This ASSET PURCHASE AGREEMENT is made this 9th day of February, 2001, by,
between and among OSAGE SYSTEMS GROUP, INC., a Delaware corporation ("Osage"), and
its wholly owned subsidiaries, OSAGE COMPUTER GROUP, INC., a Delaware corporation
("Osage Computer"), SOLSOURCE COMPUTERS, INC., a California corporation
("SolSource"), X.X. XXXXX, INC., a Texas corporation ("XX Xxxxx"), OPEN SYSTEM
TECHNOLOGIES, INC., a Delaware corporation ("OST"), OPEN BUSINESS SYSTEMS,
INC., an Illinois corporation ("OBS"), OSAGE SYSTEMS GROUP MINNESOTA, INC., a
Minnesota corporation ("OSGM"), OSAGE iXi, Inc., a Delaware corporation ("Osage iXi")
(Osage, Osage Computer, SolSource, XX Xxxxx, OST, OBS, OSGM and Osage iXi also referred
to individually as "Seller" and collectively as "Sellers"), XXXXXXX COMPUTER
RESOURCES, INC., a Delaware corporation ("Xxxxxxx") and XXXXXXX SELECT
INTEGRATION SOLUTIONS, INC., a Delaware corporation ("PSIS") (Xxxxxxx and PSIS also
referred to individually as "Purchaser" and collectively as "Purchasers").
WHEREAS, Osage, through its operating subsidiaries, markets a broad range of integration
information technology products and professional consulting services throughout the United
States;
WHEREAS, Osage, through its
operating subsidiaries, is now organized into two strategic business units,
Osage Consulting Services and Osage Systems Integration;
WHEREAS, Xxxxxxx is in the business of marketing and selling a broad range of
microcomputers and related processes, including equipment selection, procurement and
configuration;
WHEREAS, PSIS is a wholly
owned subsidiary of Xxxxxxx and is a single source provider of integrated
desktop management and network services, including life cycle services, Internet
working services and user support services;
WHEREAS, Xxxxxxx desires to
purchase certain of the assets of Sellers used in its Systems Integration
Business that relate to the selling of integrated information technology
products (“Business No. 1”), and PSIS desires to purchase certain of
the assets of Sellers related to various services provided by Sellers to the
customers of the Systems Integration Business and certain assets relating to
various services provided by Sellers to the customers of its professional
consulting services business (“Business No. 2”), and Sellers desire to
sell such assets free and clear of all liens, claims and encumbrances, in
accordance with Section 363(f) of the Bankruptcy Code; and
WHEREAS, the Sellers will,
within six (6) days after the execution of this Agreement, file with, and seek
approval of this Agreement by, the Bankruptcy Court (defined herein), in a
case(s) commenced by a voluntary petition(s) for relief under Chapter 11 of
Title 11 of the United States Code (the “Bankruptcy Code”) in the
United States Bankruptcy Court for the District of Arizona (the "Bankruptcy Court"),
to be jointly administered as In Re: Osage Systems Group, Inc., et al
(the "Bankruptcy Case");
NOW THEREFORE, in consideration of the above premises and the mutual promises,
covenants, agreements, representations and warranties herein contained, the parties hereto agree
as follows:
1.
TERMS
1.1 Agreement.
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Each Seller agrees to sell and convey to Xxxxxxx the assets set forth in Section 1.2
owned by such entity. Each Seller agrees to sell and convey to PSIS the assets
set forth in Section 1.3 owned by such entity. Xxxxxxx agrees to purchase the
assets set forth in Section 1.2, and PSIS agrees to purchase the assets set
forth in Section 1.3. The agreements of Xxxxxxx and PSIS and each Seller are
expressly conditioned upon the terms, conditions, covenants, representations and
warranties as hereinafter set forth, including the approval of the Bankruptcy
Court. |
1.2 Assets to be Sold by Each Seller and Purchased by Xxxxxxx
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At the Closing (hereinafter defined) of this Agreement, Xxxxxxx shall purchase and
each Seller shall sell all the assets of such Seller used in Business No. 1
except for assets to be acquired by PSIS pursuant to Section 1.3 and Excluded
Assets (hereinafter defined). Such assets (“Purchased Assets No. 1”)
shall include, but not be limited to: |
|
(a) |
The inventory of Sellers related to committed transactions with various
customers of Sellers, to be listed on a schedule supplied by the Sellers not
less than two business days prior to the Closing and agreed to by Xxxxxxx not
less than one business day prior to the Closing (the “Committed
Inventory”); |
|
(b) |
Furniture, fixtures and other fixed assets (other than leasehold improvements)
the net book value of which is reflected on Exhibit A attached to this
Agreement, subject to changes in the ordinary course of business prior to the
Closing (the “Fixed Assets”); |
|
(c) |
Leasehold improvements of Sellers at locations as to which Xxxxxxx assumes a
lease pursuant to Section 1.5 of this Agreement; |
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(d) |
A vendor receivable from Sun Microsystems Corporation relating to market
development funds in the amount of Three Hundred Ninety-Five Thousand Two
Hundred Twenty-Two Dollars ($395,222.00) as of November 30, 2000, as shown on
the books of Sun Microsystems Corporation as of the Closing Date and
reflecting increases or decreases for operations in the ordinary course of business from
November 30, 2000 to the Closing Date (the “Vendor Receivable”); |
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(e) |
Intangible assets of Sellers which are used in Business No. 1, including,
without limitation, various contract rights and agreements, customer lists and
records and related information, supplier agreements, service marks and the
right to use the corporate and trade name of or used by any Seller, or any
derivative thereof, all or a part of the corporate or trade name and any
Internet domain names, to be selected by Xxxxxxx; |
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(f) |
Any telephone numbers used in Business No. 1 of Sellers, to be selected by Xxxxxxx. |
1.3 Assets to be Sold by Each Seller and Purchased by PSIS
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At the Closing of this Agreement, PSIS shall purchase and each Seller shall sell certain
assets of Sellers used in Business No. 1 as described in this section and all the assets of
such Seller used in Business No. 2 except for Excluded Assets. Such assets ("Purchased
Assets No. 2") shall include, but not be limited to: |
|
(a) |
Certain computer software, licenses and rights and similar items used in the
marketing of Business No. 1 and Business No. 2 of Sellers, to be selected by
PSIS; |
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(b) |
Certain intangible assets of Sellers, to be selected by PSIS, which are used in
Business Xx. 0 xxx Xxxxxxxx Xx. 0, including without limitation, various
contract rights and agreements, customer lists and records and related
information, supplier agreements and related information, consulting agreements,
service marks, and the right to use the corporate and trade name of or used by
any Seller, or any derivative thereof, all or a part of the corporate or trade
name; |
|
(c) |
Any telephone numbers used in Business No. 2, to be selected by Xxxxxxx; |
|
(d) |
Certain service contracts relating to Business No. 1 which are set forth in Exhibit
B attached hereto (the "Assumed Service Contracts"); and |
|
(e) |
Certain maintenance contracts relating to Business No. 1 and Business No. 2
subject to review thereof and acceptance by PSIS and for which satisfactory
agreements have been reached with MRE Systems, Inc., d/b/a GE Access, relating
thereto, provided that the assumption and assignment of such maintenance
contracts is authorized by the Bankruptcy Court. |
1.4 Excluded Assets.
The
excluded assets are set forth on Exhibit C attached hereto (the “Excluded
Assets”).
1.5 Lease Agreements.
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Sellers
individually or jointly, are the lessees under certain lease agreements covering
the real and tangible personal properties described in Exhibit D. |
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No
later than fifteen (15) days before the expiration of any deadline to assume or
reject leases established by the order of the Bankruptcy Court on the motion of
the Sellers referred to in Section 7.2(f), Xxxxxxx and/or PSIS shall designate
those lease agreements from Exhibit D which it chooses to assume (the
“Assumed Leases”). Neither Xxxxxxx nor PSIS shall have any liability
or obligation with respect to any lease agreement not so designated. With
respect to the Assumed Leases, Sellers shall promptly file with the Bankruptcy
Court the necessary and appropriate motion pursuant to Section 365 of the
Bankruptcy Code to assume and assign to Xxxxxxx and/or PSIS the Assumed Leases.
Any such assumption and assignment to Xxxxxxx and/or PSIS shall be effective as
of the date of entry of an order of the Bankruptcy Court approving such
assignment and assumption (the “Lease Assumption Date”). To the extent
necessary, Xxxxxxx and/or PSIS shall pay any cure amounts owing under the
Assumed Leases as set forth in Section 2.2 herein. |
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On
or promptly after the Lease Assumption Date, subject to the entry of the
Bankruptcy Court Order, Seller and Xxxxxxx or PSIS shall execute necessary
documentation for the assignment of the Assumed Leases and all of such
Seller’s right and interest thereunder to Xxxxxxx and/or PSIS, as agreed
upon by the parties, and shall assign all its respective rights and interest in
the Assumed Leases to Xxxxxxx and/or PSIS, as applicable. Xxxxxxx and/or PSIS,
as applicable, shall indemnify and hold each Seller harmless from any liability
with respect to the Assumed Leases occurring after the Lease Assumption Date
which is assumed by such party. |
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Sellers
retain the right to seek in the Bankruptcy Case the assumption or rejection of
any of the leases described in Exhibit D which are not Assumed Leases. |
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The
assignment to and assumption by Xxxxxxx of the Assumed Leases as provided in
this Section is not a condition precedent to the obligation of the Seller to
sell or Xxxxxxx to purchase the Purchased Assets No. 1 and the Purchased Assets
No. 2 as provided in this Agreement. |
1.6 Other Executory Contracts.
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(a) |
If any assets to be acquired by Xxxxxxx pursuant to Sections 1.2 and 1.3
constitute executory contracts and any Seller is in default under any of such
executory contracts, PSIS shall pay all cure amounts owing under such executory
contracts upon earlier of the Closing Date or entry of an order by the
Bankruptcy Court authorizing the assumption and assignment of the such executory
contracts, which amounts shall be an offset against the amount due under the
Promissory Note delivered in payment of the purchase price in accordance with Section
3.2(a). |
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(b) |
Sellers retain the right to assume or reject in the Bankruptcy Case any
executory contract(s) (as defined in Bankruptcy Code §365) that are not
assumed by Xxxxxxx and/or PSIS. |
1.7 Instruments of Transfer.
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Except
as otherwise provided herein, subject to the entry of the Bankruptcy Court
Order, at Closing each Seller will deliver to Xxxxxxx and PSIS, respectively,
such bills of sale, endorsements, assignments and other good and sufficient
instruments of transfer and assignment as shall be effective to vest in Xxxxxxx
and PSIS, as applicable, good title and interest in and to Purchased Assets No.
