PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made as of the 31st day
of August, 2000, by and between TECHSYS, INC., a New Jersey corporation with its
principal executive offices located at 00 Xxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 (the "Purchaser") and TECHNOLOGY KEIRETSU, LLC a New Jersey limited
liability company, with its principal executive offices located at 00 Xxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx 00000 (the "Seller"). Capitalized terms
used in this Agreement but not defined upon their first usage are defined in
Section 9.1, unless otherwise noted.
The parties hereto, intending to be legally bound, agree as follows:
ARTICLE 1
PURCHASE AND SALE OF MEMBERSHIP UNITS
1.1 Purchase. Subject to the terms and conditions hereof, the Seller
shall sell to the Purchaser, and the Purchaser shall purchase from the Seller,
(the "Sale") 214,286 membership units of the Seller, which membership units
currently constitute approximately a 3% ownership interest in the Seller (the
"Total Units"). The closing of 142,857 units of the Total Units (the "Initial
Units") shall occur on the First Closing Date (as defined herein). The closing
of 71,429 units of the Total Units (the "Subsequent Units") shall occur on the
Second Closing Date (as defined herein).
1.2 Form of Payment. The purchase price for the Total Units shall be
$500,000 and 66,666 shares (the "Shares") of the Purchaser's common stock, no
par value per share (the "Common Stock"). On the First Closing Date, (a) the
Purchaser shall deliver to the Seller $250,000 in cash or other immediately
available U.S. funds and certificates representing the Shares, and (b) the
Seller shall deliver to the Purchaser certificates representing the Initial
Units. On the Second Closing Date, conditioned on the completion of the
Financing, (i) the Purchaser shall deliver to the Seller $250,000 in cash or
other immediately available U.S. funds and (ii) the Seller shall deliver to the
Purchaser certificates representing the Subsequent Units.
1.3 Closing Dates.
(a) First Closing Date. The first closing of the Sale will
take place no later than September 11, 2000, or such other time and date as
shall be mutually agreed upon by the Purchaser and the Seller. Such time and
date is herein called the "First Closing Date."
(b) Second Closing Date. The second closing of the Sale will
take place no later than the fifth business day following the date the Seller
completes the Financing, or such other time and date as shall be mutually agreed
upon by the Purchaser and the Seller, unless the Seller cancels the Second
Closing pursuant to Article 7. Such time and date is herein called the "Second
Closing Date."
(c) Closing. The First Closing and the Second Closing are
herein each called, individually, a "Closing" and, collectively, the "Closings."
Each Closing shall occur at the offices of Pitney, Xxxxxx, Xxxx & Xxxxx LLP, 200
Campus Drive, Florham Park, New Jersey, or at such other location as may be
agreed upon by the parties.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants that:
2.1 Organization and Qualification. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. The Purchaser has all requisite corporate power and authority to
carry on its business as described in the Purchaser Reports (as defined herein).
The Purchaser is duly qualified as a foreign corporation to do business and is
in good standing in every jurisdiction where the failure to so qualify or be in
good standing would materially adversely affect its business.
2.2 Capitalization. The authorized capital stock of the Purchaser
consists of 20,000,000 shares of Common Stock and 5,000,000 shares of preferred
stock. As of August 29, 2000, there were:
(a) 3,836,878 shares of Common Stock outstanding,
(b) 9,966,100 shares of Common Stock reserved for
issuance pursuant to outstanding securities that are
convertible into or exchangeable for shares of Common
Stock, and
(c) 3,500,000 shares reserved for issuance under the 2000
Incentive Compensation Plan.
Except for interests pursuant to which shares have been reserved for issuance as
set forth in the preceding sentence, there are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights or other contracts or commitments that could require the
Purchaser to issue, sell or otherwise cause to become outstanding any of its
capital stock or equity interests or other instruments convertible into such
interests.
2.3 Authorization; Binding Effect; No Breach. The Purchaser's
execution, delivery and performance of each Transaction Document to which it is
a party has been duly authorized by it. Each Transaction Document to which the
Purchaser is a party constitutes a valid and binding obligation of the Purchaser
which is enforceable against the Purchaser in accordance with its terms, except
to the extent that such validity or enforceability may be subject to or affected
by any bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights or remedies of creditors generally, or by other equitable principles of
general application. The execution, delivery and performance by the Purchaser of
the Transaction Documents to which it is a party do not and will not (a)
conflict with or result in a breach of the terms, conditions or provisions of,
(b) constitute a default under, (c) result in a violation of, (d) require any
authorization, consent, approval, exemption or other action by or declaration or
notice to any Government Entity pursuant to, or (e) create any Lien under, the
charter or bylaws of the Purchaser or any agreement, instrument, or other
document, or any Legal Requirement, to which the Purchaser is, or any of its
assets are, subject.
2.4 Validity of the Shares. The Shares are duly authorized, reserved
for issuance and will, when issued in accordance with the terms hereof and
thereof, be validly issued, fully paid and non-assessable, free and clear of all
Liens and any pre-emptive rights of the shareholders of the Purchaser.
