1
EXHIBIT 2.1
XXXXXXXXX.XXX, INC.
XXXX ASSOCIATES, INC.
XXXXXXX X. XXXX
Plan of Reorganization and Agreement
Dated as of July 30, 1999
TABLE OF CONTENTS
ARTICLE 1 THE TRANSACTION
1.1 The Transaction................................................................................1
1.2 Consideration..................................................................................2
1.3 Closing........................................................................................2
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF XXXX
2.1 Corporate Status of Xxxx.......................................................................4
2.2 Authority......................................................................................4
2.3 Capitalization.................................................................................4
2.4 No Default or Violation........................................................................5
2.5 Financial Statements...........................................................................5
2.6 Absence of Material Adverse Changes and Undisclosed Liabilities................................5
2.7 Title to Assets; Condition.....................................................................6
2.8 Receivables....................................................................................6
2.9 Contracts......................................................................................6
2.10 Completeness of Documentation..................................................................7
2.11 Compliance with Applicable Law.................................................................7
2.12 Absence of Certain Changes.....................................................................7
2.13 Litigation.....................................................................................8
2.14 Tax Matters....................................................................................8
2.15 Employee Benefit Plans; Compliance with ERISA..................................................9
2.16 Employment-Related Matters....................................................................10
2.17 Environmental.................................................................................10
2.18 Product and Service Liability Claims..........................................................11
2.19 Agreements, Contracts and Commitments.........................................................11
2.19.1 Existence.............................................................................11
2.12.2 Breach................................................................................12
2.20 Customers and Orders..........................................................................13
2.21 Suppliers.....................................................................................13
2.22 Absence of Certain Payments...................................................................13
2.23 Intellectual Property.........................................................................13
2.24 Insurance Contracts; Banking Relationships....................................................13
2.25 Interests of Officers and Directors...........................................................13
2.26 No Misrepresentations.........................................................................14
2.27 Investment Representations....................................................................14
2.28 WEB Site Statistics...........................................................................15
2.29 Subsidiaries; Investments.....................................................................15
2
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF CROSSWALK
3.1 Corporate Status of CROSSWALK.................................................................16
3.2 Authority for Agreement.......................................................................16
3.3 No Default or Violation.......................................................................16
3.4 Absence of Material Adverse Changes...........................................................16
ARTICLE 4 COVENANTS
4.1 Confidentiality...............................................................................17
4.2 Further Assurances............................................................................17
4.2.1 Generally..............................................................................17
4.2.2 Collection of Receivables..............................................................17
4.2.3 Obtaining Consents.....................................................................17
4.3 No-Shop Agreement.............................................................................17
4.4 Defense of Claims and Litigation..............................................................18
4.5 Retention of Books and Records................................................................18
4.6 Non-Competition Agreement.....................................................................18
4.7 Employees.....................................................................................18
4.8 Indemnities ..................................................................................18
4.8.1 Indemnification of CROSSWALK...........................................................18
4.8.2 Indemnification of Stockholder.........................................................19
4.8.3 Third Party Claims.....................................................................19
4.8.4 Minimum Liability......................................................................20
4.9 Distribution of Proceeds......................................................................20
ARTICLE 5 DEFINITIONS AND MISCELLANEOUS
5.1 Definitions of Certain Terms..................................................................20
5.2 Brokerage.....................................................................................22
5.3 Amendments and Supplements....................................................................22
5.4 Extensions and Waivers........................................................................22
5.5 Survival of Representations and Warranties....................................................23
5.6 Expenses......................................................................................23
5.7 Governing Law.................................................................................23
5.8 Alternative Dispute Resolution................................................................23
5.9 Notice........................................................................................23
5.10 Entire Agreement, Assignability, etc..........................................................24
5.11 Cumualtive Rights and Remedies................................................................24
5.12 Severability..................................................................................24
5.13 Counterparts..................................................................................24
5.14 Termination...................................................................................25
3
PLAN OF REORGANIZATION
AND AGREEMENT
AMONG
XXXXXXXXX.XXX, INC.,
CROSSWALK MERGER CORP.,
XXXX ASSOCIATES, INC.,
AND ITS SOLE STOCKHOLDER,
XXXXXXX X. XXXX
THIS PLAN OF REORGANIZATION AND AGREEMENT (the "Agreement"), is made this
30th day of July, 1999, by and among XXXXXXXXX.XXX, INC., a Delaware corporation
("CROSSWALK"), CROSSWALK MERGER CORP. ("the Merger Subsidiary"), a Virginia
corporation and a wholly-owned subsidiary of CROSSWALK, XXXX ASSOCIATES, INC., a
Virginia corporation ("Xxxx"), and its sole stockholder, Xxxxxxx X. Xxxx
("Stockholder"), and provides for Xxxx to become a wholly-owned subsidiary of
CROSSWALK by merger of Xxxx with and into the Merger Subsidiary, and for
Stockholder, by such merger, to become a stockholder of CROSSWALK.
WHEREAS, CROSSWALK wishes to acquire, on the terms and subject to the
conditions reflected below, the business of Xxxx (the "Acquired Business"); and
WHEREAS, Xxxx believes that it is desirable and in the best interests of
Xxxx that its business be combined with that of CROSSWALK by merger of Xxxx with
and into the Merger Subsidiary so that Xxxx (as merged into the Merger
Subsidiary) will become a wholly-owned subsidiary of CROSSWALK as provided below
(the "Merger");
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Plan of
Reorganization and Agreement do hereby agree as follows:
ARTICLE 1
THE TRANSACTION
1.1 THE TRANSACTION. On the Closing Date, and at the Closing Time, subject
in all instances to each of the terms, conditions, provisions and limitations
contained in this Agreement, Xxxx will merge with and into the Merger
Subsidiary, whereby the Merger Subsidiary is the surviving corporation, by
filing with the State Corporation Commission of the Commonwealth of Virginia the
fully executed Merger Agreement, in a form identical in all material respects to
that attached hereto as Exhibit 1.1, and such other documents as may be required
by applicable law to effectuate the Merger. In addition, the following shall
occur:
1.1.1 all of the shares of common stock of Xxxx outstanding prior to
the Transaction will, by said occurrence and with no further action on the part
of the holder thereof, be transformed and converted into shares of common stock
of the Merger Subsidiary;
4
1.1.2 upon surrender of the certificate(s) for all of the shares of
common stock of Xxxx outstanding prior to the Transaction, Stockholder shall
obtain the right to receive the Consideration (as defined below), without
interest or any similar payment thereon or with respect thereto.
1.1.3 the officers of Xxxx immediately prior to the effectiveness of
the Merger will resign effective as of the Merger and the officers of the Merger
Subsidiary shall remain the officers of the Merger Subsidiary immediately after
the effectiveness of the Merger;
1.1.4 the board of directors of the Merger Subsidiary immediately
prior to the effectiveness of the Merger shall be the board of directors of the
Merger Subsidiary immediately after the Merger;
1.1.5 the Merger Subsidiary, as the surviving entity of the Merger,
shall be the owner of all of the business, assets, rights and other attributes
theretofore held by either the Merger Subsidiary or Xxxx;
1.1.6 the Articles of Incorporation and Bylaws of the Merger
Subsidiary as in effect immediately prior to the effectiveness of the Merger
shall remain in effect as the Articles of Incorporation and Bylaws of the Merger
Subsidiary immediately following the Merger; and
1.1.7 the name of the Merger Subsidiary shall thereafter be Media
Management, Inc.
Nothing in this Agreement shall be deemed to restrict in any way the ability of
CROSSWALK, as sole stockholder of the Merger Subsidiary following the Merger, to
alter the number and membership of the board of directors of the Merger
Subsidiary, to amend its bylaws and articles of incorporation, or to take any
other action permitted to it by law in its capacity as sole shareholder thereof.
Nothing in this Agreement shall be deemed to restrict in any way the ability of
the board of directors of the Merger Subsidiary, following the Merger, to elect
new officers or reappoint officers of the Merger Subsidiary, or to take any
other action legally permitted to the board of directors.
1.2 CONSIDERATION. Pursuant to the Transaction, Stockholder shall be
entitled to receive, from and after the effectiveness of the Merger, in respect
of the shares of common stock of Xxxx outstanding immediately prior to the
Transaction (and upon surrender of the certificate(s) therefor, duly endorsed
and in all respects in proper form of transfer) a certificate representing
494,845 shares of the common stock of Xxxxxxxxx.xxx, Inc., plus a payment of Two
Million Dollars ($2,000,000), subject to the following terms (the
"Consideration"). Of the said $2,000,000, $1,950,000 will be delivered at the
Closing, and the balance of $50,000 will be delivered within 90 days thereafter,
subject to adjustment as set forth in Article 4 hereof. It is understood that
the shares of common stock of Xxxxxxxxx.xxx, Inc., delivered as part of the
Consideration will not be registered pursuant to the Federal Securities Act of
1933 or pursuant to the laws of any state, and consequently may only be sold
pursuant to Rule 144 of the Securities and Exchange Commission and otherwise in
accordance with the requirements for applicable exemptions from registration and
other requirements of federal and state securities laws.
1.3 CLOSING.
1.3.1 The closing of the purchase and sale of the Stock (the
"Closing") shall be held at the offices of Xxxxxxxxx.xxx Inc., 0000X Xxxxxxxxxx
Xx., Xxxxxxxxx, XX 00000, at 3:00P.M. on August 13, 1999 or at such other date
and time as shall be agreed to by the parties. Each of the parties hereto agrees
to utilize their respective best efforts to cause such closing to occur on the
first closing date specified above or as soon as practicable thereafter.
