Company, has accepted or received any improper or unlawful contributions,
payments, gifts or expenditures. The Company has at all times
complied, and is in compliance in all respects, with the applicable provisions
of the U.S. Foreign Corrupt Practices Act, as amended, and other applicable
domestic and foreign laws and regulations relating to corrupt practices and
similar matters.
|
3.26
|
Bank
Accounts
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: Disclosure Schedule 3.26 sets forth the names
and locations of all banks, trust companies, savings and loan associations
and
other financial institutions at which the Company maintains safe deposit
boxes
or accounts of any nature and the names of all persons authorized to draw
thereon, make withdrawals therefrom or have access thereto.
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18
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|
3.27
|
Previous
Conduct of Business; Insider
Interests
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: All the transactions of the Company with third parties have
been conducted on an arm's-length basis. No Shareholder, employee,
contractor, consultant or other representative of the Company has any direct
or
indirect interest, and Shareholders have no direct or indirect interest,
other
than as a Shareholder of the Company (a) in any property, real or personal,
tangible or intangible, used in or directly pertaining to the business of
the
Company, including, without limitation, any intellectual property, or
(b) in any agreement, contract, arrangement or obligation relating to the
Company, its present or prospective business or its operations. To
the knowledge of the Shareholder, neither the Company nor any of its
Shareholders, employees, contractors or consultants has any interest, either
directly or indirectly, in any entity that presently (i) provides any
services, produces and/or sells any products or product lines, or engages
in any
activity that is the same, similar to or competitive with any activity or
business in which the Company is now engaged or proposes to engage or
(ii) is a supplier, customer or creditor, or has an existing contractual
relationship with any of the Company's employees (or persons performing similar
functions).
|
3.28
|
Full
Disclosure
|
The
Company and each Shareholder represents and warrants to Buyer as
follows: No information furnished by the Company or the Shareholders
to Buyer in connection with this Agreement (including, but not limited to,
the
Financial Statements and all information in the Schedules and the Exhibits
hereto) or to be furnished prior to the Closing by or on behalf of the Company
or the Shareholder(s) to Buyer, or to others in connection with obtaining
approval of the transaction contemplated by this Agreement, is false or
misleading in any material respect. Neither the Company nor any
Shareholder has made any untrue statement of a material fact or omitted to
state
a material fact necessary in order to make the statements made or information
delivered in or pursuant to this Agreement, including, but not limited to,
the
Financial Statements, the Disclosure Schedules and Exhibits hereto, or in
or
pursuant to closing certificates executed or delivered by the Company or
the
Shareholder(s) not misleading.
ARTICLE
IV - REPRESENTATIONS AND WARRANTIES
OF
BUYER
To
induce
the Shareholders to enter into and perform this Agreement, Buyer represents
and
warrants to the Shareholders as of the date of this Agreement and as of the
Closing as follows in this Article IV:
|
4.1
|
Organization
|
Buyer
is
a corporation duly organized, validly existing and in good standing under
the
laws of the state of Colorado. Buyer has all requisite corporate
power and authority to own, operate and lease its properties and assets,
to
carry on its business as now conducted and as proposed to be conducted, to
execute, deliver and perform its obligations under this Agreement and the
other
Transaction Documents to which it is a party, and to carry out the transactions
contemplated hereby and thereby.
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19
-
|
4.2
|
Enforceability
|
All
corporate action on the part of Buyer and its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of this Agreement and the other Transaction Documents to which
it is
a party, the consummation of the transactions contemplated hereby and thereby,
and the performance of all of Buyer's obligations under this Agreement and
the
other Transaction Documents to which it is a party has been taken or will
be
taken prior to the Closing. This Agreement has been, and the other
Transaction Documents to which Buyer is a party on the Closing will be, duly
executed and delivered by Buyer, and this Agreement is, and each of the other
Transaction Documents to which Buyer is a party on the Closing will be, a
legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms.
|
4.3
|
No
Approvals or Notices Required; No Conflicts With
Instruments
|
The
execution, delivery and performance by Buyer of this Agreement and the other
Transaction Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, will not (a) constitute a
violation (with or without the giving of notice or lapse of time, or both)
of
any provision of any law or any judgment, decree, order, regulation or rule
of
any court, agency or other governmental authority applicable to Buyer,
(b) require Buyer to obtain any consent, approval or authorization of, or
declaration, filing or registration with, any Person, or (c) constitute a
violation of any provisions of Buyer's Certificate
of Incorporation and Bylaws.
|
4.4
|
Claims
and Legal Proceedings
|
There
is
no claim, action, suit, arbitration, criminal or civil investigation or
proceeding pending or involving or, to Buyer's knowledge, threatened against
Buyer before or by any court or governmental or nongovernmental department,
commission, board, bureau, agency or instrumentality, or any other Person,
that
questions the validity of this Agreement or any action taken or to be taken
by
Buyer pursuant to this Agreement or in connection with the transactions
contemplated hereby.
|
4.5
|
Brokers
or Finders
|
Buyer
has
not incurred, and will not incur, directly or indirectly, as a result of
any
action taken by or on behalf of Buyer, any liability for brokerage or finders'
fees or agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
|
4.6
|
Capitalization
|
Buyer
represents and warrants to the Company and each Shareholder as
follows:
(a) Pursuant
to the Company's Articles of Incorporation, the capital stock of Buyer consists
of 50,000,000 shares of common stock, no par value per share. There
are currently issued and outstanding 19,650,518 of the Company's common
stock.
(b) Schedule
4.6(b) lists all persons owning an amount of Stock of Buyer equal to or
exceeding five percent (5%) of the issued and outstanding Stock of
Buyer
-
20
-
(c) Except
for (i) the right of certain note holders (the “Xxxx Parties”) to convert two
promissory notes in the aggregate principal amount of $409,089 at the conversion
rate of $1.00 per share, into shares of the common stock of Buyer, and (ii)
the
right of the non-employee directors of Buyer to receive 10,000 share each
of
Buyer’s common stock, subject to a three year vesting period, there are no
outstanding rights of first refusal, preemptive rights, options, warrants,
conversion rights, anti-dilution rights or other agreements, either directly
or
indirectly, for the purchase or acquisition from the Buyer of any capital
stock
or other rights (economic or otherwise) of Buyer.
