STOCK PURCHASE AGREEMENT
Among
COMPTECH ACQUISITION CORPORATION,
ABBEY, GARRETT & SETH, LTD.
And
ALL OF THE SHAREHOLDERS OF
ABBEY, GARRETT & SETH, LTD.
_____________________________________
DATED AS OF OCTOBER 23, 1998
_____________________________________
TABLE OF CONTENTS
Page
ARTICLE I PURCHASE AND SALE OF PURCHASED SHARES . . . . . . 2
SECTION 1.1 Purchased Shares . . . . . . . . . . . . . 2
ARTICLE II REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL SHAREHOLDERS . . . . . . . . 2
SECTION 2.1 Corporate Existence and Power;
Status of Purchased Shares . . . . . . . 2
SECTION 2.2 Charter Documents and Corporate Records . 3
SECTION 2.3 Financial Information . . . . . . . . . . 3
SECTION 2.4 Liabilities . . . . . . . . . . . . . . . 3
SECTION 2.5 Absence of Certain Changes . . . . . . . . 4
SECTION 2.6 Properties; Title . . . . . . . . . . . . 5
SECTION 2.7 Contracts . . . . . . . . . . . . . . . . 5
SECTION 2.8 Claims and Proceedings . . . . . . . . . . 6
SECTION 2.9 Taxes . . . . . . . . . . . . . . . . . . 7
SECTION 2.10 Employee Benefit Plans . . . . . . . . . . 8
SECTION 2.11 Compliance with Laws . . . . . . . . . . . 8
SECTION 2.12 Permits . . . . . . . . . . . . . . . . . 9
SECTION 2.13 Depositaries; Powers of Attorney, Etc. . . 9
SECTION 2.14 No Conflicts; Consents . . . . . . . . . . 9
SECTION 2.15 Authority Relative to This Agreement . . . 9
SECTION 2.16 Disclosure . . . . . . . . . . . . . . . . 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
SHAREHOLDERS . . . . . . . . . . . . . . . . . 10
SECTION 3.1 Title to Purchased Shares . . . . . . . . 10
SECTION 3.2 Authority Relative to This Agreement . . . 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER . 11
SECTION 4.1 Authority Relative to This Agreement . . . 11
SECTION 4.2 No Conflicts; Consents . . . . . . . . . . 11
SECTION 4.3 Corporate Existence and Power . . . . . . 12
ARTICLE V DOCUMENTS AND INSTRUMENTS BEING DELIVERED . . . . 12
SECTION 5.1 Documents Delivered by Purchaser . . . . . 12
SECTION 5.2 Documents Delivered by Shareholders . . . 13
SECTION 5.3 Documents Delivered by the Company . . . . 13
ARTICLE VI INDEMNIFICATION . . . . . . . . . . . . . . . 14
SECTION 6.1 Survival of Representations and
Warranties . . . . . . . . . . . . . . . 14
SECTION 6.2 Obligation of the Shareholders to
Indemnify; Special Indemnity of
Principal Shareholders . . . . . . . . . 14
SECTION 6.3 Obligation of Purchaser to Indemnify . . . 15
SECTION 6.4 Notice and Opportunity to Defend Third
Party Claims . . . . . . . . . . . . . . 15
SECTION 6.5 Payment of Indemnification Amount . . . . 16
ARTICLE VII MISCELLANEOUS . . . . . . . . . . . . . . . . . 16
SECTION 7.1 Notices . . . . . . . . . . . . . . . . . 16
SECTION 7.2 Entire Agreement . . . . . . . . . . . . . 17
SECTION 7.3 Waivers and Amendments; Non-Contractual
Remedies; Preservation of Remedies . . . 17
SECTION 7.4 Governing Law . . . . . . . . . . . . . . 17
SECTION 7.5 Arbitration . . . . . . . . . . . . . . . 17
SECTION 7.6 Binding Effect; No Assignment . . . . . . 17
SECTION 7.7 Exhibits . . . . . . . . . . . . . . . . . 18
SECTION 7.8 Severability . . . . . . . . . . . . . . . 18
SECTION 7.9 Counterparts . . . . . . . . . . . . . . . 18
SECTION 7.10 Expenses. . . . . . . . . . . . . . . . . 18
SECTION 7.11 Further Assurances . . . . . . . . . . . . 18
ARTICLE VIII DEFINITIONS . . . . . . . . . . . . . . . . . 18
SECTION 8.1 Definitions . . . . . . . . . . . . . . . 18
SECTION 8.2 Interpretation . . . . . . . . . . . . . . 23
EXHIBITS
Exhibit A-1 - Form of Employment Agreement with Xxxxxx
Xxxxxxx
Exhibit A-2 - Form of Employment Agreement with Xxxxxx Xxxxxx
Exhibit B - Form of Noncompetition Agreement with Xxxx
Xxxxxxx
Exhibit C - General Release of Shareholders
SCHEDULES
Schedule A - Shareholders and Purchased Shares;
Allocation of Purchase Price
Schedule 2.1 - Jurisdictions Company is Qualified to do
Business as a Foreign Corporation
Schedule 2.4 - Certain Liabilities
Schedule 2.5 - Absence of Certain Changes
Schedule 2.6A - Real Property Leases
Schedule 2.6B - Liens
Schedule 2.7 - Contracts
Schedule 2.8 - Claims and Proceedings
Schedule 2.9 - Taxes
Schedule 2.10 - Employee Benefit Plans; ERISA Matters
Schedule 2.11 - Orders; Laws
Schedule 2.12 - Permits; Environmental Permits
Schedule 2.13 - Depositories; Powers of Attorney
Schedule 2.14 - Required Consents
AGREEMENT dated as of October 23, 1998 among COMPTECH
ACQUISITION CORPORATION, a New York corporation (the
"Purchaser"), ABBEY, GARRETT & SETH, LTD., a New York corporation
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(the "Company"), and all of the shareholders of the Company.
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R E C I T A L S
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1. The Company is in the business of systems integration
and maintenance and software applications sales, training,
development and consulting (which business as currently conducted
is referred to as the "Business"). The Company conducts the
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Business under the name "Comptech Resources" (the "Acquired
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Name").
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2. The shareholders of the Company (individually referred
to as a "Shareholder" and collectively referred to as the
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"Shareholders") own an aggregate of 200 shares of the common
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stock of the Company, no par value per share (the "Purchased
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Shares"), and the Purchased Shares represent all of the issued
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and outstanding capital stock of the Company. The Shareholders
and the respective number of Purchased Shares owned by each
Shareholder is set forth on Schedule A hereto.
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3. The Shareholders desire to sell and transfer to the
Purchaser, and Purchaser desires to purchase and acquire from the
Shareholders, all of the Shareholders' right, title and interest
in and to the Purchased Shares.
4. In connection with the acquisition of the Purchased
Shares, Paratech Resources, Inc., a New York corporation and the
sole shareholder of the Purchaser ("Paratech"), will agree to
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engage each of Xxxxxx Xxxxxxx ("Xxxxxxx") and Xxxxxx Xxxxxx as an
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employee and each of the foregoing will agree to serve as an
employee, of Paratech, all in accordance with the terms and
conditions set forth in employment agreements (the "Employment
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Agreements") in the form annexed hereto as Exhibit A-1 and
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Exhibit A-2, respectively, to be entered into concurrent with the
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execution hereof.
