APPENDIX A
ASSET ACQUISITION AGREEMENT
THIS ASSET ACQUISITION AGREEMENT is entered into as of
August 31, 1998 ("Agreement") by and among APPLIED
INTELLIGENCE GROUP, INC., 00000 Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxx 00000-0000 ("Seller"), and THE NETPLEX GROUP, INC.,
a New York corporation, 0000 Xxxxxxxxxx Xxxxx, Xxxxx Xxxxx,
XxXxxx, Xxxxxxxx 00000 ("Netplex").
RECITALS
WHEREAS, Seller desires to sell to Netplex all of the
Assets (as hereinafter defined) relating to the delivery of
its technical consulting services and solutions business to
the retail industry;
WHEREAS, Netplex desires to acquire said Assets, and in
connection therewith, Seller will receive from Netplex (i)
$3,000,000 in cash (the "Cash Consideration"); (ii) One
Million Dollars ($1,000,000) in value of Netplex Preferred
Stock (as defined below), and (iii) certain earn-out
compensation payments (the "Earn-Out Payments") as described
in the Earn-Out Agreement as provided for herein.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and
the agreements herein contained, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
1.1. "Accounts Receivable" shall mean the accounts
receivable of Seller arising from the operation of the
Business.
1.2 "Agreement Documents" shall mean this
Agreement and the various Schedules, Exhibits, attachments,
and other documents, of which the exchange or execution
between Netplex and Seller is contemplated by this Agreement
to occur at or before the Closing, except as to such
documents subsumed in the definitions hereinafter provided.
1.3. "Assets" shall mean all the assets of Seller
used in the operation of the Business as a going concern,
except for the ChainLink software product, Accounts
Receivable earned prior to Closing, and cash of the
Business,.
1.4. The "Business" shall mean the technical
consulting services and solutions business of Seller which
provides such services and solutions to the retail and
distribution industries, but not including the Seller's
viaLink and iJob businesses.
1.5. "Business Records" shall mean all business
records of Seller relating to the Business, including, but
not limited to, all books of account, customer contracts,
customer lists, supplier and vendor lists, employee
personnel files, file materials, logs, consultants' reports,
budgets, financial reports and sales, operating and business
plans, and customer files relating to or used or held for
use in the operation of the Business.
1.6. "Contracts" shall mean oral and written agreements
and contracts of Seller relating to the Business to the
extent identified on Schedule 4.14 attached to this
Agreement, including, without limitation, notes receivable,
license agreements, assignment agreements, purchase orders,
sales orders, warranties, rights to discounts, joint venture
agreements, partnership agreements, maintenance agreements,
sales representative agreements, service agreements,
distribution agreements, leases of real property and
automobiles and agreements for leased equipment.
1.7. "Fixed Assets and Tangible Personal Property"
shall mean all fixed assets and tangible personal property
of Seller used in the Business , including, without
limitation, all machinery, including essential replacement
parts, equipment, supplies, tools, tooling, furniture,
fixtures, hardware and spare parts.
1.8. "Intangible Property" shall mean all intangible
property and assets of Seller used in the Business (whether
owned, used, registered in the name of, or licensed by
Seller or in which Seller otherwise has an interest) .
Without limiting the generality of the foregoing, any
intangible property not used in the Business, such as the
iJobT and viaLinkr software products and all associated
intellectual property, are specifically excluded from this
definition.
1.9. "Inventory" shall mean all inventory of raw
materials, finished goods, supplies, project deliverables
and repair materials of Seller relating to the Business.
1.10. "AIG Marks" shall mean such tradenames,
trademarks, logos or graphic designs representing or
relating to the Business, except such items relating to
Chainlink, and any part of Seller's business or other
operations which are not part of the Assets.
1.11. "Permits" shall mean all licenses, permits,
franchises, approvals, authorizations, consents or orders
of, or filings with, any governmental authority whether
federal, state or local, or any other person relating to the
Business.
1.12. "Affiliate" shall mean any Person who is
controlled by, or is under common control with, a Party
hereto. The term "control" (including, with correlative
meaning, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of
such Person, whether through the ownership of voting
securities, by contract or otherwise.
1.13. "Closing" shall mean the actual transaction at
which the Seller receives the consideration and other
documents required to be given by Netplex hereunder, and at
which Netplex receives the documents required to be given by
Seller hereunder. Closing shall take place in Oklahoma City,
Oklahoma.
1.14. "Closing Date" shall mean September 30, 1998
or such other date as may be mutually agreed to by the parties.
1.15. "Code" shall mean the Internal Revenue Code
of 1986, as amended.
1.16. "Knowledge" as to any party hereto shall mean
the knowledge of such party or any officer or director of
such party after due investigation.
1.17. "Laws" shall mean the statutes, laws, rules,
regulations, ordinances, codes, directives, writs,
injunctions, decrees, judgments, and orders of any
governmental (whether foreign, federal, state, local, or
otherwise) legislative, regulatory or administrative agency,
court or other governmental body, promulgated generally and
not specifically directed to both of the parties to this
Agreement.
1.18. "Liabilities" shall mean liabilities,
obligations or commitments of any nature, absolute, accrued,
contingent or otherwise, known or unknown, whether matured
or unmatured.
1.19. "Liens" shall mean mortgages, deeds of trust,
collateral assignments, security interests, conditional or
other sales agreements, claims, options, restrictions,
liens, pledges, hypothecations, easements, rights of way,
encumbrances and adverse interests or other defects of title
of any kind, provided that "Liens" shall not mean liens for
taxes not yet due and payable.
1.20. "Material Adverse Effect" shall mean, with
respect to any Person, any condition, occurrence or effect,
which is materially adverse to the value of the business,
properties, assets, liabilities, capitalization,
stockholders' equity, financial condition, operations,
licenses or other franchises or results of operations of
such Person, considered as a whole.
1.21. "Netplex Common Stock" shall mean the shares
of Netplex common stock, par value $.001 per share.
1.22. "Netplex Preferred Stock" shall mean the
shares of Netplex preferred stock, Class B, par value $.01
per share. The Certificate of Designation which sets forth
the rights and preferences of the Netplex Preferred Stock is
attached hereto as Exhibit A.
1.23. "Person" shall mean any person or entity,
whether an individual, trustee, corporation, general
partnership, limited partnership, limited liability company,
trust, unincorporated organization, business association,
firm, joint venture, governmental agency or authority.
1.24. "Taxes" shall mean any federal, state, local,
foreign or other tax, levy, fee, assessment or other
government charge, including any penalties, additions and
interest with respect thereto.
1.25. "Work in Progress" shall mean, as to the
Contracts being transferred to Netplex under this Agreement
as of the Closing Date, any continuing or uncompleted
obligation to provide goods and/or services to Seller's
customer(s), which obligations will be transferred to
Netplex and assumed thereby hereunder, to the extent the
same are identified on Schedule 4.14.
ARTICLE 2
ASSET SALE AND PURCHASE
Netplex and Seller hereby agree that, subject to the terms
and conditions hereinafter set forth, (i) Seller shall sell,
assign, transfer and otherwise convey the Business and the
Assets, free and clear of all Liens, Contracts and
Liabilities, except as have been, or will be, identified on
schedules to this Agreement; (ii) Netplex agrees to
purchase, assume, and otherwise receive the Assets; (iii)
and Netplex agrees to pay to Seller the
consideration set forth herein for the Assets conveyed to
Netplex.
ARTICLE 3
CLOSING
3.1. Consideration to Seller:
3.1.1. At Closing, Netplex shall deliver
and pay to Seller (i) the Cash Consideration of Three
Million Dollars ($3,000,000) in certified funds or bank
wire transfer to an account designated by Seller; (ii)
a stock certificate representing the number of shares
of Netplex Preferred Stock as calculated below; (iii)
the Certificate of Designation of the Preferred Shares.
3.1.2. The number of shares of Netplex
Preferred Stock which Seller shall receive from Netplex
at Closing shall be calculated by dividing one million
(1,000,000) by the average reported closing price of
the Netplex Common Stock on the NASDAQ SmallCap Market
for the twenty (20) days immediately prior to September
1, 1998.
3.1.3. At Closing, Seller and Netplex
shall deliver to each other the executed Earn-Out
Agreement in the form substantially as set forth in
Exhibit B hereto, and such other Agreements Documents
as are provided for by this Agreement, all of which are
incorporated by reference as if fully set forth herein.
3.1.4. At Closing, Netplex shall deliver
to Seller such other documents as are reasonably
necessary to effect the transactions contemplated by
this Agreement.
3.2. Consideration to Netplex. At Closing,
Seller shall, subject to the terms, covenants, and
conditions of this Agreement, convey, transfer and deliver
to Netplex by an executed xxxx of sale, assignments,
assignments of contracts, and such other documents as are
reasonably required to perfect the transfer of the Business
and the Assets to Netplex free and clear of all Liens,
Contracts and Liabilities, except to the extent identified
on Schedule 3.2 hereto, which Schedule identifies the Liens,
Contracts and Liabilities Netplex agrees to assume
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Netplex as
follows, which representations and warranties have been
relied upon by Netplex in entering into this Agreement:
4.1. Organization. Seller is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Oklahoma, and is qualified or
registered to do business in each jurisdiction where it is
required to do so. Seller has full corporate power and
authority to carry on its business as now conducted and to
enter into and to perform this Agreement. The address of
Seller's principal office, all of Seller additional places
of business, and the locations of all tangible personal
property included in the Assets are listed on Schedule 4.1.
Except as set forth on Schedule 4.1, during the past five
(5) years, Seller has not been known by or used any
corporate, partnership, fictitious or other name in the
conduct of the Business or in connection with the use or
operation of the Assets.
4.2. Corporate Authorization. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby have been, or will be prior
to the Closing, duly authorized by Seller's board of
directors and shareholders.
4.3. Binding Agreement. This Agreement has been duly
executed by Seller and delivered to Netplex and constitutes
the valid and binding agreement of Seller, enforceable
against Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or
other laws affecting creditors' rights generally and the
exercise of judicial discretion in accordance with general
equitable principles.
4.4. Subsidiaries and Affiliates. Except as set forth
on Schedule 4.4, Seller does not own any capital stock or
other equity securities of any other corporation and does
not have any other type of ownership interest in any other
corporation, partnership, joint venture or other business
organization or entity which relates to or is integral to
the operation of the Business.
4.5. No Breach. Except as set forth in Schedule 4.5 or
otherwise in the Agreement Documents, the execution,
delivery and performance of this Agreement by Seller will
not violate or conflict with Seller's Articles of
Incorporation or Bylaws or any Law to which Seller, or the
Assets are subject, or by which Seller or the Assets may be
bound, or (with or without giving notice or the lapse of
time or both) breach or conflict with any contract,
agreement, or other commitment to which Seller is a party or
by which Seller may be bound, or result in the imposition of
any Lien on the Assets other than such Liens as have been
identified on a Schedule to this Agreement.
