1
ASSET PURCHASE AGREEMENT
by and among
OSAGE SYSTEMS GROUP, INC.
and
OSAGE COMPUTER GROUP, INC.
as Buyer,
LEVERAGED SOLUTIONS, INC.
as Seller
and
XXXXXXX XXXXXXXXXXXX
and
XXXXXX XXXXXXX
the Shareholders of Leveraged Solutions, Inc.
August 11, 1999
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TABLE OF CONTENTS
ARTICLE Page
1. SALE AND TRANSFER OF ASSETS 1
1.1 SALE AND PURCHASE OF THE ASSETS. 1
1.2 RESPONSIBILITY FOR LIABILITIES. 2
1.3 CONSIDERATION. 2
1.4 ESCROW CONSIDERATION. 3
1.5 POSSIBLE PURCHASE PRICE ADJUSTMENT. 3
1.6 ALLOCATION OF CLOSING PURCHASE PRICE. 4
1.7 INCREMENTAL TAX AMOUNT. 4
1.8 ADJUSTMENT AMOUNT. 5
2. CLOSING. 6
2.1 CLOSING DATE. 6
2.2 CLOSING TRANSACTIONS. 6
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SHAREHOLDERS 8
3.1 ORGANIZATION, QUALIFICATION AND STATUS. 8
3.2 CORPORATE INSTRUMENTS AND RECORDS. 9
3.3 CAPITALIZATION. 9
3.4 OWNERSHIP OF SHARES. 9
3.5 NO SUBSIDIARY. 10
3.6 DUE AUTHORIZATION OF SELLER. 10
3.7 AUTHORITY OF SHAREHOLDERS. 10
3.8 NO VIOLATION. 11
3.9 TITLE TO ASSETS. 11
3.10 FINANCIAL STATEMENTS. 11
3.11 ABSENCE OF UNDISCLOSED AND CONTINGENT LIABILITIES. 12
3.12 NO ADVERSE CHANGES. 12
3.13 GUARANTEES. 12
3.14 TAX MATTERS. 12
3.15 LITIGATION. 14
3.16 LEASED REAL PROPERTY. 14
3.17 OWNED TANGIBLE PERSONAL PROPERTY. 14
3.18 CONDITION OF BUILDINGS AND TANGIBLE PERSONAL PROPERTY. 15
3.19 INTENTIONALLY OMITTED. 15
3.20 MATERIAL CONTRACTS. 15
3.21 PURCHASE COMMITMENTS AND BIDS. 16
3.22 BANKING MATTERS. 17
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3.23 LABOR AND EMPLOYMENT MATTERS. 17
3.24 TERMINATION OF BUSINESS RELATIONSHIPS. 18
3.25 CUSTOMERS. 18
3.26 PRODUCT WARRANTIES. 18
3.27 INSURANCE. 18
3.28 COMPLIANCE WITH LAWS. 19
3.29 LICENSES AND PERMITS. 19
3.30 NO INTEREST IN SUPPLIERS. 19
3.31 ALL BUSINESS CONDUCTED BY THE SELLER. 19
3.32 ENVIRONMENTAL MATTERS. 19
3.33 INTELLECTUAL PROPERTY MATTERS. 20
3.34 INVESTMENT INTENT. 20
3.35 LABOR MATTERS. 22
3.36 BULK SALES COMPLIANCE AND TRANSFER TAXES. 22
3.37 NO SIGNIFICANT ITEMS EXCLUDED. 22
3.38 DISCLOSURE. 22
4. REPRESENTATIONS AND WARRANTIES OF OSAGE AND SUB 22
4.1 ORGANIZATION AND QUALIFICATION. 23
4.2 CORPORATE INSTRUMENTS AND RECORDS. 23
4.3 AUTHORIZATION; VALID AND BINDING OBLIGATION. 23
4.4 LITIGATION. 23
4.5 STOCK CONSIDERATION. 24
4.6 CAPITALIZATION. 24
4.7 SEC REPORTS. 24
4.8 DISCLOSURE. 25
4.9 NO ADVERSE CHANGES. 25
5. AGREEMENTS OF THE PARTIES 25
5.1 ACCESS TO INFORMATION. 25
5.2 CONFIDENTIALITY; NO SOLICITATION. 25
5.3 FILINGS. 27
5.4 ALL REASONABLE EFFORTS. 27
5.5 PUBLIC ANNOUNCEMENTS. 27
5.6 DOCUMENTS AT CLOSING. 27
5.7 PROHIBITION ON TRADING IN BUYER STOCK. 28
5.8 TAX MATTERS. 28
5.9 GOVERNMENTAL AUTHORITY. 28
5.10 ABSENCE OF BROKER OR FINDER. 28
5.11 COOPERATION; FURTHER ASSURANCES. 29
5.12 FURTHER MUTUAL COVENANTS. 29
5.13 RESTRICTIONS ON TRANSFER OF OSAGE STOCK. 29
6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER 29
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6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; SELLER'S AND SHAREHOLDERS' PERFORMANCE. 29
6.2 NO ADVERSE CHANGE. 30
6.3 NO LOSS. 30
6.4 NO INJUNCTION; CONSENTS. 30
6.5 ACTIONS BY THE SHAREHOLDERS AND SELLER. 30
6.6 UNIFORM COMMERCIAL CODE SEARCHES. 30
7. CONDITIONS TO THE OBLIGATIONS OF THE SELLER AND THE SHAREHOLDERS 30
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; BUYER PERFORMANCE. 31
7.2 NO ADVERSE CHANGE. 31
7.3 NO LOSS. 31
7.4 NO INJUNCTION; CONSENTS. 31
7.5 ACTIONS BY BUYER. 31
7.6 CONSENTS AND PROCEEDINGS. 31
8. INDEMNIFICATION; SURVIVAL OF REPRESENTATIONS AND WARRANTIES 32
8.1 INDEMNIFICATION. 32
8.2 SURVIVAL. 32
8.3 METHODS OF ASSERTING CLAIMS FOR INDEMNIFICATION. 33
8.4 LIMITATIONS ON AMOUNT. 34
8.5 EXCLUSIVE REMEDIES. 34
9. MISCELLANEOUS 34
9.1 NOTICES. 34
9.2 ENTIRE AGREEMENT; ASSIGNMENT. 35
9.3 BINDING EFFECT; BENEFIT. 35
9.4 HEADINGS. 35
9.5 COUNTERPARTS. 36
9.6 GOVERNING LAW. 36
9.7 ARBITRATION. 36
9.8 SEVERABILITY. 36
9.9 EXPENSES. 36
9.10 AMENDMENT AND MODIFICATION. 36
9.11 DEFINITIONS. 37
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Exhibits
A - Escrow Agreement
B - Registration Rights Agreement
C - Employment Agreements (Xxxxxxx Xxxxxxxxxxxx and Xxxxxx Xxxxxxx)
D - General Assignment and Xxxx of Sale
E - Form 8594
F - Note
G - Pledge Agreement
Schedules
1.5 Possible Purchase Price Adjustment
1.6 Allocation of Purchase Price
1.7 Estimate of Incremental Tax Amount
3.1 Organization
3.3 Capitalization
3.7 Authority of Shareholders
3.8 No Violation
3.10 Financial Statements
3.12 No Adverse Changes
3.13.2 Guarantees
3.14 Tax Matters
3.15 Litigation
3.16 Leased Real Property
3.17 Tangible Personal Property
3.20 Material Contracts
3.22 Banking Matters
3.23 Labor and Employment Matters
3.25 Five Largest Customers
3.26 Product Warranties
3.27 Insurance
3.29 Licenses and Permits
3.32 Environmental Matters
3.33.1 Intellectual Property Matters
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4.6 Capitalization (Buyer)
6.2 No Adverse Change
9.11 Assets
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), made this 11th day
of August, 1999 by and among OSAGE SYSTEMS GROUP, INC., a publicly-owned
Delaware corporation ("Osage") and OSAGE COMPUTER GROUP, INC. ("Sub"), a
Delaware corporation which is a wholly-owned subsidiary of Osage (Osage and Sub
are collectively referred to as "Buyer"), LEVERAGED SOLUTIONS, INC., an Ohio
corporation ("Seller"), and XXXXXXX XXXXXXXXXXXX and XXXXXX XXXXXXX, the
shareholders (the "Shareholders") of Seller.
WITNESSETH:
WHEREAS, Seller operates a consulting division which is engaged in
the provision of services for data warehousing and software training (the
"Business");
WHEREAS, Seller owns the "Optiload" software program and operates a
division for "Optiload" services and products, which is expressly excluded from
the Business; and
WHEREAS, Seller desires to sell all of the assets it currently uses
or which it owns and are usable in connection with the Business as currently
conducted, which assets include but are not limited to contract rights,
computers, desks, furniture and the goodwill and going concern value of the
Business.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, agreements and representations and warranties herein contained, and
for other good and legal consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. SALE AND TRANSFER OF ASSETS
1.1 Sale and Purchase of the Assets.
1.1.1 Subject to the terms and conditions hereof and on the basis of
and in reliance upon the covenants, agreements and representations and
warranties set forth herein, on the Closing Date, Seller shall sell, assign,
transfer, convey and deliver the Assets to Sub, on behalf of Buyer, and Buyer
shall purchase the Assets from Seller. The Assets shall be sold, transferred and
conveyed by Seller to Buyer free and clear of any and all Liens.
1.1.2 In addition to the foregoing, Seller will, upon Buyer's
request and without additional consideration, at and subsequent to the Closing
Date, execute and deliver all such further instruments of conveyance and
transfer and confirmation thereof as may be requested by Buyer in order to make
further effective the provisions of this Agreement and to assure the
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transfers and vesting of title provided for by this Agreement. All such
transfers and assignments of title shall vest and be effective on the Closing
Date.
1.2 Responsibility for Liabilities.
Buyer shall not assume any Liabilities of Seller by virtue of this
Agreement or otherwise, including, without limitation, the following:
1.2.1 any obligation or liability related to accounts payable, Taxes
or warranty claims which relate to goods or services sold by Seller prior to
Closing;
1.2.2 claims or obligations related to Seller's employees arising
prior to or on the Closing Date, including, without limitation, severance
claims;
1.2.3 liabilities relating to environmental matters;
1.2.4 any liability or obligation (regardless of whether it is
related to the Business) under contracts, agreements, arrangements and
understandings of Seller arising prior to or on the Closing Date;
1.2.5 any intercompany debt or other liability between the Seller or
any shareholder or affiliate of Seller; and
1.2.6 any other liability or obligation of Seller, whether known or
unknown, absolute or contingent.
Notwithstanding anything herein or in any Related Document to the
contrary, except as otherwise expressly provided herein, Buyer is neither
assuming nor agreeing to pay or discharge any of the claims against, or
Liabilities or obligations of, Seller or of any other party and nothing in this
Agreement shall be construed to the contrary. All claims against, and
Liabilities and obligations of Seller, whether known or unknown, suspected or
unsuspected, direct or contingent, in litigation, threatened or not yet asserted
or existing with respect to any aspect of the Assets or the Business, or this
Agreement, arising or existing prior to or on the Closing Date or arising after
closing an account of the Business prior to Closing are and shall remain the
responsibility of Seller.
1.3 Consideration.
In consideration of the sale and delivery of the Assets by Seller,
Buyer shall pay and deliver to the Seller as the purchase price for the Assets,
the following:
1.3.1 At the Closing, subject to Section 1.4 relating to the deposit
of the Escrow Consideration (as defined below), the sum of Two Hundred Forty
Thousand Dollars ($240,000) in cash, cashier's check or by wire transfer to the
account specified in writing to Buyer at least three (3) days prior to Closing
(the "Cash Consideration").
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1.3.2 At the Closing, also subject to Section 1.4, delivery of
certificates representing that number of shares of the common stock, par value
$0.01 per share, of Osage (the "Osage Stock") having an aggregate value as of
the time and date of Closing (the "Closing Value") equal to Nine Hundred Sixty
Thousand Dollars ($960,000) (the "Stock Consideration"). For purposes of the
Agreement, the Closing Value shall equal the average closing price of the Osage
Stock as reported on the American Stock Exchange for the ten (10) trading days
immediately preceding the third trading day preceding the Closing Date (as
defined herein).
1.3.3 The consideration set forth in Subsections 1.3.1 and 1.3.2
shall constitute the "Purchase Price".