5. In connection with the acquisition of the Purchased
Shares, Xxxx Xxxxxxx ("Xxxxxxx", and, collectively with Xxxxxxx,
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the "Principal Shareholders") will agree not to compete with
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Purchaser with respect to the "Restricted Business" (as therein
defined) for a period of three (3) years following the date
hereof and to not use the Acquired Name or any derivation thereof
at any time after the date hereof, pursuant to the terms and
conditions set forth in a noncompetition agreement (the
"Noncompetition Agreement") in the form annexed hereto as Exhibit
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B to be entered into concurrent with the execution hereof.
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6. In furtherance of the consummation of the acquisition
of the Purchased Assets and the other transactions contemplated
hereby (the "Contemplated Transactions"), the parties hereto
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desire to enter into this Agreement (certain capitalized terms
used herein have the respective meanings set forth in Article
VIII).
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby expressly acknowledged, the
parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF PURCHASED SHARES
SECTION 1.1 PURCHASED SHARES. In reliance upon the
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representations, warranties, covenants and agreements of the
Shareholders and Principal Shareholders contained herein, on the
date hereof, the Shareholders are assigning, transferring,
selling, conveying and delivering to Purchaser, and Purchaser is
purchasing and acquiring from the Shareholders, free and clear of
all Liens, all of the Shareholders' right, title and interest in
and to the Purchased Shares for an aggregate purchase price of
$200,000 (the "Purchase Price"), the allocation of which is set
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forth on Schedule A hereto and made a part hereof.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL SHAREHOLDERS
The Principal Shareholders, jointly and severally, represent
and warrant to Purchaser, as of the date of this Agreement, that:
SECTION 2.1 CORPORATE EXISTENCE AND POWER; STATUS OF
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PURCHASED SHARES. (a) The Company is a corporation duly
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organized, validly existing and in good standing under the laws
of the State of New York, and has all requisite powers and
authority to own, lease and operate its properties and to conduct
the Business as currently conducted. The Company is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property
owned or leased by it or the nature of its activities makes such
qualification necessary, which jurisdictions are listed on
Schedule 2.1, except for those jurisdictions where the failure to
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be so qualified would not, individually or in the aggregate, have
a material adverse effect on the Business, Assets, financial
condition or results of operations of the Company (collectively,
the "Condition of the Business").
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(b) The Company does not have any Subsidiaries and
does not directly or indirectly own any interest or investment in
any other person.
(c) As of the date of this Agreement, the only issued
capital stock of the Company are the Purchased Shares. There are
no outstanding options, warrants, commitments, agreements or any
other rights of any character entitling any person other than
Purchaser to acquire any of the capital stock or other interest
in the Company.
SECTION 2.2 CHARTER DOCUMENTS AND CORPORATE RECORDS. (a)
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The Company has heretofore delivered to Purchaser true and
complete copies of the Articles of Incorporation and by-laws, or
comparable instruments, of the Company as in effect on the date
hereof. The stock and transfer books of the Company have been
made available to Purchaser for its inspection and are true and
complete. The Company has heretofore permitted Purchaser to
inspect true and complete copies of the minutes of meetings (or
written consents in lieu of meetings) of the board of directors
(and all committees thereof) and shareholders of the Company.
All actions taken by the board of directors (and all committees
thereof) and shareholders of the Company are reflected in such
minutes, written consents and other documentation.
(b) To the knowledge of the Principal Shareholders,
all financial, business and accounting books, ledgers, accounts
and official and other records relating to the Company and the
Business have been properly and accurately kept and completed in
all material respects, and there are no material inaccuracies or
discrepancies contained or reflected therein.
SECTION 2.3 FINANCIAL INFORMATION. The Company has
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previously furnished to Purchaser true and complete copies of
(i) the Company's audited financial statements at and for the
year ended December 31, 1997 (the "December 1997 Statement"), and
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(ii) the Company's unaudited financial statements at and for the
years ended December 31, 1996 and 1995 and for the calendar
quarter and six months ended June 30, 1998 (collectively, the
"Interim Statements"). To the knowledge of the Principal
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Shareholders, the December 1997 Statement has been prepared in
accordance with GAAP consistently applied as set forth in the
notes thereto and was audited by the Company's accountants. To
the knowledge of the Principal Shareholders, each of the December
1997 Statement and the Interim Statements accurately presents the
financial position of the Company as of its date, and the
Company's earnings and cash flow for the periods then ended. To
the knowledge of the Principal Shareholders, the balance sheet
contained in the December 1997 Statement fully sets forth all
Assets and Liabilities of the Company existing as of its date
which, under GAAP, should be set forth therein, and the statement
of earnings contained therein sets forth the items of income and
expense of the Company which should appear therein under GAAP.
SECTION 2.4 LIABILITIES. Except as and to the extent set
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forth on Schedule 2.4 reflected in the audited balance sheet of
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the Company (the "Latest Balance Sheet") in the December 1997
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Statement (the "Latest Balance Sheet Date"), the Company did not
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have, as of the Latest Balance Sheet Date, any Liabilities or
obligations other than Liabilities or obligations entered into in
the ordinary course of the Business and consistent with past
practices; and except as set forth on Schedule 2.4 hereto, the
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Company has not incurred any Liabilities since the Latest Balance
Sheet Date, except (i) current Liabilities for trade or business
obligations incurred in connection with the purchase of goods or
services or otherwise in the ordinary course of the Business and
consistent with past practice, (ii) Liabilities in respect of
borrowings under the Company's IBM Credit Corporation line of
credit (the "IBMC Facility"), and (iii) liabilities under
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Contracts entered into in the ordinary course of the Business.
SECTION 2.5 ABSENCE OF CERTAIN CHANGES. Since the Latest
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Balance Sheet Date, except as set forth in this Agreement or in
Schedule 2.5, the Company has conducted the Business in the
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ordinary course consistent with past practices and there has not
been:
(a) Any material adverse change in the Condition of
the Business;
(b) Any transaction or Contract with respect to the
purchase, acquisition, lease, disposition or transfer of any
Assets or to any capital expenditure, in each case, other than in
the ordinary course of the Business in accordance with past
practice (either in a single or a series of related
transactions), or creation of any Lien on any Asset;
(c) Any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of
capital stock of the Company;
(d) Any damage, destruction or other casualty loss
(whether or not covered by insurance), condemnation or other
taking materially and adversely affecting the Assets of the
Company;
(e) Any change in any method of accounting or
accounting practice by the Company;
(f) Any material increase in the compensation payable
or to become payable to any officer, shareholder, director,
consultant, agent, sales representative or full-time employee of
the Company, or any alteration in the benefits payable to any
thereof other than pursuant to this Agreement or the transactions
or agreements contemplated hereby;
(g) Any material adverse change in the relationships
of the Company with its material suppliers, vendors or customers;
(h) Except for any changes made in the ordinary course
of the Business, any material change in any of the Company's
business policies, including advertising, marketing, pricing,
purchasing, personnel, returns or budget policies;
(i) Except in the ordinary course of the Business,
consistent with past practice, any payment, directly or
indirectly, of any Liability before it became due in accordance
with its terms; or
(j) Any material modification, termination, amendment
or other alteration or change in the terms or provisions of any
material Contract.