4.6. Consents and Approvals. Except as set forth on
Schedule 4.6 hereto, no filing or registration with, no
permit, authorization, consent or approval of, and no notice
to, any federal, state or local government or any court,
administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign, or
other public body or authority or any other person is
necessary or required in connection with the execution and
delivery of this Agreement by Seller or for the consummation
by Seller of the transactions contemplated by this
Agreement.
4.7. Permits. Schedule 4.7 contains a true and
complete list of all Permits. Seller has all Permits
required to conduct the Business as now being conducted.
All Permits are valid and in full force and effect. Except as set forth
on Schedule 4.7(a) or elsewhere in the Agreement Documents,
no notice to, declaration, filing or registration with,
approval or permit from, any domestic or foreign
governmental or regulatory body or authority, or any other
Person or entity, is required to be made or obtained by
Seller in connection with the execution, delivery or
performance of this Agreement and the consummation of the
transactions contemplated hereby. Notwithstanding anything
to the contrary in the foregoing, Seller makes no
representation as to whether any of said Permits may be
assumed, acquired, continued, or renewed by Netplex at or
after the Closing. It is specifically agreed and understood
between the Parties hereto that such Permits, to the extent
such Permits cannot be transferred, are not included in the
Assets.
4.8. Compliance with Laws. Except as set forth in
Schedule 4.8, Seller has, to the best Knowledge of Seller,
complied in all material respects with all of the Laws
applicable to the Business and the Assets, including,
without limitation, all applicable Laws relating to health
and sanitation, environmental protection and occupational
safety the violation of which would have a Material Adverse
Effect on its Business or the Assets.
4.9. Title to and Sufficiency of the Assets.
Seller has good and marketable title to all of the Assets
free and clear of all Liens, except for Liens described on
Schedule 4.9. The Assets constitute all of the assets,
rights and properties that are used in the operation of the
Business as it is now conducted.
4.10. Fixed Assets and Tangible Personal
Property. Schedule 4.10 contains a true and complete list of
the Fixed Assets and Tangible Personal Property which are
being sold pursuant to this Agreement. Except as set forth
on Schedule 4.10, the Fixed Assets and Tangible Personal
Property, are in good operating condition and repair
(reasonable wear and tear excepted), are performing
satisfactorily and are suitable for their intended uses.
4.11. Inventory. Schedule 4.11 contains a true
and complete list of all Inventory as of August 31, 1998
which is being sold pursuant to this Agreement. Except as
otherwise set forth on Schedule 4.11 and subject to Liens
identified in any of the Agreement Documents, all Inventory
reflected on the Seller Balance Sheet (as defined below), or
acquired since the date of the Seller Balance Sheet, was
acquired and has been maintained in the ordinary course of
business; is of good and merchantable quality; consists
substantially of a quality, quantity and condition useable,
leasable or saleable in the ordinary course of business; is
valued at reasonable amounts based on the ordinary course of
business and consistent with past practice; and is not
subject to any write-down or write-off. Seller is not under
any liability or obligation with respect to the return of
Inventory in the possession of wholesalers, retailers or
other customers.
4.12. Intangible Property and AIG Marks.
Schedule 4.12 contains a true and complete list of the
Intangible Property and AIG Marks to be conveyed to Netplex
pursuant to this Agreement. Seller has delivered to Netplex
copies of all documents (if any) establishing Seller's
rights to use the Intangible Property and AIG Marks, and any
restrictions thereof. To the best of Seller's Knowledge and
except as otherwise identified in this Agreement or the
Agreement Documents, Seller has, and after Closing, Netplex
will have, the right to use all Intangible Property and AIG
Marks, free and clear of any royalty or other payment
obligations. Except as set forth on Schedule 4.12 or in the
documents heretofore described in this section, to the best
of Seller's Knowledge, Seller's use of the Intangible
Property does not conflict with, violate or infringe any
intellectual property or other rights of any other Person,
no one has claimed any such violation or infringement, and
to Seller's best Knowledge, no Person is currently violating
or infringing any of Seller's intellectual property or other
rights with respect to the Intangible Property in any way
that would have a Material Adverse Effect on the Business.
4.13. Protection of Intellectual Property. To
the best of Seller's Knowledge, all employees and
consultants of Seller who have worked on or contributed to
the development of Seller's technology, trademarks, trade
names, copyrights and other intellectual property rights
have effectively conveyed to Seller all rights such
employees or consultants may have had in such intellectual
property.
4.14. Contracts. Schedule 4.14 contains a
true and complete list (and, in the case of oral agreements,
contracts or leases, a summary of the material terms) of all
Contracts and Works in Progress dated on or after January 1,
1996 or which represent Contracts of Seller and/or Works in
Progress to be transferred to Netplex pursuant to this
Agreement. To Seller's best Knowledge, the Contracts are
valid, binding and enforceable by Seller in accordance with
their respective terms and are in full force and effect. To
Seller's best Knowledge, Seller has delivered to Netplex
true and complete copies of the Contracts and all amendments
thereto, other than those oral agreements summarized on
Schedule 4.14. The Contracts are subject to any Liens
and/or Liabilities set forth on Schedule 4.14. Seller has
complied in all material respects with all of the Contracts
and neither it nor any other party thereto is in default, or
has been notified of a threat of a default or any dispute,
under any of the Seller Contracts. The execution, delivery
and performance of this Agreement by Seller will not
constitute a default or breach under any of the Contracts,
except as set forth in Schedule 4.14.
4.15. Litigation. Except as described on
Schedule 4.15, there is no litigation, proceeding (arbitral
or otherwise), claim or investigation of any nature pending
or, to Seller's best Knowledge, threatened against Seller,
the Business or the Assets. There are no writs,
injunctions, decrees, arbitration decisions, unsatisfied
judgments or similar orders outstanding against Seller with
respect to the Business or the Assets.
4.16. Seller Financial Statements.
(a) Schedule 4.16(a) sets forth true, correct and
complete copies of (i) the audited balance sheet of
Seller as of December 31, 1997 (the "Seller Balance
Sheet"); (ii) the statement of income of Seller for
the one year period ended December 31, 1997 (collectively
with the balance sheet described in Subsection (i) hereof,
the "Seller Annual Financials");
(iii) the unaudited balance sheet of Seller as of
June 30, 1998 and the statement of income of Seller
for the period January 1 through June 30, 1998 (the
"Seller Quarterly Financials"); and (iv) the
unaudited balance sheet of Seller as of August 31,
1998 and the statement of income for the interim
period from July 1, 1998 through August 31, 1998 (the
"Seller Monthly Financials" and, together with the
Seller Annual Financials and the Seller Quarterly
Financials, the "Seller Financial Statements"). The
Seller Financial Statements have been prepared in
accordance with generally accepted accounting
principles consistently applied, and present fairly
and accurately the financial condition of Seller at
the respective dates thereof.
(b) Schedule 4.16(b) sets forth true, correct and complete
copies of (i) the unaudited balance sheet of the
Business as of December 31, 1997 (the "Business
Balance Sheet"); (ii) the unaudited statement of
income of the Business for the one year period ended
December 31, 1997 (collectively with the balance
sheet described in Subsection (i) hereof, the
"Business Annual Financials"); (iii) the unaudited
balance sheet of the Business as of June 30, 1998 and
the statement of income of the Business for the
period January 1 through June 30, 1998 (the "Business
Quarterly Financials"); and (iv) the unaudited
balance sheet of the Business as of August 31, 1998
and the statement of income for the interim period
from July 1, 1998 through August 31, 1998 (the
"Business Monthly Financials" and, together with the
Business Annual Financials and the Business Quarterly
Financials, the "Business Financial Statements"). It
is specifically agreed
and understood by the Parties hereto that the
Business Balance Sheet was prepared for the purposes
of this Agreement with Seller's best efforts to
fairly and accurately present the financial condition
and the results of the operations of the Business at
the respective dates thereof, and such Business
Balance Sheet was not necessarily calculated or kept
by Seller in the ordinary course of its business.
4.17. Absence of Material Adverse Changes. Since
December 31, 1997, there have been no changes or conditions
constituting a Material Adverse Effect on the Assets
or Business which have not been disclosed in writing
to Netplex.
4.18. Liabilities. Except as disclosed
on Schedule 4.18 attached hereto or disclosed
elsewhere in the Agreement Documents, Seller has no
material Liabilities of any nature relating to the
Business, including without limitation, Tax
liabilities due or to become due, except iabilities
that are reflected and reserved against on the Seller
Financial Statements or otherwise disclosed pursuant
to this Agreement.
4.19. Tax Matters. Neither Seller, nor
any entity to whose liabilities Seller has succeeded,
has filed or been included in a consolidated,
unitary, or combined tax return with another Person.
Except as disclosed on Schedule 4.19 hereto: (a)
Seller has filed all tax returns and reports ("Seller
Tax Returns") required to have been filed by or for
it (except for those tax returns and reports for
which it has obtained an extension, which it will
file in a timely manner); (b) Seller has paid or made
adequate provision for all Taxes payable by Seller,
and there is no Tax due and payable, the non-payment
of which would adversely affect any of the Assets or
the use thereof, or could cause Netplex to incur any
liability; (c) no unpaid Tax deficiency has been
asserted against or with respect to Seller by any
taxing authority; (d) Seller is in compliance with,
and its Business Records contain all information and
documents necessary to comply with, all applicable
information reporting and Tax withholding
requirements; (e) Seller has not granted, nor is it
subject to, any waiver of the period of limitations
for the assessment of Tax for any currently open
taxable period; and (f) Seller has not entered into,
and holds no asset subject to, a "safe harbor lease"
subject to former Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended before the Tax
Reform Act of 1986, and the regulations thereunder;
(g) all material information set forth in the Seller
Tax Returns is accurate and complete; (h) the Seller
Balance Sheet fully and properly reflects, as of the
date thereof, the Liabilities of Seller for all
accrued taxes, additions to tax, penalties, and
interest; (i) for periods ending after the date of
the most recent Seller Financial Statements, the
books and records of Seller fully and properly
reflect its liability for all accrued taxes,
additions to tax, penalties and interest; (j) Seller
has not made or entered into, and holds no asset
subject to, a consent filed pursuant to Section
341(f) of the Code and the regulations thereunder;
and (k) Seller is not required to include in income
any amount for an adjustment pursuant to Section 481
of the Code or the regulations thereunder. Schedule
4.19 describes all material tax elections, consents,
and agreements affecting Seller, and lists all types
of taxes paid and tax returns filed by Seller.
Seller is not a "foreign person" for purposes of
Section 1445 of the Code.
