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EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
U.S. TECHNOLOGIES INC.,
USXX ACQUISITION CORPORATION
AND
ON-SITE SOURCING, INC.
DATED AS OF SEPTEMBER 27, 2000
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of the
27th day of September, 2000, by and among U.S. TECHNOLOGIES INC., a Delaware
corporation ("USXX"), USXX ACQUISITION CORPORATION, a Delaware corporation and a
wholly owned subsidiary of USXX ("Newco"), and ON-SITE SOURCING, INC., a
Delaware corporation ("ONSS").
RECITALS
WHEREAS, the Board of Directors of each of USXX, Newco and ONSS has
approved and deems it advisable and in the best interests of its stockholders to
consummate the merger of ONSS with and into Newco upon the terms and subject to
the conditions set forth herein; and
WHEREAS, in furtherance thereof, the Board of Directors of each of
USXX, Newco and ONSS has approved this Agreement and the merger (the "Merger")
of ONSS with and into Newco, with Newco being the surviving corporation;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, USXX, Newco and ONSS hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS. For purposes of this Agreement, the
following terms have the meanings specified or referred to in this Article I
(such definitions to be equally applicable to both the singular and plural forms
of the terms defined):
"Affiliate"-- with respect to any Person, any other Person that
directly, or through one or more intermediaries, controls or is controlled by or
is under common control with such first Person. As used in this definition,
"control" (including with correlative meanings, "controlled by" and "under
common control with") shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise).
"Applicable Contract"-- any Contract (a) under which ONSS has any
rights, (b) under which ONSS has any obligation or liability, or (c) by which
ONSS or any of the assets owned or used by it is bound.
"Average Trading Price"-- of USXX Common Stock, as of any date, will
equal the average of the reported closing market prices of such stock for the
twenty consecutive trading days ending on the third trading day prior to such
date (counting from and including the trading day immediately preceding such
date). The closing market price for each day in question will be the last sale
price, regular way or, if no such sale takes place on such day, the average of
the closing bid and asked
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prices, regular way, in either case as reported in the principal consolidated
transaction reporting system of the NASDAQ (OTC) or the principal national
securities exchange on which USXX Common Stock is listed or admitted to trading.
"CERCLA"-- the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"Closing Date"-- the date on which the Closing actually takes place.
"Contract"-- any agreement, contract, document, instrument, obligation,
promise or undertaking (whether written or oral) that is legally binding.
"DGCL"-- the Delaware General Corporation Law.
"Encumbrance"-- any charge, adverse claim, lien, mortgage, pledge,
security interest or other encumbrance.
"Environment"-- soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins, and
wetlands), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental Law"-- any applicable Legal Requirement that requires or
relates to:
(a) advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous
substances or materials, violations of discharge limits, or
other prohibitions and of the commencements of activities,
such as resource extraction or construction, that could have
significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the
Environment;
(c) reducing the quantities, preventing the release, or minimizing
the hazardous characteristics of wastes that are generated;
(d) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or
other potentially harmful substances; or
(e) making responsible parties pay private parties, or groups of
them, for damages done to their health by reason of Releases
of Hazardous Materials or to the Environment, or permitting
self-appointed representatives of the public interest to
recover for injuries done to public assets or for damages to
natural resources.
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"ERISA"-- the Employee Retirement Income Security Act of 1974, as
amended, or any successor law, and regulations and rules issued pursuant to that
act or any successor law.
"Exchange Act"-- the Securities Exchange Act of 1934, as amended, or
any successor law, and regulations and rules issued by the SEC pursuant to that
act or any successor law.
"Facilities"-- any real property, leaseholds, or other interests
currently or formerly owned or operated by ONSS and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated by ONSS.
"Final Order"-- an action by a Governmental Body as to which: (a) no
request for stay of the action is pending, no such stay is in effect and if any
time period is permitted by statute or regulation for filing any request for
such stay, such time period has passed; (b) no petition for rehearing,
reconsideration or application for review of the action is pending and the time
for filing any such petition or application has passed; (c) such Governmental
Body does not have the action under reconsideration on its own motion and the
time in which such reconsideration is permitted has passed; and (d) no appeal to
a court, or a request for stay by a court of the Governmental Body's action is
pending or in effect and the deadline for filing any such appeal or request has
passed.
"GAAP"-- generally accepted United States accounting principles,
applied on a consistent basis.