SECTION 2.6 PROPERTIES; TITLE. (a) The Company does not
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own, directly or indirectly, an interest in any real property.
Schedule 2.6A sets forth a complete list and general description
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of all real property and buildings and structures leased by the
Company (the "Real Property Leases"). True and correct copies of
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the Real Property Leases have been delivered to the Purchaser.
The Real Property Leases are in full force and effect and neither
party to such lease is in default.
(b) The Company has good, valid, legal and beneficial
title to (or valid leasehold interest in) all of its Assets and
is the lawful owner of its Assets, free and clear of all Liens,
except those listed on Schedule 2.6B hereto. The machinery (if
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any), equipment and other tangible personal property constituting
the Assets (whether owned or leased) are in working condition
(subject to normal wear and tear). Except as set forth on
Schedule 2.6.B, there are no outstanding options, warrants,
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commitments, agreements or any other rights of any character,
entitling any person other than Purchaser to acquire any interest
in all, or any part of, the Assets, except for purchase orders in
the ordinary course of the Business entitling customers to
purchase items of Inventory in accordance with the terms thereof.
SECTION 2.7 CONTRACTS. Schedule 2.7 lists all Contracts,
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arrangements and agreements, written or oral, of the following
types to which the Company is a party or by which the Company,
the Business or any of the Assets is bound as of the date hereof:
(a) mortgages, indentures, guarantees, security
agreements, installment obligations and other agreements and
instruments relating to the borrowing of money or extension of
credit;
(b) employment, consulting and agency agreements and
collective bargaining agreements;
(c) sales agency, manufacturer's representative or
distributorship agreements;
(d) agreements, orders or commitments for the purchase
by the Company of raw materials, supplies or finished products
exceeding $10,000;
(e) agreements, orders or commitments for the sale by
the Company of Inventory or services of the Business or Assets
exceeding $10,000;
(f) licenses of patents, trademarks, copyrights and
other intangible property rights, other than "shrink wrap"
license and intellectual property rights passed through to end-
users from manufacturers or distributors;
(g) all capitalized leases and each lease of personal
property in excess of $10,000;
(h) joint venture agreements and shareholders'
agreements;
(i) agreements limiting the freedom of the Company or
its officers and employees to compete in any line of business
similar to the Business; and
(j) other agreements, contracts and commitments
material to the Business, or which in any case involve payments
or receipts of more than $10,000 or which may not be canceled on
no more than thirty (30) days' notice without penalty or premium.
The Contracts are valid, in full force and effect and
binding upon the Company, and, to the knowledge of the Principal
Shareholders, the other parties thereto in accordance with their
terms. The Company is not in material default (or alleged
material default) under any such Contract, nor, to the knowledge
of the Principal Shareholders, is any other party thereto in
material default thereunder, nor to the knowledge of the
Principal Shareholders does any condition exist that with notice
or the lapse of time or both would constitute a material default
(or give rise to a termination right) thereunder. To the
Principal Shareholders' knowledge, none of the other parties to
any such Contract intends to terminate or alter the provisions
thereof by reason of the Contemplated Transactions or otherwise.
Since the Latest Balance Sheet Date, except as set forth on
Schedule 2.7, the Company has not waived any right under any
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Contract, amended or extended any Contract or received notice of
termination with respect to any such Contract in each case which
would have a material adverse effect on the Condition of the
Business. The Company has not received written or oral notice of
cancellation or termination of any oral Contract. The Company
has heretofore delivered to Purchaser true, correct and complete
copies of all of the written Contracts and summaries of the
material provisions of all material oral Contracts.
SECTION 2.8 CLAIMS AND PROCEEDINGS. Except as set forth on
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Schedule 2.8, there are no outstanding Orders of any Governmental
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Body against or involving the Company, the Assets or the
Business. To the Principal Shareholders' knowledge, except as
set forth on Schedule 2.8, there are no actions, suits, claims or
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counterclaims or legal, administrative or arbitral proceedings or
investigations (collectively, "Claims") (whether or not the
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defense thereof or Liabilities in respect thereof that are
covered by insurance), pending or, to the Principal Shareholders'
knowledge, threatened on the date hereof, against or involving
the Company, any of the Assets or the Business. Schedule 2.8
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also indicates those Claims the defense thereof or Liabilities in
respect thereof that are covered by insurance. Except as
provided in Schedule 2.8, there is no fact, event or circumstance
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known to the Principal Shareholders that would give rise to any
Claim that, if pending or threatened would, in the Principal
Shareholders' reasonable judgment, have an adverse effect on the
Condition of the Business. All notices required to have been
given to any insurance company listed as insuring against any
Claim set forth on Schedule 2.8 have been timely and duly given
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and, except as set forth on Schedule 2.8, no insurance company
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has asserted that such Claim is not covered by the applicable
policy relating to such Claim. There are no Claims pending or,
to the knowledge of the Principal Shareholders, threatened that
would give rise to any right of indemnification on the part of
any director, officer, employee or agent of the Company or the
heirs, executors or administrators of such director, officer,
employee or agent, against the Company.
SECTION 2.9 TAXES. (a) Except as set forth in Schedule
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2.9:
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(i) the Company has timely filed all Tax Returns
required to be filed by it for all taxable periods ending on or
before the date hereof and all such Tax Returns are correct and
complete in all material respect;
(ii) the Company has paid when due to the
appropriate Tax Authority or has established, in accordance with
GAAP and consistent with past practice, accruals that are
reflected on the Latest Balance Sheet for the payment of, all
Taxes imposed on the Company or for which the Company is or could
be liable, whether to taxing authorities or to other persons
(pursuant to a tax sharing agreement or otherwise) for all
taxable periods ending before the date hereof;
(iii) no extension of time has been requested
or granted for the Company to file any Tax Return that has not
yet been filed or to pay any Tax that has not yet been paid;
(iv) there are no Tax Liens on or pending against
the Company or any of its properties;
(v) the Company has complied with all applicable
laws, rules and regulations relating to the withholding of Taxes
and has timely withheld all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor or shareholder;
(vi) none of the Assets of the Company is property
that it is required to treat as being owned by any other person
pursuant to the "safe harbor lease" provisions of former Section
168(f)(8) of the Code;
(vii) none of the Assets of the Company
directly or indirectly secures any debt the interest on which is
tax-exempt under Section 103(a) of the Code; and
(viii) none of the Assets of the Company is
"tax-exempt use property" within the meaning of Section 168(h) of
the Code.
(b) Except for Taxes which may result from the
execution of this Agreement or the consummation of the
Contemplated Transactions, the Company has collected and remitted
to the appropriate Tax Authority all sales and use or similar
Taxes required to have been collected on or prior to the date
hereof, including any interest and any penalty, addition to tax
or additional amount unpaid, and have been furnished properly
completed exemption certificates for all exempt transactions.
The Company has collected and remitted if due to the appropriate
Tax Authority all withholding, payroll, employment, property,
customs duty, fee, assessment or charge of any kind whatsoever
(including but not limited to Taxes assessed to real property and
water and sewer rents relating thereto), including any interest
and any penalty, addition to tax or additional amount unpaid.