2
5
1.3.2 At the Closing,
1.3.2.1. Stockholder and Xxxx, as the case may be, shall deliver
to CROSSWALK:
1.3.2.1.1 Such affidavits and certificates, from
Stockholder, Xxxx and from any other essential parties as CROSSWALK shall deem
necessary to relieve CROSSWALK of any obligation to deduct and withhold any
portion of the Consideration pursuant to Section 1445 of the Internal Revenue
Code of 1986, as amended (the "Code");
1.3.2.1.2 All original books and records of Xxxx
which are in Xxxx'x or Stockholder's possession;
1.3.2.1.3 All consents, approvals and waivers under
any loan or other agreements of Xxxx that are required to consummate this
Agreement or any of the transactions contemplated hereby; and all filings,
registrations, approvals, consents and authorizations by or with, and
notifications to, all third parties (including, without limitation, governmental
entities and authorities, domestic and foreign) required to consummate this
Agreement or any of the transactions contemplated hereby, which approvals and
authorizations shall be effective and shall not have been suspended, revoked or
stayed by action of any governmental entity or authority;
1.3.2.1.4 Certifications from the appropriate officials of
the Commonwealth of Virginia that Xxxx has paid all taxes that were due as of
the date of the Closing;
1.3.2.1.5 Certificates representing all the outstanding
Stock of Xxxx, duly endorsed for transfer, or accompanied by duly executed stock
powers with all requisite state and federal transfer stamps, if any, affixed
thereto;
1.3.2.1.6 A certificate, dated the date of the Closing and
signed by the Stockholder, that the representations and warranties of
Stockholder contained in this Agreement shall be true and correct in all
material respects as of the date hereof, except for representations and
warranties made expressly as of a specified date (which representations and
warranties shall be true and correct in all material respects as of such date);
1.3.2.1.7 A certificate, dated the date of the Closing and
signed by the President of Xxxx, that the representations and warranties of Xxxx
contained in this Agreement shall be true and correct in all material respects
as of the date hereof, except for representations and warranties made expressly
as of a specified date (which representations and warranties shall be true and
correct in all material respects as of such date);
1.3.2.1.8 An opinion or opinions of counsel to Xxxx in form
and substance reasonably satisfactory to counsel to CROSSWALK, dated the date of
the Closing; and
1.3.2.1.9 All other documents consistent with the purposes
of this Agreement as CROSSWALK shall have reasonably requested (other than
additional opinions of counsel); and
1.3.2.2 CROSSWALK shall deliver to Xxxx and Stockholder, in such
form and containing such terms and provisions as shall reasonably satisfy Xxxx,
Stockholder and their counsel:
1.3.2.2.1 The Consideration required by Section 1.2;
3
6
1.3.2.2.2 A certificate, dated the date of the Closing and
signed by the President or a Vice-President of CROSSWALK, that the
representations and warranties of CROSSWALK contained in this Agreement shall be
true and correct in all material respects as of the date hereof, except for
representations and warranties made expressly as of a specified date (which
representations and warranties shall be true and correct in all material
respects as of such date);
1.3.2.2.3 An opinion of counsel to CROSSWALK in form and
substance reasonably satisfactory to counsel to Xxxx, dated the date of the
Closing; and
1.3.2.2.4 All other documents consistent with the purposes
of this Agreement as Xxxx and Stockholder shall have reasonably requested (other
than additional opinions of counsel).
1.3.3 CROSSWALK's obligation to close hereunder shall be contingent
upon its receipt, as of the Closing, of a fairness opinion in form and substance
satisfactory to it and its counsel, verifying, inter alia, that the
Consideration to be paid hereunder is fair and reasonable to CROSSWALK and its
stockholders, the said opinion to be provided by Xxxxx & Xxxxxxxxxxxx.
1.3.4 Stockholder's obligation to close hereunder shall be contingent
upon his receipt, as of the Closing, of an opinion from a tax counsel of his
choosing and at his expense, verifying that his receipt of Xxxxxxxxx.xxx, Inc.
common stock, in exchange for his shares of stock of Xxxx, is a nontaxable event
based on the Transaction.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF XXXX AND STOCKHOLDER
Xxxx and Stockholder jointly and severally represent and warrant to
CROSSWALK as follows:
2.1 CORPORATE STATUS OF XXXX. Xxxx is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Virginia.
There are no other jurisdictions in which the character of the properties owned,
leased or operated by Xxxx or the nature of the business transacted by Xxxx
might make qualification as a foreign corporation doing business in such
jurisdiction necessary. The failure of Xxxx to have qualified as a foreign
corporation doing business in any state does not and will not have a materially
adverse effect upon the Acquired Business. Xxxx has no Subsidiaries and no
investment or ownership interest in any other corporation, partnership, joint
venture, trust or unincorporated organization.
2.2 AUTHORITY. Xxxx has the full corporate power to own, lease and operate
its properties and to conduct its business as currently owned, leased, operated
and conducted and to execute, deliver, and perform this Agreement and the other
transactions contemplated herein and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement and the other transactions
contemplated hereby have been duly and validly authorized by Xxxx'x Board of
Directors and Stockholder, and no other corporate proceedings on the part of
Xxxx, including, without limitation, stockholder approval, are necessary to
authorize the execution, delivery and performance of this Agreement and the
other transactions contemplated hereby.
2.3 CAPITALIZATION. The authorized capital stock of Xxxx consists of 5,000
shares of common stock, no par value. There are no other stockholders of Xxxx,
other than Stockholder. There are 1,100 shares of common stock issued and no
additional shares are authorized for issuance. All of the issued and
4
7
outstanding share of Stock have been duly authorized, are validly issued, fully
paid and nonassessable, are not subject to, nor were they issued in violation
of, any preemptive rights or rights of first refusal, and are owned of record
and beneficially by Stockholder, free and clear of any liens, pledges, security
interests, encumbrances, taxes, or claims of any kind. There are no outstanding
or authorized options, warrants, rights, contracts, calls, puts rights to
subscribe, conversion rights or other agreements or commitments to which Xxxx or
Stockholder is a party or which are binding upon Xxxx or Stockholder providing
for the issuance, disposition or acquisition of any of its capital stock (other
than this Agreement). There are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to Xxxx. There are no voting
trusts, proxies or any other agreements or understandings with respect to the
voting of the capital stock of Xxxx. Xxxx is not subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its capital stock.
2.4 NO DEFAULT OR VIOLATION. Except as contemplated by Section 2.9 and
except for such matters, if any, which, together, do not and will not have a
material adverse effect upon the Acquired Business, the execution, delivery and
performance of this Agreement and the other transactions contemplated hereby do
not and will not (a) conflict with or result in a violation of any provision of
the Articles of Incorporation or By-Laws or other organizational documents of
Xxxx, or (b) with or without the giving of notice or the lapse of time, or both,
conflict with, or result in any violation or breach of or constitute a default
under, or require the consent of any other party to, or result in any right to
accelerate or the creation of any lien, charge or encumbrance on the common
stock or any of the assets of the Acquired Business, pursuant to, or right of
termination under, any provision of any note, mortgage, indenture, lease,
agreement or other instrument, permit, concession, grant, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation to which
Xxxx is a party or by which Xxxx or any of its assets or properties may be bound
or which is applicable to Xxxx or any of its assets or properties. Except as
contemplated by Section 2.9 and except for such matters, if any, which,
together, do not and will not have a material adverse effect upon the Acquired
Business, no authorization, consent, approval, license, order, or permit of, or
declaration of, or filing with or notice to, any governmental body or authority
or any other person or entity is necessary for the execution, delivery and
performance of this Agreement by Xxxx and Stockholder or the consummation by
Xxxx and Stockholder of this Agreement and the other transactions contemplated
hereby.
2.5 FINANCIAL STATEMENTS. Xxxx has previously furnished to CROSSWALK true
and complete copies of its profit and loss statements for each of the years
ended November 30, 1998 and 1997, a balance sheet dated November 30, 1998, and a
balance sheet as of the end of each calendar month thereafter, copies of which
are attached as Exhibit 2.5 (the "Xxxx Reports"). Each of the profit and loss
statements fairly presents the results of operations as of the dates therein set
forth and the balance sheet fairly presents the assets and liabilities of Xxxx,
excluding unbooked intellectual property, as of its date, in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved. As of the Closing, the Net Worth of Xxxx, in
accordance with generally accepted accounting principles, shall be no less than
$506,000, the amount shown on the Xxxx balance sheet for June 30, 1999,
including August xxxxxxxx and associated costs of sales and expenses posted
after the Closing. CROSSWALK shall cause the books and records of Xxxx to be
audited by the accounting firm of Xxxxxxx, Xxxxxxxx & Xxxxxxxxxx, P.C., within
90 days following the Closing. The determination of said accounting firm as to
the net worth of Xxxx as of the Closing date shall be final, binding, and
conclusive upon the parties. Said determination will include recognition of an
accrual for 1999 income taxes which have not been accrued heretofore by Xxxx. It
is understood by the parties that Stockholder will not be responsible for
payment of Xxxx'x 1999 income taxes.
2.6 ABSENCE OF MATERIAL ADVERSE CHANGES AND UNDISCLOSED LIABILITIES. Since
June 30, 1999, there has not occurred or arisen, whether or not in the ordinary
course of business, (a) any material adverse change in the business, operations,
assets, financial condition, results of operations, properties or prospects of
Xxxx, or (b) any event, condition or state of facts of any character that might
materially and
5
8
adversely affect the business, operations, assets, financial condition, results
of operations, properties or prospects of Xxxx. Xxxx has no material liabilities
or obligations, fixed, accrued, contingent or otherwise, that are not fully
reflected or provided for on, or disclosed in the notes to, the consolidated
balance sheet at November 30, 1998 (the "1998 Balance Sheet") or elsewhere in
the Xxxx Reports, except (a) liabilities and obligations incurred in or as a
result of the ordinary course of business since June 30, 1999, none of which
individually or in the aggregate has been or is materially adverse to the
business, operations, assets, financial condition, results of operations,
properties or prospects of Xxxx, (b) liabilities and obligations permitted by or
provided for or contemplated by this Agreement and (c) liabilities and
obligations disclosed on Exhibit 2.6.