2.5 Governmental Filings. Except for the filing of an Additional
Listing Application with The Nasdaq Stock Market, Inc. and a Notice of Sale of
Securities Pursuant to Regulation D on Form D with the SEC, no notices, reports
or other filings are required to be made by the Purchaser with, nor are any
consents, registrations, approvals, permits or authorizations required to be
obtained by the Purchaser from, any Government Entity in connection with the
execution and delivery of this Agreement by the Purchaser and the consummation
of the transactions contemplated by the Transaction Documents. Attached hereto
as Exhibit A-1 is a certificate by the Seller certifying that, within the
meaning of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 0000 (xxx "XXX
Xxx"), the Seller is not a person with total assets or net sales of $100 million
or more, and attached hereto as Exhibit A-2 is a certificate by the Purchaser
certifying that, within the meaning of the HSR Act, the Purchaser is not a
person with total assets of $10 million or more.
2.6 Purchaser Reports; Financial Statements. The Purchaser has filed
with the SEC each report, proxy statement or information statement required to
be filed by it since January 1, 2000 through the date hereof, including (a) the
Purchaser's Annual Report on Form 10-KSB for the year ended December 31, 1999,
as amended, (b) the Purchaser's Quarterly Report on Form 10-Q for the calendar
quarter ended March 31, 2000, and (c) the Purchaser's Quarterly Report on Form
10-Q for the calendar quarter ended June 30, 2000 (collectively, the "Purchaser
Reports"), copies of which have been made available to the Purchaser. As of
their respective dates, the Purchaser Reports did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. As of their respective
dates, the consolidated financial statements included in the Purchaser Reports
complied as to form in all material respects with then applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. Each of the consolidated balance sheets included in or incorporated by
reference into the Purchaser Reports (including the related notes and schedules)
fairly presents in all material respects the consolidated financial position of
the Purchaser and its subsidiaries as of its date and each of the consolidated
statements of income and of changes in cash flows included in or incorporated by
reference into the Purchaser Reports (including any related notes and schedules)
fairly presents in all material respects the results of operations and changes
in cash flows, as the case may be, of the Purchaser for the periods set forth
therein (subject, in the case of unaudited statements, to the absence of notes
and normal year-end audit adjustments), in each case in accordance with GAAP,
except as may be noted therein.
2.7 Nasdaq Listing. The Common Stock is listed on the Nasdaq SmallCap
and the Purchaser has not received any notice from The Nasdaq Stock Market, Inc.
advising the Purchaser of the initiation of any delisting proceedings with
respect to the Common Stock.
2.8 Absence of Certain Changes. Except as disclosed in the Purchaser
Reports filed prior to the date hereof, since January 1, 2000 the Purchaser has
conducted its business only in, and has not engaged in any material transaction
other than in, the ordinary and usual course of its business and there has not
been any material adverse change in the financial condition, business, prospects
or results of operations of the Purchaser and its Subsidiaries, taken as a
whole, since January 1, 2000.
2.9 Absence of Undisclosed Liabilities. The Purchaser and its
Subsidiaries, taken as a whole, do not have any material liability (whether
accrued, absolute, contingent, unliquidated or otherwise, whether or not known,
whether due or to become due, and regardless of when asserted) other than: (a)
the liabilities included on the latest balance sheet contained in the Purchaser
Reports (the "Latest Balance Sheet"), (b) current liabilities which have arisen
in the ordinary course of business and consistent with the Purchaser's past
practice after the date of the Latest Balance Sheet (none of which is a
liability resulting from breach of contract, breach of warranty, tort,
infringement, violation of law, claim or lawsuit), all of which have been
disclosed to the Purchaser, and (c) other liabilities and obligations expressly
disclosed in this Agreement or in any Transaction Document.
2.10 Litigation. There are no civil, criminal or administrative
actions, suits, claims, hearings, investigations, arbitrations, or proceedings
pending or, to the knowledge of the Purchaser, threatened against the Purchaser
preventing, or which, if determined adversely to the Purchaser would prevent the
Purchaser from consummating the transactions contemplated by the Transaction
Documents or would have a material adverse effect on the financial condition,
business, prospects or results of operations of the Purchaser or its
Subsidiaries, taken as a whole.
2.11 Brokerage. There is no claim for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
the Transaction Documents which is binding upon the Purchaser.
2.12 Disclosure. Neither this Article 2 nor any certificate or other
item delivered to the Purchaser by or on behalf of the Purchaser with respect to
the transactions contemplated by the Transaction Documents contains any untrue
statement of a material fact or omits a material fact which is necessary to make
any statement contained herein or therein, in light of the circumstances in
which they were made, not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants that:
3.1 Organization and Qualification. The Seller is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of New Jersey. The Seller has all requisite power and authority to
carry on its business as presently conducted. The Seller is duly qualified to do
business and is in good standing in every other jurisdiction where the failure
to so qualify or be in good standing would materially adversely affect its
business.
3.2 Capitalization. The Seller has authorized 10,000,000 membership
units, of which 7,140,616 are outstanding. There are no outstanding or
authorized purchase rights, subscription rights, conversion rights, exchange
rights or other contracts or commitments that could require the Seller to issue,
sell or otherwise cause to become outstanding any of its membership units or
equity interests or other instruments convertible into such interests.
3.3 Authorization; Binding Effect; No Breach. The Seller's execution,
delivery and performance of each Transaction Document to which it is a party has
been duly authorized by it. Xxxxx Xxxxxxxxx is the chief executive manager of
the Seller (the "Chief Executive Manager") and the Seller hereby represents that
the Chief Executive Manager is duly authorized to execute and deliver, on behalf
of the Seller, each Transaction Document to which the Seller is a party. Each
Transaction Document to which the Seller is a party constitutes a valid and
binding obligation of the Seller which is enforceable against the Seller in
accordance with its terms, except to the extent that such validity or
enforceability may be subject to or affected by any bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights or remedies of
creditors generally, or by other equitable principles of general application.
