EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
by and among
▇▇▇▇, ▇▇▇▇▇▇ & Associates, Inc., a California corporation,
TA Acquisition Corporation, a Delaware corporation, and
TeamAlliance Technology Partners, L.P., a New York limited partnership,
TeamAlliance Technology Partners, Inc., a Delaware corporation,
TeamVisions, Inc., a Delaware corporation,
Certain Designated Limited Liability Companies
▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Dated as of November 26, 1996
TABLE OF CONTENTS
Page
ARTICLE I BASIC TRANSACTION....................................................... 2
1.1 Purchase and Sale of Assets; Description of Assets to be Acquired........ 2
1.2 Excluded Assets.......................................................... 4
1.3 Assumed Liabilities...................................................... 4
1.4 Unassumed Liabilities.................................................... 4
1.5 Consideration............................................................ 6
1.6 Subsequent Payments...................................................... 6
1.7 The Closing.............................................................. 7
1.8 Arbitration.............................................................. 7
1.9 Allocation of Purchase Price............................................. 7
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF SELLERS............................. 8
2.1 Organization; Capital Structure.......................................... 8
2.2 Authority................................................................ 8
2.3 Financial Information.................................................... 9
2.4 Liabilities.............................................................. 9
2.5 Absence of Certain Changes and Events.................................... 9
2.6 Conduct of Business...................................................... 11
2.7 Taxes.................................................................... 11
2.8 Compliance With Law...................................................... 13
2.9 Proprietary Rights....................................................... 13
2.10 Restrictive Documents or Orders.......................................... 14
2.11 Contracts and Commitments................................................ 14
2.12 Operating Condition...................................................... 15
2.13 Assets................................................................... 15
2.14 Title to the Property.................................................... 15
2.15 Litigation............................................................... 15
2.16 No Conflict or Default................................................... 15
2.17 Third Party Consents..................................................... 15
2.18 Labor Relations.......................................................... 16
2.19 Brokers' and Finders' Fees/Contractual................................... 16
2.20 Interested Party Relationships........................................... 16
2.21 Environmental and Safety Matters......................................... 16
2.22 Customers................................................................ 18
2.23 Employee Benefit Plans................................................... 18
2.24 Insurance................................................................ 20
2.25 Accounts Receivable...................................................... 20
2.26 Books and Records........................................................ 20
2.27 Complete Disclosure...................................................... 20
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS....................... 20
3.1 Authority................................................................ 20
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3.2 Assets.................................................................21
3.3 Litigation.............................................................21
3.4 Brokers' and Finders' Fees/Contractual.................................21
3.5 Interested Party Relationships.........................................21
3.6 Complete Disclosure....................................................21
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF TV STOCKHOLDER....................22
4.1 Authority..............................................................22
4.2 Assets.................................................................22
4.3 Litigation.............................................................22
4.4 Brokers' and Finders' Fees/Contractual.................................23
4.5 Interested Party Relationships.........................................23
4.6 Complete Disclosure....................................................23
4.7 Knowledge Qualification................................................23
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER AND HK....................23
5.1 Organization, Standing and Capital Structure...........................23
5.2 Authorization..........................................................23
5.3 Financial Information..................................................24
5.4 Absence of Certain Changes and Events..................................24
5.5 Compliance with Other Instruments......................................24
5.6 Compliance With Law....................................................24
5.7 Consents...............................................................25
5.8 Litigation.............................................................25
5.9 Labor Relations........................................................25
5.10 Books and Records.....................................................25
5.11 Employee Benefit Plans................................................26
5.12 Complete Disclosure...................................................26
5.13 Taxes.................................................................26
5.14 Environmental Matters.................................................26
ARTICLE VI - COVENANTS...........................................................27
6.1 Best Efforts...........................................................27
6.2 Notices and Consents...................................................27
6.3 Operation of Business..................................................27
6.4 Full Access............................................................29
6.5 Covenants Against Disclosure...........................................29
6.6 Non-Competition........................................................29
6.7 Further Assurances.....................................................31
6.8 Advice of Changes......................................................32
6.9 Employees, Bonuses and Termination Payments...........................32
6.10 Cooperation by Sellers................................................32
6.11 Negotiation with Others...............................................33
6.12 Termination of Continuing LLCs........................................33
6.13 Payment of Taxes......................................................33
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6.14 Guaranty by HK........................................................33
6.15 Facilities Agreement and Non-Exclusive Trademark License..............33
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS..................................34
7.1 Conditions to Obligations of Purchaser and HK..........................34
7.2 Conditions to Obligations of Sellers...................................36
ARTICLE VIII - INDEMNIFICATION...................................................37
8.1 Survival of Representations and Warranties.............................37
8.2 Indemnification of Purchaser...........................................37
8.3 Indemnification of Sellers, Stockholders and TV Stockholders...........38
8.4 Procedure for Indemnification with Respect to Third-Party Claims.......39
8.5 Procedure for Indemnification with Respect to Non-Third-Party Claiss...40
8.6 Threshold Determination of and Limitations on Indemnification..........41
ARTICLE IX - TERMINATION.........................................................41
9.1 Termination by Mutual Consent..........................................41
9.2 Effect of Termination..................................................42
ARTICLE X - MISCELLANEOUS PROVISIONS.............................................42
10.1 Notice................................................................42
10.2 Entire Agreement......................................................42
10.3 Binding Effect; Assignment............................................43
10.4 Captions..............................................................43
10.5 Expenses of Transactions; Taxes.......................................43
10.6 Waiver; Consent.......................................................43
10.7 Third-Party Beneficiaries.............................................43
10.8 Counterparts and Facsimiles...........................................43
10.9 Severability..........................................................44
10.10 Incorporation of Exhibits and Schedules..............................44
10.11 Governing Law........................................................44
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LIST OF SCHEDULES
1.1(b) Report of Active Contracts
1.1(c) Contracts
1.1(e) Intellectual Property
1.1(l) Other Properties
1.2 Excluded Assets
1.3 Assumed Liabilities
2.1 Organization; Capital Structure
2.4 Liabilities
2.5(j) Key Employee Notices
2.5(k) Vendor/Contractor/Customer Changes
2.5(m) Disposition of Marks
2.10 Restrictive Documents or Orders
2.11(a) and (b) Contracts and Commitments
2.13 Disclosure Regarding Assets
2.14 Permitted Liens
2.15 Litigation
2.16 Conflicts or Defaults
2.17 Third Party Consents
2.18 Labor Relations
2.21 Environmental and Safety Matters
2.22 Customers
2.23 Employee Benefit Plans
2.24 Insurance Policies
2.25 Accounts Receivable
2.27 Complete Disclosure
5.1 Organization of Purchaser and HK
5.11 Purchaser or HK Employee Benefit Plans
6.3(f) Amendments to Charter Documents
6.6 List of Protected Persons
LIST OF EXHIBITS
A HK Amended and Restated Articles of Incorporation
AP Allocation of Purchase Price
E Employment Agreements
EA Escrow Agreement
L Contract and Sublease Agreements
T Technology License Agreement
LIST OF ATTACHMENTS
A List of Operating LLCs, Operating Services Companies and Operating Managers
B List of Purchased LLCs
C Contract and Lease Assignments
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT dated as of November 26, 1996, is by and among ▇▇▇▇,
▇▇▇▇▇▇ & Associates, Inc. (a California corporation), TA Acquisition Corp. (a
Delaware corporation), TeamAlliance Technology Partners, L.P. (a New York
limited partnership), TeamAlliance Technology Partners, Inc. (a Delaware
corporation), Team Visions, Inc. (a Delaware corporation), each of the Purchased
LLCs the names of which are set forth on Attachment B hereto (the "Purchased
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LLCs"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
WHEREAS, ▇▇▇▇, ▇▇▇▇▇▇ & Associates, Inc. ("HK") is currently engaged
in, among other things, the business of providing contract and temporary
personnel services to clients needing supplemental employees in technical
occupations;
WHEREAS, TeamAlliance Technology Partners, L.P. (the "Operating
Partnership") by itself and through the Purchased LLCs is also engaged in, among
other things, the business of providing contract and temporary personnel
services to clients needing supplemental employees in technical occupations
(such business of the Operating Partnership and the Purchased LLCs shall be
referred to as the "Business");
WHEREAS, the Operating Partnership owns a ninety-nine percent (99%)
limited liability company interest in each of the Operating LLCs the names of
which are set forth on Attachment A hereto (the "Operating LLCs"), and the
------------
remaining one percent (1%) limited liability company interest of each such
Operating LLC not owned by the Operating Partnership is owned by TeamAlliance
Technology Partners, Inc., the general partner of the Operating Partnership;
WHEREAS, the day-to-day administration and management of the business
of each Operating LLC is performed by an Operating Services Company the name of
which is set forth opposite the name of each such Operating LLC on Attachment A
------------
hereto (the "Operating Services Companies"), and such Operating Services
Companies are owned and managed by the Operating Managers whose names are set
forth opposite the respective Operating Services Companies on Attachment A
------------
(each, an "Operating Manager" and collectively, the "Operating Managers")
hereto;
WHEREAS, TA Acquisition Corporation, a Delaware corporation and newly
created wholly-owned subsidiary of HK ("Purchaser") proposes to acquire
designated assets and assume designated liabilities (the "Acquisition") of the
Business from the Operating Partnership and the Purchased LLCs (collectively,
the Operating Partnership and the Purchased LLCs shall be referred to as the
"Sellers");
WHEREAS, TeamAlliance Technology Partners, Inc., the general partner,
and Team Visions, Inc., the limited partner, are all of the partners (the
"Partners") of the Operating Partnership, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇
are all of the stockholders of TeamAlliance
Technology Partners, Inc. (collectively, the "Stockholders") and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
is the sole stockholder of TeamVisions, Inc. (collectively, the "TV
Stockholder") (collectively, the Partners, the Stockholders and the TV
Stockholder shall be referred to as the "Owners"); and
WHEREAS, following the Acquisition, the Business related to the Assets
(as hereafter defined) shall be conducted through Purchaser;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereby agree as follows:
ARTICLE I
BASIC TRANSACTION
1.1 Purchase and Sale of Assets; Description of Assets to be
--------------------------------------------------------
Acquired. At the Closing (as hereafter defined), subject to the terms and
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conditions of this Agreement and for the consideration set forth in Section 1.5
hereof, Sellers agree to convey, sell, transfer, assign, and deliver to
Purchaser, and Purchaser shall purchase from Sellers, all right, title, and
interest throughout the world of Sellers at the Closing in and to the assets,
properties, and rights (contractual or otherwise) of the Business (except as
limited in Section 1.2) of every kind, nature, and description, personal,
tangible and intangible, known or unknown, wherever located, including, without
limitation, the following:
(a) Personal Property. All interests in machinery, equipment,
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leasehold improvements, furniture, computer hardware, office supplies,
automobiles and other vehicles and other tangible personal property (the
"Personal Property");
(b) Relationships. All assignable rights to, or relating to,
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(i) relationships with clients or customers, whether under the TeamAlliance
Master Consulting Agreement or otherwise including, without limitation, clients
and customers listed on Schedule 1.1(b) hereto and (ii) relationships with
contractors, consultants, employees or temporary employees or other individuals
or entities contracted or engaged or otherwise employed to provide permanent or
temporary employment services to clients or customers, whether under the
TeamAlliance Services Agreement or TeamAlliance Temporary Employment Agreement
or otherwise, including, without limitation, such service providers listed on
Schedule 1.1(b) hereto;
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(c) Contracts. All claims and rights under all agreements,
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contracts, contract rights, licenses, purchase and sale orders, quotations, and
other executory commitments (collectively, the "Contracts"), including, without
limitation, those listed on Schedule 1.1(c) hereto to the extent the rights and
---------------
claims thereunder arise after the Closing and relate to goods delivered or to be
delivered or to services performed or to be performed after the Closing,
including, but not limited to, accounts receivable;
(d) Permits. All transferable franchises, licenses, permits,
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consents, authorizations, and approvals of any federal, state, or local
regulatory, administrative, or other
2
governmental agency or body (those franchises, licenses, permits, consents,
authorizations, approvals and permits are hereinafter referred to as the
"Governmental Permits");
(e) Intellectual Property. All trade secrets, financial
---------------------
information, product plans, client and customer lists, client and customer
account information (including customer payment histories), contractor and
consultant and employee lists, contractor and consultant and employee work
histories and account information, marketing plans and strategies, forecasts and
other business information, improvements, inventions, formulas, ideas, research
and development information, circuits, mask works, works of authorship,
processes, computer programs, applications, algorithms, techniques, schematics,
designs, plans, proposals, know-how, data, patents, patent applications,
trademarks and their associate goodwill, trademark applications, copyrights and
their respective moral rights, copyright applications, design rights, trade
secret rights, rights with respect to mask works and other rights (including,
without limitation, all rights to the names listed on Schedule 1.1(e) hereto)
---------------
owned, used, licensed or held for use by Sellers (including, without limitation,
any applications for or extensions, renewals, continuations or divisions of any
of the foregoing (the "Intellectual Property")).
(f) Documents. Copies of all books of account, records,
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general ledgers, documents, sales invoices, correspondence, lists, plats,
architectural plans, accounts payable and payroll records, federal and state tax
returns (including schedules thereto), drawings, files, papers, studies, reports
and all other papers and records (the "Records");
(g) Warranty Rights. All rights, if any, under express or
---------------
implied warranties from suppliers of Sellers;
(h) Causes of Action. All of Seller's causes of action,
----------------
judgments, and claims or demands of whatever kind or description;
(i) Goodwill. All goodwill;
--------
(j) Claims. All claims, deposits, prepayments, refunds,
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causes of action, choses in action, rights of recovery, rights of set off, and
rights of recoupment;
(k) Real Property. All real property interests, including
-------------
without limitation, leaseholds and subleaseholds therein, improvements,
fixtures, and fittings thereon, and easements, rights-of-way, and other
appurtenances thereto; and
(l) Other Properties. Such other properties or assets as are
----------------
listed on Schedule 1.1(l) hereto.
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The assets, properties and rights to be conveyed, sold, transferred,
assigned, and delivered to Purchaser pursuant to this Section 1.1 are sometimes
hereinafter collectively referred to as the "Assets."
Notwithstanding anything to the contrary in this Agreement, to the
extent that the assignment hereunder of any of the Assets shall require the
consent of any other party (or in the
3
event that any of the same shall be nonassignable), neither this Agreement nor
any action taken pursuant to its provisions shall constitute an assignment or an
agreement to assign if such assignment or attempted assignment would constitute
a breach of any such Assets or result in the loss or diminution thereof.
1.2 Excluded Assets. Notwithstanding the provisions of Section 1.1
---------------
hereof, the Assets to be transferred to Purchaser pursuant to this Agreement
shall not include the assets listed on Schedule 1.2 hereto (which shall include
------------
all of the assets of those certain Operating LLCs that are not among the
Purchased LLCs) (the "Excluded Assets").
