Exhibit 2.9
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THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF COMMON STOCK OF
TIGER TELEMATICS, INC. TO, OR THE SOLICITATION OF AN OFFER TO PURCHASE SHARES OF
COMMON STOCK OF TIGER TELEMATICS, INC. BY, ANY PERSON IN ANY COUNTRY OR
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS UNLAWFUL OR ANY PERSON
THAT DOES NOT QUALIFY AS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501 OF
REGULATION D PROMULGATED UNDER THE SECURITIES ACT.
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
BY AND BETWEEN
TIGER TELEMATICS, INC.
INTEGRA SP HOLDINGS LIMITED
AND
INTEGRA SP NOMINEE LIMITED
Dated as of January 19, 2005
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TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE AND SALE OF SHARES..........................................1
1.1 TRANSFER OF SHARES...........................................1
1.2 PURCHASE PRICE...............................................1
1.3 PAYMENT AT FIRST CLOSING.....................................4
1.4 DELIVERY OF SHARES...........................................4
1.5 AFFILIATE-OWNED ASSETS.......................................4
1.6 ASSET TRANSFER AND FURTHER ASSURANCES........................4
ARTICLE II THE CLOSING.........................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES of THE STOCKHOLDER..................4
3.1 TITLE TO THE SHARES..........................................5
3.2 ORGANIZATION AND POWER.......................................5
3.3 AUTHORITY; AUTHORIZATION, EXECUTION AND DELIVERY;
ENFORCEABILITY; NO CONFLICT.................................5
3.4 CONSENTS.....................................................5
3.5 BROKERS......................................................6
3.6 INVESTMENT REPRESENTATIONS...................................6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER GROUP..................7
4.1 ORGANIZATION, POWER, AUTHORITY AND GOOD STANDING.............7
4.2 AUTHORITY; AUTHORIZATION, EXECUTION AND DELIVERY;
ENFORCEABILITY; NO CONFLICT.................................7
4.3 CONSENTS.....................................................7
4.4 CAPITALIZATION...............................................8
4.5 SUBSIDIARIES; INVESTMENTS....................................8
4.6 FINANCIAL INFORMATION........................................8
4.7 ABSENCE OF UNDISCLOSED LIABILITIES...........................9
4.8 ABSENCE OF CHANGES...........................................9
4.9 TAX MATTERS.................................................10
4.10 TITLE TO ASSETS, PROPERTIES AND RIGHTS AND RELATED MATTERS..11
4.11 REAL PROPERTY - OWNED OR LEASED.............................12
4.12 INTELLECTUAL PROPERTY.......................................12
4.13 AGREEMENTS, NO DEFAULTS, ETC................................13
4.14 LITIGATION, ETC.............................................14
4.15 COMPLIANCE WITH LAWS........................................15
4.16 INSURANCE...................................................15
4.17 LABOR RELATIONS; EMPLOYEES..................................15
4.18 ERISA COMPLIANCE............................................16
4.19 ENVIRONMENTAL MATTERS.......................................16
4.20 BROKERS.....................................................17
4.21 RELATED PARTY TRANSACTIONS..................................17
4.22 ACCOUNTS AND NOTES RECEIVABLE...............................18
4.23 BANK ACCOUNTS; POWERS OF ATTORNEY...........................18
4.24 SUPPLIERS AND VENDORS.......................................18
4.25 CUSTOMERS...................................................18
4.26 CONFLICTS OF INTEREST.......................................19
4.27 DISCLOSURE..................................................19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.....................19
5.1 ORGANIZATION; CORPORATE AUTHORITY...........................19
5.2 AUTHORITY; AUTHORIZATION; EXECUTION AND DELIVERY;
ENFORCEABILITY; NO CONFLICT................................19
5.3 CONSENTS....................................................20
5.4 BROKERS.....................................................20
5.5 LITIGATION..................................................20
5.6 TIGR SHARES.................................................20
5.7 CAPITALIZATION..............................................20
5.8 WARN ACT....................................................20
5.9 SEC DOCUMENTS...............................................20
5.10 INVESTMENT INTENT...........................................21
i
ARTICLE VI COVENANTS AND AGREEMENTS...........................................21
6.1 ACCESS TO RECORDS AND PROPERTIES............................21
6.2 CONDUCT OF THE BUSINESS.....................................21
6.3 EFFORTS TO CONSUMMATE.......................................22
6.4 NEGOTIATION WITH OTHERS.....................................23
6.5 NOTICE OF PROSPECTIVE BREACH................................23
6.6 PUBLIC ANNOUNCEMENTS........................................23
6.7 EXCHANGE PROCEEDS...........................................23
6.8 NON-COMPETITION COVENANT....................................23
6.9 DISCLOSURE OF INFORMATION...................................24
6.10 USE OF PROPRIETARY NAME.....................................25
6.11 SUPPLEMENTS TO SCHEDULES....................................25
6.12 CERTAIN EMPLOYEE MATTERS....................................26
6.13 NO-HIRE OF EMPLOYEES........................................26
6.14 NASDAQ LISTING..............................................26
6.15 FINANCIAL STATEMENTS........................................26
6.16 PAYMENT TO KBC..............................................26
ARTICLE VII CLOSING OBLIGATIONS...............................................27
7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS......................27
7.2 CONDITIONS TO OBLIGATIONS OF THE PURCHASER..................27
7.3 CONDITIONS TO OBLIGATIONS OF THE SELLER GROUP...............29
ARTICLE VIII INDEMNIFICATION..................................................29
8.1 GENERALLY...................................................29
8.2 ASSERTION OF CLAIMS.........................................30
8.3 NOTICE AND DEFENSE OF THIRD PARTY CLAIMS....................30
8.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................31
8.5 LIMITATIONS ON INDEMNIFICATION..............................31
8.6 EXCLUSION OF CERTAIN CLAIMS.................................32
8.7 MITIGATION..................................................32
8.8 PARTIES TO CLAIM............................................32
ARTICLE IX TERMINATION; EFFECT OF TERMINATION.................................33
9.1 TERMINATION.................................................33
9.2 EFFECT OF TERMINATION.......................................34
ARTICLE X MISCELLANEOUS PROVISIONS............................................34
10.1 AMENDMENT...................................................34
10.2 ENTIRE AGREEMENT............................................34
10.3 SEVERABILITY................................................34
10.4 BENEFITS OF AGREEMENT.......................................34
10.5 EXPENSES; SALES AND TRANSFER TAXES..........................35
10.6 REMEDIES....................................................35
10.7 NOTICES.....................................................35
10.8 COUNTERPARTS AND FACSIMILE EXECUTION........................36
10.9 GOVERNING LAW..............................................36
10.10 JURISDICTION AND VENUE......................................36
10.11 MUTUAL CONTRIBUTION.........................................37
10.12 NO THIRD PARTY BENEFICIARIES................................37
10.13 INDEPENDENCE OF COVENANTS AND REPRESENTATIONS AND
WARRANTIES.................................................37
10.14 INTERPRETATION; CONSTRUCTION................................37
ii
ANNEXES, SCHEDULES AND EXHIBITS
Annexes
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Annex I Stockholder
Annex II Certain Definitions
Schedules
Schedule 3.4 - Stockholder Consents
Schedule 4.1 - Foreign Qualifications for the Company and
Its Subsidiaries
Schedule 4.3 - Company Consents
Schedule 4.4(a) - Capitalization of the Company and Its Subsidiaries
Schedule 4.4(b) - Options, Warrants, Voting Agreements, etc.
Schedule 4.5 - Subsidiaries and Investments
Schedule 4.6(a) - Financial Statements
Schedule 4.6(c) - Accounts Payable and Accounts Receivable
Schedule 4.7 - Undisclosed Liabilities
Schedule 4.8 - Absence of Changes
Schedule 4.9(a) - Tax Matters
Schedule 4.9(c) - Taxing Authority Notifications
Schedule 4.10(a) - Encumbrances
Schedule 4.10(b) - Tangible Personal Property
Schedule 4.11(a) - Real Property
Schedule 4.11(b) - Real Property Proceedings, Notices and Exceptions
Schedule 4.12(a) - Intellectual Property Rights
Schedule 4.12(b) - Actions to Protect Intellectual Property Rights
Schedule 4.13(a) - Material Contracts
Schedule 4.13(d) - Funded Indebtedness
Schedule 4.14(a) - Litigation, Etc.
Schedule 4.14(b) - Resolved Litigation
Schedule 4.15 - Compliance with Laws
Schedule 4.16(a) - Insurance Policies
Schedule 4.16(b) - Insurance Claims, Etc.
Schedule 4.17(a) - Directors, Officers and Key Employees
Schedule 4.17(b) - Number of Employees, Independent Contractors, etc.
Schedule 4.17(c) - Labor Relations
Schedule 4.17(e) - Labor Proceedings
Schedule 4.17(f) - Joint Employer Matters
Schedule 4.17(g) - Independent Contractor Agreements
Schedule 4.19(a) - Environmental Laws - Violations
Schedule 4.19(b) - Environmental Compliance - Previously Owned Properties
Schedule 4.21(a) - Related Party Transactions
Schedule 4.21(b) - Distributions
Schedule 4.22 - Accounts and Notes Receivable
Schedule 4.23 - Bank Accounts; Powers of Attorney
Schedule 4.24 - Suppliers and Vendors
Schedule 4.25 - Customers
Schedule 5.1 - Foreign Qualifications for the Purchaser
Schedule 5.3 - Purchaser Consents
Exhibits
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Exhibit A - Form of Escrow Agreement
iii
INDEX OF DEFINED TERMS
The following capitalized terms, which may be used in more
than one Section or other location of this Agreement, are defined in the
following Sections or other locations:
Section or
Term other Location
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Acquisition Proposal Annex II
Affiliate Annex II
Affiliate-Owned Asset 1.5
Agreement 10.14
Annual Balance Sheet 4.6(a)(i)
Annual Balance Sheet Date 4.6(a)(i)
Annual Financial Statements 4.6(a)(i)
Arbitrating Accountants Annex II
Knowledge 10.14
Business Preamble
Business Day Annex II
Capital Lease Annex II
Charter Documents Annex II
Code 4.9(a)
Commission Annex II
Company Caption
Competing Business 6.8(b)
Confidential Information 6.9(a)
Contract Annex II
Control Annex II
Covered Properties 4.19(b)
Employee Benefit Plan Annex II
Encumbrances Annex II
Environmental, Health and Safety Laws Annex II
Escrow Account 1.2
Exchange Proceeds 6.7
Exchange Rate Annex II
Exclusivity Period 6.4(a)
ERISA Annex II
Excluded Seller Representations 8.5(a)
Financial Statements 4.6(a)(iii)
First Closing Article II
First Closing Date Article II
Funded Indebtedness Annex II
GAAP Annex II
Governmental Entity Annex II
Guaranty Annex II
Hired Employees 6.12
HSR Act 6.3
Income Taxes Annex II
Indemnified Persons Annex II
Indemnifying Persons Annex II
Initial TIGR Shares Portion 1.2
Intellectual Property Rights Annex II
Interim Balance Sheets 4.6(a)(i)
Interim Financial Statements 4.6(a)(i)
Latest Balance Sheet 4.6(a)(iii)
Latest Balance Sheet Date 4.6(a)(iii)
Latest Financial Statements 4.6(a)(iii)
Law Annex II
Leased Property 4.11(a)
Letter of Intent 10.2
iv
Section or
Term other Location
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Liability Annex II
Licensed Requisite Rights 4.12(a)(i)
Litigation Expense Annex II
Losses Annex II
Management Stockholder Annex II
Market Price Annex II
Material Adverse Change 4.8(i)
Material Contracts 4.13(b)
Options Preamble
Orders Annex II
Owned Requisite Rights 4.12(a)(i)
Permits Annex II
Permitted Encumbrances Annex II
Person Annex II
Possible Transaction 6.4
Proceeding Annex II
Purchase Price 1.2
Purchaser Caption
Purchaser Indemnified Persons Annex II
Purchaser Indemnifying Persons Annex II
Purchaser Losses Annex II
Purchaser's Accountants Annex II
Purchaser SEC Documents 5.9
Representatives 6.9(a)
Requisite Rights 4.12(a)(i)
Restrictive Period 6.8(a)
Second Closing Article II
Second Closing Date Article II
Securities Annex II
Securities Act Annex II
Seller Group Caption
Seller Indemnified Persons Annex II
Seller Indemnifying Persons Annex II
Seller Losses Annex II
Shares Preamble
Stock Preamble
Stockholder Caption
Subsidiary Annex II
Survival Date 8.4(a)
Tax Return Annex II
Taxes Annex II
TIGR Shares Annex II
Third Party 4.17(f)
Third Party Claim 8.3
Twelve Month Target Net Profit 1.2(c)
Twelve Month Target Net Sales 1.2(c)
Twenty-Four Month Target Net Profit 1.2(e)
Twenty-Four Month Target Net Sales 1.2(e)
v
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
This AMENDED AND RESTATED STOCK PURCHASE AGREEMENT dated as of January
19, 2005, is by and among TIGER TELEMATICS, INC., a Delaware corporation (the
"Purchaser"), INTEGRA SP HOLDINGS LTD., an English limited company incorporated
under the laws of England (the "Company"), and INTEGRA SP NOMINEE LTD., an
English limited company incorporated under the laws of England and stockholder
of the Company (the "Stockholder"; and the Stockholder and the Company are
collectively referred to as the "Seller Group"). Certain capitalized terms used
in this Agreement are defined on Annex II attached to this Agreement.
PREAMBLE
The Company, together with its Subsidiaries, is engaged in the business
(collectively, the "Business") of (i) providing software for the visualization,
interaction and integration of real-time enterprise systems in a browser through
its award winning AltioLive(TM) product, (ii) developing software products, and
(iii) providing software support services to customers, partners and end users
within the finance, public and commercial sectors.
The Company presently has approximately seventy-four (74) Persons that
own all of the issued and outstanding shares of the common stock, .01 Xxxxx par
value per share, of the Company (collectively, the "Stock") and/or options or
other rights to acquire shares of Stock (collectively, the "Options"). In order
to comply with applicable exemptions from the registration requirements of the
Securities Act, qualification under applicable U.S. state securities laws and
compliance under other applicable Laws, on the First Closing Date, the Purchaser
has agreed to purchase only those issued and outstanding shares of Stock that
immediately prior to the First Closing were owned by an "accredited investor" as
defined in Rule 501 of Regulation D promulgated under the Securities Act, up to
a minimum number of 80 % of the issued and outstanding shares of Stock. Upon the
completion and filing of all reports required to be filed by the Purchaser
pursuant to the Securities Exchange Act and the availability of an exemption
from the registration requirements of the Securities Act, qualification under
applicable U.S. state securities laws and compliance under other applicable
Laws, on the Second Closing Date, the Purchaser shall offer to acquire, on the
same terms and conditions as provided for herein, and the Stockholder shall
deliver, the remaining issued and outstanding shares of Stock that are owned by
any Person, including any shares of Stock that are owned by an "accredited
investor" as defined in Rule 501 of Regulation D promulgated under the
Securities Act. On or before the Second Closing Date, the Company shall release
or allow to lapse all outstanding Options, warrants, convertible loans or other
rights for the purchase of shares of capital stock or convertible securities of
the Company so that such Options, warrants, convertible loans or other rights
may no longer be exercised.
The Stockholder will be on the First Closing the legal owner of at
least 80 % of the issued and outstanding shares of Stock. The shares of Stock
owned by the Stockholder as of the First Closing are collectively referred to as
the "Shares." The Stockholder desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Stockholder, all of the Shares, on the
terms and subject to the conditions contained in this Agreement.
ACCORDINGLY, in consideration of the mutual representations,
warranties, covenants and agreements contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1 Transfer of Shares.
On the terms and subject to the conditions contained in this Agreement,
at the First Closing, the Stockholder shall sell, transfer, convey and assign to
the Purchaser, and the Purchaser shall purchase and acquire from the
Stockholder, all of the Shares, free and clear of all Encumbrances.
1.2 Purchase Price.
In connection with both the First Closing and Second Closing, the
aggregate consideration to be paid by the Purchaser to the Stockholder for one
hundred percent (100%) of the issued and outstanding shares of Stock, on a fully
1
diluted basis, as if all outstanding Options, warrants, convertible loans or
other rights for the purchase of shares of capital stock or convertible
securities of the Company had been fully (a) exercised immediately prior to such
issuance (and the resulting securities fully converted into shares of Stock, if
so convertible) as of such date or (b) released or lapsed as of such date so
that such Options, warrants, convertible loans or other rights may no longer be
exercised, shall consist of the sum of the following (such sum being called the
"Purchase Price"); provided, however, notwithstanding anything to the contrary
herein or in any disclosure made in connection with this Agreement, in the event
the Purchaser has not acquired one hundred percent (100%) of the issued and
outstanding shares of Stock, on a fully diluted basis, as if all outstanding
Options, warrants, convertible loans or other rights for the purchase of shares
of capital stock or convertible securities of the Company had been fully (a)
exercised immediately prior to such issuance (and the resulting securities fully
converted into shares of Stock, if so convertible) as of such date or (b)
released or lapsed as of such date so that such Options, warrants, convertible
loans or other rights may no longer be exercised, on or before August 31, 2005,
then the actual consideration payable to the Stockholder pursuant to Sections
1.2(a)-(e) of this Agreement or otherwise shall be ratably reduced (and to the
extent the consideration payable pursuant to Section 1.2(a) has previously been
paid by the Purchaser prior to making this ratable reduction, the amount of such
ratable reduction from Section 1.2(a) may be applied to any or all of Sections
1.2(b)-(e)) by multiplying any such consideration by a fraction, (x) the
numerator of which is the number of shares of Stock actually sold and
transferred to the Purchaser and (y) the denominator of which is the aggregate
number of issued and outstanding shares of Stock, on a fully diluted basis, as
if all outstanding Options, warrants, convertible loans or other rights for the
purchase of shares of capital stock or convertible securities of the Company had
been fully (a) exercised immediately prior to such issuance (and the resulting
securities fully converted into shares of Stock, if so convertible) as of such
date or (b) released or lapsed as of such date so that such Options, warrants,
convertible loans or other rights may no longer be exercised:
(a) At the First Closing, 625,250 (the "Initial TIGR Shares
Portion") newly issued TIGR Shares;
(b) Twelve (12) months following the First Closing, Purchaser
shall release from the Escrow Account that number of TIGR Shares determined as
follows:
(i) if the Market Price of TIGR Shares immediately before
the first anniversary of the First Closing is less than $8.75 then
1,253,349 TIGR Shares; or
(ii) if the Market Price of TIGR Shares immediately before
the first anniversary of First Closing is greater than or equal to
$8.75 and less than or equal to $13.75, the number of TIGR Shares found
by dividing the sum of Sterling GBP 6 million converted to United
States dollars at the Exchange Rate by the Market Price immediately
before the first anniversary of the First Closing; or
(iii) if the Market Price of TIGR Shares immediately before
the first anniversary of the First Closing is greater than $13.75, the
number of TIGR Shares found by dividing the sum of Sterling GBP 6
million converted to United States dollars at the Exchange Rate by the
Market Price immediately before the first anniversary of First Closing
together with twenty-five percent (25%) of the amount by which the
number of TIGR Shares calculated under this clause 1.2(b) (iii) is less
than 797,586 TIGR Shares.
(c) Fifteen (15) months following the First Closing, Purchaser
shall release from the Escrow Account that number of TIGR Shares with a maximum
aggregate value of up to Sterling GBP 2,000,000, based on the Market Price of
TIGR Shares immediately before the fifteen (15) month anniversary of the First
Closing; provided, however, the payment described in this Section 1.2(c) shall
be subject to an earn-out adjustment described below based on the achievement of
targeted net sales of the Business of GBP 3,560,000 ("Twelve Month Target Net
Sales") and targeted net profit of the Business of GBP 330,314 ("Twelve Month
Target Net Profit"), in each case for the twelve (12) month period beginning
with the first full month following the First Closing:
(i) Sterling GBP 1,000,000 of the payment described in
this Section 1.2(c) will be multiplied by that percentage that is equal
to the ratio (expressed as a percentage) (A) the numerator of which is
the actual net sales of the Business for the twelve (12) month period
beginning with the first full month following the First Closing,
determined by the Purchaser on a basis consistent with the preparation
of the Company's Latest Financial Statements provided to Purchaser
prior to First Closing, and (B) the denominator of which is the Twelve
Month Target Net Sales (provided that the amount of such adjustment
shall not be less than zero or more than Sterling GBP 1,000,000); and
(ii) Sterling GBP 1,000,000 of the payment described in
this Section 1.2(c) will be multiplied by that percentage that is equal
to the ratio (expressed as a percentage) (A) the numerator of which is
the actual net profit of the Business
2
for the twelve (12) month period beginning with the first full month
following the First Closing, determined by the Purchaser on a basis
consistent with the preparation of the Company's Latest Financial
Statements provided to Purchaser prior to the First Closing and (B) the
denominator of which is the Twelve Month Target Net Profit (provided
that the amount of such adjustment shall not be less than zero or more
than Sterling GBP 1,000,000);
(d) Twenty-Four (24) months following the First Closing, Purchaser
shall release from the Escrow Account that number of TIGR Shares determined as
follows:
(i) if the Market Price of TIGR Shares immediately before
the second anniversary of First Closing is less than $8.75 then 731,120
TIGR Shares; or
(ii) if the Market Price of TIGR Shares immediately before
the second anniversary of First Closing is greater than or equal to
$8.75 and less than or equal to $13.75, the number of TIGR Shares found
by dividing the sum of Sterling GBP 3.5 million converted to United
States dollars at the Exchange Rate by the Market Price immediately
before the second anniversary of First Closing; or
(iii) if the Market Price of TIGR Shares immediately before
the second anniversary of First Closing is greater than $13.75, the
number of TIGR Shares found by dividing the sum of Sterling GBP 3.5
million converted to United States dollars at the Exchange Rate by the
Market Price immediately before the second anniversary of First Closing
together with twenty-five percent (25%) of the amount by which the
number of TIGR Shares calculated under this clause 1.2(d) (iii) is less
than 465,258 TIGR Shares; and
(e) Twenty-Seven (27) months following the First Closing,
Purchaser shall release from the Escrow Account that number of newly issued TIGR
Shares with a maximum aggregate value of up to Sterling GBP 2,000,000, based on
the Market Price of TIGR Shares immediately before the twenty-seven (27) month
anniversary of the First Closing; provided, however, the payment described in
this Section 1.2(e) shall be subject to an earn-out adjustment described below
based on the achievement of targeted net sales of the Business of GBP 7,336,000
("Twenty-Four Month Target Net Sales") and targeted net profit of the Business
of GBP 2,253,890 ("Twenty-Four Month Target Net Profit"), in each case for the
twenty-four (24) month period beginning with the first full month following the
First Closing:
(i) Sterling GBP 1,000,000 of the payment described in
this Section 1.2(e) will be multiplied by that percentage that is equal
to the ratio (expressed as a percentage) (A) the numerator of which is
the actual net sales of the Business for the twenty-four (24) month
period beginning with the first full month following the First Closing,
determined by the Purchaser on a basis consistent with the preparation
of the Company's Latest Financial Statements provided to Purchaser
prior to the First Closing, and (B) the denominator of which is the
Twenty-Four Month Target Net Sales (provided that the amount of such
adjustment shall not be less than zero or more than Sterling GBP
1,000,000); and
(ii) Sterling GBP 1,000,000 of the payment described in
this Section 1.2(e) will be multiplied by that percentage that is equal
to the ratio (expressed as a percentage) (A) the numerator of which is
the actual net profit of the Business for the twenty-four (24) month
period beginning with the first full month following the First Closing,
determined by the Purchaser on a basis consistent with the preparation
of the Company's Latest Financial Statements provided to Purchaser
prior to the First Closing, and (B) the denominator of which is the
Twenty-Four Month Target Net Profit (provided that the amount of such
adjustment shall not be less than zero or more than Sterling GBP
1,000,000);
At the First Closing, Purchaser shall place in escrow pursuant to the terms of
an Escrow Agreement substantially in the form of Exhibit A (the "Escrow
Account"), and provide Stockholder evidence of such deposit, a total of
2,794,785 TIGR Shares (as adjusted pursuant to Section 1.2), which shall be used
to satisfy Purchaser's obligation to issue TIGR Shares to the Stockholder
pursuant to Sections 1.2(b), 1.2(c), 1.2(d) and 1.2(e) of this Agreement.