2.7 TITLE TO ASSETS; CONDITION.
2.7.1 Xxxx has good record title to, or a valid leasehold interest in,
all of the assets of the Acquired Business. None of the assets is subject to any
mortgage, pledge, lien, security interest or other encumbrance. All plant,
equipment and personal property owned by Xxxx and related to the Acquired
Business are in good operating condition and repair. No notice has been received
by Xxxx from any insurance company that has issued a policy with respect to any
of the assets or from any board of fire underwriters (or other body exercising
similar functions) claiming any defects or deficiencies or requesting the
performance of any repairs, alterations or other work relating to the assets.
2.7.2 Except for such matters, if any, which, together, do not and
will not have a material adverse effect upon the Stock to be transferred or the
Acquired Business, to the best of knowledge and belief after due investigation,
Xxxx is not in violation of any law, regulation or ordinance (including, without
limitation, laws, regulations or ordinances relating to building, zoning,
environmental, city planning, land use or similar matters) relating to its
properties. There are no proceedings materially affecting the present or future
use of any such property for the purposes for which it is used or the purposes
for which it is intended to be used. All buildings, structures and fixtures used
by Xxxx in connection with the Acquired Business are in good operating condition
and repair and are insured with coverages that are usual and customary for
similar properties and similar businesses.
2.8 RECEIVABLES. All of the Receivables set forth in Exhibit 2.10(i) are
good, valid and existing accounts; and Exhibit 2.10(i) sets forth all accounts
receivable of the Acquired Business. Xxxx has good title to all of the
Receivables, free and clear of all liens, security interests, encumbrances and
other rights and claims of other persons or entities.
2.9 CONTRACTS. Xxxx has delivered to CROSSWALK or made available to
CROSSWALK a true and complete copy of each of the leases, contracts, licenses
and other agreements and all amendments thereto (collectively, the "Contracts").
All Contracts are in full force and effect. With respect to goods and services
delivered by Xxxx pursuant to the Contracts before the Closing, Xxxx has
substantially performed its obligations under the Contracts and has complied in
all material respects with all specifications thereto, and Xxxx has not received
any notice of default, nor is it in material default, nor does any condition
exist which with notice or the lapse of time, or both, will render Xxxx in
material default, under any of the Contracts. Certain of the Contracts may
require the consent of the other party(ies) thereto in the case of the purchase
of the Acquired Business, as indicated on Exhibit 2.9. Neither Xxxx nor any of
its officers, directors, employees, representatives or other agents has any
knowledge or reason to believe or suspect that any party to any of the Contracts
will not approve or consent to the purchase of the Acquired Business. The other
parties to the Contracts are in compliance with all material terms and
conditions of the Contracts. No party to a Contract has notified Xxxx of its
intention to terminate or materially change the nature of its transaction or
relationship with Xxxx or CROSSWALK under any such Contract.
6
9
2.10 COMPLETENESS OF DOCUMENTATION. Except for items which individually or
in the aggregate are not material to the business, operations, assets, financial
condition, results of operations, properties or prospects of the Acquired
Business, Exhibit 2.10 describes changes to information provided to CROSSWALK
since June 30, 1999, or the last month previously provided, concerning
outstanding proposals (2.10a); subcontracts (2.10b); customer orders (2.10c);
Tangible Assets (2.10d); supplies and inventory (2.10e); owned (2.10f) and
licensed (2.10g) Intellectual Property; Prepaid Expenses (2.10h); Receivables
(2.10i); leased property (2.10j); Leased Equipment (2.10k); product warranties
and other records related to the assets (2.10l); and unbooked assets (2.10m) of
Xxxx, used in connection with the performance of the Contracts or in connection
with the preparation of proposals in process, or otherwise in the Acquired
Business, including, without limitation, all machinery, equipment, tools,
furniture, fixtures, vehicles, related parts and supplies and leases for the
same; all intellectual property (including software, development tools and kits)
relating to or used in connection with the development, manufacture,
distribution or sale of any products or services provided in connection with the
Contracts or otherwise in the Acquired Business; agreements or other
arrangements for shipping, maintenance, repair and other services; agreements or
other arrangements for supplies and materials; sewer, electrical and other
utilities; and prepayments for any of the preceding items.
2.11 COMPLIANCE WITH APPLICABLE LAW. Xxxx has all requisite licenses,
permits and certificates from all foreign, federal, state and local authorities
necessary to perform the Contracts and to conduct the Acquired Business as
presently conducted, and to own, lease and operate its properties. Xxxx has
performed the Contracts and conducted the Acquired Business in compliance in all
material respects with all applicable laws, statutes, ordinances, regulations,
rules, judgments, decrees, orders, permits, licenses, concessions, grants or
other authorizations of any court or of any governmental entity or authority.
2.12 ABSENCE OF CERTAIN CHANGES. Since June 30, 1999, Xxxx has conducted
its business only in the ordinary course and consistent with prior practice, and
Xxxx has not:
2.12.1 discharged, satisfied or paid any obligation or liability,
absolute, accrued, contingent or otherwise, whether due or to become due,
material to the Acquired Business, other than current liabilities and current
portion of long-term debt, if any, shown on the 1998 Balance Sheet and monthly
balance sheets through June 30, 1999, and current liabilities incurred since the
date of the 1998 Balance Sheet and monthly balance sheets through June 30, 1999,
in the ordinary course of business and consistent with its prior practice;
2.12.2 suffered any damage or destruction in the nature of a casualty
loss or other loss that would be treated as an extraordinary item pursuant to
Opinion No. 30 of the Accounting Principles Board, whether covered by insurance
or not, adversely affecting any property or business of the Acquired Business,
that might reasonably be expected to be material to the business, operations,
assets, financial condition, results of operations, properties or prospects of
the Acquired Business;
2.12.3 granted any increase in the compensation payable or to become
payable by Xxxx to its directors, officers, managers, consultants or agents
employed in the Acquired Business or any increase in benefits under any bonus,
insurance, pension or other benefit plan made for or with any of such persons,
except at shown on Exhibit 2.12.3;
2.12.4 encountered any labor union organizing activity material to the
business, operations, assets, financial condition, results of operations,
properties or prospects of the Acquired Business considered alone, had any
employee strike, work-stoppage, slow-down or lockout, or any substantial threat
of any imminent strike, work-stoppage, slow-down or lock-out, or had any adverse
change in its relations with its employees, agents, customers or suppliers or
any governmental or regulatory authorities, that, in any of the foregoing cases,
has had or could reasonably be expected to have, individually
7
10
or in the aggregate, a material adverse effect on the business, operations,
assets, financial condition, results of operations, properties or prospects of
the Acquired Business;
2.12.5 transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any United States or foreign
intellectual property, or modified any existing rights with respect thereto, as
related to the Acquired Business, other than in the ordinary course of business
and consistent with prior practice;
2.12.6 canceled or compromised any debts or waived or permitted to
lapse any claims or rights of substantial value, or sold, leased, transferred or
otherwise disposed of any of its properties or assets (real, personal or mixed,
tangible or intangible), except in the ordinary course of business and
consistent with prior practice;
2.12.7 made any material capital expenditure or commitment for any
addition to property, plant or equipment not in the ordinary course of business
and consistent with prior practice;
2.12.8 made any change in any method of accounting or accounting
practice;
2.12.9 paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed, tangible or
intangible) to, or entered into any agreement or arrangement with, any officer,
director, "affiliate," officer of an "affiliate," director of an "affiliate,"
"associate" of an officer, "associate" of a director, or "associate" of an
"affiliate" (as such terms are defined in the rules and regulations of the
Securities and Exchange Commission), except for normal business advances to
employees consistent with prior practices, except as shown on Exhibit 2.12.9; or
2.12.10 agreed, whether in writing or otherwise, to take any action
described in this Section 2.12.
2.13 LITIGATION.
2.13.1 Except as disclosed to CROSSWALK on Exhibit 2.13, there is no
investigation, inquiry or review by any governmental entity or authority with
respect to Xxxx pending or threatened, nor has any governmental entity indicated
to Xxxx an intention to conduct the same;
2.13.2 except as identified in Exhibit 2.13, there is no "Action" (as
defined in Section 5.1) of any kind, pending or threatened, at law or in equity,
before any court, arbitrator, governmental entity or authority, that involves,
affects or relates to Xxxx or any of its officers, directors, employees,
properties or assets in connection with the business and affairs of the Acquired
Business, that either singly or in the aggregate may have any material adverse
effect on the business, operations, assets, financial condition, results of
operations, properties or prospects of the Acquired Business considered alone;
2.13.3 to Xxxx'x knowledge, there is no basis or ground for any
Action; and
2.13.4 neither Xxxx nor any of its directors, officers, employees or
properties is subject to any order, writ, injunction, decree or judgment of any
court, arbitrator or governmental entity or authority that involves, affects or
relates to the Acquired Business.