SECTION 2.10 EMPLOYEE BENEFIT PLANS. (a) To the knowledge
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of the Principal Shareholders, except as set forth on Schedule
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2.10, neither the Company nor any other member of the Controlled
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Group (as defined herein) (x) has at any time maintained,
contributed to or participated in, (y) has or had at any time any
obligation to maintain, contribute to or participate in, or (z)
has any liability or contingent liability, direct or indirect,
with respect to any, employee benefit plan (within the meaning of
Section 3(3) of ERISA), oral or written retirement or deferred
compensation plan, incentive compensation plan, stock option
plan, consulting agreement, leased or temporary employee
agreement, unemployment compensation plan, vacation pay plan,
severance plan, bonus plan, stock compensation plan, cafeteria or
flexible spending account plan or any other type or form of
employee-related (or independent contractor-related) arrangement,
program, policy, plan or agreement covering any current or former
employee of the Company. For purposes of this Agreement, the
term "Controlled Group" shall refer to the Company and each other
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corporation or other entity under common control with the Company
(pursuant to the provisions of Sections 414(b), (c), (m) or (o)
of the Code) at any time during the sixty (60) month period
ending on the date hereof.
(b) To the knowledge of the Principal Shareholders,
with respect to each plan, program, arrangement, agreement or
policy included, or required to be included, in Schedule 2.10
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(the "Benefit Plans") (i) there has been no violation of any
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applicable provision of ERISA; (ii) each Benefit Plan intended to
qualify under Section 401(a) of the Code or for any other tax-
exempt or tax-favored status under the Code so qualifies and has
received a favorable determination letter, opinion or
notification, as applicable, as to its qualification under the
Code, and no event has occurred that will or could be expected to
give rise to disqualification or loss of tax-exempt status of any
such plan or related trust; (iii) neither the Company nor any
other member of the Controlled Group is subject to any
outstanding or potential liability or obligation, direct or
indirect, relating to any such Benefit Plan; and (iv) there are
no actual or potential claims or actions (other than claims for
benefits in the normal course) relating to any such Benefit Plan.
SECTION 2.11 COMPLIANCE WITH LAWS. To the Principal
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Shareholders' knowledge, the Company is not in violation of any
order, judgment, injunction, award, citation, decree, consent
decree or writ (collectively, "Orders"), or any law, statute,
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code, ordinance, rule, regulation or other requirement
(collectively, "Laws"), of any government or political
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subdivision thereof, whether federal, state, local or foreign, or
any agency or instrumentality of any such government or political
subdivision, or any court or arbitrator (collectively,
"Governmental Bodies") affecting the Assets or the Business,
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except as disclosed on Schedule 2.11. The Company is not in
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violation of any Environmental Laws.
SECTION 2.12 PERMITS. To the Principal Shareholders'
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knowledge, the Company has obtained all material licenses,
permits, certificates, certificates of occupancy, orders,
authorizations and approvals of (collectively, "Permits") and all
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Environmental Permits, and has made all material required
registrations and filings with, any Governmental Body that are
required for the conduct of the Business. To the Principal
Shareholders' knowledge, all material Permits and Environmental
Permits that are required for the conduct of the Business are
listed on Schedule 2.12 and are in full force and effect; no
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violations, except as reflected on Schedule 2.12, are or have
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been recorded in respect of any material Permit; and no
proceeding is pending or threatened to revoke or limit any
material Permit. Except as listed on Schedule 2.12, no material
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Permit will terminate by reason of the Contemplated Transactions.
SECTION 2.13 DEPOSITARIES; POWERS OF ATTORNEY, ETC.
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Schedule 2.13 sets forth (i) the name of each bank or similar
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entity in which the Company has an account, lock box or safe
deposit box and the names of all persons authorized to draw
thereon or to have access thereto, and (ii) the name of each
person holding a general or special power of attorney from the
Company.
SECTION 2.14 NO CONFLICTS; CONSENTS. Except as set forth
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on Schedule 2.14 (the "Required Consents"), neither the
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execution, delivery and performance by the Shareholders of this
Agreement and each other Transaction Document to which they are a
party, nor the consummation of the Contemplated Transactions (i)
violates any provision of the Certificate of Incorporation or
by-laws (or comparable instruments) of the Company; (ii) requires
the Company or any Shareholder to obtain any consent, approval,
Permit or action of or waiver from, or make any filing with, or
give any notice to, any Governmental Body (as defined herein) or
any other person (which consent, approval, Permit or waiver has
not been obtained); (iii) violates, conflicts with or results in
a breach or default under (after the giving of notice or the
passage of time or both), or permits the termination of, any
material Contract, right, other obligation or restriction
relating to or which materially adversely affects the Company,
the Business or the Assets to which the Company is a party or by
which the Company, the Business or Assets may be bound or
subject, or results in the creation of any Lien upon any of the
Assets pursuant to the terms of any such Contract; (iv) to the
Principal Shareholders' knowledge, violates any Law or Order (as
defined herein) of any Governmental Body against, or binding
upon, the Company, any Shareholder or upon the Assets or the
Business; or (v) violates or results in the revocation or
suspension of any material Permit.
SECTION 2.15 AUTHORITY RELATIVE TO THIS AGREEMENT. The
------------------------------------
Company has full power and authority to execute and deliver this
Agreement and each other Transaction Document to which it is a
party and to consummate the Contemplated Transactions. The
execution, delivery and performance by the Company of this
Agreement and the other Transaction Documents to which it is a
party, and the consummation by it of the Contemplated
Transactions, have been duly and validly authorized and approved
by the Company's board of directors and shareholders, and no
other corporate proceedings on the part of the Company are
necessary to authorize the execution and delivery by the Company
of this Agreement or the other Transaction Documents to which the
Company is a party or the consummation of the Contemplated
Transactions. This Agreement and the other Transaction Documents
to which the Company is a party have been duly and validly
executed and delivered by the Company, and (assuming the valid
execution and delivery thereof by the other parties thereto)
constitute the legal, valid and binding agreements of the
Company, enforceable against the Company, in accordance with
their respective terms, except as such obligations and their
enforceability may be limited by applicable bankruptcy and other
similar laws affecting the enforcement of creditors' rights
generally and except that the availability of equitable remedies
is subject to the discretion of the court before which any
proceeding therefor may be brought (whether at law or in equity).
SECTION 2.16 DISCLOSURE. Neither this Agreement, the
----------
Schedules hereto, nor any audited or unaudited financial
statements, documents or certificates furnished to Purchaser or
any of its representatives or Affiliates by or on behalf of the
Shareholders or the Company pursuant to this Agreement or in
connection with the Contemplated Transactions contains any untrue
statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which they
were made, not misleading. All representations and warranties
made by the Principal Shareholders will be deemed to have been
relied on by Purchaser (notwithstanding any investigation by
Purchaser).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each Shareholder, in his or her own behalf and on a several
basis, represents to the Purchaser, as of the date of this
Agreement, that:
SECTION 3.1 TITLE TO PURCHASED SHARES. Each Shareholder
-------------------------
owns and holds good, valid, legal and beneficial title to those
Purchased Shares being sold by such Shareholder as set forth
opposite such Shareholder's name on Schedule A hereto, free and
----------
clear of any Lien of any kind.