The execution, delivery and performance by the Seller of the Transaction
Documents to which it is a party do not and will not (a) conflict with or result
in a breach of the terms, conditions or provisions of, (b) constitute a default
under, (c) result in a violation of, or (d) require any authorization, consent,
approval, exemption or other action by or declaration or notice to any
Government Entity pursuant to, the charter or bylaws of the Seller or any
agreement, instrument, or other document, or any Legal Requirement, to which the
Seller or any of its assets is subject.
3.4 Validity of the Membership Units. The Initial Units and the
Subsequent Units are duly authorized, reserved for issuance and will, when
issued in accordance with the terms hereof and thereof, be validly issued in
accordance with the terms of the Seller's Operating Agreement (the "Seller's
Operating Agreement"), free and clear of all Liens. The Initial Units and the
Subsequent Units represent the rights, title and interest in the Seller,
including the right to a percentage share of distributions of net cash flow and
net proceeds from the Seller as well as the right to participate in the
management and affairs of the Seller pursuant to the Seller's Operating
Agreement.
3.5 Investment Purpose. The Seller is capable of evaluating the risk of
its investment in the Shares and is able to bear the economic risk of such
investment, including a complete loss thereof, that it is purchasing the Shares
for its own account and that the Shares are being purchased by the Seller for
investment and not with a view to any resale or distribution thereof. If the
Seller should in the future decide to dispose of the Shares (which it does not
now contemplate), it is understood that the Seller may do so only in compliance
with the Securities Act and any applicable state blue sky or securities laws.
3.6 Information. The Seller (a) has received and carefully reviewed the
Purchaser Reports, and (b) has had the opportunity to ask questions and receive
answers from the Purchaser concerning the Purchaser Reports and the terms and
conditions of the offering of the Shares to obtain any documents relating to the
Purchaser which are publicly available and any additional information or
documents relating to the Purchaser which the Purchaser possesses or can acquire
without unreasonable effort or expense.
3.7 Seller Organizational Documents; Financial Statements. Attached
hereto as Exhibits B and C, respectively, are true and complete copies of the
Seller's Certificate of Formation and the Seller's Operating Agreement, as in
full force and effect as of the date hereof. The Seller has provided to the
Purchaser the combined balance sheets of Alliant Technologies, Inc. and
Affiliates as of December 31, 1999 and 1998 and the related combined statements
of income and equity and cash flows for the years then ended (the "Seller
Financial Statements"). As of their respective dates, the Seller Financial
Statements did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading. The combined balance sheets included into the Seller Financial
Statements (including the related noted and schedules) fairly present in all
material respects the combined financial position of Alliant Technologies, Inc.
and Affiliates as of its date. Each of the combined statements of income and of
changes in cash flow included in the Seller Financial Statements (including any
related notes and schedules) fairly present in all material respects the results
of operations and changes in cash flows, as the case may be, of Alliant
Technologies, Inc. and Affiliates for the periods set forth therein, in each
case in accordance with GAAP, except as may be noted therein.
3.8 Absence of Certain Changes. Except as disclosed in the Seller
Financial Statements, since January 1, 2000 the Seller has conducted its
business only in, and has not engaged in any material transaction other than in,
the ordinary and usual course of its business and there has not been any
material adverse change in the financial condition, business, prospects or
results of operations of the Seller since January 1, 2000.
3.9 Absence of Undisclosed Liabilities. The Seller does not have any
material liability (whether accrued, absolute, contingent, unliquidated or
otherwise, whether or not known, whether due or to become due, and regardless of
when asserted) other than: (a) the liabilities included on the latest balance
sheet contained in the Seller Financial Statements (the "Latest Balance Sheet"),
(b) current liabilities which have arisen in the ordinary course of business and
consistent with the Seller's past practice after the date of the Latest Balance
Sheet (none of which is a liability resulting from breach of contract, breach of
warranty, tort, infringement, violation of law, claim or lawsuit), all of which
have been disclosed to the Seller, and (c) other liabilities and obligations
expressly disclosed in this Agreement or in any Transaction Document.
3.10 Litigation. There are no civil, criminal or administrative
actions, suits, claims, hearings, investigations, arbitrations, or proceedings
pending or, to the knowledge of the Seller, threatened against the Seller
preventing, or which, if determined adversely to the Seller would prevent the
Seller from consummating the transactions contemplated by the Transaction
Documents or would have a material adverse effect on the financial condition,
business, prospects or results of operations of the Seller.
3.11 Brokerage. There is no claim for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
the Transaction Documents which is binding upon the Seller.
3.12 Disclosure. Neither this Article 3 nor any certificate or other
item delivered to the Seller by or on behalf of the Seller with respect to the
transactions contemplated by the Transaction Documents contains any untrue
statement of a material fact or omits a material fact which is necessary to make
any statement contained herein or therein, in light of the circumstances in
which they were made, not misleading.
ARTICLE 4
COVENANTS
4.1 Confidentiality.
(a) Confidential Information exchanged between the parties.