Following the payment to the Stockholder pursuant to Sections 1.2(b), 1.2(c),
1.2(d) and 1.2(e) of this Agreement, the remaining TIGR Shares, if any, shall be
released and returned to Purchaser. Notwithstanding anything herein to the
contrary, the maximum aggregate consideration to be paid by the Purchaser to the
Stockholder (i) pursuant to Sections 1.2(b) and 1.2(d) shall be limited to a
maximum aggregate amount of 1,984,469 TIGR Shares (as adjusted pursuant to
Section 1.2) and (ii) for the Shares pursuant to this Section 1.2 or otherwise
shall be limited to an aggregate amount of 3,420,035 TIGR Shares (as adjusted
pursuant to Section 1.2).
3
1.3 Payment at First Closing.
At the First Closing, the Purchaser shall deliver the Initial TIGR
Shares Portion of the Purchase Price to the Stockholder, in the form of stock
certificates, duly executed and issued by the Purchaser, representing the
Initial TIGR Shares Portion.
1.4 Delivery of Shares.
At the First Closing, in consideration of the Purchaser's delivery of
the Initial TIGR Shares Portion of the Purchase Price pursuant to Section 1.3
and the establishment of the Escrow Account, (a) the Stockholder shall deliver
to the Company the certificate or certificates representing the Shares,
accompanied by duly executed stock transfer forms transferring the Shares to the
Purchaser, in each case sufficient in form and substance to convey to the
Purchaser good title to all of the Shares, free and clear of all Encumbrances,
and (b) the Company shall deliver to the Purchaser a certificate registered in
the name of the Purchaser representing the Shares.
1.5 Affiliate-Owned Assets.
To the extent that any asset, property, interest in property or right
relating to, or used or held for use by the Company or any of its Subsidiaries
in the conduct of the Business is owned by the Company or a Stockholder or any
of his, her or its Affiliates or by any other Affiliate of the Company or its
Subsidiaries, such asset, property, interest in property or right shall be
deemed to be an "Affiliate-Owned Asset" for purposes of this Agreement.
1.6 Asset Transfer and Further Assurances.
The Stockholder shall, at the First Closing and at any time after the
First Closing, upon the request of the Purchaser, do, execute, acknowledge and
deliver, and cause to be done, executed, acknowledged and delivered, all such
further acts, deeds, assignments, transfers, conveyances, powers of attorney and
other assurances as may be required to transfer, convey, grant and confirm to
and vest in the Purchaser good title to (i) the Shares, and (ii) the
Affiliate-Owned Assets, in each case free and clear of all Encumbrances. Any
conversion of currency required in connection with this Agreement shall be based
on the Exchange Rate at the time of such required conversion.
ARTICLE II
THE CLOSING
On the terms and subject to the conditions contained in this Agreement,
the closing (the "First Closing") of the transactions contemplated by this
Agreement shall take place at the offices of Xxxxx Xxxxxx & Xxxxx, counsel for
the Purchaser, at the address set forth in Section 10.7, as soon as possible,
but in no event later than seven (7) business days after all of the conditions
set forth in Article VII have been satisfied or waived (other than those
conditions which by their terms are intended to be satisfied at the First
Closing, or such other place or later date as shall be mutually agreed upon by
the parties, provided that all of the conditions set forth in Article VII have
been satisfied or waived (other than those conditions which by their terms are
intended to be satisfied at the First Closing). The date on which the First
Closing occurs shall be referred to as the "First Closing Date." The closing of
the transactions contemplated by Section 6.3 of this Agreement (the "Second
Closing") shall take place at the offices of Xxxxx Xxxxxx & Xxxxx, counsel for
the Purchaser, as soon as possible, upon the completion and filing of all
reports required to be filed by the Purchaser pursuant to the Securities
Exchange Act and the availability of an exemption from the registration
requirements of the Securities Act, qualification under applicable U.S. state
securities laws and compliance under other applicable Laws. The date on which
the Second Closing occurs shall be referred to as the "Second Closing Date."
ARTICLE III
REPRESENTATIONS AND WARRANTIES of THE STOCKHOLDER
The Stockholder hereby represents and warrants to the Purchaser as of
October 29, 2004 as follows:
4
3.1 Title to the Shares.
The Stockholder (i) is the lawful owner, of record and beneficially, of
all of the Shares, and (ii) has good and marketable title to such Shares, free
and clear of any and all Encumbrances whatsoever and with no restriction on the
voting rights and other incidents of record and beneficial ownership pertaining
to the Shares. The Stockholder is not the subject of any bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar Proceeding
affecting creditors' rights and remedies generally. Except for this Agreement,
there are no Contracts or other understandings or arrangements between the
Stockholder and any other Person (including any of the Company, or any of the
Company's Subsidiaries) with respect to the acquisition, disposition, transfer,
registration or voting of, or any other matters in any way pertaining or
relating to, any of the capital stock or other securities of the Company
(including the Shares owned by the Stockholder). The Stockholder do not have any
right whatsoever to receive or acquire any additional shares of capital stock or
other securities of the Company or any of its Subsidiaries.
3.2 Organization and Power.
The Stockholder is an English limited company duly organized or formed,
validly existing, and in good standing under the Laws of the jurisdiction of its
incorporation or formation and has all requisite power and authority (corporate,
partnership or otherwise) to own, lease and operate its assets and properties
and to carry on its business as presently conducted. The Purchaser has been
furnished with true, correct and complete copies of the Stockholder's Charter
Documents, in each case as amended and in effect on and as of the date this
representation is being made and is deemed made hereunder.
3.3 Authority; Authorization, Execution and Delivery; Enforceability; No
Conflict.
(a) The Stockholder has the full and absolute legal right,
capacity, power and authority (if applicable, corporate, partnership or
otherwise) to execute, deliver and perform its obligations under this Agreement
to which it is or will be a party, and to consummate the transactions
contemplated hereby and thereby. The Stockholder's execution and delivery of
this Agreement to which it is or will be a party, and the performance by the
Stockholder of its obligations hereunder and thereunder, have been duly and
validly authorized by all requisite action on the part of such Stockholder
(including its board of directors and all committees thereof and its
stockholders). This Agreement to which the Stockholder is or will be a party has
been, or upon the execution hereof and thereof will be, duly and validly
executed and delivered by the Stockholder, and this Agreement is, or upon the
execution hereof and thereof will be, duly and validly executed and delivered by
the Stockholder and constitutes, or upon the Stockholder's execution and
delivery hereof and thereof, will constitute, a valid and binding obligation of
the Stockholder, enforceable against it in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar Laws affecting creditors' rights and
remedies generally, and, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
(b) Neither the execution and delivery by the Stockholder of, nor
the performance of its obligations under, this Agreement, nor the consummation
by the Stockholder of the transactions contemplated hereby, nor the compliance
by the Stockholder with any of the provisions hereof, will (i) conflict with, or
result in any violation of, or cause a default (with or without notice or lapse
of time or both) under, any provision of the Company's or any of its
Subsidiaries' Charter Documents, or, such Stockholder's Charter Documents, (ii)
conflict with, or result in any violation of, or cause a default (with or
without notice or lapse of time or both) under, or give rise to any right of
termination, amendment, cancellation or acceleration of any obligations
contained in, or the loss of any benefit under, any term, condition or provision
of any provision of any Contract to which the Stockholder, the Company or any of
the Company's Subsidiaries is a party or by which the Stockholder, the Company,
any of the Company's Subsidiaries, or any of its, or their assets or properties
are or may be bound, (iii) violate any Law applicable to the Stockholder, the
Company, or any of the Company's Subsidiaries, or (iv) result in an Encumbrance
on or against any assets, rights or properties of the Stockholder, the Company,
or any of the Company's Subsidiaries, or on or against any capital stock or
other securities of the Company or any of its Subsidiaries, or give rise to any
claim against the Company, any of the Company's Subsidiaries or the Purchaser.
3.4 Consents.
Except as set forth on Schedule 3.4, no Permit, authorization, consent
or approval of or by, or any notification of or filing with, any Person
5
(governmental or private) is required for, as a result of, or in connection with
the execution, delivery and performance by the Stockholder of this Agreement or
the consummation of the transactions contemplated hereby.
3.5 Brokers.
The Stockholder has not employed any broker or finder or incurred any
Liability for any brokerage fees, commissions or finders' fees or similar
compensation or transaction based payments in connection with the transactions
contemplated by this Agreement.
3.6 Investment Representations.
(a) The Stockholder acknowledges and agrees that (i) the TIGR
Shares issued to the Stockholder are to be held by the Stockholder solely for
its own account for investment purposes only and not for resale, subdivision,
transfer, assignment, pledge or other disposition. The Stockholder does not have
any present plan or intention to sell, subdivide, transfer, assign, pledge or
otherwise dispose of any part of the TIGR Shares issued to the Stockholder or to
enter into any Contract or other undertaking or arrangement with respect
thereto.
(b) The Stockholder has such knowledge and experience in financial
and business matters that the Stockholder is capable of evaluating the merits
and risks of an investment in the TIGR Shares and the Stockholder can bear the
economic risk of such investment. The Stockholder acknowledges and agrees that
the Purchaser has made available to the Stockholder and its attorneys and other
representatives all agreements, documents, records and books that the
Stockholder has requested relating to its investment in the TIGR Shares. The
Stockholder further acknowledges and agrees that it has had an opportunity to
ask questions of, and to receive answers from, individuals acting on behalf of
the Purchaser concerning the Purchaser and the terms and conditions of the
Stockholder's investment in the TIGR Shares hereunder, and answers have been
provided to all of such questions to the full satisfaction of the Stockholder.
(c) The Stockholder has relied only upon such advice as may have
been received from tax, accounting, legal and financial advisors. The
Stockholder has not received any assurances or representations from any Person
associated with the Purchaser or its Affiliates as to the benefits, economic,
tax or otherwise, likely to result from its investment in the TIGR Shares.
(d) The Stockholder understands that there are substantial
restrictions on the transferability of the TIGR Shares, that there will be no
public market for the TIGR Shares, and, accordingly, the Stockholder will need
to bear the economic risk of its investment for an indefinite period of time and
will not be readily able to liquidate its investment in case of emergency.
(e) The Stockholder understands that the TIGR Shares are
restricted securities under the Securities Act and that they may not be resold,
subdivided, transferred, assigned, pledged or otherwise disposed of unless they
are first registered under the federal securities Laws or unless an exemption
from such registration is available. The TIGR Shares are subject to registration
rights pursuant to which the Purchaser agrees to register the TIGR Shares issued
to the Stockholder upon the Purchaser's filing with the Commission of a
registration statement pursuant to which such TIGR Shares may be registered with
the Commission in a secondary offering at anytime following the date of the
execution of this Agreement. The Purchaser also agrees and covenants to treat
all TIGR Shares used as payment for this Agreement, in the same manner as all
other TIGR Shares with respect to share splits, reverse splits, pre-emption,
rights issues and any other share event which may effect the TIGR Shares
generally.
(f) Except as set forth in Section 3.6(e) above, the Stockholder
understands that the Purchaser has no obligation or intention to register the
TIGR Shares.
(g) The Stockholder is not a Person that is, or would cause the
Purchaser to be, disqualified pursuant to Rule 262 promulgated under the
Securities Act.
(h) The Stockholder understands that the Purchaser is relying on
the representations and warranties set forth in this Section 3.6 in issuing the
TIGR Shares to the Stockholder.
(i) As of the First Closing Date, the Stockholder is an
"accredited investor" as defined in Rule 501 of Regulation D promulgated under
the Securities Act due to the fact that the Stockholder was formed for the
6
purpose of acquiring the TIGR Shares and all of the holders of the issued and
outstanding share capital of the Stockholder are "accredited investors" as
defined in Rule 501 of Regulation D promulgated under the Securities Act, as at
First Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES of the seller group
Each member of the Seller Group hereby jointly and severally represents
and warrants to the Purchaser as of October 29, 2004 as follows:
4.1 Organization, Power, Authority and Good Standing.
The Company and each of its Subsidiaries are corporations duly
organized, validly existing and in good standing under the respective Laws of
the jurisdiction of their incorporation and have all requisite power and
authority (corporate or otherwise) to own, lease and operate their respective
assets and properties and to carry on their respective businesses (all of which
collectively comprise the Business) as presently conducted. The Company and each
of its Subsidiaries are duly qualified and in good standing to transact business
as a foreign Person in those jurisdictions set forth on Schedule 4.1, which
jurisdictions constitute all of the jurisdictions in which the character of the
property owned, leased or operated by the Company or such Subsidiaries or the
nature of the business or activities conducted by the Company or such
Subsidiaries makes such qualification necessary. The Purchaser has been
furnished with true, correct and complete copies of the Charter Documents of the
Company and each of its Subsidiaries, in each case as amended and in effect on
and as of the date this representation is being made and is deemed made
hereunder. Except as set forth on Schedule 4.1, neither the Company nor any of
its Subsidiaries has (i) engaged in any business or activity other than the
Business, or (ii) used any trade name or assumed name or other corporate name at
any time.
4.2 Authority; Authorization, Execution and Delivery; Enforceability; No
Conflict.
(a) The Company has all requisite power and authority (corporate
or otherwise) to execute, deliver and perform its obligations under this
Agreement, and to consummate the transactions contemplated hereby and thereby.
The Company's execution and delivery of this Agreement, and the performance by
the Company of its obligations hereunder and thereunder, have been duly and
validly authorized by all requisite action on the part of the Company (including
its board of directors and all committees thereof and its stockholders). This
Agreement is or will be a party has been, or upon the Company's execution hereof
and thereof will be, duly and validly executed and delivered by the Company and
constitutes, or upon the Company's execution and delivery hereof and thereof
will constitute, a valid and binding obligation of the Company, enforceable
against the Company in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar Laws affecting creditors' rights and remedies generally,
and, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(b) Neither the execution and delivery by the Company and the
Stockholder of, nor the performance of their respective obligations under, this
Agreement, nor the consummation by the Company and the Stockholder of the
transactions contemplated hereby, nor the compliance by the Company and the
Stockholder with any of the provisions hereof, will (i) conflict with, or result
in any violation of, or cause a default (with or without notice or lapse of time
or both) under, any provision of the Company's or any of its Subsidiaries'
Charter Documents, (ii) conflict with, or result in any violation of, or cause a
default (with or without notice or lapse of time or both) under, or give rise to
any right of termination, amendment, cancellation or acceleration of any
obligations contained in, or the loss of any benefit under, any term, condition
or provision of any provision of any Contract to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries or
any of their respective assets or properties are or may be bound, (iii) violate
any Law applicable to the Company or any of its Subsidiaries, or (iv) result in
an Encumbrance on or against any assets, rights or properties of the Company or
any of its Subsidiaries, or on or against any capital stock or other securities
of the Company or any of its Subsidiaries, or give rise to any claim against the
Company, any of the Company's Subsidiaries or the Purchaser.
4.3 Consents.
Except as set forth on Schedule 4.3, no Permit, authorization, consent
or approval of or by, or notification of or filing with, any Person
(governmental or otherwise) is required for, as a result of, or in connection
with the execution, delivery and performance by the Company of this Agreement or
the consummation of the transactions contemplated hereby.
7
4.4 Capitalization.
(a) The authorized capital stock of the Company and each of its
Subsidiaries is set forth on Schedule 4.4(a), which schedule also sets forth the
total number of outstanding shares of capital stock of the Company and each of
its Subsidiaries and options to acquire shares of capital stock of the Company.
All such outstanding shares and options to acquire shares of capital stock of
the Company disclosed on Schedule 4.4(a) are duly and validly issued and
outstanding, fully paid and non-assessable, with no personal Liability attached
to the ownership thereof, and are held of record and beneficially by the
Persons, and in the respective amounts, set forth on Schedule 4.4(a), without
Encumbrance except as noted in Section 4.4(b). On the First Closing Date, the
Stockholder will be the legal owner of at least 80% of the issued and
outstanding shares of Stock. On the Second Closing Date, the Stockholder will be
the legal owner of all 100% of the issued and outstanding shares of Stock, on a
fully diluted basis, as if all outstanding Options, warrants, convertible loans
or other rights for the purchase of shares of capital stock or convertible
securities of the Company had been fully (a) exercised immediately prior to such
issuance (and the resulting securities fully converted into shares of Stock, if
so convertible) as of such date or (b) released or lapsed as of such date so
that such Options, warrants, convertible loans or other rights may no longer be
exercised.
(b) Except as set forth on Schedule 4.4(a), there are no
outstanding securities that are convertible into, exchangeable for, or carrying
the right to acquire, any equity securities of the Company or any of its
Subsidiaries, or subscriptions, warrants, options, calls, puts, convertible
securities, registration or other rights, arrangements or commitments obligating
the Company or any of its Subsidiaries to issue, sell, register, purchase or
redeem any of its respective securities or any ownership interest or rights
therein. Except as set forth on Schedule 4.4(b), there are no Contracts,
commitments, arrangements, understandings or restrictions to which the
Stockholder, or any other Person is bound relating in any way to any shares of
capital stock or other securities of the Company or any of its Subsidiaries,
including voting trusts or other similar agreements or understandings with
respect to the voting of the Company's or any of its Subsidiaries' capital stock
or other securities. There are no stock appreciation rights, phantom stock
rights, or similar rights or arrangements outstanding with respect to the
Company or any of its Subsidiaries.
(c) All securities issued by the Company or any of its
Subsidiaries have been issued in transactions exempt from registration under all
applicable federal and state securities Laws, and neither the Company nor any of
its Subsidiaries has violated any applicable federal or state securities Laws in
connection with the issuance of any such securities.
4.5 Subsidiaries; Investments.
Except as set forth on Schedule 4.5, neither the Company nor any of its
Subsidiaries owns or holds, directly or indirectly, any equity interest in or
debt obligation of (excluding accounts receivable arising in the ordinary course
of business, consistent with past practice) any other Person.
4.6 Financial Information.
(a) Schedule 4.6(a) contains true, correct and complete copies of
the following:
(i) the audited consolidated balance sheets of the
Company and its Subsidiaries as of June 30, 2004 (the "Annual Balance
Sheet"; and such date being referred to as the "Annual Balance Sheet
Date"), June 30, 2003, and June 30, 2002, and the related audited
consolidated statements of income, stockholders' equity and cash flows
of the Company and its Subsidiaries for the fiscal years then ended,
including any footnotes and schedules thereto (all of the foregoing,
including the Annual Balance Sheet being collectively referred to as
the "Annual Financial Statements");
(ii) the unaudited consolidated balance sheets of the
Company and its Subsidiaries as of August 31, 2004, and each subsequent
month then ended through the First Closing Date (collectively, the
"Interim Balance Sheets"), and the unaudited consolidated statements of
income, stockholders' equity and cash flows of the Company and its
Subsidiaries for the period then ended, and each subsequent monthly
period then ended through the First Closing Date, including any and all
footnotes and schedules thereto (all of the foregoing, including the
Interim Balance Sheets, being collectively referred to as the "Interim
Financial Statements"); and
(iii) the unaudited consolidated balance sheet of the
Company and its Subsidiaries as of August 31, 2004 (the "Latest Balance
8
Sheet"; and such date being referred to as the "Latest Balance Sheet
Date"), and the unaudited consolidated statements of income,
stockholders' equity and cash flows of the Company and its Subsidiaries
for the period then ended, including any and all footnotes and
schedules thereto (all of the foregoing, including the Latest Balance
Sheet, being collectively referred to as the "Latest Financial
Statements"; and the Annual Financial Statements, the Interim Financial
Statements and the Latest Financial Statements being collectively
referred to as the "Financial Statements").