(d) Buyer
is not a party or subject to any agreement or understanding, and there is
no
agreement or understanding between any person or entity, that affects or
relates
to the voting or giving of written consents with respect to any capital stock
of
the Buyer or the voting by any shareholder of Buyer.
4.7 Good
Title
Except
as
provided in Section 2.2.2, and applicable securities laws, the Stock of Buyer
to
be delivered hereunder shall, at the time of delivery, be free and clear
of any
lien, encumbrance, adverse claim, restriction on sale, transfer or voting,
preemptive right, option or other right to purchase, and, except as provided
in
Section 2.2.2, and applicable securities laws, upon the delivery of the Stock
as
contemplated hereby, each Shareholder will have good title to such Stock,
free
and clear of any lien, encumbrance, adverse claim, restriction on sale, transfer
or voting, preemptive right, option or other right to purchase.
|
4.8
|
Financial
Statements; Obligations
|
Buyer
represents and warrants that any financial statements provided to the Company
or
to any Shareholder (referred to as the "Financial Statements") have
been prepared in conformity with GAAP consistently applied throughout the
periods covered, except as may be indicated in the notes thereto, and present
fairly the financial position, results of operations and changes in financial
position of the Buyer at the dates and for the periods indicated, subject,
in
the case of the unaudited financial statements, to normal recurring period-end
adjustments. Buyer has no liabilities or obligations of any nature
(absolute, accrued or contingent) that are not fully reflected or reserved
against in the Financial Statements, as prescribed by GAAP and the Financial
Accounting Standards Board, except liabilities or obligations incurred in
the
ordinary course of business and consistent with past practice.
|
4.9
|
Taxes
|
Buyer
represents and warrants to the Company and each Shareholder, to the best
of its
knowledge, as follows:
-
21
-
(a) Through
the date of this Agreement, and for a period of two years prior thereto,
Buyer
has filed on a timely basis all Tax Returns that the Buyer was required to
file. All such Tax Returns were correct and complete in all respects
and have been prepared and completed in accordance with applicable law,
including all and were prepared in accordance with the applicable statutes,
rules and regulations. No such Tax Returns are currently the subject
of audit or examination nor has the Buyer been notified in writing, or
otherwise, of any request for an audit or examination. All Taxes owed
by the Buyer (whether or not shown on any Tax Return) were paid in full when
due
or are being contested in good faith and are supported by adequate reserves
on
the Financial Statements. The Buyer has provided adequate reserves on
its Financial Statements for the payment of any Taxes accrued but not yet
due
and payable. The Buyer is not currently the beneficiary of any
extension of time within which to file any Tax Return, and the Buyer has
not
waived any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to any Tax assessment or deficiency. The Buyer
has duly and timely withheld from employee salaries, or wages or other
compensation (whether or not paid in cash) and other amounts paid to creditors,
independent contractors and other third parties and paid over to the appropriate
governmental authority all amounts required to be so withheld and paid over
for
all periods under all applicable Tax or other laws. No amounts have
been or would be required to be withheld with respect to the lapse of
restrictions on the Shares. The Tax Returns of the Buyer do not
contain a disclosure under Section 6662 of the Code (or any predecessor
provision or comparable provision of state, local or foreign
law). The Buyer does not do business in or derive income from any
state, local or foreign jurisdiction other than those jurisdictions for which
Tax Returns have been duly filed by the Buyer.
(b) There
is no dispute, claim or proposed adjustment concerning any Tax liability
of the
Buyer either (1) claimed or raised by any authority in writing or
(2) based upon personal contact with any agent of such
authority. The Buyer is not a party to nor has it been notified in
writing or, otherwise, that it is the subject of any pending, proposed or
threatened action, investigation, proceeding, audit, claim or assessment
by or
before the IRS or any other governmental authority, and no claim for assessment,
deficiency or collection of Taxes, or proposed assessment, deficiency or
collection from the IRS or any other governmental authority which has not
been
satisfied, nor does the Buyer have any reason to believe that any such notice
will be received in the future. The IRS has never audited any Tax
Return of the Buyer. There are no Tax liens of any kind upon any
property or assets of the Buyer, except for inchoate liens for Taxes not
yet due
and payable.
4.10 Securities
Representations
Buyer
(i)
is aware of the Company’s business affairs and financial condition, has reviewed
the most recent financial statements of Company; and (ii) has acquired
sufficient information about Company to reach an informed and knowledgeable
decision to acquire the Shares. Buyer has been furnished with all
information which Buyer deems necessary to evaluate the merits and risks
of the
purchase of the Shares, and Buyer has had the opportunity to ask questions
and
receive answers concerning the Shares and the Company from the officers and
directors of the Company, and to obtain any additional information concerning
the Shares or the Company necessary to verify the accuracy of the information
furnished or made available to Buyer in connection herewith. Buyer is
able to bear the economic risk of such investment in the
Shares. Buyer is purchasing the Shares for investment and not with a
view to, or for resale in connection with, any "distribution" thereof within
the
meaning of the Act. Buyer understands that the Shares have not been
registered under the Act
-
22
-
|
4.11
|
Full
Disclosure
|
The
Buyer
represents and warrants to the Company and each Shareholder as
follows: No information furnished by the Buyer to the Company or the
Shareholders in connection with this Agreement (including, but not limited
to,
any Financial Statements and all information in the Schedules and the Exhibits
hereto) or to be furnished prior to the Closing by or on behalf of the Buyer
to
the Company or the Shareholders, or to others in connection with obtaining
approval of the transaction contemplated by this Agreement, is false or
misleading in any material respect. Buyer has not made any untrue
statement of a material fact or omitted to state a material fact necessary
in
order to make the statements made or information delivered in or pursuant
to
this Agreement, including, but not limited to, any Financial Statements,
the
Disclosure Schedules and Exhibits hereto, or in or pursuant to closing
certificates executed or delivered by Buyer not misleading.
|
4.12
|
Tax
Consequences
|
Buyer
does not make any representation or warranty with respect to, and expressly
disclaims any responsibility for, any Tax consequences to the Shareholders
arising out of the structure or terms of this Agreement, or the negotiation
or
consummation hereof. Each Shareholder shall be solely
responsible for any such Tax consequences.