1 and Purchased Assets No. 2, respectively. At or after the Closing, and without
further consideration, each Seller will execute and deliver to Xxxxxxx and PSIS,
as applicable, such further instruments of conveyance and transfer and take such
other action as Xxxxxxx and/or PSIS may reasonably request in order to more
effectively convey and transfer to Xxxxxxx and/or PSIS, as applicable, any of
the Purchased Assets No. 1 and/or Purchased Assets No. 2 or for aiding and
assisting and collecting and reducing to possession and exercising rights with
respect thereto. In addition to the foregoing, each Seller will deliver to
Xxxxxxx and PSIS, as applicable, the originals or copies of all such Sellers
books, records and other data relating to Purchased Assets No. 1 and Purchased
Assets No. 2, respectively, and simultaneously with such delivery, each Seller
shall take all such acts as may be necessary to put Xxxxxxx in actual possession
and operating control of Purchased Assets No. 1 and put PSIS in actual
possession and operating control of Purchased Assets No. 2. |
2.
ASSUMPTION OF LIABILITIES
2.1 Committed Inventory.
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Xxxxxxx
will assume, as of the Closing Date, the rights and obligations of Sellers under
certain purchase contracts for the Committed Inventory but only to the extent
the corresponding benefits and obligations therefrom are assigned to and assumed
by Xxxxxxx pursuant to approval of the Bankruptcy Court. |
2.2 Assumed Leases.
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Xxxxxxx
will assume, as of the Lease Assumption Date, the rights and obligations of
Sellers under the Assumed Leases but only to the extent the corresponding
benefits and obligations therefrom are assigned to and assumed by Xxxxxxx
pursuant to approval of the Bankruptcy Court. If and to the extent that any
Seller is in default under any Assumed Leases, Xxxxxxx shall pay on the Lease
Assumption Date all cure amounts owing
under the Assumed Leases and any amount so paid by Xxxxxxx shall be an offset
against the amount due under the Promissory Note delivered in payment of the
purchase price in accordance with Section 3.2(a). |
2.3 Assumption of Service Contracts.
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PSIS
will assume, as of the Closing Date, the rights and obligations of Sellers under
the Assumed Service Contracts, but only to the extent the corresponding benefits
and obligations therefrom are assigned to and assumed by PSIS pursuant to
approval of the Bankruptcy Court. If and to the extent that any Seller is in
default under any of the Assumed Service Contracts, PSIS shall pay all cure
amounts owing under the Assumed Service Contracts upon earlier of the Closing
Date or entry of an order by the Bankruptcy Court authorizing the assumption and
assignment of the Assumed Service Contracts, which amounts shall be an offset
against the amount due under the Promissory Note delivered in payment of the
purchase price in accordance with Section 3.2(a). |
| 2.4 |
Assumption of Multi-Year Maintenance Agreements. PSIS will assume, as of
the Closing Date, the rights and obligations of Sellers under any Multi-Year
Maintenance Agreement that PSIS elects to acquire pursuant to Section 1.3(e). |
2.5 Excluded Liabilities.
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Notwithstanding
anything in this Agreement to the contrary, Xxxxxxx and PSIS shall not assume or
become responsible for any claim, liability or obligation of any nature
whatsoever, whether known or unknown, accrued, absolute, contingent or otherwise
(a “Liability”) of any of the Sellers except as set forth in Sections
1.6, 2.1, 2.3 and 2.4. Without limiting the generality of the foregoing, the
following are included among the Liabilities of any of the Sellers which Xxxxxxx
and PSIS shall not assume or become responsible for: |
|
(a) |
all Liabilities for any taxes whether deferred or which have accrued or may
accrue or become due and payable by any of the Sellers either prior to, on or
after the Closing Date, including, without limitation, all taxes and fees of a
similar nature arising from the sale and transfer of Purchased Assets No. 1 and
Purchased Assets No. 2 to Xxxxxxx and PSIS, respectively, other than sales and
transfer taxes that are imposed on the buyer according to applicable law; |
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(b) |
all Liabilities and obligations to directors, officers, employees or agents of
any of the Sellers including, without limitation, all Liabilities and
obligations for wages, salary, bonuses, commissions, vacation or severance pay,
profit sharing or pension benefits, and all Liabilities and obligations arising
under any bonus, commission, salary or compensation plans or arrangements,
whether accruing prior to, on or after the Closing Date; |
|
(c) |
all Liabilities and obligations with respect to unemployment compensation claims
and workmen’s compensation claims and claims for race, age and sex
discrimination or sexual harassment or for unfair labor practice based on or
arising from occurrences, circumstances or events, or exposure to conditions,
existing or occurring prior to the Closing Date and for which any claim may be
asserted by any of the Sellers’ employees, prior to, on or after the
Closing Date; |
|
(d) |
all Liabilities of any of the Sellers to third parties for personal injury or
damage to property based on or arising from occurrences, circumstances or
events, or exposure to conditions, existing or occurring prior to the Closing
Date and for which any claim may be asserted by any third party prior to, on or
after the Closing Date; |
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(e) |
all Liabilities and obligations of any of the Sellers arising under or by virtue
of federal or state environmental laws based on or arising from occurrences,
circumstances or events, or exposure to conditions, existing or occurring prior
to the Closing Date and for which any claim may be asserted prior to, on or
after the Closing Date; |
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(f) |
all Liabilities of any of the Sellers including any costs of attorneys’
fees incurred in connection therewith, for litigation, claims, demands, or
governmental proceedings arising from occurrences, circumstances or events, or
exposure to conditions occurring or existing prior to the Closing Date; |
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(g) |
all Liabilities based on any theory of liability or product warranty with
respect to any product manufactured or sold prior to the Closing Date and for
which any claim may be asserted by any third party, prior to, on or after the
Closing Date; |
|
(h) |
all attorneys’ fees, accountants’ or auditors’ fees, and other
costs and expenses incurred by any of the Sellers in connection with the
negotiation, preparation and performance of this Agreement or any of the
transactions contemplated hereby; |
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(i) |
all Liabilities of any of the Sellers in connection with the Excluded Assets;
|
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(j) |
any Liabilities of any of the Sellers with respect to any options, warrants,
agreements or convertible or other rights to acquire shares of its capital stock
of any class and/or of its membership interests of any class, respectively; |
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(k) |
any Liabilities of any of the Sellers incurred incident to any indemnification
for breach of any representations, warranties, covenants, or other agreements
made by any of the Sellers under any of the asset purchase, stock,
reorganization, or other legal transaction(s) set forth in Exhibit E; |
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(l) |
any Liabilities of any of the Sellers with respect to any loans or advances made by
any Seller; |
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(m) |
all other debts, Liabilities, obligations, contracts, and commitments (whether
direct or indirect, known or unknown, contingent or fixed, liquidated or
unliquidated, and whether now or hereinafter rising) arising out of or relating
to the ownership, operation or use of any Purchased Assets No. 1 and/or
Purchased Assets No. 2 on or prior to the Closing Date or the conduct of the
Business No. 1 of the Sellers and/or Business No. 2 of the Sellers prior to the
Closing Date, except only for the liabilities and obligations to be assumed or
paid, performed or discharged by Xxxxxxx and/or PSIS as set forth in Sections
1.6, 2.1, 2.2, 2.3 and 2.4. |
3.
PURCHASE PRICE
3.1 Amount of Purchase Price.
The purchase price for the Purchased Assets No. 1 and the
Purchased Assets No. 2 to be acquired by Xxxxxxx and PSIS shall be the sum of:
|
(a) |
the net book value of the Fixed Assets as of the Closing Date (which amount was
$1,355,706 as of December 31, 2000 and will be increased by acquisitions or
decreased by dispositions, depreciation and amortization of Fixed Assets in the
ordinary course of business prior to the Closing Date); |
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(b) |
the amount of the Vendor Receivable as of the Closing Date; |
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(c) |
the value of the Committed Inventory determined by its cost as of the Closing Date; |
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(d) |
$1,000,000.00, to be allocated between Business No.1 and Business No. 2 as
agreed by the parties. |
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The purchase price to be paid to the Sellers hereunder by Xxxxxxx and PSIS, as
applicable, shall be allocated as set forth on Exhibit F attached hereto. Each
Seller and Xxxxxxx and PSIS agree that each shall act in a manner consistent
with such allocation in (a) filing Internal Revenue Form 8594; and (b) in paying
sales and other transfer taxes in connection with the purchase and sale of
assets pursuant to this Agreement. To the extent that any transactions
contemplated herein are not exempt from sales and other transfer taxes pursuant
to Section 1146(c) of the Bankruptcy Code, Xxxxxxx and PSIS shall pay such sales
and other transfer taxes, and any such costs will not be deducted from the
purchase price to be paid to the Sellers hereunder. |
3.2 Payment of Purchase Price.
The purchase price shall be payable to Sellers or to its creditors as may be
directed by the Bankruptcy Court by Xxxxxxx and PSIS, as applicable, in the following manner:
|
(a) |
A promissory note in the principal amount of Two Hundred Fifty Thousand Dollars
($250,000.00), which shall be due within ninety (90) days of the Closing and
shall bear interest at the prime rate of Chase Manhattan Bank, substantially in
the form attached hereto as Exhibit G. The Note will be subject to an offset
determined by a formula to be set forth in the Note relating to the voluntary
termination of employment by 43 key employees, to be identified on a list
countersigned by Xxxxxxx, PSIS and the Seller, during such ninety day period,
along with any cure payments that Xxxxxxx or PSIS may be required to pay
pursuant to the provisions of Sections 1.6, 2.2 or 2.3; |
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(b) |
the balance of the purchase price in cash by wire transfer and immediately
available funds on the Closing Date. |
4.