"Governmental Authorization"-- any approval, consent, license,
franchise, certificate of public convenience and necessity, permit, waiver or
other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body"-- any:
(a) nation, state, county, city, town, village, district or other
jurisdiction of any nature;
(b) federal, state, county, local, municipal or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department,
official or entity and any court or other tribunal); or
(d) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Activity"-- the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, any
other act,
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business, operation, or thing that increases the danger, or risk of danger, or
poses an unreasonable risk of harm to persons or property on or off the
Facilities, or that may affect the value of the Facilities or ONSS.
"Hazardous Materials"-- any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"IRC"-- the Internal Revenue Code of 1986, as amended.
"IRS"-- the Internal Revenue Service or any successor agency.
"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 as a director or officer of such Person or any material Subsidiary of it
has actual knowledge of such fact or other matter.
"Legal Requirement"-- any federal, state, county, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, rule, tariff,
franchise agreement, statute or treaty.
"Material Contract"-- a Contract involving a total commitment by or to
any party thereto of at least $50,000 on an annual basis or at least $100,000 on
its remaining term which cannot be terminated on no more than sixty (60) days'
notice without penalty or additional cost to ONSS as the terminating party.
"Xxxxxxxx Warrant"-- redeemable ONSS Common Stock Purchase Warrant
granted by ONSS to X.X. Xxxxxxxx & Co., pursuant to the Underwriting Agreement
among ONSS, certain selling security holders named therein and X.X. Xxxxxxxx &
Co., Inc., dated as of July 9, 1996, and amended by a letter agreement dated
March 4, 1999, which letter agreement became effective February 19, 1999.
"ONSS Balance Sheet"-- the audited balance sheet of ONSS at December
31, 1999 (including the notes thereto), provided by ONSS to USXX as part of the
ONSS Financial Statements.
"ONSS Common Stock"-- the common stock, par value $0.01 per share, of
ONSS.
"ONSS Disclosure Schedule"-- the disclosure schedule delivered by ONSS
to USXX concurrently with the execution and delivery of this Agreement.
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"ONSS Material Adverse Effect"-- a material adverse effect (i) on the
assets, business, operations, financial condition or results of operations of
ONSS, or (ii) on the ability of ONSS to consummate the Merger in accordance with
this Agreement.
"ONSS Permitted Liens"-- Encumbrances securing Taxes, assessments,
governmental charges or levies, or the claims of materialmen, mechanics,
carriers and like persons, all of which are not yet due and payable or which are
being contested in good faith; Encumbrances (other than any Encumbrance imposed
by ERISA) incurred on deposits made in the Ordinary Course of Business in
connection with worker's compensation, unemployment insurance or other types of
social security; in the case of leased real property, Encumbrances (not
attributable to ONSS as lessee) affecting the landlord's (and any underlying
landlord's) interest in any leased real property; and such other Encumbrances
which are not, individually or in the aggregate, reasonably likely to have an
ONSS Material Adverse Effect.
"ONSS Units"-- the units comprised of two shares of ONSS Common Stock
and one warrant to purchase one share of ONSS Common Stock.
"Order"-- any award, decision, decree, injunction, judgment, order,
writ, ruling, subpoena, or verdict entered, issued, made, or rendered by any
court, administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business"-- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if such
action and authorization therefor is consistent with the past practices of such
Person and with such Person's policies in effect as of the date of this
Agreement and is taken in the ordinary course of the normal day-to-day
operations of such Person.
"Organizational Documents"-- (a) the articles or certificate of
incorporation or organization and the bylaws of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) the certificate of formation and the members,
operating or similar agreement of a limited liability company; (e) any charter
or similar document adopted or filed in connection with the creation, formation
or organization of a Person; and (f) any amendment to any of the foregoing.
"Person"-- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, organized group
of persons, entity of any other type, or Governmental Body.
"Proceeding"-- any action, arbitration, hearing, litigation or suit
(whether civil, criminal, administrative, investigative, or informal) commenced,
brought, conducted, or heard by or before, or otherwise involving, any
Governmental Body or arbitrator.
"Related Documents"-- any Contract provided for in this Agreement to be
entered into by one or more of the parties hereto or their respective
Subsidiaries in connection with the Merger.
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"Release"-- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment, whether
intentional or unintentional.
"Representative"-- with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"SEC"-- the United States Securities and Exchange Commission or any
successor agency.