1.4 Escrow Consideration.
1.4.1 At the Closing, Buyer shall deposit into escrow the portions of
the Purchase Price identified in Subsection 1.4.2 hereafter (the "Escrow
Consideration"). The Escrow Shares (defined below) shall serve on a
non-exclusive basis as collateral for the indemnification obligations of the
Shareholders pursuant to this Agreement. Buyer consents to the appointment of
Cors & Xxxxxxx as the Escrow Agent. The deposit, maintenance and ultimate
disposition of the Escrow Consideration shall be governed by the terms of an
escrow agreement, the form of which is attached hereto as Exhibit A (the "Escrow
Agreement").
1.4.2 The Escrow Consideration shall consist of:
1.4.2.1 25% of the Cash Consideration identified in Subsection
1.3.1 herein, equal to Sixty Thousand Dollars ($60,000) (the "Escrow Cash"); and
1.4.2.2 25% of the shares of the Stock Consideration identified
in Subsection 1.3.2 herein, with an aggregate Closing Value of Two Hundred Forty
Thousand Dollars ($240,000) (the "Escrow Shares").
1.5 Possible Purchase Price Adjustment.
The Purchase Price set forth in Section 1.3 hereof is subject to
adjustment following the Closing Date as described on Schedule 1.5 hereto. Any
adjustment to the Purchase Price on account of the matters described on Schedule
1.5 shall be made through the release from the Escrow Consideration and return
to the Buyer of (i) cash in the amount of twenty percent (20%) of any
adjustment, released from the Escrow Cash, and (ii) Osage Stock with an
aggregate Closing Value equal to eighty percent (80%) of the amount of any
adjustment, to be released from the Escrow Shares; provided, however, that in
the event there is no Escrow Cash remaining to satisfy subsection (i) of this
Section 1.5, then the adjustment shall be made through the release to Buyer of
Escrow Shares to the extent available.
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1.6 Allocation of Closing Purchase Price.
The Purchase Price shall be allocated in accordance with Schedule 1.6
hereto. Each of the parties shall timely file Internal Revenue Service Form 8594
in substantially the form attached hereto as Exhibit E.
1.7 Incremental Tax Amount
1.7.1 It is intended by the parties that the transactions covered by
this Agreement, shall not be treated by the parties as a tax-free reorganization
under the Internal Revenue Code of 1986, as amended (the "Code"). Buyer intends
that the Seller or Shareholders should not be burdened by tax greater (or
sooner) than that which it or they would have suffered had the transaction
qualified as a tax-free reorganization under the Code. To that end, Buyer shall,
from time to time loan to the Seller or Shareholders sums equal to the
incremental amount of federal and state (if any) income taxes incurred by each
of them in connection with this sale transaction, in excess of the amount of
such federal and state income taxes that would have been incurred by them, had
the transaction been structured as a tax free reorganization under Section 368
of the Code. Such amount is hereinafter referred to as the "Incremental Tax
Amount." Buyer has agreed to loan the Incremental Tax Amount as set forth herein
in reliance upon (a) Seller's and Shareholders' representation in Section 3.14.9
hereof that the Seller is and has always been a qualified S corporation and (b)
Schedule 1.7, which provides the Seller's and Shareholders' reasonable estimate
of the Incremental Tax Amount. The Incremental Tax Amount shall be loaned by
Buyer to the Seller or Shareholders no later than 15 days prior to the date on
which the Seller's or such Shareholder's income tax return is due for filing (or
on such earlier dates that estimated tax payments are due) and a copy of such
tax returns shall, once filed, be provided to Buyer to verify the timely
submission of such returns. Such loans shall be made pursuant to the terms of a
promissory note, a form of which is attached hereto as Exhibit F (the "Note"),
to be executed by the Seller or Shareholder upon advancement of the Incremental
Tax Amount. Said Note shall be secured by a pledge, pursuant to a pledge
agreement (the "Pledge Agreement"), a form of which is attached hereto as
Exhibit G, of that portion of the Stock Consideration received by the Seller or
the Shareholder having a value equal to the principal amount of the Note. For
the purposes of the preceding sentence, the "value" of the Stock Consideration
shall be based on the average closing price of the Osage Stock as reported on
the principal exchange or market on which it trades or on which it is quoted for
the ten (10) trading days immediately preceding the third trading day preceding
the date of the Note. Subject to the terms of the Note, all amounts outstanding
thereunder shall be payable thirty (30) days after the earlier to occur of (x)
the date that the public resale of the Stock Consideration is permitted pursuant
to an effective registration statement filed with the SEC; (y) the date that the
public resale of that number of shares of Stock Consideration sufficient to pay
all amounts outstanding under the Note is permitted by virtue of Rule 144
promulgated under the Act, to the extent that Rule 144 permits the public resale
of such shares; and (z) the second anniversary of the Closing Date (such date
shall be referred to as the "Note Due Date"). As set forth in the Note, any
amounts due and outstanding thereunder may be offset against outstanding
Adjustment Amount payments due the Shareholders under Section 1.8 hereof, and
shall be forgiven if, prior to the Note Due Date, Osage terminates its business
and liquidates all of its assets (unless the liquidation follows a sale of its
business by Osage). Buyer
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does not indemnify Seller or the Shareholders for any Tax consequences of the
notes being forgiven or non-interest bearing to the extent interest must be
imputed for federal income tax purposes on such advances.
1.7.2 The amount and due dates for advances of the Incremental Tax
Amount to the Seller or Shareholders shall be provided by the Seller or
Shareholders, as applicable, in written notices (each a "Tax Notice") to the
Buyer no later than 30 days prior to each required payment hereunder. Buyer
shall have 15 days in which to review the Tax Notice and shall advise the Seller
or Shareholders, as applicable, of any objection to the same. If Buyer objects
to the computation of the Incremental Tax Amount or the due dates associated
therewith, and the Buyer and the Seller or Shareholders shall not reach
agreement on such issues within 10 days after Buyer has notified the Seller or
Shareholders of its objection, the Buyer and Seller or Shareholders shall submit
the issue to arbitration by a nationally recognized accounting firm independent
of any of the parties hereto as shall be mutually acceptable to the Buyer and
the Seller or Shareholders for resolution of the disagreement, it being agreed
that the Buyer and each of the Seller or Shareholders will jointly share the
fees and expenses of such accounting firm. Notwithstanding any dispute or
arbitration which may arise pursuant hereto, Buyer shall advance to Seller or
Shareholders that portion of the Incremental Tax Amount requested by Seller or
Shareholders in the Tax Notice which is not disputed or objected to by Buyer,
such advance to occur within 30 days after delivery of the Tax Notice.
1.8 Adjustment Amount.
1.8 In the event that the "Registration Value" of the "Retained Osage
Stock" on the "Registration Date" is less than the Closing Value per share as
applied to such number of shares of "Retained Osage Stock", then Buyer agrees to
pay to the Shareholders, in either cash or shares of common stock of Buyer, in
Buyer's sole discretion, the difference thereof. For the purposes hereof, the
following terms shall be defined in the manner hereinafter set forth:
(a) "Registration Value" shall be an amount equal to the average closing price
per share of the Osage Stock on the principal exchange, market or quotation
system upon which such shares regularly trade at the time, for the 10 trading
days immediately preceding the "Registration Date", multiplied by the number of
shares of Retained Osage Stock.
(b) "Registration Date" shall be defined as the date 18 months from the Closing,
provided, however, the Registration Date shall, if necessary, be extended until
such time as the public resale of the Retained Osage Stock has been included
within a Registration Statement filed by Buyer under the Act or is permitted
under Rule 144 (and if Rule 144 only permits public resale of certain of the
Retained Osage Stock, the definition "Registration Date" shall apply at
incremental periods as public resales are permitted under Rule 144).
(C) "Retained Osage Stock" shall be that number of the shares of Osage Stock as
are determined by subtracting from the original number of shares of Osage Stock
conveyed to Seller
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at Closing any shares of Osage Stock returned to Osage by virtue of Section 1.5
hereof and any shares of Osage Stock sold by Seller of Shareholders prior to the
Registration Date. In any event payment of the amounts due hereunder may be
offset by any amounts still remaining due but unpaid under the Note described in
Section 1.7. In the event that Buyer elects to pay the amount due hereunder in
shares of Osage's common stock, the value of such shares shall be an amount
equal to the average closing price per share of Osage's common stock on the
principal exchange, market or quotation system on which such shares regularly
trade at the time, for the ten (10) trading days immediately preceding the
determination of the Adjustment Amount.
2. CLOSING.
2.1 Closing Date.
The purchase and sale (the "Closing") provided for in this Agreement will
take place on the date and at such place as the parties may agree. The date of
the Closing is hereinafter referred to as the "Closing Date."
2.2 Closing Transactions.
At the Closing, the following transactions shall occur, all of such
transactions being deemed to occur simultaneously:
2.2.1 The Seller will deliver, or shall cause to be delivered, to the
Buyer, the following documents and shall take the following actions:
2.2.1.1 a General Assignment and Xxxx of Sale, in the form
attached hereto as Exhibit D (the "Xxxx of Sale"), and such other instruments of
transfer or assignment as shall be necessary or appropriate to vest in the Buyer
good and marketable title to the Assets;
2.2.1.2 a certificate of the Chief Executive Officer or
President of Seller, dated as of the Closing Date, to the effect that (1) all of
the representations and warranties made by the Seller upon the execution and
delivery of this Agreement remain true and correct in all material respects as
of the Closing Date and (2) Seller has performed and complied with in all
material respects all of the covenants, agreements and obligations set forth in
this Agreement to be performed or complied with by it on or prior to the Closing
Date;
2.2.1.3 A certificate shall be executed by the Shareholders to
the effect that: (i) all representations and warranties made by the Shareholders
under this Agreement are true and correct in all material respects as of the
Closing and (ii) the Shareholders have performed and complied with in all
material respects all of the covenants, agreements and obligations set forth in
this Agreement to be performed or complied with by them on or prior to the
Closing Date;
2.2.1.4 A certificate of good standing shall be delivered by
the Seller from the Secretary of State of the State of Ohio, dated at or about
the Closing, to the effect that the Seller is in good standing under the laws of
such state;
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2.2.1.5 An incumbency certificate shall be delivered by the
Seller signed by all of the officers of the Seller dated at or about the
Closing;
2.2.1.6 copies of resolutions adopted by the Board of Directors
and Shareholders of Seller duly authorizing and approving the execution of this
Agreement and each of the Related Documents to which it is a party, and the
consummation of the transactions contemplated hereby and thereby, certified by
an appropriate officer as being true and correct as of the Closing Date;
2.2.1.7 Certified Articles of Incorporation shall be delivered
by the Seller dated at or about the Closing and a copy of the Code of
Regulations of the Seller certified by the Secretary of the Seller dated at or
about the Closing;
2.2.1.8 The Escrow Agreement, in the form of Exhibit A, shall
be executed and delivered by the Seller and Shareholders, Buyer and the Escrow
Agent;
2.2.1.9 A registration rights agreement (the "Registration
Rights Agreement"), the form of which is attached hereto as Exhibit B, shall be
executed and delivered by the Seller;
2.2.1.10 An employment and noncompetition agreement (the
"Employment Agreement"), the form of which is attached hereto as Exhibit C,
shall be executed and delivered by each of the Shareholders;
2.2.1.11 The delivery of an opinion of counsel of the Seller
and Shareholders in form and substance reasonably satisfactory to the Buyer; and
2.2.1.12 The Seller and Shareholders shall have otherwise
executed such documents and agreements, provided such consents or approvals and
taken all actions as are required under this Agreement.