4.20. Insolvency Proceedings.
Neither Seller nor any of the Seller's Assets being
transferred under this Agreement is the subject of
any pending or, to Seller's best Knowledge,
threatened, insolvency proceedings of any character.
Seller has not made an assignment for the benefit of
creditors or taken any action with a view to or that
would constitute a valid basis for the institution of
any such insolvency proceedings. Seller is not
insolvent and will not become insolvent as a result
of entering into this Agreement.
4.21. Employee Benefit Plans.
(a) Schedule 4.21 hereto includes a complete and correct
schedule of (i) all employee pension benefit plans
(as defined in Section 3(2) of ERISA) and employee
welfare benefit plans (as defined in Section 3(1) of
ERISA) of Seller and any other Person or entity that
together with Seller, is treated as a single employer
under Code Section 414(b), (c), (m) or (o) (each such
Person or entity being referred to herein as an
"ERISA Affiliate"), (ii) all plans, programs,
agreements and arrangements that provide benefits to
employees of Seller or any ERISA Affiliate as a
result of the transactions contemplated by this
Agreement or that provide for the payment of
separation, severance, termination or similar
benefits to such employees, (iii) all trust
agreements established for the purposes of funding
any compensation or benefit plan, program, agreement
or arrangement, in each case currently maintained for
the benefit of, or relating to, any current or former
employee, officer, director or independent contractor
of Seller or any ERISA Affiliate, and (iv) all other
plans, programs, contracts or arrangements pertaining
to or including any current or former employee,
officer, director or independent contractor of Seller
or any ERISA Affiliate (these plans, programs,
agreements and arrangements together with all other
employee benefit plans, programs, agreements and
arrangements of Seller or any ERISA Affiliate
(including, but not limited to, all "employee benefit
plans" within the meaning of Section 3(3) of ERISA)
for the benefit of, or relating to, any current or
former employee, officer, director or independent
contractor of Seller or any ERISA Affiliate, being
collectively referred to herein as the "Seller
Plans"). Neither Seller nor any ERISA Affiliate
maintains or participates in, nor has Seller or any
ERISA Affiliate ever maintained or participated in,
any defined benefit plans or any "multiemployer
plans" as defined in Section 3(37) of ERISA. Except
as set forth in Schedule 4.21 hereto, neither Seller
nor any ERISA Affiliate has ever maintained or
participated in any other employee benefit plans or
other like plans, programs or arrangements under
which Seller or any ERISA Affiliate has any
obligation to any of their current or former
employees, officers, directors, or independent
contractors, nor has Seller or any ERISA Affiliate
made any commitments or agreements to establish or
extend any such plans, programs or arrangements for
their benefit.
(b) Seller has previously provided to Netplex true, correct and
complete copies of (i) each Seller Plan (or, in the
case of any unwritten Seller Plan, a description
thereof), (ii) actuarial reports and financial
statements prepared in connection therewith for the 3
previous years, (iii) each trust agreement and/or
insurance contract with respect to each Seller Plan,
(iv) annual reports on Form 5500 filed with the
Internal Revenue Service with respect to each Seller
Plan (if required) for the 3 previous years, (v) the
most recent summary plan description for each Plan
for which such summary plan description is required;
and (vi) all IRS determination letters obtained for
any Seller Plan.
(c) To the Knowledge of Seller, each Seller Plan is now and has
been operated, administered and maintained in all
material respects in compliance with its terms and
the requirements of all applicable law, including,
without limitation, ERISA and the
Code. All contributions required to be made to any
Seller Plan have been made on or before their due
dates and no Seller Plan has incurred a funding
deficiency under Section 412 of the Code. No legal
action, suit or claim is pending or, to the Knowledge
of Seller, threatened with respect to any Seller Plan
(other than claims for benefits in the ordinary
course).
(d) Each Seller Plan that is intended to be qualified under
Section 401(a) of the Code or Section 401(k) of the
Code has received a favorable determination letter
from the Internal Revenue Service that the form of
such Seller Plan is so qualified and each trust
established in connection with any Seller Plan which
is intended to be exempt from federal income taxation
under Section 501(a) of the Code has received a
determination letter from the Internal Revenue
Service that it is so exempt from federal income
taxation. No such determination letter has been
revoked nor has revocation of any such determination
letter been threatened, nor has any such Seller Plan
been amended since the date of its most recent
determination letter or application therefor in any
respect that would adversely affect its qualified
status or materially increase its costs (provided
that for purposes of this sentence the term
"materially" shall mean, with regard to each
occurrence, an amount in excess of $10,000.00 or
$100,000.00 in the aggregate).
(e) To the Knowledge of Seller, there has been no
prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or other
breach of fiduciary responsibility with respect to
any Seller Plan that could give rise to any tax or
penalty under Section 4975 of the Code, Title I of
ERISA or other applicable law.
(f) With respect to each Seller Plan which is a group health
plan (as defined in Code Section 4980B and ERISA
Section 607), Seller and each ERISA Affiliate have
taken all necessary actions to satisfy the notice and
benefit requirements under Code Section 4980B and
Part 6 of Title I of ERISA with respect to employees,
former employees and independent contractors of
Seller and any ERISA Affiliate (and their spouses and
dependent children) who have had a "qualifying event"
as defined in Code Section 4980B and ERISA Section
603 with respect to any such Seller Plan on or before
the Closing, or as a result of the instant
transaction. Except as set forth in Schedule 4.21
hereto, there are currently no employees, former
employees or independent contractors of Seller or any
ERISA Affiliate (or their spouses and dependent
children) (i) who have elected continuation coverage
under Code Section 4980B or Part 6 of Title I or
ERISA, or (ii) who are eligible to elect such
continuation coverage with respect to any of Seller'
or any ERISA Affiliate's group health plans for a
"qualifying event" (as defined above) that occurred
prior to the date of this Agreement.
(g) Except as set forth in Schedule 4.21, there is no material
debt, liability, claim or obligation resulting (or
which may result) from any claim incurred or
asserted under any Seller Plan, or which, to the
Knowledge of Seller, may be incurred or asserted
before, on or after the Closing under any Seller
Plan, by any employees, former employees or
independent contractors of Seller or any ERISA
Affiliate (or their covered dependents), whether as
retirees, disabled persons or otherwise, which is
not fully and totally funded for by a separate trust
or insurance policy or fully and totally reserved
for on the Financial Statements as of the Closing
(in which case, the amount of such debt, liability,
claim or obligation and the actuarial methods and
assumptions are stated in Schedule 4.18).
(h) Notwithstanding anything to the contrary in
this Agreement, Netplex is not acquiring any interest
in any Employee Benefit Plan or insurance policies of Seller.
4.22. Employees. Seller has provided
Netplex with a complete and accurate list of all
employees of Seller employed in the Business, showing
for each: name, current job title or description,
current salary level (including any bonus or deferred
compensation arrangements) and any bonus, commission
or other remuneration paid or payable since December
31, 1997 (other than any bonuses paid to salespersons
in the ordinary course of the Business), and
describing any existing contractual arrangement with
such employee. Except as set forth in Schedule 4.22
hereto, Seller has not maintained, does not maintain
and has not announced to the employees listed on
Schedule 4.22 any plan to maintain any written or
other policy with respect to severance or termination
pay. Except as set forth in Schedule 4.22 and other
than usual and customary wage and salary or
employment practices, since December 31, 1997, Seller
has made no commitments or agreements to increase the
wages or to modify the conditions or terms of
employment of any of the employees listed on said
Schedule. There are no collective bargaining
agreements applicable to the Business and there have
been no union organizing efforts conducted with
respect to such employees or any work stoppages
experienced by Seller during the last three years.
4.23. Insurance. Schedule 4.23 lists
all insurance policies (by policy number, insurer,
location or property insured, annual premium, premium
payment dates, expiration date and type of coverage)
held by Seller relating to the business, properties
and employees of the Business, copies of which have
been provided to Netplex. All such insurance
policies are in full force and effect and in such
amounts and provide coverages that are reasonable and
customary in light of the business, operations and
properties of Business.
4.24. Environmental Matters.
(a) As used in this Agreement "Hazardous Material" shall mean:
(i) any "hazardous substance" as now defined pursuant
to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.
9601(14); (ii) any "pollutant or contaminant" as
defined in 42 U.S.C. 9601(33); (iii) any material
now defined as "hazardous waste" pursuant to 40
C.F.R. Part 261; (iv) any petroleum, including crude
oil and any fraction thereof; natural or synthetic
crude oil and any fraction thereof; (v) natural or
synthetic gas usable for fuel; (vi) any "hazardous
chemical" as defined pursuant to 29 C.F.R. Part 1910;
(vii) any asbestos, polychlorinated biphenyl, or
isomer of dioxin, or any material or thing containing
or composed of such substance or substances; (viii)
any infectious organism or biological or medical
waste; or (ix) any other substance, regardless of
physical form, that is subject to any Environmental
Laws.
(b) As used in this Agreement, "Environmental Laws" shall mean
any statutes, regulations, requirements, orders,
ordinances, rules of liability or standards of
conduct of any foreign, federal, state, local
government, or common law relating to the protection
of human health, plant life, animal life, natural
resources, the environment or property from the
presence in the environment of any solid, liquid,
gas, odor or any form of energy, from whatever
source, including, without limitation, any emissions,
discharges, releases, or threatened releases of
Hazardous Material into the environment (including,
without limitation, ambient air, surface water,
groundwater, land surface or subsurface or building
structures), or otherwise relating to
the manufacture, processing, distribution, use,
treatment, storage, generation, disposal, transport
or handling of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or
wastes.
(c) To the knowledge of Seller, except as set forth on Schedule
4.24, (i) there are no environmental conditions
related to the Seller Real Property Leases (as
defined herein) or Seller' business and other assets
of Seller that could have a Material Adverse Effect
on Seller, including any such conditions relating to
the use, treatment, storage, release or disposal of
any Hazardous Material; (ii) Seller has not
manufactured, processed, distributed, used, treated,
stored, disposed of, transported or handled any
Hazardous Material in a manner that could have a
Material Adverse Effect on Seller; (iii) there is no
ambient air, surface water, groundwater or land
contamination or contamination within building
structures, within, under, originating from or
relating to any real property which is the subject of
the Seller Real Property Leases, or any other
location related to the Seller Real Property Leases
such that the contamination affects such other
locations and none of such properties has been used
for the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling
of any Hazardous Material in a manner that could have
a Material Adverse Effect on Seller; and (iv) Seller
has no obligation or liability, known or unknown,
matured or not matured, absolute or contingent,
assessed or unassessed, imposed or based upon the
failure to comply with any provision under any
federal, state or local law, rule, or regulation or
common law, or under any code, order, decree,
judgment or injunction applicable to Seller, and
Seller has not received any notice, or request for
information issued, promulgated, approved or entered
thereunder, or under the common law, or any tort,
nuisance or absolute liability theory, relating to
public health or safety, worker health or safety, or
pollution, damage to or protection of the
environment, including, without limitation, the
Environmental Laws, where such obligation or
liability could have a Material Adverse Effect on
Seller.
