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EXHIBIT 2.8
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (the "Agreement"), is made this 30th day
of October, 1998, by and between PROTOCOL COMMUNICATIONS, INC., a Delaware
corporation ("Buyer"), PROTOCOL HOLDINGS, INC., a Delaware corporation and
holder of all the issued and outstanding capital stock of Buyer ("Parent"),
STRATEGIC ALTERNATIVES INC. d/b/a Strategic Alternatives Inc. of Florida, a
Florida corporation, ("SAIF"), and Xxxxxx Xxxx (the "Seller").
W I T N E S S E T H:
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WHEREAS, SAIF is principally engaged in the business of supplying
database marketing services and is the end user and subscriber for certain toll
free telephone numbers listed on Schedule 2.1(r) hereto (the "Toll Free
Telephone Numbers");
WHEREAS, the Seller is presently the owner of an aggregate of 200
shares of common stock, par value $1.00 per share, of SAIF (the "SAIF Stock"),
which represents all of the issued and outstanding capital stock of SAIF; and
WHEREAS, the Seller desires to sell his shares of SAIF Stock to Buyer
and Buyer desires to purchase all of the SAIF Stock from the Seller, all in the
manner and subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereby agree as follows:
1. TERMS OF ACQUISITION
1.1 STOCK PURCHASE. On the terms and subject to the conditions of
this Agreement, on the Closing Date (as hereinafter defined), the Seller shall
sell, convey, transfer, assign and deliver to Buyer, and Buyer shall purchase
and acquire from the Seller, all right, title and interest of the Seller, legal
and equitable, beneficially and of record, in and to the SAIF Stock. The
certificates evidencing the SAIF Stock shall be delivered at the Closing (as
hereinafter defined) to Buyer, free and clear of all liens, claims, security
interests and encumbrances, accompanied by duly executed stock powers (endorsed
in blank, with signatures guaranteed) and any necessary stock transfer tax
stamps affixed thereto.
1.2 PURCHASE PRICE. (a) As the purchase price for all of the
SAIF Stock (the "Purchase Price"), (i) Buyer shall pay to the Seller an
aggregate sum, subject to adjustment as provided in Section 1.4 below, of
[******] in cash (the "Cash Purchase Price") and (ii) Buyer shall cause Parent
to issue [******] shares of Common Stock of Parent (the "Parent Common Stock")
which shall be equal to not less than [****] of the issued and outstanding
shares of Common Stock of Parent at Closing, the further transfer of which shall
be restricted under the Securities Act of
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In this Exhibit, "[***]" represents material omitted from this Exhibit and filed
separately with the Securities and Exchange Commission and for which
Confidential Treatment has been requested.
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1933, as amended (the "Securities Act") and as provided under Section 2.2(e)
hereof.
(b) The Cash Purchase Price shall be payable in cash by wire
transfer of immediately available funds to an account of the Seller designated
by him in writing prior to Closing and shall be due as follows: (i) [******] at
Closing; (ii) [******] on January 31, 1999; (iii) [******] on December 31, 1999;
(iv) [******] on December 31, 2000 and (v) [******] on December 31, 2001.
(c) The deferred portions of the Cash Purchase Price shall be
evidenced by an interest bearing installment promissory note from the
Corporation ("Installment Note") in an amount equal to [******]. Interest on the
unpaid principal amount of the Installment Note shall be payable quarterly from
and after the Closing Date at the prime rate, from time to time in effect, as
published in the WALL STREET JOURNAL. The principal balance of the Installment
Note shall be payable (i) [******] on January 31, 1999; (ii) [******] on
December 31, 1999; (iii) [******] on December 31, 2000 and (iv) [******] on
December 31, 2001. The Installment Note shall provide for deduction, in order of
maturity, from principal of any Adjustment Amounts calculated under Section 1.4
hereof and in respect of any claims by Buyer hereunder. Buyer shall have the
right to prepay, at any time and without penalty, the Installment Note in whole
or in part.
(d) Certificates representing the shares of Parent Common Stock
shall be delivered to the Seller at Closing.
1.3 CLOSING DATE. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Boone,
Boone, Xxxxx & Xxxxx, 0000 Xxxxxxx Xxx Xxxxx, Xxxxxx, Xxxxxxx 00000 at 10:00
A.M., November 4, 1998, or at such other place and/or on such other date and
time as shall be agreed upon by Buyer and the Seller (the "Closing Date").
1.4 PURCHASE PRICE ADJUSTMENT.
(a) Within one hundred eighty (180) days after Closing,
Buyer, at its expense, shall cause KPMG Peat Marwick LLP to deliver to the
Seller audited balance sheets and related statements of income, retained
earnings and cash flows for SAIF's fiscal year ended December 31, 1997 (the
"1997 Financial Statements"); and for the 12-month period ended September 30,
1998 (the "12-Month Financial Statements") all of which financial statements
shall be prepared in accordance with generally accepted accounting principles
("GAAP") and the rules and regulations of the Securities Exchange Commission
applicable to financial reporting of public companies.
(b) The Seller shall have forty-five (45) days from delivery
of the 1997 Financial Statements and the 12-Month Financial Statements
(collectively, the "Financial Statements") to raise any objection thereto by
delivery of written notice to Buyer setting forth such objections in reasonable
detail. In the event that the Seller shall fail to so deliver such written
objections with respect to any of the Financial Statements within such 45-day
period, then any such Financial Statements in respect of which no such objection
is so delivered shall be deemed final and binding on the parties. In the event
that any such objections are so delivered, Buyer and the Seller shall attempt,
in good faith, to resolve such objections and, if unable to do so within fifteen
(15) days of delivery of such objections, shall, within five (5) business days
thereafter designate a nationally recognized firm of independent public
accountants, mutually satisfactory to Buyer and the Seller (the "Independent
Accountants"). In the event that Buyer and the Seller are
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unable to agree on the Independent Accountants within such 5-business day
period, the Independent Accountants shall be designated jointly by the
independent accountants of Buyer and SAIF within three (3) business days
thereafter. The Independent Accountants shall resolve all remaining objections
to the Financial Statements made by the Seller in accordance herewith within
forty-five (45) days from their date of designation. The determination of the
Independent Accountants shall be final and binding on the parties. The fees and
expenses of the Independent Accountants shall be borne one-half by the Seller
and one-half by Buyer.
(c) The Cash Purchase Price shall be adjusted in each of the
following instances, based on the Financial Statements, as finally determined in
accordance herewith, by the amounts ("Adjustment Amounts") determined as
follows:
(i) in the event that on the Closing Date, SAIF
shall have outstanding Funded Debt (as defined below) in excess of [******], the
Cash Purchase Price shall be reduced by an amount equal to such excess;
(ii) in the event that the sum of [******] shall
exceed 1997 EBITDA (as defined below), the Cash Purchase Price shall be reduced
by an amount equal to [****] for each $1.00 of such excess (rounded down to the
nearest whole dollar);
(iii) in the event that the sum of [******] shall
exceed 12-Month EBITDA (as defined below), the Cash Purchase Price shall be
reduced by an amount equal to [****] for each $1.00 of such excess (rounded down
to the nearest whole dollar); and
(iv) in the event that the sum of [******] shall
exceed Net Current Assets (as defined below), the Cash Purchase Price shall be
reduced [************].
Notwithstanding the foregoing, in the event that any item occurring within the
period from October 1, 1997 through December 31, 1997 shall negatively effect
1997 EBITDA or 12-Month EBITDA, such item shall be used to reduce the Cash
Purchase Price more than once. Within three (3) business days of the final
determinations of the Financial Statements, the Seller shall pay to Buyer
(whether or not the sum of such Adjustment Amounts shall exceed the Cash
Purchase Price) each Adjustment Amount by wire transfer of immediately available
funds to an account designated in writing by Buyer. Notwithstanding the
foregoing, Buyer may elect, at its sole discretion, to deduct each Adjustment
Amount from any portion of the Cash Purchase Price.
(d) For purposes hereof, (i) "Funded Debt" shall mean the
excess of all indebtedness of the Seller for borrowed money outstanding as of
the Closing Date (including, without limitation, capitalized lease obligations);
(ii) "1997 EBITDA" shall mean the earnings of the Seller for the 12-month period
ended December 31, 1997, as set forth in the final, audited 1997 Financial
Statements before deduction for interest, taxes, depreciation and amortization,
in each case determined in accordance with GAAP, as adjusted for non-recurring
revenue, charges and adjustments set forth on Schedule 1.4(d) with respect to
non-recurring and deferred revenue, to the extent actually received, and, with
respect to non-recurring charges and adjustments, to the extent actually earned
or incurred and to the extent of the amounts thereof which Buyer determines will
not be incurred by it in the operation of the Business in the ordinary course
from and after Closing; (iii) "12-Month EBITDA" shall mean the earnings of the
Seller for the 12-month period ended September 30, 1998, as set forth in the
final, audited 12-Month Financial Statements before deduction for interest,
taxes, depreciation and amortization, in each case determined in accordance
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with GAAP, as adjusted for non-recurring revenue, charges and adjustments set
forth on Schedule 1.4(d) hereto, with respect to non-recurring and deferred
revenue, to the extent actually received, and with respect to non-recurring
charges and adjustments, to the extent actually earned or incurred and to the
extent of the amounts thereof which Buyer determines will not be incurred by it
in the operation of the Business in the ordinary course from and after Closing;
and (iv) "Net Current Assets" shall mean the excess of (A) cash from operations
as of the Closing Date plus accounts receivable of SAIF as of the Closing Date,
which are good and collectible and have been incurred in the ordinary course of
business for services performed or products delivered and which are due and
payable within 90 days from the date of invoice over (B) the accounts payable of
the SAIF as of the Closing Date, including up to $90,000 accounts payable in
respect of 1997 bonuses payable to Seller and Xxxxxx Post, but specifically
excluding up to $200,000 in respect of indebtedness incurred under the credit
facility referred to in Schedule 2.1(w) hereto.
2. REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SAIF AND THE SELLER. SAIF
and the Seller hereby, jointly and severally, represent and warrant to, and
covenant and agree with, Buyer as follows:
(a) ORGANIZATION, GOOD STANDING AND POWER. SAIF is a
corporation duly organized, validly existing and in good standing and authorized
to exercise its corporate powers, rights and privileges under the laws of the
State of Florida with full corporate power and authority to own, lease and
operate its properties and to carry on its business as presently conducted by
it. There are no other states or jurisdictions in which SAIF is duly qualified
and in good standing to do business as a foreign corporation. There are no other
states or jurisdictions in which the character and location of the properties
owned or leased by it, or the conduct of its business makes such qualification
necessary, except where failure to so qualify would not have a material adverse
effect on the financial condition, business or operations of SAIF. Copies of
SAIF's Articles of Incorporation and all amendments thereto, and of SAIF's
By-Laws, as amended to date, are attached to Schedule 2.1(a) and are complete
and correct. SAIF's minute books contain complete and accurate records of all
meetings and other corporate actions, including, without limitation, actions by
unanimous written consent of the Seller and the board of directors of SAIF
(including all committees of its board of directors).
(b) CAPITALIZATION. The authorized capital stock of SAIF
consists of 1000 shares of Common Stock, par value $1.00 per share, of which 200
shares are issued and outstanding and are owned by the Seller. All issued shares
of SAIF Stock have been duly authorized and validly issued and are fully paid
and nonassessable. All prior offerings and sales of SAIF Stock have been made in
accordance with all Federal and state securities laws. There are no outstanding
obligations, options, warrants, rights, calls, commitments, conversion rights,
plans or other agreements of any character to which SAIF is a party or otherwise
bound which provide for the purchase or issuance by SAIF of any authorized but
not outstanding, or authorized and outstanding shares of capital stock of SAIF.
There is no personal liability attached to the SAIF Stock. No person has any
preemptive or similar rights in respect of any securities of SAIF.
(c) AUTHORITY. The execution and delivery by SAIF and the
Seller of this Agreement and all of the agreements, schedules, exhibits,
documents and instruments specifically provided for hereunder to be executed
and/or delivered by either or both of them (all of the foregoing, including this
Agreement, being hereinafter sometimes collectively referred to as
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the "Executed Agreements"), the performance by SAIF and the Seller (to the
extent that they are parties thereto) of their respective obligations under the
Executed Agreements, and the consummation of the transactions contemplated by
the Executed Agreements, have been duly and validly authorized by all necessary
corporate action on the part of SAIF and by the Seller, and SAIF has all
necessary corporate power with respect thereto. The Executed Agreements are, or
when executed and delivered by the delivering parties shall be, the valid and
binding obligations of the delivering parties, enforceable in accordance with
their respective terms, except to the extent that enforceability may be limited
by the operation of bankruptcy, insolvency or similar laws. Neither the
execution and delivery by SAIF and the Seller (to the extent that they are
parties thereto) of the Executed Agreements, nor the consummation of the
transactions contemplated thereby, nor the performance by SAIF and the Seller
(to the extent that they are parties thereto) of their respective obligations
under the Executed Agreements, shall (nor with the giving of notice or the lapse
of time or both would) (i) conflict with or result in a breach of any provision
of the Articles of Incorporation or By-Laws of SAIF, (ii) give rise to a
default, or any right of termination, cancellation or acceleration, or otherwise
result in a loss of contractual benefits to SAIF, under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which SAIF or the Seller is a
party or by which it or any of its properties or assets may be bound, (iii)
violate any order, writ, injunction, decree, law, statute, rule or regulation
applicable to SAIF or the Seller or any of their respective properties or
assets, (iv) result in the creation or imposition of any lien, claim,
restriction, charge or encumbrance upon any of the properties or assets of SAIF,
or (v) interfere with or otherwise materially and adversely affect the ability
of SAIF to carry on its business as now conducted.
(d) INTERESTS IN OTHER ENTITIES. Except as set forth in
Schedule 2.1(d) hereto, SAIF does not (i) own, directly or indirectly, of record
or beneficially, any shares of voting stock or other equity securities of any
other corporation or entity, (ii) have any ownership interest, direct or
indirect, of record or beneficially, in any entity, or (iii) have any
obligation, direct or indirect, present or contingent, to purchase or subscribe
for any interest in, advance or loan monies to, or in any way make investments
in, any person or entity, or to share any profits or capital investments in
other persons or entities, or both.
(e) GOVERNMENTAL AUTHORIZATIONS; THIRD PARTY CONSENTS.
Except as set forth in Schedule 2.1(e) hereto, no approval, consent, compliance,
exemption, authorization or other action by, or notice to or filing with, any
governmental authority or any other entity, and no lapse of a waiting period, is
necessary or required to be obtained by SAIF or the Seller in connection with
the execution, delivery or performance by either of them of this Agreement, any
of the Executed Agreements or the transactions contemplated hereby.
(f) PROJECTIONS. SAIF has delivered to Buyer a set of
projections (the "Projections"), a copy of which its attached hereto as Schedule
2.1(f). The Projections are based on the best estimates of SAIF and the Seller
derived from reasonable expectations at the time the Projections were made, and
SAIF and the Seller believe that Buyer is justified in relying thereon, there
being, however, no guarantee of the achievement of the Projections.
(g) FINANCIAL STATEMENTS; MINIMUM NET WORTH. SAIF has
delivered to Buyer true and complete copies of its unaudited balance sheets as
of December 31, 1996, and related statements of income, retained earnings and
cash flows for the period then ending (the "1996 Financial Statements"), true
and complete copies of its unaudited balance sheets as of December 31, 1997, and
related statements of income, retained earnings and cash flows for the
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period then ending (the "Unaudited 1997 Financial Statements") and true and
complete copies of its unaudited balance sheet as of September 30, 1998 (the
"Interim Balance Sheet"), and related statements of income, retained earnings
and cash flows for the period then ending (collectively, with the Interim
Balance Sheet, the "Interim Financial Statements"). All of such financial
statements, including any notes thereto, were prepared on a consistent basis
throughout the periods involved and such financial statements fairly present the
financial position of SAIF at the dates thereof and the results of its
operations for the periods as indicated. The books and records of SAIF are in
all material respects complete and correct, have been maintained in accordance
with good business practices, and accurately reflect the basis for the financial
condition and results of operations of SAIF as set forth in the financial
statements referred to herein.
(h) ABSENCE OF UNDISCLOSED LIABILITIES. SAIF does not have
any liabilities, commitments or obligations, whether accrued, absolute,
contingent or otherwise which have not been (i) in the case of liabilities,
commitments and obligations of a type required pursuant to GAAP to be reflected
on the corporate balance sheet of SAIF, reflected on the Interim Balance Sheet
or incurred, consistent with past practice, in the ordinary course of business
since the date of the Interim Balance Sheet and which are not material either
individually or in the aggregate or (ii) in the case of all other types of
liabilities and obligations, described in Schedule 2.1(h) hereto.