(b) The Financial Statements (i) are true, correct and complete,
(ii) fairly present in all material respects the consolidated financial position
of the Company and each of its Subsidiaries as of the dates indicated and the
consolidated results of operations of the Company and each of its Subsidiaries
for the periods indicated, (iii) have been prepared in accordance with GAAP (to
the extent GAAP has been correctly applied) consistently applied throughout the
periods covered thereby (subject to the absence of footnotes and schedules that
may be required by GAAP and, in the case of the Latest Financial Statements,
normal year-end adjustments that are not material individually or in the
aggregate), and (iv) are in accordance with the books and records of the Company
and each of its Subsidiaries, which books and records are true, correct and
complete and have been maintained in a manner consistent with historical
practice.
(c) Schedule 4.6(c) contains a true, correct and complete summary
of all accounts payable, accrued expenses and accounts receivable of the Company
and each of its Subsidiaries as of the most recent practicable date prior to the
date hereof, which schedule sets forth the name of the account debtor (in the
case of accounts receivable) or account creditor (in the case of accounts
payable) and the amount owed by such account debtor or owing to such account
creditor (identifying the portion of such amount that is current, thirty (30)
days past due, sixty (60) days past due, ninety (90) days past due, and more
than ninety (90) days past due).
4.7 Absence of Undisclosed Liabilities.
Except as set forth on Schedule 4.7, neither the Company nor any of its
Subsidiaries has any Liability except (i) to the extent expressly reflected or
reserved against on the Latest Balance Sheet, (ii) Liabilities under Contracts
(other than any Liability arising from any breach or violation thereof or
default thereunder), and (iii) Liabilities incurred in the ordinary course of
business, consistent with past practice, since the Latest Balance Sheet Date
(other than any such Liability arising from any breach or violation of, or
default under, any Contract, or arising from any breach of warranty, tort,
infringement, or violation of any Law or any Proceeding). There are no loss
contingencies (as such term is used in Statement of Financial Accounting
Standards No. 5 issued by the Financial Accounting Standards Board in March
1975) of or affecting the Company or any of its Subsidiaries that are not
adequately provided for or disclosed on the Latest Balance Sheet or in the
footnotes or schedules thereto. Neither the Company nor any of its Subsidiaries
has, either expressly or by operation of Law, assumed or undertaken any
Liability of any other Person, including any obligation for corrective or
remedial action relating to Environmental, Health and Safety Laws.
4.8 Absence of Changes.
Since the Latest Balance Sheet Date, except as set forth on Schedule
4.8, the Company and each of its Subsidiaries have been operated in the ordinary
course of business, consistent with past practice, and there has not been:
(i) any event or condition that has resulted in or could
reasonably be expected to result in an adverse change in the business,
operations, assets, condition (financial or otherwise), operating
results, liabilities, relations with employees, customers, suppliers or
prospects of the Company or any of its Subsidiaries, or any casualty
loss or damage to the assets or properties of the Company or any of its
Subsidiaries, whether or not covered by insurance (a "Material Adverse
Change");
(ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital
stock or other securities of the Company or any of its Subsidiaries, or
any direct or indirect redemption, purchase or other acquisition of any
capital stock or other securities of the Company or any of its
Subsidiaries, or any other payments of any nature directly or
indirectly to or for the benefit of the Stockholder or any Affiliate of
the Company (whether or not on or with respect to any shares of capital
stock or other securities of the Company or any of its Subsidiaries
owned by the Stockholder or Affiliate), other than salaries and
benefits paid in the ordinary course of business, consistent with past
practice;
9
(iii) any general uniform increase in the compensation of
employees (including any increase pursuant to any bonus, pension,
profit-sharing or other plan or commitment) of the Company or any of
its Subsidiaries, or any increase in or prepayment of any such
compensation payable to or to become payable to any director, officer
or key employee;
(iv) any acquisition or disposition of assets or
properties owned by the Company or any of its Subsidiaries, other than
in the ordinary course of business, consistent with past practice;
(v) any agreement or commitment on the part of the
Company or any of its Subsidiaries to merge, amalgamate or consolidate
with or into, or otherwise acquire, any other Person or division
thereof;
(vi) any change in depreciation or amortization policies
or rates previously adopted, any change in income or expense
recognition or bad debt reserve, write-down or write-off policies
previously adopted, any material write-up or write-down of inventory or
other assets or any other change in other accounting or in Tax
reporting or methods or practices followed by the Company or any of its
Subsidiaries;
(vii) any change in the manner in which products or
services of the Company or any of its Subsidiaries are marketed
(including any change in prices), any change in the manner in which the
Company or any of its Subsidiaries extends discounts or credit to
customers, or any change in the manner or terms by which the Company or
any of its Subsidiaries collects accounts receivable, except in the
ordinary course of business and which would not have a Material Adverse
Effect;
(viii) any failure by the Company or any of its Subsidiaries
to make scheduled capital expenditures or investments, or any failure
to pay trade accounts payable or any other Liability of the Company or
any of its Subsidiaries when due; or
(ix) any Contract or other understanding or arrangement
(other than this Agreement), whether in writing or otherwise, to take
any of the actions specified in the foregoing clauses (i) through
(viii).
4.9 Tax Matters.
(a) Except as set forth on Schedule 4.9(a), the Company, each of
its Subsidiaries, and each other Person included in any consolidated or combined
Tax Return and part of an affiliated group, within the meaning of Section 1504
of the Internal Revenue Code of 1986, as amended (the "Code"), of which the
Company or any of its Subsidiaries is or has been a member:
(i) has timely paid or caused to be paid all Taxes
required to be paid by it through the date hereof and as of the First
Closing Date (including any Taxes shown due on any Tax Return);
(ii) has filed or caused to be filed in a timely and
proper manner (within any applicable extension periods) all Tax Returns
required to be filed by it with the appropriate Governmental Entities
in all jurisdictions in which such Tax Returns are required to be
filed; and
(iii) has not requested or caused to be requested any
extension of time within which to file any Tax Return, which Tax Return
has not since been filed.
(b) The Company has previously delivered to the Purchaser true,
correct and complete copies of all Tax Returns filed by or on behalf of the
Company and each of its Subsidiaries for all completed Tax years of the Company
or such Subsidiary that remain open for audit or review by the relevant Taxing
authority. All such Tax Returns were true, correct and complete.
(c) Except as set forth in Schedule 4.9(c):
(i) neither the Company nor any of its Subsidiaries has
been notified by the Internal Revenue Service or any other Taxing
authority that any issues have been raised (and no such issues are
currently pending) by the Internal Revenue Service or any other Taxing
10
authority in connection with any Tax Return of the Company or any of
its Subsidiaries, there are no pending Tax audits with respect to the
Company or any of its Subsidiaries, and no waivers of statutes of
limitations related to Taxes have been given or requested with respect
to the Company or any of its Subsidiaries;
(ii) full and adequate provision has been made (A) on the
Latest Balance Sheet for all Taxes payable by the Company and each of
its Subsidiaries for all periods ending on or prior to the Latest
Balance Sheet Date, and (B) on the books and records of the Company and
each of its Subsidiaries for all Taxes payable by the Company and such
Subsidiaries for all periods beginning on or after the Latest Balance
Sheet Date;
(iii) neither the Company nor any of its Subsidiaries has
incurred any Tax Liability from and after the Latest Balance Sheet Date
other than Taxes incurred in the ordinary course of business,
consistent with past practice;
(iv) neither the Company nor any of its Subsidiaries (A)
is, or has made an election to be treated as, a "consenting
corporation" under Section 341(f) of the Code, or (B) is, or has been,
a "personal holding company" within the meaning of Section 542 of the
Code;
(v) the Company and each of its Subsidiaries have
complied in all respects with all applicable Laws relating to the
collection or withholding of Taxes (including sales Taxes and the
withholding of Taxes from the wages of employees);
(vi) neither the Company nor any of its Subsidiaries is,
or has ever been, a party to any Tax sharing, indemnity of similar
agreement with any Person;
(vii) neither the Company nor any of its Subsidiaries has
incurred any Liability to make or possibly make any payments, either
alone or in conjunction with any other payments, that:
(A) are not deductible under, or would otherwise
constitute a "parachute payment" within the meaning of,
Section 280G of the Code (or any corresponding provision of
domestic or foreign income Tax Law); or
(B) are or may be subject to the imposition of
an excise Tax under Section 4999 of the Code;
(viii) neither the Company nor any of its Subsidiaries has
agreed to, or is required to, make any adjustments or changes either
on, before or after the First Closing Date, to its accounting methods
pursuant to Section 481 of the Code, and the Internal Revenue Service
has not proposed any such adjustments or changes in the accounting
methods of the Company or any such Subsidiary;
(ix) to the knowledge of the Seller Group, no claim has
ever been made by any Taxing authority in a jurisdiction in which the
Company or any of it Subsidiaries does not file Tax Returns that the
Company or any such Subsidiary is, or may be subject to, taxation by
that jurisdiction; and
(x) neither the Company, nor any of its Subsidiaries nor
any Stockholder is a foreign Person within the meaning of Section
1.1445-2(b) of the rules and regulations promulgated under Section 1445
of the Code.
4.10 Title to Assets, Properties and Rights and Related Matters.
(a) The Company and each of its Subsidiaries, as applicable, have
good and marketable title (or a valid leasehold interest) to all of the assets,
properties and interests in properties, real, personal or mixed, reflected on
the Latest Balance Sheet or acquired after the Latest Balance Sheet Date (except
for assets or properties sold or otherwise disposed of since the Latest Balance
Sheet Date in the ordinary course of business, consistent with past practice,
and accounts receivable and notes receivable paid in full subsequent to the
Latest Balance Sheet Date in the ordinary course of business, consistent with
past practice), free and clear of all Encumbrances, of any kind or character,
except for those Encumbrances set forth on Schedule 4.10(a) and Permitted
Encumbrances. Such assets are in good operating condition and repair (normal
wear and tear excepted), are sufficient to operate the Business as presently
conducted and as presently proposed to be conducted, are suitable for the uses
for which they are used in the Business, and are not subject to any condition
that materially interferes with the economic value or use thereof. With respect
to any leased assets, such assets are in such condition as to permit the
surrender thereof to the lessors thereunder on the date hereof without any cost
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or expense for repair or restoration as if the related leases were terminated or
expired on the date hereof in the ordinary course of business, consistent with
past practice.
(b) Schedule 4.10(b) contains a materially true, correct and
complete list of all tangible personal property owned by the Company and each of
its Subsidiaries as of the First Closing Date. Except for any inventory,
supplies, equipment, tractors, trailers and automobiles in transit in the
ordinary course of business, consistent with past practice, all tangible
personal property listed on Schedule 4.10(b) is located on the Company's or its
Subsidiaries' premises listed on Schedule 4.11(a).
4.11 Real Property - Owned or Leased.
(a) Schedule 4.11(a) contains a list and brief description of all
of the real property owned, leased, subleased or otherwise occupied by the
Company or any of its Subsidiaries. The description of each parcel of real
property subject to one or more leases (the "Leased Property") includes the
names of the lessor and the lessee and the basic terms thereof. The real
property listed on Schedule 4.11(a) constitutes all real property used or
occupied by the Company or any of its Subsidiaries in connection with the
Business.
(b) With respect to the real property listed on Schedule 4.11(a),
except as set forth on Schedule 4.11(b):
(i) no portion of the real property is subject to any
pending condemnation or other Proceeding, and, to the knowledge of the
Seller Group, there is no threatened condemnation or other Proceeding
with respect thereto;
(ii) the physical condition of the real property is
sufficient to permit the continued conduct of the Business as presently
conducted and as presently proposed to be conducted, subject to the
provision of usual and customary maintenance and repairs performed in
the ordinary course of business, consistent with past practice, with
respect to similar properties of like age and construction;
(iii) the Company and its Subsidiaries, as applicable,
indicated on Schedule 4.11(b) are the fee owners of the real property
or the owners and holders of all the leasehold estates purported to be
granted by the leases associated with the Leased Property, as
applicable;
(iv) there are no Contracts to which the Company, any of
its Subsidiaries, or any of their respective Affiliates is a party,
granting to any party or parties the right of use or occupancy of any
portion of the real property;
(v) there are no parties (other than the Company and its
Subsidiaries) in possession of any portion of the real property; and
(vi) no notice of any increase in the assessed valuation
of any portion of the real property and no notice of any contemplated
special assessment with respect to any portion of the real property has
been received by the Company or any of its Subsidiaries, and, to the
knowledge of the Seller Group, there is no threatened increase in
assessed valuation or threatened special assessment pertaining to any
portion of the real property.
4.12 Intellectual Property.
(a) Except as set forth on Schedule 4.12(a):
(i) the Company and each of its Subsidiaries, as
applicable, own, have the right to use, sell, license and dispose of,
and have the right to bring actions for the infringement of, all
Intellectual Property Rights used in, necessary for, or required for
the conduct of the Business as presently conducted and as presently
proposed to be conducted (collectively, the "Owned Requisite Rights"),
other than those Intellectual Property Rights for which the Company or
any such Subsidiary has a valid license, all of which are listed on
Schedule 4.12(a) (collectively, the "Licensed Requisite Rights"; and
together with the Owned Requisite Rights, the "Requisite Rights"), and
such rights to use, sell, license, dispose of and bring actions are
exclusive with respect to the Owned Requisite Rights;
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(ii) neither the Company nor any of its Subsidiaries has
granted any Person the right to use any of the Owned Requisite Rights;
(iii) there exists no material default, or any event which
upon the giving of notice or the passage of time, or both, would give
rise to a material claim of a default by the Company or any of its
Subsidiaries under the licenses granting the Company and/or any of its
Subsidiaries the Licensed Requisite Rights;
(iv) the Company and each of its Subsidiaries have taken
all commercially reasonable and practicable steps designed to safeguard
and maintain (A) the secrecy and confidentiality of the Company's and
its Subsidiaries' Confidential Information, and (B) the proprietary
rights of the Company and each of its Subsidiaries in all of the
Requisite Rights;
(v) to the knowledge of the Seller Group, neither the
Company nor any of its Subsidiaries has interfered with, infringed
upon, misappropriated or otherwise come into conflict with any
Intellectual Property Rights of any Person or committed any acts of
unfair competition or received from any Person in the past five years
any notice, charge, complaint, claim or assertion thereof, and no such
charge, complaint, claim or assertion is impliedly threatened by an
offer to license from another Person; and
(vi) neither the Company nor any of its Subsidiaries has
sent to any Person in the past five years, or otherwise communicated to
any Person, any notice, charge, complaint, claim or other assertion of
any present, impending or threatened interference with, infringement
upon, misappropriation of, or other conflict with any Intellectual
Property Rights of the Company or any of its Subsidiaries by such other
Person or any acts of unfair competition by such other Person, nor, to
the knowledge of the Seller Group, is any such interference,
infringement, misappropriation, conflict or act of unfair competition
occurring or threatened.
(b) Schedule 4.12(b) contains a true, correct and complete list of
all applications, filings and other formal actions made or taken pursuant to any
Laws by the Company and/or any of its Subsidiaries to perfect or protect their
respective interests in their respective Intellectual Property Rights.
4.13 Agreements, No Defaults, Etc.
(a) Schedule 4.13(a) contains a true, correct and complete list
and a brief description of all material Contracts to which the Company or any of
its Subsidiaries is a party and (x) that were entered into or made outside the
ordinary course of business, consistent with past practice, or (y) that were
entered into or made in the ordinary course of business, consistent with past
practice, and are described in clauses (i) through (xiii) of the next sentence
of this Section 4.13. Except as set forth on Schedule 4.13(a), neither the
Company nor any of its Subsidiaries is a party to any of the following material
Contracts:
(i) distributorship, dealer, sales, advertising, agency,
manufacturer's representative, or any other Contract relating to the
payment of a commission;
(ii) any Contract relating to the employment of any
officer, employee or consultant or any other type of Contract or other
understanding or arrangement with any officer, employee or consultant,
including any Contract or other understanding or arrangement relating
to severance payments;
(iii) any indenture, mortgage, promissory note, loan
agreement, pledge agreement, guaranty or conditional sale or other
Contract relating to the borrowing of money, a line of credit or a
Capital Lease;
(iv) any Contract for charitable contributions in excess
of $5,000 individually or $10,000 in the aggregate;
(v) any Contract for capital expenditures in excess of
$10,000 individually or $50,000 in the aggregate;
(vi) any Contract for the sale of any assets, properties
or rights other than the sale of services or products in the ordinary
course of business, consistent with past practice;
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(vii) any Contract pursuant to which the Company or any of
its Subsidiaries is a lessee of or holds or operates any machinery,
equipment, motor vehicles, office furniture, fixtures, products,
merchandise or other personal property owned by any other Person in
excess of $10,000 individually or $50,000 in the aggregate;
(viii) any Contract relating to the lending or investing of
funds;
(ix) any Contract relating to any form of intangible
property, including any Intellectual Property Rights;
(x) any Contract that restricts the Company or any of its
Subsidiaries from engaging in any aspect of the Business or any other
business anywhere in the world;
(xi) any Contract or group of related Contracts with the
same Person or group of Affiliated Persons (excluding purchase orders
entered into in the ordinary course of business, consistent with past
practice, that are to be completed within three months of entering into
such purchase orders) for the purchase or sale of products or services
under which the undelivered or unperformed balance or portion thereof
(including the aggregate undelivered or unperformed balance or portion
under any such Contracts between the same Person and the Company or any
of its Subsidiaries) has a selling price in excess of $50,000;
(xii) any Contract for the acquisition or disposition of a
Person or a division of a Person made within the preceding five years
(whether or not such acquisition or disposition was consummated); or
(xiii) any other material Contract material to the Business.
(b) The Contracts disclosed on Schedule 4.4(b), the leases (and
any other Contracts) disclosed on Schedule 4.11(a), the licenses (and any other
Contracts) disclosed on Schedule 4.12(a), the insurance policies (and any other
Contracts) disclosed on Schedule 4.16(a), and the Contracts disclosed on
Schedule 4.21 are incorporated by reference onto Schedule 4.13. The Contracts
disclosed on Schedule 4.13, together with the Contracts incorporated by
reference onto Schedule 4.13, are collectively referred to as the "Material
Contracts."
(c) All Material Contracts (i) are in full force and effect, (ii)
constitute legal, valid and binding obligations of the Company and/or its
Subsidiaries that are parties thereto and, to the knowledge of the Seller Group,
the other parties thereto, and (iii) are enforceable in accordance with their
terms against the Company and/or its Subsidiaries that are parties thereto and,
the other parties thereto, in each case subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). The Company and each
of its Subsidiaries have performed all of the respective obligations required to
be performed by them to date pursuant to the terms of the Material Contracts,
and there exists no default, or any event which upon the giving of notice or the
passage of time, or both, would give rise to a claim of a default in the
performance by the Company or any of its Subsidiaries or, to the knowledge of
the Seller Group, any other party to any of the Material Contracts of their
respective obligations thereunder. The Purchaser has been furnished with true,
correct and complete copies of all written Material Contracts and Schedule
4.13(a) (including Contracts incorporated by reference thereon) contains true,
correct and complete descriptions of all oral Contracts listed on Schedule
4.13(a) (including Contracts incorporated by reference thereon).
(d) Schedule 4.13(d) contains a true, correct and complete list of
all Funded Indebtedness of the Company and each of its Subsidiaries, in each
case showing the aggregate principal amount thereof (and the aggregate amount of
any undrawn commitments with respect thereto), the name of the lender, and the
name of the respective borrower and any other Person that directly or indirectly
guaranteed such Funded Indebtedness.
4.14 Litigation, Etc.
(a) Except as disclosed on Schedule 4.14(a), there are no (i)
Proceedings pending or, to the knowledge of the Seller Group, threatened against
the Company or any of its Subsidiaries, whether at law or in equity, civil or
criminal in nature, or before or by any Governmental Entity or arbitrator, nor,
to the knowledge of the Seller Group, does there exist any basis therefor, or
(ii) Orders of any Governmental Entity or arbitrator with respect to, involving
or against the Company or any of its Subsidiaries. The Company and each of its
14
Subsidiaries have delivered to the Purchaser all material documents and
correspondence relating to the matters disclosed on Schedule 4.14(a).
(b) Schedule 4.14(b) lists each matter described in Section
4.14(a) that (i) resulted in any criminal sanctions against the Company or any
of its Subsidiaries, or (ii) was in existence within the last five years and
resulted in payments in excess of $10,000 by the Company or any of its
Subsidiaries (whether as a result of a judgment, civil fine, settlement or
otherwise).
4.15 Compliance with Laws.
The Company and each of its Subsidiaries (a) have complied in all
material respects with, and are in compliance with, all Laws, Orders and Permits
applicable to them and the Business, and (b) have all Permits used or necessary
in the conduct of the Business. All of the material Permits referred to in the
preceding sentence are listed on Schedule 4.15 and are in full force and effect.
No violations with respect to any of the material Permits listed on Schedule
4.15 have occurred or are or have been recorded, and no Proceeding is pending
or, to the knowledge of the Seller Group, threatened to revoke or limit any such
Permits. No investigation or review by any Governmental Entity with respect to
the Company or any of its Subsidiaries is pending or, to the knowledge of the
Seller Group, threatened, nor has any Governmental Entity notified the Company
or any of its Subsidiaries of its intention to conduct the same. Neither the
Company nor any of its Subsidiaries has received any opinion or memorandum or
legal advice from legal counsel to the effect that it is exposed, from a legal
standpoint, to any Liability or disadvantage that may be material to its
business, financial condition, operations, property or affairs. No member of the
Seller Group is aware of any proposed Law that would materially and adversely
affect the Company or any of its Subsidiaries in, conducting the Business in any
jurisdiction in which the Company or any such Subsidiary is presently conducting
business.
4.16 Insurance.
(a) Schedule 4.16(a) contains a true, correct and complete list of
all policies of liability, theft, fidelity, life, fire, product liability,
cargo, workers' compensation, health and other forms of insurance held by or on
behalf of the Company or any of its Subsidiaries (specifying the insurer, amount
of coverage, basis of coverage (i.e., "occurrence" or "claims made"), type of
insurance, policy number and any pending claims thereunder). All such coverages
have been maintained at all times during the course of the operation of the
Business. The Company and each of its Subsidiaries is insured against all risks
usually insured against by Persons conducting similar businesses and operating
similar properties in the localities where the Business is conducted and the
properties of the Company and its Subsidiaries are located, under policies of
such types and in such amounts as are customarily carried by such Persons.