ARTICLE V
- COVENANTS
Between
the date of this Agreement and the time of Closing, the parties covenant
and
agree as set forth in this Article V.
|
5.1
|
Conduct
of Business by the Company Pending the
Closing
|
Unless
Buyer shall otherwise agree in writing, the business of the Company shall
be
conducted only in, and the Company shall not take any action except in, and
the
Shareholders of the Company shall cause the Company to be conducted in, the
ordinary course of business and in a manner consistent with past practice
and in
accordance with applicable law; and the Company shall use its best efforts
to
preserve substantially intact the business organization of the Company, to
keep
available the services of the current Shareholders, employees and consultants
of
the Company and to preserve the current relationships of the Company with
customers, suppliers and other persons with which the Company has significant
business relations. By way of amplification and not limitation,
except as otherwise contemplated by this Agreement, the Company shall not,
between the date of this Agreement and the time of Closing, directly or
indirectly do, or propose to do, any of the following without giving Buyer
prior
written notice of and receiving Buyer's prior written consent:
(a) amend
or otherwise change its Articles
of
Incorporation or Bylaws;
(b) issue,
sell, pledge, dispose of, grant, encumber or authorize the issuance, sale,
pledge, disposition, grant or encumbrance of (i) any capital stock or other
interest in or to the Company, or any options, warrants, convertible securities
or other rights of any kind to acquire any Shares in or to the Company, or
any
other ownership interest (including, without limitation, any economic interest),
of the Company or (ii) any assets of the Company;
(c) declare,
set aside, make or pay any dividend or other distribution, payable in cash,
property or otherwise, with respect to any of its Shares, other than payments
necessary to achieve an Actual Net Equity (as defined in Section 2.2.2(b))
equal
to zero as of Closing;
(d) reclassify,
combine, split, subdivide, redeem, purchase or otherwise acquire, directly
or
indirectly, any of its Shares;
-
23
-
(e) (i) acquire
(including, without limitation, by merger, consolidation, or acquisition
of
stock or assets) or form any corporation, partnership, other business
organization or division thereof, or acquire directly or indirectly any material
amount of assets; (ii) incur any indebtedness for borrowed money or issue
any debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any Person, or make
any
loans or advances, except in the ordinary course of business and consistent
with
past practice which loans shall be on terms and conditions satisfactory to
Buyer; (iii) enter into any contract or agreement other than in the
ordinary course of business, consistent with past practice; (iv) authorize
any single capital expenditure that is in excess of $2,500 or capital
expenditures that are, in the aggregate, in excess of $10,000; or (v) enter
into or amend any contract, agreement, commitment or arrangement with respect
to
any matter set forth in this subsection (e);
(f) enter
into any employment, consulting or agency agreement, or increase the
compensation payable or to become payable to its Shareholders, employees
or
consultants (other than payment of compensation necessary to achieve an Actual
Net Equity (as defined in Section 2.2.2(b)) equal to zero as of Closing),
except
for increases in accordance with existing agreements or past practices for
employees of the Company who are not Shareholders of the Company, or grant
any
severance or termination pay to, or enter into any employment or severance
agreement with, any Shareholder, employee, or consultant of the Company,
or
establish, adopt, enter into or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or
other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee;
(g) take
any action, other than reasonable and usual actions in the ordinary course
of
business and consistent with past practice, with respect to accounting policies
or procedures (including, without limitation, procedures with respect to
the
payment of accounts payable and collection of accounts receivable);
(h) make
any tax election inconsistent with past practices or settle or compromise
any
material federal, state, local or foreign income tax liability;
(i) pay,
discharge or satisfy any claim, liability or obligation (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course of business and consistent
with past practice, of liabilities reflected or reserved against in the Balance
Sheet or subsequently incurred in the ordinary course of business and consistent
with past practice;
(j) enter
into any equipment lease; or
(k) issue
certificates for any of the Shares; or
(l) agree
to do any of the foregoing.
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24
-
|
5.2
|
Access
to Information;
Confidentiality
|
From
the
date hereof to the time of Closing, the Company and the Shareholders shall,
and
shall cause their representatives to, afford Buyer and its
representatives complete access at
all reasonable times to the Shareholders, employees, agents, properties,
offices, plants and other facilities, books and records of the Company and
shall
furnish Buyer with all financial, operating and other data and information
as
Buyer may reasonably request and as such access is necessary to the consummation
of the transactions contemplated hereby. From the date hereof until
the time of Closing, the Company shall provide Buyer with financial statements
of the Company as they become available internally at the Company, all of
which
financial statements shall be prepared in conformity with GAAP and shall
fairly
present the financial position and results of operations of the Company as
of
the dates and for the periods specified. All information obtained by
either party pursuant to this Section 5.2 shall be kept confidential in
accordance with the following terms:
(a) Except
as and to the extent required by law, neither Buyer nor the Company shall
disclose or use, and it shall cause its representatives not to disclose or
use,
any Confidential Information (as defined below) with respect to Buyer or
the
Company furnished, or to be furnished, by Buyer or the Company or their
respective representatives in connection herewith, at any time or in any
manner
other than in connection with its evaluation or consummation of the transaction
proposed in this Agreement. For purposes of this Agreement,
"Confidential Information" means any information about Buyer or its subsidiaries
or the Company supplied to the other and stamped "confidential" or identified
as
such to Buyer or the Company by the other; provided that Confidential
Information does not include information which the party to which it is provided
can demonstrate (i) is generally available to or known by the public, other
than
as a result of improper disclosure by the party to which the information
was
provided; or (ii) is obtained by the party to which the information was provided
from a source other than Buyer or the Company, respectively, provided that
such
source was not bound by a duty of confidentiality to Buyer or the
Company, or another party with respect to such information. If this
Agreement is terminated prior to Closing, each party shall promptly return
to
each other party any Confidential Information of another party in its
possession.