(i) ABSENCE OF CERTAIN CHANGES. Except as and to the extent
set forth in Schedule 2.1(i) hereto, since December 31, 1997, SAIF has not:
(i) suffered any material adverse change in its
working capital, condition (financial or otherwise), assets, liabilities,
business, operations or prospects;
(ii) incurred any material liabilities or obligations
except items incurred in the ordinary course of business and consistent with
past practice, which do not exceed, in the aggregate $10,000 (counting
obligations or liabilities arising from one transaction or a series of similar
transactions, and all periodic installments or payments under any lease or other
agreement providing for periodic installments or payments, as a single
obligation or liability), or experienced any increase in, or change in any
assumption underlying or methods of calculating, any bad debt, contingency or
other reserves;
(iii) paid, discharged or satisfied any claim,
liabilities or obligations (absolute, accrued, contingent or otherwise) other
than the payment, discharge or satisfaction in the ordinary course of business
and consistent with past practice of liabilities and obligations reflected or
reserved against in the Unaudited 1997 Financial Statements, the Interim Balance
Sheet or incurred in the ordinary course of business and consistent with past
practice since the date of the Interim Balance Sheet;
(iv) permitted or allowed any of its property or
assets (real, personal or mixed, tangible or intangible) to be subjected to any
mortgage, pledge, lien, security interest, encumbrance, restriction or charge of
any kind;
(v) written off as uncollectible any notes or
accounts receivable, except for write-offs in the ordinary course of business
and consistent with past practice, none of which are material;
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(vi) canceled any debts or waived or suffered to
lapse any claims or rights of substantial value, or sold, transferred, or
otherwise disposed of any of its properties or assets (real, personal or mixed,
tangible or intangible), except in the ordinary course of business and
consistent with past practice;
(vii) disposed of or suffered to lapse any rights to
use any Toll Free Telephone Number listed on Schedule 2.1(r) hereof, patent,
trademark, trade name or copyright, or disposed of or disclosed (except as
necessary in the conduct of its business) to any person any trade secret,
formula, process or know-how;
(viii) granted any general increase in the compensation
of officers or employees (including any such increase pursuant to any bonus,
pension, profit-sharing or other plan or commitment) or any increase in the
compensation payable or to become payable to any officer or employee, and,
unless otherwise set forth in Schedule 2.1(i), no such increase is customary on
a periodic basis or is required by agreement or understanding;
(ix) made any single capital expenditure or
commitment in excess of $15,000 for additions to property, plant, equipment or
intangible assets or made aggregate capital expenditures and commitments in
excess of $50,000 (on a consolidated basis), for additions to property, plant,
equipment or intangible assets;
(x) declared, paid or set aside for payment any
dividend or other distribution in respect of, or redeemed any shares of, its
capital stock;
(xi) made any change in any method of accounting or
accounting practice;
(xii) paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets (real, personal or mixed,
tangible or intangible) to, or entered into any agreement or arrangement with,
any of its officers, directors, debtholders, the Seller or employees or any
"affiliate" or "associate" of any of its officers, directors, noteholders, the
Seller or employees (as such terms are defined in Rule 405 promulgated under the
Securities Act and as used herein "Associate" and "Affiliate"), except for
compensation to officers and employees at rates not materially exceeding the
rates of compensation paid during the year ended December 31, 1997;
(xiii) paid any amount in respect of indebtedness for
borrowed money except for regularly scheduled payments of principal and interest
in accordance with the terms thereof; or
(xiv) agreed, whether in writing or otherwise, to take
any action described in this Section unless such action is specifically excepted
from this Section or described in Schedule 2.1(i).
(j) TAX MATTERS. Except as set forth in Schedule 2.1(j)
hereto, SAIF has filed with the appropriate governmental agencies all Federal,
state, local or foreign tax returns and reports required to be filed by it
("Returns"), has paid in full or made adequate provision for the payment of, all
taxes of every nature, including, but not limited to, income, sales, franchise
and withholding taxes ("Taxes"), together with interest, penalties, assessments
and deficiencies owed
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by it with respect to all periods covered by such Returns, and all such Returns
were correct and complete in all respects. SAIF is not currently the beneficiary
of any extension of time within which to file any Returns. The Seller has
previously provided Buyer with true and complete copies of all such Returns
filed within the past five (5) years. The provisions for income and other Taxes
reflected on the Interim Balance Sheet are adequate for all accrued and unpaid
taxes of SAIF as of the date of the Interim Balance Sheet, whether (i) incurred
in respect of or measured by income of SAIF for any periods prior to the close
of business on that date, or (ii) arising out of transactions entered into, or
any state of facts existing, on or prior to that date. The provision for Taxes
reflected on the books of account of SAIF is adequate for all Taxes of said
entity which accrued since the date of the Interim Balance Sheet. There are no
filed or other known tax liens upon any property or assets of SAIF. SAIF has not
waived any statute of limitations in respect of Taxes or executed or filed with
any governmental authority any agreement extending the period for the assessment
or collection of any Taxes, and it is not a party to any pending or, to SAIF's
or the Seller' best knowledge, threatened action or proceeding by any
governmental authority for the assessment or collection of Taxes. To the best
knowledge of SAIF and the Seller, no issue has arisen in any examination of SAIF
by any governmental authority that if raised with respect to any other period
not so examined would, if upheld, result in a material deficiency for any other
period not so examined. There is no unresolved written claim by a governmental
authority in any jurisdiction where SAIF does not file Returns that SAIF is or
may be subject to taxation by such jurisdiction. There has been no examination
or audit with respect to Taxes with respect to any year, except for 1994, the
details of which are set forth in Schedule 2.1(j). SAIF is not required to make
any adjustment pursuant to Section 481 of the Internal Revenue Code of 1986, as
amended (the "Code"), by reason of a change in accounting method or otherwise
and, to the best knowledge of SAIF and the Seller, neither the Internal Revenue
Service nor any other governmental authority has proposed any such adjustment or
change in accounting method in respect of SAIF, which proposal is currently
pending and SAIF does not have an application pending with any governmental
authority requesting permission for any change in accounting method that relates
to its business and/or operations. SAIF has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, Seller or other third party. SAIF
has never filed any consolidated, combined or unitary Return for any period
ending on or prior to the Closing Date.
(k) LITIGATION. Except as set forth in Schedule 2.1(k)
hereto, there are no suits or actions, or administrative, arbitration or other
proceedings or governmental investigations, pending, or to the best knowledge of
SAIF and the Seller, threatened against or affecting, or which may affect, SAIF
or any of its properties, assets or businesses or the transactions contemplated
hereby. To the best knowledge of SAIF and the Seller, there are no outstanding
judgments, orders, stipulations, injunctions, decrees or awards against SAIF
which are not satisfied.
(l) COMPLIANCE WITH APPLICABLE LAW. SAIF is, and at all
times since its formation has been in compliance in all material respects with
all Federal, state, local and foreign laws, statutes, ordinances, regulations,
and administrative rulings (collectively "Laws"), promulgated by any
governmental or regulatory authority applicable to SAIF or to the conduct of the
business or operations of SAIF or to the use of its properties and assets,
including, without limitation, all environmental Laws and all Laws relating to
the Toll Free Telephone Numbers. SAIF has not received, and does not know of the
issuance or threatened issuance of, any notices of violation or alleged
violation of any laws by SAIF.
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(m) PERMITS. A list of all permits, approvals, licenses,
certificates, franchises, authorizations, consents and orders ("Permits")
necessary to the operation of the business of SAIF in the manner in which it is
presently conducted is set forth on Schedule 2.1(m) hereto. All such Permits are
valid and remain in full force and effect. SAIF has not engaged in any activity
which would cause revocation or suspension of any such Permits and no action or
proceeding looking to or contemplating the revocation or suspension of any
thereof is pending or threatened. No additional Permits will be required to
permit SAIF to continue its business substantially in the manner it is presently
conducted after the consummation of the transactions contemplated hereby.
(n) TITLE TO PROPERTIES. SAIF does not own any real
property. Except as set forth in Schedule 2.1(n) hereto, SAIF has good title to
all of the properties and assets (personal and mixed, tangible and intangible)
reflected on the Interim Balance Sheet or thereafter acquired or which it
purports to own (except properties or assets sold or otherwise disposed of in
the ordinary course of business consistent with past practice subsequent to the
date of the Interim Balance Sheet which in the aggregate did not have a book
value in excess of $20,000), free and clear of all mortgages, liens, pledges,
charges or encumbrances of any nature whatsoever. Schedule 2.1(n) also contains
an accurate list setting forth all (i) real property leased (whether as lessor
or lessee) or subject to contract or commitment of purchase or sale or lease
(whether as lessor or lessee) by SAIF and (ii) significant personal property
leased by or to SAIF or subject to a title retention or conditional sales
agreement or other security device. All leases listed in Schedule 2.1(n) are
valid, binding and enforceable in accordance with their terms, and are in full
force and effect, except to the extent that enforceability may be limited by the
operation of bankruptcy, insolvency or similar laws and there are no existing
material defaults by SAIF thereunder; no material event of default has occurred
which (whether with or without notice, lapse of time or both) would constitute a
material default by SAIF thereunder; and all lessors under such leases have
consented (where such consent is necessary) to the consummation of the
transactions contemplated by this Agreement without requiring modification of
the rights and obligations of SAIF under such leases. All of SAIF's property is
located at SAIF's facilities at 000 Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000.
(o) ENVIRONMENTAL MATTERS. Except as set forth on Schedule
2.1(o) hereto:
(i) neither SAIF nor its operations nor the real property
leased by SAIF as set forth in Schedule 2.1(n) hereto (the "Facility") are
subject to any outstanding written order, consent decree or settlement agreement
with any person to which SAIF is a party or by which it is bound relating to (A)
any Environmental Laws (as defined in below), (B) any Environmental Claim (as
defined below), or (C) any Hazardous Materials Activity (as defined below) that,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the business, results of operations, financial
position or prospects of SAIF or the value of its properties or assets;
(ii) SAIF has not received any letter or request for
information under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9604) or any comparable state
law;
(iii) there are, and to SAIF's and the Seller's knowledge,
there have been no - conditions, occurrences, or Hazardous Materials Activities
which could reasonably be
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expected to form the basis of an Environmental Claim against SAIF or that,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the business, results of operations, financial
position or prospects of SAIF or the value of its properties or assets;
(iv) neither SAIF nor, to SAIF's and the Seller' knowledge,
any predecessor of SAIF, has filed at any time any notice under any
Environmental Law indicating past or present treatment of Hazardous Materials at
the Facility, and none of SAIF's operations involves the generation,
transportation, storage, or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent; and
(v) compliance with all current or reasonably foreseeable
future requirements pursuant to or under Environmental Laws will not, individual
or in the aggregate, have a reasonable possibility of giving rise to a material
adverse effect on the business, results of operations, financial position or
prospects of SAIF or the value of its properties or assets.