COVENANT NOT TO COMPETE AGREEMENTS
4.1 Covenant Not to Compete Agreements of Sellers.
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At
Closing, each Seller shall enter into Covenant Not to Compete Agreements with
Xxxxxxx and PSIS, substantially in the forms attached hereto and made a part
hereof as Exhibits H and I, respectively. |
5.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each
Seller hereby represents and warrants to Xxxxxxx and PSIS as follows:
5.1 Organization.
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Each
Seller is a corporation validly existing and in good standing under the laws of
the State of its incorporation. Each Seller has all requisite power and
authority to carry on Business No. 1 and Business No. 2, as applicable, as it is
now being conducted, subject to the provisions of any order of the Bankruptcy
Court. |
5.2 Authority.
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Subject
only to approval by the Bankruptcy Court, each Seller has the corporate power
and authority to perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the transactions contemplated hereby have been duly authorized by each
Seller’s Board of Directors. |
5.3 Title to Properties and Conditions.
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Each Seller has good and marketable title to the Purchased Assets No. 1 and Purchased
Assets No. 2 being sold hereunder. When sold in accordance with the Bankruptcy Court
Order, the Purchased Assets No. 1 and Purchased Assets No. 2 will not be subject to any
claims, liens, interests, mortgages, charges or other encumbrances arising through the
Sellers. The Sellers have not entered into any prior agreement to sell or transfer the
Purchased Assets No. 1 or Purchased Assets No. 2. Subject to any provisions of the
Bankruptcy Court Order, the assets purchased pursuant to this Agreement are sold "As
Is", "Where Is" and with all faults. Each Seller warrants only that title conveyed is good
and transfer rightful. This warranty is made by the Sellers in lieu of all other warranties,
express or implied. |
5.4 Brokers and Finders.
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None
of the Sellers have employed any broker, agent or finder or incurred any
liability for any brokerage fees, agent commission or finder’s fees in
connection with the transaction contemplated hereby for which Xxxxxxx or PSIS or
any third party shall have any liability. |
6.
REPRESENTATIONS AND WARRANTIES OF XXXXXXX
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Xxxxxxx
hereby represents and warrants to the Sellers that the following statements are
true and correct as of the date hereof. |
| 6.1 |
Organization, Good Standing and Power of Xxxxxxx. Xxxxxxx is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power and lawful authority
to execute, deliver and perform this Agreement and the execution, delivery and
performance of this Agreement and the transaction contemplated hereby will be,
on or before the date referred to in Sections 8.3 and 8.4 of this Agreement,
duly authorized by Xxxxxxx’x Board of Directors and its senior lender,
Deutsche Financial Services Corporation. This Agreement is a valid and binding
obligation of Xxxxxxx, enforceable in accordance with its terms except that such
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium and similar laws. |
6.2 Brokers and Finders.
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Xxxxxxx
has not employed any broker, agent or finder or incurred any liability for any
brokerage fees, agent commission or finder’s fees in connection with the
transaction contemplated hereby for which any Seller or any third party shall
have any liability. |
| 6.3 |
Organization, Good Standing and Power of PSIS. PSIS is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has full corporate power and lawful authority to execute,
deliver and perform this Agreement and the execution, delivery and performance
of this Agreement and the transaction contemplated hereby will be, on or before
the date referred to in Sections 8.3 and 8.4 of this Agreement, duly authorized
by PSIS’s Board of Directors and its senior lender, Deutsche Financial
Services Corporation. This Agreement is a valid and binding obligation of PSIS,
enforceable in accordance with its terms except that such enforceability may be
limited by bankruptcy, reorganization, insolvency, moratorium and similar laws. |
6.4 Brokers and Finders.
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PSIS
has not employed any broker, agent or finder or incurred any liability for any
brokerage fees, agent commission or finder’s fees in connection with the
transactions contemplated hereby for which any Seller or any third party shall
have any liability. |
7.
CERTAIN UNDERSTANDINGS AND AGREEMENTS
| 7.1 |
Disposition of Assets. From the date hereof to the Closing Date, except
as may be authorized by the Bankruptcy Court, none of Purchased Assets No. 1 or
Purchased Assets No. 2 will be sold, conveyed or otherwise disposed of by any
Seller without Xxxxxxx’x or PSIS’s prior written approval of the terms
and conditions of such sale, other than the sale of inventory and other assets
in the ordinary course of business of any Seller. |
7.2 Motion to the Bankruptcy Court.
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Promptly
after the commencement of the Bankruptcy Case, the Sellers shall file with the
Bankruptcy Court a motion for orders (a) authorizing the sale of the
Sellers’ assets as provided herein free and clear of all liens pursuant to
Section 363(f) of the Bankruptcy Code, (b) authorizing the Sellers, as Chapter
11 debtors-in-possession (the “Debtors”) to conduct an auction to sell
such assets to Xxxxxxx and PSIS or to any higher and better bidder, (c)
approving a break-up fee in the amount of $250,000 (the “Break-Up
Fee”) and certain bidding procedures in such auction and sale (including an
initial minimum bid of $250,000 in excess of the purchase price in Section 3.1
of this Agreement and subsequent bidding in increments of $25,000, and a minimum
good faith deposit of $250,000), and scheduling a hearing and fixing the manner
of sale and notice of such auction and sale, (d) scheduling a preliminary
hearing on shortened notice and fixing the manner and extent of notice to
consider the Break-Up Fee and bidding procedures, (e) authorizing the assumption
and assignment to Xxxxxxx of the Assumed Service Contracts and any other
executory contracts included in the Purchased Assets Xx. 0 xxx xxx Xxxxxxxxx
Xxxxxx Xx. 0, (x) extending the time to accept or reject leases of real or
personal property of the Sellers
to a date not less than 120 days after the commencement of the Bankruptcy Case
and (g) granting such other relief as the Bankruptcy Court shall deem
appropriate. |
| 7.3 |
Conduct of Business. Each Seller agrees that from the date hereto to the
Closing Date, except as otherwise set forth in this Agreement or permitted by
the Bankruptcy Code, by any order of the Bankruptcy Court, or to the extent
consented to in writing by Xxxxxxx and PSIS, or as expressly contemplated
hereby, each Seller: |
|
(a) |
will operate the Purchased Assets Xx. 0 xxx Xxxxxxxxx Xxxxxx Xx. 0 xxx Xxxxxxxx
Xx. 0 and Business No. 2 as presently operated consistent with past practices,
except for the filing of the Bankruptcy Case and the 363(f) motion; |
|
|
will promptly advise Xxxxxxx and PSIS in writing of any material loss, damage
or destruction of or to the Purchased Assets No. 1 or Purchased Assets No. 2; |
|
(c) |
will not incur any indebtedness, liability or obligation (whether absolute,
approved, contingent or otherwise) in connection with the Purchased Assets No. 1
or Purchased Assets No. 2 other than in the ordinary course of business, or as may
be authorized by the Bankruptcy Court; |
|
(d) |
except as may be authorized by the Bankruptcy Court, will not permit, create or
assume any mortgage, lien, pledge, charge or encumbrance with respect to
Purchased Assets No. 1 or Purchased Assets No. 2. |
| 7.4 |
Access to Information. From the date hereof until Closing, each Seller shall make
available or cause to be made available to the accountants, attorneys or other
representatives of Xxxxxxx and PSIS for examination during normal business hours,
upon reasonable requests, all properties, assets, books of accounts, title papers, insurance
policies, contracts, leases, commitments, records and other documents of every character
relating to Business No. 1 and Business No. 2. |
| 7.5 |
Collection of Accounts Receivable. Subject to authorization by the
Bankruptcy Court, Xxxxxxx shall have the option to enter into a Service Contract
with the Sellers pursuant to which Xxxxxxx will collect for the account of the
Sellers the accounts receivable of the Sellers outstanding as of the Closing
Date. |
| 7.6 |
Other Actions. From the date hereof until Closing, each Seller shall not
take any action which shall prevent the representations, warranties and
covenants of Sellers set forth herein from being true and correct at the
Closing. |
| 7.7 |
Occupancy Pending Assumption of Leases. After the Closing and prior to the Lease
Assumption Date, the Sellers shall permit Xxxxxxx and PSIS to occupy and use the real
property described in Exhibit D to the extent necessary for the use of the Purchased
Assets No. 1 and the Purchased Assets No. 2, provided that Xxxxxxx or PSIS pays all
rent and other costs of the use and occupancy of such premises. |
8.