(b) Except
as and to the extent required by law, without the prior written consent of
the
other parties, neither Buyer nor the Company shall, and each shall direct
its
representatives not to, directly or indirectly, make any public comment,
statement or communication with respect to, or otherwise disclose or permit
the
disclosure of the existence of discussions regarding, a possible transaction
between the parties or any of the terms, conditions or other aspects of the
transaction proposed in this Agreement. If a party is required by law
to make any such disclosure, it must first provide to the other parties the
content of the proposed disclosure, the reasons that such disclosure is required
by law, and the time and place that the disclosure will be made; provided,
however, that nothing in this Section 5.2(b) shall be deemed to prohibit
Buyer
from making any disclosure required by the rules and regulation promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") without first consulting the Company.
|
5.3
|
No
Alternative Transactions
|
The
Company and the Shareholders shall not, directly or indirectly, through any
Shareholder, employee, agent, investment banker, attorney or otherwise, solicit,
initiate or encourage the submission of any proposal, offer, inquiry or contact
from any person or entity relating to any acquisition or purchase of all
or
(other than in the ordinary course of business) any portion of the assets
of, or
any equity interest in, the Company or any business combination with the
Company, or participate in any negotiations or discussions regarding, or
furnish
to any other person or entity any information with respect to, or otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other person or entity, to do or seek any of
the
foregoing. The Shareholders immediately shall cease and cause to be
terminated with no obligation, financial or otherwise, on the part of the
Company or the Shareholders, all existing discussions or negotiations with
any
other parties conducted heretofore with respect to any of the
foregoing.
-
25
-
The
Company and the Shareholders shall notify Buyer promptly if any such proposal
or
offer, or any inquiry or contact with any Person with respect thereto, is
made
and shall, in any such notice to Buyer, indicate in reasonable detail the
identity of the person or entity making such proposal, offer, inquiry or
contact
and the terms and conditions of such proposal, offer, inquiry or
contact. The Company agrees not to release any third party from, or
waive any provision of, any confidentiality or standstill agreement to which
the
Company is a party.
|
5.4
|
Notification
of Certain Matters
|
The
Company and the Shareholders shall give prompt written notice to Buyer, and
Buyer shall give prompt written notice to the Company and the Shareholders,
of
(a) the occurrence or nonoccurrence of any event which would be likely to
(i) cause any representation or warranty of the Company, the
Shareholder(s), or Buyer, respectively, contained in this Agreement to be
materially untrue or inaccurate or (ii) result in the material failure to
satisfy a closing condition in Article VII or VIII; (b) any material
failure of the Company, the Shareholder(s), or Buyer, respectively, to comply
with or satisfy any covenant, condition or agreement to be complied with
or
satisfied by it or them; and (c) any written communication from any person
or entity alleging that the consent of such person or entity may be required
in
connection with the transactions contemplated by this Agreement; provided,
however, that the delivery of any notice pursuant to this Section 5.4 shall
not limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
|
5.5
|
Further
Action
|
Upon
the
terms and subject to the conditions hereof, each of the parties shall
(a) make promptly its respective filings, and thereafter make any other
required submissions, under applicable laws with respect to the transactions
contemplated hereby and shall cooperate with the other parties with respect
to
such filings and submissions and (b) use its best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all
things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereby, including,
without limitation, using its best efforts to obtain all waivers, licenses,
permits, consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts as are necessary for the
consummation of the transactions contemplated hereby and to fulfill the
conditions to the closing of the sale of the Shares to Buyer. In case
at any time after the Closing Date any further action is necessary or desirable
to carry out the purposes of this Agreement, each party to this Agreement
shall
use its best efforts to take all such action. Neither the Buyer
nor the Company or the Shareholder(s) will undertake any course of
action inconsistent with this Agreement or that would make any representations,
warranties or agreements made by such party in this Agreement untrue or any
conditions precedent to this Agreement unable to be satisfied at or prior
to the
Closing.
|
5.6
|
Publicity
|
Except
as
set forth in Section 5.2(b), none of the parties shall disclose, make or
issue,
or cause to be disclosed, made or issued, any statement or announcement
concerning this Agreement or the transactions contemplated hereby to any
third
parties (other than its officers, directors, employees, authorized
representatives, legal advisors and financial advisors who need to know such
information in connection with carrying out or facilitating the transactions
contemplated hereby) without the prior written consent of the other parties,
except as required by law or any listing or other agreement with any public
securities trading exchange or market to which Buyer is a party and after
providing written notice to the other parties of such required
disclosure.
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26
-
5.7. Covenants
Not to Compete
5.7.1 Covenants
In
consideration of the payment of the Purchase Price by Buyer to the Shareholders
at the Closing, the Shareholders covenant and agrees as follows:
(a) During
any period during which a Shareholder performs services as an employee,
consultant or otherwise for the Company, and, unless employment is terminated
by
Buyer without reasonable cause, for the two (2)-year period commencing upon
the
date that the Shareholder ceases to perform services for the Company (the
"Non-Compete Period"), neither the Shareholder nor any
of the Shareholder's affiliates shall engage in any Competitive Business
(as
such term is defined below), whether directly or indirectly, for its account
or
otherwise, or as a member, shareholder, owner, partner, principal, agent,
joint
venturer, consultant, advisor, franchisor or franchisee, independent contractor
or otherwise, in, with or of any person or entity that engages directly or
indirectly in any Competitive Business. As used herein, "Competitive
Business" shall mean any business that competes with the Company or the Buyer
in
the United States, including, without limitation, any business that provides
geographic and land information systems, software, services or
data.
(b) During
the Non-Compete Period, neither the Shareholder nor any of its affiliates
shall,
directly or indirectly, hire, or solicit or encourage to leave the employment
of
the Company, Buyer or any of their affiliates, or any former employee of
the
Company hired by Buyer, the Company or their affiliates, or have any arrangement
(financial, consulting or otherwise) with any such individual.
5.7.2 Minor
Investments
Notwithstanding
the provisions of Section 5.7.1(a) above, a Shareholder may at any time own
in
the aggregate, directly or indirectly, for investment purposes only, 5% or
less
of any class of securities of any entity traded on any national securities
exchange or quoted on the Nasdaq that engages in a Competitive
Business.