(vi) Notwithstanding anything in this Section 2.1(o) to the
contrary, no event or condition has occurred or is occurring with respect to
SAIF relating to any Environmental Law, any Release (as defined in subsection
(vii) below) of Hazardous Materials, or any Hazardous Material Activity,
including any matter disclosed on Schedule 2.1(o), which individually or in the
aggregate has had or could reasonably be expected to have a material adverse
effect on the business, results of operations, financial position or prospects
of SAIF or the value of its properties or assets.
(vii) The following terms used in this Section 2.1(o) shall
have the following meanings:
(A) "Environmental Laws" shall mean any and all current
or future statutes, ordinances, orders, rules regulations, guidance documents,
judgments, governmental authorizations, or any other requirements of
governmental authorities relating to (1) environmental matters, including those
relating to any Hazardous Materials Activity (as defined below), (2) the
generation, use, storage, transportation or disposal of Hazardous Materials (as
defined below), or (3) occupational safety and health, industrial hygiene, land
use or the protection of human, plant, or animal health or welfare, in any
manner applicable to SAIF or the Facility, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601
ET SEQ.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 ET
SEQ.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 ET
SEQ.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 ET SEQ.),
the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 ET SEQ.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. Section 136 ET SEQ.), the Occupational Safety and
Health Act (29 U.S.C. Section 651 ET SEQ.), the Oil Pollution Act (33 U.S.C.
Section 2701 ET SEQ.) and the Emergency Planning and Community Right-to-Know Act
(42 U.S.C. Section 11001 ET SEQ.), each as amended or supplemented, any
analogous present or future state or local statutes or laws, and any regulations
promulgated pursuant to the foregoing.
(B) "Environmental Claim" shall mean any investigation,
notice, notice of violation, claim, action, suit, proceeding, demand, abatement
order or other order or directive (conditional or otherwise), by any
governmental authority or any other person, arising (1) pursuant to or in
connection with any actual or alleged violation of any Environmental Laws, (2)
in connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or
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(3) in connection with any actual or alleged damage, injury, threat or harm to
heath, safety, natural resources or the environment.
(C) "Hazardous Materials" shall mean (1) any chemical,
material or substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "acutely hazardous waste", "radioactive waste", "biohazardous
waste", "pollutant", "toxic pollutant", "contaminant", "restricted hazardous
waste", "infectious waste", "toxic substances", or any other term or expression
intended to define, list or classify substances by reason of properties harmful
to health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws), (2) any oil, petroleum,
petroleum fraction or petroleum derived substance, (3) any drilling fluids,
produced waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources, (4) any flammable
substances or explosives, (5) any radioactive materials, (6) any
asbestos-containing materials, (7) urea formaldehyde foam insulation, (8)
electrical equipment which contains oil or dielectric fluid containing
polychlorinated biphenyls, (9) pesticides, and (10) any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by
governmental authority or which may or could pose a hazard to the health and
safety of the owners, occupants or any other persons in the vicinity of the
Facility or to the indoor or outdoor environment.
(D) "Hazardous Materials Activity" shall mean any past,
current, proposed or threatened activity, event or occurrence involving any
Hazardous Materials, including the use, manufacture, possession, storage,
holding, presence, existence, location, Release (as defined below), threatened
Release, discharge, placement, generation, transportation, processing,
construction, treatment, abatement, removal, remediation, disposal, disposition
or handling of any Hazardous Materials, and any corrective action or response
action with respect to any of the foregoing.
(E) "Release" shall mean any release, spill, emission,
leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into the indoor
or outdoor environment (including, without limitation, the abandonment or
disposal of any barrels, containers or other closed receptacles containing any
Hazardous Materials), including the movement of any Hazardous Materials through
the air, soil, surface water or ground water.
(p) ACCOUNTS RECEIVABLE; FIXED ASSETS.
(i) The accounts receivable reflected on the
Interim Balance Sheet are good and collectible in the ordinary course of
business at the aggregate recorded amounts thereof and are not subject to any
offsets. The accounts receivable of SAIF which were thereafter added are good
and collectible in the ordinary course of business at the aggregate amounts
recorded on the books of account and are not subject to any offsets. Set forth
on Schedule 2.1(p) hereto is a true and complete list of SAIF's accounts
receivable as of September 30, 1998, and aging with respect thereto.
(ii) Schedule 2.1(p) hereto contains a complete and
accurate list of all items of machinery, equipment and other fixed assets of
SAIF (the
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"Equipment") having a book value in excess of $300. Each such item of Equipment
is in good operating condition, normal wear and tear excepted, and is fit for
its intended use. Each such item has been maintained, in all material respects,
in accordance with its manufacturer's recommended maintenance practice and with
prudent business practice and no such maintenance has been deferred.
(q) INTELLECTUAL PROPERTY. Schedule 2.1(q) hereto lists all
licenses, patents, copyrights, or trademarks owned or used by SAIF in the
conduct of its business and all applications therefor (the "Intellectual
Property"). No officer or director, Seller or employee of SAIF nor any of their
Affiliates or Associates has any ownership or other interest in any of the
Intellectual Property. To the best knowledge of SAIF and the Seller, none of the
Intellectual Property is being infringed upon by, or infringes, any licenses,
patents, copyrights, trademarks or other intellectual property rights of any
other person or entity. Except as set forth in Schedule 2.1(q), the validity of
the Intellectual Property and the title thereto of SAIF have not been questioned
in any litigation or governmental inquiry or proceeding to which SAIF, is a
party, and, to the best knowledge of SAIF and the Seller, no such litigation,
governmental inquiry or proceeding is threatened. The conduct of the business of
SAIF as presently conducted does not conflict with valid licenses, trademarks,
trademark rights, trade names, trade name rights, service marks or patents of
others in any way likely to affect adversely, in any material respect, the
Intellectual Property.
(r) TOLL FREE TELEPHONE NUMBERS. Schedule 2.1(r) hereto sets
forth a complete list of all Toll Free Telephone Numbers owned or used by SAIF
in the conduct of its business. No officer or director, Seller or employee of
SAIF nor any of their Affiliates or Associates has any ownership or other
interest in the Toll Free Telephone Numbers. SAIF has not warehoused, brokered
or hoarded (as those terms are defined in the Second Report and Order and
Further Notice of Proposed Rulemaking in CC Docket No. 95-155, Released April
11, 1997, by the Federal Communications Commission ("FCC")) any of the Toll Free
Telephone Numbers in violation of any applicable FCC rules or regulations.
(s) INSURANCE. Schedule 2.1(s) hereto contains a complete
and correct list and description of all policies of insurance in which SAIF or
its officers or directors (in such capacity) is an insured party, beneficiary or
loss payable payee. Such policies are in full force and effect and provide the
type and amount of coverage reasonably required for the business of SAIF. True
and correct copies of all such policies have been provided to Buyer.
(t) BANK ACCOUNTS AND POWERS OF ATTORNEY. Schedule 2.1(t)
hereto contains a complete and correct list showing (i) the name of each bank in
which SAIF has an account or safe deposit box and the names of all persons
authorized to draw thereon or have access thereto, and (ii) the names of all
persons, if any, holding powers of attorney from SAIF.
(u) EMPLOYEE ARRANGEMENTS; ERISA. SAIF has no union,
collective bargaining, employment, management, or consulting agreements to which
SAIF is a party or is otherwise bound. Schedule 2.1(u) hereto contains a true
and complete list of all pension, profit sharing, retirement, deferred
compensation, stock purchase, stock option, incentive, bonus, severance,
disability, hospitalization, medical insurance, life insurance and other
employee benefit plans, programs or arrangements maintained by SAIF or under
which the SAIF has any material obligations (other than obligations to make
current wage or salary payments) in respect of, or which otherwise cover, any of
the current or former officers, employees or consultants of SAIF, or
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their beneficiaries (each an "Employee Benefit Plan" and collectively the
"Employee Benefit Plans"). Except as set forth in Schedule 2.1(u) hereto, no
Employee Benefit Plan is subject to Title IV of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 412 of the Internal
Revenue Code of 1986, as amended (the "Code"). SAIF has provided Buyer true and
complete copies of all Forms 5500 (with attached schedules) filed during the
three most recently ended plan years for each Employee Benefit Plan. Except as
set forth on Schedule 2.1(u) hereto, all Employee Benefit Plans comply, in all
material respects, in form, operation and administration with their respective
provisions, the applicable provisions of ERISA, the Code and other applicable
laws. All contributions to and payments from the Employee Benefit Plans which
may have been required to be made in accordance with the Employee Benefit Plans,
and when applicable, ERISA and the Code, have been made or are properly accrued
and reflected on the Balance Sheets or the books and records of SAIF. Schedule
2.1(u) hereto also lists the names and compensation of all persons employed by
SAIF. Except as set forth on Schedule 2.1(u) hereto, SAIF has no Employee
Benefit Plans which are qualified for Federal income tax exemption under
Sections 401 and 501 of the Code.