1.3 Assumed Liabilities. Purchaser shall neither assume nor be
-------------------
liable for any liabilities, claims or obligations of Sellers, whether primary or
secondary, direct or indirect, absolute or contingent, other than the
performance obligations of Sellers arising out of or related to the following:
(a) those contracts, commitments, arrangements or understandings with its
clients or customers assumed by the Purchaser (for which any required consents
to such assignments have been obtained) and set forth in Schedule 1.3 hereto
------------
(the "Listed Contracts") to the extent that the performance obligations of
Seller thereunder are required to be performed after the Closing and relate to
goods delivered or to be delivered or services performed to be performed after
the Closing, (b) those leases set forth in Schedule 1.3 hereto to the extent
------------
that the performance obligations (for which any required consents to such
assignments have been obtained) of Seller thereunder are required to be
performed after the Closing and relate to the period after the Closing, and (c)
the liabilities and obligations of Sellers listed on Schedule 1.3 hereto
------------
(collectively, the "Assumed Liabilities").
1.4 Unassumed Liabilities. Except for the Assumed Liabilities,
---------------------
Purchaser shall neither assume nor be liable for any liabilities, claims or
obligations of Sellers, related to the Business or Assets or otherwise, whether
primary or secondary, direct or indirect or absolute or contingent
(collectively, the "Unassumed Liabilities"). Such Unassumed Liabilities shall
include, without limitation, the foregoing:
(a) Service Provider Claims. Any claims by employees,
-----------------------
Operating Managers or former Operating Managers, contractors, consultants,
temporary employees or former employees, former contractors, former consultants
or former temporary employees (or any other service provider or former service
provider) (any of the foregoing, a "Service Provider") arising out of such
Service Provider's provision of services on or before the Closing (including,
without limitation, claims arising out of termination of such services or
termination of any agreement, written or oral, by, between or among, or for the
benefit of, such Service Provider or the Operating Partnership, the Partners,
the Stockholders, the TV Stockholder, the Operating LLCs, the Operating Services
Companies, or the Operating Managers prior to, or following, the Closing);
(b) Balance Sheet Liabilities. Any liabilities and
-------------------------
obligations reflected on the September 30, 1996, combined balance sheet of the
Operating Partnership and Operating LLCs, together with those not so reflected
if in accordance with generally accepted accounting principles ("GAAP") they
need not be so reflected, and any liabilities and obligations reflected
4
on any financial statements of the Operating Services Companies and any
liabilities and obligations of the Business incurred in the ordinary course of
business between September 30, 1996, and the Closing;
(c) Warranty Liabilities. Any liabilities and obligations,
--------------------
whether or not reserved for on the September 30, 1996, combined balance sheet of
the Operating Partnership and Operating LLCs, or whether or not reserved for on
any financial statements of the Operating Services Companies, with respect to
any return, warranty, claim or refund or similar liabilities relating to
products or services developed, licensed or sold in connection with the Business
on or prior to the Closing;
(d) Product or Services Liabilities. Any liabilities and
-------------------------------
obligations, whether or not reserved for on the September 30, 1996, combined
balance sheet of the Operating Partnership and Operating LLCs, or whether or nor
reserved for on any financial statements of the Operating Services Companies,
for death, personal injury, other injury to persons or property damage resulting
from, caused by or arising out of, directly or indirectly, the use or
performance or non-performance of any of the products or services sold in
connection with the Business (or any executory contract or commitment or part or
component thereof), including without limitation any liabilities or obligations
or failure to warn, breach of express or implied warranties or merchantability
or fitness for any purpose or use, developed, licensed, sold or in connection
with the Business at any time, or resulting from, caused by or arising out of,
directly or indirectly, the conduct of the Business at any time prior to the
Closing;
(e) Liabilities for Tort, Crime or Breach of Contract. Any
-------------------------------------------------
liabilities and obligations, whether or not reserved for on the September 30,
1996, combined balance sheet of the Operating Partnership and Operating LLCs, or
whether or nor reserved for on the financial statements of the Operating
Services Companies, resulting from, caused by or arising out of, directly or
indirectly, the conduct of the Business or ownership or lease of any of the
Assets at any time prior to the Closing that constitutes, may constitute or is
alleged to constitute a tort, breach of contract or violation of any domestic or
foreign statute, law, ordinance, rule or regulation of any court or domestic or
foreign statute, law, ordinance, rule or regulation of any court or domestic or
foreign governmental agency, authority or instrumentality, including, without
limitation, such of the foregoing as relate to employment, environmental and
occupational safety and health matters;
(f) Liabilities Related to Business and Assets. Any
------------------------------------------
liabilities and obligations, whether or not reserved for on the September 30,
1996, combined balance sheet of the Operating Partnership and Operating LLCs, or
on any financial statements of the Operating Services Companies, in respect of
liabilities, claims, actions, suits, proceedings and investigations relating to
or arising out of, directly or indirectly, the conduct of the Business or
ownership, license or lease of any of the Assets of Sellers on or prior to the
Closing, including, without limitation, such of the foregoing as are listed or
described on any schedule hereto;
(g) Tax Liabilities. Any liability for any foreign or federal
---------------
income taxes, payroll taxes, state or local income taxes and excise and
franchise taxes, or any other taxes
5
or penalties associated with taxes, incurred or accrued in connection with the
operation of the Business or the Assets on or before the Closing, together with
all interests and penalties imposed with respect to such amounts and any
liabilities or obligations of the Business or Sellers, whether primary or
secondary, direct or indirect, absolute or contingent, that do not arise
primarily out of or relate primarily to the Business or the Assets;
(h) Contract Liabilities. Any performance obligation of the
--------------------
Business or Sellers under any contract, commitment, arrangement or understanding
of any kind, oral or written, except as provided in Section 1.3 hereof with
respect to the Listed Contracts; and
(i) Seller Employee Plans. Any obligations arising out of or
---------------------
associated with any Seller Employee Plans (as hereafter defined) relating to any
Service Provider prior to and including the Closing.
1.5 Consideration. In consideration for the Assets and the other
-------------
forms of consideration to be given by Sellers, and in full payment therefor,
Purchaser will deliver to the Operating Partnership, or require HK to deliver,
the following: (a) upon the Closing, four million one hundred and sixty-eight
thousand dollars ($4,168,000) in cash payable by bank cashier's check or wire
transfer, (b) upon the Closing, 52,000 shares of Common Stock of HK (the
"Stock"), having the rights, preferences and privileges set forth in the
Purchaser's Amended and Restated Articles of Incorporation in substantially the
form attached hereto as Exhibit A (the "Restated Articles"), and (c) the
---------
Subsequent Payments set forth in Section 1.6 below.
1.6 Subsequent Payments.
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(a) Subject to offset by amounts due pursuant to the
indemnification provisions of this Agreement as set forth in Section 8.5 hereof,
Purchaser or HK shall deliver by bank cashier's check or by wire transfer to the
Operating Partnership, or its assigns as provided below in the sentence
following, an additional one million two hundred and fifty thousand dollars
($1,250,000) on October 31, 1997 (the "First Payment Date"). The Operating
Partnership irrevocably instructs Purchaser and HK, and Purchaser and HK agree,
to deliver such payments to each of TeamAlliance Technology Partners, Inc. and
Team Visions, Inc. in the amount of $625,000 each.
(b) Subject to offset by amounts due pursuant to the
indemnification provisions of this Agreement as set forth in Section 8.5 hereof,
Purchaser shall deliver by cashier's check or by wire transfer to the Operating
Partnership, or its assigns as provided below in the sentencing following, an
additional one million two hundred and fifty thousand dollars ($1,250,000) on
October 31, 1998 (the "Second Payment Date"). The Operating Partnership
irrevocably instructs Purchaser and HK, and Purchaser and HK agree, to deliver
such payments to each of TeamAlliance Technology Partners, Inc. and Team
Visions, Inc. in the amount of $625,000 each.
(c) Subject to offset by amounts due pursuant to the
indemnification provisions of this Agreement as set forth in Section 8.5 hereof,
Purchaser shall deliver by bank cashier's check or by wire transfer to the
Operating Partnership, or its assigns as provided below
6
in the sentence following, an additional one million seven hundred thousand
dollars ($1,700,000) on October 31, 1999 (the "Third Payment Date"). The
aggregate amount payable pursuant to this Section 1.6(a), (b) and (c) shall be
referred to herein as the "Aggregate Subsequent Payments." The Operating
Partnership irrevocably instructs Purchaser and HK, and Purchaser and HK agree,
to deliver such payments to each of TeamAlliance Technology Partners, Inc. and
Team Visions, Inc. in the amount of $850,000 each.
(d) In the event that either ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
or both, as the case may be, voluntarily terminates his or their employment with
the Purchaser, other than for Good Reason as such term is defined in the
Employment Agreement attached as Exhibit E, Purchaser shall not be required to
deliver fifty percent (50%) of the balance of the Aggregate Subsequent Payments
payable to TeamAlliance Technology Partners, Inc. after such termination for
each departed employee. Any right to receive such payment shall be forfeited and
not otherwise due to TeamAlliance Technology Partners, Inc.
(e) In the event of a dispute as to whether any post-Closing
cash payments should be made pursuant to this Section 1.6, the dispute shall be
submitted for binding arbitration in accordance with Section 1.8 below.
1.7 The Closing. Subject to termination of this Agreement as
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provided in Article IX below, the closing of the Acquisition contemplated by
this Agreement shall take place at the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, Palo Alto, California, on such date that
the conditions of closing set forth in Article V hereof have been satisfied or
waived, or such other place as the parties hereto may mutually select (the
"Closing").
1.8 Arbitration. Any controversy pursuant to this Agreement, shall
-----------
be finally determined by arbitration in San Francisco, California, in accordance
with the then-current Commercial Arbitration Rules of the American Arbitration
Association then in effect (the "Rules"), and judgment upon the award rendered
by the arbitrators may be entered in any court of competent jurisdiction. For
purposes of such arbitration, three arbitrators shall be chosen in accordance
with the Rules. There shall be limited discovery prior to the arbitration
hearing (the "Hearing") as follows: (a) exchange of witness lists and copies of
documentary evidence and documents related to or arising out of the issues to be
arbitrated, (b) depositions of all party witnesses, and (c) such other
depositions as may be allowed by the arbitrators upon a showing of good cause.
Depositions shall be conducted in accordance with the California Code of Civil
Procedure. The arbitrators shall award to the prevailing party its costs and
expenses (including counsel fees) of any such arbitration. Notwithstanding the
amount in controversy, the Expedited Procedures as set forth in the Rules shall
apply. The parties hereby agree that to the extent practicable, the Hearing
shall take place within one hundred twenty (120) days of the selection of the
arbitrators. The arbitration proceeding shall be conducted in confidence and no
party thereto shall disclose to any other person any matters disclosed at or in
connection with the hearing unless required to do so by law or pursuant to a
court order.
1.9 Allocation of Purchase Price. The consideration given for the
----------------------------
Assets shall be allocated among the Assets and the noncompetition covenants
herein in the manner provided
7
for in Exhibit AP ("Allocation of Purchase Price"), which the parties
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acknowledge will be prepared by mutual agreement of the parties within sixty
(60) days of the Closing, using the allocation methods and principles required
by Section 1060 of the Internal Revenue Code of 1986, as amended, (the "Code")
and the Treasury Regulations promulgated thereunder; provided however, that the
parties hereto shall agree prior to closing on an allocation of the purchase
price to be made to the covenants not to compete and provided further, that the
amount allocated to fixed assets currently described on the Operating
Partnership's balance sheet as "computer equipment and furnishings" shall be no
more than the amount reflected as the book value of such fixed assets on the
balance sheet of the Operating Partnership at the time of closing (it being
understood that the book value for such fixed assets on September 30, 1996 was
$227,521). Neither Purchaser nor Sellers shall take any position inconsistent
with such allocation, and any and all filings with and reports made to any
Taxing authority will be consistent with that allocation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers hereby jointly and severally represent and warrant to
Purchaser and HK that, except as set forth in a Schedule hereto, specifically
referring to the applicable section of this Article II, delivered by the Sellers
to Purchaser and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP,
counsel to Purchaser and HK:
2.1 Organization; Capital Structure. In the amounts set forth
-------------------------------
opposite their names on Schedule 2.1 hereto, Stockholders and TV Stockholder own
all outstanding limited partnership interests and rights to acquire limited
partnership interests of the Operating Partnership. The membership interests in
the Purchased LLCs and the rights to acquire membership interests in the
Purchased LLCs are owned by the persons and in the amounts set forth on Schedule
--------
2.1 hereto. Each of the Sellers is duly organized, validly existing and in good
---
standing under the laws under which it was organized, and has all requisite
power and authority to carry on its business as now conducted. Each of the
Sellers is qualified to transact business and is in good standing in each
jurisdiction where its failure to qualify would have a material adverse effect
on the Business or Assets. Except as set forth on Schedule 2.1 hereto, neither
------------
the Operating Partnership nor the Purchased LLCs have granted or issued any
interest or right to any profits or revenues or other economic interest with
respect to such entities or the Business or Assets.
2.2 Authority.
---------
(a) Sellers have full power and authority to enter into this
Agreement and the Contract and Lease Assignments set forth on Attachment C
------------
hereto (collectively, the "Related Agreements"), to execute, deliver and perform
their obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Related Agreements, the performance by Sellers of their obligations
hereunder and thereunder, and the consummation of the transactions contemplated
8
hereby and thereby, have been duly and validly authorized by all necessary
partnership action or limited liability company action on the part of Sellers,
including approval by a requisite percentage in interest of each of their
general partners and limited partners or members. Each of this Agreement and the
Related Agreements is a legal, valid and binding obligation of Sellers,
enforceable against Sellers and their general and limited partners and members
in accordance with their respective terms, subject to (i) any applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws relating to
or affecting the enforcement of creditors' rights generally, (ii) the discretion
of a court ordering specific performance and other equitable remedies, and (iii)
general principles of equity regardless of whether raised in a proceeding at law
or in equity.
(b) No consent, approval, order or authorization of, or
registration, declaration of, or qualification or filing with, any court,
administrative agency, commission, regulatory authority or other governmental or
administrative body or instrumentality, whether domestic or foreign (a
"Governmental Entity"), is required by or with respect to Sellers in connection
with the execution and delivery of this Agreement and the Related Agreements by
Sellers or the consummation by Sellers of the transactions contemplated hereby
or thereby.
2.3 Financial Information. Sellers have delivered to Purchaser the
---------------------
unaudited and reviewed balance sheets and related statements of combined
operations and cash flows prepared in connection with the operation of the
Business for (i) the fiscal years ended December 31, 1993, 1994 and 1995 and
(ii) for the nine month period ended September 30, 1996 (the "Financial
Statements"). The Financial Statements are complete and correct in all material
respects, have been prepared on a consistent basis throughout the periods
indicated and with each other and present fairly and accurately the financial
condition of the Business as of the respective dates thereof and the results of
operations for the periods then ended have been prepared in accordance with
GAAP. All of Sellers' general ledgers, books and records are located at
Sellers' principal place of business in New York.
2.4 Liabilities. Except as set forth on Schedule 2.4, Sellers have
----------- ------------
no liabilities arising in connection with or affecting the Business or the
Assets (contingent, absolute, accrued or unaccrued, liquidated or unliquidated,
or otherwise) other than those reflected in the Financial Statements, or those
as to which an adequate reserve therefor has been established and is adequately
reflected in the Financial Statements. Except as set forth on Schedule 2.4,
------------
there are no debts, liabilities or obligations with respect to Sellers or to
which the Assets are subject, liquidated, unliquidated, accrued absolute,
contingent or otherwise, in excess of $5,000 individually or in excess of
$10,000 in the aggregate.