2.2.2 Buyer will deliver, or shall cause to be delivered, to the
Seller, the following documents and shall take the following actions:
2.2.2.1 Subject to subparagraph 2.2.2.3 herein, Buyer shall
deliver or shall cause to be delivered to the Seller a certificate or
certificates representing the Stock Consideration in Seller's name;
2.2.2.2 Subject to subparagraph 2.2.2.3 herein, Buyer shall
deliver or shall cause to be delivered to the Seller, the Cash Consideration by
wire transfer of immediately available funds to the bank account designated in
writing by the Seller at least three (3) days prior to Closing;
2.2.2.3 The Buyer shall deliver the Escrow Consideration into
escrow pursuant to the terms of the Escrow Agreement;
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2.2.2.4 A certificate shall be executed by the Buyer's Chief
Executive Officer to the effect that all representations and warranties of the
Buyer under this Agreement are true and correct in all material respects as of
the Closing;
2.2.2.5 A certificate of good standing and certified copies of
Buyer's certificate of incorporation shall be delivered by Buyer from the
Secretary of the State of Delaware dated at or about the Closing that the Buyer
is in good standing under the laws of said state;
2.2.2.6 Copies of resolutions adopted by the Board of Directors
of each of Osage and Sub duly authorizing and approving the execution of the
Agreement and each of the Related Documents to which it is a party, and the
consummation of the transactions contemplated hereby and thereby;
2.2.2.7 An incumbency certificate shall be delivered by Buyer
signed by all of the officers thereof dated at or about the Closing;
2.2.2.8 Buyer will execute and deliver the Registration Rights
Agreement with the Seller, the form of which is attached hereto as Exhibit B;
2.2.2.9 Buyer will execute and deliver an Employment Agreement
with each of the Shareholders, the form of which is attached hereto as Exhibit
C;
2.2.2.10 The delivery of an opinion of counsel of Buyer in form
and substance reasonably satisfactory to the Seller; and
2.2.2.11 Buyer shall have otherwise executed such documents and
agreements, provided such consents or approvals and shall have taken all such
actions as are required under this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SHAREHOLDERS
As a material inducement to Buyer to execute this Agreement and consummate
the transactions contemplated hereby, the Seller and the Shareholders hereby
make, jointly and severally, the following representations and warranties to
Buyer. All the representations and warranties made by the Seller and the
Shareholders in this Agreement pertain solely to the Business. Other than with
respect to Liens on the Assets, the Seller and the Shareholders make no
representations or warranties with regard to the Seller's Optiload software
business. The representations and warranties are true and correct in all
material respects at this date.
3.1 Organization, Qualification and Status.
The Seller is a corporation duly incorporated and organized, validly
existing and in good standing under the laws of the State of Ohio. The Seller
has full corporate power and authority to own, lease and use its properties, to
carry on its business as presently conducted and to sell the
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Assets, free and clear of any and all Liens. The Seller is duly qualified or
licensed to do business and in good standing as a foreign corporation in each of
the jurisdictions in which the nature of its business or the character of the
properties and assets which it owns or leases makes such qualification or
licensing necessary.
Except as set forth on Schedule 3.1 hereto, the Seller has not, during the
six- (6-) year period immediately preceding the date hereof, changed its name,
been the surviving entity of a merger, consolidation or other reorganization, or
acquired all or substantially all of the assets of any person or entity.
Schedule 3.1 also sets forth all fictitious names under which the Seller or such
predecessors have conducted business.
3.2 Corporate Instruments and Records.
The copies of the Seller's Articles of Incorporation and Code of
Regulations, each certified by the Secretary of the Seller and heretofore
furnished to Buyer, are true, correct and complete and each include all
amendments to the date hereof. The Seller's minute books, as made available to
Buyer, contain a true, complete and correct record of all corporate action taken
on or prior to the date hereof at the meetings of its shareholders and directors
and committees thereof. The stock certificate books and ledgers of the Seller
are true, correct and complete, and accurately reflect, at the date hereof, the
ownership of the outstanding capital stock of the Seller by the Shareholders.
3.3 Capitalization.
The authorized capital stock of the Seller consists of 750,000 shares of
common stock, no par value, of which 600,000 shares (the "Shares") are issued
and outstanding. All of the Shares are held beneficially and of record by the
Shareholders. No shares of the common stock of the Seller are held in the
treasury of the Seller. All of the Shares are validly issued, fully paid and
non-assessable and entitled to vote at shareholder meetings. None of the Shares
has been issued in violation of any preemptive rights of shareholders or
transferred in violation of any transfer restrictions relating thereto. Except
as set forth on Schedule 3.3, there are no authorized or outstanding options,
warrants, convertible securities, subscription rights, puts, calls, unsatisfied
pre-emptive rights or other rights of any nature to purchase or otherwise
receive, or to require the Seller to purchase, redeem or acquire, any shares of
the capital stock or other securities of the Seller and there is no outstanding
security of any kind convertible into such capital stock. Except as set forth on
Schedule 3.3, there are no existing shareholder agreements, voting agreements or
voting trusts respecting any shares of the capital stock of the Seller. None of
the shares of capital stock or other securities of the Seller were issued in
violation of the Act or any other legal requirement.
3.4 Ownership of Shares.
The Shareholders own and hold, beneficially and of record, the entire
right, title and interest in and to all of the Shares, free and clear of any
claim, suit, proceeding, call, commitment, voting trust, proxy, restriction,
limitation, security interest, pledge or lien or
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encumbrance of any kind or nature whatsoever, and has full power and authority
to vote said Shares and to approve the transactions contemplated by this
Agreement, such Shares constituting, in the aggregate, all of the issued and
outstanding shares of capital stock of the Seller. The Shareholders have full
power and authority to vote, transfer and dispose of the Shares, free and clear
of any claim, suit, proceeding, call, voting trust, proxy, restriction, security
interest, lien or other encumbrance of any kind or nature whatsoever other than
restrictions under the Act and applicable state securities laws.
3.5 No Subsidiary.
The Seller does not have any subsidiary or any ownership interest in any
other entity. Except for a joint venture relating to the Seller's Optiload
business, the Seller is not a party to any joint venture arrangement and does
not have the right to acquire any securities of or ownership interests in any
other person or entity.
3.6 Due Authorization of Seller.
This Agreement has been duly authorized, executed and delivered by Seller
and constitutes a valid and binding agreement of Seller, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium, and other similar laws relating
to, limiting or affecting the enforcement of creditors' rights generally or by
the application of equitable principles. As of the Closing all corporate action
on the part of Seller required under applicable law in order to consummate the
transactions contemplated hereby will have occurred.
3.7 Authority of Shareholders.
The Shareholders have full power and authority to enter into this
Agreement, and to consummate the transactions contemplated hereby, without the
consent of or notice to any third-party, and to comply with the terms,
conditions and provisions hereof. This Agreement has been duly executed and
delivered by the Shareholders and is, and each other agreement or instrument of
the Shareholders contemplated by this Agreement will be, the legal, valid and
binding agreement of each of the Shareholders, enforceable against each of the
Shareholders in accordance with its terms. The execution, delivery and
performance of this Agreement and the other agreements of the Shareholders
contemplated hereby (collectively, the "Shareholders' Agreements") do not
require the consent of or notice to any third-party. Neither the execution and
delivery of the Shareholders' Agreements nor the consummation of the
transactions contemplated thereby will conflict with or result in any violation
of or constitute a default under any term of the Articles of Incorporation or
Code of Regulations of the Seller, or any agreement, mortgage, debt instrument,
indenture, or other instrument, judgment, decree, Order, award, law or
regulation by which the Seller or the Shareholders are bound, or result in the
creation of any Lien upon any of the Assets of the Seller, or result in the
cancellation, modification, revocation or suspension of any license,
certificate, permit or authorization held by the Seller, except as set forth in
Schedule 3.7.
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3.8 No Violation.
The Seller is not in default under or in violation of any provision of (a)
its Articles of Incorporation or Code of Regulations, or (b) any agreement,
understanding, arrangement, indenture, contract, lease, sublease, loan
agreement, note, restriction, obligation or liability to which it is a party or
by which it is bound or to which it or its assets are subject (individually, an
"Instrument" and collectively, the "Instruments"), the effect of which would
have a material adverse effect on the Business or the creation of a Lien on the
Assets. Except as set forth in Schedule 3.8, neither the execution and delivery
of this Agreement or the Related Documents by the Seller or the Shareholders,
nor the consummation of the transactions contemplated hereby or thereby, nor
compliance with the terms hereof or thereof, will (i) conflict with or result in
a breach of any of the terms, conditions or provisions of the Articles of
Incorporation or Code of Regulations of the Seller, nor (ii) violate, conflict
with or result in a breach of or default under any of the terms, conditions or
provisions of any material Instrument, nor (iii) accelerate or give to others
any interests or rights, including rights of acceleration, termination,
modification or cancellation, under any material Instrument or in or with
respect to the Business or Assets, nor (iv) result in the creation of any Lien
on any of the Assets, nor (v) conflict with, violate or result in a breach of or
constitute a default under any law, statute, rule, judgment, order, decree,
injunction, ruling or regulation of any government, governmental agency,
authority or instrumentality, court or arbitration tribunal to which the Seller
or any of its assets or properties is subject, the effect of which would create
an obligation to Buyer, have a material adverse effect on the Assets or the
Business or affect Seller's ability to consummate the transactions contemplated
by this Agreement or the Related Documents in a timely fashion, nor (vi) require
the Seller to give notice to, or obtain an authorization, approval, order,
license, franchise, declaration or consent of, or make a filing with, any
foreign, federal, state, county, local or other governmental or regulatory body
or other person, other than any filings required to be made with the Federal
Trade Commission ("FTC") and Antitrust Division of the Department of Justice
("Justice Department") of Notification and Report Forms pursuant to the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended ("HSR Act") and
the rules promulgated thereunder.
3.9 Title to Assets.
Seller owns and holds of record the entire right, title and interest in and
to all of the Assets, free and clear of any and all Liens.
3.10 Financial Statements.
3.10.1 Schedule 3.10 hereto contains true and correct and complete
copies of the following financial statements of the Seller at the dates and for
the periods specified:
Unaudited financial statements of the Seller (inclusive of the Business and
the Optiload business) for its two most recently completed fiscal years ended
December 31, 1997 and December 31, 1998 (the "Unaudited Financial Statements")
and an unaudited financial statement for the period from January 1, 1999 through
August 6, 1999 (the "Interim Financial Statement").
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Unless otherwise referred to, the Unaudited Financial Statements and the Interim
Financial Statement shall be referred to as the "Financial Statements." Such
Financial Statements have been prepared on the cash basis of accounting,
consistently applied throughout the periods reported upon and fairly present in
all material respects the financial position of the Seller as of the dates
thereof and the results of operations for the periods then ended (subject to
normal year-end adjustments). There have been no material adverse changes in the
financial condition, assets or liabilities of the Seller from the date of the
Interim Financial Statement to the date hereof, except changes in the Ordinary
Course of Business, none of which, either singly or in the aggregate, has been
materially adverse. Since the date of the Interim Financial Statement, the
Seller has conducted its business in a normal and customary manner. The books
and records of the Seller from which the Financial Statements were prepared
properly and accurately record in all material respects the transactions and
activities which they purport to record.
3.11 Absence of Undisclosed and Contingent Liabilities.
Except for obligations arising in the Ordinary Course of Business after
August 6, 1999, and other obligations of the Seller under the Material Contracts
and contracts that would be Material Contracts except for the amount involved,
neither Seller nor any Shareholder knows of any basis for the assertion against
the Seller by any person of a valid claim based on a liability in excess of
$15,000 which is not disclosed within the Financial Statements.
3.12 No Adverse Changes.
Except as and to the extent set forth on the Financial Statements, to the
extent contained in this Agreement or as set forth on Schedule 3.12, since the
date of the Interim Financial Statements, the Seller has been operated in the
ordinary course and there has not been a material adverse change in the
condition (financial or otherwise), properties, assets, liabilities, rights,
operations or business of the Seller.
3.13 Guarantees.
3.13.1 The Seller has not guaranteed, become surety or contingent
obligor for or assumed any obligation, debt or dividend of any person or entity.
No Assets are or have been pledged, hypothecated, delivered for safekeeping,
subjected to a security interest or otherwise provided in any way as security
for payment or performance of any obligation of a person other than the Seller.
3.13.2 Schedule 3.13.2 identifies all obligations and liabilities of
the Seller for which the Shareholders have provided or been caused to incur
personal guarantees.
3.14 Tax Matters.
Except as set forth on Schedule 3.14 attached hereto:
3.14.1 The Seller (i) has timely and properly filed or caused to be
filed all Tax returns which it is or has been required to file on or prior to
the date hereof, by any jurisdiction to
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which it is or has been subject, all such Tax returns being true and correct and
complete in all material respects, (ii) has timely paid or caused to be paid in
full all Taxes which are or have become due and payable to all taxing
authorities with respect to such returns and periods, (iii) has made or caused
to be made all withholdings of Taxes required to be made by it, and such
withholdings have either been paid to the appropriate governmental agency or set
aside in appropriate accounts for such purpose, and (iv) has otherwise
satisfied, in all material respects, all applicable laws and agreements with
respect to the filing of Tax returns and the payment of Taxes.