(v) CERTAIN BUSINESS MATTERS. Except as set forth in
Schedule 2.1(v) hereto (i) SAIF is not a party to or bound by any
distributorship, dealership, sales agency, franchise or similar agreement which
relates to the sale, distribution or servicing of the Toll Free Telephone
Numbers or services related thereto, (ii) SAIF does not have any sole-source
supplier of significant goods or services (other than utilities) with respect to
which practical alternative sources are not available on comparable terms and
conditions, (iii) there are not pending and, to SAIF's and the Seller's best
knowledge there are not threatened, any labor negotiations involving or
affecting SAIF and, to SAIF's and the Seller' best knowledge, no organizing
activities involving union representation exist in respect of any of its
employees, (iv) SAIF neither gives nor is bound by any express warranties
relating to its services and, to the best knowledge of SAIF and the Seller,
there has been no assertion of any breach of warranties which could have a
material adverse effect on the business or condition (financial or otherwise) of
SAIF and, to the best knowledge of SAIF and the Seller, there are no problems or
potential problems with respect to any product sold or services provided by
SAIF, (v) SAIF is not a party to or bound by any agreement which limits its
freedom to compete in any line of business or with any person or entity, and
(vi) SAIF is not a party to or bound by any agreement or involved in any
transaction in which any officer, director, debtholder or Seller, or any
Affiliate or Associate of any such person has, or had when made, a direct or
indirect material interest.
(w) CONTRACTS. Schedule 2.1(w) hereto contains a complete
and correct list and brief description of any and all loan agreements, notes,
mortgages and other agreements and instruments relating to indebtedness for
borrowed money (including, without limitation, capitalized lease obligations)
and other material contracts, commitments, obligations and undertakings
("Material Contracts") to which SAIF is a party or otherwise bound. True and
complete copies of all Material Contracts set forth in Schedule 2.1(w) hereto
have been furnished to Buyer, and except as expressly stated in Schedule 2.1(w),
each of them is in full force and effect, no person or entity which is a party
thereto or otherwise bound thereby is, to the best knowledge of SAIF and the
Seller, in default thereunder, and no event, occurrence, condition or act exists
which, with the giving of notice or the lapse of time or both, would give rise
to a default or right of cancellation thereunder, and SAIF is not in default
thereunder and no event, occurrence, condition or act exists by or on behalf of
SAIF which, with the giving of notice or the lapse of time or both would give
rise to a default by SAIF thereunder, and to SAIF's and the Seller's best
knowledge, there have been no threatened cancellations thereof and there are no
outstanding
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disputes thereunder. To the best of SAIF's and the Seller's knowledge there is
no reason why any of the Material Contracts listed on Schedule 2.1(w), could not
be continued between Buyer and SAIF's contractual partners on the same terms and
conditions as currently apply. Neither SAIF nor the Seller has been advised that
any of SAIF's contractual partners will terminate its relationship with SAIF as
a result of the acquisition of SAIF by Buyer.
(x) BROKERS. No agent, broker, person or firm acting on
behalf of SAIF or the Seller or under the authority of any of the foregoing, is
or shall be entitled to a brokerage commission, finder's fee, or other like
payment in connection with any of the transactions contemplated hereby, from
SAIF or the Seller.
(y) DISCLOSURE. No representation or warranty made by SAIF
or the Seller herein or in any of the Executed Agreements contains any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements therein not misleading.
(z) AFFILIATED TRANSACTIONS. Except as set forth in Schedule
2.1(z) hereto, no Seller (i) is a party to any agreement, transaction or
arrangement (oral or written) with or involving SAIF or any Associate or
Affiliate of SAIF or any of the Seller, or (ii) has any claim, monetary or
otherwise, of any sort against SAIF.
(aa) CLAIMS AGAINST SAIF. Except as set forth in Schedule
2.1(aa) hereto, SAIF has no debts, obligations or liabilities owing to the
Seller and, to the best knowledge of SAIF, nothing exists that could give rise
to a claim by the Seller of any such debts, obligation or liability of SAIF to
the Seller.
(bb) DISCLOSURE SCHEDULES. All schedules to this Agreement
are integral parts to this Agreement. Nothing in a schedule shall be deemed
adequate to disclose an exception to a representation or warranty made herein,
unless the schedule identifies the exception with reasonable particularity and
describes the relevant facts in reasonable detail. The Seller is responsible for
preparing and arranging the schedules corresponding to the lettered and numbered
paragraphs contained herein.
2.2 REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to, and covenants and agrees with Buyer as follows:
(a) CAPACITY; VALIDITY. The Seller has the legal capacity to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed by the
Seller and constitutes a valid and binding obligation of the Seller enforceable
against him in accordance with its terms.
(b) TITLE TO SECURITIES. The Seller holds of record and owns
beneficially (or will own beneficially on the Closing Date) all of the SAIF
Stock free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act and state securities laws), taxes, liens,
charges, claims, demands, security interests, options, warrants, purchase
rights, contracts, commitments or other encumbrances. The Seller is not a party
to any option, warrant, purchase right or other agreement or understanding that
could require the Seller to sell, transfer or otherwise dispose of any shares of
the SAIF Stock. The Seller is not a party to any voting trust, proxy or other
agreement or understanding with respect to the voting of any shares of the SAIF
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Stock. The sale and transfer of such shares of SAIF Stock to Buyer as provided
herein shall vest Buyer with good and marketable title to the SAIF Stock, free
and clear of all liens, charges, claims and encumbrances.
(c) RIGHTS TO TOLL FREE TELEPHONE NUMBERS. The Seller does
not own or possess any rights in or to the Toll Free Telephone Numbers listed on
Schedule 2.1(r) hereto.
(d) INVESTMENT INTENT. The Seller acknowledges that none of
the shares of Parent Common Stock are registered under the Securities Act or any
state securities laws. The shares of Parent Common Stock are being acquired by
the Seller for investment purposes only and not with a view to the distribution
or resale thereof. The Seller has no present intention to sell or otherwise
dispose of the Parent Common Stock, except in compliance with the provisions of
the Securities Act. The Seller acknowledges that no representation or warranty
is being made with respect to the value of the shares of Parent Common Stock.
(e) RESTRICTIONS ON TRANSFER.
(i) The Seller agrees that he will not transfer or
otherwise dispose of (each, a "Transfer") any of the shares of Parent Common
Stock (or any interest therein) except upon the terms and conditions specified
herein and the Seller will cause any subsequent holder of such shares of Parent
Common Stock to agree to take and hold the shares of Parent Common Stock subject
to the terms and conditions of this Agreement, if such shares of Parent Common
Stock are required to include a legend pursuant to Section 2.2(e)(ii) hereof.
(ii) Each certificate representing the shares of
Parent Common Stock issued to the Seller or to any subsequent stockholder shall
include a legend in the following form; PROVIDED, HOWEVER, that such legend
shall not be required (and shall be removed by Buyer) if (A) a Transfer is being
made in connection with a sale of shares of Parent Common Stock registered under
the Securities Act, or in connection with a sale in compliance with Rule 144
under the Securities Act, as such Rule may be amended from time to time (each a
"Public Sale") or (B) in the opinion of counsel satisfactory to Buyer that the
shares represented thereby may be publicly sold without registration under the
Securities Act and any applicable state securities laws.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAW, AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION THEREOF OR A VALID EXEMPTION
THEREFROM.
(iii) Notwithstanding anything to the contrary in this
Section 2.2(e), the Seller shall not Transfer any of the shares of Parent Common
Stock except to the extent permitted, and in accordance with, the Shareholder
Agreement referred to in Section 4.1(h) hereof.
2.3 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents
and warrants to the Seller as follows:
(a) ORGANIZATION, STANDING AND POWER. Buyer is a corporation
duly
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organized, validly existing and in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate its
properties and to carry on its business as presently conducted by it and is
qualified in each other jurisdiction in which qualification is required for it
to own, lease and operate its properties and carry on its business as presently
conducted by it, except to the extent that failure to so qualify would not have
a material adverse effect on the financial condition, business or operations of
Buyer.