2.5 Absence of Certain Changes and Events. Since September 30,
-------------------------------------
1996, there has not been in connection with or affecting the Business or the
Assets:
(a) Any material adverse change in the financial condition,
results of operation, assets, liabilities or prospects of Sellers or the
Business, or any occurrence, circumstance, or in the aggregate that would result
in any such material adverse change;
9
(b) Any event, including, without limitation, shortage of
materials or supplies, fire, explosion, accident, requisition or taking of
property by any governmental agency, flood, drought, earthquake, or other
natural event, riot, act of God or a public enemy, or damage, destruction, or
other casualty, whether covered by insurance or not, that has had a material
adverse effect on Sellers, the Business or the Assets or any such event that
would have a material adverse effect on Sellers, the Business or the Assets;
(c) Any material transaction relating to or involving Sellers,
the Business, or the Assets taken as a whole which was entered into or carried
out by any of Sellers other than in the ordinary course of business or in
connection with this Agreement;
(d) Any material change made by Sellers in the method of
operating the Business, including, but not limited to, changes in collection
practices or changes in the granting of discounts;
(e) Any material change by Sellers in accounting or tax
practices or procedure;
(f) Any sale, lease or disposition of, or any agreement to
sell, lease, or dispose of the Assets other than in the ordinary course of
business and consistent with prior practice, other than in connection with this
Agreement;
(g) Any material modification, waiver, change, amendment,
release, rescission, accord and satisfaction, or termination of, or with respect
to, any material term, condition, or provision of any material contract,
agreement, proprietary right, license, permit or other instrument to which any
of Sellers, Stockholders or TV Stockholder is a party and relating to or
affecting the Business or the Assets other than any satisfaction by performance
in accordance with the terms thereof in the ordinary course of business and
consistent with prior practice;
(h) Any event permitting any of the Assets to be subjected to
any pledge, encumbrance, security interest, lien, charge, or claim of any kind
whatsoever (direct or indirect) (collectively, "Liens"), other than (a)
mechanic's, materialmen's, landlord's, lessor's, carrier's, warehousemen's or
similar liens incurred in the ordinary course of business or (b) liens for
taxes, assessments or other governmental charges not yet due (collectively,
"Permitted Liens");
(i) Any increase in compensation or any adoption of, or
increase in, any bonus, incentive compensation, pension, profit sharing,
retirement, insurance, medical reimbursement or other employee benefit plan,
payment or arrangement to, for, or with any of Sellers, Stockholders, or TV
Stockholder, other than in the ordinary course of business;
(j) Except as set forth on Schedule 2.5(j), any notice
---------------
(written or unwritten) from any Service Provider earning more than $40,000 per
year in base pay and commissions (a "Key Employee") of Sellers that such Key
Employee has terminated, or intends to terminate, such Key Employee's service
with Sellers;
10
(k) Except as set forth on Schedule 2.5(k), any material
---------------
adverse change in the Business' relationship with any vendor or contractor, or
the occurrence of any condition or event with respect to any vendor, contractor
or customer, that is reasonably likely to have material adverse effect on
Sellers, the Business or the Assets taken as a whole;
(l) Any waiver of any rights of material value relating to the
Business or the Assets by Sellers without corresponding benefit;
(m) Except as set forth on Schedule 2.5(m), any disposition
---------------
or abandonment of any of Sellers' trademarks, trade names, patents, copyrights
or other intellectual property rights or proprietary trade secrets or processes,
necessary or incidental to the conduct of the Business; or
(n) Any other event or condition of any character that
materially adversely affects the Business or the Assets.
2.6 Conduct of Business. Since September 30, 1996, Sellers have
-------------------
conducted the Business in the ordinary course thereof, consistent with past
practices.
2.7 Taxes.
-----
(a) Sellers have completed and duly and timely filed in correct
form with the appropriate United States, state and local governmental agencies
and with the appropriate foreign countries and political subdivisions thereof,
all Returns (as hereinafter defined) required to be filed on or prior to the
date hereof and will complete and duly and timely file in correct form with the
appropriate United States, state and local governmental agencies and with the
appropriate foreign countries and political subdivisions thereof, all Returns
required to be filed after the date hereof. All of such Returns that have been
filed were accurate and complete as filed and all of such Returns that will be
filed will be accurate and complete when filed. Sellers have paid in full all
Taxes (as hereinafter defined), assessments or deficiencies (A) shown to be due
on those Returns that have been filed or (B) claimed to be due by any Taxing
authority or otherwise due or owing, except as to such Taxes as disputed in good
faith by Sellers. Sellers have made all withholdings of Tax required to be made
under all applicable United States, foreign, state and local tax laws and
regulations; and such withholdings have been or will be paid to the respective
governmental agencies when due and to the extent not yet due have been set aside
in accounts for purposes of such payment.
(b) The Assets are not subject to any liens for Taxes, except
liens for current ad valorem Taxes not yet due, and neither Purchaser nor any
affiliate thereof will become directly or indirectly liable for, an no lien,
claim or encumbrance will be placed upon the Assets with respect to, (A) any
Taxes attributable to the ownership or use of the Assets with respect to periods
prior to and including the date of Closing (other than ad valorem Taxes not yet
due and payable as of the Closing) or (B) any other Taxes (regardless of whether
attributable to periods prior to and including the Closing) imposed upon Sellers
or attributable to the actions or activities of Sellers. There is no contract,
agreement, plan or arrangement, including but not limited to the provisions of
this Agreement or any exhibit or annex hereto, covering any Service
11
Provider that, individually or collectively, could give rise to the payment of
any amount by Purchaser or its affiliates that would not be deductible pursuant
to Section 280G or Section 162 of the Internal Revenue Code of 1986, as amended
(the "Code"). None of the Assets consist of stock of another corporation or
entity treated as such for tax purposes.
(c) No issues have been raised (nor are any currently pending)
by any Taxing authority in connection with any of the Returns. No extensions or
waivers of statutes of limitations with respect to the Returns have been given
by or requested from Sellers. No Returns are presently under examination and no
assessments or deficiencies with respect to the Returns are presently being
contested by Sellers. Sellers are not a party to or bound by (and, except for
this Agreement, prior to the Closing will not become a party to or bound by) any
Tax indemnity, Tax sharing or Tax allocation agreement. None of Sellers has ever
been a member of an affiliated group of corporations, within the meaning of
Section 1504 of the Code, other than as a common parent corporation, and each of
the subsidiaries of Sellers has never been a member of an affiliated group of
corporations, within the meaning of Section 1504 of the Code. None of the assets
of Sellers, directly or indirectly, secures any debt the interest on which is
tax exempt under Section 103(a) of the Code. None of the assets of Sellers is
"tax-exempt use property" within the meaning of Section 168(h) of the Code. None
of Sellers nor any shareholder or partner or member of any of Sellers is other
than a United States person within the meaning of the Code.
(d) For federal income tax purposes and for purposes of all
states in which Sellers conduct business, each of Sellers that shall be
designated in this Agreement as a partnership or limited liability company has
been at all times from and after formation, taxable as a partnership and not as
a corporation. None of Sellers that shall be designated in this Agreement as a
corporation has filed an election to be an S corporation within the meaning of
the Code.
(e) For purposes of this Agreement:
(i) "Tax" (and, with correlative meaning, "Taxes,"
"Taxable" and "Taxing") means (A) any net income, alternative or add-on minimum
tax, gross income, gross receipts, sales , use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, environmental or windfall profit tax, custom,
duty or other tax, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or any penalty, addition to tax or
additional amount imposed by any governmental, regulatory or administrative
entity or agency responsible for the imposition of any such tax (domestic or
foreign), (B) any liability for the payment of any amounts of the type described
in (A) as a result of being a member of an affiliated, consolidated, combined,
unitary or other group for any Taxable period and (C) any liability for the
payment of any amounts of the type described in (A) or (B) as a result of any
express or implied obligation to indemnify any other person.
(ii) The term "Returns" means all returns,
declarations, reports, statements and other documents required to be filed in
respect of Taxes, and the term "Return" means any one of the foregoing Returns.
12
2.8 Compliance With Law. Sellers have complied and are in
-------------------
compliance with all applicable federal, state and local laws, statutes,
licensing requirements, rules, and regulations and judicial or administrative or
zoning decisions. Sellers have been granted all licenses, permits (temporary and
otherwise), authorizations, and approvals from federal, state, and local
government regulatory or zoning agencies or bodies necessary to carry on the
Business and maintain the Assets, all of which are currently valid and in full
force and effect, other than where the failure to be valid or in full force and
effect would not have material adverse effect on the Business. All transferable
Governmental Permits shall be (i) transferred to Purchaser as of the Closing and
(ii) valid and in full force and effect upon the consummation of the
transactions contemplated by this Agreement to the same extent as applicable to
Sellers prior to the Acquisition. There is no order issued, investigation, or
proceeding pending or threatened, or notice served with respect to any material
violation of any law, ordinance, order, writ, decree, rule, or regulation issued
by any federal, state, local, or foreign court or governmental agency or
instrumentality applicable to Sellers. Sellers have valid use permits for the
Business and its operations, other than those the failure of which to obtain
will not have a material adverse effect on the Business.
2.9 Proprietary Rights.
------------------
(a) All Intellectual Property requiring the execution and
filing with an appropriate governmental agency, including without limitation,
the Patent and Trademark Office, has been so indicated in Schedule 1.1(e)
---------------
hereto. The Intellectual Property includes all patents, patent applications,
trademarks, trademark applications, trade names, copyrights and associated moral
rights, copyright applications, trade secrets, information, proprietary rights
and processes necessary for the Business as now conducted without any conflict
with or infringement upon the rights of others. The Operating Partnership is the
sole owner of all right, title and interest in and to all Intellectual Property
free and clear of all liens, encumbrances, claims, rights of use and
restrictions whatsoever. Except for the management agreements and service
agreements between the Operating Services Companies and the Operating LLCs and
the service agreements between the Operating LLCs and the consultants (copies of
each of which have been delivered to counsel for the Purchaser), there are no
outstanding options, licenses or agreements of any kind relating to the
Intellectual Property nor are Sellers a party to any options, licenses or
agreements of any kind with respect to the logo, trademark and trade name
rights, software, databases, source code patents, patent rights, copyrights,
trade secrets, processes and proprietary licenses, information, proprietary
rights and processes of any other person or entity which relates to the Business
or Assets.
(b) Neither the Intellectual Property nor any other processes,
methods, or operations employed by Sellers, now or in the past, infringes upon
any proprietary rights, or intellectual property of any other person, firm,
corporation, or other entity. There is not pending or, to the knowledge of
Sellers, threatened any claim or litigation contesting the right of Sellers to
engage in or employ any such processes, methods, operations, or the Proprietary
Rights. To the knowledge of Sellers, no Service Provider at the date hereof or
as of the Closing is in violation of any material term of any employment
contract, proprietary information or inventions agreement, or any other contract
or agreement relating to the relationship of any such Service
13
Provider with Sellers or, to the knowledge of Sellers, any previous employer. To
Sellers' knowledge, no Service Provider as of the date hereof or as of the
Closing is obligated under any contract (including licenses, covenants, or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency that would conflict with
their obligation to use their best efforts to promote the interests of the
Business or which would conflict with the Business as conducted or as proposed
to be conducted.
2.10 Restrictive Documents or Orders. Except as set forth in
-------------------------------
Schedule 2.10, Sellers are not party to or bound under any agreement, contract,
-------------
order, judgment, or decree, or any similar restriction that adversely affects
(i) the continued operation by Purchaser of the Business after the Closing on
substantially the same basis as said Business was theretofore operated or (ii)
the consummation of the transactions contemplated by this Agreement. Sellers are
not party to or bound under, and at no time have been a party to or bound under,
any franchise agreement(s).
2.11 Contracts and Commitments.
-------------------------
(a) Except as set forth in Schedule 2.11(a) hereto and except
----------------
for this Agreement, there are no agreements or contracts, whether or not in
writing, to which Sellers are a party that may: (i) involve obligations
(contingent or otherwise) of Sellers in excess of $10,000; (ii) involve the
license of any Intellectual Property to or from Sellers; (iii) contain
provisions restricting and/or affecting the development, distribution or sales
of Sellers or the Business' products or services; (iv) relate to any aspect of
the Business and in which any person who was or is a manager, officer or
director of Sellers (or any person, firm partnership, trust or corporation
affiliated with any such persons) has a material interest; (v) involve any joint
venture or partnership contract or arrangement or any other agreement which has
involved or is expected to involve a sharing of profits with other persons; (vi)
involve any agreement containing covenants purporting to limit the freedom of
Sellers to compete in any line of business or geographic area or involve the
distribution of Sellers' or the Business' products or services; (vii) involve
any agreement of indemnification regarding Sellers and/or the Business; (viii)
establish any powers of attorney regarding Sellers and/or the Business, (ix)
obligate Sellers for the repayment of borrowed money; or (x) involve any other
agreement, contract or commitment which is material to Sellers as a whole (such
listed contracts being referred to collectively as the "Material Contracts").
(b) Except as set forth on Schedule 2.11(b), Sellers have
----------------
performed all obligations to be performed by them under the terms of each
Material Contract, and are not in default thereunder. No event or omission has
occurred that but for the giving of notice or lapse of time or both would
constitute a default by Sellers under any such Material Contract. Each such
Material Contract is valid and binding on all parties thereto and in full force
and effect, and to Sellers' knowledge, no other party to any of the Material
Contracts is in default thereunder. Except as set forth on Schedule 2.11(b),
----------------
Sellers have received no written or unwritten notice of any default,
cancellation, or termination in connection with any such Material Contract.
Except as set forth on Schedule 2.11(b), each Listed Contract, and all rights
----------------
and interests of Sellers
14
thereunder, shall have been assigned to Purchaser at the Closing, and no
consents or approvals of any third parties are required in connection with such
assignments.
2.12 Operating Condition. To Sellers' knowledge, the Assets that
-------------------
are necessary to operate the Business as the Business was operated by Sellers
immediately prior to the Closing are, taken as a whole, in adequate and suitable
condition for the purposes for which they are presently being used.
2.13 Assets. Except as set forth on Schedule 2.13, the Assets
------ -------------
include all Intellectual Property and all of the property in which Sellers have
any right, title and interest. Such Assets include all the assets necessary to
operate the Business in the same manner as the Business was operated by Sellers
immediately prior to the Closing. No entity affiliated with any of Sellers owns,
or has any interest in, any Asset used in the operation of the Business.
2.14 Title to the Property. Sellers have good and marketable title
---------------------
to the Assets, free and clear of any Liens other than those Permitted Liens
specifically identified on Schedule 2.14 hereto. By virtue of the deliveries
-------------
made at the Closing, Purchaser will obtain good and marketable title to the
Assets, free and clear of any Liens other than the Permitted Liens specifically
identified on Schedule 2.14 hereto.