3.14.2 All Taxes relating to the Assets have been or will be paid in
full when due unless protested in good faith by Seller, and there is no Lien or
claim of any taxing authority on, or threatened against, any of the Assets, and
Seller has withheld and paid in connection with amounts paid or owing to any
employees employed by Seller, independent contractors, creditors or other third
parties with respect to the Business. Seller shall remain responsible for and
retain all liability with respect to federal, state and local Tax matters
relating to Seller for all periods prior to and including the Closing Date
regardless of when such Taxes are assessed.
3.14.3 The Seller has properly accrued and reflected within its
Financial Statements, and has thereafter to the date hereof properly accrued,
and will from the date hereof through the Closing Date properly accrue, all
liabilities for Taxes and assessments, all such accruals being in the aggregate
sufficient for payment of all such Taxes and assessments.
3.14.4 To the Knowledge of the Seller and the Shareholders, there are
no unassessed Tax deficiencies proposed or threatened against the Seller, nor
are there any agreements, waivers, or other arrangements providing for extension
of time with respect to the assessment or collection of any Tax against the
Seller or any actions, suits, proceedings, investigations or claims now pending
against the Seller with respect to any Tax, or any matter under discussion with
any federal, state, local or foreign authority relating to any Taxes.
3.14.5 The Seller is not and has never been a member of an affiliated
group of corporations (within the meaning of Section 1504 of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code")).
3.14.6 The Seller is not a party to, is not bound by, and does not
have any obligation under any Tax sharing, Tax indemnity, or similar agreement.
3.14.7 The Seller has not made a change in method of accounting for a
taxable year beginning on or before the Closing Date, which would require it to
include any adjustment under Section 481(a) of the Internal Revenue Code in
taxable income for any taxable year beginning on or after the Closing Date.
3.14.8 Shareholders are not foreign persons so that Section 897 and
6039C of the Internal Revenue Code are not applicable to the transactions
provided for hereunder.
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3.14.9 The Seller, since its inception, has been a qualified "S
Corporation" as that term is defined in the Internal Revenue Code, and has never
revoked or terminated such election, nor has it taken any action which would
disqualify the Seller from its S Corporation status.
3.15 Litigation.
Except as set forth on Schedule 3.15, there are no actions, suits or
proceedings at law or in equity, or arbitration proceedings, or claims, demands
or investigations, pending or, to the Knowledge of the Seller or the
Shareholders, threatened, against or involving the Seller, or state of facts
existing which, to the Knowledge of Seller or the Shareholders, is reasonably
likely to give rise to any such action, suit, proceeding, claim, demand or
investigation; there are no proceedings pending or, to the Knowledge of the
Seller or the Shareholders, threatened, against or involving the Seller by or
before any governmental board, department, commission, bureau, instrumentality
or agency (including but not limited to any federal, state, local or foreign
governmental agency or body concerned with control of foreign exchange, energy,
environmental protection or pollution control, franchising or other distribution
arrangements, antitrust or trade regulation, civil rights, labor or
discrimination, wages and hours, safety or health, zoning or land use), or state
of facts existing which is reasonably likely to give rise to any such
proceedings; and the Seller is not in violation of any order, ruling, decree or
judgment of any court or arbitration tribunal or governmental board, department,
commission, bureau, instrumentality or agency which could adversely affect the
Business or the Assets.
3.16 Leased Real Property.
The Seller is the lessee under the real estate leases described on Schedule
3.16 hereto. True, correct and complete copies of said leases and any
amendments, extensions and renewals thereof have heretofore been delivered by
the Seller to Buyer. The Seller now enjoys quiet and undisturbed possession
under each of said leases. The Seller's interest in each of such leases is free
and clear of any mortgages and liens created by the Seller, is not subject to
any deeds of trust, assignments, subleases or rights of any third parties
created by the Seller, other than the lessor thereof. To the Knowledge of the
Seller and the Shareholders, such leased real estate is free and clear of any
zoning or use or building restriction or any pending, proposed or threatened
zoning or use or building restriction which would now, or on the Closing Date or
thereafter, materially interfere with the present or any intended use by the
Seller of any of such leased real estate. Said leases now are valid and binding
and in full force and effect, and are not now, and on the Closing Date will not
be, in default as to the payment of rent or otherwise. The consummation of the
transactions contemplated by this Agreement will not constitute an event of
default under any of said leases and the continuation, validity and
effectiveness of such leases will not be adversely affected by the transactions
contemplated by this Agreement.
3.17 Owned Tangible Personal Property.
Schedule 3.17 sets forth a list of the material tangible personal property
of the Seller which are part of the Assets (the "Tangible Personal Property").
Except as set forth on
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Schedule 3.17 hereto and except for property disposed of in the Ordinary Course
of Business of the Seller, the Seller has all right, title and interest in, and
good title to, the Tangible Personal Property free and clear of any claim,
lease, pledge, mortgage, security interest, conditional sale agreement or other
title retention agreement, restriction, lien or encumbrance of any kind or
nature whatsoever. True, complete and correct copies of all leases and licenses
relating to the Tangible Personal Property have heretofore been delivered by the
Seller to Buyer.
3.18 Condition of Buildings and Tangible Personal Property.
To the Knowledge of the Seller and the Shareholders, all of the premises
occupied, and the items of Tangible Personal Property are in operating condition
and repair, comply in all material respects with applicable laws, regulations
and ordinances, including but not limited to zoning, building and fire codes and
are suitable and sufficient for the present conduct of the Seller's Business.
Each item of Tangible Personal Property is adequately covered by one of the
insurance policies described in Section 3.27 hereto.
3.19 Intentionally omitted.
3.20 Material Contracts.
3.20.1 Schedule 3.20 sets forth a list of each Material Contract of
the Seller, whether oral, written or implied, or other agreements, leases,
surety arrangements or other commitments to which the Seller is a party, under
which the Seller may become subject to any obligation or liability, or by which
the Seller or any of its Assets may become bound, including the following:
3.20.1.1 each arrangement, agreement, contract or
understanding that involves performance of services or delivery of goods or
materials by the Seller in an amount or for a value in excess of $25,000;
3.20.1.2 each arrangement, agreement, contract or
understanding that was not entered into in the Ordinary Course of Business and
that involves expenditures or receipts by the Seller in excess of $25,000;
3.20.1.3 each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other arrangement, agreement,
contract or understanding affecting the ownership of, leasing of, title to, use
of, or any leasehold or other interest in, any real or personal property (except
personal property leases and installment and conditional sales agreements having
a value per item or aggregate payments of less than $25,000 and with terms of
less than one year);
3.20.1.4 each licensing agreement or other arrangement,
agreement, contract or understanding with respect to patents, trademarks,
copyrights, or other intellectual property, including agreements with current
employees, consultants, or contractors regarding the appropriation or the
nondisclosure of any intellectual property assets of the Seller;
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3.20.1.5 each collective bargaining agreement or other
arrangement, agreement, contract or understanding with any labor union or other
employee representative of a group of employees;
3.20.1.6 each joint venture, partnership, and other
arrangement, agreement, contract or understanding (however named) involving a
sharing of profits, losses, costs, or liabilities by the Seller with any other
person;
3.20.1.7 each arrangement, agreement, contract or
understanding containing covenants that restrict the business activity of the
Seller;
3.20.1.8 each arrangement, agreement, contract or
understanding providing for payments to or by any person based on sales,
purchases, or profits, other than direct payments for goods;
3.20.1.9 each power of attorney that is currently effective
and outstanding;
3.20.1.10 each arrangement, agreement, contract or
understanding for capital expenditures in excess of $25,000;
3.20.1.11 each written warranty, guaranty, and or other
similar undertaking with respect to contractual performance extended by the
Seller other than in the Ordinary Course of Business; and
3.20.1.12 each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.
3.20.2 The Material Contracts constitute all of the material
agreements and instruments which are necessary to operate the Business as
currently conducted by the Seller. True, correct and complete copies of each
Material Contract described and listed under subsection 3.20.1 have been made
available to Buyer prior to the date hereof. The term "Material Contract"
excludes purchase orders entered into in the Ordinary Course of Business for
personalty. To the Knowledge of Seller and the Shareholders, all of the Material
Contracts are valid, binding and enforceable against the respective parties
thereto in accordance with their respective terms. Neither the Seller nor, to
the Knowledge of Seller and the Shareholders, any other party, is in default or
in arrears under the terms thereof, and no condition exists or event has
occurred which, with the giving of notice or lapse of time or both, would
constitute a default thereunder.
3.21 Purchase Commitments and Bids.
All accepted and unfulfilled orders for the sale of merchandise or services
entered into by the Seller in the operation of the Business, and the aggregate
of all commitments for the purchase of merchandise or supplies by the Seller
were made in the Ordinary Course of Business of the Seller. There are no claims
against the Seller or the Shareholders to return merchandise by
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reason of alleged overshipments, defective merchandise or otherwise, or of
merchandise in the hands of customers under an understanding that such
merchandise would be returnable, except for claims in the Ordinary Course of
Business which do not exceed $15,000. Each outstanding bid, proposal, commitment
or unfulfilled order which relates to the operations of the Seller was priced
upon terms consistent with the Seller's past practices.
3.22 Banking Matters.
Schedule 3.22 hereto contains a true, complete and correct list of the
names of all banks and other financial institutions (with account numbers) in
which the Seller has an account or safe deposit box, and of all brokerage firms
and other entities and persons holding funds or investments of the Seller, and
the names of all persons authorized to draw thereon or have access thereto.
3.23 Labor and Employment Matters.
3.23.1 Schedule 3.23 contains a complete list of (i) the names of all
incumbent directors and officers of the Seller; (ii) the names and job
designations, descriptions and locations of all employees, consultants and
agents of the Seller, the current remuneration of each, and (iii) all employment
arrangements, pension, retirement, profit sharing and bonus plans, and all
deferred compensation, health, welfare, all severance management, and other
similar plans for the benefit of any employees of the Seller, including employee
plans ("Employee Benefit Plan"). Subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), the Seller at present is not, and
during the five (5) year period preceding the Closing Date, has not been a
sponsor of, party to or obligated to contribute to any employee benefit plan (as
defined in Section 3(3) of ERISA), and has not been a party to any collective
bargaining agreement currently in effect or in effect during the five-year
period preceding the Closing Date, except as set forth on Schedule 3.23 hereto.
The Seller has never been a member of a "controlled group of corporations"
within the meaning of Internal Revenue Code Section 414(b) or (c) is or has ever
maintained a defined benefit pension plan or contributed to a multiemployer plan
as defined in Section 3(37) of ERISA. Buyer will not be subject to any
obligations or liability under any of the Employee Benefit Plans. Buyer is not
responsible for any severance pay or other payments on account of termination by
Seller of any employee of Seller.
3.23.2 With respect to each Employee Benefit Plan,
3.23.2.1 there is no litigation, disputed claim (other than
routine claims for benefits), governmental proceeding, inquiry or investigation
pending or threatened with respect to each such Plan, its related trust, or any
fiduciary, administrator or sponsor of such Plan;
3.23.2.2 each such Plan has been established, maintained,
funded and administered in all material respects in accordance with its
governing documents, and any applicable provisions of ERISA, the Internal
Revenue Code, other applicable law, and all regulations promulgated thereunder.
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3.23.3 Except as disclosed on Schedule 3.23, the Seller is not
obligated to and does not (directly or indirectly) provide death benefits or
health care coverage to any former employees or retirees.
3.24 Termination of Business Relationships.
No supplier of the Seller which cannot be replaced on commercially
reasonable terms has evidenced to the Seller any intention to cancel or
terminate its business relationship with the Seller. No key employee of the
Seller has notified the Seller or any Shareholders of his intent or desire to
terminate employment with the Seller.
3.25 Customers.
Set forth on Schedule 3.25 is a list of the five largest customers of the
Business of the Seller based on the percentage of revenue represented by those
customers for the fiscal year ended December 31, 1998 and the six month period
ended June 30, 1999. The relationship of the Seller with its suppliers and
customers are good commercial working relationships, and no supplier or customer
of the Seller has canceled, materially curtailed or otherwise terminated or
threatened to cancel or otherwise terminate, his or its relationship with the
Seller, except that the mix of the Seller's customers changes from time to time
in the ordinary course of the Seller's business.