The Purchaser and the Seller have made, or expect to make available to each
other Confidential Information (as defined herein) concerning their respective
businesses, financial condition, operations, assets, properties, liabilities,
and prospects in connection with transactions contemplated by this Agreement or
pursuant hereto. The term "Confidential Information" shall mean all information
concerning the Furnishing Party or any of its Subsidiaries or Affiliates,
whether in verbal, visual, written, electronic or other form which is made
available by the Furnishing Party to the Receiving Party or any its
Representatives (as defined herein) and which the Furnishing Party identifies to
the Receiving Party, whether verbally or in writing, as being confidential. The
term "Confidential Information" shall not apply to (i) any information which (A)
the Receiving Party can establish by convincing evidence was already in its
rightful possession prior to the disclosure thereof to it by the Furnishing
Party; (B) was then generally known to the public other than as a result of a
disclosure by the Receiving Party or its Representative; (C) became known to the
public through no fault of the Receiving Party; or (D) was disclosed to the
Receiving Party by a third-party who, to the Receiving Party's knowledge, was
not bound by an obligation of confidentiality; or (ii) information disclosed
pursuant to a legal, regulatory requirement or in accordance with an order of a
court of competent jurisdiction, provided that in the event of any disclosure
required by this clause (ii), the Receiving Party will give reasonable prior
written notice of such disclosure to the Furnishing Party, and disclosure under
this clause (ii) does not constitute the public knowledge under clause (i). The
term "Representative" shall mean the Receiving Party's agents and
representatives, including, without limitation, officers, directors, employees,
attorneys, accountants and financial advisors. The Receiving Party acknowledges
that it has informed and hereafter shall inform its Representatives of the terms
of this Section 4.1. Any breach of this Section 4.1 by a Representative of the
Receiving Party shall be deemed to be a breach thereof by the Receiving Party.
(b) Use of Confidential Information. Confidential Information
shall be (i) kept confidential, (ii) used solely by the Receiving Party and its
Representatives, (iii) used solely for the purposes specified by the Furnishing
Party at the time the Furnishing Party furnishes the Confidential Information to
the Receiving Party, and (iv) treated as the sole property of the Furnishing
Party.
(c) Equitable Relief. In addition to all other remedies that
may be available to the Furnishing Party in connection with a breach by the
Receiving Party of its or its Representative's obligations under this Section
4.1, the Furnishing Party shall be entitled to specific performance and
injunctive and other equitable relief with respect to this Section 4.1. The
Receiving Party waives, and agrees to use all reasonable efforts to cause its
Representatives to waive, any requirement to secure or post a bond in connection
with any such relief.
4.6 Securities Laws. The Purchaser shall timely file a Notice of Sale
of Securities Pursuant to Regulation D on Form D with respect to the Shares with
the SEC as required under Regulation D and to provide a copy thereof to the
Seller promptly after such filing.
4.7 Legends. The Purchaser may endorse on all certificates evidencing
the Shares a legend restricting their transfer that shall read as follows: "The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") or the securities laws
of any state of the United States. The securities represented hereby have been
acquired for investment and may not be sold, transferred, pledged, assigned or
otherwise disposed of in the absence of an effective registration statement for
the securities under the Securities Act or an opinion, if requested, of counsel
satisfactory to the Purchaser that registration is not required under the
Securities Act."
ARTICLE 5
CONDITIONS
5.1 Conditions to Obligations of the Purchaser to Effect the Sale at
the First Closing and the Second Closing. The obligations of the Purchaser to
effect the Sale at each Closing shall be subject to the fulfillment or waiver at
or prior to each Closing of the following conditions:
(a) Each representation and warranty by the Seller (including
those relating to equity holders of the Seller) set forth in Article 3 shall be
true and correct in all material respects as of the Closing.
(b) The Seller shall have performed in all material respects
each covenant or other obligation required to be performed by it pursuant to the
Transaction Documents prior to the each Closing.
(c) The consummation of the transactions contemplated by the
Transaction Documents shall not be prohibited by any Legal Requirement or
subject the Seller or any of its assets to any penalty or liability arising
under any Legal Requirement or imposed by any Government Entity.
(d) No action, suit or proceeding shall be pending or
threatened before any Government Entity the result of which could prevent or
prohibit the consummation of any transaction pursuant to the Transaction
Documents, cause any such transaction to be rescinded following such
consummation or adversely affect the Seller's performance of its obligations
pursuant to the Transaction Documents, and no judgment, order, decree,
stipulation, injunction or charge having any such effect shall exist.
(e) All filings, notices, licenses, consents, authorizations,
accreditation, waivers, approvals and the like of, to or with any Government
Entity or any other Person that are required for the Seller to effect the
portion of the Sale scheduled for such Closing or any other transaction
contemplated by the Transaction Documents shall have been duly made or obtained
and the Seller shall have delivered copies thereof to the Purchaser.
(f) The Seller shall have delivered to the Purchaser a
certificate, dated as of the Closing, signed by the Chief Executive Manager of
the Seller stating that the conditions set forth in Sections 5.1(a) through (e)
have been satisfied.
(g) The Seller shall have delivered to the Purchaser a copy of
the resolutions duly adopted by the Directors Committee of the Seller
authorizing the Seller's execution, delivery and performance of the Transaction
Documents to which the Seller is a party, the Sale, and all other transactions
contemplated by the Transaction Documents, as in effect as of each Closing,
certified by the Chief Executive Manager of the Seller.
(h) The Seller shall have delivered to the Purchaser a
certificate (dated not more than five business days prior to the Closing) of the
Secretary of State of the State of New Jersey as to the good standing of the
Purchaser in New Jersey.