(d) Seller possesses and is in compliance in all material
respects with all permits, licenses, certificates,
franchises and other authorizations relating to the
Environmental Laws necessary to conduct Seller's
business or required by environmental regulations.
4.25. Seller Real Property Leases. Schedule 4.25
lists the real property leases to which Seller is a party.
Seller has a valid leasehold interest in all real
property it uses or occupies pursuant to real
property leases included within the Contracts (the
"Seller Real Property Leases"). Seller's leasehold
interest in all Seller Real Property Leases is free
and clear of all Liens, except for (i) easements and
other rights or restrictions of record that do not
materially impair the use or value of the Seller Real
Property Leases as they are now used by Seller, and
(ii) except for Liens set forth on Schedule 4.9. To
the best of Seller's Knowledge, the buildings,
improvements and fixtures that are included in the
Seller Real Property Leases are in good operating
condition and repair (reasonable wear and tear
excepted), free of structural defects and are
suitable for their intended uses. To the best of
Seller's Knowledge, the real property which is the
subject of the Seller Real Property Leases, the
improvements located thereon, and the furniture,
fixtures and equipment relating thereto (including
plumbing, heating, air conditioning and electrical
systems), conform to any and all applicable health,
fire, safety, zoning, environmental, land use and
building laws, ordinances and regulations. Seller is
current with respect to all rental payments under the
Seller Real Property Leases and is not in default under any of
the Seller Real Property Leases. In addition, with
respect to all Liens listed on Schedule 4.9, to
Seller's Knowledge, there are no facts or
circumstances which would give rise to a claim under
the Seller Real Property Leases in connection with
any such Lien. Seller owns no real property and has
no other interests therein, other than its leasehold
interests in the Seller Real Property Leases.
4.26. Brokers. Other than Ampton
Investments, Inc., Seller has not dealt with, or made
any arrangements or agreements with any third party
in connection with the transactions contemplated by
this Agreement so as to give rise to any claims for
brokerage commissions, finders fees or similar
compensation.
4.27. No Other Agreements to Merge or
Sell. Seller has no legal obligation, absolute or
contingent, to any other Person to sell the Assets or
the Business (in whole or in part), or effect any
merger, consolidation or other reorganization of
Seller, or to enter into any agreement with respect
thereto.
4.28. Financing Statements. Except as
set forth on Schedule 4.28, all of the Assets are and
have been located in the State of Oklahoma since the
Assets were acquired by Seller. To Seller's best
Knowledge, all Uniform Commercial Code financing
statements, if any, filed by any person with respect
to the Assets are listed on Schedule 4.28.
4.29. Transactions with Certain
Persons; Interest in Customers, Suppliers or
Competitors. To Seller's best Knowledge, except as
set forth on Schedule 4.29, no officer, director or
employee of Seller nor any member of any such
person's immediate family ("Interested Person") is,
or has within the past five (5) years been, a party
to any transaction with Seller relating to the
Business, other than for services as officers,
directors or employees of Seller, or transactions in
the ordinary course of business, which transaction
provides or provided for: (a) furnishing of services
by such Interested Person, (b) rental of real or
personal property from such Interested Person, or (c)
payments to such Interested Person or a corporation,
partnership, trust or other entity in which any such
Interested Person has a controlling interest as a
shareholder, officer, director, trustee or partner.
No Interested Person has any direct or indirect
controlling interest in any competitor, supplier or
customer of the Business or in any Person from whom
or to whom Seller leases any Real Property or
personal property, or in any other Person with whom
Seller is doing business.
4.30. Accounts Receivable. Schedule
4.30 contains a true and complete aging report of all
of the Accounts Receivable relating to the Business
as of August 31, 1998. All Accounts Receivable
relating to the Business, except as set forth on
Schedule 4.30, represent bona fide claims of Seller
against debtors for sales, services performed or
other charges arising on or before August 31, 1998,
and all the goods delivered and services performed
which gave rise to said accounts were delivered or
performed in accordance with the applicable orders,
contracts or customer requirements. The Accounts
Receivable are subject to no defenses, counterclaims
or rights of setoff and are fully collectible in the
ordinary course of Seller's business without cost in
collection efforts therefor, except as set forth on
Schedule 4.30 and except to the extent of the
appropriate reserves for bad debts on the Accounts
Receivable as set forth in the Seller Financial
Statements.
4.31. Material Misstatements Or
Omissions. No representations or warranties by
Seller in this Agreement, nor in any of the Agreement
Documents, contain or will contain any untrue
statement of a material fact, or omit or will omit to
state any material fact necessary to make the
statements or facts contained therein not misleading.
4.32. Acquisition for Own Account. The
Netplex Preferred Stock to be acquired by Seller
hereunder will be acquired for investment for
Seller's own account, not as a nominee or agent, and
not with a view to the public resale or distribution
thereof within the meaning of the Securities Act of
1933, as amended (the "1933 Act"), and Seller has no
present intention of selling, granting any
participation in, or otherwise distributing the same.
4.33. Restricted Securities. Seller
understands that the shares of Netplex Preferred
Stock are characterized as "restricted securities"
under the 1933 Act inasmuch as they are being
acquired from Netplex in a transaction not involving
a public offering and that under the 1933 Act and
applicable regulations thereunder such securities may
be resold without registration under the 1933 Act
only in certain limited circumstances. In this
connection, Seller represents that it is familiar
with Rule 144 of the Securities and Exchange
Commission ("SEC"), as presently in effect, and
understands such resale limitations imposed thereby
and by the 1933 Act.
4.34. Legends. Seller understands that the
instruments and certificates evidencing the shares of
Netplex Preferred Stock will bear the legend
substantially as set forth below:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE ACT AND THE APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed by
Netplex from any certificate or instrument evidencing
the Shares upon delivery to Netplex of an opinion by
counsel, reasonably satisfactory to Netplex, that a
registration statement under the 1933 Act is at that
time in effect with respect to the legended security
or that such security can be freely transferred in a
public sale without such a registration statement
being in effect and that such transfer will not
jeopardize the exemption or exemptions from
registration pursuant to which Netplex issued the
Shares.
4.35. No Owned Software or Patents.
Except as set forth on Schedule 4.35, or transferred
as part of the Assets, Seller owns no software or
patents which are used or required for use in the
operation of the Business as it is presently being
conducted.
4.36. No Customer Complaints. To
Seller's Knowledge and except as set forth on
Schedule 4.36, there are no currently
pending complaints from customers of the Business
which are substantially likely to have a Material
Adverse Effect on the Business, and no customer of
the Business with any pending complaint or claim has
threatened to file suit against or refused to pay
Seller for products or services sold to a customer in
the ordinary course of the Business.
4.37. Business Records. Seller has
delivered, or will deliver, to Netplex copies of all
of the Business Records and copies of all customer
lists and accounts of Seller. The customer list as
set forth in Schedule 4.37 is a complete list of all
current customers of Seller relating to the Business
as of August 31, 1998.
4.38. Year 2000 Compliance. Seller's
"RSA," "Chainlink" and "IDP" software products
("Compliant Products"), subject to the disclaimer
below, will not produce errors processing date data
in connection with the year change from December 31,
1999 to January 1, 2000 when used with accurate date
data in accordance with the documentation for the
Compliant Products, provided all other products
(including, without limitation, other software,
firmware, hardware, and operating systems) used with
it properly exchange date data with the Seller's
Compliant Products. Said Compliant Products will
recognize the year 2000 as a leap year. DISCLAIMER:
The foregoing statement refers to the Seller's
identified Compliant Products as delivered by Seller,
and does not apply to user initiated modifications,
user customizable features or third party add-on
features or products, including items such as macros
and custom programming and formatting features, and
further does not constitute a warranty or extend the
terms of any existing warranty. The warranties for
the Compliant Products, if any, are set forth in the
license agreement(s) that were signed by Seller's
customer in conjunction with the licensing of the
Compliant Product. Except as to the Compliant
Products, no representation or warranty is made by
Seller concerning the compatibility or functionality
of any other program or software product included in
any way in the Assets, including, without limitation,
any items of software, operating systems, or hardware
with which the Compliant Products may interact, nor
does Seller make or extend any warranty or
representation concerning "year2000 compliance" of
any kind with regard to any product or item created
or provided by any third party, whether owned or
licensed, that is to be transferred to Netplex as an
Asset pursuant to this Agreement, or any other item
of software created or provided by Seller.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF NETPLEX
Netplex hereby represents and warrants to Seller
as follows, which representations and warranties have
been relied upon by Seller in entering into this
Agreement:
5.1. Organization. Netplex is a
corporation duly organized, validly existing and in
good standing under the laws of the State of New
York, and is qualified or registered to do business
in each jurisdiction where it is required to do so.
Netplex has full corporate power and authority to
carry on its business as now conducted and to enter
into and to perform this Agreement.
5.2. Corporate Authorization. The
execution and delivery of this Agreement, the
issuance of the Netplex Preferred Stock as provided
herein and the consummation of all the transactions
contemplated hereby have been duly authorized by all
requisite corporate action with respect to Netplex,
including, without limitation, approval by Netplex's
board of directors.
5.3. Binding Agreement. This Agreement has
been duly executed by Netplex and delivered to Seller
and constitutes the valid and binding agreement of
Netplex, enforceable against Netplex in accordance
with its respective terms, except as enforceability
may be limited by bankruptcy, insolvency or other
laws affecting creditors' rights generally and the
exercise of judicial discretion in accordance with
general equitable principles.
5.4. No Breach. The execution, delivery
and performance of this Agreement by Netplex and the
issuance of any Netplex stock pursuant to this
Agreement and the Agreement Documents will not
violate Netplex's Certificate of Incorporation, as
amended, or Bylaws or any Law to which Netplex is
subject or by which Netplex may be bound, or (with or
without giving notice or the lapse of time or both)
breach or conflict with any contract, agreement, or
other commitment to which either of Netplex is a
party or by which Netplex is or may be bound, or
result in the creation or imposition of any Lien
against or upon the Shares or any of the assets or
properties owned or leased by either of Netplex or
the Business.