-------------
2.15 Litigation. Except as set forth on Schedule 2.15, Sellers
---------- -------------
have not engaged in nor are they planning to engage in, nor have they received
any threat of, any litigation, arbitration, investigation, or other proceeding
relating to Sellers or Sellers' Service Providers, benefit plans, properties,
Intellectual Property, the Business, or the Assets, licenses, permits, or
goodwill of Sellers, or affecting this Agreement, the Related Agreements or the
actions taken or contemplated in connection herewith and therewith, nor, to
Sellers' knowledge, is there any reasonable basis therefor. Sellers represent
that they are not bound by any judgment, decree, injunction, ruling or order of
any court, governmental, regulatory or administrative department, commission,
agency or instrumentality, arbitrator or any other person that has or could have
a material adverse effect on the Business, Assets or the results of operations,
prospects or financial condition of the Business or Sellers.
2.16 No Conflict or Default. Except as set forth on Schedule 2.16,
---------------------- -------------
neither the execution and delivery of this Agreement and the Related Agreements,
nor compliance with the terms and provisions hereof and thereof, including
without limitation, the consummation of the transactions contemplated hereby and
thereby, will violate any statute, regulation, or ordinance of any governmental
or administrative authority or conflict with or result in the breach of any
term, condition, or provision of the partnership agreement or limited liability
company agreements under which Sellers are organized or of any agreement, deed,
contract, mortgage, indenture, writ, order, decree, legal obligation, or
instrument to which any of Sellers is a party or by which they or any of the
Assets of Sellers are or may be bound (including, without limitation, the
Material Contracts), or constitute a default (or an event which, with the lapse
of time or the giving of notice, or both, would constitute a default)
thereunder.
2.17 Third Party Consents. Except as set forth on Schedule 2.17, no
-------------------- -------------
consent, approval, or authorization of any person, agency or third party or on
the part of Sellers is required
15
in connection with the consummation of the transactions contemplated hereunder,
including without limitation the assignment to Purchaser of the Listed
Contracts.
2.18 Labor Relations.
---------------
(a) Except as set forth on Schedule 2.18, Sellers have not
-------------
failed to comply in any material respect with Title VII of the Civil Rights Act
of 1964, as amended, the Occupational Safety and Health Act of 1970, as amended,
all applicable federal, state, and local laws, rules, and regulations relating
to employment, and all applicable laws, rules and regulations governing payment
of minimum wages and overtime rates, and the withholding and payment of taxes
from compensation of employees.
(b) There are no labor disputes pending or, to the knowledge of
any of Sellers, threatened between Sellers and any Service Providers or any
labor union or other collective bargaining unit representing any of the Service
Providers.
(c) Sellers have never entered into a collective bargaining
agreement or other labor union contract relating to the Business or applicable
to the Service Providers.
(d) Except as set forth on Schedule 2.18, there are no oral
-------------
or written employment or separation or severance agreements or benefits
continuation obligations on the part of Sellers.
2.19 Brokers' and Finders' Fees/Contractual. Sellers represent
--------------------------------------
that they have not taken any action that obligates Sellers to pay any fees or
expenses of any broker or finder in connection with the origin, negotiation, or
execution of this Agreement, the Related Agreements, or in connection with any
transactions contemplated hereby or thereby. Sellers represent that they are
not, nor is any agent or representative of Sellers, subject to any agreement,
letter of intent, or understanding of any kind which prohibits, limits, or
restricts Sellers from negotiating, entering into, and consummating this
Agreement, the Related Agreements, and the transactions contemplated hereby and
thereby.
2.20 Interested Party Relationships. Neither Sellers nor any
------------------------------
corporation, partnership, or other entity that, directly or indirectly, alone or
together with others, controls, is controlled by, or is in common control with
Sellers nor, to the Sellers' knowledge, any Service Provider, agent, or
representative of Sellers who is a Service Provider at the date hereof or at the
date of the Closing, has any financial interest (other than the ownership of
accounts receivable or accounts payable in the ordinary course of business),
direct or indirect, in any vendor, contractor or customer, or any party to any
Material Contract.
2.21 Environmental and Safety Matters.
--------------------------------
(a) To the knowledge of Sellers, Sellers have all material
permits, licenses, approvals and registrations required to be issued under
applicable federal, state and local laws, statutes and regulations relating to
the protection of human health, safety, the environment and natural resources
("Environmental Laws") and, to the knowledge of Sellers, are
16
in compliance with the material terms and conditions thereunder. To the
knowledge of Sellers, Sellers are in compliance with, and to the knowledge of
Sellers, there are no past or present material conditions, activities, actions
or plans which may prevent compliance with, any current or past law related to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the release, emission or discharge of any hazardous
substance or hazardous waste ("Hazardous Substance Issues") or any material
regulations, plans, judgments, injunctions or notices promulgated or approved
thereunder.
(b) To the knowledge of Sellers, Sellers have not disposed,
released or threatened release of any hazardous substance or hazardous waste on,
from or under the property owned or leased currently by Sellers or in the past
by Sellers or any predecessor, other than those authorized by permit under
federal, state and local laws. To the knowledge of Sellers, Sellers are not in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety. For purposes of this Agreement,
the terms "disposal," "release," "hazardous substance" and "hazardous waste"
shall have the definitions assigned thereto under federal, state and local laws
applicable to Sellers, the Business, the assets of Sellers and the property
owned or leased by Sellers, including without limitation the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. (S)9601 et seq., as amended, and any regulations promulgated thereto,
------
except that "hazardous substance" and "hazardous waste" shall include all
varieties of petroleum hydrocarbons, refined or unrefined.
(c) To the knowledge of Sellers, no disposal or release of a
hazardous substance has come to be located on or beneath and remain located on
or beneath any of the real property owned or leased currently or in the past by
Sellers or any predecessor which relates to the Business or operations of
Sellers or upon which any of the property owned or leased currently by in the
past by Sellers or any predecessors which relates to the Business or operations
of Sellers are, or have been, held or maintained.
(d) Except as set forth in Schedule 2.21, to the knowledge of
-------------
Sellers, Sellers currently and in the past have had in effect no arrangements
for the removal, disposal, release and/or processing of waste and by-products,
including any hazardous substances or hazardous waste, and there are no reports,
studies and evaluations conducted by Sellers, or received by Sellers, with
respect to such matters.
(e) To the knowledge of Sellers, there is no presence,
disposal, release or threatened release of any hazardous substance or hazardous
waste on or under any properties adjacent to properties currently leased by
Sellers.
(f) To the knowledge of Sellers, there has been no violation
of, or any administrative, judicial or regulatory proceeding pursuant to, any
applicable Environmental Laws. To the knowledge of Sellers, no Claims (as
hereinafter defined) have been or are currently asserted against Sellers based
on any acts or failures to act prior to the Closing with respect to hazardous
substances or hazardous wastes. As used herein, "Claim" shall mean any and all
claims, demands, orders, causes of action, suits, proceedings, administrative
proceedings, losses,
17
judgments, decrees, debts, damages, liabilities, court costs, attorneys' fees
and any other expenses incurred, assessed or sustained by or against any of
Sellers in connection therewith.
2.22 Customers. Except as set forth on Schedule 2.22, no single
--------- -------------
client or customer of Sellers has accounted for more than five percent (5%) of
the total sales of the Business during the three fiscal years ended December 31,
1995, and the nine months ended September 30, 1996. No Customer has terminated
its relationship with Sellers during the one (1) year period preceding the
Closing, and none of such Customers has notified Sellers of an intention to
terminate, or alter in any material adverse way, its relationship with Sellers.
Sellers are not aware of any events or facts that would lead it to believe that
any such Customer will not continue to purchase Seller's services at
substantially the same level as currently purchased by such Customer.
2.23 Employee Benefit Plans.
----------------------
(a) Schedule 2.23 lists, with respect to Sellers, any
-------------
subsidiary of Sellers and any trade or business (whether or not incorporated)
which is treated as a single employer with any Seller (an "ERISA Affiliate")
within the meaning of Section 414(b), (c), (m) or (o) of the Code, (i) all
employee benefit plans (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), (ii) each loan to a non-
officer employee in excess of $10,000, loans to officers and directors and any
stock option, stock purchase, phantom stock, stock appreciation right,
supplemental retirement, severance, sabbatical, medical, dental, vision care,
disability, employee relocation, cafeteria benefit (Code Section 125) or
dependent care (Code Section 129), life insurance or accident insurance plans,
programs or arrangements, (iii) all bonus, pension, profit sharing, savings,
deferred compensation or incentive plans, programs or arrangements, (iv) other
fringe or employee benefit plans, programs or arrangements that apply to senior
management of Sellers and that do not generally apply to all employees, and (v)
any current or former employment or executive compensation or severance
agreements, written or otherwise (together, the "Seller Employee Plans").
(b) Sellers have furnished to the Purchaser a copy of each of
the Seller Employee Plans and related plan documents (including trust documents,
insurance policies or contracts) and have, with respect to each Seller Employee
Plan which is subject to ERISA reporting requirements, provided copies of the
Form 5500 reports filed for the last plan year. Any Seller Employee Plan
intended to be qualified under Section 401(a) of the Code has either obtained
from the Internal Revenue Service a favorable determination letter as to its
qualified status under the Code, including all amendments to the Code effected
by the Tax Reform Act of 1986 and subsequent legislation, or has applied to the
Internal Revenue Service for such a determination letter prior to the expiration
of the requisite period under applicable Treasury Regulations or Internal
Revenue Service pronouncements in which to apply for such determination letter
and to make any amendments necessary to obtain a favorable determination, or has
been established under a standardized prototype plan for which an Internal
Revenue Service opinion letter has been obtained by the plan sponsor and is
valid as to the adopting employer. Seller has also furnished the Purchaser with
the most recent Internal Revenue Service determination or opinion letter issued
with respect to each such Seller Employee Plan.
18
(c) (i) None of the Seller Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person; (ii) there has
been no "prohibited transaction," as such term is defined in Section 406 of
ERISA and Section 4975 of the Code, with respect to any Seller Employee Plan,
(iii) each Seller Employee Plan has been administered in accordance with its
terms and in compliance with the requirements prescribed by any and all
statutes, rules and regulations (including ERISA and the Code), and Seller and
each subsidiary or ERISA Affiliate have performed all material obligations
required to be performed by them under, are not in any material respect in
default under or violation of, and have no knowledge of any material default or
violation by any other party to, any of the Seller Employee Plans; (iv) neither
Seller nor any subsidiary or ERISA Affiliate is subject to any liability or
penalty under Sections 4976 through 4980 of the Code or Title I of ERISA with
respect to any of the Seller Employee Plans; (v) all material contributions
required to be made by Seller or ERISA Affiliate to any Seller Employee Plan
have been made on or before their due dates and a reasonable amount has been
accrued for contributions to each Seller Employee Plan for the current plan
years; and (vi) no Seller Employee Plan is covered by, and neither Seller nor
any subsidiary or ERISA Affiliate has incurred or expects to incur any liability
under Title IV of ERISA or Section 412 of the Code. With respect to each Seller
Employee Plan subject to ERISA as either an employee pension plan within the
meaning of Section 3(2) of ERISA or an employee welfare benefit plan within the
meaning of Section 3(1) of ERISA, Sellers have prepared in good faith and timely
filed all requisite governmental reports (which were true and correct as of the
date filed) and have properly and timely filed and distributed or posted all
notices and reports to employees required to be filed, distributed or posted
with respect to each such Seller Employee Plan. No suit, administrative
proceeding, action or other litigation has been brought, or to the knowledge of
Sellers, is threatened, against or with respect to any such Seller Employee
Plan, including any audit or inquiry by the IRS or United States Department of
Labor. Neither Sellers nor other ERISA Affiliate is a party to, or has made any
contribution to or otherwise incurred any obligation under, any "multiemployer
plan" as defined in Section 3(37) of ERISA.
(d) With respect to each Seller Employee Plan, Sellers have
complied with (i) the applicable health care continuation and notice provisions
of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and the
proposed regulations thereunder and (ii) the applicable requirements of the
Family Leave Act of 1993 and the regulations thereunder.
(e) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or other service
provider of Sellers or any other ERISA Affiliate to severance benefits or any
other payment (including, without limitation, unemployment compensation, golden
parachute or bonus), except as expressly provided in this Agreement, or (ii)
accelerate the time of payment or vesting of any benefits, or increase the
amount of compensation due any such employee or service provider.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by Sellers or, to Sellers' knowledge, any
other ERISA Affiliate, or change in participation or coverage under, any Seller
Employee Plan which would
19
materially increase the expense of maintaining such Plan above the level of
expense incurred with respect to that Plan in the Financial Statements.
2.24 Insurance. Sellers maintain policies of insurance covering
---------
the Assets in types and amounts customary for similarly-sized companies engaged
in similar businesses. To Sellers' knowledge, Sellers are in compliance with
each of such policies such that none of the coverage provided under such
policies has been invalidated, and Sellers have not received any written notice
of cancellation of any such policies. Schedule 2.24 lists and describes all of
-------------
Sellers' insurance policies covering the Assets in effect immediately prior to
the Closing.
2.25 Accounts Receivable. Schedule 2.25 sets forth an aging of
-------------------
accounts receivable of Sellers as of September 30, 1996 in the aggregate and by
customer (0-30 days, 30-90 days and greater than 90 days) that corresponds to
accounts receivable on the balance sheet in the Financial Statements.
2.26 Books and Records. The books and records of Sellers to which
-----------------
Purchaser and its accountants and attorneys have been given access are the true
books and records of Sellers and fairly reflect the underlying facts and
transactions consistent with normal bookkeeping practices so as to permit the
financial statements derived therefrom to be prepared in accordance with past
practices.
2.27 Complete Disclosure. Except as set forth on Schedule 2.27, no
------------------- -------------
representation or warranty by Sellers and no exhibit, schedule, statement,
certificate, or other writing furnished to Purchaser pursuant to this Agreement
or the Related Agreements or in connection with the transactions contemplated
thereby, contains any untrue statement of a material fact or omits to state any
fact necessary to make the statements contained herein and therein not
materially misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
The Stockholders hereby jointly and severally represent and warrant to
Purchaser and HK that, except as set forth in a Schedule hereto, specifically
referring to the applicable section of this Article III, delivered by the
Sellers to Purchaser and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, LLP, counsel to Purchaser and HK:
3.1 Authority.
---------
(a) Stockholders have, full power and authority to enter into
this Agreement and the Employment Agreements (as herein defined) (collectively,
the "Related Agreements"), to execute, deliver and perform their obligations
hereunder and thereunder, and to consummate the transactions contemplated hereby
and thereby. Each of this Agreement and the Related Agreements is a legal, valid
and binding obligation of Stockholders enforceable against Stockholders in
accordance with their respective terms, subject to (i) any applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws relating to
or affecting the enforcement
20
of creditors' rights generally, (ii) the discretion of a court ordering specific
performance and other equitable remedies, and (iii) general principles of equity
regardless of whether raised in a proceeding at law or in equity.
(b) No consent, approval, order or authorization of, or
registration, declaration of, or qualification or filing with, any court,
administrative agency, commission, regulatory authority or other governmental or
administrative body or instrumentality, whether domestic or foreign (a
"Governmental Entity"), is required by or with respect to Stockholders in
connection with the execution and delivery of this Agreement and the Related
Agreements by Stockholders or the consummation by Stockholders of the
transactions contemplated hereby or thereby.