5.2 Additional Conditions to Obligations of the Purchaser to Effect the
Sale at the First Closing. The obligations of the Purchaser to effect the Sale
at the First Closing shall be subject to the fulfillment or waiver at or prior
to the First Closing of the additional following conditions:
(a) The Seller shall have delivered to the Purchaser a
certificate evidencing the Initial Units.
5.3 Additional Conditions to Obligations of the Purchaser to Effect the
Sale at the Second Closing. The obligations of the Purchaser to effect the Sale
at shall be subject to the fulfillment or waiver at or prior to the Second
Closing of the following additional conditions:
(a) The Purchaser shall have completed the Financing.
(b) The Seller shall have delivered to the Purchaser a
certificate evidencing the Subsequent Units.
5.4 Conditions to Obligations of the Seller to Effect the Sale at the
First and Second Closings. The obligations of the Seller to effect the Sale
shall be subject to the fulfillment or waiver at or prior to the First Closing
and the Second Closing of the following conditions:
(a) Each representation and warranty of the Purchaser set
forth in Article 2 shall be true and correct in all material respects as of the
each Closing.
(b) The Purchaser shall have performed in all material
respects each covenant or other obligation required to be performed by it
pursuant to the Transaction Documents prior to each Closing.
(c) The consummation of the transactions contemplated by the
Transaction Documents shall not be prohibited by any Legal Requirement or
subject the Purchaser to any penalty or liability arising under any Legal
Requirement or imposed by any Government Entity.
(d) No action, suit or proceeding shall be pending or
threatened before any Government Entity the result of which could prevent or
prohibit the consummation of any transaction pursuant to the Transaction
Documents, cause any such transaction to be rescinded following such
consummation or adversely affect the Purchaser's performance of its obligations
pursuant to the Transaction Documents, and no judgment, order, decree,
stipulation, injunction or charge having any such effect shall exist.
(e) All filings, notices, licenses, consents, authorizations,
accreditation, waivers, approvals and the like of, to or with any Government
Entity or any other Person that are required for the Purchaser to effect the
portion of the Sale scheduled for such Closing or any other transaction
contemplated by the Transaction Documents shall have been duly made or obtained
and the Purchaser shall have delivered copies thereof to the Seller.
(f) The Purchaser shall have delivered to the Seller a
certificate dated the Closing, signed by the President of the Purchaser stating
that the conditions set forth in Section 5.4 (a) through (e) have been
satisfied.
(g) The Purchaser shall have delivered to the Seller a copy of
the resolutions duly adopted by the Purchaser's board of directors authorizing
the Purchaser's execution, delivery and performance of the Transaction Documents
to which the Purchaser is a party, the Sale, and all other transactions
contemplated by the Transaction Documents, as in effect as of the Closing,
certified by an officer of the Purchaser.
(h) The Purchaser shall have delivered to the Seller a
certificate (dated not more than five business days prior to the Closing) of the
Treasurer of the State of New Jersey as to the good standing of the Purchaser in
New Jersey.
5.5 Additional Conditions to Obligations of the Seller to Effect the
Sale at the First Closing. The obligations of the Seller to effect the Sale at
the First Closing shall be subject to the fulfillment or waiver at or prior to
the First Closing of the following additional conditions:
(a) The Purchaser shall have delivered to the Seller $250,000
in cash or other immediately available U.S. funds.
(b) The Purchaser shall have delivered to the Seller a
certificate representing the Shares.
(c) The Shares shall have been listed, or approved for listing
subject to issuance, on the Nasdaq SmallCap (or such other market or exchange on
which the Common Stock is then listed).
5.6 Additional Conditions to Obligations of the Seller to Effect the
Sale at the Second Closings. The obligations of the Seller to effect the Sale at
the Second Closing shall be subject to the fulfillment or waiver at or prior to
the Second Closing of the following conditions:
(a) The Purchaser shall have completed the Financing.
(b) The Purchaser shall have delivered to the Seller $250,000
in cash or other immediately available U.S. funds.
ARTICLE 6
SURVIVAL AND INDEMNIFICATION
6.1 Survival of Representations, Warranties and Covenants.
(a) Survival Term. All representations, warranties and
covenants contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (regardless of any
investigation made by any party or on its behalf) and will continue in full
force and effect for:
(i) perpetuity, in the case of the representations
and warranties in Sections 2.3, 2.4, 3.2 and 3.3; and;
(ii) for a period of two years following the Closing
Date for all other representations and warranties set forth in Articles 2 and 3,
and for the covenant in Section 4.1.
(b) Special Rule for Fraud. Notwithstanding anything in this
Section 6.1 to the contrary, in the event of a breach by any party of a
representation or warranty which breach is intentional, or constitutes fraud,
the representation or warranty that has been breached will survive the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby (regardless of any investigation made by any party or on its
behalf) and will continue in full force and effect for six years following the
Closing Date or the discovery of such fraud, whichever is later.
(c) No Waiver. Neither a party's participation in the
consummation of any transaction pursuant to any Transaction Document nor any
waiver of any condition to such participation (including any condition that a
representation or warranty of any other party be true and correct) will
constitute a waiver by such participating party of any representation or
warranty of any party or otherwise affect the survival of any such
representation or warranty.