5.5. Litigation; Compliance with Law.
Other than as disclosed in its public filings, there
is no litigation, proceeding (arbitral or otherwise),
claim or investigation of any nature, pending or, to
Netplex's best Knowledge, threatened, against
Netplex that reasonably could be expected to
adversely affect Netplex's ability to perform in
accordance with the terms of this Agreement. Neither
Netplex nor any officer, director, partner or
employee of Netplex has been permanently or
temporarily enjoined or barred by any legal judgment
from engaging in or continuing any conduct or
practice in connection with the activities of Netplex
as currently conducted; and there is not in existence
any legal judgment requiring Netplex to take any
action of any kind with respect to the assets or
properties owned or leased by it, or its activities,
or to which Netplex or its activities, properties or
assets are otherwise subject or by which they are
otherwise bound or affected. The conduct by Netplex
of its activities as currently conducted does not
violate or infringe any Laws currently in effect, or,
to the Knowledge of Netplex, proposed to become
effective; and Netplex has not received any notice of
any violation by Netplex of any Laws applicable to
Netplex or their respective activities as currently
conducted; and Netplex does not know of any basis
for the allegation of any such violation.
5.6. Brokers. Other than Zanett Securities
Corporation, Buyer has not dealt with, or made any
arrangements or agreements with any third party in
connection with the transactions contemplated by this
Agreement so as to give rise to any claims for
brokerage commissions, finders fees or similar
compensation..
5.7. Capitalization. Netplex has
authorized and outstanding the capital stock set
forth on Schedule 5.7. Except as set forth on
Schedule 5.7, there are not outstanding any options,
warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition
from Netplex of any shares of its capital stock or
any securities convertible into or ultimately
exchangeable or exercisable for any shares of
Netplex's capital stock.
5.8. Certificate of Incorporation;
Certificate of Designation. Schedule 5.8 includes true,
complete and current copies of Netplex's Certificates of
Incorporation, as amended, and Netplex's Certificate of Designation,
respectively, to be filed with the Secretary of State
of the State of New York.
5.9. Consents and Approvals. Except as set
forth on Schedule 5.9 hereto, no filing or
registration with, no permit,
authorization, counsel or approval of, and no notice
to, any federal, state or local government or any
court, administrative or regulatory agency or
commission or other governmental authority or agency,
domestic or foreign, or other public body or
authority or any other Person is necessary or
required in connection with the execution and
delivery of this Agreement by Netplex or for the
consummation by Netplex of the transactions
contemplated by this Agreement.
5.10. Valid Issuance of Preferred
Shares. The Preferred Shares, when issued and
delivered in accordance with the terms of this
Agreement for the consideration provided for herein,
will be duly and validly issued, fully paid and
nonassessable and shall not be subject to, or bound
or affected by, any proxies, voting agreements, or
other restrictions on the incidents of ownership or
Liens of any nature.
5.11. Permits of Netplex. Netplex
represents and warrants that, at its expense, it has
or shall obtain at or prior to Closing all Permits
required to conduct the Business as now being
conducted. In the event Netplex is required to
obtain any Permit other than by receipt of the same
from Seller, Netplex shall bear the cost of obtaining
it. Until the expiration of nine quarters after the
Closing, all Permits shall be maintained by Netplex
as valid and in full force and effect until December
31, 2000. Except as set forth on Schedule 5.11, no
notice to, declaration, filing or registration with,
approval or permit from, any domestic or foreign
governmental or regulatory body or authority, or any
other Person or entity, is required to be made or
obtained by Netplex in connection with the execution,
delivery or performance of this Agreement and the
consummation of the transactions contemplated hereby.
5.12. Compliance with Laws. Netplex
has and shall continue until December 31, 2000 to
comply in all material respects with all of the Laws
applicable to the Business and the Assets, including,
without limitation, all applicable Laws relating to
health and sanitation, employment and employment
benefits, equal opportunity, discrimination,
environmental protection and occupational safety, the
violation of which would have a Material Adverse
Effect on the Business or the Assets.
5.13 Absence of Material Adverse Changes.
Since December 31, 1997, there have been no changes
or conditions constituting a Material Adverse Effect
on Netplex which has not been disclosed in writing to
Seller.
ARTICLE 6
COVENANTS OF SELLER
Between the date of this Agreement and the
Closing, Seller hereby covenants:
6.1. Maintenance of the Business. Seller
shall conduct the Business and use the Assets only in
the ordinary course of business, consistent with past
practices, which shall include compliance in all
respects with all Laws, regulations and administrative
orders of any federal, state or local governmental
authority that are applicable to Seller with respect
to the Assets or Business, with the intent of
preserving the ongoing operations of the Assets and
Business and which shall also include, without
limitation, not selling, transferring or disposing of
any assets or properties currently owned by Seller,
as applicable, nor making any distributions of cash
or other property to shareholders or incurring any
indebtedness for borrowed money without Netplex's
consent, other than accounts payable consistent with
past practices.
6.2. Adverse Developments. Seller shall
promptly notify Netplex of any materially adverse
developments that occur prior to Closing with respect
to the Assets or the operation of the Business.
Seller shall keep Netplex informed of all material
operational matters and business developments with
respect to the Business and its markets, including
any competitive changes.
6.3. Access. Seller will provide Netplex,
its counsel, accountants, financing sources and other
representatives ("Netplex's Representatives") with
access to the Business Records, to the Assets, and to
the officers, employees, agents and accountants of
each with respect to matters relating to the Business
during normal business hours, upon reasonable notice
and at a mutually agreeable time; provided that such
access does not materially disrupt the operations of
the Business, and Seller will provide Netplex's
Representatives with such information concerning the
Assets and the Business as they reasonably may
request for the purpose of allowing Netplex to
perform a due diligence review of Seller. Seller
shall instruct its representatives to cooperate fully
with the review by Netplex's Representatives of the
Business Records.
6.4. Financial Statements and Other
Reports. Between the date of this Agreement and the
Closing, as soon as the same are available, Seller
will provide Netplex with copies of the Business'
regularly prepared sales reports and any regularly
prepared periodic financial statements or reports.
6.5. No Negotiations. Seller will refrain,
and will cause each other Person acting for or on
behalf of Seller, to refrain, from taking, directly
or indirectly, any action (a) to merge, consolidate,
or combine, or to permit any other Person to merge,
consolidate or combine, with Seller in a manner which
affects the Business; and (b) to seek or encourage
any offer or proposal from any Person to acquire the
Business or any Assets (other than in the ordinary
course of business consistent with past practices).
6.6. Third Party Consents. Seller shall
use its best efforts to obtain any third party
consents required for performance under this
Agreement and the consummation of the transactions
contemplated hereby.
6.7. Satisfaction of Conditions. Seller
shall in good faith use its reasonable best efforts
to satisfy all conditions to its obligations to close
and consummate the transactions contemplated by this
Agreement.
ARTICLE 7
COVENANTS OF NETPLEX
Between the date of this Agreement and the
Closing, Netplex hereby covenants:
7.1. Adverse Developments. Netplex shall
promptly notify Seller of any materially adverse
developments that occur
prior to Closing with respect to the operation of its
business.
7.2. Access. Netplex will provide Seller,
its counsel, accountants, financing sources and other
representatives ("Seller's Representatives") with
access to its business records, and to its officers,
employees, agents and accountants with respect to
matters relating to its business during normal
business hours, upon reasonable notice and at a
mutually agreeable time; provided that such access
does not materially disrupt the operations of
Netplex's business, and Netplex will provide Seller's
Representatives with such information concerning its
business as they reasonably may request for the
purpose of allowing Seller to perform a due diligence
review of Netplex. Netplex shall instruct its
representatives to cooperate fully with the review by
Seller's Representatives.
7.3. Financial Statements and Other
Reports. Between the date of this Agreement and the Closing, as soon
as the same are available, Netplex will provide
Seller with copies of its regularly prepared sales
reports and any regularly prepared periodic financial
statements or reports.
7.4. Third Party Consents. Netplex shall use its best
efforts to obtain any third party consents required
for performance under this Agreement and the
consummation of the transactions contemplated hereby.
7.5. Financial Statements and Other Reports. Between
the date of this Agreement and the Closing, as soon
as the same are available, Netplex will provide
Seller with copies of Netplex's regularly prepared
periodic financial statements or reports.
7.6. Third Party Consents. Netplex shall obtain any
and all third party consents required for performance
under this Agreement and the consummation of the
transactions contemplated hereby.
7.7. Satisfaction of Conditions. Netplex shall in good
faith use its reasonable best efforts to satisfy all
conditions to its obligations to close and consummate
the transactions contemplated by this Agreement.
ARTICLE 8
OTHER COVENANTS
8.1. Governmental Consents. Promptly following the
execution of this Agreement, Seller and Netplex shall
proceed to prepare and file with the appropriate
governmental authorities such requests for approvals
or waivers, reports or notifications as may be
required in connection with this Agreement.
Notwithstanding anything to the contrary in the
foregoing, Seller's obligations under this section
8.1 shall be construed under and limited to any
requests, waivers, reports or notifications as a
required specifically by Oklahoma or federal law.
8.2. Confidentiality. Netplex and Seller shall each
keep confidential and not, directly or indirectly,
reveal, report, publish, disclose or transfer any
information obtained by it with respect to the others
in connection with this Agreement and the
negotiations preceding this Agreement (the
"Confidential Information"). Each will use such
Confidential Information solely in connection with
the transactions contemplated by this Agreement, and
if the transactions contemplated hereby are not
consummated for any reason, each shall return to the
others, without retaining any copies thereof, any schedules,
documents or other written information obtained from
the other in connection with this Agreement and the
transactions contemplated hereby and shall cause all
of its officers, employees, agents, accountants,
attorneys and other representatives to whom it may
have disclosed such Confidential Information to do
the same. Notwithstanding the foregoing limitation,
neither party shall be required to keep confidential
or return any Confidential Information that (a) is
known or available through other lawful sources, not
bound by a confidentiality agreement with the
disclosing party, (b) is or becomes publicly known or
generally known in the industry through no fault of
the receiving party or its agents, (c) is required to
be disclosed pursuant to Law (provided the other
parties are given reasonable prior notice), and (d)
is developed by the receiving party independently of
the disclosure by the disclosing party. This Section
8.2 shall survive the termination of this Agreement.
8.3. No Inconsistent Action. Each of
Netplex and Seller shall not take any action which is
materially inconsistent with its obligations under
this Agreement or that would hinder or delay the
consummation of the transactions contemplated by this
Agreement.
8.4. Non-competition by Seller.
(a) For a period of four (4) years after the Closing Date,
Seller and any of its subsidiaries, Affiliates,
successors or assigns (except as hereinafter stated)
shall not, directly or indirectly, alone, or as a
partner, partial owner, consultant, or agent (of any
other corporation, partnership or other business
organization), engage in the delivery of technology
consulting services and solutions to the retail and
distribution industries other than as is reasonably
necessary for the sale, licensing, installation,
integration, use, implementation and support of
viaLink products and services. Seller and Netplex
agree that the viaLink business is defined as
substantially building, marketing and implementing
proprietary software products, information content
and related services to facilitate electronic
commerce. If Seller sells, assigns, or otherwise
disposes of its viaLink business to a buyer who is
not under the control of Seller, and such Buyer is
already in competition with Netplex or any of its
Affiliates, then this Section 8.4(a) shall not apply.