2.14 TAX MATTERS. Xxxx has complied in all material respects with the
requirements for filing federal, state, local and foreign tax returns and
reports required to be filed by it or on its behalf. All taxes shown by the
returns to be due and payable have been paid or are reflected as a liability on
the Xxxx balance sheets included in the Xxxx Reports. All tax returns of Xxxx
that have been examined by any
8
11
governmental authority since December 31, 1994 are identified on Exhibit 2.14
along with the respective authority; CROSSWALK has been provided with a copy of
all returns and any assessments resulting from such examinations, and all
assessments, penalties and interest have been paid in full. Xxxx has not been
notified in writing or otherwise by any taxing authority of any pending actions,
claims, suits or assessments for any tax deficiency. The accruals for taxes
reflected on the Xxxx balance sheets are adequate under generally accepted
accounting principles for all unpaid federal, state, local or foreign taxes
(including but not limited to interest, charges, fees, levies or other
assessments, gross receipts, excise and franchise taxes and penalties, if any,
thereon) due or that will become due for any period commencing prior to the date
of the Closing. Xxxx has no material liability, contingent or otherwise, for
unpaid federal, state, local or foreign taxes (including, but not limited to
interest, charges, fees, levies or other assessments, gross receipts, excise and
franchise taxes and penalties, if any, thereon) due or that will become due for
any period commencing prior to the date of such Xxxx balance sheets that is not
reflected on such Xxxx balance sheets. Xxxx has not made an election under
Section 341(f) of the Code. Xxxx is not a party to any tax indemnity or tax
sharing agreement.
2.15 EMPLOYEE BENEFIT PLANS; COMPLIANCE WITH ERISA. Exhibit 2.15 contains a
true, correct and complete list of all pension, profit sharing, retirement,
deferred compensation, welfare, insurance, disability, bonus, vacation pay,
severance pay and other similar plans, programs or agreements, and every
material personnel policy, whether reduced to writing or not, relating to any
persons employed by Xxxx and related to the Acquired Business and maintained at
any time after December 31, 1994, by Xxxx or by any other member (hereinafter,
"Affiliate") of a controlled group of corporations, group of trades or
businesses under common control or affiliated service group which includes Xxxx
(as defined for purposes of Section 414(b), (c) and (m) of the Code)
(collectively, the "Xxxx Plans"). Xxxx has made available to CROSSWALK true,
correct and complete copies of all Xxxx Plans that have been reduced to writing,
together with all documents establishing or constituting any related trust,
annuity contract, insurance contract or other funding instrument, and summaries
of those that have not been reduced to writing. With respect to any "defined
benefit plan," as defined in Section 3(35) of ERISA, Xxxx has made available a
copy of the latest annual actuarial report, and with respect to all Xxxx Plans
the latest Forms 5500. Neither Xxxx nor any Affiliate has any obligation or
other employee benefit plan liability under applicable law; nor has Xxxx or any
Affiliate ever been obligated to contribute to any "multi-employer plan," as
defined in Section 3(37) of ERISA. Neither Xxxx nor any Affiliate has incurred
any "withdrawal liability" calculated under Section 4211 of ERISA and there has
been no event or circumstance which would cause them to incur any such
liability. Neither Xxxx nor any Affiliate has ever maintained a Xxxx Plan
providing health or life insurance benefits to former employees (other than as
required by Part 6 of Subtitle B of Title I of ERISA). No plan previously
maintained by Xxxx or its Affiliates which was subject to ERISA has been
terminated; no proceedings to terminate any such Xxxx Plan have been instituted
within the meaning of Subtitle C of Title IV of ERISA; and no reportable event
within the meaning of Section 4043 of said Subtitle C has occurred with respect
to any such Xxxx Plan, and no liability to the Pension Benefit Guaranty
Corporation has been incurred. With respect to all the Xxxx Plans, Xxxx and
every Affiliate are in material compliance with all requirements prescribed by
all statutes, regulations, orders or rules currently in effect, and have in all
material respects performed all obligations required to be performed by them.
Neither Xxxx nor any Affiliate, nor any of their directors, officers, employees
or agents, nor any trustee or administrator of any trust created under the Xxxx
Plans, has engaged in or been a party to any "prohibited transaction" as defined
in Section 4975 of the Code and Section 406 of ERISA which could subject Xxxx or
CROSSWALK or their Subsidiaries, affiliates, directors or employees or the Xxxx
Plans or the trusts relating thereto or any party dealing with any of the Xxxx
Plans or trusts to any tax or penalty on "prohibited transactions" imposed by
Section 4975 of the Code. Neither the Xxxx Plans nor the trusts created
thereunder have incurred any "accumulated funding deficiency," as such term is
defined in Section 412 of the Code and regulations issued thereunder, whether or
not waived.
9
12
Each Xxxx Plan intended to qualify under Section 401(a) of the Code has
been determined by the Internal Revenue Service to so qualify, and the trusts
created thereunder have been determined to be exempt from tax under Section
501(a) of the Code; copies of all determination letters have been delivered to
CROSSWALK; and nothing has occurred since the date of such determination letters
which might cause the loss of such qualification or exemption. With respect to
each Xxxx Plan that is a "defined benefit plan" as defined in Section 3(35) of
ERISA, the present value of the actuarial accrued liability, determined on a
plan termination basis, does not exceed the fair market value of the assets held
under such Xxxx Plan, and there is no unpaid contribution for any Xxxx Plan year
ended prior to the Closing as required under Section 412 of the Code. With
respect to each Xxxx Plan which is a qualified profit sharing or stock bonus
plan, all employer contributions accrued for plan years ending prior to the
Closing under the Xxxx Plan terms and applicable law have been made.
There is no Action threatened or pending or that can reasonably be expected
to be asserted with respect to any of the Xxxx Plans or any prior plan
maintained by Xxxx, and there are no outstanding written requests, other than
routine requests for information concerning such Xxxx Plans, by participants,
beneficiaries or any government agency. All of the liabilities with respect to
all of the Xxxx Plans are accurately reflected in Xxxx'x financial statements
and Xxxx'x balance sheets included in the Xxxx Reports.
2.16 EMPLOYMEMT-RELATED MATTERS. Except for such matters, if any, which,
together, do not and will not have a material adverse effect upon the Stock to
be transferred or the Acquired Business, to the best of knowledge and belief,
after due investigation, (a) Xxxx is in compliance with all applicable laws
respecting employment, consulting, employment practices, wages, hours, and terms
and conditions of employment; (b) Xxxx is not a party to any collective
bargaining agreement or other contract or agreement affecting the Acquired
Business with any labor organization or other representative of any employees
related to the Acquired Business; (c) there is no labor strike, dispute,
slowdown, work stoppage, lockout or other labor controversy in effect, that is
pending or threatened against or otherwise affecting the Acquired Business or
Xxxx, and Xxxx has not experienced any labor controversy within the past three
years; (d) no labor representation question exists or has been raised respecting
any of the employees of Xxxx; (e) Xxxx has not closed any plant or facility, or
effectuated any layoffs of employees or implemented any early retirement,
separation or window program at any time from or after June 30, 1996 nor has
Xxxx planned or announced any action or program for the future with respect to
which Xxxx has or may have any material liability; and (f) Xxxx is in compliance
in all material respects with its obligations pursuant to the Worker Adjustment
and Retraining Notification Act of 1988, and all other notification and
bargaining obligations arising under any collective bargaining agreement or
statute relating to employment.
2.17 ENVIRONMENTAL.
2.17.1 To the best of Xxxx'x knowledge and belief (a) there is no
liability for violation of any applicable Environmental Law (as defined in
Section 5.1) or for clean-up or similar costs with respect to any Environmental
Contamination (as defined in Section 5.1) as a result of (i) an act or omission
of Xxxx or, (ii) to Xxxx'x knowledge, acts or omissions of third parties, (b)
Xxxx has not received any communication (written or oral), whether from a
governmental authority, employee, or any other person that alleges that Xxxx is
not in compliance, (c) there are no circumstances that may prevent or interfere
with full compliance in the future, and (d) all permits and other governmental
authorizations currently held by Xxxx pursuant to the Environmental Laws are in
full force and effect and no other permits are required by Xxxx.
2.17.2 There is no Environmental Claim (as defined in Section 5.1)
pending or threatened against or involving Xxxx or against any person or entity
whose liability for any Environmental Claim Xxxx has or may have retained or
assumed either contractually or by operation of law.
10
13
2.17.3 To the best of Xxxx'x knowledge and belief (a) there are no
past or present actions, activities, circumstances, conditions, events or
incidents caused, performed or omitted by Xxxx, including, without limitation,
the release, threatened release, emission, discharge or disposal of any Material
of Environmental Concern (as defined in Section 5.1), that could form the basis
of any Environmental Claim against Xxxx, and, (b) there are no such actions,
activities, circumstances, conditions, events or incidents caused, performed or
omitted by third parties, that could form the basis of any Environmental Claim
against any person or entity whose liability for any Environmental Claim Xxxx
may have retained or assumed either contractually or by operation of law.
2.18 PRODUCT AND SERVICE LIABILITY CLAIMS. No product liability, service
liability or warranty claims have been made against Xxxx for goods or services
provided in connection with the Acquired Business.