CONDITIONS PRECEDENT TO OBLIGATIONSOF
XXXXXXX AND PSIS
| |
The
obligation of Xxxxxxx and PSIS to consummate the transactions contemplated
hereby shall be subject to the following conditions: |
| 8.1 |
Xxxxxxx and PSIS shall acquire all necessary permits from federal, state and
local agencies that are necessary to conduct business in the states of Arizona,
Texas, Florida, Illinois, and Minnesota. |
| 8.2 |
Xxxxxxx and PSIS shall have completed their due diligence investigation of the
books and records of each Seller to their satisfaction. This condition shall be
deemed to have been waived by Xxxxxxx and PSIS unless Xxxxxxx and PSIS notify
the Sellers of their election to terminate this Agreement on or before the 14th
day after the commencement of the Bankruptcy Case. |
| 8.3 |
Xxxxxxx and PSIS shall have obtained the consent of their primary lender,
Deutsche Financial Services Corporation, to the transaction. This condition
shall be deemed to have been waived by Xxxxxxx and PSIS unless Xxxxxxx and PSIS
notify the Sellers of their election to terminate this Agreement on or before
the 14th day after the commencement of the Bankruptcy Case. |
| 8.4 |
The transactions shall have been approved by the Board of Directors of Xxxxxxx
and PSIS, respectively. This condition shall be deemed to have been waived by
Xxxxxxx and PSIS unless Xxxxxxx and PSIS notify the Sellers of their election to
terminate this Agreement on or before the 14th day after the commencement of the
Bankruptcy Case. |
| 8.5 |
Xxxxxxx and/or PSIS shall have entered into Employment Agreements with key
employees of Sellers identified by Xxxxxxx or PSIS (including, but not limited
to, certain system engineers and Java programmers that are currently providing
services to Sellers’ consulting unit) on terms that are mutually agreeable
to such parties, subject in any event to the approval by the Bankruptcy Court of
the sale of the assets to Xxxxxxx and PSIS. This condition shall be deemed to
have been waived by Xxxxxxx and PSIS unless Xxxxxxx and PSIS notify the Sellers
of their election to terminate this Agreement on or before the 14th day after
the commencement of the Bankruptcy Case. |
| 8.6 |
The representations and warranties of each Seller contained in this Agreement
shall be true and correct, in all material respects, as of the Closing Date and
each of the covenants, agreements and obligations to be performed by each Seller
on or before the Closing Date pursuant to the terms hereof shall have been
performed, in all material respects, on or before the Closing Date. |
| 8.7 |
Except for the filing of the Bankruptcy Case or as may be authorized by an order of the
Bankruptcy Court, no material loss, damage or destruction shall have occurred to the
Purchased Assets No. 1 or Purchased Assets No. 2, which loss, damage or destruction
cannot reasonably be repaired within ninety (90) days after the date of such loss, damage
or destruction. |
| 8.8 |
Except for the filing of the Bankruptcy Case or as may be authorized by an order
of the Bankruptcy Court, no action, suit or proceedings against any of the
parties hereto shall be issued or pending before any court or governmental
agency seeking to restrain or prohibit the transactions contemplated by this
Agreement. |
| 8.9 |
A bid procedures order (the “Bid Procedures Order”) shall have been
entered by the Bankruptcy Court within 20 days of execution of this Agreement,
unless otherwise agreed to by the parties, establishing such bid procedures,
granting such bid procedures, bidder protections, bidder qualifications and
appropriate Break-Up Fee and addressing such other matters as such Sellers and
Xxxxxxx and PSIS mutually agree upon, including, but not limited to,
reimbursement of Xxxxxxx’x and PSIS’s costs not to exceed $250,000
(encompassed in the proposed Break-Up Fee) in the event that Xxxxxxx and PSIS
are not the successful bidders in any sale of Purchased Assets No. 1 and
Purchased Assets No. 2 conducted in the Bankruptcy Case, an initial minimum bid
of $250,000 in excess of the purchase price in Section 3.1 and subsequent
bidding in increments of $25,000, and a minimum good faith deposit of $250,000. |
8.10 Final Order of Bankruptcy Court.
| |
The
Bankruptcy Court shall have entered an order (the “Bankruptcy Court
Order”) in form and substance satisfactory to Xxxxxxx and PSIS, authorizing
and directing each Seller to (a) sell Purchased Assets No. 1 and Purchased
Assets No. 2 to Xxxxxxx and PSIS, as applicable, free and clear of all liens,
claims, interests and encumbrances in accordance with Section 363(f) of the
Bankruptcy Court, and (b) to assign the Assumed Service Contracts to Xxxxxxx and
PSIS, as applicable, in accordance with Section 365 of the Bankruptcy Code. The
Bankruptcy Court Order shall become a Final Order on or before April 30, 2001,
or such other date as is agreed to by the parties in accordance with this
Agreement. For purposes of this Agreement, a “Final Order” shall mean
an order or judgment of the Bankruptcy Court or other court of competent
jurisdiction (i) which has not been reversed, stayed, modified or amended and as
to which the time to appeal or seek review, reconsideration or rehearing has
expired and as to which no appeal, petition for certiorari, or other
proceedings for re-argument, review, reconsideration or rehearing shall be
pending or (ii) for which an appeal, writ of certiorari, re-argument or
rehearing thereof has been sought, and as to which such order was appealed,
or certiorari, reargument or rehearing shall have been denied and
the time to take any further appeal, petition for certiorari or move for
re-argument or rehearing shall have expired, so that in the event of either (i)
or (ii), such order or judgment shall have become final and non-appealable in
accordance with applicable law; provided, however, that the
possibility that a motion under Rules 59 or 60 of the Federal Rules of Civil
Procedure or any analogous rule under the Bankruptcy Rules may be, but has not
then been, filed with respect to such order or judgment shall not cause such
order or judgment not to be a Final Order, and provided
further that nothing herein will preclude the Sellers and the Purchasers
from closing in reliance upon the Bankruptcy Court Order and Section 363(m) of
the Bankruptcy Code, when and if they agree to do so in their sole discretion,
regardless of whether the Bankruptcy Court Order has become a Final Order as
heretofore described, and so long as the Bankruptcy Court Order is in full force
and effect and has not been reversed, modified, or stayed. |
| 8.11 |
The Bankruptcy Court shall have entered an order on the Sellers’ motion
referred to in Section 7.2(f) of this Agreement extending the time for assuming
or rejecting leases to 120 days after the commencement of the Bankruptcy Case. |
| 8.12 |
The Bankruptcy Case shall have been commenced not later than six (6) days after
the execution and delivery of this Agreement. |
| 8.13 |
Each Seller shall have delivered to Xxxxxxx and PSIS, as applicable, at or
before Closing, the following documents, all of which shall be in form and
substance reasonable acceptable to Xxxxxxx and PSIS and their counsel: |
|
(a) |
Instruments of transfer required by Section 1.7; |
|
(b) |
Copies of resolutions of the Board of Directors of each Seller and any other
necessary corporate actions, certified by the Secretary or Assistance Secretary
of each Seller, authorizing the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby and
attesting to the signatures of the officers signing documents on behalf of each
Seller; |
|
(c) |
Each Seller shall have entered into the non-competition agreements as set forth in
Exhibits H and I; and |
|
(d) |
Possession of Purchased Assets No. 1 and Purchased Assets No. 2 shall be
provided to Xxxxxxx and PSIS, as applicable. |
9.
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
| |
The
obligations of each Seller to consummate the transactions contemplated hereby
shall be subject to the following conditions: |
| 9.1 |
Each Seller will have obtained the consent of its senior lender, if required, to the sale of
the Purchased Assets No. 1 and Purchased Assets No. 2 and all other consents and
approvals of any third party whose consent is required in connection with the transactions
contemplated by this Agreement. |
| 9.2 |
The representations and warranties of Xxxxxxx and PSIS contained in this
Agreement shall be true and correct as of the Closing Date and each of the
covenants, agreements and obligations to be performed by Xxxxxxx and PSIS on or
before the Closing Date pursuant to the terms hereof shall have been performed
on or before the Closing Date. |
| 9.3 |
Final Order of Bankruptcy Court. The Bankruptcy Court shall have entered
the Bankruptcy Court Order in form and substance satisfactory to each Seller
authorizing and directing each Seller to (a) sell Purchased Assets No. 1 and
Purchased Assets No. 2 to Xxxxxxx and PSIS, as applicable, free and clear of all
liens, claims, interests and encumbrances in accordance with Section 363(f) of
the Bankruptcy Code, and (b) to assign the Assumed Service Contracts to Xxxxxxx
and PSIS, as applicable, in accordance with Section 365 of the Bankruptcy Code.
The Bankruptcy Court Order shall become a Final Order on or before April 30,
2001, or such other date as is agreed to by the parties in accordance with this
Agreement. |
| 9.4 |
Xxxxxxx and PSIS, as applicable, shall have delivered to the Sellers at or
before Closing, the following documents, all of which shall be in form and
substance reasonably acceptable to the Sellers and their counsel: |
|
(a) |
A certified or bank cashier’s check or wire transfer for the aggregate
amount to be paid to Sellers or as otherwise directed by the Bankruptcy Court at
the Closing pursuant to Section 3.2(b); |
|
(b) |
A promissory note made payable to Sellers as seat forth in Section 3.2(a); |
|
(c) |
An Assumption of Liabilities Agreement under which Xxxxxxx and/or PSIS, as
applicable, assumes the contracts set forth in Section 1.6, 2.1, 2.2, 2.3 and
2.4; respectively; |
|
(d) |
Copies of resolutions of the Board of Directors of Xxxxxxx and PSIS, certified
by the Secretary of Xxxxxxx and PSIS, respectively, authorizing the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby and attesting to the signatures of the officers
signing documents on behalf of Xxxxxxx and PSIS. |
10.