SECTION 3.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each
------------------------------------
Shareholder has full power, capacity and authority to execute and
deliver this Agreement on behalf of himself or herself and each
other Transaction Document to which he or she is a party and to
consummate the Contemplated Transactions. No other proceedings
on the part of the Shareholders (or any other person) are
necessary to authorize the execution and delivery by the
Shareholders of this Agreement or the other Transaction Documents
to which he or she is a party or the consummation of the
Contemplated Transactions. This Agreement and the other
Transaction Documents to which each Shareholder is a party have
been duly and validly executed and delivered by the Shareholders
and (assuming the valid execution and delivery thereof by the
other parties thereto) constitute the legal, valid and binding
agreements of the Shareholders, enforceable against the
Shareholders in accordance with their respective terms, except as
such obligations and their enforceability may be limited by
applicable bankruptcy and other similar Laws (as defined herein)
affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies is subject to
the discretion of the court before which any proceeding therefor
may be brought (whether at law or in equity).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to each of the
Shareholders, as of the date of this Agreement, that:
SECTION 4.1 AUTHORITY RELATIVE TO THIS AGREEMENT.
------------------------------------
Purchaser has full power and authority to execute and deliver
this Agreement and each other Transaction Document to which it is
a party and to consummate the Contemplated Transactions. The
execution, delivery and performance by Purchaser of this
Agreement and the other Transaction Documents to which it is a
party and the consummation by it of the Contemplated Transactions
have been duly and validly authorized and approved by Purchaser's
board of directors, and no other corporate proceedings on the
part of Purchaser are necessary to authorize the execution and
delivery by Purchaser of this Agreement or the other Transaction
Documents to which Purchaser is a party or the consummation of
the Contemplated Transactions to which Purchaser is a party.
This Agreement has been duly and validly executed and delivered
by Purchaser and (assuming the valid execution and delivery of
this Agreement by the other parties hereto) constitutes the
legal, valid and binding agreement of Purchaser, enforceable
against Purchaser in accordance with its terms, except as such
obligations and their enforceability may be limited by applicable
bankruptcy and other similar laws affecting the enforcement of
creditors' rights generally and except that the availability of
equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought (whether at
law or in equity).
SECTION 4.2 NO CONFLICTS; CONSENTS. Neither the execution,
----------------------
delivery and performance by Purchaser of this Agreement and each
other Transaction Document to which its is a party nor the
consummation of the Contemplated Transactions to which Purchaser
is a party (i) violates any provision of the Certificate of
Incorporation or by-laws of Purchaser; (ii) requires Purchaser to
obtain any consent, approval or action of or waiver from, or make
any filing with, or give any notice to, any Governmental Body or
any other person; (iii) violates, conflicts with or results in
the breach or default under (after the giving of notice or the
passage of time), or permits the termination of, any material
Contract to which Purchaser is a party or by which it or any of
its respective assets may be bound or subject; or (iv) violates
any Law or Order of any Governmental Body against, or binding
upon, Purchaser or upon its respective assets or businesses.
SECTION 4.3 CORPORATE EXISTENCE AND POWER. Purchaser is a
-----------------------------
corporation duly organized, validly existing and in good standing
under the laws of the State of New York and has all requisite
powers and all material Permits required to own, lease and
operate its properties and to conduct its business as currently
conducted. Purchaser is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by Purchaser
or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be
so qualified would not, individually or in the aggregate, have a
material adverse effect on the business, assets, financial
condition or the results of operations of Purchaser.
ARTICLE V
DOCUMENTS AND INSTRUMENTS BEING DELIVERED
SECTION 5.1 DOCUMENTS DELIVERED BY PURCHASER. On the date
--------------------------------
hereof, the Purchaser is delivering the following:
(a) Employment Agreements. The executed Employment
---------------------
Agreements.
(b) Purchase Price. The Purchase Price is being paid
--------------
by certified or bank check pro rata to each Shareholder.
(c) Closing Certificate. A certificate, dated the
-------------------
Closing Date, of the Secretary or Assistant Secretary of
Purchaser certifying that attached or appended to such
certificate (A) is a true and correct copy of its Articles of
Incorporation and all amendments if any thereto as of the date
hereof; (B) is a true and correct copy of its by-laws as of the
date thereof; (C) is a true copy of all corporate actions taken
by it, including resolutions of its board of directors
authorizing the consummation of the Contemplated Transactions and
the execution, delivery and performance of this Agreement and
each other Transaction Document to be delivered by Purchaser
pursuant hereto; and (D) are the names and signatures of its duly
elected or appointed officers who are authorized to execute and
deliver this Agreement, the Transaction Documents to which
Purchaser is a party and any certificate, document or other
instrument in connection herewith.
(d) Evidence satisfactory to the Principal
Shareholders that the Purchaser and/or one or more of its
Affiliates has assumed all obligations under (i) the IBMC
Facility (and delivered releases from IBMC of any personal
guarantees of the Shareholders (or other persons) under the IBMC
Facility), and (ii) that certain real property lease relating to
the Company's offices at 000 Xxxxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxx Xxxx, Xxx Xxxx.
SECTION 5.2 DOCUMENTS DELIVERED BY SHAREHOLDERS. On the
-----------------------------------
date hereof, the Shareholders are delivering the stock
certificates representing the Purchased Shares duly endorsed in
blank or accompanied by duly and properly executed stock powers
with all required transfer taxes.
SECTION 5.3 DOCUMENTS DELIVERED BY THE COMPANY. On the
----------------------------------
date hereof, the Company is delivering the following:
(a) Closing Certificate. A certificate, dated the
-------------------
Closing Date, of the Secretary or Assistant Secretary of the
Company certifying that attached or appended to such certificate
(A) is a true and correct copy of the Articles of Incorporation
and all amendments if any thereto as of the date hereof; (B) is a
true and correct copy of its by-laws as of the date hereof;
(C) is a true copy of all corporate actions taken by the board of
directors and the shareholders of the Company (which actions
shall have been taken prior to the date of entering into this
Agreement) to authorize the Contemplated Transactions; and (D)
are the names and signatures of the duly elected or appointed
officers of the Company who are authorized to execute and deliver
this Agreement, the Transaction Documents to which the Company is
a party and any certificate, document or other instrument in
connection herewith;
(b) Consents. True, correct and complete copies of
--------
all Required Consents.
(c) Resignations. The resignations, dated on or
------------
before the date hereof, of all officers and directors of the
Company.
(d) Assets. Possession and control of the Assets.
------
(e) Noncompetition Agreement. The executed
------------------------
Noncompetition Agreement.
(f) Good Standing Certificates. Good standing
--------------------------
certificates for the Company from the Secretary of State of the
State of New York and each of the jurisdictions identified on
Schedule 2.1 in which the Company is qualified to do business as
------------
a foreign corporation.
(g) Books and Records. All books and records relating
-----------------
to the Business or the Company.
(h) General Releases. General Releases from each of
----------------
the Shareholders, substantially in the form annexed hereto as
Exhibit C.