2.19 AGREEMENTS, CONTRACTS AND COMMITMENTS
2.19.1 EXISTENCE. Except as described in Exhibit 2.19.1, in connection
with the Acquired Business, Xxxx is not a party to:
2.19.1.1 any bonus, deferred compensation, pension, severance,
profit-sharing, stock option, employee stock purchase or retirement plan,
contract or arrangement or other employee benefit plan or arrangement;
2.19.1.2 any employment agreement that contains any severance pay
liabilities or obligations;
2.19.1.3 any agreement for personal services or employment;
2.19.1.4 any agreement of guarantee or indemnification in an
amount that (a) could exceed $5,000, or (b) is material to the business,
operations, assets, financial condition, results of operations, properties or
prospects of the Acquired Business;
2.19.1.5 any agreement or commitment containing a covenant
limiting or purporting to limit the freedom of Xxxx to compete with any person
in any geographic area or to engage in any line of business;
2.19.1.6 any lease to which Xxxx is a party as lessor or lessee
that (a) provides for future payments of $2,500 or more, or (b) is material to
the business, operations, assets, financial condition, results of operations,
properties or prospects of the Acquired Business considered alone;
2.19.1.7 any joint venture agreement or profit-sharing agreement;
2.19.1.8 except for trade indebtedness incurred in the ordinary
course of business, any loan or credit agreements providing for the extension of
credit to Xxxx or any instrument evidencing or related in any way to
indebtedness incurred in the acquisition of companies or other entities or
indebtedness for borrowed money by way of direct loan, sale of debt securities,
purchase money obligation, conditional sale, guarantee, or otherwise that (a)
individually is in the amount of $5,000 or more, or (b) is material to the
business, operations, assets, financial condition, results of operations,
properties or prospects of the Acquired Business;
2.19.1.9 any license agreement, either as licensor or licensee,
or distributor, dealer, franchise, manufacturer's representative, sales agency
or other similar agreement or commitment;
11
14
2.19.1.10 any contract or agreement for the future sale by Xxxx
of materials, products, services or supplies that is material to the business,
operations, assets, financial condition, results of operations, properties or
prospects of Xxxx considered as a whole or of the Acquired Business considered
alone;
2.19.1.11 any contract or agreement for the future purchase by
Xxxx of any materials, equipment, services, or supplies, that either provides
for payments in excess of $2,500 and cannot be terminated by it without penalty
upon less than three (3) months' notice or was not made in the ordinary course
of business and consistent with prior practice;
2.19.1.12 any agreement that provides for the sale of goods or
services that will result in a loss as a result of costs already incurred or
expected to be incurred to complete the agreement;
2.19.1.13 any agreement or arrangement for the assignment, sale
or other transfer by Xxxx of any agreement or lease (or right to payment
thereunder) by which it leases materials, products or other property to a third
party;
2.19.1.14 any contract or agreement that provides for any
discount other than pursuant to Xxxx'x standard discount terms, which are
described in Exhibit 2.19.1.14;
2.19.1.15 any agreement or commitment for the acquisition,
construction or sale of assets owned or to be owned by Xxxx;
2.19.1.16 any contract or agreement not described above involving
the payment or receipt by Xxxx of more than $500 individually or $5,000 in the
aggregate other than contracts or agreements in the ordinary course of business
for the purchase of inventory, supplies or services consistent with prior
practice, or for the sale or lease of finished goods or services in the ordinary
course of business and consistent with prior practice; or
2.19.1.17 any contract or agreement not described above that was
not made in the ordinary course of business and consistent with prior practice
and that is material to the business, operations, assets, financial condition,
results of operations, properties or prospects of the Acquired Business.
2.19.2 BREACH. All agreements, contracts, plans, leases, instruments,
arrangements, licenses and commitments listed in Exhibit 2.19.1 pursuant to this
Section 2.19 are valid and in full force and effect, and except for such
matters, if any, which, together, do not and will not have a material adverse
effect upon the Acquired Business, Xxxx has not, nor has any other party
thereto, to the best of its knowledge, breached any provision of, or defaulted
under the terms of, nor are there any facts or circumstances that would
reasonably indicate that Xxxx will or may be in such breach or default under,
any such contract, agreement, instrument, arrangement, commitment, plan, lease
or license, which breach or default has or could reasonably be expected to have
a material adverse effect on the business, operations, assets, financial
condition, results of operations, properties or prospects of the Acquired
Business. Exhibit 2.19.1 correctly identifies each contract the provisions of
which would be materially and adversely affected by this Agreement and each
contract that requires the consent of a third party to the Agreement in order to
complete this transaction.
12
15
2.20 CUSTOMERS AND ORDERS
2.20.1 Exhibit 2.20.1 hereto contains a true and complete list of all
customers of Xxxx for goods or services of the Acquired Business. None of the
present listed customers has notified Xxxx of an intention to cease purchasing
goods or services from Xxxx, except as shown on Exhibit 2.20.1.
2.20.2 Exhibit 2.20.2 hereto contains a true and complete list of all
customer orders to Xxxx related to the Acquired Business outstanding and
unfilled as of July 16, 1999. During the period from July 16, 1999 through the
date of this Agreement Xxxx has not accepted customer orders on any terms other
than those used in the ordinary course of the Acquired Business and consistent
with prior practice, except as shown in said Exhibit.
2.21 SUPPLIERS. Exhibit 2.21 hereto contains a true and complete list of
all material suppliers from or through whom Xxxx has purchased products or
services for use in connection with operation of the Acquired Business. None of
the present listed suppliers has notified Xxxx of an intention to materially
change its business relationship with Xxxx.
2.22 ABSENCE OF CERTAIN PAYMENTS. Neither Xxxx nor any director, officer,
agent, employee or other person associated with or acting on behalf of Xxxx has
used any funds of Xxxx for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, or made any direct or indirect
unlawful payments to government officials or employees from corporate funds, or
established or maintained any unlawful or unrecorded funds, or violated any
provisions of the Foreign Corrupt Practices Act of 1977 or any rules or
regulations promulgated thereunder.
2.23 INTELLECTUAL PROPERTY. Xxxx owns, or is licensed or otherwise has the
full right to use all Intellectual Property of material importance to the
conduct of the Acquired Business as currently conducted. Exhibit 2.10(f) lists
all Intellectual Property owned by Xxxx and related to the Acquired Business.
Exhibit 2.10(g) lists all Licensed Intellectual Property and third party
licenses related to the Acquired Business (other than end-user licenses of
commercially available software related to the Acquired Business). Further, (a)
all Intellectual Property that is identified on Exhibit 2.10(f) as owned by Xxxx
is owned by Xxxx free and clear of any license or sublicense that would prevent
the use of the Intellectual Property by CROSSWALK, or any agreement, judgment,
order, decree, stipulation or material adverse lien or encumbrance; (b) the
business and operations of Xxxx do not infringe upon or violate any intellectual
property owned by any third party; (c) Xxxx has not received, within the past
three (3) years, notice of any claim that Xxxx has infringed or violated any
intellectual property of any third party, or that any Intellectual Property
identified on Exhibit 2.10(f) as owned by Xxxx is invalid or violates or
infringes upon the rights of any third party; and (d) Xxxx has not sent or
otherwise communicated to another person any notice, charge, claim or other
assertion of, nor does Xxxx have any knowledge of, any present, impending or
threatened infringement or violation by any third party of any Intellectual
Property or Licensed Intellectual Property of Xxxx, or any acts of unfair
competition by any third party. Xxxx maintains reasonable security measures to
prevent disclosure or transfer to unauthorized persons of any trade secrets and
confidential information that are proprietary to Xxxx and material to the
Acquired Business.
2.24 INSURANCE CONTRACTS; BANKING RELATIONSHIPS. Exhibit 2.24 lists all
contracts of insurance and indemnity in force at the date hereof with respect to
Xxxx and relating to the Acquired Business. Exhibit 2.24 also shows the names
and locations of all banks in which Xxxx has accounts or lines of credit and,
with respect to each such account or line of credit, the names of all persons
authorized to draw thereon.
2.25 INTERESTS OF OFFICERS AND DIRECTORS. None of the officers or directors
of Xxxx has any material interest in any property, real or personal, tangible or
intangible, including Intellectual Property used
13
16
in or pertaining to the Acquired Business, except for the normal rights of a
stockholder, and except for rights under existing employee benefit plans.
2.26 NO MISREPRESENTATIONS. No representation or warranty by Stockholder or
Xxxx in this Agreement, nor any statement, certificate, list, exhibit or
schedule furnished or to be furnished by or on behalf of Stockholder or Xxxx
pursuant to this Agreement nor any document or certificate delivered to
CROSSWALK pursuant to this Agreement, when taken together with the foregoing,
contains or shall contain any untrue statement of material fact or omits or
shall omit to state a material fact necessary to make the statements not
misleading.
2.27 INVESTMENT REPRESENTATIONS.
2.27.1 Stockholder represents and confirms to CROSSWALK that he (1) is
an accredited investor within the meaning of Rule 501(a) under the Securities
Act or, if not such an accredited investor, has, alone or together with a
purchaser representative within the meaning of Rule 501(h) under the Securities
Act, such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in securities of the
Purchaser of the type contemplated by this Agreement; (2) is aware of the limits
on resale imposed by virtue of the nature of the transaction contemplated
hereby; and (3) is receiving the consideration hereunder, to the extent that
such consideration consists of securities issued without registration under the
Securities Act in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act, which securities are identified for this
purpose in Section 1.2 hereto, for investment, and without any view to the sale,
resale or other distribution thereof in any manner that is in violation of the
Securities Act. The certificates representing such securities, when delivered at
the Closing, may have appropriate orders restricting transfer placed against
them on the records of the transfer agent for such securities, and may have
placed upon them appropriate legends including the following:
This Corporation is a religious corporation. All shares of this
corporation are subject to the terms as set forth in the BYLAWS of the
corporation which restricts the amendment or deletion of that section
of the BYLAWS which prescribes a corporate Statement of Faith in the
LORD XXXXX XXXXXX and directs or prohibits certain corporate actions
on the basis of the Statement of Faith.
The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares have been acquired for
investment and may not be sold, transferred or assigned in the absence
of an effective registration statement for these shares under the
Securities Act of 1933 and any applicable state securities laws or an
opinion of the Company's counsel that registration is not required.