6.2 Indemnification Obligations of the Purchaser.
(a) Specific Indemnifiable Losses. The Purchaser will
indemnify the Seller and its Affiliates, shareholders, officers, directors,
employees, agents, representatives and permitted successors and assigns
(collectively, the "Seller Indemnitees") in respect of, and save and hold each
Seller Indemnitee harmless against and pay on behalf of or reimburse each Seller
Indemnitee as and when incurred, any Loss which any Purchaser Indemnitee
suffers, sustains or becomes subject to as a result of, in connection with,
relating or incidental to or by virtue of, without duplication:
(i) subject to the survival provisions of Section
6.1, any misrepresentation or breach of any representation or warranty (other
than intentional misrepresentations or breaches of representations and
warranties arising out of fraud) by the Purchaser set forth in this Agreement or
any certificate or other instrument or document furnished to the Seller by the
Purchaser pursuant to any Transaction Document;
(ii) any intentional misrepresentation or breach of
any representation or warranty arising out of fraud by the Purchaser set forth
in this Agreement or any certificate or other instrument or document furnished
to the Seller by the Purchaser pursuant to any Transaction Document; or
(iii) any nonfulfillment or breach of any covenant or
agreement of the Purchaser set forth in any Transaction Document.
(b) Limitation of Liability. In no event, except with respect
to any claim described in Sections 6.2(a)(ii) and 6.1(b) of this Agreement,
shall any indemnification be made under Section 6.2 until the aggregate amount
of Losses with respect to an indemnity obligation of the Purchaser exceeds
$10,000, then indemnification for such obligation shall be made to the full
extent of Losses in excess of $10,000. In no event, except with respect to any
claim described in Sections 6.2(a)(ii) and 6.1(b) of this Agreement, shall the
indemnify obligation of the Purchaser under this Agreement exceed, in the
aggregate, $750,000.
6.3 Indemnification Obligations of the Seller.
(a) Specific Indemnifiable Losses. The Seller will indemnify
the Purchaser and its Affiliates, members, officers, directors, employees,
agents, representatives and permitted successors and assigns (collectively, the
"Purchaser Indemnitees") in respect of, and save and hold each Purchaser
Indemnitee harmless against and pay on behalf of or reimburse each Purchaser
Indemnitee as and when incurred, any Loss which any Purchaser Indemnitee
suffers, sustains or becomes subject to as a result of, in connection with,
relating to or by virtue of, without duplication:
(i) subject to the survival provisions of Section
6.1, any misrepresentation or breach of any representation or warranty (other
than intentional misrepresentations or breaches of representations and
warranties arising out of fraud) by the Seller set forth in this Agreement or
any certificate or other instrument or document furnished to the Purchaser by
the Seller pursuant to any Transaction Document;
(ii) any intentional misrepresentation or breach of
any representation or warranty arising out of fraud by the Seller set forth in
this Agreement or any certificate furnished to the Purchaser by the Seller
pursuant to any Transaction Document; or
(iii) any nonfulfillment or breach of any covenant or
agreement of the Seller set forth in any Transaction Document.
(b) Limitation of Liability. In no event, except with respect
to any claim described in Sections 6.3(a)(ii) and 6.1(b) of this Agreement,
shall any indemnification be made under Section 6.2 until the aggregate amount
of Losses with respect to an indemnity obligation of the Seller exceeds $10,000,
then indemnification for such obligation shall be made to the full extent of
Losses (including the initial $10,000). In no event, except with respect to any
claim described in Sections 6.3(a)(ii) and 6.1(b) of this Agreement, shall the
indemnity obligation of the Seller under this Agreement exceed, in the
aggregate, $750,000.
6.4 Indemnification Procedures.
(a) Notice of Claim. Any Person making a claim for
indemnification pursuant to Section 6.2 or Section 6.3 (an "Indemnified Party")
must give the party from whom indemnification is sought (an "Indemnifying
Party") written notice of such claim (an "Indemnification Claim Notice")
promptly after the Indemnified Party receives any written notice of any action,
lawsuit, proceeding, investigation or other claim (a "Proceeding") against or
involving the Indemnified Party by a Government Entity or other third-party or
otherwise discovers the liability, obligation or facts giving rise to such claim
for indemnification; provided, that the failure to notify or delay in notifying
an Indemnifying Party will not relieve the Indemnifying Party of its obligations
pursuant to Section 6.2 or Section 6.3, as applicable, except to the extent that
such failure actually xxxxx the Indemnifying Party. Such notice must contain a
description of the claim and the nature and amount of such Loss (to the extent
that the nature and amount of such Loss is known at such time).
(b) Control of Defense; Conditions. With respect to the
defense of any Proceeding against or involving an Indemnified Party in which a
Government Entity or other third-party in question seeks only the recovery of a
sum of money for which indemnification is provided in Section 6.2 or Section
6.3, at its option an Indemnifying Party may appoint as lead counsel of such
defense any legal counsel selected by the Indemnifying Party; provided, that
before the Indemnifying Party assumes control of such defense it must first:
(i) enter into an agreement with the Indemnified
Party (in form and substance satisfactory to the Indemnified Party) pursuant to
which the Indemnifying Party agrees to be fully responsible (with no reservation
of any rights other than the right to be subrogated to the rights of the
Indemnified Party) for all Losses relating to such Proceeding and
unconditionally guarantees the payment and performance of any liability or
obligation which may arise with respect to such Proceeding or the facts giving
rise to such claim for indemnification; and
(ii) furnish the Indemnified Party with evidence that
the Indemnifying Party, in the Indemnified Party's reasonable judgment, is and
will be able to satisfy any such liability.