(b) Except as set forth on Schedule 4.16(b), with respect to each
policy of insurance listed on Schedule 4.16(a): (i) all premiums with respect
thereto are currently paid and to the knowledge of the Company are not subject
to adjustment, (ii) neither the Company nor any of its Subsidiaries is in
default in any respect with respect to its respective obligations under such
policy, (iii) to the knowledge of the Seller Group, no basis exists that would
give any insurer under any such policy the right to cancel or unilaterally
reduce or limit the stated coverages contained in such policy, (iv) there are no
outstanding claims currently pending under such policy that could be expected to
cause an increase in the insurance rates of the Company or any of its
Subsidiaries, and no facts or circumstances exist that might be expected to
relieve the insurer under such policy of its obligations to satisfy in full any
claim thereunder, and (v) neither the Company nor any of its Subsidiaries has
received any notice that any such policy has been or shall be canceled or
terminated or will not be renewed on substantially the same terms as are now in
effect or that the premium on such policy shall be increased on the renewal
thereof.
4.17 Labor Relations; Employees.
(a) Schedule 4.17(a) sets forth a list of all directors, officers
and key employees of the Company and each of its Subsidiaries as of the date
hereof, together with their respective titles (if any) and positions held, their
current compensation (including salary, wages, bonuses and commissions), and the
respective dates on which they commenced employment. To the extent any such
employee is on a leave of absence, Schedule 4.17(a) indicates the nature of such
leave of absence and such employee's anticipated date of return to active
employment. No officer or key employee listed on Schedule 4.17(a) has given the
Company or any of its Subsidiaries notice, and, to the knowledge of the Seller
Group, no officer or key employee listed on Schedule 4.17(a) has any plans or
intends to terminate his or her employment with the Company or such Subsidiary.
No former officer or key employee has left the service of the Company or any of
its Subsidiaries within the last six months.
15
(b) Schedule 4.17(b) sets forth the aggregate number of employees,
other non-supervisory personnel, independent contractors and owner/operators
that work for the Company or any of its Subsidiaries, specifying in the case of
the Company and each such Subsidiary the number that belong to a union or are
otherwise covered by an employment agreement or a collective bargaining
agreement, identified by terminal location or facility.
(c) Except as set forth on Schedule 4.17(c), (i) there is no labor
strike, dispute or grievance, or work slowdown or stoppage actually pending or,
to the knowledge of the Seller Group, threatened against or involving the
Company or any of its Subsidiaries, and (ii) neither the Company nor any of its
Subsidiaries is a party to or bound by any collective bargaining agreement,
union Contract or similar agreement, no such Contract or agreement is currently
being negotiated by the Company or any of its Subsidiaries, no labor union has
taken any action with respect to organizing the employees of the Company or any
of its Subsidiaries, and no representation question exists with respect to any
such employees.
(d) The Company, and each of its Subsidiaries, have complied in
all material respects with all Laws relating to the hiring and retention of all
employees, leased employees and independent contractors relating to wages,
hours, Company Employee Plans, workers' compensation, unemployment, equal
opportunity, collective bargaining, and the payment of social security and other
Taxes.
(e) Schedule 4.17(e) sets forth a true, correct and complete list
of any and all unfair labor practice charges or other Proceedings, charges,
employment discrimination lawsuits, wrongful discharge lawsuits, citations and
litigation, wage and hour charges and litigation, and employment related
litigation that are presently pending, or to the knowledge of the Seller Group,
threatened at law or in equity, involving the Company or any of its
Subsidiaries. Schedule 4.17(e) also sets forth a true, correct and complete list
of those charges, lawsuits, citations, litigation and Proceedings falling within
the above categories that have been settled or otherwise disposed of within the
previous two years.
(f) Except as set forth in Schedule 4.17(f), neither the Company
nor any of its Subsidiaries is a joint employer or alter ego, with or of any of
its suppliers, distributors, customers or other Persons with which it has any
Contract or other understanding or arrangement, including any owner/operator
with whom the Company or any of its Subsidiaries has a Contract or other
understanding or arrangement, or any other Person with which the Company or any
of its Subsidiaries has a leasing arrangement (collectively referred to for the
purposes of this Section 4.17(f) as "Third Parties"), and no Third Parties are
alter egos of the Company or any of its Subsidiaries. Neither the Company nor
any of its Subsidiaries (i) exercises management power or authority over the
operations or personnel of any Third Party, (ii) supervises the employees of any
Third Party, or (iii) is responsible for, or has the authority to establish,
implement or effectively recommend the labor relations or employment policies or
actions, including wages, hours, working conditions or any terms of employment,
for any employee of any Third Party. There is no interchange of personnel, no
common boards of directors and no common officers, managers or employees between
the Company or any of its Subsidiaries and any Third Party. Neither the Company
or any of its Subsidiaries provides any administrative services for any Third
Party that are not required by Law or that are not provided in a bona fide,
arms-length transaction at fair market value. Any administrative services
provided by the Company or any of its Subsidiaries for any Third Party have been
detailed on Schedule 4.17(f).
(g) Except as set forth on Schedule 4.17(g), the Company's and
each of its Subsidiaries' Contracts and other understandings with
owner/operators and independent contractors establish a bona fide arrangement
where such individuals are independent contractors to, and are not employees of,
the Company or any of its Subsidiaries, and there are not any disputes, claims,
charges or allegations pending or, to the knowledge of the Seller Group,
threatened at law or in equity before any Governmental Entity that challenges
the independent contractor nature of such Contract or other understanding or
arrangement.
4.18 ERISA Compliance.
The Company does not have any Employee Benefit Plans as defined in ERISA or any
similar plan or benefit governed by applicable Law.
4.19 Environmental Matters.
(a) Except as set forth on Schedule 4.19(a), neither the Company,
any of its Subsidiaries, or any of their respective Affiliates has received any
written or oral notice, report or other information (i) regarding any actual or
alleged violation of any Environmental, Health and Safety Laws, or any
16
Liabilities, including any investigatory, remedial or corrective obligations,
relating to (A) the Company, any of its Subsidiaries, any of their respective
Affiliates, or any of their respective predecessors, (B) the Business, or (C)
any of the Company's or any of its Subsidiaries' currently or formerly owned or
leased properties or operations, or (ii) that the Company or any of its
Subsidiaries is potentially responsible under any Environmental, Health and
Safety Laws for response costs, corrective action or natural resource damages,
as those terms are defined under the Environmental, Health and Safety Laws, at
any location.
(b) Schedule 4.19(b) sets forth a true, correct and complete list
of all properties and facilities previously owned, leased or operated by the
Company, any of its Subsidiaries, or any of their respective predecessors at any
time (together with the Leased Properties, the "Covered Properties"). There has
been no release, discharge, spill or disposal of any substance at any of the
Covered Properties so as to give rise to any Liability of the Company or any of
its Subsidiaries under any Environmental, Health and Safety Laws. Except as set
forth on Schedule 4.19(b), there is not now, nor has there ever been, any
asbestos-containing material in any form or condition, underground storage tank,
above-ground storage tank, landfill, waste pile, surface impoundment, disposal
area, or article or equipment containing polychlorinated biphenyls on or at any
of the Covered Properties.
(c) Neither the Company, any of its Subsidiaries, any of their
respective Affiliates, nor any of their respective predecessors has treated,
stored, disposed of, arranged for or permitted the disposal of, transported,
handled or released any substance, or owned or operated any property or facility
(and no such property or facility is contaminated by any such substance) in a
manner that has given or would give rise to Liability pursuant to any
Environmental, Health and Safety Laws, including any Liability for response
costs, corrective action costs, personal injury, property damage, natural
resources damage or attorney fees, or any investigative, corrective or remedial
obligations pursuant to any Environmental, Health and Safety Laws.
(d) To the knowledge of the Seller Group, no facts, events or
conditions relating to the past or present operations of the Company, any of its
Subsidiaries, any of their respective Affiliates, any of their respective
predecessors, or any of the Covered Properties will prevent, hinder or limit
continued compliance by the Company or any of its Subsidiaries with any
Environmental, Health and Safety Laws, or give rise to any investigative,
corrective or remedial obligations pursuant to any Environmental, Health and
Safety Laws, or give rise to any other Liability pursuant to any Environmental,
Health and Safety Laws, including any relating to on-site or off-site releases
or threatened releases of materials, substances or wastes, personal injury,
property damage or natural resources damage.
(e) Neither this Agreement nor the consummation of the
transactions contemplated by this Agreement will result in any obligations for
site investigation or cleanup, or notification to or consent of any Governmental
Entity or other third party, pursuant to any of the so-called
"transaction-triggered" or "responsible property transfer" Environmental, Health
and Safety Laws.
(f) The Company and each of its Subsidiaries have provided the
Purchaser with true, correct and complete copies of all reports and studies
within the possession or control of the Company and its Subsidiaries with
respect to past and present environmental conditions or events at any of the
Covered Properties (all of which are listed on Schedule 4.19(b)), and, to the
knowledge of the Seller Group, there are no other environmental reports or
studies with respect thereto.
4.20 Brokers.
Neither the Company nor any of its Subsidiaries has employed any broker
or finder or incurred any Liability for any brokerage fees, commissions or
finders' fees or similar compensation or transaction based payments in
connection with the transactions contemplated by this Agreement.
4.21 Related Party Transactions.
(a) Except as set forth on Schedule 4.21(a), and except for
compensation to bona fide employees of the Company or any of its Subsidiaries
for services rendered in the ordinary course of business, consistent with past
practice, no current or former Affiliate of the Company or any of its
Subsidiaries or any "Associate" (as defined in the rules promulgated under the
Securities Exchange Act) of any thereof, is now, or has been during the last
five fiscal years, (i) party to any transaction or Contract with the Company or
17
any of its Subsidiaries (including any Contract or other understanding or
arrangement providing for the furnishing of services by, or the rental of real
or personal property from, or otherwise requiring payments to, any such
Affiliate or Associate), or (ii) the direct or indirect owner of an interest in
any Person that is a present or potential competitor, supplier or customer of
the Company or any of its Subsidiaries (other than non-affiliated holdings in
publicly held companies). Except as set forth on Schedule 4.21(a), neither the
Company nor any of its Subsidiaries is a guarantor or otherwise liable for any
actual or potential Liability of its Affiliates or their Associates. Except as
set forth on Schedule 4.21(a), neither the Company nor any of its Subsidiaries
(x) owns or operates any vehicles, boats, aircraft, apartments or other
residential or recreational properties or facilities for executive,
administrative or sales purposes, or (y) owns or pays for any social club
memberships, whether or not for the benefit of the Company, any of its
Subsidiaries, and/or any of their respective executives.
(b) Schedule 4.21(b), sets forth a true, correct and complete list
of all distributions, dividends, redemptions or repurchases, of or with respect
to the capital stock of the Company (as set forth on Schedule 4.21(b)), made by
the Company during the Company's current fiscal year.
4.22 Accounts and Notes Receivable.
Except as set forth on Schedule 4.22, and except for allowances for
doubtful accounts reflected on the Latest Balance Sheet, all accounts receivable
and notes receivable owing to the Company or any of its Subsidiaries as of the
date hereof constitute, and as of the First Closing shall constitute, valid and
enforceable claims arising from bona fide transactions in the ordinary course of
business, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar Laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity), and, to the knowledge of the Seller Group, there are no asserted
claims, refusals to pay or other rights of set-off against any thereof. Except
as set forth on Schedule 4.22 (including those items categorized as "legal" on
such Schedule), there is (i) no account debtor or note debtor that is delinquent
by more than thirty (30) days for payments due from such account debtor or note
debtor in excess of $10,000 in the aggregate, (ii) no account debtor or note
debtor that has refused, or, to the knowledge of the Seller Group, threatened to
refuse, to pay its obligations to the Company or its Subsidiaries, as the case
may be, for any reason, or has otherwise made a claim of set-off or similar
claim (other than in amounts not in excess of $5,000 per account debtor or note
debtor, or $10,000 in the aggregate), and (iii) to the knowledge of the Seller
Group, no account debtor or note debtor that owes the Company or any of its
Subsidiaries amounts in excess of $10,000 in the aggregate is insolvent or
bankrupt.
4.23 Bank Accounts; Powers of Attorney.
Schedule 4.23 sets forth a true and complete list of (i) all bank
accounts and safe deposit boxes of the Company and each of its Subsidiaries and
all Persons who are signatories thereunder or who have access thereto, and (ii)
the names of all Persons holding general or special powers of attorney from the
Company or any of its Subsidiaries and a summary of the terms thereof (excluding
ministerial powers of attorney granted to representatives of the Company or any
of its Subsidiaries that are terminable at will).
4.24 Suppliers and Vendors.
Except as set forth on Schedule 4.24, no material supplier or vendor to
the Company or any of its Subsidiaries has canceled or otherwise terminated, or,
to the knowledge of the Seller Group, threatened to cancel or otherwise
terminate, its relationship with the Company or any of its Subsidiaries or has
decreased, limited or otherwise modified, or, to the knowledge of the Seller
Group, threatened to decrease, limit or otherwise modify, the services, supplies
or materials it provides to the Company or any of its Subsidiaries.
4.25 Customers.
Except as set forth on Schedule 4.25, no customer of the Company or any
of its Subsidiaries to which more than $50,000 of annual sales were attributable
during any of the preceding three fiscal years has notified the Company or any
of its Subsidiaries that it intends, or, to the knowledge of the Seller Group,
has threatened, to terminate or materially curtail its relationship and dealings
with the Company or any of its Subsidiaries.
18
4.26 Conflicts of Interest.
To the knowledge of the Seller Group, neither the Company, any of its
Subsidiaries, any Stockholder, nor any officer, employee, agent or other Person
acting on their behalf has, directly or indirectly, given or agreed to give, any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business, consistent with past practice) to any
customer, supplier, employee or agent of a customer or supplier, or official or
employee of any Governmental Entity or other Person who was, is, or may be in a
position to help or hinder the Business (or assist in connection with any actual
or proposed transaction) that (i) might subject the Company or any of its
Subsidiaries to any damage or penalty in any Proceeding, (ii) if not given in
the past, would have resulted in a Material Adverse Change, or (iii) if not
continued in the future, reasonably could be expected to result in a Material
Adverse Change. There is not now, and there has never been, any employment by
the Company or any of its Subsidiaries of, or beneficial ownership in the
Company or any of its Subsidiaries by, any governmental or political official in
any jurisdiction in which the Company or any of its Subsidiaries has conducted,
presently is conducting, or presently is proposing to conduct business.
4.27 Disclosure.
Neither this Agreement, including the Schedules, Annexes, attachments
and Exhibits hereto, contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained herein or therein,
taken as a whole, in light of the circumstances in which they were made, not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Stockholder as of October
29, 2004 as follows:
5.1 Organization; Corporate Authority.
The Purchaser is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation and has
all requisite power and authority (corporate or otherwise) to own, lease and
operate its assets and properties and to carry on its business as presently
conducted and as presently proposed to be conducted. The Purchaser is duly
qualified and in good standing to transact business as a foreign Person in those
jurisdictions set forth on Schedule 5.1, which constitute all of the
jurisdictions in which the character of the property owned, leased or operated
by the Purchaser or the nature of the business or activities conducted by the
Purchaser makes such qualification necessary. The Seller Group has been
furnished with true, correct and complete copies of the Purchaser's Charter
Documents, in each case as amended and in effect on the date this representation
is being made and is deemed made hereunder.
5.2 Authority; Authorization; Execution and Delivery; Enforceability; No
Conflict.
(a) The Purchaser has all requisite power and authority (corporate
and otherwise) to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby and thereby.
The Purchaser's execution and delivery of this Agreement, and the performance by
the Purchaser of its obligations hereunder and thereunder, have been duly and
validly authorized by all requisite action on the part of the Purchaser
(including its board of directors and all committees thereof and its
stockholders). This Agreement has been, or upon the Purchaser's execution hereof
and thereof will be, duly and validly executed and delivered by the Purchaser
and constitutes, or upon the Purchaser's execution and delivery hereof and
thereof will constitute, a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar Laws affecting creditors' rights and
remedies generally, and, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
(b) Neither the execution and delivery by the Purchaser of, and
performance of its obligations under, this Agreement, nor the consummation by
the Purchaser of the transactions contemplated hereby, nor the compliance by the
Purchaser with any of the provisions hereof, will (i) conflict with, or result
in any violation of, or cause a default (with or without notice or lapse of time
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or both) under, any provision of the Purchaser's Charter Documents, (ii)
conflict with, or result in any violation of, or cause a default (with or
without notice or lapse of time or both) under, or give rise to any right of
termination, amendment, cancellation or acceleration of any obligations
contained in, or the loss of any benefit under, any term, condition or provision
of any provision of any Contract to which the Purchaser is a party, or by which
the Purchaser or any of its assets or properties is or may be bound, (iii)
violate any Law applicable to the Purchaser, or (iv) result in an Encumbrance on
or against any assets, rights or properties of the Purchaser, or on or against
any capital stock or other securities of the Purchaser, or give rise to any
claim against the Company, any of the Company's Subsidiaries, or the Purchaser.
5.3 Consents.
Except as set forth on Schedule 5.3, no Permit, authorization, consent
or approval of or by, or notification of or filing with, any Person
(governmental or otherwise) is required for, as a result of, or in connection
with the execution, delivery and performance by the Purchaser of this Agreement
or the consummation of the transactions contemplated hereby.
5.4 Brokers.
The Purchaser has not employed any broker or finder or incurred any
Liability for any brokerage fees, commissions or finders' fees or similar
compensation or transaction based payments in connection with the transactions
contemplated by this Agreement.
5.5 Litigation.
Except as disclosed on Schedule 5.5 or the Purchaser's reports filed
pursuant to the Securities Exchange Act, there are no (i) Proceedings pending
or, to the knowledge of the Purchaser, threatened against the Purchaser or any
of its Subsidiaries, whether at law or in equity, civil or criminal in nature,
or before or by any Governmental Entity or arbitrator, or (ii) Orders of any
Governmental Entity or arbitrator with respect to, involving or against the
Purchaser or any of its Subsidiaries.
5.6 TIGR Shares.
The TIGR Shares that will be issued to the Stockholder pursuant to this
Agreement when issued in accordance with this Agreement will be duly authorized,
validly issued, fully paid and non-assessable. Except as described in this
Agreement, there are no outstanding reservations of shares, subscriptions,
warrants, puts, calls, unsatisfied preemptive rights or options of any kind or
any nature with respect to the TIGR Shares that will be issued to the
Stockholder pursuant to this Agreement.
5.7 Capitalization.
The aggregate number of shares and type of all authorized, issued and
outstanding classes of capital stock of the Company is set forth in Schedule
5.7.
5.8 WARN Act.
Purchaser does not intend to implement a "plant closing" or "mass
layoff" as those terms are defined in the WARN Act with respect to the Company's
business within ninety (90) days after the First Closing. The Purchaser hereby
assumes responsibility for giving any and all notices required by the WARN Act
or any similar state law or regulation and assumes liability for any and all
claims asserted under the WARN Act or any similar state law or regulation
because of any action taken by Purchaser with respect to the Company's business
occurring on or after the First Closing Date. The parties hereby designate the
First Closing Date as the "effective date" for purposes of the WARN Act.
5.9 SEC DOCUMENTS
As of their respective filing dates, each statement, report, effective
registration statement, definitive proxy statement and other filings filed with
the Commission by Purchaser since and including the date of the Form 10-K most
recently filed by Purchaser prior to the date hereof (collectively, the
"Purchaser SEC Documents") complied in all material respects with the applicable
requirements of the Securities Exchange Act and the Securities Act and none of
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the Purchaser SEC Documents contained any untrue statement of material fact or
omitted 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 in any material respect, except to the extent corrected
by a subsequently filed Purchaser SEC Document.
5.10 INVESTMENT INTENT.
Purchaser has the ability to evaluate the merits and risks associated
with the transactions contemplated by this Agreement on the basis of its
knowledge and experience in financial and business matters.
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1 Access to Records and Properties.
From and after the date hereof until the earlier of the First Closing
or termination of this Agreement pursuant to Article IX and subject to the
confidentiality provisions of Section 6.9 of this Agreement, the Company and the
Stockholder will, and the Company will cause its management employees to, afford
the Purchaser and its attorneys, consultants, accountants and authorized
representatives full access, upon reasonable notice during normal business hours
and at other reasonable times, to all properties, books, contracts, commitments,
records, personnel, lenders and advisors of the Company in order to permit the
Purchaser to conduct a due diligence investigation of the Company, provided
that, notwithstanding any other provision of this paragraph, in no event will
the foregoing be undertaken in such a manner as would reasonably be expected to
interfere with, impair or impede in any material respect the business or
operations of the Company. Such investigation will include, among other things,
reviewing relevant financial information, reviewing relevant contractual
obligations of the Company, conducting discussions with the Company's management
and, with the Company's prior written consent, other employees and customers of
the Company, conducting an environmental review of the Company's facilities and
operational practices, reviewing and evaluating all pension, health, retiree and
other ERISA-related plans and liabilities of the Company, and such other
investigations and evaluations as may be deemed reasonably necessary by the
Purchaser.