5.7.3 Remedies
The
Shareholders acknowledge that compliance with the provisions of this Section
5.7
is necessary and proper to preserve and protect the business of the Company
acquired by Buyer under this Agreement and to assure that the parties receive
the benefits intended to be conveyed pursuant to this Section 5.7, the
Shareholders agree that any failure by the Shareholders or any of their
affiliates to comply with the provisions of this Section 5.7 shall entitle
Buyer
and its affiliates, in addition to such other relief and remedies as may
be
available, to equitable relief, including, but not limited to, the remedy
of
injunction. Resort to any remedy shall not prevent the concurrent or
subsequent employment of any other remedy, or preclude the recovery by Buyer
and
its affiliates of monetary damages and compensation.
5.7.4 Severability;
Reformation
The
covenants in this Section 5.7 are severable and separate, and the
unenforceability of any specific covenant shall not affect the continuing
validity and enforceability of any other covenant. In the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth in this Section 5.7 are unreasonable and
therefore unenforceable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent that the court deems reasonable
and this Agreement shall thereby be reformed.
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27
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5.8. Payment
of Audit Costs
The
Company and Shareholders have
contracted to have an audit (the "Audit") conducted by
certified public accountants necessary to create and deliver audited financial
statements required to be delivered pursuant to Section 3.6
hereof. The Company shall pay the costs of such Audit, whether
invoiced and billed prior to Closing or post closing.
ARTICLE
VI – INTENTIONALLY OMITTED
ARTICLE
VII - CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The
obligations of Buyer to perform and observe the covenants, agreements and
conditions to be performed and observed by it at or before the Closing shall
be
subject to the satisfaction of the following conditions, which may be expressly
waived only in writing signed by Buyer.
|
7.1
|
Accuracy
of Representations and
Warranties
|
Each
of
the representations and warranties of the Company and/or the Shareholders
contained in this Agreement and the other Transaction Documents to which
each is
a party (including all exhibits, schedules, and attachments thereto) shall
be
true and correct as of the date hereof and at and as of the Closing Date
as
though made on that date; except to the extent such representations and
warranties are made as of a specified date, in which case such representations
and warranties shall be true and correct as of the specified date.
|
7.2
|
Performance
of Agreements
|
The
Company and the Shareholders shall have performed all obligations and agreements
and complied with all covenants and conditions contained in this Agreement
or
any other Transaction Document to be performed and complied with by them
at or
prior to the Closing.
|
7.3
|
Liabilities
|
The
liabilities of the Company shall be as disclosed in Schedule
2.2.2(b).
|
7.4
|
Shareholders'
Certificate
|
Buyer
shall have received a certificate of the Shareholders of the Company, dated
the
Closing Date, substantially in the form attached as
Exhibit 7.4, certifying that the conditions set
forth in Sections 7.1, 7.2, 7.5 and 7.7 have been fulfilled.
|
7.5
|
Material
Adverse Change
|
Since
the
date hereof and through the Closing, there shall not have occurred (or be
threatened) any material adverse change (a) in the business, operations,
assets, liabilities, earnings, condition (financial or other), or prospects
of
the Company or (b) with respect to the Shareholders or the Shares, and no
material adverse change shall have occurred (or be threatened) in any domestic
or foreign laws or regulations affecting the Company or in any third party
contractual or other business relationships of the Company.
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28
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|
7.6
|
Due
Diligence and Board
Approval
|
The
results of Buyer's due diligence investigation of the Company and the
Shareholders shall be satisfactory in all respects to Buyer and the Board
of
Directors of Buyer shall have approved this Agreement and the transactions
contemplated hereby.
|
7.7
|
Approvals
and Consents
|
All
transfers of permits or licenses and all approvals, applications or notices
to
public agencies, federal, state, local or foreign, the granting or delivery
of
which is necessary for the consummation of the transactions contemplated
hereby
or for the continued operation of the Company shall have been obtained, and
all
waiting periods specified by law shall have passed. All other
consents, approvals and notices material to the consummation of the transactions
contemplated by this Agreement shall have been obtained or
delivered. All such transfers, approvals, and consents shall be
satisfactory in all respects to Buyer in its sole and absolute
discretion.
|
7.8
|
Proceedings
and Documents
|
All
corporate and other proceedings in connection with the transactions contemplated
hereby and all documents and instruments incident to such transactions shall
have been approved by counsel to Buyer and the Buyer.
|
7.9
|
Compliance
With Laws
|
The
consummation of the transactions contemplated by this Agreement shall be
legally
permitted by all laws and regulations to which Buyer is subject.
|
7.10
|
Legal
Proceedings
|
No
order
of any court or administrative agency shall be in effect that enjoins,
restrains, conditions or prohibits consummation of this Agreement, and no
litigation, investigation or administrative proceeding shall be pending or
threatened that would enjoin, restrain, condition or prevent consummation
of
this Agreement or the transactions contemplated hereby.
|
7.11
|
Delivery
of Endorsed Certificates
|
The
Shareholders shall deliver to Buyer at Closing original certificates
representing the Shares, duly endorsed in favor of Buyer.
ARTICLE
VIII - CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
SHAREHOLDERS
The
obligations of the Company and the Shareholders to perform and observe the
covenants, agreements and conditions to be performed and observed by any
of them
at or before the Closing shall be subject to the satisfaction of the following
conditions, which may be expressly waived only in writing signed by the
Shareholders.