3.26 Product Warranties.
Except as set forth on Schedule 3.26, there are no liabilities of or claims
against the Seller or any Shareholders, and no liabilities or claims are
threatened against the Seller, with respect to any product liability (or similar
claim) or product warranty (or similar claim) claim that relates to any product
manufactured or sold by the Seller in the operations of the Seller, except for
standard warranty and maintenance obligations made in the ordinary course of the
operations of the Seller to purchasers of its products and services.
3.27 Insurance.
Schedule 3.27 sets forth a list of all the Seller's insurance policies. All
of such policies are in full force and effect and all premiums payable have been
paid in full and the Seller is in full compliance with the terms and conditions
of such policies. The Seller has not received any notice from any issuer of such
policies of its intention to cancel or refusal to renew any policy issued by it
or of its intention to renew any such policy based on a material increase in
premium rates other than in the Ordinary Course of Business. None of such
policies are subject to cancellation by virtue of the Agreement or the
consummation of the other transactions contemplated herein. There is no claim by
the Seller pending under any of such policies as to which coverage has been
questioned or denied.
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3.28 Compliance with Laws.
To the Knowledge of Seller and the Shareholders, the Seller has complied in
all material respects with all applicable laws, statutes, rules and regulations,
orders of federal, state, local and foreign governments and governmental
agencies applicable to it and its business, assets, properties and operations
and no claim of any violation of such laws or regulations exists on the date
hereof.
3.29 Licenses and Permits.
The Seller has secured all licenses, franchises, permits and other
authorizations from federal, state, local and other governmental or
administrative authorities (an "Authority") applicable to its assets, properties
and operations or necessary for the conduct of its business (the "Permits"),
except for any of the foregoing, the absence of which, either alone or in the
aggregate, would not have a material adverse effect upon the Business or
financial condition of the Seller. Except as set forth in Schedule 3.29, (a)
each of said Permits is in full force and effect, (b) the Seller (or other
designated permittee or licensee thereunder) is in compliance with the terms,
provisions and conditions thereof, (c) there are no outstanding violations,
notices of noncompliance therewith, judgments, consent decrees, orders or
judicial or administrative action(s) or proceedings(s) affecting any of said
Permits and (d) no condition exists and no event has occurred which (whether
with or without notice, lapse of time or the occurrence of any other event)
would permit the suspension or revocation of any of said permits other than by
expiration of the term set forth therein. To the Knowledge of the Shareholders,
consummation of the transactions contemplated by this Agreement will not affect
the validity, enforceability or effectiveness of any such Permit and no filing
with or consent authorization or approval of any Authority is required in
connection with the consummation of the transactions contemplated hereby.
3.30 No Interest in Suppliers.
Neither the Seller nor any of the Shareholders has any direct or indirect
equity interest in, or power to control the business or affairs of, or intention
to acquire such interest in or control of, any person that is a manufacturer,
supplier, lender, lessor or provider of services or equipment to the Seller.
3.31 All Business Conducted by the Seller.
The business and operations of the Seller are conducted exclusively by the
Seller, and not by the Shareholders or any other business entity whether or not
affiliated with the Seller.
3.32 Environmental Matters.
To the Knowledge of Seller and the Shareholders, except as set forth on
Schedule 3.32 hereto, (i) the Seller is currently in compliance with all
applicable Environmental Laws, and has obtained all permits and other
authorizations from, and submitted all forms, fees, registrations, reports and
similar filings to, the appropriate person or governmental agency needed, or
required,
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to operate its facilities in compliance with the applicable Environmental Laws;
(ii) the Seller has not violated any applicable Environmental Law; and (iii) the
Shareholders are unaware of any present requirement of any applicable
Environmental Law which is due to be imposed upon it which will increase its
cost of complying with the Environmental Laws.
As used in this Agreement, the terms (i) "Environmental Laws" include but
are not limited to any federal, state, foreign or local law, statute, charter or
ordinance, and any rule, regulation, binding interpretation, binding policy,
permit, order, court order or consent decree issued pursuant to any of the
foregoing, which pertains to, governs or otherwise regulates any of the
following activities: (a) the emission, discharge, release or spilling of any
Regulated Substance into the air, surface water, groundwater, soil or substrata
and (b) the manufacturing, processing, sale, generation, treatment,
transportation, storage, disposal, labeling or other management of any Waste,
including any Hazardous Waste or Regulated Substance; (ii) "Waste" and
"Hazardous Waste" include any substance defined as such by any applicable
Environmental Law; and (iii) "Regulated Substances" include any substance the
manufacturing, processing, sale, generation, treatment, transportation, storage,
disposal, labeling or other management or use of which is regulated by any
applicable Environmental Law.
3.33 Intellectual Property Matters.
3.33.1 The corporate name of the Seller and the trade names and
service marks listed on Schedule 3.33.1 are the only names and service marks
which are used by the Seller in the operation of its business (the "Names and
Service Marks"). The Seller owns, or has enforceable rights to use all
intellectual property presently in use by it and necessary for the operation of
its business as now being conducted, which intellectual property includes, but
is not limited to, patents, trademarks, trade names, service marks, copyrights,
trade secrets, customer lists, inventions, formulas, methods, processes and
other proprietary information (the "Intellectual Property"). Except as set forth
on Schedule 3.33.1, there are no outstanding licenses or consents granting third
parties the right to use the Intellectual Property owned by the Seller. The
Seller has received no notice of any adversely held patent, invention,
trademark, copyright, service xxxx or tradename of any person, or any claims of
any other person relating to any of the Intellectual Property subject hereto.
There is no presently known threatened use or encroachment of any such
intellectual property. To the Knowledge of the Shareholders, the manufacture,
sale or use of any products now or heretofore manufactured or sold by the Seller
did not and does not infringe (nor has any claim been made that any such action
infringes) the intellectual property rights of others.
3.34 Investment Intent.
3.34.1 Except with respect to the registration rights granted
to the Seller pursuant to the terms of the Registration Rights Agreement, the
shares included in the Stock Consideration are not being registered under the
Act on the basis of the statutory exemption provided by Section 4(2) thereof,
relating to transactions not involving a public offering, and the Buyer's
reliance on the statutory exemption thereof is based in part on the
representations contained in this Agreement.
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3.34.2 The Seller represents (i) that it has reviewed such
quarterly, annual and periodic reports of the Buyer as have been filed with the
Securities and Exchange Commission since December 31, 1998 (the "Reports") and
that it has such knowledge and experience in financial and business matters that
it is capable of utilizing the information set forth therein, concerning Buyer
to evaluate the risk of investing in the Buyer; (ii) that it has been advised
that the Osage Stock to be issued to it by the Buyer will not be registered
under the Act, except as otherwise provided in this Agreement, and accordingly,
the Seller may only be able to sell or otherwise dispose of such shares in
accordance with Rule 144, an applicable exemption from registration under the
Act, or except as otherwise provided in this Agreement; (iii) that the Osage
Stock will be held for investment and not with a view to, or for resale in
connection with the public offering or distribution thereof; (iv) that the Osage
Stock so issued will not be sold without registration thereof under the Act
(unless such shares are subject to registration or in the opinion of counsel to
the Buyer an exemption from such registration is available), or in violation of
any law; and (v) that the certificate or certificates representing the Osage
Stock to be issued will be imprinted with a legend in form and substance
substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE
ACT"). THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION, OR THE
AVAILABILITY OF AN EXEMPTION FROM REGISTRATION, UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, BASED ON AN OPINION LETTER
OF COUNSEL FOR THE COMPANY OR A NO-ACTION LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION.
and Buyer is hereby authorized to notify its transfer agent of the status of the
Osage Stock and to take such other action, including but not limited to, the
placing of a "stop-transfer" order on the transfer agent's books and records to
assure compliance with the Act.
3.34.3 The Seller has, on or before the date hereof, been
afforded the opportunity to review and is familiar with the Reports and has
based its decision to invest solely on the information contained therein, and
the information contained within this Agreement and the associated exhibits and
schedules, and has not been furnished with any other literature, prospectus or
other information except as included in the Reports or this Agreement.
3.34.4 The Seller has been given the opportunity to ask
questions about the Buyer and is satisfied that any information about the Buyer
have been answered to the Sellers' satisfaction.
3.34.5 The Seller understands that no federal or state agency
has approved or disapproved the Osage Stock, passed upon or endorsed the merits
of the transfer of such shares set forth within this Agreement or made any
finding or determination as to the fairness of such shares for investment.
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3.35 Labor Matters.
Seller is not a party to any collective bargaining agreement relating
to the employees of Seller employed in the Business. No strike, work stoppage,
grievance, unfair labor practice claim, union organizing activity or concerted
employee action of any kind has occurred since January 1, 1994, or currently is
pending or, to the Knowledge of Seller and the Shareholders, threatened, which
would materially adversely affect any of the Assets, the Business or the
transactions contemplated by this Agreement. Seller has discharged and will
discharge any and all collective bargaining agreement obligations which it may
have in connection with the transactions contemplated by this Agreement.
3.36 Bulk Sales Compliance and Transfer Taxes.
Neither the sale and transfer of the Assets to be acquired pursuant to
this Agreement, nor Buyer's possession and use thereof after Closing because of
such sale and transfer, will result in or be subject to: (a) any law pertaining
to bulk sales or transfers which make such sales or transfers ineffective as to
creditors of Seller; (b) any federal, state or local sales, use, transfer,
excise or license tax, fee or charge applicable to any of the Assets to be
acquired; or (c) the imposition of any liability upon Buyer for appraisal rights
or other liability owing to any shareholder of Seller.
3.37 No Significant Items Excluded.
Other than the Excluded Assets, there are no assets or properties of
Seller or Contracts to which Seller is a party that are of material importance
to the ongoing operation of the Business by Buyer that are not being transferred
to Buyer under the terms of this Agreement. To Seller's and the Shareholders'
Knowledge, the Assets are suitable and sufficient for the operation and conduct
of the Business as presently operated and conducted by the Seller.
3.38 Disclosure.
Neither this Agreement nor any other document, certificate, exhibit,
statement or schedule furnished or to be furnished by or on behalf of any of the
Shareholders to Buyer in connection with the transactions contemplated hereby
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the factual statements
contained therein, in light of the circumstances under which made, not
misleading.
4. REPRESENTATIONS AND WARRANTIES OF OSAGE AND SUB
As a material inducement to the Seller and Shareholders to execute this
Agreement and to consummate the transactions contemplated hereby, Osage and Sub
hereby make the following representations and warranties to the Shareholders.
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4.1 Organization and Qualification.
Each of Osage and Sub is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Each of Osage and
Sub has the corporate power and authority to carry on its business as presently
conducted. Each of Osage and Sub is duly qualified or licensed to do business
and in good standing as a foreign corporation in each of the jurisdictions in
which the nature of its business or the character of the properties and assets
which it owns or leases makes such qualification or licensing necessary.
4.2 Corporate Instruments and Records.
The copies of the certificate of incorporation and bylaws of each of
Osage and Sub, each certified by the Secretary of Osage or Sub, as applicable,
and heretofore furnished to Seller and Shareholders, are true, correct and
complete and each include all amendments to the date hereof. The minute books of
Osage and Sub contain a true, complete and correct record of all corporate
action taken on or prior to the date hereof at the meetings of its shareholders
and directors and committees thereof.
4.3 Authorization; Valid and Binding Obligation.
Each of Osage and Sub has full corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder. This
Agreement has been duly executed and delivered by each of Osage and Sub and
constitutes, and the other documents to be executed and delivered pursuant
hereto when executed and delivered by Osage or Sub will constitute, the legal,
valid and binding obligations of Osage or Sub, as applicable, enforceable
against it in accordance with its terms. The execution, delivery and performance
of this Agreement and the other agreements of each of Osage and Sub contemplated
hereby (collectively, the "Buyer's Agreements") do not require the consent of or
notice to any third-party. Neither the execution and delivery of the Buyer's
Agreements nor the consummation of the transactions contemplated thereby will
conflict with or result in any violation of or constitute a default under any
term of the certificate of incorporation or bylaws of Osage or Sub, or any
agreement, mortgage, debt instrument, indenture, or other instrument, judgment,
decree, order, award, law or regulation by which Osage or Sub is bound, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the assets of Osage or Sub, or result in the cancellation,
modification, revocation or suspension of any license, certificate, permit or
authorization held by Osage or Sub.