SURVIVAL OF AND RELIANCE UPON REPRESENTATIONS,WARRANTIES
AND AGREEMENT; INDEMNIFICATION
10.1 Survival of Representations and Warranties:
| |
The parties acknowledge and agree that all representations, warranties and
agreements contained in this Agreement or in any agreement, instrument, exhibit,
certificate, schedule or other document delivered in connection herewith, shall
survive the Closing and
continue to be binding upon the party giving such representation, warranty or
agreement and shall be fully enforceable to the extent provided for herein, at
law or in equity, for a period beginning on the Closing Date and ending180 days
thereafter, except for the representations and warranties set forth in Sections
5.2, 5.3, 6.1 and 6.3, which shall survive the Closing Date and shall terminate
in accordance with the statute of limitations governing written contracts in the
State of Arizona, and Exhibits H and I, which shall terminate as provided
therein. |
10.2 Indemnification by Sellers.
Sellers
shall indemnify Xxxxxxx and PSIS against and hold them harmless from:
|
(a) |
any and all loss, damage, liability or deficiency resulting from or arising out
of any inaccuracy in or breach of any representation, warranty, covenant, or
obligation made or incurred by any Seller herein or in any other agreement,
instrument or document delivered by or on behalf of any Seller pursuant to the
provisions of the Agreement; |
|
(b) |
any imposition (including by operation of law) or attempted imposition by a
third party upon Xxxxxxx and/or PSIS of any liability of any Seller which
Xxxxxxx or PSIS has not specifically agreed to assume pursuant to Sections 1.6,
2.1, 2.2, 2.3 or 2.4 of this Agreement; |
|
(c) |
any and all costs and expenses (including reasonable legal and accounting fees)
related to any of the foregoing. |
10.3 Indemnification by Xxxxxxx and/or PSIS.
Xxxxxxx and PSIS, as applicable, shall indemnify each Seller against and hold them
harmless from:
|
(a) |
any and all loss, damage, liability or deficiency resulting from or arising out of
Xxxxxxx'x and PSIS's operations subsequent to the Closing; |
|
(b) |
any inaccuracy in or breach of any representation, warranty, covenant or
obligation made or incurred by Xxxxxxx and/or PSIS, as applicable herein, or in
any other agreement, instrument, or document delivered by or on behalf of such
party pursuant to the provisions of this Agreement; |
|
(c) |
any obligation of Xxxxxxx and/or PSIS emanating out of the assumption of certain
leases, service contracts, committed inventories or other agreements as set
forth in Sections 1.6, 2.1, 2.2, 2.3 and 2.4, respectively; and |
|
(d) |
any and all related costs and expenses (including reasonable legal and accounting
fees). |
11.
DEFAULT AND TERMINATION
| 11.1 |
A party shall “default” under this Agreement if it makes any material
misrepresentation to the other party in connection with this Agreement, or
breaches or fails to perform any of its representations, warranties or covenants
contained in this Agreement. |
| 11.2 |
If either party desires to terminate this Agreement because it believes the
other to be in default hereunder, the former party shall provide the other with
written notice specifying in reasonable detail the nature of such default. If
the default is not curable or has not been cured within ten (10) days after
delivery of that notice (or such additional reasonable time as the circumstances
may warrant provided the default is curable and the party in default undertakes
diligent, good faith efforts to cure the default within such ten (10) day period
and continues such efforts thereafter), then the party giving such notice may
terminate this Agreement and/or exercise the remedies available to such party
pursuant to this Agreement, subject to the right of the other party to contest
such action though appropriate proceedings. Notwithstanding the foregoing,
neither party shall have any right to cure such party’s wrongful failure to
consummate this transaction, as provided herein, on the Closing Date. The remedy
of terminating this Agreement in accordance with this Section shall not be
exclusive of any other rights which a party may have to terminate this Agreement
under any other provisions hereof, or of any other rights or remedies which a
party may otherwise have under this Agreement, or any other agreement or
instrument, all of which rights and remedies shall be cumulative. |
| 11.3 |
If a lawsuit is filed by Xxxxxxx or PSIS or any Seller pursuant to the terms of
this Section 11, the prevailing party in the litigation shall be entitled to
payment by the losing party of attorneys’ fees, costs and other expenses
reasonably incurred by the prevailing party in filing and prosecuting the
lawsuit. |
12.
THE CLOSING
12.1 Date, Time and Place of Closing.
| |
Closing
of the sale and purchase of Purchased Assets No. 1 and Purchases Assets No. 2
(the “Closing”) shall take place at the offices of Xxxxxxx’x and
PSIS’s counsel, Xxxxxxxxx & Dreidame Co., L.P.A., 000 Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxxx, Xxxx 00000, on the first Business Day which is at least
seven (7) days after the Bankruptcy Court Order has become a Final Order, or at
such other time or place as may be mutually agreed to in writing by Xxxxxxx and
PSIS and Sellers and as permitted in Section 8.10 (the “Closing
Date”). |
13.
MISCELLANEOUS
| 13.1 |
Except to the extent otherwise specifically provided herein or in the Bid
Procedures Order or the Bankruptcy Court Order, Xxxxxxx and/or PSIS, as
applicable, shall pay all of the expenses incident to the transactions
contemplated by this Agreement that are incurred by Xxxxxxx and/or PSIS or their
representatives and each Seller shall pay all of the expenses incident to the
transactions contemplated by this Agreement that are incurred by each Seller or
its respective representatives. Xxxxxxx and/or PSIS shall pay all sales,
transfer, intangible and similar taxes, and all filing of recording fees, if
any, in connection with the transactions contemplated by this Agreement. To the
extent that any transactions contemplated herein are not exempt from sales and
other transfer taxes pursuant to Section 1146(c) of the Bankruptcy Code, Xxxxxxx
and PSIS shall pay such sales and other transfer taxes. |
| 13.2 |
Except as otherwise expressly agreed herein, each of the parties shall pay its
own costs and expenses in connection with this Agreement and the transactions
contemplated hereby, including without limitation all legal and accounting fees. |
| 13.3 |
This Agreement, the construction of this Agreement, all rights and obligations
between the parties to this Agreement, and any and all claims arising out of or
relating to the subject matter of this Agreement (including all tort claims),
shall be governed by the laws of the State of Arizona, without regard to its
conflicts of law principles. Any litigation or other legal proceeding of any
kind based upon or in any way related to this Agreement, its subject matter, or
the rights or obligations of the parties to this Agreement, shall be brought
exclusively in an appropriate court of competent jurisdiction (state or federal)
located in Maricopa County, Arizona (if the action is brought in state court) or
in the District of Arizona (if the action is brought in federal court). Any
action brought in such courts shall not be transferred or removed to any other
state or federal court. The parties consent to the exercise of jurisdiction over
them by the above-named courts (including, but not limited to, the Bankruptcy
Court in and for the District of Arizona) as their freely negotiated choice of
forum for all actions subject to this forum selection clause. |
| 13.4 |
This Agreement shall not be assignable by any Seller without the prior written
consent of Xxxxxxx or PSIS, or by Xxxxxxx or PSIS without the prior written
consent of each Seller, provided, however, that Xxxxxxx or
PSIS may assign this Agreement without any Seller’s consent to a subsidiary
or affiliate of Xxxxxxx or PSIS. Regardless if any such assignment shall occur,
Xxxxxxx and/or PSIS, as applicable, shall remain liable and responsible for the
performance of all of Xxxxxxx’x and/or PSIS’s obligations, as
applicable, under this Agreement. |
| 13.5 |
Each party acknowledges and agrees that no employee, officer, agent or
representative or the other party has the authority to make any representations,
statements or promises in addition to or in any way different than those
contained in this Agreement, and that it is not
entering into this Agreement in reliance upon any representation, statement or
promise of the other party except as expressly stated herein. |
| 13.6 |
This Agreement shall be binding upon, and inure to the benefit of, Xxxxxxx, PSIS
and each Seller, and their respective successors and permitted assigns. |
| 13.7 |
Neither Sellers nor Xxxxxxx or PSIS shall make any public announcements
concerning this transaction without prior written consent of the other parties
hereto, provided that the parties shall issue a mutually agreeable press release
regarding any of the transactions contemplated by this Agreement, unless
compelled by judicial or administrative process or by other requirements of law,
or unless the Sellers and/or Xxxxxxx or PSIS determines that such announcement
is advisable under applicable securities laws, in which event reasonable prior
notice of any such disclosure shall be given to the other party. |
| 13.8 |
This Agreement constitutes the entire agreement and understanding between the
parties and supersedes any prior written or oral understandings between them
respecting the subject matter hereof. This Agreement may be amended or modified
only in a writing signed by Xxxxxxx, PSIS and each Seller that specifically
refers to this Agreement. |
| 13.9 |
All notices, consents or approvals required hereunder will be in writing and
will be deemed to have been received by a party hereto if delivered personally
to such party, or sent by facsimile transmission (followed by written
confirmation), or by overnight courier service, or by certified or registered
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or to such other address as any party may give to the
other in writing for such purpose: |
To Pomeroy at: Pomeroy Computer Resources, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000-0000
To PSIS at: Pomeroy Select Integration Solutions, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
With a copy to: Xxxxx X. Xxxxx, III, Esq.
Xxxxxxxxx & Dreidame
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
To Sellers at: Osage Systems Group, Inc., et al
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
With copies to: Xxxxxx Xxxxx, Esq.