6.2 Conduct of the Business.
Except as set forth on Schedule 6.2, from and after the date hereof
until the earlier of the First Closing or the termination of this Agreement
pursuant to Article IX, the Company and each of its Subsidiaries shall, and the
Stockholder shall cause the Company and each of its Subsidiaries to:
(i) conduct its business substantially as presently
conducted and only in the ordinary course of business, consistent with
past practice;
(ii) not undertake (or enter into any Contract or other
understanding or arrangement to undertake) any action, and use its
commercially reasonable efforts to avoid and prevent the occurrence of
any event, described in Section 4.8;
(iii) not enter into any transaction other than in the
ordinary course of business, consistent with past practice, that is not
at arms-length with Persons that are not Affiliates, or any transaction
with any Person that is an Affiliate;
(iv) not acquire or dispose of any assets other than in
the ordinary course of business, consistent with past practice;
(v) use commercially reasonable efforts to (A) maintain
its business, assets, relations with present employees, relations with
customers and suppliers, licenses and operations as an ongoing business
and preserve its goodwill, in accordance with past custom, and (B)
satisfy each of the closing conditions set forth in Article VII;
(vi) not issue or sell any shares of its capital stock,
not issue or sell any securities convertible into, exercisable or
exchangeable for, or options or warrants to purchase or rights to
subscribe for, any shares of its capital stock, and not enter into any
Contract or other understanding or arrangement to do any of the
foregoing, other than those issues relating to disclosed options,
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convertible loans, and pre-allotted share issues, all of which are
incorporated in the full consideration paid by the Purchaser and which
do not add to the consideration for the whole purchase of the
Stockholder equity;
(vii) not declare or pay any dividend or distribution on or
with respect to its capital stock, not change the number of authorized
shares of its capital stock or reclassify, combine, split, subdivide,
or redeem or otherwise repurchase any of shares of its capital stock,
not issue, deliver, pledge or encumber any additional shares of its
capital stock or other securities equivalent to or exchangeable for
shares of its capital stock, and not enter into any Contract or other
understanding or arrangement to do any of the foregoing;
(viii) not take or omit to take any action that would result
in the representations and warranties contained in this Agreement being
untrue on the First Closing Date; and
(ix) not delay or postpone the payment of accounts payable
and other obligations and liabilities or accelerate the collection of
accounts receivable.
6.3 Efforts to Consummate.
Subject to the terms and conditions of this Agreement, each party shall
use commercially reasonable efforts to take or cause to be taken all actions and
do or cause to be done all things required under all applicable Laws, Orders and
Contracts in order to consummate the transactions contemplated hereby, including
(i) all commercially reasonable efforts to obtain or make from or with all
Persons all such consents, approvals, authorizations, waivers, notifications and
filings as are required to be obtained or made by such party under such Laws,
Orders and Contracts for the consummation of the transactions contemplated
hereby (including the filing of all notification and reports forms and other
information required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act")), and (ii) in the case of the Seller Group, all
commercially reasonable efforts to assist the Purchaser in replacing the
Company's performance bonds and guarantees; provided, however, that nothing
contained herein shall require the Purchaser to undertake any action, including
the divestiture of any assets or properties, that may be required to obtain the
consent or approval of the United States Federal Trade Commission or the
Department of Justice for the consummation of the transactions contemplated
hereby. The Company and each of its Subsidiaries shall take all commercially
reasonably actions and do all things, and the Stockholder shall cause the
Company and each of its Subsidiaries to take all actions and do all things,
required to extinguish at or prior to the First Closing all Funded Indebtedness
and to release any and all Encumbrances on or affecting any of the Company's or
any of the its Subsidiaries' assets or properties, other than the Permitted
Encumbrances. The Company and the Stockholder shall use commercially reasonable
efforts to procure that legal title to all the Shares is transferred to the
Stockholder to hold them as nominee for the Shareholders until the First
Closing, including, without limitation, complying with all requirements of the
Financial Services and Markets Xxx 0000 and all regulations made thereunder.
Purchaser shall use commercially reasonably efforts to assist the Company and
Stockholder in complying with all requirements of the Financial Services and
Markets Xxx 0000 and all regulations made thereunder. Upon the completion and
filing of all reports required to be filed by the Purchaser pursuant to the
Securities Exchange Act and the Purchaser's determination that an exemption is
available from the registration requirements of the Securities Act and
applicable U.S. state securities laws, the Purchaser shall offer to acquire, on
the same terms and conditions as provided for herein, and the Stockholder shall
cause to be delivered to Purchaser, on the same terms and conditions provided
for herein, all remaining issued and outstanding shares of Stock (other than
Stock owned by the Purchaser) and the Company shall release or allow to lapse
all outstanding Options, warrants, convertible loans or other rights for the
purchase of shares of capital stock or convertible securities of the Company so
that on such date, all such Options, warrants, convertible loans or other rights
may no longer be exercised and the Purchaser is the owner and has good title,
free and clear of all Encumbrances, to one hundred percent (100%) of the issued
and outstanding shares of Stock, on a fully diluted basis, as if all outstanding
Options, warrants, convertible loans or other rights for the purchase of shares
of capital stock or convertible securities of the Company had been fully (a)
exercised immediately prior to such issuance (and the resulting securities fully
converted into shares of Stock, if so convertible) as of such date or (b)
released or lapsed as of such date so that such Options, warrants, convertible
loans or other rights may no longer be exercised. As of the Second Closing Date,
the Stockholder shall permit the Persons that participated in the Second Closing
(whether by transferring shares of Stock to the Stockholder or by consenting to
the release or lapse of Options, warrants, convertible loans or other rights for
the purchase of shares of capital stock or convertible securities of the Company
that are owned by such Person) to receive a portion of the consideration paid or
payable pursuant to Section 1.2 of this Agreement.
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6.4 Negotiation with Others.
(a) During the period (the "Exclusivity Period") commencing on
January 1, 2005, and ending on the first to occur of (a) the 180th day following
January 1, 2005, and (b) the termination of this Agreement pursuant to Section
9.1(i), the Company and the Stockholder will not, either directly or indirectly
through their respective representatives, submit, solicit, initiate, or discuss
any proposal or offer from or to any person other than the Purchaser, or engage
in any discussions that could lead to any proposal or offer from or to any
person other than the Purchaser, regarding any possible sale, acquisition,
reorganization, recapitalization, or other similar transaction involving the
Company or any of its subsidiaries (whether by way of stock sale, sale of all or
any material portion of assets, merger, consolidation or otherwise), or any
stock sale or issuance or debt and/or equity financing involving the Company or
any of its subsidiaries (each, a "Possible Transaction"), unless consented to in
writing by the Purchaser. If, during the Exclusivity Period, any of the
Stockholder or the Company is contacted by any other person or receives from any
other person any written offer or proposal in connection with a Possible
Transaction, the Company will promptly notify the Purchaser thereof, including
any details and the identity of the person making any such offer or proposal and
a copy thereof. During the Exclusivity Period, the Company will, and the
Stockholder will cause the Company to, continue to operate its business in the
ordinary course, unless otherwise consented to by the Purchaser.
(b) The parties recognize and acknowledge that a breach of this
Section 6.4 will cause irreparable and material loss and damage to the
non-breaching party as to which it will not have an adequate remedy at law or in
equity. Accordingly, each party acknowledges and agrees that the issuance of an
injunction or other equitable remedy is an appropriate remedy for any such
breach.
6.5 Notice of Prospective Breach.
Each party shall promptly notify the other parties in writing upon the
occurrence, or the failure to occur, of any event, which occurrence or failure
to occur would be reasonably likely to cause (i) any representation or warranty
of such party that is contained in this Agreement to be untrue or inaccurate in
any respect at any time from the date of this Agreement to the First Closing as
if such representation and warranty were made at such time, or (ii) any failure
of any party hereto to comply with or satisfy any covenant or agreement to be
complied with or satisfied by it under this Agreement.
6.6 Public Announcements.
From and after the date hereof until the earlier of the First Closing
or the termination of this Agreement pursuant to Article IX, each member of the
Seller Group, each of the Company's Subsidiaries, and the Purchaser agree that,
except (i) as otherwise required by Law, (ii) for disclosure to his, her or its
respective directors, officers, employees, financial advisors, financing
sources, legal counsel, independent certified public accountants or other
agents, advisors or representatives on a need-to-know basis and with whom such
party has a confidential relationship, and (iii) in the case of the Purchaser,
in connection with its compliance with the disclosure requirements under federal
and state securities Laws, he, she or it will not issue any reports, statements
or releases, in each case pertaining to this Agreement to which he, she or it is
a party or the transactions contemplated hereby or thereby, without the prior
written consent of the Company and the Purchaser, which consent shall not
unreasonably be withheld or delayed.
6.7 Exchange Proceeds.
If, between the date hereof and the First Closing, the Company or any
of its Subsidiaries receives any proceeds in consideration for the exchange of
any of its assets, whether from the sale of any such assets, from insurance
proceeds payable on account of any loss or casualty to such assets, any proceeds
from the taking of such assets pursuant to the power of eminent domain, or any
other proceeds from whatever source relating to the disposition of such assets
(the "Exchange Proceeds"), the Company and/or its Subsidiaries shall, and the
Stockholder shall cause the Company and/or such Subsidiary to, promptly notify
the Purchaser of such receipt of such Exchange Proceeds and shall consult with
the Purchaser with respect to the application of any such Exchange Proceeds.
6.8 Non-Competition Covenant.
(a) Each Management Stockholder acknowledges and agrees that as a
condition to the respective obligations of the Purchaser and Seller Group at the
23
First Closing, and as a material inducement to the Purchaser to enter into and
perform its obligations hereunder and in consideration of the payments and other
consideration to be received by the Stockholder under this Agreement, such
Management Stockholder shall not, without the prior written consent of the
Purchaser, at any time during the period beginning on the First Closing Date and
ending on the third anniversary thereof (the "Restrictive Period"), (i) directly
or indirectly engage in, represent in any way, or be connected with, any
Competing Business (as defined below), whether such engagement shall be as a
director, an officer, an owner, an employee, a partner, an Affiliate or other
participant in such Competing Business, (ii) assist others in engaging in any
Competing Business in the manner described in clause (i) above, (iii) induce any
employees of the Purchaser or any of its Subsidiaries or other Affiliates, or
any employees of the Company or any of its Subsidiaries, at any time during the
Restrictive Period to terminate their employment with the Purchaser or any of
its Subsidiaries or other Affiliates, or to terminate their employment with the
Company or any of its Subsidiaries, or to engage in any Competing Business, or
(iv) induce any customer, vendor or agent or any other Person with which the
Purchaser or any or its Subsidiaries or other Affiliates, or with which the
Company or any of its Subsidiaries, has a business relationship, contractual or
otherwise, at any time during the Restrictive Period to terminate or alter such
business relationship. This covenant is considered an integral part of this
Agreement. The foregoing restriction shall not apply to the ownership of
publicly traded Securities that represent less than five percent (5%) of the
ownership interests of the issuer.
(b) As used herein, the term "Competing Business" means any
business conducted in (A) any county in the State of Florida, and (B) every
other state, province, or other political subdivision of the United States,
Canada, Mexico, Japan, China, South America or Europe that is engaged in the
business of (x) providing software for the visualization, interaction, and
integration of real-time enterprise systems in a browser, (y) developing
software products and (z) providing software support services, and, in each
case, such business or the services or products provided or sold by it are
competitive, directly or indirectly, with the Business. Anything contained in
the immediately preceding sentence to the contrary notwithstanding, any entity
that has separate divisions or business units, one or more of which are engaged
in a business described above, will not be deemed a Competing Business with
respect to those portions of such entity that are not engaged in a business
described above so long as such Stockholder's association with any such separate
divisions or business units (fully taking into account his, her or its functions
and the nature of his, her or its work at such division or business unit) does
not involve existing customers of the Company or any of its Subsidiaries or
relate in any material respect to that portion of such business which would be a
Competing Business hereunder.
(c) If, at the time of enforcement of this Section 6.8, a court
holds that the restrictions stated herein are unreasonable under the
circumstances then existing, the parties agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or geographical area. If any one of such covenants is
declared invalid for any reason, such determination shall not affect the
validity of the remainder of the covenants or any covenant covering territory
other than the State of Florida. The other covenants set forth in Section 6.8(a)
shall remain in effect as if the provision had been executed without the invalid
covenants. The parties hereto hereby declare that they intend that the remaining
covenants of the provision continue to be effective without any covenants that
have been declared invalid. The parties hereto acknowledge that money damages
would be an inadequate remedy for any breach of this Section 6.8. Therefore, in
the event of a breach or threatened breach of this Section 6.8, the Purchaser
and/or its successors or assigns may, in addition to other rights and remedies
existing in its or their favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violations of the provisions of this Section 6.8 (without posting a bond or
other security).
6.9 Disclosure of Information.
(a) As used in this Agreement, the term "Confidential Information"
means, with respect to any Person, all information (whether written or oral)
furnished (whether before or after the date hereof) by such Person or its
owners, members, partners, directors, officers, employees, Affiliates,
representatives (including its financial advisors, attorneys and accountants) or
agents (collectively, "Representatives") to any other Person or its
Representatives, and all analyses, compilations, forecasts, studies or other
documents prepared by such other Person or its Representatives in connection
with the transactions contemplated by this Agreement that contain or reflect any
such information; provided, however, that the term "Confidential Information"
shall not include information that (i) is or becomes publicly available other
than as a result of a disclosure by any Person or its Representatives in
violation of this Agreement, or (ii) is or becomes available to such other
Person on a non-confidential basis from a source that is not prohibited from
disclosing such information by any legal, contractual or fiduciary obligation;
provided further, however, that for purposes of this Section 6.9, from and after
the First Closing, Confidential Information of the Company or any of its
Subsidiaries shall be deemed Confidential Information of the Purchaser and
24
shall, as of such time, no longer be deemed Confidential Information of the
Company or such Subsidiaries, as applicable.
(b) The Purchaser will keep all Confidential Information of the
Company and each of its Subsidiaries confidential and will not (except as
required by applicable Law, regulation or legal process, and then only after
compliance with the last sentence of this Section 6.9(b)) without the prior
written consent of the Company or such Subsidiary, as applicable, disclose any
of such Confidential Information in any manner whatsoever, directly or
indirectly, and will not use any Confidential Information of the Company or any
of its Subsidiaries except for the purposes contemplated by this Agreement;
provided, however, that the Purchaser may reveal Confidential Information of the
Company or any of its Subsidiaries to its Representatives (i) who need to know
such Confidential Information for the purposes contemplated by this Agreement,
(ii) who are informed by the Purchaser of the confidential nature of the
Confidential Information, and (iii) who agree to act in accordance with the
terms of this Section 6.9(b). The Purchaser will cause its Representatives to
observe the terms of this Section 6.9(b), and will be responsible for any breach
hereof by any of its Representatives. In the event that the Purchaser or any of
its Representatives is requested pursuant to, or required by, applicable Law,
regulation or legal process to disclose any Confidential Information of the
Company or any of its Subsidiaries, the Purchaser will notify the Company or
such Subsidiary, as applicable, promptly so that it may seek a protective order
or other appropriate remedy or, in its sole and absolute discretion, waive
compliance with the terms of this Section 6.9(b). In any event, the Purchaser
will furnish only that portion of the Confidential Information of the Company
any its Subsidiaries that it is advised by counsel is legally required and will
exercise all commercially reasonable efforts to obtain reliable assurance, to
the extent it is possible to obtain the same, that confidential treatment will
be afforded to such Confidential Information.
(c) The Company and the Stockholder will keep all Confidential
Information of the Purchaser confidential and will not (except as required by
applicable Law, regulation or legal process, and then only after compliance with
the last sentence of this Section 6.9(c)), without the prior written consent of
the Purchaser, disclose any of such Confidential Information in any manner
whatsoever, directly or indirectly, and will not use any Confidential
Information of the Purchaser except for the purposes contemplated by this
Agreement; provided, however, that the Company and the Stockholder may reveal
Confidential Information of the Purchaser to his, her or its Representatives (i)
who need to know such Confidential Information for the purposes contemplated by
this Agreement, (ii) who are informed by the Company or such Stockholder of the
confidential nature of the Confidential Information, and (iii) who agree to act
in accordance with the terms of this Section 6.9(c). The Company and each
Stockholder will cause his, her or its Representatives to observe the terms of
this Section 6.9(c), and will be responsible for any breach hereof by any of
his, her or its Representatives. In the event that the Company, any Stockholder
or any of their respective Representatives is requested pursuant to, or required
by, applicable Law, regulation or legal process to disclose any Confidential
Information of the Purchaser, the Company or such Stockholder will notify the
Purchaser promptly so that it may seek a protective order or other appropriate
remedy or, in its sole and absolute discretion, waive compliance with the terms
of this Section 6.9(c). In any event, the Company or such Stockholder will
furnish only that portion of the Confidential Information of the Purchaser that
he, she or it is advised by counsel is legally required and will exercise all
commercially reasonable efforts to obtain reliable assurance, to the extent it
is possible to obtain the same, that confidential treatment will be afforded to
such Confidential Information.
(d) Each of the parties hereto recognizes and acknowledges that a
breach of his, her or its covenants in Section 6.9(b) or Section 6.9(c), as the
case may be, will cause irreparable and material loss and damage to the other
parties, the amount of which cannot be determined readily and as to which such
other parties will not have an adequate remedy at law or in damages.
Accordingly, in addition to any remedy such other parties may have in damages by
an action at law, such other parties shall be entitled to the issuance of an
injunction restraining any such breach or threatened breach or any other remedy
at law or in equity for any such breach.
6.10 Use of Proprietary Name.
From and after the First Closing, the Stockholder shall not use the
name "Integra" or "AltioLive" or any derivation thereof for any purpose.
6.11 Supplements to Schedules.
Prior to the First Closing, the Company and the Stockholder shall
promptly supplement or amend any Schedule with respect to any matter arising
after the date of this Agreement that, if existing or occurring on the date of
this Agreement, would have been required to be set forth or described in such
Schedule. No supplement or amendment of a Schedule made pursuant to this Section
6.11 shall be deemed to constitute a cure of any breach of any representation or
25
warranty made by the Company or such Stockholder pursuant to this Agreement
unless consented to in writing by the Purchaser, which consent may be withheld
by the Purchaser in its sole and absolute discretion for any reason. For
purposes of the rights and obligations of the parties hereunder, upon the
occurrence of the First Closing, any such supplemental or amended disclosure
consented to in writing by the Purchaser as aforesaid shall be deemed to have
been disclosed as of the date of this Agreement.
6.12 Certain Employee Matters.
On the First Closing Date the employees of the Company and each of its
Subsidiaries that are actively employed by the Company or such Subsidiaries in
the Business on the First Closing Date shall continue their employment on terms
and conditions similar to those provided by the Company or such Subsidiaries
prior to the First Closing Date (any such employees who continue their
employment being referred to herein as the "Hired Employees"), and the Purchaser
shall initially provide benefits to the Hired Employees, effective as to group
health insurance benefits on the First Closing Date and effective as to other
employee benefits as soon as practicable after the First Closing Date, in each
case that are reasonably comparable on an overall basis to the benefits provided
by the Company or such Subsidiaries prior to the First Closing Date to such
employees. Nothing contained in this Agreement shall confer upon any Hired
Employee any rights or remedies of any nature or kind whatsoever under or by
reason of this Agreement, including any right to employment or continued
employment or to any benefits that may be provided, directly or indirectly,
under any employee benefit plan, policy or arrangement of the Purchaser, nor
shall anything contained in this Agreement constitute a limitation on or
restriction against the right of the Purchaser to amend, modify or terminate any
such plan, policy or arrangement at any time and from time to time.
6.13 No-Hire of Employees.
From and after the date hereof until the earlier of the First Closing
or October 29, 2007:
(a) the Purchaser shall not, and shall cause its subsidiaries and
affiliates not to, hire any employee of the Company or any of its subsidiaries
or affiliates without first obtaining the written consent of the Company
(provided, however, that this clause shall not be deemed to be breached by an
affiliate that is not controlled by the Purchaser and that hires an employee of
the Company, or any of its subsidiaries or affiliates, if such affiliate of the
Purchaser did not learn of the identity of such employee or acquire access to
such employee or to any confidential information of the Company related to such
employee from or through the Purchaser or any of its attorneys, consultants,
accounts or authorized representatives, whether directly or indirectly); and
(b) the Company shall not, and shall cause its subsidiaries and
affiliates not to, hire any employee of the Purchaser or any of its subsidiaries
or affiliates without first obtaining the written consent of the Purchaser.
6.14 NASDAQ Listing.
After the First Closing, Purchaser shall use commercially reasonable
efforts to cause the shares of common stock of Purchaser to be listed on NASDAQ.
6.15 Financial Statements.
Prior to the First Closing Date, the Company shall deliver to the
Purchaser a true, correct and complete copy of all of the Financial Statements
required to be delivered pursuant to Section 4.6 of this Agreement.
6.16 Payment to KBC.
In satisfaction of all amounts owed from the Company and/or its
Subsidiaries to KBC Peel Xxxx, on the First Closing Date, Purchaser shall pay to
KBC Peel Xxxx, an amount equal to (x) GBP 100,000 and (y) restricted TIGR Shares
with an aggregate Market Price equal to GBP 100,000. Prior to Purchaser making
such payment, KBC Peel Xxxx shall acknowledge and agree that this payment
satisfies all amounts owed or claimed to be owed by the Company and its
Subsidiaries to KBC Peel Xxxx and shall furnish to the Purchaser such investment
representations and undertakings as Purchaser may reasonably request.
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ARTICLE VII
CLOSING OBLIGATIONS
7.1 Conditions to Each Party's Obligations.
The respective obligations of the parties to consummate the
transactions contemplated hereby are subject to the satisfaction prior to the
First Closing Date of the following conditions, unless waived (to the extent
such conditions can be waived) by the Company or the Purchaser, as applicable:
(a) Approvals. All authorizations, consents, Orders or approvals
of, or declarations or filings with, or expiration of waiting periods imposed
by, any Governmental Entity (including those under the HSR Act) necessary for
the consummation of the transactions contemplated hereby shall have been
obtained or made.
(b) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction, or other Order issued by any court or
Governmental Entity of competent jurisdiction, nor other legal restraint or
prohibition preventing the consummation of the transactions contemplated hereby,
shall be in effect.
(c) Actions and Statutes. No action, suit or proceeding shall have
been taken or threatened, and no statute, rule, regulation or Order shall have
been enacted, promulgated, issued or deemed applicable to the transactions
contemplated by this Agreement by any Governmental Entity that would (i) make
the consummation of the transactions contemplated hereby or thereby illegal or
substantially delay the consummation of any material aspect of the transactions
contemplated hereby or thereby, or (ii) render any party unable to consummate
the transactions contemplated hereby or thereby.