4.4 Litigation.
There are no material legal proceedings (as such term is defined in
Regulation S-K promulgated under the Securities Act of 1933, as amended) pending
or, to the Buyer's Knowledge, threatened against or involving the Buyer, or
state of facts existing which to Buyer's Knowledge could give rise to any such
legal proceeding; and the Buyer is not in violation of any order, ruling, decree
or judgment of any court or arbitration tribunal or governmental board,
department, commission, bureau, instrumentality or agency.
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4.5 Stock Consideration.
Shares to be issued as Stock Consideration pursuant to this Agreement
will be, upon issuance, duly authorized, validly issued, fully paid and
non-assessable with no liability on the part of the holders thereof.
4.6 Capitalization.
4.6.1 As of the date hereof, the outstanding capital stock of
Osage consists solely of shares of: (A) 9,594,621 shares of Osage's common stock
par value $0.01 per share (the "Common Stock"); (B) 1,000 shares of Series D
Convertible Preferred Stock, which as of the date hereof are convertible into an
aggregate of 201,006 shares, subject to adjustment; (C) 2,000 shares of Series E
Convertible Preferred Stock, which as of the date hereof are convertible into an
aggregate of 304,762 shares, subject to adjustment; (D) Options to purchase
3,362,668 shares of the Common Stock; and (E) Warrants to purchase 992,500
shares of the Common Stock. All outstanding shares of capital stock of Osage
have been duly authorized and validly issued and are fully paid and
nonassessable and free of preemptive rights. Except as otherwise set forth
herein, within the SEC Reports or on Schedule 4.6, there are no outstanding or
presently authorized warrants, preemptive rights, subscription rights, options
or related commitments or agreements of any nature to issue any of Osage's
securities or to sell, pledge, assign or otherwise transfer such securities.
4.6.2 Osage has a sufficient number of its authorized but unissued
shares of Common Stock to permit it to issue the Stock Consideration due in
connection with the Agreement, assuming trading prices of Osage's Common Stock
remain at current levels, as well as all of Osage's other obligations to issue
shares of its Common Stock upon exercise of any option, warrant or other right
to acquire the same, based upon the same assumption. In the event that the
number of authorized but unissued shares of Osage's Common Stock is insufficient
to satisfy Osage's obligations to issue any shares of its Common Stock to Seller
pursuant to this Agreement, the Board of Directors of Osage shall promptly hold
a stockholders meeting in which the stockholders would vote for authorization to
amend Osage's certificate of incorporation to increase that number of shares of
Common Stock which Osage is authorized to issue to at least the number which
would allow Osage to satisfy its obligations to issue shares of its Common Stock
to Seller under this Agreement.
4.7 SEC Reports.
Osage has heretofore delivered to Seller and Shareholders copies of its
Annual Report on Form 10-KSB for the year ended December 31, 1998, its quarterly
report on Form 10-QSB for the quarterly period ended March 31, 1999 and its
proxy statement dated as of April 28, 1999 (the "SEC Reports"). As of their date
of filing, the SEC Reports did not contain any untrue statements of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances in which they
were made, not misleading. Furthermore, except as otherwise disclosed in Osage's
SEC Reports, Osage has experienced no material adverse change in its financial
condition, properties, business
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or prospects since the date thereof. The SEC Reports have been prepared in
compliance with all applicable securities laws, rules and regulations, and the
financial statements included therein had been prepared in accordance with
generally accepted accounting principles, consistently applied, and fairly
present the financial condition of Osage as of the date and for the periods
covered thereby.
4.8 Disclosure.
No representation or warranty of Osage or Sub in this Agreement
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the factual statements contained herein, in light of the
circumstances under which such statements are made, not misleading.
4.9 No Adverse Changes.
Since the date of the most recent SEC Reports to the date of this
Agreement, the business of Osage and Sub has been operated in the ordinary
course and there has not been any materially adverse change in the business,
condition (financial or otherwise), results of operations, properties, assets,
liabilities, earnings or net worth of Osage and Sub.
5. AGREEMENTS OF THE PARTIES
5.1 Access to Information.
At all times prior to the Closing, and in each case subject to Section
5.2 below, each of the parties hereto shall provide to the other parties (and
the other parties' authorized representatives) full access during normal
business hours and upon reasonable prior notice to the premises, properties,
books, records, assets, liabilities, operations, contracts, personnel, financial
information and other data and information of or relating to such party
(including without limitation all written proprietary and trade secret
information and documents, and other written information and documents relating
to intellectual property rights and matters), and will cooperate with the other
party in conducting its due diligence investigation of such party.
5.2 Confidentiality; No Solicitation.
5.2.1 With respect to information concerning the Seller that
is made available to Buyer pursuant to the terms of this Agreement, Buyer agrees
that it shall hold such information in strict confidence, shall not use such
information except for the sole purpose of evaluating the Agreement and related
transactions and shall not disseminate or disclose any of such information other
than to its directors, officers, employees, shareholders, affiliates, agents and
representatives who need to know such information for the sole purpose of
evaluating the Agreement and the related transactions (each of whom shall be
informed in writing by Buyer of the confidential nature of such information and
directed by Buyer in writing to treat such information confidentially). If this
Agreement is terminated, Buyer shall immediately return all such information,
all copies thereof and all information prepared by Buyer based upon the same;
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provided, however, that one copy of all such material may be retained by Buyer's
outside legal counsel for purposes only of resolving any disputes under this
Agreement. The above limitations on use, dissemination and disclosure shall not
apply to information that (i) is learned by Buyer from a third party entitled to
disclose it; (ii) becomes known publicly other than through Buyer or any party
who received the same through Buyer, provided that Buyer has no knowledge that
the disclosing party was subject to an obligation of confidentiality; (iii) is
required by law or court order to be disclosed by Buyer; or (iv) is disclosed
with the express prior written consent thereto of the Shareholders. Buyer shall
undertake all necessary steps to ensure that the secrecy and confidentiality of
such information will be maintained in accordance with the provisions of this
paragraph 5.2.1. Notwithstanding anything contained herein to the contrary, in
the event a party is required by court order or subpoena to disclose information
which is otherwise deemed to be confidential or subject to the confidentiality
obligations hereunder, prior to such disclosure, the disclosing party shall: (i)
promptly notify the non-disclosing party and, if having received a court order
or subpoena, deliver a copy of the same to the non-disclosing party; (ii)
cooperate with the non-disclosing party, at the expense of the non-disclosing
party in, obtaining a protective or similar order with respect to such
information; and (iii) provide only such of the confidential information as the
disclosing party is advised by its counsel is necessary to strictly comply with
such court order or subpoena.
5.2.2 With respect to information concerning Buyer that is
made available to the Shareholders pursuant to the provisions of this Agreement,
each of the Shareholders agrees that he shall hold such information in strict
confidence, shall not use such information except for the sole purpose of
evaluating the Agreement and the related transactions, and shall not disseminate
or disclose any of such information other than to the Seller's directors,
officers, employees, affiliates, agents and representatives who need to know
such information for the sole purpose of evaluating the Agreement and the
related transactions (each of whom shall be informed in writing by the
Shareholders of the confidential nature of such information and directed by such
party in writing to treat such information confidentially). If this Agreement is
terminated, each of the Shareholders agrees to return immediately all such
information, all copies thereof and all information prepared by either of the
Shareholders or the Seller based upon the same; provided, however, that one copy
of all such material may be retained by the Shareholders' legal counsel for
purposes only of resolving any disputes under this Agreement. The above
limitations on use, dissemination and disclosure shall not apply to information
that (i) is learned by either of the Shareholders from a third party entitled to
disclose it; (ii) becomes known publicly other than through either of the
Shareholders or any party who received the same through either of the
Shareholders, provided that such Shareholders has no knowledge that the
disclosing party was subject to an obligation of confidentiality; (iii) is
required by law or court order to be disclosed by either of the Shareholders; or
(iv) is disclosed with the express prior written consent thereto of Buyer. Each
of the Shareholders agrees to undertake all necessary steps to ensure that the
secrecy and confidentiality of such information will be maintained in accordance
with the provisions of this paragraph 5.2.2. Notwithstanding any thing contained
herein to the contrary, in the event a party is required by court order or
subpoena to disclose information which is otherwise deemed to be confidential or
subject to the confidentiality obligations hereunder, prior to such disclosure,
the disclosing party shall: (i) promptly notify the non-disclosing party and, if
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having received a court order or subpoena, deliver a copy of the same to the
non-disclosing party; (ii) cooperate with the non-disclosing party at the
expense of the non-disclosing party in obtaining a protective or similar order
with respect to such information; and (iii) provide only such of the
confidential information as the disclosing party is advised by its counsel is
necessary to strictly comply with such court order or subpoena.
5.3 Filings.
Buyer, Seller and each of the Shareholders shall, as promptly as
practicable, make any required filing, and any other required submissions, under
any law, statute, Order, rule or regulation with respect to the Agreement and
the related transactions and shall cooperate with each other with respect to the
foregoing.
5.4 All Reasonable Efforts.
Subject to the terms and conditions of this Agreement and to the
fiduciary duties and obligations of the boards of directors of the parties
hereto to their respective shareholders, as advised by their counsel, each of
the parties to this Agreement shall use all reasonable efforts to take, or cause
to be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations, or to remove any
injunctions or other impediments or delays, legal or otherwise, as soon as
reasonably practicable, to consummate the transactions contemplated by this
Agreement.
5.5 Public Announcements.
Neither the Shareholders nor the Buyer shall disclose to the public or
to any third party the existence of this Agreement or the transactions
contemplated hereby or any other material non-public information concerning or
relating to the other party hereto, other than with the express prior written
consent of the other party hereto, except as may be required by law or court
order or to enforce the rights of such disclosing party under this Agreement, in
which event the contents of any proposed disclosure shall be discussed with the
other party before release; provided, however, that notwithstanding anything to
the contrary contained in this Agreement, any party hereto may disclose this
Agreement to any of its directors, officers, employees, shareholders,
affiliates, agents and representatives who need to know such information for the
sole purpose of evaluating the Agreement, and to any party whose consent is
required in connection with this Agreement. The parties anticipate issuing a
mutually acceptable, joint press release on the Closing Date announcing the
execution of this Agreement and the consummation of the transactions provided
for herein.
5.6 Documents at Closing.
Each party to this Agreement agrees to execute and deliver at the
Closing the Exhibits and other documents identified in Section 2.2.
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5.7 Prohibition on Trading in Buyer Stock.
The Seller and each of the Shareholders acknowledges that the United
States securities laws prohibit any person who has received material non-public
information concerning the matters which are the subject matter of this
Agreement from purchasing or selling the securities of the Buyer, or from
communicating such information to any person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell securities
of the Buyer. Accordingly, the Seller and each of the Shareholders agrees that
it/he will not purchase or sell any securities of the Buyer, or communicate such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell securities of the
Buyer, until no earlier than 72 hours following (i) the dissemination of a
Current Report on Form 8-K to the SEC announcing the Closing pursuant to this
Agreement provided that the Form 8-K is required and timely filed; or (ii) the
dissemination of a public announcement of the execution of this Agreement and
the consummation of the transactions provided for herein provided the Form 8-K
is not required or filed timely.
5.8 Tax Matters
5.8.1 The Seller will timely and properly file or cause to be
filed all Tax returns of the Seller which are due or which will become due for
periods ending through the Closing Date relating to the Assets and/or Business,
all such Tax returns to be true and correct and complete in all material
respects, and the Seller and/or Shareholders will pay or cause to be paid in
full when due all Taxes, if any, which become due and payable pursuant to such
returns, or assessments received by them on or before the Closing Date. Seller
and Shareholders agree that any and all costs of preparing such return shall be
borne exclusively by the Seller and Shareholders.
5.9 Governmental Authority.
If so required, the parties shall have filed with the Federal Trade
Commission and the Antitrust Division of the Department of Justice notification
and report forms with respect to the transactions contemplated hereby pursuant
to the HSR Act and the rules promulgated thereunder, and the waiting period
required to expire under the HSR Act and rules, including any extension thereof,
shall have expired.