3.2 Assets. No family member or entity affiliated with any of
------
Stockholders owns, or has any interest in, any Asset used in the operation of
the Business.
3.3 Litigation. Stockholders are not engaged in nor are they
----------
planning to engage in, nor have they received any threat of, any litigation,
arbitration, investigation, or other proceeding relating to Sellers or Sellers'
Service Providers, benefit plans, properties, Intellectual Property, the
Business, or the Assets, licenses, permits, or goodwill of Sellers, or affecting
this Agreement, the Related Agreements or the actions taken or contemplated in
connection herewith and therewith, nor, to Stockholders' knowledge, is there any
reasonable basis therefor. Stockholders are not bound by any judgment, decree,
injunction, ruling or order of any court, governmental, regulatory or
administrative department, commission, agency or instrumentality, arbitrator or
any other person that has or could have a material adverse effect on the
Business, Assets or the results of operations, prospects or financial condition
of the Business or Sellers.
3.4 Brokers' and Finders' Fees/Contractual. Stockholders have not
--------------------------------------
taken any action that obligates Stockholders to pay any fees or expenses of any
broker or finder in connection with the origin, negotiation, or execution of
this Agreement, the Related Agreements, or in connection with any transactions
contemplated hereby or thereby. Stockholders represent that neither they, nor
any agent or representative of Stockholders is subject to any agreement, letter
of intent, or understanding of any kind which prohibits, limits, or restricts
Stockholders from negotiating, entering into, and consummating this Agreement,
the Related Agreements, and the transactions contemplated hereby and thereby.
3.5 Interested Party Relationships. No Stockholder (nor any family
------------------------------
member of a Stockholder, or any corporation, partnership, or other entity that,
directly or indirectly, alone or together with others, controls, is controlled
by, or is in common control with Stockholder or any such family member), nor to
Stockholders' knowledge, any Service Provider who is a Service Provider at the
date hereof or at the date of the Closing, agent, or representative of
Stockholders, has any financial interest (other than the ownership of accounts
receivable or accounts payable in the ordinary course of business), direct or
indirect, in any vendor, contractor or customer of the Operating Partnership, or
any party to any Material Contract.
3.6 Complete Disclosure. No representation or warranty by
-------------------
Stockholders, or to their knowledge, the Sellers in this Agreement, and, to
their knowledge, no exhibit, schedule,
21
statement, certificate, or other writing furnished to Purchaser pursuant to this
Agreement or the Related Agreements or in connection with the transactions
contemplated thereby, contains any untrue statement of a material fact or omits
to state any fact necessary to make the statements contained herein and therein
not materially misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TV STOCKHOLDER
The TV Stockholder hereby jointly and severally represent and warrant
to Purchaser and HK that, except as set forth in a Schedule hereto, specifically
referring to the applicable section of this Article IV, delivered by the Sellers
to Purchaser and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP,
counsel to Purchaser and HK:
4.1 Authority.
---------
(a) TV Stockholder have full power and authority to enter into
this Agreement, to execute, deliver and perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement is a legal,
valid and binding obligation of TV Stockholder enforceable against TV
Stockholder in accordance with its terms, subject to (i) any applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws relating to
or affecting the enforcement of creditors' rights generally, (ii) the discretion
of a court ordering specific performance and other equitable remedies, and (iii)
general principles of equity regardless of whether raised in a proceeding at law
or in equity.
(b) No consent, approval, order or authorization of, or
registration, declaration of, or qualification or filing with, any court,
administrative agency, commission, regulatory authority or other governmental or
administrative body or instrumentality, whether domestic or foreign (a
"Governmental Entity"), is required by or with respect TV Stockholder in
connection with the execution and delivery of this Agreement by TV Stockholder
or the consummation by TV Stockholder of the transactions contemplated hereby or
thereby.
4.2 Assets. No family member or entity affiliated with TV
------
Stockholder owns, or has any interest in, any Asset used in the operation of the
Business.
4.3 Litigation. TV Stockholder are not engaged in nor are they
----------
planning to engage in, nor have they received any threat of, any litigation,
arbitration, investigation, or other proceeding relating to Sellers or any
person who is a Service Provider on the date hereof, benefit plans, properties,
Intellectual Property, the Business, or the Assets, licenses, permits, or
goodwill of Sellers, or affecting this Agreement, or the actions taken or
contemplated in connection herewith, nor, to TV Stockholder's knowledge, is
there any reasonable basis therefor. TV Stockholder are not bound by any
judgment, decree, injunction, ruling or order of any court, governmental,
regulatory or administrative department, commission, agency or instrumentality,
arbitrator or any other person that has or could have a material adverse effect
on the Business, Assets or the results of operations, prospects or financial
condition of the Business or Sellers.
22
4.4 Brokers' and Finders' Fees/Contractual. TV Stockholder have
--------------------------------------
not taken any action that obligates TV Stockholder to pay any fees or expenses
of any broker or finder in connection with the origin, negotiation, or execution
of this Agreement or in connection with any transactions contemplated hereby.
Neither TV Stockholder, nor any agent or representative of TV Stockholder, is
subject to any agreement, letter of intent, or understanding of any kind which
prohibits, limits, or restricts TV Stockholder from negotiating, entering into,
and consummating this Agreement and the transactions contemplated hereby and
thereby.
4.5 Interested Party Relationships. Except as disclosed in Schedule
------------------------------ --------
2.11(a), neither TV Stockholder (nor any family member of TV Stockholder, or any
-------
corporation, partnership, or other entity that, directly or indirectly, alone or
together with others, controls, is controlled by, or is in common control with
TV Stockholder or any such family member), nor to TV Stockholder's knowledge,
any agent or representative of TV Stockholder has any material financial
interest (other than ownership of accounts receivable or accounts payable in the
ordinary course of business), direct or indirect, in any vendor, contractor or
customer of the Operating Partnership, or any party to any Material Contract.
4.6 Complete Disclosure. No representation or warranty by TV
-------------------
Stockholder, and no exhibit, schedule, statement, certificate, or other writing
furnished to Purchaser by TV Stockholder pursuant to this Agreement or in
connection with the transactions contemplated hereby, contains any untrue
statement of a material fact or omits to state any fact necessary to make the
statements contained herein and therein not materially misleading.
4.7 Knowledge Qualification. The representations and warranties
-----------------------
in this Article IV which are made by TV Stockholder to their knowledge shall not
be deemed to imply that TV Stockholder have made any investigation to determine
the accuracy thereof and Purchaser and HK acknowledge that TV Stockholder have
not made any such investigation.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND HK
Purchaser and HK hereby jointly and severally represent and warrant to
Sellers that, except as set forth in a Schedule hereto specifically referring to
the application section of this Article V delivered by Purchaser and HK to
counsel for Sellers:
5.1 Organization, Standing and Capital Structure. Purchaser and HK
--------------------------------------------
are corporations duly organized, validly existing, and in good standing under
the laws of their respective state of incorporation. The capital stock of
Purchaser and HK and rights to acquire such stock are held in the amounts set
forth on Schedule 5.1.
------------
5.2 Authorization. Each of HK and Purchaser has full corporate
-------------
power and authority to enter into this Agreement and the Related Agreements, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, including, without limitation, the
execution and delivery of this Agreement and the Related
23
Agreements. Each of HK and Purchaser has taken all necessary and appropriate
corporate action with respect to the execution and delivery of this Agreement
and the Related Agreements. This Agreement and the Related Agreements constitute
valid and binding obligations of HK and Purchaser, enforceable in accordance
with their respective terms; subject to (i) any applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or affecting
the enforcement of creditors' rights generally, (ii) the discretion of a court
ordering specific performance and other equitable remedies, and (iii) general
principles of equity regardless of whether raised in a proceeding at law or in
equity.
5.3 Financial Information. HK has delivered to Sellers its audited
---------------------
financial statements for the fiscal years ended December 31, 1994 and December
31, 1995, and unaudited balance sheets and related statements of combined
operations and cash flows prepared in connection with its operations for the
nine month period ended September 30, 1996 (the "HK Financial Statements"). The
HK Financial Statements are complete and correct in all material respects, have
been prepared on a consistent basis throughout the periods indicated and with
each other and present fairly and accurately the financial condition of the
Business as of the respective dates thereof and the results of operations for
the periods then ended have been prepared in accordance with GAAP.
5.4 Absence of Certain Changes and Events. Since September 30,
-------------------------------------
1996, there has not been in connection with or affecting either Purchaser or HK:
(a) Any material adverse change in its financial condition,
results of operation, assets, liabilities or prospects, or any occurrence,
circumstance, or in the aggregate that would result in any such adverse change;
or
(b) Any other event or condition of any character that
materially adversely affects its business or its assets.
5.5 Compliance with Other Instruments. The execution and delivery
---------------------------------
of this Agreement and the Related Agreements by Purchaser and HK, the
consummation of the transactions contemplated hereby and thereby, and the
compliance with the terms hereof and thereof by Purchaser and HK do not conflict
with or result in a breach of any terms of, or constitute a default under their
respective charter documents or any agreement with any third party.
5.6 Compliance With Law. Purchaser and HK have materially complied
-------------------
and are in material compliance with all applicable federal, state and local
laws, statutes, licensing requirements, rules, and regulations and judicial or
administrative or zoning decisions. Purchaser and HK have been granted all
material licenses, permits (temporary and otherwise), authorizations, and
approvals from federal, state, and local government regulatory or zoning
agencies or bodies necessary to carry on its business, all of which are
currently valid and in full force and effect, other than where the failure to be
valid or in full force and effect would not have material adverse effect. There
is no order issued, investigation, or proceeding pending or threatened, or
notice served with respect to any material violation of any law, ordinance,
order, writ, decree, rule, or regulation issued by any federal, state, local, or
foreign court or
24
governmental agency or instrumentality applicable to HK or Purchaser. Purchaser
and HK have valid use permits for their respective businesses and operations,
other than those the failure of which to obtain will not have a material adverse
effect.
5.7 Consents. No consent, approval, order, or authorization or
--------
registration, qualification, designation, declaration, or filing with any
federal, state, local, or provincial governmental authority, is required in
connection with the consummation of the transactions contemplated hereunder
other than as contemplated herein.
5.8 Litigation. Neither Purchaser nor HK is engaged in or is
----------
planning to engage in, or has received any threat of, any material litigation,
arbitration, investigation, or other proceeding relating to Purchaser's or HK's
employees or consultants or former employees or consultants, benefit plans,
properties, intellectual property, licenses, permits, or goodwill, or affecting
this Agreement, the Related Agreements or the actions taken or contemplated in
connection herewith and therewith, nor, to each of their knowledge, is there any
reasonable basis therefor. Neither Purchaser nor HK is bound by any material
judgment, decree, injunction, ruling or order of any court, governmental,
regulatory or administrative department, commission, agency or instrumentality,
arbitrator or any other person that has or could have a material adverse effect
on its business, results of operations, prospects or financial condition.
5.9 Labor Relations.
---------------
(a) Neither HK nor Purchaser has failed to comply in any
material respect with Title VII of the Civil Rights Act of 1964, as amended, the
Occupational Safety and Health Act of 1970, as amended, all applicable federal,
state, and local laws, rules, and regulations relating to employment, and all
applicable laws, rules and regulations governing payment of minimum wages and
overtime rates, and the withholding and payment of taxes from compensation of
employees.
(b) There are no labor disputes pending or, to the knowledge of
Purchaser, threatened, between HK or Purchaser and any of their respective
employees or consultants, or any labor union or other collective bargaining unit
representing any of their employees or consultants.
(c) Neither HK nor Purchaser has entered into a collective
bargaining agreement or other labor union contract relating to its employees or
consultants.
5.10 Books and Records. The books and records of Purchaser and HK
-----------------
to which Sellers and its accountants and attorneys have been given access are
the true books and records of Purchaser and HK and fairly reflect the underlying
facts and transactions consistent with normal bookkeeping practices so as to
permit the financial statements derived therefrom to be prepared in accordance
with past practices.
25
5.11 Employee Benefit Plans.
----------------------
(a) Schedule 5.11 lists, with respect to Purchaser or HK (an
-------------
"ERISA Affiliate") within the meaning of Section 414(b), (c), (m) or (o) of the
Code, (i) all employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), (ii) each stock
option, stock purchase, phantom stock, supplemental retirement, severance,
sabbatical, medical, dental, vision care, disability, employee relocation,
cafeteria benefit (Code Section 125) or dependent care (Code Section 129), life
insurance or accident insurance plans, (iii) all bonus, pension, profit sharing,
savings, deferred compensation or incentive plans, programs, arrangements and
other fringe or employee benefit plans, programs or arrangements that apply
generally with respect to the plans identified in clauses (i), (ii) or (iii) to
all employees (together, the "Purchaser Employee Plans").
(b) Each of HK's and Purchaser's Employee Plans has been
administered in accordance with its terms and in compliance with the
requirements prescribed by any and all statutes, rules and regulations
(including ERISA and the Code). With respect to each Purchaser or HK Employee
Plan subject to ERISA as either an employee pension plan within the meaning of
Section 3(2) of ERISA or an employee welfare benefit plan within the meaning of
Section 3(1) of ERISA, Purchaser or HK has prepared in good faith and timely
filed all requisite governmental reports (which were true and correct as of the
date filed) and has properly and timely filed and distributed or posted all
notices and reports to employees required to be filed, distributed or posted
with respect to each such Purchaser or HK Employee Plan.
5.12 Complete Disclosure. No representation or warranty by
-------------------
Purchaser or HK in this Agreement, and no exhibit, schedule, statement,
certificate, or other writing furnished to Sellers pursuant to this Agreement or
the Related Agreements or in connection with the transactions contemplated
thereby, contains any untrue statement of a material fact or omits to state any
fact necessary to make the statements contained herein and therein not
materially misleading.
5.13 Taxes. To the knowledge of HK and Purchaser, HK and Purchaser
-----
have completed and duly filed with the appropriate United States, state and
local governmental agencies and with the appropriate foreign countries and
political subdivisions thereof, all tax returns and reports required to be
filed; and HK and Purchaser have paid in full or adequate provision has been
made on the HK Financial Statements for all taxes, interest, penalties,
assessments or deficiencies shown to be due on such tax returns and reports or
claimed to be due by any taxing authority, which are the obligations of HK or
Purchaser, including, without limitation, those due in respect of properties,
income, franchises, licenses, sales and payrolls. To the knowledge of HK and
Purchaser, HK and Purchaser have made all withholdings of tax required to be
made under all applicable tax regulations, and such withholdings have either
been paid to the respective governmental agencies or set aside in accounts for
such purpose or accrued, reserved against and entered upon the books of HK or
Purchaser.