(b) AUTHORITY. The execution and delivery by Buyer of this
Agreement and of each of the other Executed Agreements to which it shall be a
party, the performance by Buyer of its obligations under this Agreement or such
Executed Agreements and the consummation of the transactions contemplated hereby
and thereby, have been duly and validly authorized by all necessary corporate
action on the part of Buyer, and Buyer has all necessary corporate power with
respect thereto. This Agreement and the Executed Agreements are, or when
executed and delivered by Buyer shall be, the valid and binding obligations of
Buyer, enforceable in accordance with their respective terms, except to the
extent that enforceability may be limited by the operation of bankruptcy,
insolvency or similar laws and, as to the availability of equitable remedies,
subject to general principles of equity and the discretion of the court having
jurisdiction thereof. Neither the execution and delivery by Buyer of the
Executed Agreements, nor the consummation of the transactions contemplated
thereby, nor the performance by Buyer of its obligations under the Executed
Agreements, shall (nor with the giving of notice or the lapse of time or both
would) (i) conflict with or result in a breach of any provision of the Articles
of Incorporation or By-Laws of Buyer, (ii) violate any order, writ, injunction,
decree, law, statute, rule or regulation or (iii) interfere with or otherwise
materially and adversely affect the ability of Buyer to carry on its business as
now conducted.
(c) INVESTMENT INTENT. The SAIF Stock is being acquired by
Buyer for investment purposes only and not with a view to the distribution or
resale thereof. Buyer has no present intention to sell or otherwise dispose of
the SAIF Stock, except in compliance with the provisions of the Securities Act.
(d) BROKERS. No agent, broker, person or firm acting on
behalf of Buyer or under its authority is or shall be entitled to a brokerage
commission, finder's fee, or other like payment in connection with any of the
transactions contemplated hereby.
(e) DISCLOSURE. No representation or warranty made by Buyer
herein or in any of the Executed Agreements contains any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements therein not misleading.
2.4 REPRESENTATIONS AND WARRANTIES OF PARENT. Parent hereby
represents and warrants to Seller that the authorized capital stock of Parent
consists of (i) 15,000,000 shares of Common Stock, par value $.001 per share, of
which 100,000 shares are designated Class B Common Stock ("Class B Stock") and
(ii) 7,000,000 shares of Series A Preferred Stock, par value $.001 per share. No
more than 10,000,00 shares of Common Stock are issued and outstanding, shares
are Class B Stock and 6,520,000 shares of Series A Preferred Stock are issued
and outstanding. The shares of the Parent Common Stock being transferred to the
Seller in accordance herewith shall be duly and validly issued and fully paid
and non-assessable.
3. COVENANTS
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3.1 COVENANTS OF THE SELLER AND SAIF. The Seller and SAIF jointly
and severally covenant and agree to perform or take any and all such actions to
effectuate the following from the date hereof until the Closing Date or the
termination of this agreement, whichever shall first occur:
(a) INVESTIGATION BY BUYER. Buyer may, prior to the Closing
Date, through its representatives (including its counsel, accountants and
consultants) make such investigations of the properties, offices and operations
of SAIF and such audit of the financial condition of SAIF as it deems necessary
or advisable in connection with the transactions contemplated hereby, including,
without limitation, any investigation enabling it to familiarize itself with
such properties, offices, operations and financial condition provided that no
unreasonable interference with the normal business operations of SAIF be thereby
caused; such investigation shall not, however, affect SAIF's or the Seller's
representations, warranties and agreements hereunder provided that Buyer
notifies the Seller of any fact it discovers in such investigation which it
believes is in conflict with the representations and warranties made by SAIF
and/or the Seller hereunder. SAIF and the Seller shall permit Buyer and its
authorized representatives to have, after the date hereof, full access to the
premises and to all books and records and tax returns of SAIF and Buyer shall
have the right to make copies thereof and excerpts therefrom. SAIF and the
Seller shall furnish Buyer with such financial and operating data and other
information with respect to SAIF as Buyer may from time to time reasonably
request.
(b) CARRY ON IN ORDINARY COURSE. Except with Buyer's prior
written consent, SAIF shall, and the Seller shall cause SAIF to, carry on its
business diligently and substantially in the same manner as heretofore
conducted, and shall not (i) enter into or agree to enter into any extraordinary
transaction, contract, lease or commitment, (ii) declare any dividends, nor make
any distributions or payments to the Seller other than employment compensation,
(iii) redeem any shares of SAIF Stock or issue any capital stock or enter into
any agreement which grants a right to acquire any of SAIF's capital stock and
not material in amount, (iv) increase the compensation of any employee of SAIF,
other than ordinary year-end increases or enter into any severance agreement or
employment agreement with any employee of SAIF; (v) loan or advance any amounts
to any officer, director, stockholder or employee of SAIF or enter into any
agreement with any of the foregoing or any person related to any of the
foregoing, (vi) acquire or dispose of any assets, other than in the ordinary
course of business and not material in amount, and (vii) encumber or commit to
encumber any of its assets, (viii) take any action, or suffer any action to be
taken, which could cause any of the representations or warranties of the Seller
or SAIF contained herein not to be true and correct on and as of the Closing
Date, or (ix) enter into any agreement to take any of the foregoing actions.
(c) OTHER TRANSACTIONS. SAIF and the Seller shall not, and
shall cause SAIF's directors, officers, employees, agents and Affiliates or
Associates not to, directly or indirectly, solicit or initiate the submission of
proposals from, or solicit, encourage, entertain or enter into any arrangement,
agreement or understanding with, or engage in any negotiations with, or furnish
any information to, any person, other than Buyer or a representative thereof,
with respect to the acquisition of all or any part of the business or assets of
SAIF or any of its securities. Should SAIF or any of its Affiliates or
Associates, during such period, receive any offer or inquiry relating to such
acquisition, or obtain information that such an offer is likely to be made, they
will provide Buyer with immediate written notice thereof, which notice will
include the identity of the prospective offeror and the price and terms of any
offer.
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(d) CONSENTS. The Seller shall cause SAIF to, and SAIF
shall, use their best efforts to obtain in writing, prior to the Closing Date,
all consents, approvals, waivers, authorizations and orders necessary or
reasonably required in order to permit it to effectuate this Agreement and to
consummate the transactions contemplated hereby (collectively, "Consents"). All
such Consents will be in writing and copies thereof will be delivered to Buyer
promptly after SAIF's receipt thereof but no later than immediately prior to
Closing.
(e) SUPPLEMENTAL DISCLOSURE. The Seller and SAIF agree that,
with respect to their representations and warranties made in this Agreement,
they will have a continuing obligation to promptly supplement or amend the
schedules hereto with respect to any matter hereafter discovered which, if
existing or known at the date of this Agreement and on the Closing Date, would
have been required to be set forth or described in the schedules hereto.
(f) PUBLIC ANNOUNCEMENTS. The Seller and Buyer agree that
they will consult with each other before issuing any press releases or otherwise
making any public statements with respect to this Agreement or the transactions
contemplated hereby and any press release or any public statement shall be
subject to mutual agreement of the parties, except as may be required by the
disclosure obligations of Buyer under applicable securities laws.
4. CONDITIONS TO CLOSING
4.1 CONDITIONS OF BUYER'S OBLIGATION TO CLOSE. The obligation of
Buyer to close under this Agreement is subject to the satisfaction of following
conditions any of which may be waived by Buyer in writing at or prior to
Closing:
(a) DUE DILIGENCE. Buyer shall have completed, to its
satisfaction, its business, legal, tax and accounting due diligence.
(b) AGREEMENTS AND CONDITIONS. On or before the Closing
Date, the Seller and SAIF shall have complied with and duly performed all
agreements and conditions on their part to be complied with and performed
pursuant to or in connection with this Agreement on or before the Closing Date.
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Seller and SAIF contained in this Agreement, or otherwise made
in connection with the transactions contemplated hereby, shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made on
and as of the Closing Date.
(d) LOSS, DAMAGE OR DESTRUCTION. Between the date hereof and
the Closing Date there shall not have been any loss, damage or destruction to or
of any of the assets, property or business of SAIF in excess of $10,000 in the
aggregate, whether or not covered by insurance, nor shall the assets,
properties, business or prospects of SAIF have been adversely affected in any
way as a result of any fire, accident, or other casualty, war, civil strife,
riot or act of God or the public enemy or otherwise.
(e) NO LEGAL PROCEEDINGS. No court or governmental action or
proceeding shall have been instituted or threatened to restrain or prohibit the
transactions contemplated hereby, and on the Closing Date there will be no court
or governmental actions or
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proceedings pending or threatened against or affecting SAIF which involve a
demand for any judgment or liability, whether or not covered by insurance, and
which may result in any material adverse change in the business, operations,
properties or assets or in the condition, financial or otherwise, of SAIF.
(f) CERTIFICATE. Buyer shall have received a certificate
dated the Closing Date and executed by the Seller and an authorized officer of
SAIF to the effect that the conditions expressed in Sections 4.1(b), 4.1(c),
4.1(d) and 4.1(e) have been fulfilled.
(g) CONSENTS. Buyer shall have received all Consents
necessary to effectuate this Agreement and to consummate the transactions
contemplated hereby.
(h) EMPLOYMENT AGREEMENT; NON-COMPETITION AGREEMENT. Buyer
shall have entered into an Employment Agreement with Seller and a
Non-Competition Agreement with Xxxxxx Post, each in form and substance
satisfactory to Buyer and the Seller.
(i) SHAREHOLDERS AGREEMENT. The Seller shall have entered
into a Shareholders Agreement, in form and substance satisfactory to Buyer.