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29
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|
8.1
|
Accuracy
of Representations and
Warranties
|
Each
of
the representations and warranties of Buyer contained in this Agreement and
the
other Transaction Documents to which it is a party shall be true and correct
as
of the date hereof and at and as of the Closing Date as though made on that
date, except to the extent such representations and warranties are made as
of a
specified date, in which case such representations and warranties shall be
true
and correct as of the specified date.
|
8.2
|
Performance
of Agreements
|
Buyer
shall have performed all obligations and agreements and complied with all
covenants and conditions contained in this Agreement or any other Transaction
Document to be performed and complied with by it at or prior to the
Closing.
|
8.3
|
Officers'
Certificate
|
|
8.4
|
Material
Adverse Change
|
Since
the
date hereof and through the Closing, there shall not have occurred any material
adverse change in the business, operations, assets, liabilities, earnings,
condition (financial or other) of Buyer that would render Buyer unable to
perform its obligations under the Transaction Documents.
|
8.5
|
Approvals
and Consents
|
All
transfers of permits or licenses and all approvals, applications or notices
to
public agencies, federal, state, local or foreign, required to be obtained
by
Buyer for the consummation of the transactions contemplated hereby shall
have
been obtained, and all waiting periods specified by law shall have
passed.
|
8.6
|
Proceedings
and Documents
|
All
corporate and other proceedings in connection with the transactions contemplated
hereby and all documents and instruments incident to such transactions shall
have been approved by counsel to the Shareholders and the
Shareholders.
|
8.7
|
Compliance
With Laws
|
The
consummation of the transactions contemplated by this Agreement shall be
legally
permitted by all laws and regulations to which the Company and the Shareholders
are subject.
|
8.8
|
Legal
Proceedings
|
No
order
of any court or administrative agency shall be in effect that enjoins,
restrains, conditions or prohibits consummation of this Agreement, and no
litigation, investigation or administrative proceeding shall be pending or
threatened that would enjoin, restrain, condition or prevent consummation
of
this Agreement or the transactions contemplated hereby.
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30
-
8.9 Deliveries
of Buyer
Buyer
shall deliver to Shareholders, at
or before Closing, the following documents and agreements executed by Buyer:
(a)
Offer Letter – Xxx Xxxxxxxxx; (b) Offer Letter – Xxxxxxx Xxxxx; and (c) Offer
Letter – X.X. XxXxxxx, III.
ARTICLE
IX - TERMINATION, AMENDMENT AND WAIVER
|
9.1
|
Termination
|
This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual written consent of the Shareholders and Buyer;
(b) by
the Company and the Shareholders, if Buyer shall have breached any of its
representations, warranties or agreements;
(c) by
Buyer, if the Shareholders or the Company shall have breached any of its
or
their representations, warranties or agreements;
(d) by
either the Company or Buyer if the Closing has not occurred by ____________March 31, 2007; provided,
however, that the right
to terminate this Agreement under this subsection (d) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing
to
occur on or before such date;
(e) by
either the Company or Buyer if there shall be any law or regulation that
makes
consummation of the sale of the Shares by the Shareholders to Buyer illegal
or
otherwise prohibited or if any judgment, injunction, order or decree enjoining
Buyer or the Company from consummating the sale of the Shares by the
Shareholders to Buyer is entered and such judgment, injunction, order or
decree
shall become final and nonappealable; or
(f)
at any time prior to the Closing by Buyer if, at any time in the course of
its
legal, accounting, financial or operational due diligence investigation as
to
the Company and the Shareholders, it shall have become aware of any facts
or
circumstances that it was not aware of on the date hereof, or any additional
facts and circumstances as to matters of which it was aware on the date hereof,
in either case that would, in the reasonable judgment of Buyer, make it
inadvisable to consummate the purchase of the Shares and the other transactions
contemplated hereby.
|
9.2
|
Effect
of Termination
|
In
the
event of the termination of this Agreement pursuant to Section 9.1, there
shall be no further obligation on the part of any party, except that the
confidentiality obligations under Section 5.2, and the obligations arising
under Sections 9.2, 11.1, 11.2, 11.5 and 11.8 shall survive any such termination
and nothing shall relieve any party from liability for any breach
thereof.
|
9.3
|
Amendment
|
Buyer,
the Company and the Shareholders may amend, modify or supplement this Agreement
at any time, but only in writing duly executed on behalf of each of the parties
to be bound thereby.
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31
-
|
9.4
|
Waiver
|
At
any
time prior to the Closing, any party may (a) extend the time for the
performance of any obligation or other act of any other party, (b) waive
any inaccuracy in the representations and warranties contained in any
Transaction Document, or (c) waive compliance with any agreement or
condition in any Transaction Document. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the
party
or parties to be bound. The failure of any party at any time or times
to require performance of any provisions shall in no manner affect its right
at
a later time to enforce the same. No waiver by any party of any
condition or of any breach of any terms, covenants, representations, warranties
or agreements contained in this Agreement shall be deemed to be a further
or
continuing waiver of any such condition or breach in other instances or a
waiver
of any other condition or any breach of any other terms, covenants,
representations, warranties or agreements.
ARTICLE
X - SURVIVAL AND INDEMNIFICATION
|
10.1
|
Survival
|
All
representations and warranties contained in this Agreement or the other
Transaction Documents shall survive for a period of three (3) years following
the Closing. The
covenants and agreements contained in this Agreement that contemplate
performance after the Closing shall survive the Closing and shall continue
until
all obligations with respect thereto shall have been performed or satisfied
or
shall have been terminated in accordance with their terms.
|
10.2
|
Indemnification
|
|
|
10.2.1
|
Indemnification
by the Shareholders
|
From
and
after the Closing Date, the Shareholders shall jointly and
severally indemnify and hold Buyer and its affiliates (the
"Buyer Indemnified Parties") harmless from and
against, and shall reimburse Buyer Indemnified Parties for, any and all losses,
damages, debts, liabilities, obligations, judgments, orders, awards, writs,
injunctions, decrees, fines, penalties, taxes, costs or expenses (including
but
not limited to any legal and accounting fees and expenses)
("Losses") arising out of or in connection
with:
(a) any
inaccuracy in or other breach of any representation or warranty made by the
Shareholders in this Agreement or in any other Transaction
Document;
(b) any
failure by the Shareholders or the Company to perform or comply, in whole
or in
part, with any covenant or agreement in this Agreement or any other Transaction
Document to which it is a party; or
(c) any
claim, demand, cause of action, suit, proceeding, hearing or investigation
by
any person or entity for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made
by
such person or entity directly or indirectly with the Company, any of its
Shareholders or employees in connection with any of the transactions
contemplated by this Agreement or any other Transaction
Document.