5.14 Environmental Matters. To the knowledge of HK and Purchaser,
---------------------
HK and Purchaser have obtained all federal, state and local permits,
authorizations, certificates and
26
licenses required by the Environmental Laws for the conduct of their business
and the use of their properties. To HK and Purchaser's knowledge, HK and
Purchaser have not breached any provision of, and are not in default in any
material respect under the terms of, and have not engaged in any activity that
would cause revocation or suspension of any such permits, authorizations,
certificates or licenses. To the knowledge of HK and Purchaser, HK and Purchaser
have not disposed, released or threatened release of any hazardous substance or
hazardous waste on, from or under the property owned or leased currently by HK
or Purchaser, or in the past by HK or Purchaser, other than those authorized by
permit under federal, state and local laws. To the knowledge of HK and
Purchaser, HK and Purchaser are not in material violation of any applicable
statute, law or regulation relating to the environment or occupational health
and safety.
ARTICLE VI
COVENANTS
6.1 Best Efforts. Each party hereto shall use its best efforts
------------
consistent with reasonable business practice to take all actions and to do all
things necessary, proper and advisable to consummate the transactions
contemplated by this Agreement.
6.2 Notices and Consents. Sellers shall use their reasonable best
--------------------
efforts to obtain, at their expense, all such waivers, permits, consents,
approvals or other authorizations from third parties and Governmental Entities,
and to effect all such registrations, filings and notices with or to third
parties and Governmental Entities, as may be required by or with respect to
Sellers in connection with the transactions contemplated by this Agreement
6.3 Operation of Business. Except as contemplated by this
---------------------
Agreement, during the period from the date of this Agreement to the Closing,
Sellers shall conduct their Business and operations only in the ordinary course
of business in compliance with all applicable laws and regulations, and to the
extent consistent therewith use all reasonable efforts to preserve intact their
current business organization, keep their physical assets in good working
condition, keep available the services of their current officers, employees,
consultants and contractors, and preserve their relationships with clients,
customers, suppliers and others having business dealings with them to the end
that their goodwill and ongoing business dealings shall not be impaired in any
material respect. Without limiting the generality of the foregoing, prior to the
Closing, Sellers shall not, without the written consent of Purchaser:
(a) issue, sell, deliver or agree to commit to issue, sell or
deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, interests, rights to purchase or otherwise) or
authorize the issuance, sale or delivery of, or redeem or repurchase, any stock
of any class or any other securities or interests or any rights, warrants or
options to acquire any such stock or other securities or interests (except
pursuant to the conversion or exercise of convertible securities, interests,
options or warrants outstanding on the date hereof), or amend any of the terms
of any such convertible securities, interests, options or warrants;
27
(b) split, combine or reclassify any shares of its capital
stock or interests; declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock or interests;
(c) create, incur or assume any debt or liability not currently
outstanding (including obligations in respect of capital leases), except in the
ordinary course of business, assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other person or entity, or make any loans, advances or
capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Seller Employee Plan or any
employment or severance agreement or arrangement of the type described in
Section 2.23 or increase in any manner the compensation or fringe benefits of,
or materially modify the employment terms of, its directors, officers or
employees, generally or individually, or adopt or modify any other compensation
plan, or pay any benefit not required by the terms in effect on the date hereof
of any existing Seller Employee Plan or accelerate, or agree to accelerate the
vesting of any outstanding options, warrants or benefits, except in the ordinary
course of business;
(e) acquire, sell, lease, encumber or dispose of any assets or
property (including without limitation any shares or other equity interests in
or securities of any subsidiary or any corporation, partnership, limited
liability company, association or other business organization or division
thereof), other than purchases and sales of assets in the ordinary course of
business, or sales or disposition of the non-purchased limited liability
companies;
(f) amend its charter or Bylaws or limited partnership
agreement or limited liability company operating agreement or any agreement by
and between or among the Operating Partnership and the Purchased LLCs other than
the agreement set forth in Schedule 6.3(f);
---------------
(g) change in any material respect its accounting methods,
principles or practices, except insofar as may be required by a generally
applicable change in GAAP;
(h) discharge or satisfy any security interest or pay any
obligation or liability other than in the ordinary course of business;
(i) mortgage or pledge any of the Assets or subject any such
Assets to any security interest;
(j) sell, assign, transfer or license any Intellectual
Property;
(k) enter into, amend, terminate, take or omit to take any
action that would constitute a violation of or default under, or waive any
rights under, any Material Contract or agreement;
(l) make or commit to make any capital expenditure in excess of
$25,000 per item;
28
(m) hire any employee earning more than $40,000 per annum;
(n) make any cash disbursement in excess of $25,000, other than
partnership distributions and other than cash disbursements that do not result
in a breach of a representation or warranty made by Sellers, Stockholders or TV
Stockholder herein);
(o) initiate any litigation;
(p) take any action or fail to take any action permitted by
this Agreement with the knowledge that such action or failure to take action
would result in (i) any of the representations and warranties of Sellers,
Stockholders or TV Stockholder set forth in this Agreement becoming untrue or
(ii) any of the conditions hereunder not being satisfied;
(q) agree in writing or otherwise to take any of the foregoing
actions.
6.4 Full Access. Sellers shall permit HK or Purchaser, after
-----------
reasonable notice, to have full access (at all reasonable times, and in a manner
so as not to interfere with normal business operations of Sellers) to all
premises, properties, financial and accounting records, contracts, other records
and documents, and personnel, of or pertaining to Sellers.
6.5 Covenants Against Disclosure. The parties agree to maintain the
----------------------------
confidentiality of the terms and conditions of this Agreement, except to the
extent required by law or pursuant to the public reporting obligations of HK or
Purchaser or as necessary to consummate the transactions contemplated herein.
No party shall disseminate (except to the parties to this Agreement) any press
release or announcement concerning the transactions contemplated by this
Agreement or the Related Agreements or the parties hereto or thereto without the
prior written consent of Stockholders, TV Stockholder, Sellers, Purchaser and
HK, except as required under the public reporting obligations of HK or Purchaser
or as required by law.
6.6 Non-Competition.
---------------
(a) Commencing as of the Closing and continuing for three (3)
years thereafter, Sellers and Stockholders agree that they shall not engage,
directly or indirectly, whether on their own account or as a shareholder (other
than as a less than 1% shareholder of a publicly-held company), partner, member,
joint venturer, employee, consultant, advisor, and/or agent, of any person,
firm, corporation, or other entity, in any or all of the following activities in
the United States or throughout the remainder of the world:
(i) Enter into or engage in the business of providing
contract and temporary personnel or other employment or employee services (such
business referred to herein as the "Protected Business").
(ii) Solicit clients, customers, suppliers, or business
patronage which results in competition with the Business, or Purchaser, or any
of
29
Purchaser's affiliates (as the term "Affiliates" is defined in Section 144(a)(1)
of the Securities Act of 1933, as amended, "Affiliates") in the Protected
Business;
(iii) Encourage or solicit any Service Provider of
Purchaser, or any of Purchaser's Affiliates, employees, consultants or temporary
employees or other service providers to leave the employment of, or terminate
their service relationship with, Purchaser, or any of Purchaser's Affiliates for
any reason;
(iv) Promote or assist or encourage or facilitate in any
manner, financially or otherwise, any of the persons listed on Schedule 6.6
hereof to engage in any aspect of the Protected Business; or
(v) Promote or assist or encourage or facilitate,
financially or otherwise, any person, firm, association, corporation or other
entity engaged in any aspect of the Protected Business;
provided however, that until April 30, 1997, Sellers and Stockholders shall be
permitted under this Agreement to continue certain minimal business activities
associated with the phasing out or liquidation or disposition of the non-
purchased LLCs not transferred pursuant to this Agreement (the "Continuing
LLCs"), which activities shall not exceed or involve more than two to three
hours per week spent by each of the Stockholders at any time following the
Closing. In addition, such activities may include those provided for in Section
6.15 hereof.
(b) Commencing as of the Closing and continuing for three (3)
years thereafter, TV Stockholder agrees that he will not engage, directly or
indirectly, whether on his own account or as a shareholder (other than as a less
than 1% shareholder of a publicly-held company), partner, member, joint
venturer, employee, consultant, advisor, and/or agent ("Directly or
Indirectly"), of any person, firm, corporation, or other entity ("Person"), in
any or all of the following activities in the United States or throughout the
remainder of the world:
(i) Enter into or engage in the business of providing
contract and temporary personnel or other employment or employee services (such
business referred to herein as the "Protected Business"); provided that nothing
herein shall be deemed to prohibit TV Stockholder from Directly or Indirectly
entering into or engaging in the business of (aa) providing software or software
consulting services, or (bb) as ancillary to the activities described in the
preceding clause (aa), Directly or Indirectly providing contract and temporary
personnel to any Person to whom TV Stockholder has Directly or Indirectly, sold,
licensed, leased or otherwise provided any software or software consulting
services or to any Person to whom TV Stockholder is Directly or Indirectly
attempting to do so;
(ii) Solicit clients, customers, suppliers, or business
patronage which results in competition with the Protected Business; provided
that nothing herein shall be deemed to prohibit TV Stockholder from Directly or
Indirectly engaging in the activities permissible under the preceding clause
(i), including the
30
provision of services permissible under such clause to current or future clients
or customers of Sellers, Purchaser or Purchaser's Affiliates;
(iii) Solicit any person who at the time is a Service
Provider of Purchaser or of any of Purchaser's Affiliates to leave the
employment of Purchaser or of any of Purchaser's Affiliates for any reason;
provided that nothing herein shall be deemed to prohibit TV Stockholder from
Directly or Indirectly soliciting any such person to leave such employment if at
the time TV Stockholder has no knowledge that such person is such a Service
Provider; and provided further that nothing herein shall be deemed to prohibit
TV Stockholder from Directly or Indirectly, advertising, publicizing, announcing
or otherwise generally disclosing a desire to hire additional personnel in the
ordinary course of business, so long as there is no (aa) solicitation of any
specific manager, director or officer of Purchaser or any of Purchaser's
Affiliates or (bb) solicitation directed only to employees of Purchaser or
Purchaser's Affiliates; or
(iv) Hire, promote or assist or encourage or facilitate in
any manner, financially or otherwise, any of the persons listed on Schedule 6.6
hereof to engage in any aspect of the Protected Business on behalf of any Person
other than Purchaser or any of Purchaser's Affiliates, except as otherwise
permitted above.
(c) Without limitation, the parties agree and intend that the
covenants contained in this Section 6.6 shall be deemed to be a series of
separate covenants and agreements, one for each and every county of each state
and political subdivision where this agreement is applicable. If, in any
judicial proceeding, a court shall refuse to enforce in such action any of the
separate covenants deemed included herein, then at the option of Purchaser, or
its affiliates, wholly-unenforceable covenants shall be deemed eliminated from
the provisions hereof for the purpose of such proceeding to the extent necessary
to permit the remaining separate covenants to be enforced in such a proceeding.
The parties intend to have covenants enforceable to the fullest extent of the
law as to scope, time and geography.
(d) The parties agree that due to the unique nature of the
services and capabilities of Sellers, Stockholders and TV Stockholder, there can
be no adequate remedy at law for any breach of their respective obligations
hereunder, that any such breach may allow Sellers, Stockholders and TV
Stockholder and/or third parties to unfairly compete with Purchaser or its
affiliates resulting in irreparable harm to Purchaser or its affiliates, and
therefore, that upon any such breach or any threat thereof, Purchaser or its
affiliates shall be entitled to appropriate equitable relief in addition to
whatever remedies it might have at law.
(e) Sellers, Stockholders and TV Stockholder acknowledge,
represent and warrant to Purchaser that the covenants in this Section 6.6 are
reasonably necessary for the protection of Purchaser's interests under this
Agreement and are not unduly restrictive upon it, her or him, and that
notwithstanding any other provision of this Agreement, this Section 6.6 shall
survive the Closing and shall terminate as of the third anniversary of Closing
and not sooner.
6.7 Further Assurances. Following the Closing, Sellers,
------------------
Stockholders and TV Stockholder shall use their commercially reasonable efforts
to obtain any consents and approvals
31
of, or effect the notification of or filing with, each person or authority,
whether private or governmental, whose consent or approval is required in order
to permit the consummation of the Acquisition and the transactions contemplated
hereby and to enable Purchaser to conduct and operate the Business substantially
as presently conducted. Following the Closing, each party shall prepare,
execute, and deliver such further instruments, and shall take or cause to be
taken such other or further action, as any party shall reasonably request of any
other party at any time or from time to time in order to consummate the terms
and provisions of this Agreement, provided that in any such case the requesting
party shall pay the reasonable out-of-pocket costs incurred by the party
complying with such request. Sellers, Stockholders and TV Stockholder shall also
reasonably cooperate with any audits of the Financial Statements and shall
execute any such representation letters satisfactory to their respective
certified public accountants with respect thereto that are reasonably requested
by Purchaser or its certified public accountants.
6.8 Advice of Changes. For a period of one year, each of the
-----------------
Sellers and Stockholders and TV Stockholder will promptly advise Purchaser in
writing of any event occurring subsequent to the date of this Agreement that
would demonstrate that their respective representations or warranties herein
were untrue or inaccurate in any material respect as of the date of the Closing,
provided, however, no disclosure made by Sellers or Stockholders or TV
Stockholder to Purchaser pursuant to this Section 6.8 shall give rise to any
liability of Sellers or Stockholders or TV Stockholder to Purchaser if made
prior to the Closing. If appropriate, Sellers or Stockholders or TV Stockholder
may fulfill their obligations under this Section 6.8 prior to the Closing by
updating the applicable disclosure schedules attached to this Agreement and
notifying Purchaser of such changes in writing.
6.9 Employees, Bonuses and Termination Payments.
-------------------------------------------
(a) At or before the Closing or within fifteen days thereafter,
Sellers shall pay all amounts due as of the date of the Closing to all Service
Providers by way of salaries, bonuses, vacation, incentive, commission,
severance or termination payments and shall pay or cause to be paid over to the
appropriate Governmental Entities or other appropriate persons or entities all
withheld taxes, social security and other payments accrued and payable with
respect to such Service Providers through the Closing.
(b) Sellers shall promptly provide, or use their best efforts
to cause any administrator of any Seller Employee Plan to provide, to Purchaser
or their designee at any time before or after the Closing, all information in
the custody or control of Sellers requested by Purchaser or their designee to
(i) determine whether there have been any failures to comply with the
continuation health care requirements of COBRA on or prior to the Closing, and
(ii) correct any such failures.
6.10 Cooperation by Sellers. Sellers shall provide HK or Purchaser
----------------------
with (i) such assistance as may reasonably be requested by HK or Purchaser in
connection with the preparation of any Return or in connection with any audit or
other examination by any taxing authority or any judicial or administrative
proceedings relating to liability for Taxes, (ii) any records or other
information which may be relevant to any such Return, audit or examination,
32
proceeding or determination, and (iii) any final determination of any such audit
or examination, proceeding or determination that affects any amount required to
be shown on any Return of the other for any period. Without limiting the
generality of the foregoing, Sellers shall retain, until the applicable statute
of limitations (including any extensions) have expired, copies of all Returns,
supporting work schedules and other records or information which may be relevant
to such Returns for all tax periods or portions thereof ending before or
including the Closing and shall not destroy or otherwise dispose of any such
records without first providing the Purchaser with a reasonable opportunity to
review and copy the same.