Xxxxxxx Xxxx LLP
Xxx X&X Xxxxx
Xxxxxxx, XX 00000-0000
Xxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Xxxxxxx & Xxxxx Xxxxxxx Xxxx, LLP
Renaissance Xxx
Xxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
| 13.10 |
All such communications, if personally delivered, will be conclusively deemed to
have been received by a party hereto and to be effective when so delivered, or
if sent by facsimile transmission, on the day on which transmitted, or if sent
by overnight courier service, on the day after deposit thereof with such
service, or if sent by certified or registered mail, on the third business day
after the day on which deposited in the mail. |
| 13.11 |
The invalidity or unenforceability of any term or provision of this Agreement
shall not affect the validity or enforceability of any of the remaining terms or
provisions hereof. |
| 13.12 |
Each party has been represented by its own counsel in connection with the
negotiation and preparation of this Agreement and, consequently, each party
hereby waives the application of any rule of law to the effect that any
provision of this Agreement shall be interpreted or construed against the party
whose counsel drafted that provision. |
| 13.13 |
Time shall be of the essence in this Agreement and the performance of each and
every provision hereof. |
| 13.14 |
This Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement. |
| 13.15 |
Any of the terms and conditions of this Agreement may be waived at any time and
from time to time in writing by the party entitled to the benefit thereof
without affecting any other terms and conditions of this Agreement. Any waiver
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach. |
| 13.16 |
Each Seller shall be permitted to retain copies of books and records relating to
Purchased Assets No. 1 and/or Purchased Assets No. 2 and shall have access to
all original copies of records so delivered to Xxxxxxx and PSIS at reasonable
times, for any reasonable business purpose, for a period of six (6) years after
the Closing. |
IN WITNESS WHEREOF, the parties have entered into this ASSET PURCHASE
AGREEMENT as of the day and year first above written.
XXXXXXX COMPUTER RESOURCES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, President
XXXXXXX SELECT INTEGRATION
SOLUTIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx,
Chief Executive Officer and President
OSAGE SYSTEMS GROUP, INC.
By: /s/Xxxx Xxxxxx
Xxxx Xxxxxx
Chairman and Chief Executive Officer
OSAGE COMPUTER GROUP, INC.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Chairman and Chief Executive Officer
SOLSOURCE COMPUTERS, INC.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Chairman and Chief Executive Officer
X.X. XXXXX, INC.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Chairman and Chief Executive Officer
OPEN SYSTEM TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Chairman and Chief Executive Officer
OPEN BUSINESS SYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Chairman and Chief Executive Officer
OSAGE SYSTEMS GROUP MINNESOTA, INC.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Chairman and Chief Executive Officer
OSAGE iXi, INC.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Chairman and Chief Executive Officer
EXHIBIT A
FIXED ASSETS
OSAGE
Fixed Asset Analysis as of 12/31/00
Fixed Asset Analysis as of December 31, 2000
NBV of NBV of NBV of Furn & NBV of NBV of Other NBV as of
Location Hardware Software Fix Leashold Assets 12/31/00
Imp.
Corporate Assets 97,509 161,253 0 0 243,583 502,345
Phoenix Assets 27,138 2,573 12,985 3,273 51,651 97,620
Texas Assets 64,134 13,629 65,412 0 (83,093) 60,082
Florida Assets 79,710 0 44,389 10,686 0 134,785
Illinois Assets 10,954 583 0 0 0 11,536
Minnesota Assets 112,023 0 61,574 12,585 0 186,181
IXI Assets 403,007 26,844 6,174 0 125,058 561,083
------- -- ------ ---- ----- --------- - ------- --- -------
794,474 204,881 190,535 26,543 337,199 1,553,632
Description Location Cost Depreciation NBV Adjusted XXX
XXX as of 12/31/00 1,553,632
Less Leasehold Improvements:
Service, Installation, Equipment Phoenix 3,850 578 3,273
Leasehold Improvement Florida 9,965 916 9,049
Leasehold Improvement Florida 1,725 89 1,636
------------ ----------- --------------- -------------
Subtotal Florida 11,690 1,004 10,686
Blinds for Office Minnesota 986 345 641
Cabling for Cubes Minnesota 500 175 325
Cabling for Building Minnesota 10,122 3,880 6,242
Relocate/Label Cable Minnesota 617 195 421
1 Addition of Two Minnesota 3,470 1,157 2,313
Signage for Building Minnesota 1,845 1,215 630
Window Tinting Minnesota 3,265 1,251 2,013
------------ ----------- --------------- -------------
Subtotal Minnesota 20,803 7,084 12,585
Total Leasehold Improvements Combined 36,343 8,665 26,543 (26,543)
Less Construction in Progress (CIP)
Vertex Corporate 119,732 0 119,732
------------------------------------------------- ------------ ----------- --------------- -------------
Total CIP Corporate 119,732 0 119,732 (119,732)
Less Website:
OCG Website Phoenix 154,940 103,289 51,651
------------------------------------------------- ------------ ----------- --------------- -------------
Total Website Phoenix 154,940 103,289 51,651 (51,651)
---------------
1,355,706
Adjusted Net Book Value as of 12/31/00
===============
Percentage of reported NBV as of 12/31/00 87.26%
EXHIBIT B
ASSUMED SERVICE CONTRACTS
Order #
2487
2814
160
758
2565
07-995
07-252
1822
07-383
07-436
07-631
1215
414
07-640
1991
07-91
07-931
07-482
07-452
07-250
2865
433
EXHIBIT C
EXCLUDED ASSETS
i. Seller's cash, cash equivalents, bank accounts, marketable securities;
ii. Seller's accounts receivable and vendor receivables
(other than the Sun Microsystems vendor receivable);
iii. All of Seller's inventory (other than the Committed Inventory);
iv. Seller’s corporate records to the extent such records relate
to each Seller as a corporate entity, including but not limited to,
Seller’s Articles of Incorporation, regulations, shareholder
records, corporate minute books and other corporate and tax records;
v. Any insurance policy or policies maintained by any Seller
covering Business No. 1 or Business No. 2 insuring the
assets and property associated therewith against losses and risks;
vi. All of Seller’s claims or causes of action vested in Seller
pursuant to Sections 544, 545, 547, 548 and 549 of the Bankruptcy Code
and all remedies available under Bankruptcy Code Section 550 relating
to monetary payments or other transfers made during the applicable
statutory period;
vii. Rights of any Seller arising out of the Asset Purchase Agreement;
viii. All contract rights of any Seller associated with contracts which
are not assumed by Xxxxxxx or PSIS;
ix. All life insurance owned by any Seller;
x. All federal, state and local tax refunds of Sellers, whether arising
now or at any time thereafter;
xi. Any and all insurance claims of any Seller, including but not limited
to, any and all claims for business interruption and stop loss;
xii. Any of the Purchase Price being transferred hereunder;
xiii. All rights, title and interest in the proprietary software
known as "Vertex";
xiv. Any furniture, fixtures or other assets which are not specifically
being purchased by Xxxxxxx or PSIS pursuant to Sections 1.2 or 1.3;
xv. Analysts Inc. Service Agreement;
xvi. Seller's pre-paid expenses and deferred income taxes; and
xvii. "Other Assets" as shown on the balance sheet of the Seller as of December 31, 2000.
EXHIBIT D
REAL PROPERTY LOCATIONS
0000 X. Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
0000 X. Xxx Xxxxxxx Xxxxxxx X.
Xxxxxxx, Xxxxx 00000
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxx 00000
000 Xxxxxx Xxxxx, Xxxxx000
Xxxx Xxxx, Xxxxxxxx 00000
000 X. Xxxxx Xxxx 0 #0
Xxxxxxx Xxxxx, Xxxxxxx 00000
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xx. Xxxx, Xxxxxxxxx 00000
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
00000 Xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
EXHIBIT E
LIST OF CERTAIN TRANSACTIONS
The acquisition by the Sellers of the following:
Leveraged Solutions, Inc.
Solsource Computers, Inc.
X.X. Xxxxx, Inc.
Open System Technologies, Inc.
Open Business Systems, Inc.
Electronic Commerce Network Solutions Corporation
IntraNet Solutions, Inc.
PR Acquisition Corp.
Pacific Rim Entertainment, Inc.
Osage Computer Group, Inc.
EXHIBIT F
ALLOCATION OF PURCHASE PRICE
| Asset | Purchase Price |
| Vendor Receivable | Net Book Value as of the Closing Date as
shown on books of Sun Microsystems
Corporation |
| Committed Inventory | Net Book Value as of the Closing Date |
| Equipment, Furniture and Fixtures | Net Book Value as of the Closing Date |
| Leasehold Improvements | Net Book Value as of the Closing Date |
| Other Assets | Net Book Value as of the Closing Date |
| Good Will | Remainder of Purchase Price |
EXHIBIT G
FORM OF PROMISSORY NOTE
| $250,000.00 | Cincinnati, Ohio |
| (to be adjusted as hereinafter set forth) | February _____, 2001 |
1. FOR VALUE RECEIVED, XXXXXXX COMPUTER RESOURCES, INC., a Delaware
corporation (hereinafter, together with its successors in title and assigns, called the
“Borrower”) does hereby absolutely and unconditionally promise to pay
to the order of OSAGE SYSTEMS GROUP, INC., a Delaware corporation
(“Lender”), the sum of Two Hundred Fifty Thousand Dollars
($250,000.00) (as may be adjusted in the manner hereinafter set forth), together
with interest on the outstanding principal balance from the date hereof, at the
rate specified below.