"Securities Act"-- the Securities Act of 1933, as amended, or any
successor law, and regulations and rules issued by the SEC pursuant to that act
or any successor law.
"Subsidiary"-- with respect to any Person (the "Owner"), any Person of
which securities or other interests having the power to elect a majority of that
other Person's board of directors or similar governing body, or otherwise having
the power to direct the business and policies of that corporation or other
Person (other than securities or other interests having such power only upon the
happening of a contingency that has not occurred) are held by the Owner or one
or more of its Subsidiaries; when used without reference to a particular Person,
"Subsidiary" means a Subsidiary of ONSS.
"Tax"-- any tax (including any income tax, capital gains tax,
value-added tax, sales and use tax, transfer tax, franchise tax, payroll tax,
withholding tax or property tax), levy, assessment, tariff, duty (including any
customs duty), deficiency, franchise fee or payment, payroll tax, utility tax,
gross receipts tax or other fee or payment, and any related charge or amount
(including any fine, penalty, interest or addition to tax), imposed, assessed or
collected by or under the authority of any Governmental Body or payable pursuant
to any tax-sharing agreement or any other Contract relating to the sharing or
payment of any such tax, levy, assessment, tariff, duty, deficiency or fee.
"Tax Return"-- any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax, including any
amendment thereto.
"Threatened"-- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing)
that would lead a director or officer of a comparable company to conclude that
such a claim, Proceeding, dispute, action, or other matter is likely to be
asserted, commenced, taken or otherwise pursued in the future.
"USXX Balance Sheet"-- the audited consolidated balance sheet of USXX
at December 31, 1999 (including the notes thereto), provided by USXX to ONSS as
part of the USXX Financial Statements.
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"USXX Common Stock"-- the common stock, par value $0.02 per share, of
USXX.
"USXX Disclosure Schedule"-- the disclosure schedule delivered by USXX
to ONSS concurrently with the execution and delivery of this Agreement.
"USXX Material Adverse Effect"-- a material adverse effect (i) on the
assets, business, operations, financial condition or results of operations of
USXX and its Subsidiaries, taken as a whole, or (ii) on the ability of USXX to
consummate the Merger in accordance with this Agreement.
SECTION 1.2 OTHER DEFINED TERMS. In addition to the terms defined
in Section 1.1, certain other terms are defined elsewhere in this Agreement as
indicated below and, whenever such terms are used in this Agreement, they shall
have their respective defined meanings.
TERM SECTION
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Agreement Introductory Paragraph
Business Combination 6.1(h)(5)
Cash Consideration 3.1(a)
Cash Election 3.1(b)
Cash Election Number 3.1(b)
Cash Election Shares 3.1(c)
Cash Fraction 3.1(c)
Charter Amendment 7.1(m)
Certificates 3.2(b)
Closing 2.3
Confidentiality Agreement 6.1(c)(1)
Dissenting Shares 3.3
Effective Time 2.2
Election Deadline 3.2(b)
Exchange Ratio 3.1(a)
Form of Election 3.2(b)
Indemnified Parties 9.1(a)
Initial Termination Date 8.1(i)
Merger Recitals
Merger Consideration 3.1(a)
ONSS Introductory Paragraph
ONSS Benefit Plans 5.17(a)
ONSS Commonly Controlled Entity 5.17(e)
ONSS Convertible Securities 3.6(a)
ONSS Diluted Shares 3.1(a)
ONSS Financial Statements 5.8
ONSS Meeting 6.1(j)(1)
ONSS Options 3.4
ONSS Public Warrants 3.5
ONSS Proxy Statement 4.17
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ONSS SEC Documents 5.8
ONSS Stockholders' Approval 5.22
Paying Agent 3.2(a)
PBGC 4.13(b)
Registration Statement 4.17
Rule 145 Affiliates 6.1(k)
Rule 145 Letters 6.1(k)
Stock Consideration 3.1(a)
Superior Proposal 6.1(h)(5)
Surviving Corporation 2.1
Third Party Beneficiary 10.11
USXX Introductory Paragraph
USXX Benefit Plans 4.13(a)
USXX Commonly Controlled Entity 4.13(e)
USXX Financial Statements 4.8
USXX Meeting 6.2(k)
USXX Proxy Statement 4.17
USXX SEC Documents 4.8
USXX Stockholders' Approval 4.18
ARTICLE II
THE MERGER; OTHER TRANSACTIONS
SECTION 2.1 THE MERGER. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time, ONSS will be merged with
and into Newco in accordance with the laws of the State of Delaware. As a result
of the Merger, the separate existence of ONSS shall cease and Newco will be the
surviving corporation in the Merger (the "Surviving Corporation"). In connection
with the Merger, Newco will amend its certificate of incorporation to change its
name to "On-Site Sourcing, Inc." and will continue its corporate existence under
the laws of the State of Delaware. The Merger will have the effect as provided
in the applicable provisions of the DGCL. Without limiting the generality of the
foregoing, upon the Merger, all the property, rights, privileges, immunities,
powers and franchises of Newco and ONSS will vest in the Surviving Corporation
and all obligations, duties, debts and liabilities of ONSS and Newco will be the
obligations, duties, debts and liabilities of the Surviving Corporation.