5.10 Absence of Broker or Finder.
Seller and the Shareholders jointly and severally indemnify and hold
Buyer harmless from and against any claims for a fee from any investment banker,
broker, finder or other similar intermediary which has been retained by, or is
authorized by, the Shareholders to act on behalf of any of them in connection
with the consummation of the transactions contemplated by this Agreement. Buyer
indemnifies and holds Seller and the Shareholders harmless from and against any
claims for a fee from any investment banker, broker, finder or other similar
intermediary which has been retained by, or is authorized by, the Buyer to act
on its behalf in connection with the consummation of the transactions
contemplated by this Agreement.
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5.11 Cooperation; Further Assurances.
Each party to this Agreement agrees to cooperate fully with the other
parties hereto and their counsel and accountants and other representatives, will
use best efforts to cause satisfaction of the conditions to consummation of the
transactions contemplated herein as promptly as possible, and will refrain from
a course of action inconsistent with this Agreement. Each party shall, upon
request of any of the other parties hereto, at any time and from time to time
execute, acknowledge, deliver and perform all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and instruments of
further assurances as may be necessary or appropriate to carry out the
provisions and intent of this Agreement.
5.12 Further Mutual Covenants.
If Buyer on the one hand or either of the Shareholders or the Seller on
the other takes or refrains from taking any action which would render any
representations or warranties contained in Articles 3 or 4 of this Agreement
inaccurate as of the Closing Date, he or it, as applicable, shall promptly
notify the other party(ies) upon the happening of any event or taking of any
action which renders any such representation or warranty inaccurate. Each party
shall promptly notify the other of any action, suit or proceeding that shall be
instituted or threatened against such party to restrain, prohibit, or otherwise
challenge the legality of any transaction contemplated by this Agreement.
5.13 Restrictions on Transfer of Osage Stock.
The Seller and each of the Shareholders agree not to sell, transfer or
otherwise dispose of the Osage Stock (including private sales) in the absence of
(i) an opinion of counsel to the Seller and Shareholders, such opinion and
counsel reasonably acceptable to Buyer's counsel, that such transfer, sale or
other disposition may be made without registration; or (ii) registration of the
Osage Stock under the Act.
6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
The obligations of Buyer hereunder shall be subject to the following
conditions, any or all of which may be waived in writing by Buyer:
6.1 Accuracy of Representations and Warranties; Seller's and
Shareholders' Performance.
Each of the representations and warranties of the Seller and
Shareholders contained herein shall be true and correct in all material respects
on and as of the Closing Date with the same effect as though made on and as of
such date and the Seller and the Shareholders shall have performed and complied
in all material respects with each of the agreements, covenants, stipulations,
terms and conditions contained herein and required to be performed or complied
with by it or them on or prior to the Closing Date.
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6.2 No Adverse Change.
Except for (i) distributions to the Shareholders for salaries and
pension plan contributions; (ii) amounts expended to purchase outstanding stock
options granted by the Seller; and (iii) withholdings from Seller's accounts
receivable to pay corporate taxes for tax year 1999, all as set forth on
Schedule 6.2 hereof, since the date of the Financial Statements, there shall
have been no material adverse change in the financial condition, assets or
liabilities of the Seller.
6.3 No Loss.
Since the date of the Financial Statements, the Seller shall not have
suffered any material loss on account of fire, flood, accident, strike or other
calamity which has had or is likely to have an adverse effect on the financial
condition or any Assets of the Seller, whether or not such loss shall have been
covered by insurance.
6.4 No Injunction; Consents.
No action, proceeding or investigation shall have been instituted or
threatened to set aside the transactions provided for herein or to enjoin or
prevent the consummation of the transactions contemplated hereby and all
required consents and approvals for the consummation of the transactions
contemplated hereby shall have been secured.
6.5 Actions by the Shareholders and Seller.
The Seller and Shareholders shall have taken all actions and executed
such documents as set forth in Section 2.2 hereof.
6.6 Uniform Commercial Code Searches.
Uniform Commercial Code searches (which searches shall be made or
caused to be made by and at the expense of Buyer) of filings made pursuant to
Article 9 thereof in all jurisdictions where any assets of the Seller are
located, in form, scope and substance reasonably satisfactory to Buyer and its
counsel, shall not disclose any liens, claims, security interests or
encumbrances against any of such assets disclosed thereby except liens, claims,
security interests or encumbrances that are disclosed in Financial Statements,
this Agreement, or are otherwise released or terminated by the Seller prior to
or at the time of Closing.
7. CONDITIONS TO THE OBLIGATIONS OF THE SELLER AND THE
SHAREHOLDERS
The obligations of the Seller and Shareholders shall be subject to the
following conditions, any or all of which may be waived in writing by the Seller
and Shareholders:
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7.1 Accuracy of Representations and Warranties; Buyer Performance.
Each of the representations and warranties of Buyer set forth in
Article 4 hereof shall be true and correct in all material respects on and as of
the Closing Date with the same effect as though made on and as of such date and
Buyer shall have in all material respects performed and complied with each of
the agreements, covenants, stipulations, terms and conditions contained herein
and required to be performed or complied with by Buyer on or prior to the
Closing Date.
7.2 No Adverse Change.
Since the date of the most recent SEC Report there shall have been no
material adverse change in the financial condition, assets or liabilities of the
Buyer.
7.3 No Loss.
Since the date of the most recent SEC Report, the Buyer shall not have
suffered any material loss on account of fire, flood, accident, strike or other
calamity which has had or is likely to have an adverse effect on the financial
condition or the assets of the Buyer, whether or not such loss shall have been
covered by insurance.
7.4 No Injunction; Consents.
No action, proceeding or investigation shall have been instituted or
threatened to set aside the transactions provided for herein or to enjoin or
prevent the consummation of the transactions contemplated hereby and all
required consents and approvals for the consummation of the transactions shall
have been secured.
7.5 Actions by Buyer.
Buyer shall have taken all actions and executed such documents as set
forth in Section 2.2 hereof.
7.6 Consents and Proceedings.
The Buyer shall have obtained all of the consents, authorizations,
orders or approvals required in order to execute and deliver this Agreement and
to perform its obligations hereunder and thereunder and all actions,
proceedings, instruments and documents deemed necessary or appropriate by
Shareholders and their counsel to effectuate this Agreement and the consummation
of the transactions contemplated hereby, or incidental thereto, shall have been
obtained and all other related legal matters shall have been approved by such
counsel.
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8. INDEMNIFICATION; SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.1 Indemnification.
8.1.1 Seller and the Shareholders shall, jointly and
severally, indemnify, defend and hold harmless Buyer from and against any and
all demands, claims, actions or causes of action, judgments, assessments,
losses, liabilities, damages or penalties and reasonable attorneys' fees and
related disbursements (collectively, "Claims") incurred by Buyer which arise out
of or result from a misrepresentation, breach of warranty, or breach of any
covenant or agreement of either the Seller or either or both of the Shareholders
contained herein or in the Schedules annexed hereto or in any deed, exhibit,
closing certificate, schedule or any ancillary certificates or other documents
or instruments furnished by the Seller or Shareholders pursuant hereto or in
connection with the transactions contemplated hereby or thereby.
8.1.2 Buyer shall indemnify, defend and hold harmless the
Shareholders from and against any and all Claims, as defined at subsection 8.1.1
above, incurred by the Shareholders which arise out of or result from a
misrepresentation, breach of warranty or breach of any covenant or agreement of
Buyer contained herein or in the Schedules annexed hereto or in any deed,
exhibit, closing certificate, schedule or any ancillary certificates or other
documents or instruments furnished by Buyer pursuant hereto or in connection
with the transactions contemplated hereby or thereby.
8.1.3 The right to indemnification, payment of damages or
other remedy based on any representations, warranties, covenants and obligations
contained within this Agreement will not be affected by any investigation
conducted with respect to, or any knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery of
this Agreement or the Closing Date, with respect to the accuracy or inaccuracy
of or compliance with, any such representation, warranty, covenant or
obligation. The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
damages, or other remedy based on such representations, warranties, covenants
and obligations.
8.2 Survival.
8.2.1 All representations and warranties contained in or made
pursuant to this Agreement or in any agreement, certificate, document or
statement delivered pursuant hereto shall survive the Closing for a period of
eighteen (18) months from the Closing Date, unless otherwise specified in such
agreement, certificate or document; provided, however, that notwithstanding the
foregoing, (i) the representations and warranties set forth in Section 3.14
(relating to Taxes) and all covenants and agreements of the parties relating to
the subject matter(s) thereof shall survive the Closing for the period equal to
the statute of limitations applicable to Claims arising under such subject
matters, and (ii) the representations and warranties set forth in Section 3.9
(relating to title to Assets) shall survive indefinitely.
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8.3 Methods of Asserting Claims for Indemnification.
All claims for indemnification under this Agreement shall be asserted
as follows:
8.3.1 Third Party Claims. In the event that any Claim for
which a party (the "Indemnitee") would be entitled to indemnification under this
Agreement is asserted against or sought to be collected from the Indemnitee by a
third party the Indemnitee shall promptly notify the other party (the
"Indemnitor") of such Claim, specifying the nature thereof, the applicable
provision in this Agreement or other instrument under which the Claim arises,
and the amount or the estimated amount thereof (the "Claim Notice"). The
Indemnitor shall have thirty (30) days (or, if shorter, a period to a date not
less than ten (10) days prior to when a responsive pleading or other document is
required to be filed but in no event less than ten (10) days from delivery or
mailing of the Claim Notice) (the "Notice Period") to notify the Indemnitee (a)
whether or not it disputes the Claim and (b) if liability hereunder is not
disputed, whether or not it desires to defend the Indemnitee. If the Indemnitor
elects to defend by appropriate proceedings, such proceedings shall be promptly
settled or prosecuted to a final conclusion in such a manner as to avoid any
risk of damage to the Indemnitee; and all costs and expenses of such proceedings
and the amount of any judgment shall be paid by the Indemnitor.
If the Indemnitee desires to participate in, but not control, any such
defense or settlement, it may do so at its sole cost and expense. If the
Indemnitor has disputed the Claim, as provided above, and shall not defend such
Claim, the Indemnitee shall have the right to control the defense or settlement
of such Claim, in its sole discretion, and shall be reimbursed by the Indemnitor
for its reasonable costs and expenses of such defense. Neither Indemnitee nor
Indemnitor shall be liable for any settlement of any Claim without the prior
written consent of the other party.
8.3.2 Non-Third Party Claims. In the event that the Indemnitee
should have a Claim for indemnification hereunder which does not involve a Claim
being asserted against it or sought to be collected by a third party, the
Indemnitee shall promptly send a Claim Notice with respect to such Claim to the
Indemnitor. If the Indemnitor does not dispute the Claim by giving written
notice to Indemnitee within thirty (30) days of the date of the Claim Notice,
then such Claim shall be payable in accordance with the terms of Article 8. If
the Indemnitor disputes the amount of such Claim, the controversy in question
shall be submitted to arbitration pursuant to Section 9.7 hereof.
8.3.3 Right of Set-Off. Subject to the terms of the Escrow
Agreement, in the event a Claim arises pursuant to subparagraph 8.1.1, in
addition to any of its other rights under this paragraph 8, Buyer shall have the
right to apply the amount of the Claim which is agreed to by the Seller or
Shareholders, as applicable, or otherwise definitively concluded under this
Section 8, against the amounts identified at Section 1.8; provided, however,
that this subparagraph shall not be the exclusive remedy of Buyer in the event a
Claim arises pursuant to subparagraph 8.1.1. Seller and/or Shareholders shall
also have the right to apply the amount of any Claim which is agreed to by the
Buyer, or otherwise definitively concluded under this Section 8, against any
liability owed to Buyer under Section 1.7.
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8.4 Limitations on Amount.
8.4.1 Notwithstanding the provisions of this Article 8, the
Indemnitor shall not be required to indemnify the Indemnitee with respect to
Claims until the aggregate amount of such Claims shall exceed $15,000 (the
"Indemnitor's Floor"); provided, however, if such Claims in the aggregate exceed
the amount of the Indemnitor's Floor, the Indemnitor shall indemnify Indemnitee
for all Claims in excess of the Indemnitor's Floor (i.e., if such Claims in the
aggregate totaled $16,000, Indemnitor shall indemnify Indemnitee for $1,000).