2. The initial face amount
of this note, Two Hundred Fifty Thousand Dollars ($250,000.00), shall be
adjusted by any amounts that Borrower, or its wholly owned subsidiary, Xxxxxxx
Select Integration Solutions, Inc., may be required to pay pursuant to the
provisions of Sections 1.6, 2.2 or 2.3 of the Asset Purchase Agreement. In
addition, the face amount of such note shall be reduced by Fifteen Thousand
Dollars ($15,000.00) (but not below zero) for each of the executive and upper
management employees of Lender designated on a list to be countersigned by
Xxxxxxx, PSIS and the Lender, (the “Management List”) and shall be
reduced by Seven Thousand Five Hundred Dollars ($7,500.00) (but not below zero)
for each of the other employees of Lender, designated on a list to be
countersigned by Xxxxxxx, PSIS and the Lender (the “Non-Management Employee
List”), who were hired by Borrower upon the closing of the Asset Purchase
Agreement, if he or she shall leave the employment of Borrower or its wholly
owned subsidiary, Xxxxxxx Select Integration Solutions, Inc. within ninety (90)
days of the Closing Date. Provided said offset shall not be applicable for an
employee in the event the employment of such individual is terminated because of
the death or disability of said individual during said ninety (90) day period,
or in the event that the employment of said individual’s should be
terminated prior to the expiration of such ninety (90) day period without cause.
The Management List and the Non-Management Employee List shall be kept
confidential except to the extent that an order of the Bankruptcy Court or other
applicable law requires disclosure thereof.
3. Interest shall accrue at
the prime rate of Chase Manhattan Bank as of the date of Closing. Interest on
the unpaid principal balance of the Note and the entire principal balance shall
be due and payable ninety (90) days from Closing.
4. All payments received
hereunder shall be applied first to interest and then to principal.
5. Upon the occurrence of an
Event of Default, the entire principal amount outstanding under this Note, and
accrued interest thereon, shall at once become due and payable, at the option
of the Lender and the
Lender shall have the remedies set forth in the Asset Purchase Documents. During
the continuance of any Event of Default, all principal evidenced by this Note
(whether for principal or otherwise) shall (to the extent permitted by
applicable law) bear interest at the annual rate of twelve percent (12%). The
unpaid interest accrued during the continuation of any Event of Default on the
indebtedness evidenced by this Note (whether for principal or otherwise) in
accordance with the foregoing terms of this paragraph shall become and be
absolutely due and payable by the Borrower to the Lender hereof on demand by the
Lender of this Note at any time. Interest will continue to accrue on all
indebtedness evidenced hereby until the Event of Default shall be cured or
otherwise remedied.
6. This Note is issued
pursuant and subject to the terms and conditions of the Asset Purchase
Agreement. This Note is subject to all terms and conditions set forth in the
Asset Purchase Documents, including, but not limited to, terms of default and
rights of acceleration, if any. Any holder of this Note is subject to all claims
and defenses which the Borrower could pursue against Lender under the Asset
Purchase Agreement.
7. When this Note becomes
due, by acceleration or otherwise, the Lender may, at its option, demand, xxx
for, collect or make any compromise or settlement it deems desirable with
reference to property held as security herefor. The failure to exercise any
option, to declare the maturity hereof, or to exercise any other rights under
any of the covenants or conditions contained in the Asset Purchase Documents
shall not be taken or deemed to be a waiver of the right to exercise such option
or to declare such maturity after any subsequent violation of any such covenants
or conditions. All remedies provided for herein upon any default by the Borrower
shall be cumulative and not exclusive.
8. Notwithstanding the
above, pursuant to the Asset Purchase Agreement, Lender made certain
representations, warranties, covenants and agreements with and to the Borrower.
Lender agrees that if the Borrower is entitled to indemnification from the
Lender under the Asset Purchase Agreement or any other of the Asset Purchase
Documents, the amount of such indemnification due from Lender may be set off
against the amounts payable hereunder if permitted under the Asset Purchase
Agreement, being first applied to interest and the withholding all or any part
of payment due hereunder as a result of such a set off shall not be considered
an Event of Default hereunder. Lender agrees that the amount to which the
Borrower may be entitled to recover from Lender shall not be limited by either
the amount paid or due to be paid to Lender hereunder or by the terms of this
Note but shall be governed by the terms of the Asset Purchase Documents.
9. The provisions of this
Note and the obligations of the Borrower hereunder shall in all respects be
governed by and interpreted and determined in accordance with the internal laws
of the State of Delaware.
10. The Borrower hereby
unconditionally and irrevocably waives notice of acceptance, presentment, notice
of nonpayment (except as provided herein), protest, notice of protest, suit and
all other conditions precedent in connection with the delivery, acceptance,
collection and/or enforcement of this Note.
11. Should all or any part
of the indebtedness represented by this Note be collected by action in law, or
in bankruptcy, insolvency, receivership or other court proceedings, or should
this Note be placed in the hands of attorneys for collection after the
occurrence of an Event of Default, the Borrower hereby promises to pay to the
Lender of this Note, upon demand by the Lender hereof at any time, in addition
to principal and all (if any) other amounts payable on or in respect of this
Note or the indebtedness evidenced hereby, all court costs and reasonable
attorneys’ fees and all other reasonable collection charges and expenses
incurred or sustained by the Lender of this Note.
12. If for any
circumstances whatsoever, the fulfillment of any provision of this Note involves
transcending the limit of validity prescribed by any applicable usury statute or
any other applicable law with regard to obligations of like character and
amount, then the obligation to be fulfilled will be reduced to the limit of such
validity as provided in such statute of law, so that in no event shall any
exaction of interest be possible under this Note in excess of the limit of such
validity. In no event shall the Borrower be bound to pay interest of more than
the legal limit for the use, forbearance or detention of money, and the right to
demand any such excess is hereby expressly waived by the Lender.
13. No delay or omission of
the holder of this Note to exercise any right or power arising from any default
shall impair any such right or power or be considered to be a waiver of any such
default or any acquiescence therein, nor shall the action or non-action of the
holder in case of default on the part of the Borrower impair any right or power
resulting therefrom.
14. As used herein, the
following terms shall have the following meanings, respectively:
(a)
“Asset Purchase Agreement” - The Asset Purchase Agreement by and
between the Borrower and the Lender dated February _____, 2001.
(b)
“Asset Purchase Documents” - The Asset Purchase Agreement and all
Exhibits thereto (except for any employment agreements and all noncompetition
agreements, other than the one provided by Lender) by and between the parties to
the Asset Purchase Agreement.
(c) "Event of Default" -
|
(i) |
The failure of Borrower to make any payment of principal or interest due
under this Note for a period of ten (10) days after receipt of written notice from the Lender to the
Borrower that such installment has not been paid. |
| WITNESSES: | BORROWER |
| Xxxxxxx Computer Resources, Inc. |
| | |
_____________________________ | By: _____________________________
Its: _____________________________ |
EXHIBIT H
FORM OF XXXXXXX NON-COMPETITION AGREEMENT
THIS AGREEMENT made and
entered into this _____ day of _______________, 2001, by and between OSAGE
SYSTEMS GROUP, INC., a Delaware corporation (hereinafter referred to as
“Seller”) and XXXXXXX COMPUTER RESOURCES, INC., a Delaware corporation
(hereinafter referred to as “Purchaser”).
WHEREAS, Seller, through its operating subsidiaries, markets a broad range of integrated
information technology products and professional consulting services throughout the United
States; and
WHEREAS, simultaneously
with the execution of this Agreement, Seller and Purchaser have entered into an
Asset Purchase Agreement (“Asset Purchase Agreement”) whereby Seller
has sold to Purchaser certain assets of Seller relating to the selling of
integrated information technology products; and
WHEREAS, the Purchaser
would not have entered into the Asset Purchase Agreement with Seller without the
consent of Seller to enter into this Covenant Not to Compete Agreement; and
WHEREAS, pursuant to Section 4 of said Asset Purchase Agreement, Seller agreed to enter into
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained
and in consideration of the execution and closing of the Asset Purchase Agreement, the parties
hereto agree as follows:
| 1. |
In consideration of the payments to be made by Purchaser to Seller for its
assets, Seller covenants and agrees that for a period equal to five (5) years
from the closing of the Asset Purchase Agreement of even date, Seller will not,
or with any other person, corporation or entity, directly or indirectly, by
stock or other ownership, investment, management, employment or otherwise, or in
any relationship whatsoever: |
|
(a) |
Solicit, divert or take away or attempt to solicit, divert or take away, any of
the business, clients, customers or patronage of Purchaser or any affiliate or
subsidiary thereof relating to the Business of Purchaser, as defined below; or |
|
(b) |
Attempt to seek or cause any clients or customers of Purchaser or any such
affiliate or subsidiary relating thereto to refrain from continuing their
patronage of the Business of Purchaser; or |
|
(c) |
Engage in the Business of Purchaser in any state in which Purchaser or its
subsidiaries transact business during the term of this Agreement. A list of the
states in which Purchaser and its subsidiaries currently transact business is
attached hereto as Exhibit A; or |
|
(d) |
Knowingly employ or engage, or attempt to employ or engage, in any capacity,
any person in the employ of the Purchaser or any affiliate or subsidiary. |
|
(e) |
In addition, nothing in this Agreement shall prohibit Seller from engaging in
any activities incident to the collection of any and all of its vendor and
accounts receivables being retained by it, from the selling of any inventory or
other assets being retained by it, nor from the sale or other disposition of any
other assets being retained by it or any of its subsidiaries. |
| |
For
purposes of this Section, the “Business of Purchaser” shall mean any
person, corporation, partnership or other legal entity engaged, directly or
indirectly, through subsidiaries or affiliates, in the following line of
business: |
|
(i) |
Distributing of computer hardware, software, peripheral devices, and related
products and services to other entities or persons engaged in any manner in the
business of the distribution, sale, resale or servicing, whether at the
wholesale or retail level, or leasing or renting, of computer hardware,
software, peripheral devices or related products; |
|
(ii) |
Sale or servicing, whether at the wholesale or retail level, or leasing or renting, of
computer hardware, software, peripheral devices or related products; |
|
(iii) |
Sale, servicing, consulting or supporting of microcomputer products,
microcomputer support solutions and computer integration products, peripheral
devices and related products and the sale of networking services; and |
|
(iv) |
Any other business activity which can reasonably be determined to be competitive
with the principal business activity being engaged in by Purchaser or any of its
subsidiaries. |
| |
Seller
has carefully read all the terms and conditions of this Paragraph 1 and has
given careful consideration to the covenants and restrictions imposed upon
Seller herein, and agrees that the same are necessary for the reasonable and
proper protection of Seller’s Business acquired by Purchaser and have been
separately bargained for and agrees that Purchaser has been induced to enter
into the Asset Purchase Agreement and pay the consideration described in
Paragraph 2 by the representation of Seller that it will abide by and be bound
by each of the covenants and restrictions herein; and Seller agrees that
Purchaser is entitled to injunctive relief in the event of any breach of any
covenant or restriction contained herein in addition to all other remedies
provided by law or equity. Seller hereby acknowledges that each and every one of
said covenants and restrictions is reasonable with respect to the subject
matter, the length of time and geographic area embraced therein, and agrees that
irrespective of when or in what manner this agreement may
be terminated, said covenants and restrictions shall be operative during the
full period or periods hereinbefore mentioned and throughout the area
hereinbefore described. |
| |
The parties acknowledge that this Agreement, which Agreement is ancillary to the
main thrust of the Asset Purchase Agreement, is being entered into to protect
the legitimate business interests of Purchaser, including, but not limited to,
(i) trade secrets; (ii) valuable confidential business or professional
information that otherwise does not qualify as trade secrets; (iii) substantial
relationships with specific prospective or existing customers or clients; (iv)
client or customer good will associated with an on-going business by way of
trade name, trademark, or service xxxx, a specific geographic location, or a
specific marketing or trade area; and (v) extraordinary or specialized training.