6.11 Negotiation with Others. Until November 30, 1996, Sellers shall
-----------------------
not (nor will they permit any of their general partners, limited partners,
members, agents, representatives or affiliates to), directly or indirectly, take
any of the following actions with any party other than Purchaser and its
designees: (i) solicit, encourage, initiate or participate in any negotiations
or discussions with respect to the admission of any additional general or
limited partners or any offer or proposal to acquire all or substantially all of
Sellers' business and properties whether by merger, purchase of assets or equity
interest, tender offer or otherwise, or the sale, transfer or issuance of any
equity interests of Sellers, (ii) disclose any information not customarily
disclosed to any person concerning Sellers' business and properties or afford to
any person or entity access to its properties, books or records in connection
with a transaction of the type referred to in clause (i), or (iii) assist or
cooperate with any person to make any proposal to consummate a transaction of
the type referred to in clause (i). In the event Sellers shall receive any offer
or proposal, directly or indirectly, of the type referred to in clause (i) or
(iii) above, or any request for disclosure or access pursuant to clause (ii)
above, it shall immediately inform Purchaser as to any such offer or proposal
and will cooperate with Purchaser by furnishing any information with respect to
such offer or proposal it may reasonably request.
6.12 Termination of the Continuing LLCs. Sellers shall use their
----------------------------------
best efforts to terminate existing contracts and relationships with the non-
purchased LLCs by no later than April 30, 1997. Sellers further covenant to
terminate prior to Closing any agreements of the Operating Services Companies
and Purchased LLCs.
6.13 Payment of Taxes. Except as to such Taxes as may be disputed
----------------
in good faith, Sellers will pay in full when due all Taxes imposed upon Sellers
or with respect to its assets arising from any periods prior to and including
the Closing, whether due before or after the date hereof. For federal and state
income tax purposes, each of Sellers that shall be designated in this Agreement
as a partnership or limited liability company will continue to be at all times
through the day of the Closing, taxable as a partnership and not as a
corporation.
6.14 Guaranty by HK. HK hereby guarantees the complete and timely
--------------
performance by Purchaser of Purchaser's obligations hereunder and guarantees the
accuracy of the representations and warranties made by Purchaser herein.
6.15 Facilities Agreement and Non-Exclusive Trademark License. From
--------------------------------------------------------
the Closing until April 30, 1997, Purchaser and HK shall (i) allow, on an as-
needed basis, the assignment of up to two employees and the use of Purchaser's
equipment, including the use of
33
certain back office software related to invoicing and purchasing and the resume
management program and the data contained therein only as it relates to
TeamAlliance Connecticut, LLC, in the New York office to be used for the phasing
out, liquidation or other disposition (i.e. winding down) of the Continuing LLCs
by the Operating Partnership and (ii) grant the Operating Partnership a limited,
non-exclusive, non-transferable technology license in the form attached hereto
as Exhibit T (the "Technology License"); provided, however, that Sellers agree
that they shall reimburse Purchaser or HK for any monies paid to the employees
referred to in clause (i) above for services rendered to the Operating
Partnership pursuant to the foregoing clause (i).
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS
7.1 Conditions to Obligations of Purchaser and HK. Each and every
---------------------------------------------
obligation of Purchaser and HK to be performed at the Closing shall be subject
to the satisfaction as of on or before the Closing of the following conditions
(unless waived in writing by Purchaser and HK):
(a) The representations and warranties of Sellers, Stockholders
and TV Stockholder are true on the date of the Closing, and Sellers,
Stockholders and TV Stockholder shall be in compliance with all covenants
required to be complied with as of the Closing.
(b) The approval of the Acquisition and all transactions
contemplated by this Agreement by the general and limited partners and members
and stockholders of Sellers, in accordance with applicable laws and regulatory
requirements.
(c) The Closing shall have occurred on or before November 30,
1996.
(d) An opinion of counsel for Sellers, satisfactory to
Purchaser, as to matters usual in an acquisition transaction of this type.
(e) Completion of a "due diligence" investigation by Purchaser
and representatives of Purchaser, the results of which are satisfactory to
Purchaser in Purchaser's sole discretion and which, inter alia, revealed no
----------
material adverse conditions or material adverse changes in Sellers or the Assets
prior to the Acquisition.
(f) The obtaining of all material consents and approvals
required under Sellers' limited partnership agreements, limited liability
company operating agreements, charter documents or any other outstanding
contracts of Sellers, under applicable law, or otherwise, and the making of all
material or significant filings which are necessary or which Purchaser or ▇▇
▇▇▇▇▇ appropriate in connection with the Acquisition.
(g) Sellers shall have obtained all consents and approvals
required to consummate the transactions contemplated by this Agreement and the
Related Agreements, unless otherwise waived by mutual agreement.
34
(h) There shall be no pending or threatened lawsuit challenging
the Acquisition, the Agreement, the Related Agreements or the transactions
contemplated hereby and thereby, by any body or agency of the federal, state, or
local government or by any third party, and the consummation of the Acquisition
shall not have been enjoined by a court of competent jurisdiction as of the
Closing.
(i) Purchaser shall have received evidence (in the form of UCC-
3 termination statements and a recent UCC-1 financing statement search), at or
prior to the Closing, satisfactory to it of Sellers' title to all of the Assets
and Sellers' right to fully convey all such Assets described herein free and
clear of all Liens, other than the Permitted Liens specifically identified on
Schedule 2.14.
(j) Sellers, Stockholders and TV Stockholders shall have
delivered to Purchaser a certificate executed by each of them, dated the date of
the Closing, to the effect that the conditions set forth in subsections (a) and
(b) of this Section 7.1 have been satisfied.
(k) The form and substance of all certificates, instruments,
opinions, and other documents delivered or to be delivered to Purchaser under
this Agreement shall be satisfactory to Purchaser and its counsel in all
reasonable respects.
(l) Purchaser shall have received fully executed copies of the
Related Agreements.
(m) Purchaser and each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
shall have entered into an Employment Agreement, dated as of the date hereof, in
the forms attached hereto as Exhibit E.
---------
(n) Purchaser and Sellers shall have entered into the Contract
and Sublease Agreements dated as of the Closing in the form attached hereto as
Exhibit L or such form as may be reasonably satisfactory to HK and the Sellers'
---------
landlord.
(o) There shall have occurred no material adverse change in the
financial condition, the Business or the Assets or properties of Sellers which
materially and adversely affects the conduct of the Business as presently being
conducted, or the financial condition of Sellers since the date of the Financial
Statements.
(p) Sellers shall have provided Purchaser with all clearance
certificates or similar documents which may be required by any state taxing
authority in order to relieve Purchaser of any obligation to withhold any
consideration hereunder to satisfy or be applied to any Tax obligation. Sellers
shall furnish Purchaser an affidavit stating, under penalties of perjury, each
of Sellers' United States taxpayer identification number and that none of the
Sellers is a foreign person pursuant to Section 1445(b)(2) of the Code.
(q) Sellers, Stockholders, TV Stockholder, HK, Purchaser and an
escrow agent ("Escrow Agent") reasonably acceptable to Sellers, Stockholders, TV
▇▇▇▇▇▇▇▇▇▇▇,
▇▇
▇▇ and Purchaser shall have entered into an escrow agreement ("Escrow
Agreement") in the form attached hereto as Exhibit EA.
----------
7.2 Conditions to Obligations of Sellers. Each and every obligation
------------------------------------
of Sellers, Stockholders and TV Stockholder to be performed at the Closing shall
be subject to the satisfaction as of or before such time of the following
conditions (unless waived in writing by Sellers, Stockholders and TV
Stockholder):
(a) The representations and warranties of Purchaser and HK are
true on the date of the Closing, and Purchaser and HK shall be in compliance
with all covenants required to be complied with as of the Closing.
(b) Purchaser shall have obtained all consents and approvals
(including consents from governmental authorities) required to consummate the
transactions contemplated by this Agreement and the Related Agreements.
(c) Purchaser and HK shall have delivered to Sellers a
certificate executed by each of them, dated the date of the Closing, to the
effect that the conditions set forth in subsections (a) and (b) of this Section
7.2 have been satisfied.
(d) There shall be no pending or threatened lawsuit challenging
the Acquisition, the Agreement, the Related Agreements or the transactions
contemplated hereby and thereby, by any body or agency of the federal, state, or
local government or by any third party, and the consummation of the transaction
shall not have been enjoined by a court of competent jurisdiction as of the
Closing.
(e) The form and substance of all certificates, instruments,
assumptions, opinions, and other documents delivered or to be delivered to
Sellers under this Agreement shall be satisfactory to Sellers and its counsel in
all reasonable respects.
(f) Sellers shall have received fully executed copies of each
of the Related Agreements to which he, she or it is a party.
(g) An opinion of counsel for Purchaser and HK, satisfactory to
Sellers, as to matters usual in an acquisition transaction of this type.
(h) Purchaser and each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
shall have entered into an Employment Agreement, dated as of the date hereof, in
the forms attached hereto as Exhibit E.
---------
(i) There shall have occurred no material adverse change in the
financial condition, the business of Purchaser or HK which adversely affects the
conduct of the its business as presently being conducted, or the financial
condition of Purchaser or HK since September 30, 1996.
36
(j) Completion of "due diligence" investigation by Sellers,
Stockholders and their representatives, the results of which are satisfactory to
Sellers in their sole discretion and which, inter alia, reveal no material
adverse conditions or material adverse changes in HK or Purchaser prior to the
Closing.
(k) Purchaser shall have delivered to Sellers an agreement
assuming the Assumed Liabilities in form and substance reasonably satisfactory
to Sellers.
(l) Purchaser shall have executed the Technology License.
ARTICLE VIII
INDEMNIFICATION
8.1 Survival of Representations and Warranties.
------------------------------------------
(a) Notwithstanding any investigation conducted at any time
with regard thereto by or on behalf of any party, all representations and
warranties of Sellers, Stockholders, TV Stockholder and Purchaser and HK shall
survive the Closing hereunder for a period of three years following the Closing,
except for the representations set forth in Section 2.7 hereof which shall
survive until the applicable respective statute of limitations for such claims
by the respective taxing authorities shall have expired.
(b) As used in this Article VIII, except as otherwise indicated
in this Article VIII, any reference to a representation or warranty in any
section of this Agreement shall include the schedule relating to such section.
8.2 Indemnification of Purchaser.
----------------------------
(a) Sellers, Stockholders and TV Stockholder hereby agree,
severally, to indemnify and hold harmless Purchaser and its affiliates against
any and all losses, liabilities, damages, demands, claims, suits, actions,
judgments, causes of action, assessments, costs, and expenses, including,
without limitation, interest, penalties, reasonable attorneys' fees, any and all
expenses incurred in investigating, preparing, and defending against any
litigation, commenced or threatened, and any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation (collectively, "Purchaser
Damages"), asserted against, resulting from, imposed upon, or incurred by
Purchaser or its affiliates directly or indirectly, as a result of or arising
from any inaccuracy in or breach or nonfulfillment of any of the
representations, warranties, covenants, or agreements made by Sellers in this
Agreement or any facts or circumstances constituting such an inaccuracy, breach,
or nonfulfillment (all of which shall also be referred to as "Identifiable
Claims"), including, without limitation, the following:
(i) Any liabilities, indebtedness or obligations of
Sellers, Stockholders or TV Stockholder sought to be imposed on Purchaser,
whether such liabilities or obligations are contingent or otherwise or direct or
indirect, in existence on or prior to the
37
Closing or otherwise or based on any events, facts, or circumstances in
existence prior to or in connection with the Acquisition or in connection with
or arising from any activities or the operations of Sellers (collectively, the
"Liabilities"), which Liabilities relate to any services rendered or products or
goods sold or transferred, or to any omission with respect thereto, by Sellers
prior to the Closing;
(ii) Liabilities imposed on Purchaser or any of its
affiliates as a result of, arising from or related to, directly or indirectly,
any handling, discharge, disposal, release, or storage of any hazardous or toxic
substances, wastes or materials by any of Sellers or any predecessor of Sellers
or any other third party with respect to any of the properties owned, occupied
or leased by Sellers occurring prior to the Closing; and
(iii) Any Liabilities of Sellers imposed upon HK or
Purchaser as transferee of the Assets other than those expressly assumed in
Section 1.3 hereof or Schedule 1.3 hereto, including, without limitation, any
Liability arising out of obligations to the Operating LLCs, Sellers' Service
Providers (including, without limitation, any obligations under any employee
benefit, profit sharing, or pension or welfare plan) or out of Sellers' status
as employer or otherwise relative to such Service Providers.
(b) Stockholders hereby agree, severally, to indemnify and hold
harmless HK and Purchaser and its Affiliates against any and all Purchaser
Damages, asserted against, resulting from, imposed upon, or incurred by
Purchaser or its Affiliates directly or indirectly, as a result of or arising
from any inaccuracy in or breach or nonfulfillment of any of the
representations, warranties, covenants, or agreements made by Stockholders in
this Agreement or any facts or circumstances constituting such an inaccuracy,
breach, or nonfulfillment (all of which shall also be referred to as
"Identifiable Claims").
(c) TV Stockholder hereby agree, severally, to indemnify and
hold harmless HK and Purchaser and its Affiliates against any and all Purchaser
Damages, asserted against, resulting from, imposed upon, or incurred by HK and
Purchaser or its Affiliates directly or indirectly, as a result of or arising
from any inaccuracy in or breach or nonfulfillment of any of the
representations, warranties, covenants, or agreements made by TV Stockholder in
this Agreement or any facts or circumstances constituting such an inaccuracy,
breach, or nonfulfillment (all of which shall also be referred to as
"Identifiable Claims").
8.3 Indemnification of Sellers, Stockholders and TV Stockholder.
-----------------------------------------------------------
Purchaser and HK hereby agree, severally, to indemnify and hold harmless the
Sellers, Stockholders and TV Stockholder against any and all losses,
liabilities, damages, demands, claims, suits, actions, judgments, causes of
action, assessments, costs, and expenses, including, without limitation,
interest, penalties, reasonable attorneys' fees, any and all expenses incurred
in investigating, preparing, and defending against any litigation, commenced or
threatened, and any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation (collectively, "Sellers Damages"), asserted against,
resulting from, imposed upon, or incurred or suffered by Sellers, Stockholders
or TV Stockholder directly or indirectly, as a result of or arising from (i) any
inaccuracy in or breach or nonfulfillment of any of the representations,
warranties,
38
covenants, or agreements made by Purchaser or HK in this Agreement or any facts
or circumstances constituting such an inaccuracy, breach, or nonfulfillment,
(ii) the operation of the Business by Purchaser or HK after the Closing or (iii)
any liabilities, indebtedness or obligations of HK or Purchaser sought to be
imposed on Sellers, whether such liabilities or obligations are contingent or
otherwise or direct or indirect, based on any events, facts, or circumstances in
existence following the Acquisition or in connection with or arising from any
activities or the operations of HK or Purchaser (collectively, the
"Liabilities"), which Liabilities relate to any services rendered or products or
goods sold or transferred, or to any omission with respect thereto, by HK or
Purchaser after the Closing (all of which shall be referred to as "Identifiable
Claims").
8.4 Procedure for Indemnification with Respect to Third-Party
---------------------------------------------------------
Claims.