(d) U.S. Securities Laws. Purchaser shall be current with respect
to all reports required to be filed by the Purchaser pursuant to the Securities
Exchange Act and such reports shall not reflect a material adverse change in the
Purchaser from information previously furnished to Stockholder.
(e) Shareholder Loans. All amounts outstanding in connection with
any loan or other obligation for Funded Indebtedness owed by the Company and/or
its Subsidiaries to any Affiliate shall be paid or satisfied in full.
7.2 Conditions to Obligations of the Purchaser.
The obligations of the Purchaser to consummate the transactions
contemplated by this Agreement are subject to the satisfaction of the following
conditions, unless waived (to the extent such conditions can be waived) by the
Purchaser:
(a) Accuracy of Representations and Warranties. All
representations and warranties made by the Company and the Stockholder and the
Company in this Agreement shall be true and correct in all material respects at
and as of the First Closing Date with the same effect as if such representations
and warranties had been made at and as of the First Closing Date (provided,
however, that to the extent a representation is already limited to matters
characterized as "material," it shall be correct in all respects), and the
Purchaser shall have received a certificate to that effect signed by a principal
executive officer of the Company and the Stockholder.
(b) Performance of Obligations of the Company and the Stockholder.
The Company and the Stockholder shall have performed in all material respects
all obligations and covenants required to be performed by each of them under
this Agreement prior to or as of the First Closing Date, and the Purchaser shall
have received a certificate to that effect signed by a principal executive
officer of the Company and Stockholder.
(c) Authorization. All action necessary to authorize the
execution, delivery and performance of this Agreement by the Company and the
Stockholder and the consummation of the transactions contemplated hereby and
thereby, including the requisite shareholder approvals, shall have been duly and
validly taken by the Company and the Stockholder, and the Company and the
Stockholder shall have the full power and right to consummate the transactions
contemplated hereby and thereby on the terms provided herein and therein.
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(d) Financial Statements. The Purchaser shall have received a
true, correct and complete copy of all of the Financial Statements required to
be delivered pursuant to Section 4.6 of this Agreement, up to the First Closing
Date, and such Financial Statements shall not be materially different from
drafts of such Financial Statements previously furnished to Purchaser.
(e) Consents and Approvals. The Seller Group shall deliver to the
Purchaser duly executed copies of all consents and approvals required for or in
connection with (i) the execution and delivery by the Company and Stockholder of
this Agreement to which each of them is a party, and the consummation of the
transactions contemplated hereby and thereby, in form and substance reasonably
satisfactory to the Purchaser and its counsel, and (ii) the continued conduct of
the Business as previously conducted (including any consent identified on
Schedule 4.3), in form and substance reasonably satisfactory to the Purchaser
and its counsel.
(f) Absence of Material Adverse Change. Since the Latest Balance
Sheet Date, there shall have been no Material Adverse Change in the Business.
(g) Delivery of the Shares. The Purchaser shall have received all
of the Shares in accordance with Section 1.4.
(h) Seller Certificates. The Seller Group shall cause each of the
following certificates to be executed and/or delivered, as the case may be, by
the Person who or which is the subject thereof:
(i) a certificate of the secretary of the Company, dated
as of the First Closing Date, certifying (A) that true, correct and
complete copies of the Company's Charter Documents as in effect on the
First Closing Date are attached thereto, (B) as to the incumbency and
genuineness of the signatures of each officer of the Company executing
this Agreement on behalf of the Company; and (C) the genuineness of the
resolutions (attached thereto) of the board of directors or similar
governing body of the Company and the Stockholder authorizing the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby;
(ii) a certificate of the secretary of each of the
Company's Subsidiaries, dated as of the First Closing Date, certifying
that true and complete copies of such Subsidiary's Charter Documents as
in effect on the First Closing Date are attached thereto; and
(iii) certificates dated within ten (10) days of the First
Closing Date of the secretaries of state of the states in which the
Company and each of its Subsidiaries is organized and qualified to do
business, certifying as to the good standing and non-delinquent Tax
status of such Person.
(i) Seller Group Approvals. The Seller Group shall have provided
assurances reasonable satisfactory to the Purchaser and its counsel that all
requisite corporate, shareholder and other consents have been obtained to
approve and authorize the consummation of the transactions contemplated by this
Agreement. The Purchaser shall have approved in its reasonable discretion all
information provided to the Company's shareholders in connection with this
Agreement, including information concerning the Purchaser.
(j) U.S. Securities Laws. The Purchaser shall have received
assurances reasonably satisfactory to it and its counsel that the issuances of
all TIGR Shares pursuant to this Agreement and the distribution of any such TIGR
Shares to the holders of shares, options or other equity or debt interests in
Stockholder shall be exempt from the registration requirements of the Securities
Act, qualification under any applicable U.S. state securities laws and
registration, approval or consent under any other applicable Laws.
(k) Non-Competition Covenant. Each Management Stockholder shall
have acknowledged and agreed to be bound by the terms and conditions of Section
6.8 of this Agreement.
(l) Debenture. There exists no default, or any event which upon
the giving of notice or the passage of time, or both, would give rise to a claim
of a default in the payment or performance by the Company or any of its
Subsidiaries under that certain Convertible Debenture in the principal face
amount of up to GBP 1,000,000, between Purchaser and Integra SP IPR Ltd., which
is guaranteed by the Company; provided, however, that the maturity date of the
Convertible Debenture shall be extended until the earlier of the First Closing
Date or termination of this Agreement.
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(m) As of the First Closing Date, the Purchaser shall have
received from all of the "accredited investors" as defined in Rule 501 of
Regulation D promulgated under the Securities Act that are participating in the
First Closing, an agreement and undertaking satisfactory to the Purchaser
pursuant to which such Person covenants and agrees not to exercise, assign or
transfer any outstanding Options, warrants, convertible loans or other rights
for the purchase of shares of capital stock or convertible securities of the
Company, except in connection with the release or lapse of such Options,
warrants, convertible loans or other rights as contemplated herein.
7.3 Conditions to Obligations of the Seller Group.
The obligations of the Seller Group to consummate the transactions
contemplated by this Agreement are subject to the satisfaction of the following
conditions, unless waived (to the extent such conditions can be waived) by the
Seller Group:
(a) Accuracy of Representations and Warranties. All
representations and warranties made by the Purchaser in this Agreement shall be
true and correct in all material respects at and as of the First Closing Date
with the same effect as if such representations and warranties had been made at
and as of the First Closing Date (provided, however, that to the extent a
representation is already limited to matters characterized as "material," it
shall be correct in all respects), and the Seller Group shall have received a
certificate to that effect signed by a principal executive officer of the
Purchaser.
(b) Performance of Obligations of the Purchaser. The Purchaser
shall have performed in all material respects all obligations and covenants
required to be performed by it under this Agreement prior to or as of the First
Closing Date, and the Seller Group shall have received a certificate to that
effect signed by a principal executive officer of the Purchaser.
(c) Authorization. All action necessary to authorize the
execution, delivery and performance of this Agreement by the Purchaser and the
consummation of the transactions contemplated hereby and thereby, including the
requisite shareholder approvals, shall have been duly and validly taken by the
Purchaser, and the Purchaser shall have the full power and right to consummate
the transactions contemplated hereby and thereby on the terms provided herein
and therein.
(d) Consents and Approvals. The Purchaser shall deliver to the
Seller Group duly executed copies of all consents and approvals required for or
in connection with the execution and delivery by the Purchaser of this Agreement
to which it is a party, and the consummation of the transactions contemplated
hereby and thereby, in form and substance reasonably satisfactory to the Seller
Group.
(e) Purchaser Certificates. The Purchaser shall cause each of the
following certificates to be executed and/or delivered, as the case may be, by
the Person who or which is the subject thereof:
(i) a certificate of the secretary of the Purchaser,
dated as of the First Closing Date, certifying (A) that true, correct
and complete copies of the Purchaser's Charter Documents as in effect
on the First Closing Date are attached thereto, (B) as to the
incumbency and genuineness of the signatures of each officer of the
Purchaser executing this Agreement on behalf of the Purchaser; and (C)
the genuineness of the resolutions (attached thereto) of the board of
directors or similar governing body of the Purchaser authorizing the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby; and
(ii) certificates dated within ten (10) days of the First
Closing Date of the secretaries of state of the states in which the
Purchaser is organized, certifying as to the good standing and
non-delinquent Tax status of the Purchaser.
ARTICLE VIII
INDEMNIFICATION
8.1 Generally.
(a) Subject to the further provisions of this Article VIII, the
Seller Indemnifying Persons, jointly and severally, shall indemnify the
Purchaser Indemnified Persons for, and hold each of them harmless from and
against, any and all Purchaser Losses arising from or in connection with any of
the following:
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(i) the untruth, inaccuracy or breach of any
representation or warranty of the Company or the Stockholder contained
in this Agreement or in any certificate delivered by the Company, the
Stockholder or any of the Company's Subsidiaries in connection herewith
or therewith at or before the First Closing (or any facts or
circumstances constituting any such untruth, inaccuracy or breach); and
(ii) the breach of any covenant or agreement of the
Company or the Stockholder contained in this Agreement.
(b) Subject to the further terms of this Article VIII, the
Purchaser shall indemnify the Seller Indemnified Persons for, and hold each of
them harmless from and against, any and all Seller Losses arising from or in
connection with any of the following:
(i) the untruth, inaccuracy or breach of any
representation or warranty of Purchaser contained in this Agreement or
in any certificate delivered by the Purchaser in connection herewith or
therewith at or before the First Closing (or any facts or circumstances
constituting any such untruth, inaccuracy or breach); and
(ii) the breach of any covenant or agreement of the
Purchaser contained in this Agreement.
8.2 Assertion of Claims.
No claim for indemnification shall be brought under Section 8.1 for a
breach of a representation or warranty unless the Indemnified Persons, or any of
them, at any time prior to the applicable Survival Date, give the Indemnifying
Persons (a) written notice of the existence of any such claim, specifying the
nature and basis of such claim and the amount thereof, to the extent known, or
(b) written notice pursuant to Section 8.3 of any Third Party Claim, the
existence of which might give rise to such a claim for indemnification. Upon the
giving of such written notice as aforesaid, the Indemnified Persons, or any of
them, shall have the right to commence legal proceedings subsequent to the
Survival Date for the enforcement of their rights under Section 8.1.
8.3 Notice and Defense of Third Party Claims.
The obligations and liabilities of an Indemnifying Person with respect
to Losses resulting from the assertion of liability by third parties (each, a
"Third Party Claim") shall be subject to the following terms and conditions:
(a) The Indemnified Persons shall give prompt written notice to
the Indemnifying Persons of any Third Party Claim that might give rise to any
Loss by the Indemnified Persons, stating the nature and basis of such Third
Party Claim, and the amount thereof to the extent known; provided, however, that
no delay on the part of the Indemnified Persons in notifying any Indemnifying
Persons shall relieve the Indemnifying Persons from any liability or obligation
hereunder unless (and then solely to the extent that) the Indemnifying Person
thereby is prejudiced by the delay. Such notice shall be accompanied by copies
of all relevant documentation with respect to such Third Party Claim, including
any summons, complaint or other pleading that may have been served, any written
demand or any other document or instrument.
(b) If the Indemnifying Persons acknowledge in a writing delivered
to the Indemnified Persons that such Third Party Claim is properly subject to
their indemnification obligations hereunder, and the Indemnifying Persons
demonstrate to the Indemnified Persons' reasonable satisfaction that the
Indemnifying Persons have the financial resources to meet such indemnification
obligations, then the Indemnifying Persons shall have the right to assume the
defense of any Third Party Claim at their own expense and by their own counsel,
which counsel shall be reasonably satisfactory to the Indemnified Persons;
provided, however, that the Indemnifying Persons shall not have the right to
assume the defense of any Third Party Claim, notwithstanding the giving of such
written acknowledgment, if (i) the Indemnified Persons have been advised by
counsel that there are one or more legal or equitable defenses available to them
that are different from or in addition to those available to the Indemnifying
Persons, and, in the reasonable opinion of the Indemnified Persons, counsel for
the Indemnifying Persons could not adequately represent the interests of the
Indemnified Persons because such interests could be in conflict with those of
the Indemnifying Persons, (ii) such action or proceeding involves, or could have
a material effect on, any matter beyond the scope of the indemnification
obligation of the Indemnifying Persons, or (iii) the Indemnifying Persons have
not assumed the defense of the Third Party Claim in a timely fashion.
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(c) If the Indemnifying Persons assume the defense of a Third
Party Claim (under circumstances in which the proviso to Section 8.3(b) is not
applicable), the Indemnifying Persons shall not be responsible for any legal or
other defense costs subsequently incurred by the Indemnified Persons in
connection with the defense thereof. If the Indemnifying Persons do not exercise
their right to assume the defense of a Third Party Claim by giving the written
acknowledgment referred to in Section 8.3(b), or are otherwise restricted from
so assuming by the proviso to Section 8.3(b), the Indemnifying Persons
nevertheless shall be entitled to participate in such defense with their own
counsel and at their own expense. If the defense of a Third Party Claim is
assumed by the Indemnified Persons pursuant to clause (i) or clause (ii) of the
proviso to Section 8.3(b), the Indemnified Persons shall not be entitled to
settle such Third Party Claim without the prior written consent of the
Indemnifying Persons, which consent shall not be unreasonably withheld or
delayed.
(d) If the Indemnifying Persons exercise their right to assume the
defense of a Third Party Claim, (i) the Indemnified Persons shall be entitled to
participate in such defense with their own counsel at their own expense, and
(ii) the Indemnifying Persons shall not make any settlement of any claims
without the prior written consent of the Indemnified Persons, which consent
shall not be unreasonably withheld or delayed.
8.4 Survival of Representations and Warranties.
(a) Subject to the further provisions of this Section 8.4, the
representations and warranties of the Seller Group contained in Article IV or in
any certificate or other writing delivered in connection with this Agreement
shall survive the First Closing, and shall expire and be of no further force or
effect on the third anniversary of the First Closing; provided, however, that
the representations and warranties contained in Article III, Section 4.1,
Section 4.2, Section 4.3, Section 4.4, Section 4.5, Section 4.10 and Section
4.20 shall survive the First Closing indefinitely and the representations and
warranties contained in Section 4.9 and Section 4.18 shall survive the First
Closing until ninety (90) days after the expiration of the applicable statutes
of limitations for claims applicable to the matters covered thereby. Subject to
the further provisions of this Section 8.4, the representations and warranties
of the Stockholder contained in Article III or in any certificate or other
writing delivered in connection with this Agreement and the representations and
warranties of the Purchaser contained in Article V or in any certificate or
other writing delivered in connection with this Agreement shall survive the
First Closing indefinitely. The covenants and other agreements of the Seller
Group and the Purchaser contained in this Agreement shall survive the First
Closing until they are performed in full or otherwise expire or are terminated
by their terms. For convenience of reference, the date upon which any
representation or warranty contained herein shall terminate, if any, is referred
to as the "Survival Date."
(b) From and after the First Closing, the Stockholder shall not
have any recourse against the Company for any breach of any representation,
warranty, covenant or agreement of the Company set forth in this Agreement or in
any certificate or other writing delivered by the Company in connection with
this Agreement.
8.5 Limitations on Indemnification.
(a) Indemnity Basket for the Stockholder. From and after the First
Closing, the Purchaser Indemnified Persons (or any member thereof) shall not
have the right to be indemnified pursuant to Section 8.1(a)(i) unless and until
the Purchaser Indemnified Persons (or any member thereof) shall have incurred on
a cumulative basis aggregate Losses in an amount exceeding GBP 37,500, whereupon
the Purchaser Indemnified Persons (or any member thereof) shall be entitled to
indemnification for all Losses incurred by the Purchaser Indemnified Persons (or
any member thereof); provided, however, that in no event shall the limitations
set forth in this Section 8.5(a) apply with respect to (i) any breaches of those
representations and warranties set forth in Article III, Section 4.1, Section
4.2, Section 4.3, Section 4.4, Section 4.5, Section 4.10, or Section 4.20
(collectively, the "Excluded Seller Representations"), or (ii) any willful or
knowing breach or any fraudulent or intentional acts or intentional
misrepresentations of any member of the Seller Group.
(b) Indemnity Limitations for the Stockholder. From and after the
First Closing, the sum of all Losses incurred by the Purchaser Indemnified
Persons (or any member thereof) pursuant to which indemnification is payable by
the Stockholder pursuant to Section 8.1(a)(i) shall not exceed GBP 10,000,000;
provided, however, that in no event shall the limitations set forth in this
Section 8.5(b) apply with respect to (i) the Excluded Seller Representations, or
(ii) any willful or knowing breach of such representations or warranties or any
fraudulent or intentional acts or intentional misrepresentations of any member
of the Seller Group.
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(c) Indemnity Baskets for the Purchaser. From and after the First
Closing, the Seller Indemnified Persons shall not have the right to be
indemnified pursuant to Section 8.1(b)(i) unless and until the Seller
Indemnified Persons (or any member thereof) shall have incurred on a cumulative
basis aggregate Losses in an amount exceeding GBP 37,500, whereupon the Seller
Indemnified Persons (or any member thereof) shall be entitled to indemnification
for all Losses incurred by the Seller Indemnified Persons (or any member
thereof); provided, however, that in no event shall the limitations set forth in
this Section 8.5(c) apply with respect to any willful or knowing breach of such
representations or warranties or any fraudulent or intentional acts or
intentional misrepresentations of the Purchaser.
(d) Indemnity Limitations for the Purchaser. From and after the
First Closing, the sum of all Losses pursuant to which indemnification is
payable by the Purchaser pursuant to Section 8.1(b)(i) shall not exceed GBP
10,000,000; provided, however, that in no event shall the limitations set forth
in this Section 8.5(d) apply with respect to any willful or knowing breach of
such representations or warranties or any fraudulent or intentional acts or
intentional misrepresentations of the Purchaser.
(e) Indemnity Limitation on Shares. From and after First Closing
the sum of all Losses incurred by the Purchaser Indemnified Persons (or any
member thereof) pursuant to which indemnification is payable by the Stockholder
pursuant to Section 8.1(a)(i) shall be satisfied and any recovery may be made
only against any shares in the Escrow Account and not against any of the other
assets or property of the Stockholder; provided, however, that in no event shall
the limitations set forth in this Section 8.5(e) apply with respect to (i) the
Excluded Seller Representations, or (ii) any willful or knowing breach of such
representations or warranties or any fraudulent or intentional acts or
intentional misrepresentations of any member of the Seller Group. From and after
First Closing the Purchaser and/or the Purchaser Indemnified Persons shall have
no claim or right of action against the shareholders of the Company absent any
fraudulent or intentional acts or intentional misrepresentations of any such
shareholder of the Company.
8.6 Exclusion of certain claims.
(a) No claim shall be made by the Purchaser against the
Stockholder and the Stockholder shall have no liability to the Purchaser under
this agreement, including the Warranties, in respect of any matter or liability,
which is fairly and accurately disclosed in this Agreement as of the date of
execution of this Agreement;
(b) To the extent that it arises or is increased as a result of or
is otherwise attributable to:
(i) any change in or introduction of new law;
(ii) any change in the rates of tax; or
(iii) any change or withdrawal by any authority of any
published administrative practice; in each case announced after First
Closing;
(c) To the extent that loss or liability is recoverable under a
policy of insurance or otherwise at no cost to the Purchaser or the Company or
its subsidiaries.
8.7 Mitigation.
Nothing contained in this Agreement shall have the effect of relieving
the Purchaser from any duty to mitigate any loss or damage suffered by it.
8.8 Parties to claim.
The Warranties and the undertakings, covenants and indemnities given by
the Stockholder and the Purchaser under this Agreement shall be actionable only
by the original Purchaser and original Stockholder and no person other than the
Purchaser or Stockholder may make any Claim or take any action against the other
party under this Agreement.
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ARTICLE IX
TERMINATION; EFFECT OF TERMINATION
9.1 Termination.
This Agreement may be terminated at any time prior to the First Closing
by:
(i) the mutual consent of the Purchaser and the Company;
(ii) the Purchaser, if there has been a breach by any
member of the Seller Group of any representation, warranty, covenant or
agreement set forth in this Agreement that such breaching party fails
to cure within ten (10) Business Days after notice thereof is given by
the Purchaser (except no cure period shall be provided for any such
breach that by its nature cannot be cured);
(iii) the Company, if there has been a breach by the
Purchaser of any representation, warranty, covenant or agreement set
forth in this Agreement that the Purchaser fails to cure within ten
(10) Business Days after notice thereof is given by the Company (except
no cure period shall be provided for any such breach that by its nature
cannot be cured);
(iv) the Purchaser, if the conditions set forth in Section
7.1 or Section 7.2 have not been satisfied or waived by the Purchaser
by January 31, 2005;
(v) the Company, if the conditions set forth in Section
7.1 or Section 7.3 have not been satisfied or waived by the Company by
January 31, 2005; or
(vi) the Purchaser or the Company if any permanent
injunction or other Order of a court or other competent Governmental
Entity preventing the First Closing shall have become final, binding
and non-appealable;
provided, however, that neither the Purchaser nor the Company shall be entitled
to terminate this Agreement pursuant to clause (iv) or clause (v) of this
Section 9.1, respectively, if such party's breach (or, with respect to such
termination by the Company, the Stockholder's breach) of this Agreement has
prevented the satisfaction of any such condition. Any termination pursuant to
clause (i) of this Section 9.1 shall be effected by a written instrument signed
by the Purchaser and the Company, and any termination pursuant to this Section
9.1 (other than a termination pursuant to clause (i) of this Section 9.1) shall
be effected by written notice from the party or parties so terminating to the
other parties hereto, which notice shall specify the Section of this Agreement
pursuant to which this Agreement is being terminated. If (i) this Agreement is
terminated by the Purchaser pursuant to Section 9.1(ii) or (ii) the Seller Group
fails to consummate the transaction contemplated by this Agreement before
January 31, 2005, even though all conditions to Seller Group's obligations
specified in Article VII hereof, and all conditions to Purchaser's obligations
specified in Article VII hereof, shall have been satisfied or waived, in each
case on or before January 31, 2005, the Company will promptly pay Purchaser a
fee equal to US $75,000 in immediately available funds. Payment of the fees
described in this Section 9.1 will be Purchaser's sole and exclusive remedy
against the Seller Group in the event of (i) a termination of this Agreement by
the Purchaser pursuant to Section 9.1(ii) or (ii) Seller Group's failure to
consummate the transaction contemplated by this Agreement before January 31,
2005, if all conditions to Seller Group's obligations specified in Article VII
hereof, and all conditions to Purchaser's obligations specified in Article VII
hereof, shall have been satisfied or waived, in each case on or before January
31, 2005. If (i) this Agreement is terminated by the Company pursuant to Section
9.1(iii) or (ii) Purchaser fails to consummate the transaction contemplated by
this Agreement before January 31, 2005, even though all conditions to
Purchaser's obligations specified in Article VII hereof, and all conditions to
Seller Group's obligations specified in Article VII hereof, shall have been
satisfied or waived, in each case on or before January 31, 2005, Purchaser will
promptly pay Company a fee equal to US $75,000 in immediately available funds.