In the event that any provision or portion of Paragraph 1 shall for any reason
be held invalid or unenforceable, it is agreed that the same shall not affect
the validity or enforceability of any other provision of Paragraph 1 of this
Agreement, but the remaining provisions of Paragraph 1 of this Agreement shall
continue in force and effect; and that if such invalidity or unenforceability is
due to the reasonableness of the line of business, time or geographical area
covered by certain covenants and restrictions contained in Paragraph 1, said
covenants and restrictions shall nevertheless be effective for such line of
business, period of time and for such area as may be determined by arbitration
or by a Court of competent jurisdiction to be reasonable. |
| 2. |
The consideration for Seller’s covenant not to compete shall be One Dollar
($1.00) and other valuable consideration, including the consideration paid by
the Purchaser to Seller pursuant to an Asset Purchase Agreement to which Seller
and Purchaser are parties of even date herewith. |
| 3. |
The terms and conditions of this Agreement shall be binding upon the Seller and
Purchaser, and their successors and assigns. |
| 4. |
This Agreement shall be construed in accordance with and governed by the laws of the
State of Arizona. |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year
first above written.
SELLER:
OSAGE SYSTEMS GROUP, INC.
By: _____________________________________
EXHIBIT I
FORM OF PSIS NON-COMPETITION AGREEMENT
THIS AGREEMENT made and
entered into this _____ day of _______________, 2001, by and between OSAGE
SYSTEMS GROUP, INC., a Delaware corporation (hereinafter referred to as
“Seller”) and XXXXXXX SELECT INTEGRATION SOLUTIONS, INC., a Delaware
corporation (hereinafter referred to as “Purchaser”).
WHEREAS, Seller, through its operating subsidiaries, markets a broad range of integrated
information technology products and professional consulting services throughout the United
States; and
WHEREAS, simultaneously
with the execution of this Agreement, Seller and Purchaser have entered into an
Asset Purchase Agreement (“Asset Purchase Agreement”) whereby Seller
has sold to Purchaser certain assets of Seller relating to the selling of
integrated information technology products; and
WHEREAS, the Purchaser
would not have entered into the Asset Purchase Agreement with Seller without the
consent of Seller to enter into this Covenant Not to Compete Agreement; and
WHEREAS, pursuant to Section 4 of said Asset Purchase Agreement, Seller agreed to enter into
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained
and in consideration of the execution and closing of the Asset Purchase Agreement, the parties
hereto agree as follows:
| 1. |
In consideration of the payments to be made by Purchaser to Seller for its
assets, Seller covenants and agrees that for a period equal to five (5) years
from the closing of the Asset Purchase Agreement of even date, Seller will not,
or with any other person, corporation or entity, directly or indirectly, by
stock or other ownership, investment, management, employment or otherwise, or in
any relationship whatsoever: |
|
(a) |
Solicit, divert or take away or attempt to solicit, divert or take away, any of
the business, clients, customers or patronage of Purchaser or any affiliate or
subsidiary thereof relating to the Business of Purchaser, as defined below; or |
|
(b) |
Attempt to seek or cause any clients or customers of Purchaser or any such
affiliate or subsidiary relating thereto to refrain from continuing their
patronage of the Business of Purchaser; or |
|
(c) |
Engage in the Business of Purchaser in any state in which Purchaser or its
subsidiaries transact business during the term of this Agreement. A list of the
states in which Purchaser and its subsidiaries currently transact business is
attached hereto as Exhibit A; or |
|
(d) |
Knowingly employ or engage, or attempt to employ or engage, in any capacity,
any person in the employ of the Purchaser or any affiliate or subsidiary. |
|
(e) |
In addition, nothing in this Agreement shall prohibit Seller from engaging in
any activities incident to the collection of any and all of its vendor and
accounts receivables being retained by it, from the selling of any inventory or
other assets being retained by it, nor from the sale or other disposition of any
other assets being retained by it or any of its subsidiaries. |
| |
For purposes of this Section, the “Business of Purchaser” shall mean any
person, corporation, partnership or other legal entity engaged, directly or
indirectly, through subsidiaries or affiliates, in the following line of
business: |
|
(i) |
Distributing of computer hardware, software, peripheral devices, and related
products and services to other entities or persons engaged in any manner in the
business of the distribution, sale, resale or servicing, whether at the
wholesale or retail level, or leasing or renting, of computer hardware,
software, peripheral devices or related products; |
|
(ii) |
Sale or servicing, whether at the wholesale or retail level, or leasing or renting, of
computer hardware, software, peripheral devices or related products; |
|
(iii) |
Sale, servicing, consulting or supporting of microcomputer products,
microcomputer support solutions and computer integration products, peripheral
devices and related products and the sale of networking services; and |
|
(iv) |
Any other business activity which can reasonably be determined to be competitive
with the principal business activity being engaged in by Purchaser or any of its
subsidiaries. |
| |
Seller
has carefully read all the terms and conditions of this Paragraph 1 and has
given careful consideration to the covenants and restrictions imposed upon
Seller herein, and agrees that the same are necessary for the reasonable and
proper protection of Seller’s Business acquired by Purchaser and have been
separately bargained for and agrees that Purchaser has been induced to enter
into the Asset Purchase Agreement and pay the consideration described in
Paragraph 2 by the representation of Seller that it will abide by and be bound
by each of the covenants and restrictions herein; and Seller agrees that
Purchaser is entitled to injunctive relief in the event of any breach of any
covenant or restriction contained herein in addition to all other remedies
provided by law or equity. Seller hereby acknowledges that each and every one of
said covenants and restrictions is reasonable with respect to the subject
matter, the length of time and geographic area embraced therein, and agrees that
irrespective of when or in what manner this agreement may
be terminated, said covenants and restrictions shall be operative during the
full period or periods hereinbefore mentioned and throughout the area
hereinbefore described. |
| |
The
parties acknowledge that this Agreement, which Agreement is ancillary to the
main thrust of the Asset Purchase Agreement, is being entered into to protect
the legitimate business interests of Purchaser, including, but not limited to,
(i) trade secrets; (ii) valuable confidential business or professional
information that otherwise does not qualify as trade secrets; (iii) substantial
relationships with specific prospective or existing customers or clients; (iv)
client or customer good will associated with an on-going business by way of
trade name, trademark, or service xxxx, a specific geographic location, or a
specific marketing or trade area; and (v) extraordinary or specialized training.
In the event that any provision or portion of Paragraph 1 shall for any reason
be held invalid or unenforceable, it is agreed that the same shall not affect
the validity or enforceability of any other provision of Paragraph 1 of this
Agreement, but the remaining provisions of Paragraph 1 of this Agreement shall
continue in force and effect; and that if such invalidity or unenforceability is
due to the reasonableness of the line of business, time or geographical area
covered by certain covenants and restrictions contained in Paragraph 1, said
covenants and restrictions shall nevertheless be effective for such line of
business, period of time and for such area as may be determined by arbitration
or by a Court of competent jurisdiction to be reasonable. |
| 2. |
The consideration for Seller’s covenant not to compete shall be One Dollar
($1.00) and other valuable consideration, including the consideration paid by
the Purchaser to Seller pursuant to an Asset Purchase Agreement to which Seller
and Purchaser are parties of even date herewith. |
| 3. |
The terms and conditions of this Agreement shall be binding upon the Seller and
Purchaser, and their successors and assigns. |
| 4. |
This Agreement shall be construed in accordance with and governed by the laws of the
State of Arizona. |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year
first above written.
SELLER:
OSAGE SYSTEMS GROUP, INC.
By: _____________________________________