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32
-
|
|
10.2.2
|
Indemnification
by Buyer
|
From
and
after the Closing Date, Buyer shall indemnify and hold the Shareholders (the
"Shareholder Indemnified Parties") harmless from and
against, and shall reimburse the Shareholder Indemnified Parties for, any
and
all Losses arising out of or in connection with:
(a) any
inaccuracy in or other breach of any representation or warranty made by Buyer
in
this Agreement or in any other Transaction Document;
(b) any
failure by Buyer to perform or comply, in whole or in part, with any covenant
or
agreement in this Agreement or any other Transaction Document to which it
is a
party.
(c) any
claim, demand, cause of action, suit, proceeding, hearing or investigation
by
any person or entity for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made
by
such person or entity directly or indirectly with the Buyer, any of its
shareholders or employees in connection with any of the transactions
contemplated by this Agreement or any other Transaction Document.
|
10.3
|
Limitations
|
(a) Any
claim for indemnification must be asserted as provided in Section 10.4
within three years from the Closing, otherwise, this Article X shall be
null, void and without effect.
(b) In
no event shall any party be indemnified for any Loss to the extent it is
covered
by insurance.
|
10.4
|
Procedure
for Indemnification
|
|
|
10.4.1
|
Claim
Notice
|
The
Shareholder Indemnified Parties together with Buyer Indemnified Parties,
are
sometimes referred to herein as the "Indemnified
Parties" In the event that any Indemnified Party
sustains or incurs any Losses in respect of which indemnification may be
sought
pursuant to this Article X, such Indemnified Party may assert a claim for
indemnification by giving written notice (the "Claim
Notice") to the indemnifying party, which will describe in
reasonable detail the facts and circumstances on which the asserted claim
for
indemnification is based. The Claim Notice will also specify how the
Indemnified Party intends to recover such funds pursuant to this
Agreement. Unless the claim described in the Claim Notice is
contested by the indemnifying party by written notice to the Indemnified
Party
of the amount of the claim that is contested, given within 30 days of the
receipt of the Claim Notice, the Indemnified Party may recover such undisputed
amount of the claim described in the Claim Notice.
|
|
10.4.2
|
Dispute
Notice
|
If,
within thirty (30) days of the receipt by the indemnifying party of the
Claim Notice, the indemnifying party contests in writing to the Indemnified
Party that such Loss constitutes an indemnifiable claim (the
"Dispute Notice"), then the Indemnified Party and the
indemnifying party, acting in good faith, shall attempt to reach agreement
with
respect to such claim. If the Indemnified Party and the indemnifying
party should so agree, a memorandum setting forth such agreement shall be
prepared and signed by the Indemnified Party and the indemnifying
party.
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33
-
|
|
10.4.3
|
Third-Party
Claims
|
With
respect to claims for indemnification resulting from or in connection with
any
legal proceeding commenced by a third party, the Indemnified Party will give
the
Claim Notice to the indemnifying party no later than ten (10) days prior
to the
time any initial answer or response to the asserted claim is legally required
under any applicable court or procedural rule. Nothing in this
Section 10.4.3 limits in any way the right of the Indemnified Party to
defend against any claim or litigation in such manner as it may deem
appropriate, including, but not limited to, settling the claim or litigation
(after giving notice of the same to the indemnifying party) on such terms
as the
Indemnified Party may in good xxxxx xxxx appropriate (provided, however,
that no
such settlement shall occur without the indemnifying party's prior written
consent, which shall not be unreasonably withheld). The indemnifying
party will, subject to the limitations set forth in Section 10.3, promptly
indemnify the Indemnified Party in accordance with the provisions of this
Article X and the Escrow Agreement.
|
10.5
|
Investigations;
Waivers
|
An
Indemnified Party's right to indemnification provided for in this Article X
will remain in effect notwithstanding any investigation at any time by or
on
behalf of any party or any waiver by any party of any condition to such party's
obligations to consummate the transactions contemplated hereby.
10.6 Post
Closing Adjustments
In
the
event that the undisclosed liabilities of the Company as of Closing exceed
$50,000 (whether such liabilities are discovered prior to Closing or post
Closing at anytime during the survival period set forth in Section 10.1)
(the
total amount of such liabilities being referred to herein as the
"Excess Liabilities"), then the Buyer shall deduct,
pro-rata, from the Post Closing Payment that number of shares of Stock having
a
fair market value, determined by the average closing price per share of the
Stock for the five (5) days prior to the date Excess Liabilities are discovered,
equal to the dollar amount of the Excess Liabilities. In the event
the Post Closing Payment has already been made then, within 10 days after
receiving written notice from Buyer concerning the Excess Liabilities, the
Shareholders shall obligated, pro-rata, to surrender for cancellation and
shall
deliver to Buyer certificates for the Stock, duly endorsed in favor of Buyer,
having a fair market value, determined by the average closing price per share
of
the Stock for the five (5) days prior to the date Excess Liabilities are
discovered, equal to the dollar amount of the Excess Liabilities. In
the event there are Excess Liabilities and the Shareholders fail to surrender
or
are unable to surrender the Stock required hereby, the Shareholders, pro-rata,
shall pay to Buyer an amount equal to the Excess Liabilities less the value
of
any Stock surrendered pursuant to the terms of this section 10.6.
ARTICLE
XI - GENERAL
|
11.1
|
Expenses
|
Whether
or not the transactions contemplated by this Agreement are consummated, each
party shall each pay its own fees and expenses for the negotiation, preparation
and carrying out of this Agreement and the other Transaction Documents
(including legal and accounting fees and expenses).
|
11.2
|
Consequential
Damages
|
No
party
shall be liable to the other parties for any special, indirect, incidental
or
consequential damages resulting from any breach of this
Agreement.
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34
-
|
11.3
|
Assignment
|
This
Agreement shall not be assigned by operation of law or otherwise, except
that
Buyer may assign all or any of its rights and obligations to any of its
affiliates. In the event of any such permitted assignment, Buyer
shall guarantee the performance of such obligations by such
assignee.
|
11.4
|
Notices
|
Unless
otherwise provided, any notice under this Agreement shall be given in writing
and shall be deemed effectively given (a) upon personal delivery to the
party to be notified, (b) upon confirmation of receipt by fax by the party
to be notified, (c) one business day after deposit with a reputable
overnight courier, prepaid for overnight delivery and addressed as set forth
in
(d), or (d) three days after deposit with the U.S. Post Office, postage
prepaid, registered or certified with return receipt requested and addressed
to
the party to be notified at the address indicated for such party below, or
at
such other address as such party may designate by 10 days' advance written
notice to the other parties given in the foregoing manner.