2.27.2 Stockholder represents and confirms to CROSSWALK that he has
received a package of information about CROSSWALK (the "Information Package")
including CROSSWALK's most recent 10K, 10Q, Annual Report, proxy statement, and
other materials. Stockholder represents and confirms to CROSSWALK that he has
carefully reviewed the Information Package, and has relied on the information
contained therein, information otherwise provided to him in writing by
CROSSWALK, or information made available through the XXXXX database. Stockholder
represents and confirms that he understands that all documents, records and
books pertaining to this investment have been made available for his inspection,
and he has had a reasonable opportunity to ask questions of and receive answers
from CROSSWALK, or a person or persons acting on its behalf, concerning
CROSSWALK's stock, and all such questions have been answered to his full
satisfaction. No oral representations have been made or oral
14
17
information furnished to Stockholder in connection with the Stock which were in
any way inconsistent with the Information Package.
2.27.3 Stockholder represents and confirms that he recognizes that
CROSSWALK is in a development stage and has limited financial or operation
history and the CROSSWALK stock as an investment involves significant risks,
including those set forth in the Information Package, and overall is a
speculative, high risk investment.
2.27.4 Stockholder represents and confirms that he understands that
the CROSSWALK stock has not been registered under the Securities Act of 1933, as
amended (the "Act"), in reliance upon an exemption therefrom for non-public
offerings under Section 4(2) of the Act and Rule 506 of Regulation D of the
Securities and Exchange Commission (the "Commission"). Stockholder further
understands that CROSSWALK is under no obligation to register the Stockholder's
CROSSWALK stock on Stockholder's behalf or to assist Stockholder in complying
with any exemption for registration.
2.27.5 Stockholder represents and confirms that he understands that
the shares of CROSSWALK stock are "restricted securities" under applicable
federal securities laws and that the Act and the rules of the Commission provide
in substance that Stockholder may dispose of the CROSSWALK stock only pursuant
to an effective registration statement under the Act or to an exemption
therefrom. Stockholder understands that under the commission's rules,
Stockholder may dispose of the CROSSWALK stock only pursuant to the Commission's
Rule 144, when available, or in "private placements" subject to the same
limitations as in the hands of Stockholder. As a consequence, Stockholder
understands that he must bear the economic risks of investment in the CROSSWALK
stock for an indefinite period of time.
2.27.6 Stockholder agrees (a) that he will not sell, assign, pledge,
give, transfer or otherwise dispose of the CROSSWALK stock or any interest
therein, or make any offer or attempt to do any of the foregoing, except
pursuant to a registration of the CROSSWALK stock, as applicable, under the Act
and all applicable state securities laws or in a transaction which is exempt
from the registration provisions of the Act and all applicable state securities
laws; (b) that the certificate(s) for the CROSSWALK stock will bear a legend
making reference to the foregoing restrictions; and (c) that CROSSWALK and any
transfer agent for the CROSSWALK stock shall not be required to give effect to
any purported transfer of such shares except upon compliance with the foregoing
restrictions.
2.27.7 Stockholder represents and confirms that he understands that
neither the Commission nor any state securities commissioner has passed on or
endorsed the merits of this offering.
2.27.8 Stockholder represents and confirms that the CROSSWALK stock is
being acquired solely for his own account for investment and not for the account
of any other person and not for distribution, assignment or resale to others and
no other person has a direct or indirect beneficial interest in such stock.
2.28 WEB SITE STATISTICS. It is understood that the Consideration hereunder
was arrived at based, for the larger part, upon valuation of Xxxx'x internet web
site business as opposed to other assets transferred hereunder. Exhibit 2.28
sets forth relevant information concerning, inter alia, membership and access by
customers and the public to Xxxx'x XXXXXX.xxx and related web sites and web
pages for the month of July, 1999. The information provided in Exhibit 2.28 is
accurate and complete, and fairly represents the level of web site access and
operations for the period specified.
2.29 SUBSIDIARIES; INVESTMENTS. Xxxx does not own or hold any share of
stock or any other security or interest in any other entity or any rights to
acquire any such stock or other security or interest.
15
18
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CROSSWALK
CROSSWALK represents and warrants to Xxxx as follows:
3.1 CORPORATE STATUS OF CROSSWALK. CROSSWALK is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
CROSSWALK is duly qualified to do business as a foreign corporation and is in
good standing in all jurisdictions in which the character of the properties
owned, leased or operated by it or the nature of the business transacted by it
makes such qualification necessary, except where failure to be so qualified
would not have a materially adverse effect on the business, operations, assets,
financial condition, results of operations, properties or prospects of CROSSWALK
considered as a whole.
3.2 AUTHORITY FOR AGREEMENT. CROSSWALK has the full corporate power to
execute, deliver, and perform this Agreement and the other transactions
contemplated hereby and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement and the other transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of CROSSWALK, and no other corporate proceedings on the part of
CROSSWALK including, without limitation, stockholder approval, are necessary to
authorize the execution, delivery and performance of this Agreement and the
other transactions contemplated hereby.
3.3 NO DEFAULT OR VIOLATION. The execution, delivery and performance of
this Agreement and the other transactions contemplated hereby do not and will
not (a) conflict with or result in a violation of any provision of the
Certificate of Incorporation or ByLaws or other organizational documents of
CROSSWALK, or (b) with or without the giving of notice or the lapse of time, or
both, conflict with, or result in any violation or breach of or constitute a
default under, or require the consent of any other party to, or result in any
right to accelerate or the creation of any lien, charge or encumbrance pursuant
to, or right of termination under, any provision of any note, mortgage,
indenture, lease, agreement or other instrument, permit, concession, grant,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation to which CROSSWALK is a party or by which any of its assets or
properties may be bound or which is applicable to its assets or their
properties. No authorization, consent, approval, license, order, or permit of,
or declaration of, or filing with or notice to, any governmental body or
authority or any other person or entity is necessary for the execution, delivery
and performance of this Agreement by CROSSWALK or the consummation by CROSSWALK
of this Agreement or the other transactions contemplated hereby.
3.4 ABSENCE OF MATERIAL ADVERSE CHANGES. Except as set forth on Exhibit
3.4, since June 30, 1999, there has not occurred or arisen, whether or not in
the ordinary course of business: (a) any material adverse change in the
business, operations, assets, financial condition, results of operations,
properties or prospects of CROSSWALK considered as a whole, or (b) any event,
condition or state of facts of any character that might materially and adversely
affect the business, operations, assets, financial condition, results of
operations, properties or prospects of CROSSWALK considered as a whole.
16
19
ARTICLE 4
COVENANTS
It is further agreed as follows:
4.1 CONFIDENTIALITY. Except as required by law, each party and its
representatives will hold in strict confidence all documents and information
concerning any of the other parties furnished in connection with the
transactions contemplated by this Agreement (except to the extent that such
information can be shown to have been (a) in the public domain through no action
by the party in violation of this Section 4.1, (b) in the party's possession at
the time of disclosure and not acquired by the party directly or indirectly from
such other party on a confidential basis, or (c) disclosed by such other party
to others on an unrestricted, non-confidential basis), and will not release or
disclose any such documents or information to any other person and shall not use
nor permit others to use such documents or information except in connection with
this Agreement and the transactions contemplated hereby. Such use shall be
deemed to include disclosure in confidence to the party's attorneys,
accountants, and financial advisors, and financial institutions. It is further
agreed that, subject to CROSSWALK's legal obligations and regulatory
requirements relating to its public-company status, the timing and content of
any public announcement regarding this Agreement and the transactions
contemplated thereby will be mutually agreed upon and made jointly by the
parties, and that CROSSWALK will provide an advance copy of any such public
announcement to Xxxx.
4.2 FURTHER ASSURANCES
4.2.1 GENERALLY. Subject to the terms and conditions herein provided
and to the fiduciary duty of each party's board of directors and officers (as
applicable), each of the parties agrees to use his or its best reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective this Agreement and the transactions
contemplated hereby. In case at any time any further action, including the
obtaining of waivers and consents under material contracts and leases and the
execution and delivery of any licenses or sublicenses, is necessary or desirable
to carry out the purposes of this Agreement, the proper officers and directors
of each party to this Agreement, or Stockholder, are hereby directed and
authorized to use their reasonable best efforts to effectuate all required
action. Xxxx agrees to use all reasonable efforts after the Closing to obtain
any necessary consents or waivers to assure CROSSWALK of the benefits of such
leases, contracts, commitments or rights.
4.2.2 COLLECTION OF RECEIVABLES. Stockholder shall provide CROSSWALK
reasonable assistance in the collection of the Receivables and any other amounts
due CROSSWALK with respect to the Acquired Business.
4.2.3 OBTAINING CONSENTS. Stockholder and Xxxx agree that they will
assist in obtaining any and all consents from any parties to Contracts such as
are required to effectuate the transaction contemplated by this Agreement and
all other agreements contemplated hereby.
4.3 NO-SHOP AGREEMENT. Xxxx will not, nor will it permit any of its
officers, directors, employees, financial advisers, brokers, stockholders or any
person acting on its behalf, to consider, solicit or negotiate, or cause to be
considered, solicited or negotiated on behalf of Xxxx or Stockholder, or provide
or cause to be provided information to any third party in connection with, any
proposal or offer from a third party with respect to the acquisition of Xxxx, or
all or substantially all of its assets, until such time as this Agreement has
been terminated pursuant to Article 5.14 hereof.
17
20
4.4 DEFENSE OF CLAIMS AND LITIGATION. At all times from and after the
Closing, each party shall consult, confer and cooperate in good faith on a
reasonable basis with the other (including, without limitation, the making
available of witnesses and cooperation in discovery proceedings) in the conduct
or defense of any claim, litigation or proceeding which relates to the Acquired
Business, or any matter which, directly or indirectly, arises therefrom, whether
known at the Closing or arising thereafter, against the other or any of their
affiliates by any third party. To the extent the indemnification provisions of
this Agreement or of any other document delivered in connection with the
transactions contemplated hereby apply to any such conduct or defense, they
shall control as to the payment of costs and expenses.