8.4.2 Notwithstanding the provisions of this Article 8, the
Buyer's liability with respect to matters set forth in subsection 8.1.2 above
for damages shall be limited to the amount of the Purchase Price. The Seller's
and Shareholders' liability with respect to matters set forth in subsection
8.1.1 shall also be limited to the amount of the Purchase Price, except for
damages arising out of a breach of the representations and warranties at
Sections 3.1, 3.9 and 3.14, and any and all fraudulent actions and statements or
intentional misrepresentations.
8.5 Exclusive Remedies.
The right to indemnification under Article 8 of the Agreement shall be
the exclusive remedy for a breach of a representation, warranty, covenant or
other provision of this Agreement except that Buyer and the Shareholders shall
have the right to obtain injunctive relief to restrain any breach or otherwise
to specifically enforce the provisions of this Agreement, it being agreed by the
parties that money damages alone would be inadequate to compensate Buyer or the
Shareholders, as the case may be, for such breach or other failure to perform
the obligations under this Agreement.
9. MISCELLANEOUS
9.1 Notices.
All notices requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given on the date if delivered personally, or
upon the next business day if sent by a nationally recognized overnight courier
such as federal express, or upon the third business day after it shall have been
deposited by certified or registered mail with postage prepaid, or sent by telex
or telecopier, if sender receives confirmation of transmission from its
facsimile machine, as follows (or at such other address or facsimile number for
a party as shall be specified by like notice):
if to the Shareholders: Xx. Xxxxxxx Xxxxxxxxxxxx
000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Mr. Xxxxxx Xxxxxxx
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
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with a copy to: Xxxxxxx Xxxxxxxx, Esquire
Cors & Xxxxxxx
000 X. Xxxx Xxxx Xxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
and
if to Buyer, to it at: Xx. Xxxx Xxxxxxxxxx, Chief Executive Officer
Osage Systems Group, Inc.
000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to: Xxxxxxx X. Xxxxx, Esquire
Xxxxxxxx Ingersoll, P.C.
Eleven Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
9.2 Entire Agreement; Assignment.
This Agreement, including all Exhibits and Schedules hereto,
constitutes the entire Agreement among the parties with respect to its subject
matter and supersedes all prior agreements and understandings, both written and
oral, among the parties or any of them with respect to such subject matter and
shall not be assigned by operation of law or otherwise.
9.3 Binding Effect; Benefit.
This Agreement shall inure to the benefit of and be binding upon the
parties and their respective successors and assigns. Nothing in this Agreement
is intended to confer on any person other than the parties to this Agreement or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
9.4 Headings.
The descriptive headings of the sections of this Agreement are inserted
for convenience only, do not constitute a part of this Agreement and shall not
affect in any way the meaning or interpretation of this Agreement.
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9.5 Counterparts.
This Agreement may be executed in two or more counterparts and
delivered via facsimile, each of which shall be deemed to be an original, and
all of which together shall be deemed to be one and the same instrument.
9.6 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to the laws that might
otherwise govern under principles of conflicts of laws applicable thereto.
9.7 Arbitration.
If a dispute arises as to the interpretation of this Agreement, it
shall be decided finally in an arbitration proceeding conforming to the Rules of
the American Arbitration Association applicable to commercial arbitration then
in effect at the time of the dispute. The arbitration shall take place in
Cincinnati, Ohio. The decision of the Arbitrators shall be conclusively binding
upon the parties and final, and such decision shall be enforceable as a judgment
in any court of competent jurisdiction. The parties shall each pay their own
costs and fees for the arbitration but shall share equally the costs of the
arbitrators.
9.8 Severability.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid,
void, unenforceable or against its regulatory policy, the remainder of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
9.9 Expenses.
Except as set forth in this Article 9, the Seller shall pay all fees
and expenses incurred by the Shareholders and the Seller in connection with the
transactions provided for hereunder, including the fees and expenses of Seller's
and Shareholders' counsel and accountants; and Buyer shall pay all expenses
incurred by it in connection with the transactions provided for hereunder,
including the fees and expenses of its counsel and accountants.
9.10 Amendment and Modification.
This Agreement may be amended, by written agreement of Buyer, Seller
and the Shareholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of Buyer, Seller and the Shareholders.
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9.11 Definitions.
When used in this Agreement, the following terms, in their singular and
plural forms, shall have the meanings assigned to them below:
"Act" means the Securities Act of 1933, as amended.
"Agreement" is defined in the initial paragraph hereof.
"Assets" means all of Seller's right, title and interest in
and to all of the following described holdings (except the Excluded Assets):
(a) all of Seller's interest in (including all rights and
benefits) all written or oral commitments, contracts, leases, licenses,
agreements and understandings in connection with the Business identified in
Schedule 9.11 hereto, and all outstanding offers or solicitations to enter into
any of the foregoing;
(b) all licenses, permits and other governmental approvals and
authorizations, whether federal, state or local, owned, held or utilized by
Seller in connection with the operation of the Business, and all pending
applications therefor;
(c) all operating data and records of Seller, including
without limitation, client and customer lists and records, referral sources,
research and development reports and records, production reports and records,
operating guides and manuals, sales literature, copies of the Records,
correspondence and other similar documents relating to the Business;
(d) all of the intellectual property owned by Seller and used
in connection with the Business, including, without limitation, all trade
secrets, know-how, processes, methods, plans, research data, marketing plans and
strategies, forecasts, trademarks, service marks, trade names, patents and
patent rights, logos and copyrights;
(e) the goodwill and going concern value of the Business;
(f) all claims of Seller against third parties relating to the
Business, whether known or unknown, contingent or otherwise;
(h) all inventory, machinery, equipment, fixtures, computer
hardware and software, tools, supplies, spare parts, furniture and other
tangible personal property and assets owned or leased by Seller (other than
those that are used in the operation of Seller's Optiload software business),
which assets are set forth on Schedule 3.17; and
(i) all other intangible assets of every kind, character or
description relating to the Business, except the Excluded Assets.
"Xxxx of Sale" is defined in Section 2.2.1.1.
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"Business" is defined in the recitals of this Agreement.
"Buyer" is defined in the initial paragraph hereof.
"Cash Consideration" is defined in Section 1.3.1.
"Claim" means a claim or demand for any and all Liabilities,
damages, losses, obligations, deficiencies, encumbrances, penalties, costs and
expenses, including reasonable attorneys' fees, resulting from, related to or
arising out of (i) any misrepresentation, breach of warranty or non-fulfillment
of any covenant set forth in this Agreement or in any Related Document; (ii)
Seller's ownership of the Assets; (iii) any and all Proceedings, demands,
assessments, audits, judgments and claims arising out of any of the foregoing.
"Closing" and "Closing Date" are defined in Section 2.1.
"Closing Purchase Price" is defined in Section 3.2.
"Closing Value" is defined in Section 1.3.2.
"Contract" means any agreement, contract, obligation, promise,
or undertaking (whether written or oral and whether express or implied) that is
legally binding.
"Employment Agreement" is defined in Section 2.2.1.10.
"Escrow Agent" means Cors & Xxxxxxx, counsel to Seller and
Shareholders.
"Escrow Agreement" is defined in Section 1.4.1.
"Escrow Cash" is defined in Section 1.4.2.1
"Escrow Consideration" is defined in Section 1.4.1.
"Escrow Shares" is defined in Section 1.4.2.2.
"Excluded Assets" means:
(a) all cash and cash equivalents and all securities and
short term investments;
(b) Seller's "Optiload" software program and all
intellectual property rights thereto;
(c) all trade accounts receivable and other rights to
receive payments from Seller's customers as of the Closing Date;
(d) all inventory, machinery, equipment, fixtures, computer
hardware and software, tools, supplies, spare parts, furniture and other
tangible personal property and assets
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owned or leased by Seller or which Seller has a right to use, that are used in
the operation of Seller's Optiload software business;
(e) the minute books, stock records and corporate seal of
Seller;
(f) the shares of capital stock of Seller; and
(g) the corporate name "Leveraged Solutions, Inc."
"Financial Statements" is defined in Section 3.10.1.
"GAAP" means generally accepted accounting principles in the
United States, consistently applied.
"Governmental Authority" means any foreign, federal, state,
regional or local authority, agency, body, court or instrumentality, regulatory
or otherwise, which, in whole or in part, was formed by or operates under the
auspices of any foreign, federal, state, regional or local government.
"Indemnitee" is defined in Section 8.3.1.
"Indemnitor" is defined in Section 8.3.1.
"Knowledge" - an individual will be deemed to have "Knowledge"
of a particular fact or other matter if such individual is actually aware of
such fact or other matter. A Person (other than an individual) will be deemed to
have "Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter. Seller will be deemed to have
"Knowledge" of a particular fact or other matter if any director or officer of
Seller has, or at any time had, Knowledge of such fact or other matter.
"Law" means any common law and any federal, state, regional,
local or foreign law, rule, statute, ordinance, rule, order or regulation.
"Liabilities" means liabilities, obligations, claims or debts
of Seller of any type or nature, whether matured, unmatured, contingent or
unknown, including, without limitation, tort, contract or other claims asserted
against Seller which are based on acts or omissions occurring on, before or
after the Closing Date.
"Lien" means any lien, charge, covenant, condition, easement,
adverse claim, demand, encumbrance, security interest, option, pledge, or any
other title defect, easement or restriction of any kind.
"Material Contract" means any Contract relating in whole or in
part to the Business or any of the Assets (a) under which Seller has or may
acquire any rights, (b) under
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which Seller has or may become subject to any obligation or liability, or (c) by
which Seller or any of the Assets is or may become bound.
"Note Due Date" is defined in Section 1.7.1.
"Order" means any award, decision, injunction, judgment,
order, ruling, subpoena, or verdict entered, issued, made, or rendered by any
court, administrative agency, or other Governmental Authority or by any
arbitrator.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
"Osage Stock" is defined in Section 1.3.2.
"Person" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental Authority.
"Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Authority or arbitrator.
"Purchase Price" is defined in Section 1.3.3.
"Records" means all financial, accounting and personnel
records of Seller relating to the Business.
"Registration Rights Agreement" is defined in Section 2.2.1.9.
"Related Documents" means this Agreement and each document or
instrument executed in connection with the consummation of the transactions
contemplated herein.
"SEC" means the U.S. Securities & Exchange Commission.
"SEC Reports" is defined in Section 4.7.
"Seller" is defined in the initial paragraph of this
Agreement.
"Stock Consideration" is defined in Section 1.3.2.
"Tax" and "Taxes" include all income, gross receipts,
franchise, excise, transfer, severance, value added, ad valorum, sales, use,
wage, payroll, workmen's compensation, employment, occupation, and real and
personal property taxes; taxes measured by or imposed on capital; levies,
imposts, duties, license and legislation fees; other taxes imposed by a federal,
state, municipal, local, foreign or other governmental authority or agency,
including assessments in the nature of taxes; including without limitation,
interest, penalties, fines, assessments and
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deficiencies relating to any tax or taxes; and including transferee or secondary
liability for taxes and any taxes due as a result of being a member of any
affiliated, consolidated, combined or unitary group or any liability in respect
of taxes under a tax sharing, tax allocation, tax indemnity or other agreement.
"Tax return" or "Tax returns" shall mean all returns, reports,
estimates, schedules, declarations, information statements and documents
required to be filed in connection with any taxes pursuant to the statutes,
rules or regulations of any federal, state, local or foreign government taxing
authority.
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IN WITNESS WHEREOF, each of the parties has executed or caused this
Agreement to be executed as of the date first above written.
ATTEST: OSAGE SYSTEMS GROUP, INC.
By: /s/ Xxxx Xxxxxxxxxx
--------------------------- -----------------------
Xxxx Xxxxxxxxxx,
Chief Executive Officer
ATTEST: OSAGE COMPUTER GROUP, INC.
By: /s/ Xxxx Xxxxxxxxxx
--------------------------- ------------------------
Xxxx Xxxxxxxxxx,
Chief Executive Officer
ATTEST: LEVERAGED SOLUTIONS, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxxx
--------------------------- ------------------------
Xxxxxxx Xxxxxxxxxxxx,
President
WITNESS: SHAREHOLDERS
/s/ Xxxxxxx Xxxxxxxxxxxx
--------------------------- ------------------------
Xxxxxxx Xxxxxxxxxxxx
WITNESS:
/s/ Xxxxxx Xxxxxxx
--------------------------- ------------------------
Xxxxxx Xxxxxxx
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