---------
ARTICLE VI
INDEMNIFICATION
SECTION 6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
------------------------------------------
(a) Notwithstanding any right of Purchaser fully to investigate
the affairs of the Company and any knowledge of facts determined
or determinable by Purchaser pursuant to such investigation or
right of investigation, Purchaser each has the right to rely
fully upon the representations, warranties, covenants and
agreements of the Principal Shareholders and the Shareholders
contained in this Agreement, or listed or disclosed on any
Schedule hereto or in any instrument delivered in connection with
or pursuant to any of the foregoing. The representations and
warranties made by (A) the Shareholders in Section 3.2 with
-----------
respect to due authority and Section 3.1 with respect to title to
-----------
the Purchased Shares, and (B) by the Company in Section 2.15 with
------------
respect to due authority shall survive the execution and delivery
of this Agreement and the closing hereunder. No other
representations or warranties shall survive the Closing of the
transactions contemplated hereunder.
(b) The representations and warranties made by the
Purchaser in Section 4.1 with respect to due authority, shall
-----------
survive the execution and delivery of this Agreement and the
closing hereunder.
SECTION 6.2 OBLIGATION OF THE SHAREHOLDERS TO INDEMNIFY;
-------------------------------------------
SPECIAL INDEMNITY OF PRINCIPAL SHAREHOLDERS. (a) The
-------------------------------------------
Shareholders, on a several basis, hereby agree to indemnify,
defend and hold harmless Purchaser (and its directors, officers,
employees, Affiliates, successors, assigns and representatives)
from and against all Claims, losses, liabilities, damages,
deficiencies, judgments, settlements, costs of investigation or
other expenses (including interest, penalties and reasonable
attorneys' fees and disbursements and expenses incurred in
enforcing this indemnification or in any litigation between the
parties or with third parties) suffered or incurred by Purchaser
or any of the foregoing persons arising out of any breach of the
representations and warranties in Article III hereof
-----------
(collectively, "Losses" or, individually, a "Loss"); provided,
------ ---- --------
however, that any payments required under this Article VI shall
------- ----------
in no event exceed the allocable share of the Purchase Price
attributable to each Shareholder as set forth on Schedule A
----------
hereto (regardless of whether the Shareholder actually receives
such allocable share).
(b) The Principal Shareholders acknowledge that the
Company has previously entered into a Stock Purchase Agreement
with Infotex, Holdings, Ltd. ("Infotex"), under which and subject
-------
to the terms thereof the Company proposed being acquired by
Infotex. Under the terms of such Stock Purchase Agreement,
Infotex deposited $100,000 as partial performance thereunder,
which deposit, the Principal Shareholders represent and warrant,
has been forfeited to the Shareholders. The Principal
Shareholders, on a joint and several basis, hereby agree to
indemnify, defend and hold harmless Purchaser (and its directors,
officers, employees, Affiliates, successors, assigns and
representatives) from and against all Losses relating to or
arising under, directly or indirectly, the Infotex Stock Purchase
Agreement, the retention by the Shareholders of the
aforementioned $100,000 deposit, any other agreement (written or
oral) between Infotex and the Company and/or any of its
shareholders or in any way pertaining in whatsoever manner to
Infotex Stock Purchase Agreement or the transactions contemplated
thereby.
SECTION 6.3 OBLIGATION OF PURCHASER TO INDEMNIFY.
------------------------------------
Purchaser hereby agrees to indemnify, defend and hold harmless
each of the Shareholders (and their respective directors,
officers, employees, Affiliates, successors, heirs, assigns and
Representatives) from and against any Losses suffered by the
Shareholders or any of the foregoing arising out of any breach of
the representations and warranties of Purchaser or of the
covenants and agreements of Purchaser contained in this Agreement
or in the Schedules or any Transaction Documents.
SECTION 6.4 NOTICE AND OPPORTUNITY TO DEFEND THIRD PARTY
--------------------------------------------
CLAIMS. (a) Promptly after receipt by any party hereto (the
------
"Indemnitee") of notice of any demand, claim, circumstance which
----------
would or might give rise to a claim or the commencement (or
threatened commencement) of any action, proceeding or
investigation (an "Asserted Liability") that may result in a
------------------
Loss, the Indemnitee shall give prompt notice thereof (the
"Claims Notice") to the party or parties obligated to provide
-------------
indemnification pursuant to Section 6.2 or 6.3 (the "Indemnifying
----------- --- ------------
Party"). The Claims Notice shall describe the Asserted Liability
-----
in reasonable detail and shall indicate the amount (estimated, if
necessary, and to the extent feasible) of the Loss that has been
or may be suffered by the Indemnitee.
(b) The Indemnifying Party may elect to defend, at its
own expense and with its own counsel, any Asserted Liability,
unless (i) the Asserted Liability seeks an Order, injunction or
other equitable or declaratory relief against the Indemnitee, or
(ii) the Indemnitee shall, upon the written advice of counsel,
have reasonably concluded that (x) there is a conflict of
interest between the Indemnitee and the Indemnifying Party in the
conduct of such defense, or (y) the Indemnitee shall have one or
more defenses not available to the Indemnifying Party. If the
Indemnifying Party elects to defend such Asserted Liability, it
shall within thirty (30) days (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnitee of its
intent to do so and the reasons therefor, and the Indemnitee
shall cooperate, at the expense of the Indemnifying Party, in the
defense of such Asserted Liability. If the Indemnifying Party
elects not to defend the Asserted Liability, is not permitted to
defend the Asserted Liability by reason of the first sentence of
this Section 6.4(b), fails to notify the Indemnitee of its
--------------
election as herein provided or contests its obligation to
indemnify under this Agreement with respect to such Asserted
Liability, the Indemnitee may pay, compromise or defend such
Asserted Liability at the sole cost and expense of the
Indemnifying Party, unless a court of competent jurisdiction
shall determine otherwise. Notwithstanding the foregoing,
neither the Indemnifying Party nor the Indemnitee may settle or
compromise any claim over the reasonable written objection of the
other, provided that the Indemnitee may settle or compromise any
--------
claim as to which the Indemnifying Party has failed to notify the
Indemnitee of its election as herein provided or is contesting
its indemnification obligations hereunder. In any event, the
Indemnitee and the Indemnifying Party may participate, at their
own expense, in the defense of such Asserted Liability. If the
Indemnifying Party chooses to defend any Asserted Liability, the
Indemnitee shall make available to the Indemnifying Party any
books, records or other documents within its control that are
necessary or appropriate for such defense. Any expenses of any
Indemnitee for which indemnification is available hereunder shall
be paid upon written demand therefor.
SECTION 6.5 Payment of Indemnification Amount. Any payment
---------------------------------
pursuant to this Article VI shall be made not later than thirty
(30) days after receipt by the Indemnifying Party of written
notice from the Indemnitee stating that a Final Determination of
any Loss has occurred, and the amount thereof and of the
indemnity payment requested.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 NOTICES. (a) Any notice or other
-------
communication required or permitted hereunder shall be in writing
and shall be delivered personally by hand or by recognized
overnight courier, telecopied or mailed (by registered or
certified mail, postage prepaid) as follows:
(i) If to Purchaser, one copy to:
Paramount Financial Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxxxx, Chief Executive
Officer
with a simultaneous copy to:
Xxxxxx Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
(ii) If to the Shareholders, one copy to:
Comptech Resources
000 Xxxxxxx Xxxxxxxxx Xxxx.
Xxxxxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with a simultaneous copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
(b) Each such notice or other communication shall be
effective (i) if given by telecopier, when such telecopy is
transmitted to the telecopier number specified in Section 7.1(a)
--------------
(with confirmation of such transmission), or (ii) when delivered
at the address specified in Section 7.1(a). Any party by notice
--------------
given in accordance with this Section 7.1 to the other party may
designate another address or person for receipt of notices
hereunder. Notices by a party may be given by counsel to such
party.