4.5 RETENTION OF BOOKS AND RECORDS. For a period of three (3) years after
the date of the Closing, Stockholder shall retain any of its books and records
relating to the Acquired Business and not delivered at the Closing. If CROSSWALK
desires to obtain any such books and records it may do so by notifying the other
party, in writing, at any time prior to the end of such three-year period. The
notice must specify the documents which the requesting party wishes to obtain.
The parties shall then promptly arrange for the delivery of copies of such
documents. All out-of-pocket costs associated with the delivery of the requested
documents shall be paid by the requesting party.
4.6 NON-COMPETITION AGREEMENT. Unless otherwise agreed between the parties,
for a period of five (5) years after the date of the Closing, Stockholder shall
not participate, directly or indirectly, as owner, stockholder, joint venturer,
subcontractor, supplier, manager, partner, agent, consultant, representative or
otherwise, in any business, firm or corporation that manufactures, produces,
sells, leases or otherwise provides any products or services similar to, or
directly or indirectly competitive with, the products and services of the
Acquired Business to any customer; provided, however, that nothing in this
paragraph shall preclude Stockholder from owning as an investment a minority
interest which shall be less than five percent (5%) of any class of equity
security of any publicly traded corporation. This paragraph shall cease to be
effective if CROSSWALK, its successors and assigns, shall cease doing business
in any form.
4.7 EMPLOYEES. On or before the Closing, CROSSWALK and each of Xxxxxxx X.
Xxxx, Xxxxxx Xxxx, Xxxxxx Xxxx, and Xxxx Xxx shall have entered into employment
agreements, contingent upon the closing of the transactions set forth in this
Agreement, together with confidentiality and noncompetition agreements in the
forms set forth in Exhibit 4.7. CROSSWALK shall otherwise have no obligation to
employ any employee of Xxxx or to make any payment to any employee of Xxxx. Xxxx
agrees that CROSSWALK may employ any present employee of Xxxx whose work relates
to the Acquired Business.
4.8 INDEMNITIES.
4.8.1 INDEMNIFICATION OF CROSSWALK. Subject to the limitations set
forth in Section 4.8.3, Stockholder shall indemnify and hold harmless CROSSWALK
and its respective successors by merger or other operation of law (the
"Successors"), directors, officers and assigns from and against all losses,
liabilities, claims, damages, costs or expenses (including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and
disbursements) suffered, incurred or paid:
4.8.1.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of Stockholder and
Xxxx in this Agreement had been (with respect to representations and warranties)
true and had been (with respect to covenants and agreements) fully performed and
fulfilled;
4.8.1.2 as a result of any Action arising out of or relating to
the conduct of Stockholder before or after the Closing or any liability or
obligation, or alleged liability, of Stockholder, including, without limitation,
any liability or obligation arising out of or relating to the employment of any
employees of Xxxx before the Closing; and
18
21
4.8.1.3 as a result of any Action which arises out of or relates
to the failure of Stockholder to pay, promptly and when due, any tax, fee or
other charge which shall become due or shall have accrued on account of the use,
acquisition or ownership of Xxxx of any of its assets or any tax, fee or other
charge Xxxx or Stockholder is obligated to pay, or to reimburse CROSSWALK for,
hereunder on account of the sale of the Stock or the transactions contemplated
hereby.
Notwithstanding anything herein to the contrary, if Stockholder shall be
required to indemnify CROSSWALK, or any of its subsidiaries or any of its
respective directors, officers, successors or permitted assigns with respect to
the same item of damage and amount, the satisfaction of such indemnity to one of
them shall discharge Stockholder's obligations to the other to the extent of the
amount paid. In the event that CROSSWALK shall have an indemnification claim or
other violation of a representation or warranty made by Xxxx or Stockholder
during the time period that part of the Consideration is being withheld as
described in Section 1.2, it may defer delivery of the remaining $50,000 held by
CROSSWALK, until such time as such claim has been fully resolved or satisfied
pursuant to the procedures set forth below. The remedy available to CROSSWALK
for any indemnification hereunder shall be satisfied first from the part of the
Consideration withheld pursuant to Section 1.2 hereof, to the extent of such
amount, and thereafter CROSSWALK may proceed against Stockholder.
4.8.2 INDEMNIFICATION OF STOCKHOLDER. Subject to the limitations set
forth in Section 4.8.3, CROSSWALK shall indemnify and hold harmless Stockholder
from and against all losses, liabilities, claims, damages, costs or expenses
(including, without limitation, reasonable expenses of investigation and
reasonable attorney's fees and disbursements) suffered, incurred or paid:
4.8.2.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of CROSSWALK in
this Agreement or in any other instrument or document furnished to Stockholder
pursuant to Section 1.3.2.2 hereof had been (with respect to representations and
warranties) true and had been (with respect to covenants and agreements) fully
performed and fulfilled;
4.8.2.2 as a result of any Action arising out of or relating to
the conduct of the Acquired Business after the Closing or any liability or
obligation, or alleged liability or obligation of CROSSWALK, including, without
limitation, any liability or obligation arising out of the employment of former
employees of Xxxx after the Closing;
4.8.2.3 as a result of any Action which arises out of or relates
to the failure of CROSSWALK to pay, promptly and when due, any tax, fee or other
charge which shall become due or shall accrue on account of the use, acquisition
or ownership of the Stock or the operation or conduct of the Acquired Business
by CROSSWALK after the Closing.
4.8.3 THIRD PARTY CLAIMS. The obligations and liabilities of a party
for which indemnification is sought (an "Indemnifying Party") by a person or
entity seeking indemnification (an "Indemnified Party") under this Section 4.8
with respect to claims resulting from the assertion of liability by third
parties or from liability resulting from the discovery of facts giving rise to
indemnification hereunder shall following the following procedures:
4.8.3.1 The Indemnified Party shall give written notice to the
Indemnifying Party of the nature of the assertion of liability by a third party
or the discovery of the liability, obligation or facts giving rise to such claim
for indemnification, and the amount thereof, promptly after the Indemnified
Party learns of such assertion or discovery. The foregoing notwithstanding,
failure of an Indemnified Party to
19
22
comply with its obligations under this Section 4.8.3 shall affect its right to
indemnity only to the extent that such failure shall have a material adverse
effect on the Indemnifying Party's ability to defend.
4.8.3.2 If any Action is brought by a third party against an
Indemnified Party, the Action shall be defended by the Indemnifying Party and
such defense shall include all appeals or reviews which counsel for the
Indemnifying Party shall deem appropriate. Until the Indemnifying Party shall
have assumed the defense of any such Action, or if, because of material
conflicts of interest or defenses available to one but not both the Indemnified
and the Indemnifying Parties or other matter which makes it professionally
impermissible for both parties to be represented by the same counsel (in which
case the Indemnifying Party shall not be entitled to assume the defense of such
Action), all legal or other expenses reasonably incurred by the Indemnified
Party shall be borne by the Indemnifying Party.
4.8.3.3 In any Action initiated by a third party and defended by
the Indemnifying Party, subject to the confidentiality provisions of this
Agreement, (a) the Indemnified Party shall have the right to be represented by
advisory counsel and accountants, at its own expense, (b) the Indemnifying Party
shall keep the Indemnified Party fully informed as to the status of such Action
at all stages thereof, whether or not the Indemnified Party is represented by
its own counsel, (c) the Indemnified Party shall make available to the
Indemnifying Party, and its attorneys and accountants, all books and records of
the Indemnified Party relating to such Action and (d) the parties shall render
to each other such assistance as may be reasonably required for the proper and
adequate defense of such Action.
4.8.3.4 In any Action initiated by a third party and defended by
the Indemnifying Party, the Indemnifying Party shall not make any settlement of
any claim without the written consent of the Indemnified Party, which consent
shall not be unreasonably withheld or delayed. Without limiting the generality
of the foregoing, it shall not be deemed unreasonable to withhold consent to a
settlement involving injunctive or other equitable relief against the
Indemnified Party or its assets, employees or business.
4.8.4 MINIMUM LIABILITY. Stockholder shall not be liable under Section
4.8.1, and CROSSWALK shall not be liable under Section 4.8.2, unless and until
the aggregate amount of liability under such Section shall exceed Ten Thousand
Dollars ($10,000) in total, in which case the indemnifying party shall make
indemnification thereunder for the aggregate amount of such liability, including
without limitation, such Ten Thousand Dollars ($10,000).
4.9 DISTRIBUTION OF PROCEEDS. CROSSWALK agrees that if, during a period of
one year following the Closing, CROSSWALK shall enter into a transaction calling
for the sale of all or substantially all of its assets, then any distribution of
the proceeds of such sale shall be made fairly, in accordance with the interests
of the security holders of CROSSWALK, and not in a manner to disproportionately
favor any substantial security-holder, officer, or director of CROSSWALK. It is
further agreed that in the event of such a sale, the value of the proceeds to
the security holders of CROSSWALK shall not be diluted by the making of any
unreasonable bonus or unreasonable increase in the compensation of any officer
of director of CROSSWALK.
ARTICLE 5
DEFINITIONS AND MISCELLANEOUS
5.1 DEFINITIONS OF CERTAIN TERMS. As used herein, the following terms shall
have the following meanings:
ACQUIRED BUSINESS: as defined in the recitals hereof.
20
23
ACTION: any suit, claim, action, arbitration, dispute, investigation,
inquiry, review, or proceeding.
AFFILIATE: as defined in Section 2.15 hereof.
CLOSING: as defined in Section 1.3 hereof.
CODE: as defined in Section 1.3.2.1.1 hereof.
CONSIDERATION: as defined in Section 1.2 hereof.
CONTRACTS: as defined in Section 2.9 hereof.