(b) For a period of four (4) years after the Closing Date,
Seller and any of its subsidiaries, Affiliates,
successors or assigns shall not, directly or
indirectly, alone, or as a partner, partial owner,
consultant, or agent of any other corporation,
partnership or other business organization, knowingly
solicit the employment of, or knowingly hire, any
employee of Netplex, or any Netplex subsidiary, or
intentionally cause any such employee to terminate
the employee's relationship with Netplex or any
Netplex subsidiary, without the prior written
approval of Netplex.
(c) For a period of four (4) years after the Closing Date,
Seller and any of its subsidiaries, Affiliates,
successors or assigns (except as hereinafter stated)
shall not, directly or indirectly, alone, or as a
partner, partial owner, consultant or agent (of any
other corporation, partnership or other business
organization), knowingly solicit any of the accounts
of Netplex relating to the retail and distribution
industries unless such solicitation is undertaken on
behalf of a business venture which does not engage in
the delivery of information technology services and
solutions to the retail and distribution industries
other than as is reasonably necessary for the sale,
licensing,
installation, integration, use, implementation and
support of viaLink products and services. Seller and
Netplex agree that the viaLink business is defined as
substantially building, marketing and implementing
proprietary software products, information content
and related services to facilitate electronic
commerce. If Seller sells, assigns, or otherwise
disposes of its viaLink business to a buyer who is
not under the control of Seller, and such Buyer is
already in competition with Netplex or any of its
Affiliates, then this Section 8.4(c) shall not apply.
(d) The parties agree that any breach of this Section 8.4 of
this Agreement may cause irreparable injury to
Netplex and that money damages may not provide an
adequate remedy. Accordingly, Netplex shall, in
addition to other remedies provided by law, be
entitled to such equitable and injunctive relief as
may be necessary to enforce the provisions of this
Section 8.4 against Seller or any of its subsidiaries
or Affiliates, or any person or entity participating
in such breach or threatened breach.
Nothing contained herein shall be construed as
prohibiting Netplex from pursuing any other and
additional remedies available to it, at law or in
equity, for such breach or threatened breach
including any recovery of damages from Seller or any
other person or entity participating in such breach
or threatened breach.
8.5. Piggyback Registration. Seller understands
that Netplex is under no obligation to register any of the
Netplex Preferred Stock sold hereunder. However,
Netplex, at its sole cost and expense, agrees to
either: (i) include in its next registration
statement, or (ii) register no later than 12 months
after Closing, whichever first occurs, sufficient
Netplex Common Stock to permit the conversion of the
Netplex Preferred Stock and to maintain effectiveness
of such registration statement until such time as the
Netplex Common Stock underlying the Netplex Preferred
Stock may be sold pursuant to Rule 144(k) of the SEC
upon conversion of the Netplex Preferred Stock to
Netplex Common Stock.
8.6 Compensation of Broker - Netplex. If
Netplex has or is alleged to have any liability to
any Person who has or claims to have acted on
Netplex's behalf as a finder, broker, intermediary or
otherwise in connection with this Agreement or the
transactions contemplated hereby, then Netplex shall
be totally responsible for payment of any amounts due
to the Person and shall fully indemnify and hold
Seller harmless from any claim, expense (including
attorney's fees) and Liabilities to such Person
arising out of or related to such Person's claims.
8.7. Compensation of Broker - Seller.
If Seller has or is alleged to have any liability to
any Person who has or claims to have acted on
Seller's behalf as a finder, broker, intermediary or
otherwise in connection with this Agreement or the
transactions contemplated hereby, then Seller shall
be totally responsible for payment of any amounts due
to the Person and shall fully indemnify and hold
Netplex harmless from any claim, expense (including
attorney's fees) and Liabilities to such Person
arising out of or related to such Person's claims.
8.8. Schedules. The parties shall have
completed and/or updated the schedules attached to
this Agreement so that such schedules are complete
and accurate as of the Closing Date.
8.9. Assignment of Assets and Contracts. The parties
shall assist each other in good faith in securing the
consent of any third parties to the transfer and/or
assignment of any Assets and Contracts.
8.10. Earned Compensation. All compensation which
represents payment of any amounts earned by Seller
for any previously completed work for any customer or
any Contract obligations for which payment was earned
at any time prior to Closing shall be Seller's. If
such compensation is received by Netplex or the
Business after the Closing, it shall promptly be
accounted for and paid or delivered to Seller and
shall not be included in any calculation of earnings
or expenses for the business for any period
subsequent to the Closing. Any compensation
collected by Seller which represents payment for Work
in Progress earned after Closing through continuation
or completion of such work by the Business after the
Closing shall be paid to Netplex. Compensation due
to either Party under this section, or any other
compensation due to either Party due to audit
adjustments, credits for prepaid assets, credits for
prepaid expenses, vacation liabilities or other
amounts agreed to by the parties, to the extent such
amounts to be received are known at or before the
Closing, are set forth on Schedule 8.10.
8.11. Receipt of Payments/Property. If one party for
any reason receives any payment or property which
belongs to the other party, the party receiving the
funds or property shall immediately notify the other,
and shall immediately forward such funds or property
to the other party.
8.12. Sales and Transfer Taxes. Seller shall any
sales and transfer taxes relating to the sale and
transfer of the Assets, and shall hold Netplex
harmless therefrom.
8.13. Filings. If required by Law, Seller shall
comply with any Bulk Sales Act or similar
requirements necessary to consummate the transactions
contemplated herein.
8.14. Material Misstatements Or Omissions. No
representations or warranties by Netplex in this
Agreement, nor any document, exhibit, statement,
certificate or Schedule heretofore or hereinafter
furnished to Seller pursuant hereto, or in connection
with the transactions contemplated hereby, including,
without limitation, the Agreement Documents, contain
or will contain any untrue statement of a material
fact, or omit or will omit to state any material fact
necessary to make the statements or facts contained
therein not misleading.
8.15. Compliance With Constituent Agreements.
Netplex shall comply with all terms and provisions
and shall meet all of Netplex's obligations contained
in the Earn-Out Agreement, the Certification of
Designation, and each and all of the Agreement
Documents, the breach or default of any of which
shall constitute a material breach of this Agreement.
8.16. Adverse Developments. Netplex shall promptly
notify Seller of any materially adverse developments
that occur subsequent to Closing with respect to the
Assets or the operation of the Business until all
compensation due to Seller under the Agreement
Documents has been paid. Seller shall keep Netplex
informed of all material operational matters and
business developments with respect to the Business
and its markets, including any competitive changes
during such time.
8.17. Access. Netplex will provide Seller, its
counsel, accountants, financing sources and other
representatives ("Seller's Representatives") with
access to the Business Records and Assets during
normal business hours, upon reasonable notice and at
a mutually agreeable time; provided that such access
does not materially disrupt the operations of the
Business, and Netplex will provide Seller's
Representatives with such information concerning the
Business Records, Assets and Business
as they reasonably may request for the purposes of
(i) allowing Seller to reasonably audit the Business
while any compensation due under the Agreement
Documents remains due; and (ii) to defend, counter,
or respond to any claim, complaint, or litigation
matter which may arise involving Seller and any
Person.
8.18. In addition to Netplex's other
confidentiality obligations as set forth in this
Agreement or any of the Agreement Documents, Netplex
adopts, assumes, and shall remain bound by any and
all agreements of Seller or provisions contained in
the Contracts or elsewhere disclosed in the Agreement
Documents that provide for any continuing obligation
of Seller to maintain or protect the confidentiality
of any information of any customer, client, or other
Person with whom Seller has had any commercial
dealings. This Section 8.16 shall survive
termination of this Agreement.
8.19. Netplex shall not impair the
rights or the value of the Netplex Preferred Stock to
be issued to Seller by the Agreement or the Agreement
Documents.
ARTICLE 9
CONDITIONS PRECEDENT TO CLOSING
9.1. Conditions Precedent to Each Party's
Obligation to Effect the Closing. The respective
obligations of each party to consummate the Agreement
are subject to the satisfaction at or prior to the
Closing of the following conditions precedent:
(a) This Agreement, the Agreement Documents, and the
transactions contemplated hereby shall have been
authorized and approved by the each Party's Board of
Directors and shareholders in accordance with all
applicable Laws and regulations.
(b) No order, decree or injunction shall have been enacted,
entered, promulgated or enforced by any court of
competent jurisdiction or any governmental authority
which prohibits the Closing; provided, however, that
the parties hereto shall use their best efforts to
have any such order, decree or injunction vacated or
reversed.
(c) No action, claim, suit or proceeding seeking to enjoin,
restrain, or prohibit the consummation of this
Agreement shall be pending before any court or any
other governmental authority; provided, however, that
this condition may not be invoked by a party if any
such action, suit, or proceeding was solicited or
encouraged by, or instituted as a result of any act
or omission of such party.
(d) Netplex and each of Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, and
Xxxxx Xxxxx shall have executed employment agreements
in substantially the form attached as Exhibit C
hereto (the "Employment Agreements").
(e) The parties shall have obtained all required regulatory
approvals in connection with this Agreement and the
transactions contemplated herein.
(f) The parties shall have obtained consent from Seller's lessor
and Netplex shall have entered into a sublease with
Seller, on terms mutually satisfactory to both
Parties, for a portion of the real property currently
used in the Business.
(g) Subject to the terms of this Agreement, All Contracts and
Works in Progess shall have been assigned to Netplex or the same
shall have been modified, amended or novated so that
Netplex has been substituted for Seller.
(h) All Agreement Documents shall have been completed and/or
executed by the Parties.
(i) The parties shall have entered into a Remarketing Agreement
for Seller's ChainLink software product, on terms
mutually satisfactory to both Parties.
(j) The parties shall have entered into an agreement for
office support and other administrative services to
be provided by Seller to Netplex, on terms mutually
satisfactory to both Parties.
(k) The parties shall have entered into a computer equipment
lease agreement, on terms mutually satisfactory to both Parties.
(l) The closing or closings of a financing transaction with
First Union Bank pursuant to which First Union Bank
loans to Netplex up to 80% of Netplex's accounts
receivable and the sale of equity securities to
Zanett Securities for $1,500,000 and the receipt of
said proceeds of the sale transaction, or any similar
financing arrangement.
(m) The Parties mutually agree as to which Liens, Liabilities
and Contracts regarding the Assets, if any, will be
assumed by Netplex.
(n) The parties acknowledge that at the time of signing this
Agreement, the Schedules and Exhibits have not been
completed and annexed to the Agreement. In the event
that any qualification of a representation which is
reflected on a Schedule is unacceptable to either
party, that Party shall have the right to terminate
this Agreement.