If
to the
Buyer:
Xedar Corporation.
0000
Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attention: Xxxx
X. Xxxxxxxxxx, III
President
and CEO
Fax:
000-000-0000
With
a
copy
to: Castle
Xxxxxxxx & Stawiarski, LLC
000
00xx Xxxxxx, Xxxxx
0000
Xxxxxx,
XX 00000
Attention: Xxxx
X. Xxxxxxx, Esq.
Fax:
000-000-0000
If
to the
Company or the
Shareholders: Point
One Inc.
0000
Xxxxx Xxxxx Xxxxxx, Xxxxx
0000
Xxxxxxxxx,
XX 00000
Attention:
Xxx X. Xxxxxxxxx, Xxxxxxx
X. Xxxxx and X.X. XxXxxxx, III
Fax:
000-000-0000
With
a
xxx
to:
Xxxxxxx & Xxxxxxx, P.L.C.
000
X. Xxxx Xxxxxx
Xxxxxxxx,
XX 00000
|
11.5
|
Governing
Law; Jurisdiction; Venue
|
This
Agreement shall be governed by and construed under the laws of the state
of
Colorado without regard to principles of conflict of
laws. The parties irrevocably consent to the jurisdiction and venue
of the state and federal courts located in Denver,
Colorado in connection with any action relating to this
Agreement.
|
11.6
|
Successors
and Assigns
|
The
terms
and conditions of this Agreement shall inure to the benefit of and be binding
on
the respective successors and assigns of the parties.
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35
-
|
11.7
|
Severability
|
If
one or
more provisions of this Agreement are held to be unenforceable under applicable
law, such provision shall be excluded from this Agreement, and the balance
of
this Agreement shall be interpreted as if such provision were so excluded
and
shall be enforceable in accordance with its terms.
|
11.8
|
Entire
Agreement; Counterparts
|
This
Agreement constitutes the entire agreement among the parties with respect
to
this subject matter and supersedes all prior agreements
and undertakings, both written and oral, among the parties with respect to
this
subject matter hereof. This Agreement may be executed in two or more
counterparts, which together shall constitute one instrument.
11.9 Headings
and Captions
The
headings and captions prefacing each Section and most paragraphs of this
Agreement are inserted only for the purpose of convenient reference and
cross-reference and in no way define, limit or prescribe the substantive
content, scope or intent of this Agreement nor affect the meaning,
interpretation, construction or enforcement of any provision
thereof.
|
11.10
|
Further
Assurances
|
The
parties agree, at any time and from time to time to do, execute, acknowledge,
deliver, all such further acts, stock certificates, stock powers, proxies,
resignations, assignments, transfers, conveyances, powers of attorney, and
assurances as may be required to complete the transactions contemplated in
this
Agreement.
|
11.11
|
Exhibits
and Schedules
|
All
Exhibits and Schedules referenced in, and attached to, this Agreement are
incorporated in this Agreement by this reference hereto.
IN
WITNESS WHEREOF, the parties hereto have entered into and signed this Agreement
effective as of the date and year first above written.
BUYER:
Xedar
Corporation,
a
Colorado corporation
By: /s/
Xxxx X. Xxxxxxxxxx, III
Xxxx
X. Xxxxxxxxxx, III, President and
CEO
-
36
-
COMPANY:
Atlantic
Systems Corporation
a
Virginia corporation
By:
/s/ Xxx X. Xxxxxxxxx
Name:
Xxx X. Xxxxxxxxx
Title: CEO
SHAREHOLDERS:
/s/
Don W.
Rakesraw
Xxx
X.
Xxxxxxxxx
/s/
Xxxxxxx X.
Xxxxx
Xxxxxxx
X. Xxxxx
/s/
X.X. XxXxxxx,
III
X.X.
XxXxxxx, III
-
37
-
List
of Exhibits and Schedules
Exhibits
Exhibit
2.2.2 – Registration Rights and Lock-Up Agreement
Exhibit
7.4 – Shareholders' Certificate
Exhibit
8.3 – Officer’s Certificate (Buyer)
Schedules
Schedule
2.1 – Excluded Assets
Schedule
2.2.2(b) – Accounts Receivable as of Closing Balance Sheet date
Schedule
3.6 – Operating Liabilities
Schedule
3.9(a) – Real Property (owned, leased, rented or used by the
Company)
Schedule
3.9(b) – Personal Property (owned, leased, rented or used by the Company and
having a value in
excess
of
$2,000)
Schedule
3.10 – Material Contracts (all material contracts, agreements, arrangements of
the Company)
Schedule
3.11 – Customers (material customers of the Company)
Schedule
3.12 – Pending Litigation and Claims
Schedule
3.15 – Employee Benefit Plans (benefit plans of the Company)
Schedule
3.17.2 – Third Party Technology; Third Party Licenses (used in the Company's
business)
Schedule
3.17.3 – Trademarks (trademarks, trade names, brand names of the
Company)
Schedule
3.17.4 – IP Registrations (all patents, patent applications, copyright
registrations, trademark
applications
of the Company)
Schedule
3.17.8 – Domain Names (all websites of the Company)
Schedule
3.20 – Permits; Registrations (all governmental approvals, authorizations,
consents, licenses, orders,
registrations
and permits of the
Company)
Schedule
3.22 – Insurance Policies (all insurance policies of the Company)
Schedule
3.26 – Bank Accounts (all accounts and account signatories of the
Company)
Schedule
4.6(b) – Shareholders holding 5% or more Shares of Common Stock
-
38
-
Exhibit
2.2.2
[Registration
Rights and Lock-Up Agreements – Xxxxxxxxx, Grime and XxXxxxx]
-
39
-
Exhibit
7.4
[Shareholders'
Certificate]
-
40
-
Exhibit
8.3
[Officer’s
Certificate (Buyer)]
-
41
-