(j) RESIGNATIONS OF OFFICERS AND DIRECTORS. Buyer shall
have received resignations effective as of the Closing Date from all of the
executive officers and each of the members of the board of directors of SAIF.
(k) TERMINATION OF 401K PLAN. SAIF shall furnished Buyer
with evidence satisfactory to Buyer that appropriate actions are being taken to
terminate the 401K Plan listed on Schedule 2.1(u) hereto and the disbursement of
all amounts due to participants thereunder as soon as practical following the
Closing at no cost to or obligation on the part of the Buyer.
(l) CERTIFICATES OF STATUS. Buyer shall have received
certificates from the Secretary of State of Florida and of each jurisdiction set
forth in Schedule 2.1(a) hereto, providing that SAIF has filed its most recent
annual report, has not filed articles of dissolution and is in good standing in
each such jurisdiction.
(m) OPINION OF COUNSEL. The Seller shall have furnished
Buyer with a favorable opinion of Boone, Boone, Xxxxx & Xxxxx, P.A., counsel for
SAIF and the Seller, dated as of the Closing Date, and in form and substance
reasonably satisfactory to Buyer.
(n) GENERAL RELEASE OF SAIF BY THE SELLER. The Seller shall
have fully released and discharged SAIF from any and all obligations owing to
him by SAIF, other than the 1997 bonuses payable to Seller and Xxxxxx Post
referred to in Section 1.4(d) hereof, and all claims, actions or suits that they
now has or may hereafter have against SAIF in form and substance satisfactory to
Buyer and its counsel.
4.2 CONDITIONS OF THE SELLER'S AND SAIF'S OBLIGATIONS TO CLOSE.
The obligations of the Seller and SAIF to close under this Agreement are subject
to the following conditions any of which may be waived by SAIF in writing at or
prior to Closing:
(a) AGREEMENTS AND CONDITIONS. On or before the Closing
Date,
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Buyer shall have complied with and duly performed all agreements and conditions
on its part to be complied with and performed pursuant to or in connection with
this Agreement on or before the Closing Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer contained in this Agreement, shall be true and correct in
all material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on and as of
the Closing Date.
(c) CLOSING CERTIFICATE. The Seller shall have received a
certificate dated the Closing Date and executed by an authorized officer of
Buyer to the effect that the conditions contained in Section 4.2(a) and (b) have
been fulfilled.
5. TRANSFER TAXES. Notwithstanding anything to the contrary
contained herein, the Seller shall assume and pay all sales, use, privilege,
transfer, stock transfer, real property transfer, documentary, gains, stamp,
duties, recording and similar Taxes and fees (including any penalties, interest
or additions) imposed upon any party hereto incurred in connection with the
purchase of SAIF Stock as contemplated by this Agreement (collectively,
"Transfer Taxes") and shall, at their own expense, accurately file all necessary
Returns and other documentation with respect to any Transfer Tax other than
Returns which Buyer is responsible for filing under applicable law. The Seller
agrees to timely sign and deliver such certificates or forms as may be necessary
or appropriate to establish a lawful exemption from (or otherwise lawfully
reduce), or file Returns with respect to, such Transfer Taxes.
6. INDEMNIFICATION
6.1 SURVIVAL OF REPRESENTATIONS. The representations and warranties
of the Seller in this Agreement or in any document delivered pursuant hereto
shall survive the Closing Date for a period of three years and shall then
terminate; PROVIDED, HOWEVER, that (i) any such representation and warranty
shall survive the time it would otherwise terminate only with respect to claims
of which notice has been given as provided in this Agreement prior to such
termination and (ii) such time limitation shall not apply to the representations
and warranties set forth in Section 2.2(b) hereof, which shall survive
indefinitely, and Sections 2.1(h), 2.1(j), 2.1(n), 2.1(o) hereof, which shall
survive until the expiration of the applicable statute of limitations.
6.2 INDEMNITORS; INDEMNIFIED PERSONS. For purposes of this Section
6, each party which, pursuant to this Section 6, shall agree to indemnify any
other person or entity shall be referred to, as applicable, as the "Indemnitor",
and each such person and entity who is entitled to be indemnified by any
Indemnitor shall be referred to as the "Indemnified Person" with respect to such
Indemnitor.
6.3 INDEMNITY OF THE SELLER. The Seller and, with respect only to
claims made hereunder by Buyer prior to the Closing, SAIF, hereby jointly and
severally agree to indemnify, hold harmless and reimburse Buyer and its
directors, officers, stockholders, agents and employees from and against any and
all claims, liabilities, losses, damages and expenses incurred by such
Indemnified Persons (including reasonable attorneys' fees and disbursements)
which shall be caused by or related to or shall arise out of any breach or
alleged breach of any representation, warranty, covenant or agreement of SAIF or
the Seller contained in this Agreement and shall reimburse such Indemnified
Persons for all costs and expenses (including reasonable attorneys' fees and
dis-
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bursements) as they shall be incurred, in connection with paying, investigating,
preparing for or defending any action, claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
which shall be caused by or related to or shall arise out of such breach or
alleged breach, whether or not any such Indemnified Person shall be named as a
party thereto and whether or not any liability shall result therefrom. The
Seller and SAIF further agree that they shall not, without the prior written
consent of Buyer settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder unless such settlement, compromise or
consent shall include an unconditional release of each Indemnified Person under
this Section 6.3 from all liability arising out of such claim, action, suit or
proceeding.
6.4 INDEMNITY OF BUYER. Buyer hereby agrees to indemnify, hold
harmless and reimburse the Seller and SAIF and SAIF's directors, officers,
agents and employees from and against any and all claims, liabilities, losses,
damages and expenses incurred by them (including reasonable attorneys' fees and
disbursements) which shall be caused by or related to or shall arise out of any
breach or alleged breach of any representation, warranty, covenant or agreement
of Buyer contained in this Agreement and shall reimburse such Indemnified
Persons for all costs and expenses (including reasonable attorneys' fees and
disbursements) as shall be incurred, in connection with paying investigating,
preparing for or defending any action, claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
which shall be caused by or related to or shall arise out of such breach or
alleged breach, whether or not such Indemnified Persons shall be named as a
party thereto and whether or not any liability shall result therefrom. Buyer
further agrees that it shall not, without the prior written consent of the
Seller and SAIF, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder unless such settlement, compromise or
consent shall include an unconditional release of the Seller and SAIF under this
Section 6.4 from all liability arising out of such claim, action, suit or
proceeding.
6.5 PROCEDURES FOR INDEMNIFICATION; DEFENSE. Promptly after receipt
by an Indemnified Person of notice of the commencement of any action or
proceeding with respect to which indemnification may be sought hereunder, such
Indemnified Person shall notify the Indemnitor of the commencement of such
action or proceeding, but failure to so notify the Indemnitor shall not relieve
the Indemnitor from any liability which the Indemnitor may have hereunder or
otherwise, unless the Indemnitor shall be materially prejudiced by such failure.
If the Indemnitor shall so elect, the Indemnitor shall assume the defense of
such action or proceeding, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall pay the fees and
disbursements of such counsel. In the event, however, that such Indemnified
Person shall reasonably determine in its judgment that having common counsel
would present such counsel with a conflict of interest or alternative defenses
shall be available to an Indemnified Person or if the Indemnitor shall fail to
assume the defense of the action or proceeding in a timely manner, then such
Indemnified Person may employ separate counsel to represent or defend it in any
such action or proceeding and the Indemnitor shall pay the reasonable fees and
disbursements of such counsel; PROVIDED, HOWEVER, that the Indemnitor shall not
be required to pay the fees and disbursements of more than one separate counsel
for all Indemnified Persons in any jurisdiction in any single action or
proceeding. In any action or proceeding the defense of which the Indemnitor
shall assume, the Indemnified Person shall have the right to participate in such
litigation and to retain its own counsel at such Indemnified Person's own
expense except as otherwise provided above in this Section 6.5, so long as such
participation does not interfere with the Indemnitor's
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control of such litigation.
7. NON-COMPETITION; CONFIDENTIALITY
7.1 NON-COMPETITION. Following the Closing Date and for a period
of four (4) years thereafter (the "Non-Competition Period"), the Seller shall
not, directly or indirectly, (a) engage in any business or activity that
competes with the business in which SAIF or any of its Affiliates is currently
engaged, anywhere in the United States (the "Business"); (b) enter the employ of
any person or entity engaged in any business or activity that competes with the
Business or render any consulting or other services to any person or entity for
use in or with the effect of competing with the Business; or (c) have an
interest in any business or activity that competes with the Business, in any
capacity, including, without limitation, as an investor, partner, stockholder,
officer, director, principal, agent, employee, or creditor; PROVIDED, HOWEVER,
that nothing herein shall prevent the purchase or ownership by the Seller of
less than 3% of the outstanding equity securities of any class of securities of
a company registered under Section 12 of the Securities and Exchange Act of
1934, as amended, nor the Seller's ownership of any amount of the Buyer's equity
securities, nor the Seller's employment by Buyer or an affiliate of Buyer.