9.2. Conditions Precedent to Obligations of Netplex.
The obligations of Netplex to consummate the Agreement are
subject to the satisfaction or waiver at or prior to the
Closing of the following conditions precedent;
(a) The representations and warranties of Seller contained in
Article 4 that are qualified as to materiality shall
be true and correct and the representations and
warranties of Seller contained in Article 4 that are
not qualified as to materiality shall be true and
correct in all material respects in each case when
made, and at and as of the Closing, with the same
force and effect as if those representations and
warranties had been made at and as of such time (with
such exceptions if any, necessary to give effect to
events or transactions expressly permitted herein).
(b) Seller shall, in all material respects, have
performed all obligations and complied with all
covenants contemplated herein that are required by
this Agreement to be performed or complied with by
Seller on or before the Closing.
(c) Netplex shall have received a certificate of the President
or Vice President of Seller, in form satisfactory to
counsel for Netplex, certifying fulfillment of the
matters referred to in paragraphs (a) and (b),
respectively, and (d), (e), (f), (g) and (i) of this
Section 9.2.
(d) Seller shall have obtained all necessary consents of
third parties to the transactions contemplated by this Agreement,
including without limitation, any governmental
consents or approvals and any consents required to
prevent a default under any Contract as a result of
the transactions contemplated in this Agreement.
(e) Netplex shall have completed and been satisfied with the
results of its due diligence review of Seller as
being consistent with the representations and
warranties contained herein.
(f) All necessary agreements and approvals by the holders of the
shares of Seller Capital Stock shall have been
obtained in order to consummate this Agreement.
(g) Seller shall not have suffered any material adverse change
with respect to its financial condition or its
properties since December 31, 1997 (regardless of
whether such material adverse change shall have been
reflected on the updated Disclosure Schedules to be
delivered to Netplex by Seller at the Closing); and
(h) Netplex shall have received good standing
certificates with respect to Seller in Oklahoma, and
in each other jurisdiction where Seller is qualified
as a foreign corporation.
(i) Seller shall have changed its corporate name in Oklahoma and
in each other jurisdiction where Seller is qualified
as a foreign corporation.
(j) Seller shall have delivered to Netplex copies of all
Business Records and all current customer lists and
accounts of the Business.
(k) Netplex shall have (i) extended offers of employment
to each Person listed on Schedule 4.22 at the
compensation rates set forth in said Schedule and
with an effective date of hire equal to the Closing
Date; (ii) offered to such Person the usual and
customary benefits provided by Netplex to its
employees; (iii) for purposes of determining vacation
and sick leave benefits, credited such employee's
prior service as an employee of Seller toward such
employee's entitlement to any such benefits as an
employee of Netplex; (iv) provided vested vacation
and/or sick leave benefits equal to any such benefit
accrued and unused while such employee was employed
with Seller prior to the Effective Date hereof; and
(v) complied with all applicable Laws regarding the
hiring of said Employees, including, without
limitation, any Laws relating to employee benefits.
(l) All of Seller's employees involved in the operation of the
Business shall have been offered employment as in (j)
above and shall have accepted such offer of
employment with Netplex.
(m) Netplex shall have received an opinion of Seller's
outside counsel, in form satisfactory to counsel for
Netplex, to the effect all necessary approvals
of shareholders and/or the Board of Directors of
Seller have been obtained for the transaction.
9.3. Conditions Precedent to the Obligations of Seller.
The obligation of Seller to consummate the Agreement is subject to the
satisfaction or waiver at or prior to the Closing of the following
conditions precedent:
(a) The representations and warranties of Netplex contained in
Article 5 shall have been true and correct in all material
respects when made, and as of the Closing with the same force and
effect as if those representations and warranties had been made at
and as of such time (with such exceptions, if any, necessary to
give effect to events or transactions expressly permitted herein).
(b) Netplex shall, in all material respects, have performed all
obligations and complied with all covenants contemplated herein
that are required by this Agreement to be performed or complied
with by Netplex on or before the Closing;
(c) Seller shall have received certificates of the President or
Vice President of Netplex, in form satisfactory to counsel for
Seller, certifying fulfillment of the matters referred to in
paragraphs (a) and (b), respectively, and (d), (e), and (f) of
this Section 9.3.
(d) Netplex shall have obtained all necessary consents of third
parties to the transactions contemplated by this Agreement,
including without limitation, any governmental consents or
approvals and any consents required to prevent a default or breach
under any contract as a result of the transactions contemplated in
this Agreement.
(e) All necessary agreements and approvals by the holders of the
shares of Netplex stock shall have been obtained in order to
consummate this Agreement.
(f) Netplex shall not have suffered any material adverse change
with respect to its financial condition or its properties since
December 31, 1997; and
(g) Seller shall have received good standing certificates with respect
to Netplex in New York, and in each other jurisdiction where
Netplex is qualified as a foreign corporation.
(h) Seller shall have received an opinion of Netplex's outside
counsel, in form satisfactory to counsel for Seller, to the effect
that the Certificate of Designation of the Preferred Stock of
Netplex fully complies with all applicable Laws and that all
necessary approvals of shareholders and/or the Board of Directors
of Netplex have been obtained both for the Certificate of
Designation and for the transactions contemplated hereby.
(i) Seller shall have received a fairness opinion concerning the
contemplated transactions from Xxxxxxx & Co., Inc.
(j) To the extent Netplex expressly agrees to do so in
accordance with the terms and conditions as set forth in the
Agreement or a Schedule to this Agreement, Netplex expressly shall
have assumed, adopted and accepted as its own obligations all
Liabilities to Seller's customers contained in all Contracts,
Works in Progress, and in any of the Agreement Documents, whether
express or implied by law, relating to the Contracts or the
Assets, to the extent identified on a Schedule to this Agreement.
(k) The Certificate of Designation, its approval, and all
necessary filings related thereto shall be satisfactory to Seller;
or Netplex, in a form satisfactory to Seller, has agreed to issue
to Seller an equivalent number of shares of Netplex Common Stock
upon similar terms and conditions a those relating to the Netplex
Preferred Stock.
ARTICLE 10
TERMINATION; AMENDMENT; WAIVER
10.1. Termination. This Agreement may be terminated
without liability of any Party, each to the other, and the Closing
contemplated hereby may be abandoned at any time notwithstanding
approval thereof by the shareholders of Seller, but prior to the
Closing:
(a) by mutual written consent of Seller and Netplex;
(b) by Netplex, or Seller, if the Closing shall not have
occurred on or before September 30, 1998 (provided that the right
to terminate this Agreement under this Section 9.1 shall not be
available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of or has resulted in the
failure of the Closing to occur on or before such date); or
(c) by either Party, if prior to the Closing, the Board of
Directors of either Party shall have withdrawn, or modified in a
manner adverse to the other Party, its approval or recommendation
of the Agreement, or shall have recommended another offer or
shall have resolved to do any of the foregoing;
(d) by Netplex or Seller, if any court of competent jurisdiction
in the United States or other United States governmental body
shall have issued an order, decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the
Agreement and such order, decree, ruling or other action shall
have become final and nonappealable;
(e) by Netplex or Seller if there shall be pending any suit,
action or proceeding, which has a reasonable possibility of
success, or there shall be pending by any other Person any suit,
action or proceeding, which has a substantial likelihood of
success, (i) seeking to restrain or prohibit the consummation of
the Agreement or the performance of any of the other transactions
contemplated by this Agreement, or (ii) which otherwise is
reasonably likely to have a Material Adverse Effect on the
business, properties, assets, condition (financial or otherwise),
results of operations or prospects of Seller.
(f) by Netplex or Seller, if there shall be pending any suit,
action or proceeding which has a reasonable possibility of
success, or there shall be pending by any other Person any suit,
action or proceeding, which has a substantial likelihood of
success, (i) seeking to prohibit or limit the ownership or
operation by Seller, Netplex of a material portion of the Business
or Assets, (ii) seeking to impose material limitations on the
ability of Netplex to exercise full rights of ownership of the
Assets, or (iii) seeking to prohibit Netplex from effectively
controlling in any material respect the Business.
10.2. Effect of Termination. If this Agreement is
so terminated and the Agreement is not consummated, this Agreement
shall forthwith become void and have no effect,
without any liability on the part of any party or its directors,
officers or shareholders, other than the provisions of this
Section 10.2 and the provisions of this Agreement which are
indicated herein as surviving such termination. Nothing
contained in this Section 10.2 shall relieve any party from
liability for any breach of this Agreement.
10.3. Amendment. This Agreement may not be amended
except by an instrument in writing signed by both Parties.
10.4. Extension; Waiver. At any time prior to the
Closing, the parties may (a) extend the time for the performance
of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document, certificate or
writing delivered pursuant hereto or (c) waive compliance with any
of the agreements or conditions contained herein. Any agreement
on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE 11
INDEMNIFICATION
11.1. From and after the Closing, Seller shall
indemnify, defend, protect and hold harmless Netplex, from and
against all losses, liabilities, obligations, damages, deprivation
of benefits, costs and expenses (including reasonable attorneys'
fees) (collectively hereinafter "Losses"), which result from or
arise in connection with: (a) any breach of any warranty made by
Seller in the Agreement or any representation in any of the
Agreement Documents, not being true when made or when required by
this Agreement to be true in all material respects, or in any
certificate or other instrument delivered by or on behalf of
Seller pursuant thereto not being true when made or when required
by this Agreement to be true in all material respects; or (b) any
breach of any covenant set forth in this Agreement or any
Agreement Documents to be performed (prior to or after the
Closing) by Seller; or (c) the Liabilities of Seller which are not
assumed or acquired by Netplex pursuant to this Agreement or the
Agreement Documents.
The parties anticipate that a claim for indemnification
may be made under any or all of subsections (a) through (c) above;
in any such case, each such clause and sub-clause shall be
independently effective to provide Netplex with a right to
indemnification.
11.2. From and after the Closing, Netplex, shall
indemnify, defend, protect and hold harmless Seller, from and
against all Losses as defined in Section 11.1, which result from,
or arise in connection with: (a) any breach of any warranty made
by Netplex in the Agreement or any representation in any of the
Agreement Documents, not being true when made or when required by
this Agreement to be true in all material respects, or in any
certificate or other instrument delivered by or on behalf of
Netplex pursuant thereto not being true when made or when required
by this Agreement to be true in all material respects; (b) any
breach of any covenant set forth in this Agreement or the
Agreement Documents to be performed (prior to or after the
Closing) by Netplex; or (c) any of the Liabilities assumed by
Netplex pursuant to this Agreement or the Agreement Documents .
The parties anticipate that a claim for indemnification may
be made under any or all of subsections (a) through (c) above; in
any such case, each such clause and sub-clause shall be
independently effective to provide Seller with a right to
indemnification.