SECTION 2.2 EFFECTIVE TIME OF THE MERGER. On the Closing Date,
with respect to the Merger, a duly executed certificate of merger complying with
the requirements of the DGCL will be filed with the Secretary of State of the
State of Delaware. The Merger will become effective upon filing the certificate
of merger with the Secretary of State of the State of Delaware (the "Effective
Time").
SECTION 2.3 CLOSING. Unless this Agreement has been terminated
and the transactions contemplated herein have been abandoned pursuant to Article
VIII hereof, the closing of the
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transactions contemplated by this Agreement (the "Closing") will take place at
10:00 a.m., Eastern Time, on the Closing Date to be specified by the parties,
which shall be no later than the tenth business day after satisfaction or, if
permissible, waiver of all of the conditions set forth in Article VII hereof
(other than conditions that by their nature are required to be performed on the
Closing Date, but subject to satisfaction of such conditions), at the offices of
Xxxxxxxxxx and Xxxxx, L.L.P., Washington , D.C., counsel to USXX, unless another
date or place is agreed to in writing by the parties hereto.
SECTION 2.4 CERTIFICATE OF INCORPORATION; BYLAWS. Pursuant to the
Merger, the certificate of incorporation of Newco, as in effect immediately
prior to the Effective Time, shall be the certificate of incorporation of the
Surviving Corporation until thereafter amended as provided by law and (ii) the
bylaws of Newco as in effect immediately prior to the Effective Time, shall be
the bylaws of the Surviving Corporation until thereafter amended as provided by
law.
SECTION 2.5 DIRECTORS AND OFFICERS. The directors of Newco
immediately prior to the Effective Time will be the directors of the Surviving
Corporation, each to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation. The officers of ONSS
immediately prior to the Effective Time will be the officers of the Surviving
Corporation, each to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation. Immediately after the
consummation of the Merger, Xxxxxxxxxxx X. Xxxxxx and Xxxxx Xxxxxx will be
elected or appointed as members of the Board of Directors of USXX.
ARTICLE III
CONVERSION OF SHARES
SECTION 3.1 EFFECT OF THE MERGER. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of ONSS Common Stock:
(a) Each issued and outstanding share of ONSS Common Stock (either
separately or as part of the ONSS Units) (other than
Dissenting Shares) will be converted into the right of each
holder thereof to receive either (i) that number of fully paid
and nonassessable shares of USXX Common Stock (the "Stock
Consideration") equal to (A) (x) 35,000,000 divided by (y) the
sum of the number of shares of ONSS Common Stock outstanding
immediately prior to the Effective Time (either separately or
as part of the ONSS Units), the number of shares of ONSS
Common Stock subject to issuance pursuant to the Xxxxxxxx
Warrant to the extent not exercised prior to the Effective
Time (but not including shares of ONSS Common Stock subject to
issuance pursuant to the underlying warrants included in such
Xxxxxxxx Warrant units) and the number of shares of ONSS
Common Stock subject to issuance pursuant to ONSS employee
stock options outstanding immediately prior to the Effective
Time (collectively, the "ONSS Diluted Shares") divided by (B)
the Stock Conversion Reference (the "Exchange Ratio"), or (ii)
upon a valid Cash Election as provided in Section 3.1(b),
cash, without interest, equal to (x) $35,000,000 divided by
(y) the
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number of ONSS Diluted Shares (the "Cash Consideration"),
subject to the limitations set forth in Section 3.1(b), 3.1(c)
and 3.1(e). In the case of the consideration to be received by
the holders of ONSS Common Stock in the aggregate, "Merger
Consideration" shall mean the Cash Consideration together with
the Stock Consideration. In the case of the consideration to
be received by an individual holder of ONSS Common Stock,
"Merger Consideration" shall mean the Cash Consideration
and/or the Stock Consideration to be received by such holder,
as the case may be.