------
(a) If Purchaser or its Affiliates or Sellers or Stockholders
or TV Stockholder (the party seeking such indemnification hereinafter referred
to as the "Indemnified Party" and the party against whom such indemnification is
sought is hereinafter referred to as the "Indemnifying Party") determines to
seek indemnification under this Article VIII with respect to Identifiable Claims
resulting from the assertion of liability by third parties, the Indemnified
Party shall give notice to the Indemnifying Parties within 30 days of the
Indemnified Party becoming aware of any such Identifiable Claim or of facts upon
which any such Identifiable Claim will be based; the notice shall set forth such
material information with respect thereto as is then reasonably available to the
Indemnified Party. In case any such liability is asserted against the
Indemnified Party or its affiliates, and the Indemnified Party notifies the
Indemnifying Parties thereof, the Indemnifying Parties will be entitled, if such
Indemnifying Parties so elect by written notice delivered to the Indemnified
Party within 30 days after receiving the Indemnified Party's notice, to assume
the defense thereof with counsel reasonably satisfactory to the Indemnified
Party (and if such Indemnifying Parties so assume such defense, such Indemnified
Parties or affiliates thereof shall not compromise or settle such Identifiable
Claim without the prior consent of the Indemnifying Party). Notwithstanding the
foregoing, (i) the Indemnified Party or its affiliates shall also have the right
to employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Party, and (ii) the rights of
the Indemnified Party or its affiliates to be indemnified hereunder in respect
of Identifiable Claims resulting from the assertion of liability by third
parties shall not be adversely affected by their failure to give notice pursuant
to the foregoing unless, and, if so, only to the extent that, such Indemnifying
Parties are materially prejudiced thereby; provided, however, the Indemnifying
Party shall not be liable for attorneys fees and expenses incurred by the
Indemnified Party prior to the Indemnified Party's giving notice to the
Indemnifying Party of an Identifiable Claim. With respect to any assertion of
liability by a third party that results in an Identifiable Claim, the parties
hereto shall make available to each other all relevant information in their
possession material to any such assertion.
(b) The Indemnified Party will cooperate in the defense of any
Identifiable Claim and will provide full access to documents, assets,
properties, books and records and will make available all officers, directors
and employees for investigation, depositions and trial.
39
(c) In the event that such Indemnifying Parties, within 60 days
after receipt of the aforesaid notice of an Identifiable Claim, fail to assume
the defense of the Indemnified Party or its affiliates against such Identifiable
Claim, the Indemnified Party or its affiliates shall have the right to undertake
the defense, compromise, or settlement of such action on behalf of and for the
account, expense, and risk of such Indemnifying Parties.
(d) Notwithstanding anything in this Article VIII to the
contrary, if there is a reasonable probability that an Identifiable Claim may
materially adversely affect the Indemnified Party or its affiliates, the
Indemnified Party or its affiliates shall have the right to participate in such
defense, compromise, or settlement and such Indemnifying Parties shall not,
without the Indemnified Party's written consent (which consent shall not be
unreasonably withheld), settle or compromise any Identifiable Claim or consent
to entry of any judgment in respect thereof unless such settlement, compromise,
or consent includes as an unconditional term thereof the giving by the claimant
or the plaintiff to the Indemnified Party of a release from all liability in
respect of such Identifiable Claim.
8.5 Procedure For Indemnification with Respect to Non-Third Party
-------------------------------------------------------------
Claims. In the event that the Indemnified Party asserts the existence of an
------
Identifiable Claim giving rise to Purchaser Damages or Sellers Damages, as
applicable (but excluding claims resulting from the assertion of liability by
third parties), it shall give written notice to the Indemnifying Parties. Such
written notice shall state that it is being given pursuant to this Section 8.5,
specify the nature and amount of the Identifiable Claim asserted and indicate
the date on which such assertion shall be deemed accepted and the amount of
Identifiable Claim deemed a valid Identifiable Claim (such date to be
established in accordance with the next sentence). If such Indemnifying Parties,
within 60 days after the mailing of notice by the Indemnified Party, shall not
give written notice to the Indemnified Party announcing its intent to contest
such assertion of the Indemnified Party, such assertion shall be deemed accepted
and the amount of claim shall be deemed a valid Identifiable Claim. In the
event, however, that such Indemnifying Parties contest the assertion of an
Identifiable Claim by giving such written notice to the Indemnified Party within
said period, then the parties shall act in good faith to reach agreement
regarding such claim. If the parties hereto, acting in good faith, cannot reach
agreement with respect to such claim within ten (10) days after notice thereof,
such Identifiable Claim will be settled or resolved pursuant to Section 1.8
hereof. To the extent that there are any Identifiable Claims outstanding on any
Payment Date under Section 1.6, Purchaser shall deposit that portion of the
Aggregate Subsequent Payments equal to the amount of the Identifiable Claim by
the Indemnified Party into an escrow account pursuant to the terms of the Escrow
Agreement to the extent not previously deposited; provided, however, that as to
(i) an Identifiable Claim described in Section 8.2(b), Purchaser may make such
deposit only from that portion of the Aggregate Subsequent Payments payable to
TeamAlliance Technology Partners, Inc., (ii) an Identifiable Claim described in
Section 8.2(c), Purchaser may make such deposit only from that portion of the
Aggregate Subsequent Payments payable to Team Visions, Inc., and (iii) an
Identifiable Claim described in Section 8.2(a), Purchaser may first make such
deposit only from that portion of the Aggregate Subsequent Payments payable to
TeamAlliance Technology Partners, Inc. and if such Identifiable Claim exceeds
the Aggregate Subsequent Payments payable to TeamAlliance Technology Partners,
Inc., Purchaser may then make an additional deposit to the extent of such
40
excess from that portion of the Aggregate Subsequent Payments payable to Team
Visions, Inc.; provided further, however, that in no event shall deposits under
this Section 8.5 from that portion of the Aggregate Subsequent Payments payable
to (i) Team Visions, Inc. exceed the lesser of $1,000,000 in the aggregate or
20% of Purchaser Damages (to the extent not previously deposited) and (ii)
TeamAlliance Technology Partners, Inc. exceed 80% of Purchaser Damages (to the
extent not previously deposited).
8.6 Threshold Determination of and Limitations on Indemnification.
-------------------------------------------------------------
Notwithstanding anything in this Article VIII to the contrary, (a) Sellers,
Stockholders and TV Stockholder shall not be under any obligations of indemnity
with respect to HK or Purchaser, and Purchaser or HK shall not be under any
obligations to Sellers, Stockholders or TV Stockholder until such time as HK and
Purchaser, or Sellers or Stockholders or TV Stockholder, respectively, have
incurred Damages in the aggregate in excess of $25,000, for which HK and
Purchaser, or Sellers or Stockholders or TV Stockholder, respectively, would
have been entitled to be indemnified against but for the provisions of this
Section 8.6, (b) in no event shall the aggregate liability of Sellers and
Stockholders for Purchaser Damages exceed the lesser of $4,000,000 or 80% of
Purchaser Damages, (c) in no event shall the aggregate liability of TV
Stockholder for Purchaser Damages exceed the lesser of $1,000,000 or 20% of
Purchaser Damages, and (d) in no event shall the aggregate liability of HK and
Purchaser for Sellers, Stockholders' and TV Stockholder's Damages (other than
damages as a result of or arising from a breach of Sections 1.5 or 1.6) exceed
$5,000,000.
ARTICLE IX
TERMINATION
9.1 Termination by Mutual Consent. At any time prior to the
-----------------------------
Closing, this Agreement may be terminated as provided below:
(a) HK, Purchaser, Sellers, the Stockholders and TV Stockholder
may terminate this Agreement by mutual written consent;
(b) Purchaser may terminate this Agreement if (i) there has
been a material breach of any representation, warranty or covenant of Sellers,
Stockholders or TV Stockholder set forth herein, which breach is not curable or,
if curable, is not cured within 10 days after written notice of such breach is
given by Purchaser to Sellers or Stockholders or TV Stockholder, as applicable;
(c) Sellers, Stockholders and TV Stockholder may terminate this
Agreement if (i) there has been a material breach of any representation,
warranty or covenant of Purchaser set forth herein, which breach is not curable
or, if curable, is not cured within 10 days after written notice of such breach
is given by Sellers, Stockholders or TV Stockholder to Purchaser;
(d) Purchaser may terminate this Agreement by giving written
notice to Sellers if the Closing shall not have occurred on or before November
30, 1996 by reason of the
41
failure of any condition precedent under Section 7.1 or 7.2 hereof (unless the
failure results primarily from a breach by Purchaser of any representation,
warranty or covenant contained in this Agreement); or
(e) Sellers, Stockholders or TV Stockholder may terminate this
Agreement by giving written notice to Purchaser if the Closing shall not have
occurred on or before November 30, 1996 by reason of the failure of any
condition precedent under Section 7.1 or 7.2 hereof (unless the failure results
primarily from a breach by Sellers, Stockholders or TV Stockholder of any
representation, warranty or covenant contained in this Agreement).
9.2 Effect of Termination. If any party terminates this Agreement
---------------------
pursuant to Section 9.1, all obligations of the parties hereunder shall
terminate without any liability of any party to any other party (except for any
liability of any party for breaches of this Agreement).
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Notice. All notices and other communications required or
------
permitted under this Agreement shall be delivered to the parties at the address
set forth below, or at such other address that they designate by notice to all
other parties in accordance with this Section 10.1. Any party delivering notice
to HK or Purchaser shall deliver a copy to: ▇▇▇▇ ▇▇▇▇▇▇ & Associates, Inc.,
Attn: ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ and to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Esq. Any party delivering notice to Sellers, TV Stockholder and/or ▇▇▇▇▇▇▇▇▇
▇▇▇▇ shall deliver a copy to: Seyfarth, Shaw, Fairwearther & ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. and to
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. All notices and communications shall be deemed to have
been received unless otherwise set forth herein: (i) in the case of personal
delivery, on the date of such delivery; (ii) in the case of telex or facsimile
transmission, on the date on which the sender receives confirmation by telex or
facsimile transmission that such notice was received by the addressee, provided
that a copy of such transmission is additionally sent by mail as set forth in
(iv) below; (iii) in the case of overnight air courier, on the second business
day following the day sent, with receipt confirmed by the courier; and (iv) in
the case of mailing by first class certified or registered mail, postage
prepaid, return receipt requested, on the fifth business day following such
mailing.
10.2 Entire Agreement. This Agreement, the exhibits and schedules
----------------
hereto, and the documents referred to herein embody the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and supersede all prior and contemporaneous agreements and understandings, oral
or written, relative to said subject matter. The parties acknowledge and agree
that each is relying solely on the representations and warranties contained
herein and therein and the schedules, exhibits, and other materials specifically
referred
42
to herein, in determining whether to enter into this Agreement and the Related
Agreements to which each is a party.
10.3 Binding Effect; Assignment. This Agreement and the various
--------------------------
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon Sellers, Stockholders, TV Stockholder their respective successors
and permitted assigns, and HK and Purchaser and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interests, or
obligations hereunder shall be transferred or assigned (by operation of law or
otherwise) by any of the parties hereto without the prior written consent of the
other parties, except for transfers and assignments with respect to applicable
laws of descent and distribution and except that HK's and Purchaser's rights
hereunder may be assigned in connection with a merger of HK or Purchaser with or
into each other or into a third party or a sale of all or substantially all of
HK's or Purchaser's assets.
10.4 Captions. The article and section headings of this Agreement
--------
are inserted for convenience only and shall not constitute a part of this
Agreement in construing or interpreting any provision hereof.
10.5 Expenses of Transaction; Taxes. Sellers shall pay in full all
------------------------------
professional fees and expenses incurred by Sellers and the Business in
connection with this Agreement and the Related Agreements, and the transactions
contemplated hereby and thereby. HK and Purchaser shall pay in full all
professional fees and expenses incurred by HK and Purchaser in connection with
this Agreement and the Related Agreements, and the transactions contemplated
hereby and thereby. Sellers shall pay all applicable sales, use, excise,
transfer, documentary and any other similar taxes or arising out of the purchase
and sale of the Assets.
10.6 Waiver; Consent. This Agreement may not be changed, amended,
---------------
augmented, or discharged (other than by performance), in whole or in part,
except by a writing executed by the parties hereto, and no waiver of any of the
provisions or conditions of this Agreement or any of the rights of a party
hereto shall be effective or binding unless such waiver shall be in writing and
signed by the party claimed to have given or consented thereto. Except to the
extent that a party hereto may have otherwise agreed in writing, no waiver by
that party of any condition of this Agreement or breach by the other party of
any of its obligations or representations hereunder or thereunder shall be
deemed to be a waiver of any other condition or subsequent or prior breach of
the same or any other obligation or representation by the other party, nor shall
any forbearance by the first party to seek a remedy for any noncompliance or
breach by the other party be deemed to be a waiver by the first party of its
rights and remedies with respect to such noncompliance or breach.
10.7 Third-Party Beneficiaries. Except as otherwise expressly
-------------------------
provided for in this Agreement, nothing herein, expressed or implied, is
intended or shall be construed to confer upon or give to any person, firm,
corporation, or legal entity, other than the parties hereto, any rights,
remedies, or other benefits under or by reason of this Agreement.
10.8 Counterparts and Facsimiles. This Agreement may be executed
---------------------------
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of
43
which taken together shall constitute one and the same instrument. All
signatures may be delivered by facsimile which shall be as binding as if an
original. All facsimile signatures shall be followed by an exchange of original
signatures as soon as possible thereafter.
10.9 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
10.10 Incorporation of Exhibits and Schedules. The exhibits and
---------------------------------------
schedules and recitals identified in this Agreement are incorporated herein by
reference and made a part hereof.
10.11 Governing Law. This Agreement shall in all respects be
-------------
construed in accordance with and governed by the laws of the State of New York
as applied to agreements among New York residents entered into and to be
performed entirely within New York.
44
IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be executed as of the day and year first above written.
▇▇▇▇, ▇▇▇▇▇▇ &
ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Its: CEO / PRES.
TEAMALLIANCE TECHNOLOGY PARTNERS, L.P.
/s/ Teamalliance Technology Partners, Inc.
By:__________________________________________
General Partner, By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its:_________________________________________
President
Its:_________________________________________
TEAMALLIANCE TECHNOLOGY PARTNERS, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:_________________________
President
Its:________________________
TEAM VISIONS, INC.
/s/ ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
By:_________________________
President
Its:________________________
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
____________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
____________________________
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
____________________________
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
TEAMALLIANCE CHICAGO, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Its: President
--------------------------
TEAMALLIANCE COLORADO, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Its: President
--------------------------
TEAMALLIANCE HOUSTON, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Its: President
--------------------------
TEAMALLIANCE ORLANDO-JACKSONVILLE, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Its: President
-------------------------
TEAMALLIANCE TAMPA BAY, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Its: President
-------------------------
TEAMALLIANCE UTAH/NEVADA, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Its: President
------------------------
TA ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Its: CEO/President
------------------------
Pursuant to Item 601(b)(2) of Regulation S-K, the attachments, exhibits and
schedules to this Asset Purchase Agreement have been omitted. Such attachments,
exhibits and schedules will be submitted to the Securities and Exchange
Commission upon request.