Payment of the fees described in this Section 9.1 will be Seller Group's sole
and exclusive remedy against the Purchaser in the event of (i) a termination of
this Agreement by the Company pursuant to Section 9.1(iii) or (ii) Purchaser's
failure to consummate the transaction contemplated by this Agreement before
January 31, 2005, if all conditions to Purchaser's obligations specified in
Article VII hereof, and all conditions to Seller Group's obligations specified
in Article VII hereof, shall have been satisfied or waived, in each case on or
before January 31, 2005.
33
9.2 Effect of Termination.
In the event of the termination of this Agreement pursuant to Section
9.1, this Agreement shall be of no further force or effect, except for Section
6.4, Section 6.9, Section 6.13, this Section 9.2 and Article X, each of which
shall survive the termination of this Agreement; provided, however, that the
Liability of any party for any breach by such party of the representations,
warranties, covenants or agreements of such party set forth in this Agreement
occurring prior to the termination of this Agreement shall survive the
termination of this Agreement, and, in the event of any action for breach of
contract in the event of a termination of this Agreement, the prevailing party
shall be reimbursed by the other party to such action for all fees, costs and
expenses relating to such action incurred by the prevailing party, including the
fees, costs and expenses of attorneys, accountants and other professional
advisers, and including those incurred in the investigation of any such breach
and in enforcing the terms of this Section 9.2.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendment.
This Agreement may not be altered or otherwise amended except pursuant
to an instrument in writing signed by each party, except that any party may
waive any obligation owed to it by another party under this Agreement. No waiver
by any party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.
10.2 Entire Agreement.
This Agreement and the other agreements and documents referenced herein
(including the Schedules, Annexes and Exhibits (in their executed form) attached
hereto) and any other document or agreement contemporaneously entered into with
this Agreement contain all of the agreements among the parties hereto with
respect to the transactions contemplated hereby and supersede all prior
agreements or understandings among the parties with respect thereto (including
the Letter of Intent (the "Letter of Intent") dated July 30, 2004, by and
between the Stockholder and the Purchaser).
10.3 Severability.
It is the desire and intent of the parties that the provisions of this
Agreement be enforced to the fullest extent permissible under the Laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
10.4 Benefits of Agreement.
All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Except as expressly provided herein, this Agreement shall not
confer any rights or remedies upon any Person other than the foregoing. Anything
contained herein to the contrary notwithstanding, (a) this Agreement shall not
be assignable by any member of the Seller Group without the express written
consent of the Purchaser and (b) the Purchaser may, without the consent of any
other party hereto, (i) assign any or all of its rights and interests hereunder
to one or more of its Affiliates and designate one or more of its Affiliates to
perform its obligations hereunder, and (ii) assign any or all of its rights and
interests hereunder as security for any obligations arising in connection with
the financing of the transactions contemplated hereby, in any or all of which
cases the Purchaser nonetheless shall remain responsible for the performance of
its obligations hereunder.
34
10.5 Expenses; Sales and Transfer Taxes.
Except as otherwise provided in this Agreement, the Purchaser on the
one hand and the Seller Group on the other hand shall each bear their own
expenses incurred in connection with this Agreement (including the legal,
accounting and due diligence fees, costs and expenses incurred by such party)
and shall each pay their own sales, use, gains and excise Taxes and all
registration or transfer taxes that may be payable in connection with or arising
as a result of the consummation of the transaction contemplated by this
Agreement.
10.6 Remedies.
The parties each shall have and retain all rights and remedies existing
in their favor under this Agreement, at law or in equity, including rights to
bring actions for specific performance, injunctive and other equitable relief
(including the remedy of rescission) to enforce or prevent a breach or violation
of any provision of this Agreement, and all such rights and remedies shall, to
the extent permitted by applicable Law, be cumulative and a party's pursuit of
any such right or remedy shall not preclude such party from exercising or
pursuing any other available right or remedy.
10.7 Notices.
All notices or other communications pursuant to this Agreement shall be
in writing and shall be deemed to be sufficient if delivered personally,
telecopied, sent by nationally-recognized, overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(i) if to the Company or the Stockholder, to:
Integra SP Holdings LTD.
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attention: Xxxx Xxxxxx
Telephone No.: 00 (0) 00 0000 0000
Facsimile No.: 00 (0) 00 0000 0000
with a copy to:
Bircham Xxxxx Xxxx
00 Xxxxxxxx
Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Attention: Xxx Xxxxxxx
Telephone No.: x00 (0)00 0000 0000
Facsimile No.: x00 (0)00 0000 0000
(ii) if to the Purchaser, to:
Tiger Telematics, Inc.
00000 Xxxxxxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone No.:(000) 000-0000
Facsimile No.:(000) 000-0000
with a copy to:
Xxxxx Xxxxxx & Xxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx, Xx.
Telephone No.:(000) 000-0000
Facsimile No.:(000) 000-0000
All such notices and other communications shall be deemed to have been given and
received (i) in the case of personal delivery, on the date of such delivery,
35
(ii) in the case of delivery by telecopy, on the date of such delivery, (iii) in
the case of delivery by nationally-recognized, overnight courier, on the
Business Day following dispatch, and (iv) in the case of mailing, on the third
Business Day following such mailing.
10.8 Counterparts and Facsimile Execution.
This Agreement may be executed in two or more counterparts, and each
such counterpart shall be deemed to be an original instrument. All such
counterparts shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered (by facsimile or otherwise) to the other parties, it being
understood that all parties need not sign the same counterpart. Any counterpart
or other signature hereupon delivered by facsimile shall be deemed for all
purposes as constituting good and valid execution and delivery of this Agreement
by such party.
10.9 Governing Law.
(a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF
DELAWARE, OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED.
(b) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH THAT APPLICABLE LAWS, EVIDENTIARY RULES AND
JUDICIAL PROCEDURES APPLY OR THAT APPLICABLE LAWS AND ARBITRATION RULES IN CASES
IN WHICH THE PARTIES HAVE EXPRESSLY AGREED TO SUBMIT ANY SUCH DISPUTES TO
BINDING ARBITRATION APPLY, THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY
A JUDGE APPLYING SUCH APPLICABLE LAWS, EVIDENTIARY RULES AND JUDICIAL
PROCEDURES, OR BY AN ARBITRATOR APPLYING APPLICABLE LAWS AND ARBITRATION RULES
IN SUCH CASES WHERE THEY HAVE EXPRESSLY AGREED TO BINDING ARBITRATION.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO. THE PARTIES
HERETO AGREE THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL
COURTS LOCATED IN THE CITY OF JACKSONVILLE, FLORIDA, AND ANY APPELLATE COURT
FROM ANY THEREOF.
10.10 Jurisdiction and Venue.
(a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for himself, herself or itself and his, her or its
property, to the exclusive jurisdiction of any Florida state court or federal
court of the United States of America sitting in Jacksonville, Florida, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereunder or for
recognition or enforcement of any judgment relating thereto, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
Florida state court or, to the extent permitted by law, in any such federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the parties hereto hereby irrevocably and
unconditionally waives, to the fullest extent he, she or it may legally and
effectively do so, any objection that he, she or it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereunder in any Florida
state or federal court of the United States of America sitting in Jacksonville,
Florida. Each of the parties hereto hereby irrevocably waives, to the fullest
extent he, she or it may legally and effectively do so, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.
(c) Each of the parties hereto hereby agree that the mailing by
certified or registered mail, return receipt requested, of any process required
by any such court shall constitute valid and lawful service of process against
them, without the necessity for service by any other means provided by law.
36
10.11 Mutual Contribution.
The parties to this Agreement and their respective counsel have
contributed mutually to the drafting of this Agreement. Consequently, no
provision of this Agreement shall be construed against any party on the ground
that a party drafted the provision or caused it to be drafted.
10.12 No Third Party Beneficiaries.
Except as expressly provided in this Agreement, this Agreement shall
not confer any rights or remedies upon any Person other than the parties hereto
and their respective successors and permitted assigns.
10.13 Independence of Covenants and Representations and Warranties.
All covenants hereunder shall be given independent effect so that if a
certain action or condition constitutes a default under a certain covenant, the
fact that such action or condition is permitted by another covenant shall not
affect the occurrence of such default, unless expressly permitted under an
exception to such initial covenant. In addition, all representations and
warranties hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached shall not affect the incorrectness of or a breach
of a representation and warranty hereunder.
10.14 Interpretation; Construction.
The term "Agreement" means this Purchase Agreement together with all
Schedules, Annexes and Exhibits hereto, as the same may from time to time be
amended, modified, supplemented or restated in accordance with the terms hereof.
Certain capitalized terms used and not otherwise defined elsewhere in this
Agreement have the meanings given to them in Annex II attached hereto. In this
Agreement, the term "knowledge" of any Person means (i) the actual knowledge of
such Person, and (ii) that knowledge that should have been acquired by such
Person after making such reasonable inquiry and exercising such reasonable due
diligence as a prudent businessperson would have made or exercised in the
management of his or her business affairs, including reasonable inquiry of those
directors, officers, key employees and professional advisors (including
attorneys, accountants and consultants) of such Person who could reasonably be
expected to have actual knowledge of the matters in question. For purposes of
the preceding sentence, the knowledge, both actual and constructive, of the
Stockholder and each other director, officer and key employee of the Company and
its Subsidiaries shall be imputed to each member of the Seller Group. The use in
this Agreement of the word "including" means "including, without limitation."
The words "herein," "hereof," "hereunder," "hereby," "hereto," "hereinafter,"
and other words of similar import refer to this Agreement as a whole, including
the Schedules, Annexes and Exhibits, as the same may from time to time be
amended, modified, supplemented or restated, and not to any particular article,
section, subsection, paragraph, subparagraph or clause contained in this
Agreement. All references to articles, sections, subsections, paragraphs,
subparagraphs, clauses, Schedules, Annexes and Exhibits mean such provisions of
this Agreement and the Schedules, Annexes and Exhibits attached to this
Agreement, except where otherwise stated. The title of and the article, section
and paragraph headings in this Agreement are for convenience of reference only
and shall not govern or affect the interpretation of any of the terms or
provisions of this Agreement. The use herein of the masculine, feminine or
neuter forms also shall denote the other forms, as in each case the context may
require. Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed to
modify, limit or restrict in any manner the construction of the general
statement to which it relates. The language used in this Agreement has been
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party. Accounting terms used but not
otherwise defined herein shall have the meanings given to them under GAAP.
Unless expressly provided otherwise, the measure of a period of one month or
year for purposes of this Agreement shall be that date of the following month or
year corresponding to the starting date, provided that if no corresponding date
exists, the measure shall be that date of the following month or year
corresponding to the next day following the starting date. For example, one
month following February 18 is March 18, and one month following March 31 is May
1.
* * * * *
37
IN WITNESS WHEREOF, the parties hereto have executed this Purchase
Agreement as of the date first written above.
Company:
-------
INTEGRA SP HOLDINGS LTD.
By:
-----------------------------------
Xxxx Xxxxxx, CEO
Stockholder:
-----------
INTEGRA SP NOMINEE LTD.
By:
-----------------------------------
Xxxx Xxxxxx, CEO
Purchaser:
---------
TIGER TELEMATICS, INC.
By:
-----------------------------------
Xxxxxxx X. Xxxxxxxxx, CEO
38
Management Stockholders:
-------------------------
The following individuals are signing this
Agreement solely for the purpose of agreeing
to be bound by the provisions of Section 6.8
of this Agreement.
____________________________________________
Xxxx Xxxxxx, Individually
____________________________________________
Xxxx Xxxxxx, Individually
____________________________________________
Xxxxx Xxxxxxx, Individually
39
ANNEX I
Stockholder
-----------
Name and Address
----------------
INTEGRA SP NOMINEE LTD.
40
ANNEX II
Certain Definitions
-------------------
"Acquisition Proposal" means any offer, proposal or indication
of interest in (i) the direct or indirect acquisition or sale of all or any
material part of the Company or any of its Subsidiaries (whether by stock sale
or asset sale), (ii) a merger, consolidation or other similar business
combination, or a reorganization, recapitalization or other similar transaction,
directly or indirectly involving the Company or any of its Subsidiaries, (iii)
the direct or indirect acquisition of any capital stock or other securities of
the Company or any of its Subsidiaries, or (iv) any stock sale or issuance or
debt and/or equity financing directly or indirectly involving the Company or any
of its Subsidiaries.
"Affiliate" means, with respect to any Person, (i) a partner,
member, owner, shareholder, trustee, director or officer of such Person or of
any Person identified in clause (iii) below, (ii) a spouse, parent, sibling or
descendant of such Person (or spouse, parent, sibling or descendant of any
partner, member, owner, shareholder, trustee, director or officer of such Person
or of any Person identified in clause (iii) below), and (iii) any other Person
that, directly or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with such Person.
"Arbitrating Accountants" means such independent "Big 5"
public accounting firm as shall be agreed upon by the Purchaser and the
Stockholder in writing or, if the Purchaser and the Stockholder cannot so agree,
by lot from among the independent "Big 5" public accounting firms (other than
the Purchaser's Accountants and PriceWaterhouseCoopers).
"Business Day" means any day that is not a Saturday, Sunday or
a day on which banking institutions in New York, New York are authorized or
required to be closed.
"Capital Lease" means any obligation to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use)
assets or properties, whether real, personal or mixed, which obligations are
required to be classified and accounted for as capital leases on a balance sheet
of such Person as of such date computed in accordance with GAAP.
"Charter Documents" means, (i) as to any corporation, the
articles, certificate or memorandum of incorporation or association of such
corporation, the by-laws of such corporation, and each other instrument or other
document governing such corporation's existence and internal affairs, (ii) as to
any limited partnership, the certificate of limited partnership of such
partnership, the agreement of limited partnership of such partnership, and each
other instrument or other document governing such partnership's existence and
internal affairs, (iii) as to any limited liability company, the articles,
certificate or memorandum of organization of such limited liability company, the
operating agreement of such limited liability company, and each other instrument
or other document governing such limited liability company's existence and
internal affairs, and (iv) as to any trust, the agreement or other instrument
creating such trust and any and all other documents, instruments and
certificates granting (and limiting) the powers and authorities of such trust
and the trustee(s) thereof and governing the activities and operations of such
trust and the trustee(s) thereof, in each case in clauses (i) through (iv)
above, as amended and restated and in effect at the time in question.
"Commission" means the United States Securities and Exchange
Commission, or any Governmental Entity succeeding to the functions thereof.
"Contract" means any loan or credit agreement, note, bond,
mortgage, indenture, license, lease, sublease, grant of easement, right of way,
purchase order, sale order, service order, or other contract, agreement,
commitment, instrument, permit, concession, franchise or license, whether
written or oral.
"Control" means, with respect to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by Contract or otherwise.
"Employee Benefit Plan" means any employee benefit, fringe
benefit, compensation, severance, incentive, bonus, profit-sharing, stock
option, stock purchase or other plan, program or arrangement, whether or not
funded.
"Encumbrances" means and includes security interests,
mortgages, liens, pledges, charges, easements, reservations, restrictions,
rights of way, servitudes, options, rights of first refusal, community property
interests, equitable interests, restrictions of any kind and all other
1
encumbrances, whether or not relating to the extension of credit or the
borrowing of money; provided, however, Encumbrances shall not include any
restrictions imposed by United States federal and state securities laws.
"Environmental, Health and Safety Laws" means all Laws,
Permits, Orders, Contracts and common law relating to or addressing pollution or
protection of the environment, public health and safety, or employee health and
safety, including all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise or radiation, in each case as amended and in effect from time
to time.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor legislation thereto, and the rules and
regulations promulgated thereunder, all as the same shall be in effect from time
to time.
"ERISA Affiliate" means, with respect to any Person, any other
Person that is a member of a "controlled group of corporations" with, or is
under "common control" with, or is a member of the same "affiliated service
group" with such Person as defined in Section 414(b), 414(c), 414(m) or 414(o)
of the Code.
"Exchange Rate" means the average closing currency conversion
rate published on xxx.xxx.xxx, or if such website is not available, on another
currency conversion website mutually agreeable to the Purchaser and the
Stockholder, averaged over a period of 11 days consisting of the day as of which
the "Exchange Rate" is being determined and the 10 consecutive business days
prior to such day.
"Funded Indebtedness" means, without duplication, the
aggregate amount (including the current portions thereof) of all (i)
indebtedness for money borrowed by the Company or any of its Subsidiaries from
other Persons (including any prepayment and similar penalties) and purchase
money indebtedness (other than accounts payable in the ordinary course of
business, consistent with past practice); (ii) indebtedness of the type
described in clause (i) above guaranteed, directly or indirectly, in any manner
by the Company or any of its Subsidiaries or in effect guaranteed, directly or
indirectly, in any manner by the Company or any of its Subsidiaries through a
Contract or other understanding or arrangement, contingent or otherwise, to
supply funds to, or in any other manner invest in, the debtor, or to purchase
indebtedness, or to purchase and pay for property if not delivered or pay for
services if not performed, primarily for the purpose of enabling the debtor to
make payment of the indebtedness or to assure the owners of the indebtedness
against loss (any such Contract or other understanding or arrangement being
referred to as a "Guaranty") (but the term "Guaranty" shall exclude endorsements
of checks and other instruments in the ordinary course or business, consistent
with past practice); (iii) all indebtedness of the type described in clause (i)
above secured by any Encumbrance upon assets or properties owned by the Company
or any of its Subsidiaries even though the Company or any such Subsidiary has
not in any manner become liable for the payment of such indebtedness; (iv)
Capital Leases, and (v) all interest expense and other charges accrued but
unpaid, and all prepayment penalties and premiums, on or relating to any of such
indebtedness. Funded Indebtedness of the Company and each of its Subsidiaries as
of the date hereof is set forth on Schedule 4.13(d).
"GAAP" means generally accepted accounting principles in the
United Kingdom, as promulgated by the English Institute of Certified Public
Accountants, consistently applied.
"Governmental Entity" means any domestic or foreign government
or political subdivision thereof, whether on a federal, state, provincial or
local level and whether legislative, executive, judicial in nature, including
any agency, authority, board, bureau, commission, court, department or other
instrumentality thereof.
"Guaranty" has the meaning given to it in the definition of
Funded Indebtedness.
"Income Taxes" means all income Taxes (including any Tax on or
based upon net income, gross income, income as specially defined, earnings,
profits or selected items of income, earnings or profits (including state Taxes
imposed on subchapter S corporations)).
"Indemnified Persons" means and includes the Seller
Indemnified Persons and/or the Purchaser Indemnified Persons, as the case may
be.
"Indemnifying Persons" means and includes the Seller
Indemnifying Persons and/or the Purchaser Indemnifying Persons, as the case may
be.
2
"Intellectual Property Rights" means all intellectual property
rights, including patents, patent applications, trademarks, trademark
applications, trade names, service marks, service xxxx applications, trade
dress, logos and designs, and the goodwill connected with the foregoing,
copyrights and copyright applications, know-how, trade secrets, proprietary
processes and formulae, confidential information, franchises, licenses,
inventions, instructions, marketing materials and all documentation and media
constituting, describing or relating to the foregoing, including manuals,
memoranda and records.
"Law" means any applicable domestic or foreign law, statute,
treaty, rule, directive, regulation, ordinance or similar provision having the
force or effect of law, whether on a federal, state, provincial or local level
(including all Environmental, Health and Safety Laws), or any applicable Order
of any Governmental Entity.
"Liability" means any actual or potential liability or
obligation, whether known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, or liquidated or unliquidated, and whether due
or to become due, regardless of when asserted.
"Litigation Expense" means any out-of-pocket expenses incurred
in connection with investigating, defending or asserting any claim, legal or
administrative action, suit or Proceeding incident to any matter indemnified
against hereunder, including court filing fees, court costs, arbitration fees or
costs, witness fees, and fees and disbursements of outside legal counsel,
investigators, expert witnesses, accountants and other professionals.
"Losses" means any and all losses (including a diminution in
the value of the Company's capital stock), claims, shortages, damages, expenses
(including reasonable attorneys' and accountants' and other professionals' fees
and Litigation Expenses), assessments and Taxes (including interest and
penalties thereon), as reduced by (i) the amount actually recovered under
insurance policies (net of deductibles and incidental expenses resulting
therefrom), and (ii) Tax benefits actually realized under Tax Laws in respect of
such Losses, net of all reasonable costs and expenses of recovering any such Tax
benefits. For purposes of determining Tax benefits actually realized, there
shall be included only those Tax benefits resulting from such Loss that are
actually realized before the taxable year in which a payment for a Loss is
received and Tax benefits resulting from such Loss that are actually realized in
the taxable year in which a payment for a Loss is received, as increased by (x)
the amount of any Taxes payable on such indemnification payment and (y) the
amount of any Taxes payable on the payment referred to in clause (x) hereof. The
Purchaser and each member of the Seller Group hereby agree that the Purchase
Price shall be deemed to be decreased by the amount of any payment made by the
Seller Indemnifying Persons to the Purchaser with respect to Losses incurred by
the Purchaser Indemnified Persons for which the Seller Indemnifying Persons was
obligated to indemnify the Purchaser Indemnified Persons.