SECTION 7.2 ENTIRE AGREEMENT. This Agreement (including
----------------
the Schedules and Exhibits hereto) and the collateral agreements
executed in connection with the consummation of the Contemplated
Transactions contain the entire agreement between the parties
with respect to the subject matter hereof and related
transactions and supersede all prior agreements, written or oral,
with respect thereto.
SECTION 7.3 WAIVERS AND AMENDMENTS; NON-CONTRACTUAL
---------------------------------------
REMEDIES; PRESERVATION OF REMEDIES. This Agreement may be
----------------------------------
amended, superseded, canceled, renewed or extended only by a
written instrument signed by the parties hereto. The provisions
hereof may be waived in writing by the parties hereto. No delay
on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or
privilege, nor any single or partial exercise of any such right,
power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. Except as
otherwise provided herein, the rights and remedies herein
provided are cumulative and are not exclusive of any rights or
remedies that any party may otherwise have at law or in equity.
SECTION 7.4 GOVERNING LAW. This Agreement shall be
-------------
governed and construed in accordance with the laws of the State
of New York applicable to agreements made and to be performed
entirely within such State, without regard to the conflict of
laws rules thereof.
SECTION 7.5 ARBITRATION. The parties hereto irrevocably
-----------
agree that any dispute arising out of this Agreement shall be
adjudicated in Nassau County, in the State of New York, before a
single arbitrator of the American Arbitration Association
applying Commercial Arbitration rules.
SECTION 7.6 BINDING EFFECT; NO ASSIGNMENT. This Agreement
-----------------------------
and all of its provisions, rights and obligations shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors, heirs and legal representatives.
This Agreement may not be assigned (including by operation of
Law) by a party without the express written consent of Purchaser
(in the case of assignment by the Shareholders) or the
Shareholders (in the case of assignment by Purchaser) and any
purported assignment, unless so consented to, shall be void and
without effect; provided, that the benefits hereunder (but not
--------
the obligations) of Purchaser may be assigned by Purchaser.
Except to the extent so assigned, nothing herein express or
implied is intended or shall be construed to confer upon or to
give anyone other than the parties hereto and their respective
heirs, legal representatives and successors any rights or
benefits under or by reason of this Agreement and no other party
shall have any right to enforce any of the provisions of this
Agreement.
SECTION 7.7 EXHIBITS. All Exhibits and Schedules attached
--------
hereto are hereby incorporated by reference into, and made a part
of, this Agreement.
SECTION 7.8 SEVERABILITY. If any provision of this
------------
Agreement for any reason shall be held to be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability
shall not affect any other provision of this Agreement, but this
Agreement shall be construed as if such illegal, invalid or
unenforceable provision had never been included herein.
SECTION 7.9 COUNTERPARTS. The Agreement may be executed in
------------
any number of counterparts, each of which shall be deemed to be
an original as against any party whose signature appears thereon,
and all of which shall together constitute one and the same
instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear
the signatures of all of the parties reflected hereon as the
signatories.
SECTION 7.10 EXPENSES. Except as otherwise specifically
--------
provided in this Agreement, the parties hereto shall bear their
respective expenses incurred in connection with the preparation,
execution and performance of this Agreement and the Contemplated
Transactions, including, without limitation, all fees and
expenses of their respective representatives.
SECTION 7.11 FURTHER ASSURANCES. The Shareholders hereby
------------------
agree, without further consideration, to execute and deliver at
or following the date hereof such instruments of transfer and
take such other action as the other parties may reasonably
request in order to put Purchaser in possession of, and to vest
in Purchaser, good, valid and unencumbered title to the Purchased
Shares or the Assets in accordance with this Agreement and to
otherwise give effect to the Contemplated Transactions.
ARTICLE VIII
DEFINITIONS
SECTION 8.1 DEFINITIONS. (a) The following terms, as used
-----------
herein, have the following meanings:
"Affiliate" of any person means any other person directly or
---------
indirectly through one or more intermediary persons,
controlling, controlled by or under common control with such
person.
"Agreement" or "this Agreement" means, and the words
--------- --------------
"herein", "hereof" and "hereunder" and words of similar import
------ ------ ---------
refers to, this agreement as it from time to time may be amended.
"Assets" means properties, rights, interests and assets of
------
every kind, real, personal or mixed, tangible and intangible,
used or usable in the Business.
The term "audit" or "audited" when used in regard to
----- -------
financial statements means an examination of the financial
statements by a firm of independent certified public accountants
in accordance with generally accepted auditing standards for the
purpose of expressing an opinion thereon.
"Certificate of Incorporation" means, in the case of any
----------------------------
corporation, the certificate of incorporation, articles of
incorporation or charter of a corporation, howsoever denominated
under the laws of the jurisdiction of its incorporation.
"Contract" means any contract, agreement, indenture, note,
--------
bond, lease, conditional sale contract, mortgage, license,
franchise, instrument, commitment or other binding arrangement,
whether written or oral, which involves an amount in excess of
$10,000.00.
"Code" means the Internal Revenue Code of 1986, as amended.
----
The term "control", with respect to any person, means the
-------
power to direct the management and policies of such person,
directly or indirectly, by or through stock ownership, agency or
otherwise, or pursuant to or in connection with an agreement,
arrangement or understanding (written or oral) with one or more
other persons by or through stock ownership, agency or otherwise;
and the terms "controlling" and "controlled" have meanings
----------- ----------
correlative to the foregoing.
"Environmental Laws" means any and all Laws, Orders,
------------------
Permits, agreements or any other requirement or restriction
promulgated, imposed, enacted or issued by any federal, state,
local and/or foreign Governmental Bodies relating to human health
or the environment, including the emission, discharge or Release
of pollutants, contaminants, Hazardous Substances or wastes into
the environment (which includes, without limitation, ambient air,
surface water, ground water, or land), and the remediation
thereof, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof, including
without limitation, the Clean Air Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the
Emergency Planning and Community Right To Know Act, the Federal
Water Pollution Control Act, the Oil Pollution Act of 1990, the
Pollution Prevention Act of 1990, the Resource Conservation and
Recovery Act, the Safe Drinking Water Act, the Endangered Species
Act, the Toxic Substances Control Act, each as amended, and any
state or local counterparts thereof.
"Environmental Permits" with respect to the Company means
---------------------
those Permits required to be obtained by the Company under
Environmental Laws in connection with the Business or the use and
operation of the Assets owned or leased by them.
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended.
"Final Determination" means (i) with respect to United
-------------------
States federal income Taxes, a "determination" as defined in
Section 1313(a) of the Code or execution of an Internal Revenue
Service Form 870AD; (ii) with respect to Taxes other than United
States federal income Taxes, any final determination of liability
in respect of a Tax provided for under applicable Law, provided,
--------
however, that if the meaning of "Final Determination" under
-------
foreign, state or local law is unclear, "Final Determination"
shall mean the expiration of the statute of limitations for
claiming a refund or asserting a deficiency, whichever is later,
with respect to the payment of Taxes in question; and (iii) any
final determination of liability in respect of a Loss provided
for under applicable law.