(c) Control of Defense; Related Matters. Notwithstanding
Section 6.4(b):
(i) the Indemnified Party will be entitled to
participate in the defense of such claim and to employ counsel of its choice for
such purpose at its own expense; provided, that the Indemnifying Party will bear
the reasonable fees and expenses of such separate counsel incurred prior to the
date upon which the Indemnifying Party effectively assumes control of such
defense;
(ii) the Indemnifying Party will not be entitled to
assume control of the defense of such claim, and will pay the reasonable fees
and expenses of legal counsel retained by the Indemnified Party, if
(A) the Indemnified Party reasonably
believes that an adverse determination of such Proceeding could be materially
detrimental to or injure the Indemnified Party's reputation or future business
prospects, or
(B) a court of competent jurisdiction rules
that the Indemnifying Party has failed or is failing to prosecute or defend
vigorously such claim; and
(iii) the Indemnifying Party must obtain the prior
written consent of the Indemnified Party (which the Indemnified Party will not
unreasonably withhold) prior to entering into any settlement of such claim or
Proceeding or ceasing to defend such claim or Proceeding.
ARTICLE 7
TERMINATION/CANCELLATION
7.1 Events of Termination/Cancellation.
(a) Prior to the First Closing. This Agreement may be
terminated at any time prior to the First Closing:
(i) By mutual consent of the Purchaser and the Chief
Executive Manager of the Seller;
(ii) By the Seller or the Purchaser in the event of
(i) a breach by the other party of any representation or warranty contained
herein, which breach has not been cured within 30 days after the giving of
written notice to the breaching party of such breach and which breach,
individually or in the aggregate when combined with other such breaches, would
cause the conditions set forth in Section 5.2 or Section 5.3, as the case may
be, not to be met by the date of the First Closing or (ii) a material breach by
the other party of any of the covenants or agreements contained herein, which
breach has not been cured within 30 days after the giving of written notice to
the breaching party of such breach.
(b) After December 31, 2000. The Second Closing may be
canceled by the Seller after December 31, 2000 in the event that on or before
December 31, 2000 the Purchaser does not register the resale of the Shares on
Form S-3 under the Securities Act of 1933, as amended.
7.2 Effect of Termination/Cancellation. In the event of the termination
of this Agreement pursuant to Section 7.1(a), this Agreement, except for the
provisions of Section 4.1, shall become void and have no effect, without any
liability on the part of any party or its directors, officers or shareholders.
In the event of the cancellation of the Second Closing pursuant to Section
7.1(b), (i) the Seller shall redeem 71,428 units of the Initial Units, and (ii)
the Purchaser shall redeem the Shares.
ARTICLE 8
MISCELLANEOUS
8.1 Waivers, Amendments to be in Writing. No waiver, amendment,
modification or supplement of this Agreement will be binding upon a party unless
such waiver, amendment, modification or supplement is set forth in writing and
is executed by such party.
8.2 Successors and Assigns. Except as otherwise expressly provided in
this Agreement, all covenants and agreements set forth in this Agreement by or
on behalf of the Purchaser and the Seller will bind and inure to the benefit of
the respective successors and assigns of the Purchaser and the Seller, whether
so expressed or not. This Agreement and any of the rights, interests or
obligations hereunder may not be assigned by the Purchaser or the Seller.
8.3 Governing Law. This Agreement will be governed by and construed in
accordance with the domestic laws of the State of New Jersey, without giving
effect to any choice of law or conflict rule of any jurisdiction that would
cause the laws of any other jurisdiction to be applied. In furtherance of the
foregoing, the internal law of the State of New Jersey will control the
interpretation and construction of this Agreement, even if under any choice of
law or conflict of law analysis, the substantive law of some other jurisdiction
would ordinarily apply.
8.4 Jurisdiction. Each of the parties hereby (a) irrevocably submits to
the exclusive jurisdiction of the state courts of, and the federal courts
located in, the State of New Jersey in any action or proceeding arising out of
or relating to, this Agreement, (b) waives, and agrees to assert, by way of
motion, as a defense, or otherwise, in any such suit, action or proceeding, any
claim that it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution under
the law of another jurisdiction, that the suit, action or proceeding is brought
in an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Agreement or the subject matter hereof may not be enforced
in or by such court, and agrees not to seek any review by any court of any other
jurisdiction which may be called upon to grant an enforcement of the judgment of
any such court.
8.5 Notices.
(a) All demands, notices, communications and reports
("notices") provided for in this Agreement will be in writing and will be either
personally delivered, mailed by registered or certified mail (return receipt
requested) or sent by reputable overnight courier service (delivery charges
prepaid) to any party at the address specified below, or at such address, to the
attention of such other Person, and with such other copy, as the recipient party
has specified by prior written notice to the sending party pursuant to the
provisions of this Section 8.5.
If to the Seller:
Technology Keiretsu, LLC
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile Number: (000) 000-0000
with a copy, which will not constitute notice to the Seller, to:
----------------------------------------------------------------
Xxxxx, Xxxxx & Cabana, LLC
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxx
If to the Purchaser:
TechSys, Inc.
00 Xxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
with a copy, which will not constitute notice to the Purchaser, to:
-------------------------------------------------------------------
Pitney, Xxxxxx, Xxxx & Xxxxx LLP
000 Xxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxx Xxxxx
Facsimile Number: (000) 000-0000
(b) Any such notice will be deemed to have been given when
delivered personally, on the third business day after deposit postage pre-paid
in the U.S. mail, or on the business day after deposit with a reputable
overnight courier service delivery charges pre-paid, as the case may be.