7.2 NO COMPETING INTERESTS. The Seller hereby represent and warrant
to Buyer that they have no ownership or other interest in any business or
activity that competes, directly or indirectly, with the Business.
7.3 NON-DISRUPTION. During the Non-Competition Period, the Seller
shall not, directly or indirectly, interfere with, disrupt or attempt to disrupt
or solicit any present or prospective relationship, contractual or otherwise,
between SAIF or any of its Affiliates, on the one hand, and any of its
customers, suppliers or employees, on the other hand.
7.4 CONFIDENTIALITY. The Seller shall not use for their own behalf
or divulge to any other person or entity any confidential information or trade
secrets of or relating to Buyer in any manner whatsoever (except as authorized
and required in connection with the Seller's relationship with Buyer or any of
its Affiliates during the term of such relationship or except as may be required
under legal process by subpoena or other court order; PROVIDED, HOWEVER, that
the Seller shall give Buyer prompt prior written notice thereof in order to
contest such requirement or order). As used herein, confidential information
shall consist of all information, knowledge or data relating to Buyer or any of
its Affiliates (including, without limitation, all information relating to
inventions, procedures and operations, processes and methods, financial
information, customer lists, lists of prospective customers known to the Seller,
prices and trade practices) which is not in the public domain or otherwise
published or publicly available, except for information which the Seller can
demonstrate by written records was previously known to him, is now, or becomes
in the future, public knowledge, other than through acts or omissions of the
Seller, is lawfully obtained by the Seller from sources independent of the
Buyer, or is subsequently developed by the Seller independent of confidential
information or trade secrets of or relating to Buyer in connection with this
transaction.
7.5 REMEDIES UPON BREACH. The Seller acknowledges and agrees that
(a) Buyer shall be irreparably injured in the event of a breach by the Seller of
any of their obligations under this Section 7; (b) monetary damages shall not be
an adequate remedy for such breach; (c) Buyer shall be entitled to injunctive
relief, in addition to any other remedy which it may have, in the event of any
such breach; and (d) the existence of any claims which the Seller may have
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against Buyer, whether under this Agreement or otherwise, shall not be a defense
to the enforcement by Buyer of any of its rights under this Agreement.
8. INSTALLMENT NOTE DEFAULT In the event of a failure by Buyer to
pay, within thirty (30) days of the dates due (the "Default Date"), any amounts
due under the Installment Note referred to in Section 1.2(c) hereof (a) the
Non-Competition Period shall expire with respect to Section 7.1 on the Default
Date, together with any obligations on the part of the Seller pursuant to
Sections 7.2, 7.3 and 7.4 above with respect to customers of SAIF and (b) Buyer
shall assign to the Seller such customer contracts set forth on Schedule 2.1(w)
as remain in effect on the Default Date.
9. MISCELLANEOUS PROVISIONS
(a) CONFIDENTIALITY. SAIF, the Seller and Buyer agree not
to, directly or indirectly, without the prior written consent of the other, use
or disclose to any person, firm or corporation, any of the terms of this
Agreement, except as may be required by the disclosure obligations of Buyer
under applicable securities laws or as may be required to be disclosed to the
attorneys and/or accountants of the parties hereto in connection with the
transactions contemplated hereby.
(b) NOTIFICATION. Each party hereto shall give the other
party or parties hereto prompt written notice of (i) the existence of any fact
or the occurrence of any event which constitutes, or with the giving of notice
or the passage of time or both would constitute, a breach of any representation
or warranty of the party giving such notice made herein or pursuant hereto and
(ii) the taking of any action by the party giving such notice that would breach
or violate, or constitute a default under, any agreement or covenant of such
party made herein or pursuant hereto. The giving of any such notice shall not
affect, modify or limit in any way any representation, warranty, agreement or
covenant of the parties made herein or pursuant hereto.
(c) EXECUTION IN COUNTERPARTS. This Agreement may be
executed in counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
(d) NOTICES. All notices, requests, demands and other
communications which are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed duly given when delivered by
hand, telecopied or posted in the United States mail by registered or certified
mail with postage pre-paid, return receipt requested, (i) if to Buyer, to
Protocol Communications, Inc., 0000 Xxxxxxxx Xxxx., Xxxxxxxx, Xxxxxxx 00000,
Attention: President, facsimile number: (000) 000-0000, with a copy to Xxxxxxx,
Calamari & Xxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
X. Xxxxxxx, Esq., facsimile number: (000) 000-0000; and (ii) if to the Seller,
to 000 Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Mr. Xxxxxx Xxxx, facsimile
number: (000) 000-0000, or to such other address(es) as shall be specified by
like notice to the other parties.
(e) AMENDMENTS. This Agreement may be amended or modified at
any time prior to the Closing Date, but only by a written instrument executed by
all of the parties hereto.
(f) ENTIRE AGREEMENT. This Agreement (together with the
other
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agreements, certificates, instruments and documents delivered pursuant hereto)
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings,
oral and written, among the parties hereto with respect to the subject matter
hereof.
(g) APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida applicable to
contracts entered into and to be performed wholly within said State. The parties
hereby consent to the exclusive jurisdiction of Federal and Florida State courts
located in the County of Sarasota and agree that service of process by certified
mail, return receipt requested, shall constitute personal service for all
purposes hereof.
(h) TERMINATION. This Agreement may be terminated at any
time prior to the Closing Date by any of the following:
(i) By mutual written agreement of Buyer and the
Seller;
(ii) By either Buyer or the Seller, if the Closing
has not occurred within 30 days of the date hereof, upon written notice by such
terminating party, provided that at the time such notice is given a material
breach of this Agreement by such terminating party shall not be the principal
reason for the Closing's failure to occur;
(iii) Subject to the provisions of Section 9(i)
hereof, by Buyer, by written notice to the Seller and SAIF, if there has been a
material violation or breach of any of the Seller's or SAIF's covenants or
agreements made herein or in connection herewith or if any representation or
warranty of the Seller or SAIF made herein or in connection herewith proves to
be materially inaccurate or misleading; or
(iv) Subject to the provisions of Section 9(i)
hereof, by the Seller, by written notice to Buyer, if there has been a material
violation or breach of any of Buyer's covenants or agreements made herein or in
connection herewith or if any representation or warranty of Buyer made herein or
in connection herewith proves to be materially inaccurate or misleading.
(i) EFFECTS OF TERMINATION. If this Agreement is
terminated as provided in Section 9(h) hereof, then this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of any party hereto (or any of their respective stockholders, officers,
directors or employees), except based on the agreements contained in Section 6.3
and 6.4 hereof; PROVIDED, HOWEVER, that if Buyer terminates this Agreement
pursuant to Section 9(h)(iii) hereof, or the Seller terminates this Agreement
pursuant to Section 9(h)(iv) hereof, the non-terminating party shall remain
liable for any breach hereof.
(j) HEADINGS. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
(k) FEES AND DISBURSEMENTS. Buyer shall pay its own
expenses, and the fees and disbursements of the counsel, accountants or auditors
retained by it in connection with the preparation, execution and delivery of
this Agreement. The fees and expenses and
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disbursements of the counsel to SAIF and the Seller shall be paid by the Seller.
(l) ASSIGNMENT. This Agreement may not be assigned by SAIF
or the Seller without the prior written consent of Buyer. This Agreement may not
be assigned by Buyer, except for an assignment by Buyer to any Affiliate,
without the prior written consent of the Seller.
(m) BINDING EFFECT; BENEFITS. This Agreement shall inure to
the benefit of, and be binding upon, the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto and their respective heirs, legal representatives, successors
and permitted assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
(n) SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(o) RECORDS RETENTION. On the Closing Date the Seller shall
deliver to the Buyer all books, records and other documents ("Books and
Records") pertaining to the business of SAIF, including, without limitation,
(i) all instruments, documents and evidences of
title of any of the assets of SAIF and the SAIF Stock;
(ii) all books of account, ledgers, minute books and
other records of SAIF;
(iii) any and all other documents, records and writing
of any kind whatsoever which on the Closing Date shall be possessed by the
Seller or SAIF for use to any extent or in any manner in connection with the
business of SAIF.
Buyer shall permit the Seller or his duly authorized representatives at any time
and from time to time between the hours of 9:00 a.m. and 5:00 p.m., local time,
on weekdays excepting holidays, or upon reasonable prior written notice, during
the period of six (6) years following the Closing to examine, inspect, photocopy
and/or copy such Books and Records then in the possession of Buyer as shall
pertain to the operation of the SAIF business for the period ending on the
Closing Date.
[NEXT PAGE IS SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement the day and year first above written.
PROTOCOL COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. XxXxxx
President
PROTOCOL HOLDINGS, INC.
with respect only to Section 2.4
hereof
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. XxXxxx
President
STRATEGIC ALTERNATIVES, INC. d/b/a
Strategic Alternatives, Inc. of Florida
By: /s/ XXXXXX XXXX
-------------------------------------
Xxxxxx Xxxx
President
SELLER:
/s/ XXXXXX XXXX
----------------------------------------
Xxxxxx Xxxx
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