ENVIRONMENTAL CLAIM: any written notice by any governmental agency
alleging potential liability (including, without limitation, potential liability
for investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, fines or penalties)
arising out of, based on or resulting from (a) the presence, or release into the
environment, of any Material of Environmental Concern at any location, whether
or not owned by CROSSWALK or any of its Subsidiaries or (b) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law.
ENVIRONMENTAL CONTAMINATION: (a) an occurrence occurring or a
condition existing relating to the Acquired Business at or before the Closing if
such occurrence or condition was in violation of any Environmental Law or
Environmental Permit existing at or before the Closing and if CROSSWALK is
specifically required to take remedial action with respect thereto by a
governmental agency or a negotiated agreement, decree or clean-up plan with a
governmental agency, regardless of when such occurrence or condition is
discovered or when such remedial action is required, (b) any use, disposal or
discharge of Materials of Environmental Concern before the Closing resulting in
liability to a third party, regardless of when such use, disposal or discharge
is discovered, or (c) an occurrence occurring or condition existing at or before
the Closing if CROSSWALK investigates or takes remedial action with respect
thereto as required by applicable law or regulation.
ENVIRONMENTAL LAWS: mean all Federal, state and local laws, rules and
regulations relating to pollution or protection of the environment, or
occupational or human health and safety, including, without limitation, laws,
rules and regulations relating to handling, processing, storage, recycling,
emission, discharge, disposal, treatment, transportation, release or threatened
release of any Material of Environmental Concern or other waste or material into
ambient air, surface water, ground water or land, including, without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. 9601 et seq.), the Hazardous Material Transportation Act (49 U.S.C. 1801
et seq.), the Federal Water Pollution Control Act (38 U.S.C. 1251 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.), the Clean Air
Act (42 U.S.C. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. 2601
et seq.), the Occupational Safety and Health Act (29 U.S.C. 651 et seq.), the
Emergency Planning and Community Right to Know Act (42 U.S.C. 11001 et seq.),
the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 135 et seq.),
and the Food, Drug and Cosmetic Act (15 U.S.C. 2000 et seq.), in each case as
these laws have been amended or supplemented.
ENVIRONMENTAL PERMIT: all certificates, consents, permits, licenses,
authorizations and approvals required under or relating to any Environmental
Law.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended.
21
24
GOVERNMENT: the Federal Government of the United States of America.
INTELLECTUAL PROPERTY: all rights to all patents, trademarks, service
marks, trade names, mask works, software, programs, development tools,
methodologies, specifications, processes, know-how, blueprints, drawings,
designs, patterns, copyrights, formulae, inventions, technology, trade secrets,
proprietary information, confidential information and other information and
documents, and the registrations and applications therefor and the goodwill
related thereto.
LEASED EQUIPMENT: all leases relating to all leased machinery,
equipment, tools, firmware, furniture, fixtures, vehicles, related parts and
supplies and all other leased assets.
MATERIALS OF ENVIRONMENTAL CONCERN: those substances or constituents
which are regulated by, or form the basis of liability under, any Environmental
Law.
MERGER: as defined in the recitals hereof.
MERGER SUBSIDIARY: Crosswalk Merger Corp.
PREPAID EXPENSES: all advances, prepaid expenses, other prepayments
and related rights.
RECEIVABLES: all accounts receivable together with all cash balances
as of the Closing.
SUBSIDIARY: any corporation, association, or other business entity a
majority (by number of votes) of the shares of capital stock (or other voting
interests) of which is owned by Xxxx, CROSSWALK or their respective
Subsidiaries.
XXXX REPORTS: as defined in Section 2.5 hereof.
TANGIBLE ASSETS: all machinery, equipment, tools, firmware, furniture,
fixtures, supplies, raw materials, work in process, accessories, vehicles,
related parts and supplies, other items related to the Contracts, all related
computer programs, software and firmware owned by Xxxx and used in connection
its business, and all other tangible assets of Xxxx.
TRANSACTION: the Merger and the related transactions contemplated by
this Agreement.
5.2 BROKERAGE. Each party shall be solely responsible for payment of any
fee or charge of any broker, finder, financial advisor or intermediary engaged,
employed, or consulted by that party in connection with negotiations or
discussions incident to the execution of this Agreement or any of the
transactions contemplated hereby.
5.3 AMENDMENTS AND SUPPLEMENTS. This Agreement may be amended or
supplemented by a written instrument signed by duly authorized representatives
of Stockholder, Xxxx and CROSSWALK.
5.4 EXTENSIONS AND WAIVERS. The parties hereto may (a) extend the time for
the performance of any of the obligations or other acts of the parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, and (c) waive compliance
with any of the covenants or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party. Neither
party's refusal to waive fulfillment of any condition precedent to its
obligations under this Agreement shall constitute a breach of its duty under
this Agreement. No failure on the part of any
22
25
party to exercise, and no delay in exercising, any right or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right or remedy. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate as a
waiver of any subsequent breach.
5.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding any
investigation conducted before or after the Closing, and except as provided
below, notwithstanding any knowledge or notice of any fact or circumstance which
a party may have as the result of such investigation or otherwise, each party
and its successors and assigns shall be entitled to rely upon the
representations, warranties and covenants of the other in this Agreement. Each
of the representations, warranties and covenants contained in this Agreement,
made in any document delivered hereunder or otherwise made in connection with
the Closing hereunder shall survive for a period of five (5) years after the
Closing.
5.6 EXPENSES. Each party shall pay its own expenses, including the fees of
attorneys, accountants, investment bankers, valuation experts and others, in
connection with the transactions contemplated hereby, whether or not they are
completed.
5.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, without regard for its
principles of conflicts of laws.
5.8 ALTERNATIVE DISPUTE RESOLUTION. In the event that any dispute arises
under any provision of this Agreement, the parties agree to make reasonable
efforts to resolve the dispute by negotiation, mediation, or alternative dispute
resolution before any resort to legal remedies; provided, however, that the
provisions hereof shall not prevent any party from filing a lawsuit, or taking
any other action, as may be necessary to preserve the legal rights of such party
from impairment or extinction under any applicable statute of limitations or
other similar statute or rule of law, and that no party shall be bound by the
determination of any mediation or alternative dispute resolution proceeding
without that party's consent to the proceeding.
5.9 NOTICE. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered by hand sent via a reputable
nationwide courier service or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice) and shall be deemed
given on the date on which so hand-delivered or on the third business day
following the date on which so mailed or sent:
To CROSSWALK:
Xxxxxxxxx.xxx, Inc.
0000X Xxxxxxxxxx Xx.,
Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
With a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx, P.C.
000 Xxxxxx Xxxxxx XX, Xxxxx X
Xxxxxx, XX 00000
23
26
To Xxxx:
Xxxx Associates, Inc.
d/b/a Media Management
X.X. Xxx 00000
Xxxxxxx, XX 00000
With a copy to:
Xxxxxx Xxxx, Esq.
Osterhoudt, Fergison, Natt, Xxxxxx & Xxxx, PC
XX Xxx 00000
Xxxxxxx, XX 00000
To Stockholder:
Xxxxxxx Xxxx
00000 Xxxxxx Xxxx Xx.
Xxxxxxxx, XX 00000
5.10 ENTIRE AGREEMENT, ASSIGNABILITY, ETC. This Agreement and the Exhibits
and documents delivered at the Closing pursuant to Section 1.3 constitute the
entire agreement, and supersede all other prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof, (b) are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder, except as otherwise expressly provided
herein, and (c) shall not be assignable by operation of law or otherwise. The
representations and warranties of the parties shall not be enlarged or
restricted by any statement in any instrument of assignment or other Closing
document. This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their respective legal representatives, successors and
permitted assigns, and shall inure to the benefit of the Indemnified Parties and
their respective legal representatives, successors and permitted assigns. All
Exhibits mentioned in this Agreement shall be attached to this Agreement, and
shall form an integral part hereof. All capitalized terms defined in this
Agreement which are used in any Exhibit shall, unless the context otherwise
requires, have the same meaning therein as given herein.
5.11 CUMULATIVE RIGHTS AND REMEDIES. Each party acknowledges that money
damages alone will not adequately compensate the other party for breach of a
party's obligations under this Agreement and, therefore, agrees that in the
event of the breach or threatened breach of any such obligation, in addition to
all other remedies available, at law, in equity or otherwise, each party shall
be entitled to injunctive relief compelling specific performance of, or other
compliance with, the terms of this Agreement. Except as provided in Section 4.8,
all rights and remedies under this Agreement are cumulative and are in addition
to and not exclusive of any other rights and remedies provided hereunder, under
any other document delivered as part of a transaction contemplated hereby or
otherwise by agreement or law, at equity or otherwise. Without limiting the
generality of the foregoing, the parties expressly recognize that specific
performance is not either party's sole remedy for any reason hereunder.
5.12 SEVERABILITY. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.
5.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same Agreement.
24
27
5.14 TERMINATION. This Agreement may be terminated (a) by the mutual written
consent of all of the parties hereto; (b) by CROSSWALK, upon the giving of
written notice thereof to the other parties in the event that the Closing has
not occurred on or before August 30, 1999; or (c) by Xxxx, upon the giving of
written notice thereof to the other parties in the event that the Closing has
not occurred on or before August 30, 1999.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
XXXXXXXXX.XXX, INC.
[SEAL]
By: /s/ XXXXXXX X. XXXXXX
-------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer and President
XXXX ASSOCIATES, INC.
[SEAL]
By: /s/ XXXXXXX X. XXXX
-------------------------
Xxxxxxx X. Xxxx,
President
STOCKHOLDER
[SEAL]
/s/ XXXXXXX X. XXXX
-------------------------
Xxxxxxx X. Xxxx
25