11.3. Whenever any claim shall arise for
indemnification hereunder, the party entitled to such
indemnification (the "Indemnitee") shall notify the party from
whom indemnification is sought (the "Indemnitor") of such claim in
writing promptly and in no case later than ninety (90) days after
such Indemnitee has received actual written notice of the facts
constituting the basis for such claim; each Indemnitee shall also
so notify the Indemnitor promptly and in no case later than
fifteen (15) days after the commencement of any legal proceedings
with respect to any such claim. The failure to notify the
Indemnitor will not relieve the Indemnitor from any
liability which it may have to any Indemnitee to the extent the
Indemnitor is not prejudiced as a proximate result of such
failure. Such notice shall specify, in reasonable detail, the
facts known to such Indemnitee giving rise to the indemnification
sought . Such notice shall also include photocopies of all
relevant communications received from third party claimants and
their attorneys.
11.4. If the facts giving rise to any
indemnification provided for in this Agreement shall involve any
actual or threatened claim or demand by any person other than a
party to the Agreement or its successors or permitted assigns (a
"Third Party") against any Indemnitee, the Indemnitor shall be
entitled, upon its election, by written notice given to the
Indemnitee as soon as reasonably practicable and in any case
within thirty (30) days after the date on which notice of the
claim or demand is given to the Indemnitor (without prejudice to
the right of such Indemnitee to participate at its expense through
counsel of its own choosing), to assume the defense of such claim
and any litigation resulting therefrom at its expense and through
counsel of its own choosing; provided, however, that if by reason
of the claim of such Third Party a Lien, attachment, garnishment
or execution is placed upon any of the property or assets of such
Indemnitee, the Indemnitor, if it desires to exercise its right to
defend such claim or litigation, shall furnish an indemnity bond
or other form of security reasonably satisfactory to the
Indemnitee to obtain the prompt release of such Lien, attachment,
garnishment or execution. If the Indemnitor assumes the defense
of any such claim or litigation, it shall take all steps
reasonably necessary in the defense or settlement of such claim or
litigation. In any such suit, action or proceeding, the
Indemnitee shall have the right to control its own defense through
its own counsel, but the fees and expenses of such counsel shall
be at its own expense unless (i) the parties shall have mutually
agreed to the retention of such counsel or (ii) the named parties
to such suit, action or proceeding (including any impleaded
parties) shall include an Indemnitee and an Indemnitor and the
representation of both parties by the same counsel would present a
conflict of interest as reasonably determined by counsel to the
Indemnitee, in which event the Indemnitor shall pay such counsel's
fees and expenses. If the Indemnitor has timely assumed defense,
the Indemnitor shall not be liable for any settlement effected
without its consent, which consent shall not be unreasonably
withheld or delayed. The Indemnitor may settle any claim without
the consent of any Indemnitee, but only if the sole relief awarded
is money damages that are paid in full by the Indemnitor and
either (i) the consent to the entry of any judgment or settlement
includes as an unconditional term thereof the giving to the
Indemnitee of a release from all liability in respect to such
claim or litigation or (ii) the litigation against the Indemnitee
is dismissed with prejudice; otherwise, the Indemnitor may not
settle any claim against an Indemnitee without the consent of the
Indemnitee, which consent shall not unreasonably withheld or
delayed. The parties shall cooperate in the defense of any such
claim or litigation. If the Indemnitor does not timely assume the
defense of any such claim or litigation, the Indemnitee may defend
against such claim or litigation in such manner as it may deem
appropriate and may settle such claim or litigation, after giving
written notice thereof to the Indemnitor, on such terms as such
Indemnitee may deem appropriate; and the Indemnitor will promptly
reimburse such Indemnitee for the Losses incurred as a result of
such settlement. If no settlement of such claim or litigation is
made, the Indemnitor shall promptly reimburse such Indemnitee for
the amount of any judgment rendered with respect to such claim or
such litigation and for all expenses, legal and other, incurred
by such Indemnitee in connection with any such judgment for which
the Indemnitee has been so reimbursed pursuant hereto; provided,
however, that if such judgment is appealable and such Indemnitee
notifies the Indemnitor of its intention not to appeal, the
Indemnitor may prosecute such appeal, at its sole cost and expense
and subject to the obligations set forth herein.
11.5. Each amount determined to be payable by an
Indemnitor to an Indemnitee under the terms hereof ("Indemnity")
shall be paid in cash to the Indemnitee within thirty (30) days
after the date on which the Indemnitor is notified in writing of
the amount of such Indemnity, as finally determined in accordance
with the terms hereof. Each such notice shall contain an
itemization of the damages, expenses, costs and liabilities
comprising the Indemnity, certified to be true and correct by the
Indemnitee or its legal representative.
11.6. Indemnification Threshold. Neither party
shall have any indemnification payment obligations under this
Agreement unless and until all such obligations exceed One
Thousand Dollars ($1,000) in aggregate, and then only to the
extent that such obligations exceed One Thousand Dollars ($1,000)
in the aggregate.
ARTICLE 12
MISCELLANEOUS
12.1. Further Assurances. From time to time at or
after the Closing, at the request of the other, Seller and
Netplex, as necessary, will execute and deliver such other
instruments and take such other action as is reasonably necessary
to consummate, complete and carry out the purposes of the
transactions contemplated hereby.
12.2. Benefit and Assignability. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted
assigns, and no other person or entity shall have any right
(whether third party beneficiary or otherwise) hereunder. This
Agreement may not be assigned by any party without the prior
written consent of the other party.
12.3. Notices. All notices demands and other
communications pertaining to this Agreement ("Notices") shall be
in writing addressed as follows:
If to Seller:
Xxxxxx X. Xxxxx, Vice President
viaLink
00000 Xxxxxx Xxxx
Xxxxxx, XX 00000-0000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx X. Xxxxxx & Associates, P.C.
000 Xxxxxx X. Xxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
If to Netplex:
The Netplex Group, Inc.
Attention: Xxxx X. Xxxxx, President
0000 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
XxXxxx, Xxxxxxxx 00000
with a copy to:
Attn: Xxxxxx X. Xxxxx, Xx., Esq.
Xxxxxx Price Xxxxxxx & Day
22nd Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Notices shall be deemed given five (5) business days after being
mailed by certified or registered United States mail, postage
prepaid, return receipt requested, or on the first business day
after being sent, prepaid, by nationally recognized overnight
courier that issues a receipt or other confirmation of delivery to
the appropriate recipient of such Notice. Any party may change
the address to which Notices under this Agreement are to be sent
to it by giving written notice of a change of address in the
manner provided in this Agreement for giving Notice.
12.4. Waiver. Unless otherwise specifically agreed
in writing to the contrary: (a) the failure of any party at any
time to require performance by the other of any provision of this
Agreement shall not affect such party's right thereafter to
enforce the same; (b) no waiver by any party of any default by any
other shall be valid unless in writing and acknowledged by an
authorized representative of the nondefaulting party, and no such
waiver shall be taken or held to be a waiver by such party of any
other preceding or subsequent default; and (c) no extension of
time granted by any party for the performance of any obligation or
act by any other party shall be deemed to be an extension of time
for the performance of any other obligation or act hereunder.
12.5. Entire Agreement. This Agreement and the
Agreement Documents as defined herein constitutes the entire
agreement between the parties with respect to the subject matter
hereof and referenced herein, and supersedes and terminates any
prior agreements or representations between the parties (written
or oral) with respect to the subject matter hereof. This
Agreement may not be altered or amended except by an instrument in
writing signed by the party against whom enforcement of any such
change is sought.
12.6. Counterparts; Facsimile. This Agreement may
be signed in any number of counterparts with the same effect as if
the signature on each such counterpart were on the same
instrument. This Agreement and any counterparts may be executed
by facsimile with the same effect as if the signature were an
original.
12.7. Construction. The headings of the Articles
and Sections of this Agreement are for convenience only and in no
way modify, interpret or construe the meaning of specific
provisions of the Agreement.
12.8. Agreement Documents. The Agreement Documents
are a material part of this Agreement.
12.9. Severability. In case any one or more of the
provisions contained in this Agreement should be held invalid,
illegal or unenforceable in any respect, the validity, legality,
and enforceability of the remaining provisions will not in any way
be affected or impaired. Any illegal or unenforceable term
shall be deemed to be void and of no force and effect only to the
minimum extent necessary to bring such term within the provisions
of applicable Laws and such term, as so modified, and the balance
of this Agreement shall then be fully enforceable.
12.10. Choice of Law. The obligations,
representations, covenants and warranties entered into by the
Parties under this Agreement shall be construed and governed by
the Laws of the State of Oklahoma, without regard for the choice
of law rules of that State.
12.11. Survival and Limitation of Actions. The
representations, warranties and covenants of Seller and Netplex
contained in the Agreement Documents shall survive the consumation
of the transactions contemplated hereby. Any claims or causes of
action for breach or default, or for indemnification, under this
Agreement or any of the Agreement Documents, must be commenced by
either party hereto no later two years after such Party discovers
or reasonably should have discovered the existence of any such
claim or cause of action. For any action between the parties not
otherwise subsumed in the foregoing, such action may be commenced
no later than within the time permitted by the statute of
limitations provided by applicable Law.
12.12. Public Statements. Prior to the Closing,
neither Seller nor Netplex shall, without the prior written
approval of the other party, make any press release or other
public announcement concerning the transactions contemplated by
this Agreement, except that (a) Seller and Netplex shall issue a
mutually agreeable press release promptly after the signing of
this Agreement; and (b) Seller and Netplex shall be permitted to
make public announcements to the extent required by Law, in which
case the other party shall be so advised as far in advance as
possible.
12.13. Attorneys' Fees. If either party initiates
any litigation against the other party involving this Agreement,
the prevailing party in such action shall be entitled to receive
reimbursement from the other party for all reasonable attorneys'
fees and other costs and expenses incurred by the prevailing party
in respect of that litigation, including any appeal, and such
reimbursement may be included in the judgment or final order
issued in that proceeding.
12.14. Expenses. Seller shall be responsible for
the legal, accounting and other expenses incurred by Seller in
connection with this Agreement and the transactions contemplated
hereby. Netplex shall be responsible for the legal, accounting
and other expenses incurred by Netplex in connection with this
Agreement and the transactions contemplated hereby.
12.15. Counsel. 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 that would otherwise be applicable
in connection with the interpretation of this Agreement,
including, but not limited to, 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.
12.16. De Minimus violations. Any act,
omission, or misrepresentation which does not materially result in
any measurable damage or liability to either party shall not be
deemed or considered a breach or default of this Agreement by
either party.
12.17 Remedies Nonexclusive. The rights and
remedies provided to the Parties in this Agreement are in addition
to and not in lieu of any other right or remedy which may exist at
law or in equity according to applicable Laws.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
THE NETPLEX GROUP, INC.
By: /s/Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: President & CEO
APPLIED INTELLIGENCE GROUP, INC.
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