"GAAP" means generally accepted accounting principles in
----
effect on the date hereof as set forth in the opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by
a significant segment of the accounting profession of the United
States.
"Hazardous Substances" means any dangerous, toxic,
--------------------
radioactive, caustic or otherwise hazardous material, pollutant,
contaminant, chemical, waste or substance defined, listed or
described as any of such in or governed by any Environmental Law,
including but not limited to, urea-formaldehyde, polychlorinated
biphenyls, asbestos or asbestos-containing materials, radon,
explosives, known carcinogens, petroleum and its derivatives,
petroleum products, or any substance which might cause any injury
to human health or safety or to the environment or might subject
the owner or operator of real property owned, leased or
controlled by the Company (both currently or ever in the present)
to any Regulatory Actions or Claims.
"Inventory" means, as of any date, collectively, all
---------
inventories of merchandise and other products owned by the
Company and held for resale or for distribution, together with
packaging and samples thereof, operating supplies and spare or
maintenance parts owned by the Company as of such date.
"IRS" means the Internal Revenue Service.
---
The term "knowledge" with respect to (a) any individual
---------
means actual knowledge, and (b) any corporation means the actual
knowledge of the directors or the officers of such corporation;
and "knows" has a correlative meaning.
-----
"Liability" means any direct or indirect indebtedness,
---------
liability, assessment, claim, loss, damage, deficiency,
obligation or responsibility, fixed or unfixed, xxxxxx or
inchoate, liquidated or unliquidated, secured or unsecured,
accrued, absolute, actual or potential, contingent or otherwise
(including any liability under any guaranties, letters of credit,
performance credits or with respect to insurance loss accruals).
"Lien" means, with respect to any Asset, any mortgage, lien
----
(including mechanics, warehousemen, laborers and landlords
liens), claim, pledge, charge, security interest, preemptive
right, right of first refusal, option, judgment, title defect or
encumbrance of any kind in respect of or affecting such Asset.
The term "person" means an individual, corporation,
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partnership, joint venture, association, trust, unincorporated
organization or other entity, including a government or political
subdivision or an agency or instrumentality thereof.
"Regulatory Actions" means any claim, demand, action, suit
------------------
or proceeding brought or instigated by any Governmental Body in
connection with any Environmental Law, including, without
limitation, civil, criminal and/or administrative proceedings,
whether or not seeking costs, damages, penalties or expenses.
"Release" means the intentional or unintentional, spilling,
-------
leaking, disposing, discharging or disturbance of, or emitting,
depositing, injecting, leaching, escaping or any other release or
threatened release, however defined, of any Hazardous Substance.
"Subsidiary" of the Company means any entity of which
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securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other
persons performing similar functions are owned directly or
indirectly through one or more intermediaries, or both, by the
Company.
"Tax" (including, with correlative meaning, the terms
---
"Taxes" and "Taxable") means (i) any net income, gross income,
----- -------
gross receipts, sales, use, ad valorem, transfer, transfer gains,
franchise, profits, license, withholding, payroll, employment,
social security (or similar), unemployment, disability, excise,
severance, stamp, rent, recording, registration, occupation,
premium, real or personal property, intangibles, environmental
(including taxes under Code S. 59A) or windfall profits tax,
alternative or add-on minimum tax, capital stock, customs duty or
other tax, fee, duty, levy, impost, assessment or charge of any
kind whatsoever (including but not limited to taxes assessed to
real property and water and sewer rents relating thereto),
together with any interest and any fine, penalty, addition to tax
or additional amount or deductions imposed by any Governmental
Body (domestic or foreign) (a "Tax Authority") responsible for
-------------
the imposition of any such tax, whether disputed or not,
including any liability arising under any tax sharing agreement,
with respect to the Company, the Business or the Assets (or the
transfer thereof); (ii) any liability for the payment of any
amount of the type described in the immediately preceding clause
(i) as a result of the Company being a member of an affiliated or
combined group with any other corporation at any time on or prior
to the Closing Date; and (iii) any liability of the Company for
the payment of any amounts of the type described in the
immediately preceding clause (i) as a result of a contractual
obligation to indemnify any other person.
"Tax Return" means any return or report (including
----------
elections, declarations, disclosures, schedules, attachments,
estimates and information returns) relating to Taxes required to
be supplied to any Tax Authority, and including any amendment
thereof.
"Transaction Documents" means, collectively, this Agreement,
---------------------
and each of the other agreements and instruments to be executed
and delivered by all or some of the parties hereto in connection
with the consummation of the transactions contemplated hereby.
The term "voting power" when used with reference to the
------------
capital stock of, or units of equity interests in, any person
means the power under ordinary circumstances (and not merely upon
the happening of a contingency) to vote in the election of
directors of such person (if such person is a corporation) or to
participate in the management and control of such person (if such
person is not a corporation).
(b) The following additional terms are defined in the
following sections of this Agreement:
TERM SECTION
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Acquired Name Recital
Asserted Liability 6.4(a)
Xxxxxxx Recital
Benefit Plans 2.10(b)
Business Recital
Claims 2.8
Claims Notice 6.4(a)
Company Recital
Condition of the Business 2.1(a)
Contemplated Transactions Recital
Controlled Group 2.10(a)
December 1997 Statement 2.3
Employment Agreement(s) Recital
Governmental Bodies 2.11
IBMC Facility 2.4
Indemnifying Party 6.4(a)
Indemnitee 6.4(a)
Infotex 6.2(b)
Xxxxxxx Recital
Latest Balance Sheet 2.4
Latest Balance Sheet Date 2.4
Laws 2.11
Losses 6.2
Noncompetition Agreement Recital
Orders 2.11
Permits 2.12
Purchase Price 1.1
Purchased Shares Recital
Purchaser Recital
Real Property Leases 2.6(a)
Required Consents 2.14
Shareholder(s) Recital
SECTION 8.2 INTERPRETATION. Unless the context otherwise
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requires, the terms defined in Section 8.1 shall have the
-----------
meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the
terms defined herein. All accounting terms defined in
Section 8.1, and those accounting terms used in this Agreement
-----------
not defined in Section 8.1, except as otherwise expressly
-----------
provided herein, shall have the meanings customarily given
thereto in accordance with GAAP. When a reference is made in
this Agreement to Sections, such reference shall be to a Section
of this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation".
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
COMPTECH ACQUISITION CORPORATION
By: /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: President
ABBEY, GARRETT & SETH, LTD.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
XXXX XXXXXXX
/s/ Xxxx Xxxxxxx
---------------------------
XXXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
-----------------------------
XXXXXX XXXXXX
/s/ Xxxxxx Xxxxxx
----------------------------
XXXX XXXXXXX
/s/ Xxxx Xxxxxxx
----------------------------
XXXX XXXXX
/s/ Xxxx Xxxxx
---------------------------
XXXX XXXXXXX
/s/ Xxxx Xxxxxxx
----------------------------
XXXXXXX XXXXX
/s/ Xxxxxxx Xxxxx
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