8.6 Severability of Provisions. If any provision of this Agreement is
held to be invalid for any reason whatsoever, then such provision will be deemed
severable from the remaining provisions of this Agreement and will in no way
affect the validity or enforceability of any other provision of this Agreement.
8.7 Counterparts. The parties may execute this Agreement in separate
counterparts (no one of which need contain the signatures of all parties), each
of which will be an original and all of which together will constitute one and
the same instrument.
8.8 No Third-Party Beneficiaries. Except as otherwise expressly
provided in this Agreement, no Person which is not a party will have any right
or obligation pursuant to this Agreement.
8.9 Headings. The headings used in this Agreement are for the purpose
of reference only and will not affect the meaning or interpretation of any
provision of this Agreement.
8.10 Merger and Integration. Except as otherwise provided in this
Agreement, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, whether
written or oral, are superseded by this Agreement.
8.11 Transaction Expenses. The Purchaser and the Seller, whether or not
the Sale is consummated, shall bear their own legal and other fees and expenses
with respect to the Sale.
8.12 Further Assurances. From and after the Closing, the Purchaser and
the Seller will, and will cause their respective Affiliates to, execute all
documents and take any other action which they are reasonably requested to
execute or take to further effectuate the transactions contemplated by the
Transaction Documents.
8.13 Announcements. The Seller and the Purchaser shall have the right
to review any press release or other public statement with respect to the
transactions contemplated by this Agreement for a reasonable period of time
before issuance thereof; provided, however, that the Purchaser shall be
entitled, without the prior approval of the Seller, to make any press release or
other public statement with respect to such transactions as is required by
applicable law and regulations (although the Seller shall be consulted by the
Purchaser in connection with any such press release or other public statement
prior to its release and shall be provided with a copy thereof and be given an
opportunity to comment thereon).
8.14 Cooperation on SEC Filings. The Purchaser and the Seller
acknowledge that the Purchaser may now or in the future be required to include
information concerning the Seller in SEC reports or other filings. The Seller
shall provide the Purchaser with any information, certificates, documents or
other materials about the Seller that are reasonably necessary to be included in
such SEC reports or other filings.
ARTICLE 9
DEFINITIONS
9.1 Definitions. For purposes hereof, the following terms, when used
herein with initial capital letters, shall have the respective meanings set
forth herein:
"Affiliate" of any Person means any other Person controlling,
controlled by or under common control with such first Person.
"Agreement" means this Purchase Agreement (including Exhibits)
as it may be amended from time to time in accordance with its terms.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Financing" means a sale by the Purchaser of its securities in
which the gross proceeds to the Purchaser equal or exceed $10,000,000.
"Furnishing Party" means the party providing Confidential
Information.
"GAAP" means, at a given time, United States generally
accepted accounting principles, consistently applied.
"Government Entity" means the United States of America or any
other nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government.
"Legal Requirement" means any requirement arising under any
action, law, treaty, rule or regulation, determination or direction of an
arbitrator or Government Entity.
"Lien" means any mortgage, pledge, security interest,
encumbrance, easement, restriction on use, restriction on transfer, charge, or
other lien.
"Loss" means, with respect to any Person, any diminution in
value, consequential or other damage, liability, demand, claim, action, cause of
action, cost, damage, deficiency, Tax, penalty, fine or other loss or expense,
whether or not arising out of a third-party claim, including all interest,
penalties, reasonable attorneys' fees and expenses and all amounts paid or
incurred in connection with any action, demand, proceeding, investigation or
claim by any third-party (including any Government Entity) against or affecting
such Person or which, if determined adversely to such Person, would give rise
to, evidence the existence of, or relate to, any other Loss and the
investigation, defense or settlement of any of the foregoing, together with
interest thereon from the date on which such Person provides the written notice
of the related claim as described in Section 6.4 through and including the date
on which the total amount of the claim, including such interest, is recovered or
recouped pursuant to Article 6.
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Receiving Party" means a party receiving Confidential
Information.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" of any Person means any corporation, partnership,
association or other business entity which such Person, directly or indirectly,
controls or in which such Person has a majority ownership interest. For purposes
of this definition, a Person is deemed to have a majority ownership interest in
a partnership, association or other business entity if such Person is allocated
a majority of the gains or losses of such entity or is or controls the managing
director or general partner of such entity.
"Transaction Documents" means this Agreement, and all other
agreements, instruments, certificates and other documents to be entered into or
delivered by any party hereto in connection with the Sale.
9.2 Other Definitional Provisions.
(a) "Hereof," etc. The terms "hereof," "herein" and
"hereunder" and terms of similar import are references to this Agreement as a
whole (including Exhibits) and not to any particular provision of this
Agreement. Section and clause references contained in this Agreement are
references to Sections and clauses in this Agreement, unless otherwise
specified.
(b) "Including." The term "including" means including, without
limitation.
(c) Successor Laws. Any reference to any particular law or
regulation will be interpreted to include any revision of or successor to that
section regardless of how it is numbered or classified.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
TECHNOLOGY KEIRETSU, LLC
XXXXX XXXXXXXXX
By: ___________________________
Xxxxx Xxxxxxxxx
Chief Executive Manager
TECHSYS, INC.
XXXXXX X. XXXXX
By: ___________________________
Xxxxxx X. Xxxxx
President