"Management Stockholder" means those individuals set forth on
the signature pages of this Agreement and identified as signing this Agreement
solely for purposes of agreeing to be bound by Section 6.8 of this Agreement.
"Market Price" of any security means the average of the
closing prices of such security's sales on all securities exchanges on which
such security may at the time be listed, or, if there has been no sales on any
such exchange on any day, the average of the highest bid and lowest asked prices
on all such exchanges at the end of such day, or, if on any day such security is
not so listed, the average of the representative bid and asked prices quoted in
the NASDAQ System as of 4:00 P.M., New York time, or, if on any day such
security is not quoted in the NASDAQ System, the average of the highest bid and
lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of 11 days
consisting of the day as of which "Market Price" is being determined and the 10
consecutive business days prior to such day.
"NASDAQ" means the National Association of Securities Dealers,
Inc. Automated Quotation System.
"Orders" means judgments, writs, decrees, compliance
agreements, injunctions or judicial or administrative orders and determinations
of any Governmental Entity or arbitrator.
"Permits" means all permits, licenses, authorizations,
registrations, franchises, approvals, consents, certificates, variances and
similar rights obtained, or required to be obtained, from a Governmental Entity.
"Permitted Encumbrances" means (i) Encumbrances for Taxes not
yet due and payable or being contested in good faith by appropriate Proceedings
3
and for which there are adequate reserves on the books, (ii) workers' or
unemployment compensation liens arising in the ordinary course of business, and
(iii) mechanic's, materialman's, supplier's, vendor's or similar liens arising
in the ordinary course of business, consistent with past practice, securing
amounts that are not delinquent.
"Person" shall be construed as broadly as possible and shall
include an individual or natural person, a partnership (including a limited
liability partnership), a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, a business, a Governmental Entity, and any other entity.
"Proceeding" means any action, suit, investigation or
proceeding before any Governmental Entity or arbitrator.
"Purchaser Indemnified Persons" means and includes the
Purchaser and its Affiliates (including, following the First Closing, the
Company), their respective successors and assigns, and the respective officers,
directors, successors and permitted assigns and controlling parties of each of
the foregoing; provided, however, that any such Person who was, prior to the
First Closing Date, an officer, director, employee, Affiliate, successor or
assign of the Company or any of its Subsidiaries, or a Stockholder, shall not in
such capacity, be a Purchaser Indemnified Person with respect to a breach of
this Agreement based on facts or circumstances occurring, or actions taken by
such Person, at or prior to the First Closing.
"Purchaser Indemnifying Persons" means the Purchaser and its
successors.
"Purchaser Losses" means any and all Losses sustained,
suffered or incurred by any Purchaser Indemnified Person arising from or in
connection with any matter that is the subject of indemnification under Article
VIII.
"Purchaser's Accountants" means GGK/Xxxxx & Xxxxxxxxxx (Nexia
Audit Group).
"Securities" means "securities" as defined in Section 2(1) of
the Securities Act.
"Securities Act" means the United States Securities Act of
1933, as amended, or any successor federal statute, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be
in effect from time to time.
"Securities Exchange Act" means the United States Securities
Exchange Act of 1934, as amended, or any successor federal statute, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect from time to time.
"Seller Indemnified Persons" means and includes either (i) if
the First Closing does not occur, the Company, each of the Company's
Subsidiaries, each Stockholder, and their respective Affiliates, directors,
officers, successors and permitted assigns or (ii) if the First Closing occurs,
each Stockholder and his personal representatives, estate, heirs, successors and
permitted assigns.
"Seller Indemnifying Persons" means and includes either (i) if
the First Closing does not occur, the Company, each of the Company's
Subsidiaries, the Stockholder, and their respective successors and permitted
assigns, or (ii) if the First Closing occurs, the Stockholder and its successors
and permitted assigns.
"Seller Losses" means any and all Losses sustained, suffered
or incurred by any Seller Indemnified Person arising from or in connection with
any matter that is the subject of indemnification under Article VIII.
"Subsidiary" means, with respect to any Person, any other
Person (i) whose Securities having a majority of the general voting power in
electing the board of directors or equivalent governing body of such Person
(excluding Securities entitled to vote only upon the failure to pay dividends
thereon or the occurrence of other contingencies) are, at the time as of which
any determination is being made, owned by such Person either directly or
indirectly through one or more other entities constituting Subsidiaries, or (ii)
a fifty percent (50%) interest in the profits or capital of whom is, at the time
as of which any determination is being made, owned by such Person either
directly or indirectly through one or more other entities constituting
Subsidiaries.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
4
"Taxes" means, with respect to any Person, (i) all Income
Taxes and all gross receipts, sales, use, ad valorem, transfer, franchise,
license, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property or windfall profits taxes, alternative or add-on minimum
taxes, customs duties and other taxes, fees, assessments or charges of any kind
whatsoever, together with all interest and penalties, additions to tax, and
other additional amounts imposed by any taxing authority (domestic or foreign)
on such Person, and (ii) any liability for the payment of any amount of the type
described in the foregoing clause (i) as a result of (A) being a "transferee"
(within the meaning of Section 6901 of the Code or any other applicable Law) of
another Person, (B) being a member of an affiliated, combined or consolidated
group, or (C) a Contract or other understanding or arrangement.
"TIGR Shares" means, restricted shares of common stock, .001
Dollar par value per share, of Purchaser, issued as "restricted securities"
within the meaning of the Securities Act and represented by stock certificates
bearing the following legend: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. WITHOUT SUCH
REGISTRATIONS, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATIONS ARE NOT
REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY TO THE EFFECT THAT
ANY SUCH TRANSFER WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS
AMENDED, APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED
THEREUNDER."
5
SELLER GROUP SCHEDULES
Disclosure
Unless the context otherwise requires words and expressions defined in
the Agreement shall have the same meaning in these Schedules. The
representations, warranties and indemnities contained in this Agreement are made
and given subject to the disclosures referred to or contained in these
Schedules. The Stockholder shall not be or be deemed to be in breach of any of
those representations, warranties or indemnities (and no claim shall lie or
liability attach) in respect of any matter which is fairly and accurately
disclosed in these Schedules. The following are disclosed or are deemed to have
been disclosed by these Schedules:
(a) any matter specifically described in written correspondence
between the Stockholder, the Stockholder's agents, the Company, any subsidiary
or the Stockholder's Solicitors and the Purchaser's Solicitors and accountants
on or before the date of these Schedules in relation to the Agreement or any
transactions under or associated with it;
(b) all the contents of the documents described in the attached
disclosure schedules (true, correct and complete copies of which have been
provided to Purchaser and initialed on behalf of the Stockholder and the
Purchaser for purposes of identification); and
(c) any matter specifically referred to in the Agreement or in any
document referred to in it.
SCHEDULE 3.1
The Stockholder is a nominee company formed for the purpose of this transaction
and will hold the Shares on behalf of the Shareholders, for the purpose of
transferring them to the Purchaser. The Stockholder will acquire these Shares
prior to Closing.
The Company has granted a number of options over its shares. The Company will be
inviting those option holders to exercise their options prior to Closing and
upon exercise of those options and grant of Shares to those option holders those
new shareholders will be asked to transfer their Shares to the Stockholder. The
Company is taking advice on the nominee structure whereby the option holder may
set off the price for exercising their options (in total some (pound)6m) against
an equivalent value of Integra shares. This will have a neutral effect on the
balance sheet of the Company.
Neither the Company nor the Stockholder is aware of any Encumbrance over the
Shares.
The rules of the Integra SP Holdings Limited 2001 Employees Share Option Scheme
(governed by English law) and ISO option scheme (governed by US law) are
disclosed in the Disclosure Document at Tab 3 of Volume 1.
The Shareholders Agreement entered into between shareholders of the Company is
disclosed at Tab 3 of Volume 1 of the Disclosure Document. The Shareholders
Agreement contains certain restrictions on the ability of the Shareholders to
transfer their shares without the agreement of the other shareholders. The
Articles of Association of the Company (which is disclosed at Tab 2 of Volume 1
of the Disclosure Document) also contains restrictions on the ability of the
Shareholders to sell their Shares. The Shareholders will be required to waive
their pre-emption rights.
Details of subsidiaries of the Company, namely Integra SP Limited, Integra SP
Inc, Integra France SAS and Integra SP IPR Limited appear at Tab 1 of Volume 1
of the Disclosure Document.
6
SCHEDULE 3.3
The Shareholders will be required to waive their pre-emption rights and their
rights under the Shareholders Agreement.
The Board of Directors of the Company will be required to comply with their
obligations under the Financial Services and Markets Xxx 0000 by delivering to
the Shareholders a letter of offer approved by an approved body to be appointed
and enclosing a letter of offer from the Purchaser.
SCHEDULE 3.5
The Company has employed brokers KBC Peel Xxxx and the terms of their retainer
appear in a letter dated 8 June 2004, which appears at Tab 5 of Volume 1 of the
Disclosure Document together with an email confirming their agreement with the
Company regarding their revised fees and payment terms.
SCHEDULE 4.1
See the disclosures under Article 3 above.
Integra SP Limited trades in the United States and the European Community.
Integra SP Inc trades in the United States.
Integra SP France SAS trades in Spain, France and Portugal.
Integra SP IPR Limited trades in the UK.
SCHEDULE 4.2
See the disclosures under Article 3 above.
Board minutes authorizing the execution of this agreement appear at Tab 7 of
Volume 1 of the Disclosure Document.
SCHEDULE 4.3
See the disclosures in Schedule 3 above.
Application has been made for approval by the Inland Revenue in the United
Kingdom of the status of the Stockholder as a nominee company.
SCHEDULE 4.4
A schedule showing the capital structures of the Company and its subsidiaries,
including options granted and outstanding appear at Tab 9 of Volume 1 of the
Disclosure Document.
A shareholder in the Company, Xxxxx Xxxx, agreed to transfer his shares in the
Company. These shares have been transferred over a period of time to various
other shareholders in the Company. It is arguable under the terms of the
Shareholders Agreement that these transfers need the consent of the Shareholders
7
and an extraordinary general meeting of the Company was called for 28 October
2004, under which a Shareholders resolution was passed authorizing these
transfers subject to the approval of the Remuneration Committee. A copy of the
resolution passed at this meeting appears at Tab 9 of Volume 1 of the Disclosure
Documents.
Prior to Closing the Company will undertake the following transactions:
a) the following options will be issued: Issue of option
certificates set out in Capitalization Table at Tab 9 of Volume 1 of the
Disclosure Document.
b) the following shares will be issued: Allot 93,750 shares to
Xxx Xxxxxx. Approximately 85,000 A Ordinary Shares in issue transferred from
Xxxxx Xxxx to other shareholders.
c) the following loans will be converted to shares: As per
Shareholder Interest Loan Table at Tab 11 of Volume 1 of the Disclosure Document
SCHEDULE 4.5
There are a number of inter-company loans between the Company and its
subsidiaries, details of which appears at Tab 11 of Volume 1 of the Disclosure
Document.
Integra SP Limited has a bank facility with the Bank of Scotland with an
overdraft facility. A copy of the facility letter appears at Tab 11 of Volume 1
of the Disclosure Document.
The Company has entered into loan agreements with a number Shareholders on the
basis that the Shareholders may convert their loans into shares. Details of the
current outstanding Shareholder loans appear at Tab 11 of Volume 1 of the
Disclosure Document. Prior to the Closing Date, the Company will subject to the
terms of the Agreement pay all amounts outstanding under any Shareholder loans
in full.
SCHEDULE 4.6
The audited accounts of the Company and Integra SP Limited and its group for the
year to 30 June 2002 appear at Tab 12 of Volume 1 of the Disclosure Document.
The consolidated audited accounts of the Company and its group for the years to
30 June 2003 and 30 June 2004 are in draft and will be completed and signed off
by the Company's auditors and by the Company and disclosed prior to Closing. The
Company and its subsidiaries are in breach of their obligations to deliver these
accounts to Companies House and have incurred penalty fines of (pound)1500 in
total relating to 2003 account for Integra SP Limited, Integra SP Holdings
Limited and Integra SP IPR Limited.
The unaudited management accounts of the Company and its group containing a
profit and loss account for the period from the 1 July 2004 to 30 September 2004
and a balance sheet as at 30 September 2004 appear at Tab 12 of Volume 1 of the
Disclosure Document.
8
SCHEDULE 4.6(c)
A computer printout of the debtors and creditors of the Company and its
subsidiaries appear at Tab 13 of Volume 1 of the Disclosure Document and show
the balances as at 30 September 2004.
There is a provision in the accounts for deferred salaries and fees including
tax and NIC. Details appear at Tab 13 of Volume 1 of the Disclosure Document.
SCHEDULE 4.8(ii)
Prior to closing, all the option holders who hold options granted by the Company
will be invited to exercise their options in exchange for shares. See
disclosures under Article III above. As of the Closing Date, the Company will
subject to the terms of the Agreement have no outstanding securities that are
convertible into, exchangeable for, or carrying the right to acquire, any equity
securities of the Company or any of its Subsidiaries.
SCHEDULE 4.9
Neither the Company nor any member of its group have made nor are they required
to make any tax filings in the United States.
Integra SP Limited is approximately one month in arrears in payment of PAYE to
the Inland Revenue, which is some (pound)60,000 outstanding to pay. Integra SP
Limited is to pay VAT over a period and there is currently (pound)22,000
outstanding which will be paid in the first half of November. As of the Closing
Date, Integra SP Limited expect to be current in all amounts payable by it to
Inland Revenue, including, without limitation amounts due for PAYE and VAT.
The company has received notice from the Inland Revenue that it will be carrying
out a routine PAYE inspection of the Company and its subsidiaries in early
November.
Neither the Company nor Integra SP France SAS has filed any tax returns with
respect to Integra SP France SAS and no such tax returns are required to be
filed.
The tax returns made by the Company and its UK subsidiaries for the tax year to
5 April 2003 are returns based on pre-audit numbers.
The tax affairs for the years to 30 June 2002 and 2003 are open with the Inland
Revenue and there is a claim against the reduction of the research and
development tax credit claim, which could result in a tax rebate of up to
(pound)100,000 (this has not been provided for in the book of Integra SP
Limited).
SCHEDULE 4.9 - vi, vii, viii, x
These warranties refer to American tax legislation, which is not relevant to the
Company or its subsidiaries. The Company does not believe that it has any
obligations under provisions referred to therein.
SCHEDULE 4.10
Integra SP Limited has granted debenture over all its assets to the Bank of
Scotland as security for the lending made by the Bank of Scotland. A copy of the
9
debenture appears at Tab 19 of Volume 1 of the Disclosure Document. The Company
has notified the Bank of Scotland of this transaction, but the Bank's consent is
not required.
Some of the assets of Integra SP Limited are subject to equipment leases.
Details of those leases appear at Tab 20 of Volume 1 of the Disclosure Document.
SCHEDULE 4.10(b)
The list at Tab 20 of Volume 1 of the Disclosure Document contains all material
assets and does not include intellectual property rights, which appear in later
schedules.
SCHEDULE 4.11
This Schedule 4.11 lists all real property owned, leased or occupied by the
Company and its subsidiaries
A copy of a lease granted to Integra SP Limited by Calathea Trust on the 3
February 2002 appears at Tab 1 of Volume 2 of the Disclosure Document. Integra
SP Limited is one month in arrears of payment of the rent under the terms of the
lease. As of the Closing Date, Integra SP Limited expects to be current on all
amounts due under the terms of the lease.
A service office is rented in Paris. See contract with Fast Connect SAS at Tab 1
of Volume 3 of the Disclosure Document.
Integra SP Limited has to pay rates and other overheads in respect of the
property in addition to rent. These sums appear in the accounts and management
accounts. See xxxx at Tab 1 of Volume 11 of the Disclosure Document.
SCHEDULE 4.12
The Company and its subsidiaries own or have applied for a number of patents,
details of which are set out at Tab 4 of Volume 2 of the Disclosure Document.
As a matter of policy any significant software of the Company and its
subsidiaries is patented. In addition, intellectual property rights in the form
of copyrights will be owned in any significant software.
It is a term of some agreements for the creation of software that software
belongs to the customer in respect of service business where customers pay time
and materials (T&M). Altio IPR is not affected by this.
All source codes for software belonging to the Company and its subsidiaries are
available. Details of escrow agreements under which source codes are held appear
at Tab 1 of Volume 3 of the Disclosure Document.
The Company and its subsidiaries hold a number of standard licenses for the use
of standard software such as Microsoft Office Software. A List appear at Tab 3
of Volume 2 of the Disclosure Document.
10
A number of licenses for software from Tipco, Librados and other suppliers
appear at Tab1 of Volume 3 of the Disclosure Document.
The standard form of terms and conditions for licenses granted by the Company
and its subsidiaries and a list of licensees appear at Tab 3 of Volume 2 of the
Disclosure Document.
SCHEDULE 4.13
Schedule 4.13 Tab 1 of Volume 3 of the Disclosure Document contains all material
Contracts of the Company and its subsidiaries Please note that some of these
contracts include change of control clauses.
Integra SP Limited has a contract with Casanove and an employee was dismissed
for breach of confidentiality but the Company does not believe that it will
result in any claim by Casanove. Additional details appear at Tab 1 of Volume 3
of the Disclosure Document.
As set out above Integra SP Limited has borrowings from Bank of Scotland and
there are shareholder loans outstanding.
At Tab 1 of Volume 3 there are four contracts with HSBC, one is signed and the
other three are awaiting signature.
SCHEDULE 4.14
The Company has been pursuing a claim against a company in Luxembourg called
Alfa Consult but it is unlikely that there will be any recovery. There are no
sums outstanding to the lawyers in Luxembourg.
SCHEDULE 4.15
Schedule 4.15 at Tab 9 of Volume 3 of the Disclosure Document are all material
Permits of the Company and its subsidiaries
SCHEDULE 4.16
Schedule 4.16 at Tab 10 of Volume 3 of the Disclosure Document contains details
of all insurance policies of the Company and its subsidiaries.
The Company insurances are due for renewal during October 2004 when new policy
documents will be issued.
SCHEDULE 4.17
Xxxxx Xxxx was dismissed as a result of a breach of confidence involving the
Casanove but it is not expected that there will be any claim.
Xxxxx Xxx is expected to go on maternity leave in December 2004.
11
Xxxxxx Xxx has already indicated that he intends to resign and his written
resignation is expected shortly.
A number of employees hold options granted by the Company. The Capitalization
Table at Tab 9 of Volume 1 of the Disclosure Document provides details.
SCHEDULE 4.17(g)
The Company and its subsidiaries have a number of relationships with individuals
who trade through their own limited company as service companies including:
Xxxxxxx Xxxx who trades through Maxsam Limited and who is on a long term
assignment at Casanove.
Xxxxx Xxxxxxxx trades through Hasbang Computing Limited and charges through his
company for off side data hacker work and in addition is an employee.
Xxxx Gourpinar trades through M Toros Limited and is on long-term contract at
Royal Bank of Scotland.
Loan Hill Finance Limited provides the service of Xxxx Xxxxxx and Xxxx Xxxxxx to
Integra SP Inc on the terms of the contract at Tab 17 of Volume 3 of the
Disclosure Document.
SCHEDULE 4.18
SCHEDULE 4.20
The Company has retained KBC Peel Xxxx on terms disclosed above.
SCHEDULE 4.22
None.
SCHEDULE 4.23
Schedule 4.23 at Tab 4 of Volume 4 of the Disclosure Document list all bank
accounts of the Company and its subsidiaries
12
PURCHASER SCHEDULES
Disclosure
Unless the context otherwise requires words and expressions defined in
the Agreement shall have the same meaning in these Schedules. The
representations, warranties and indemnities contained in this Agreement are made
and given subject to the disclosures referred to or contained in these
Schedules. Purchaser shall not be or be deemed to be in breach of any of those
representations, warranties or indemnities (and no claim shall lie or liability
attach) in respect of any matter which is fairly and accurately disclosed in
these Schedules. The following are disclosed or are deemed to have been
disclosed by these Schedules:
(a) any matter specifically described in written correspondence
between the Purchaser, the Purchaser's agents, any subsidiary or the Purchaser's
Solicitors and the Company's Solicitors and accountants on or before the date of
these Schedules in relation to the Agreement or any transactions under or
associated with it;
(b) all the contents of the documents described in the attached
disclosure schedules (true, correct and complete copies of which have been
provided to Stockholder and initialed on behalf of the Stockholder and the
Purchaser for purposes of identification); and
(c) any matter specifically referred to in the Agreement or in any
document referred to in it.
SCHEDULE 5.1
Tiger Telematics, Inc. is a USA Delaware corporation with a corporate office in
Florida and is qualified to do business as a foreign corporation in the State of
Florida.
SCHEDULE 5.3
None.
SCHEDULE 5.5
Jordan Lawsuit litigation- see Form 10 Q for 3rd Quarter ended September 30,
2003.
SCHEDULE 5.7
Common stock, par value $0.001 per share
Authorized - 500,000,000 shares
Issued and Outstanding as of September 29, 2004 - 22,975,621
shares
Reserved for issuance upon exercise of options and warrants as follows:
Incentive stock option plan with 320,000 shares authorized; outstanding
options to purchase 144,000 shares at an average exercise price of
approximately $1.50, of which options to purchase 108,000 are fully
vested. See 10K and 10Q Filings.
Warrants expiring on June 30, 2006 to purchase 245,525 shares at an
exercise price of $11.25.
From time to time the Company issues shares to various companies and persons
that provide products and services to the Company including suppliers,
distributors, and professional advisors including public relations, advertising
and legal. The Company has offered Xxxxx Xxxxxx & Xxxxx, legal counsel to the
Company, warrants to purchase 250,000 shares of common stock at $5.00 per share,
expiring September 30, 2009.
The Company issued shares to Golden Sands for the Indie Studios acquisition (see
press release).
The Company is in discussions to issue shares as a part of a potential
acquisition of Warthog plc.
13