"Stock Conversion Reference" shall be equal to: (i) 1, if the Average Trading
Price of USXX Common Stock as of the Closing Date is greater than or equal to
$0.90 but less than $1.15; (ii) the number equal to the Average Trading Price of
USXX Common Stock as of the Closing Date, if such Average Trading Price of USXX
Common Stock as of the Closing Date is greater than or equal to $0.75 but less
than $0.90; (iii) 0.75, if the Average Trading Price of USXX Common Stock as of
the Closing Date is less than $0.75; or (iv) 1.15, if the Average Trading Price
of USXX Common Stock as of the Closing Date is greater than or equal to $1.15.
(b) Subject to the immediately following sentence and to Section
3.1(c) and 3.1(e), each record holder of shares of ONSS Common
Stock immediately prior to the Effective Time shall be
entitled to elect to receive cash, in lieu of Stock
Consideration, for all or any part of such shares of ONSS
Common Stock (a "Cash Election"). Notwithstanding the
foregoing, the aggregate number of shares of ONSS Common Stock
that may be converted into the right to receive cash
consideration shall not exceed the Cash Election Number. All
shares of ONSS Common Stock not covered by a properly given
Cash Election shall, except as provided in Section 3.1(g), be
converted solely into shares of USXX Common Stock.
"Cash Election Number" shall equal the lesser of:
(i) the number obtained by subtracting (A) the sum of (a)
the number of shares of ONSS Common Stock to be exchanged for
cash in lieu of fractional shares pursuant to Section 3.1(f)
and (b) the number of Dissenting Shares, from (B) 50% of the
number of shares of ONSS Common Stock outstanding immediately
prior to the Effective Time; and
(ii) the number obtained by subtracting (A) the sum of (a)
the number of shares of ONSS Common Stock to be exchanged for
cash in lieu of fractional shares pursuant to Section 3.1(f),
and (b) the number of Dissenting Shares, from (B) 12,000,000
divided by the Cash Consideration.
(c) If the aggregate number of shares of ONSS Common Stock covered
by Cash Elections (the "Cash Election Shares") exceeds the
Cash Election Number, each Cash Election Share shall be
converted into (i) the right to receive an amount in cash,
without interest, equal to the product of (a) the Cash
Consideration and (b) a fraction (the "Cash Fraction"), the
numerator of which shall be the Cash Election Number and
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the denominator of which shall be the total number of Cash
Election Shares, and (ii) a number of shares of USXX Common
Stock equal to the product of (a) the Exchange Ratio and (b) a
fraction equal to one minus the Cash Fraction.
(d) USXX will make all computations to give effect to this Section
3.1 promptly in accordance with the provisions of Section 3.2.
(e) Each holder of ONSS Common Stock shall surrender all such
holder's certificates formerly representing ownership of
shares of ONSS Common Stock in the manner provided in Section
3.2. At the Effective Time, all such shares of ONSS Common
Stock, shall no longer be outstanding and shall be canceled
and automatically converted into the right to receive the
Merger Consideration (and cash in lieu of fractional shares)
therefor upon the surrender of such certificate in accordance
with Section 3.2. Any payment made pursuant to this Section
3.1 shall be made net of applicable withholding taxes to the
extent such withholding is required by law.
(f) No fractional share of USXX Common Stock shall be issued in
connection with the Merger. Each holder of shares of ONSS
Common Stock shall be entitled to receive in lieu of any
fractional share of USXX Common Stock to which such holder
otherwise would have been entitled pursuant to this Section
3.1 (after taking into account all shares of ONSS Common Stock
then held of record by such holder) a cash payment in an
amount equal to the product of (i) the fractional interest of
a share of USXX Common Stock to which such holder otherwise
would have been entitled and (ii) the Cash Consideration.
Payment of such amounts shall be made by USXX.
(g) Pursuant to a Stock Election Agreement of even date herewith,
among Xxxxxxxxxxx X. Xxxxxx, Xxxxx Xxxxxx and USXX, such
individuals have irrevocably agreed to elect to receive all
Stock Consideration and no Cash Consideration (other than cash
in lieu of fractional shares) in exchange for all of the
shares of ONSS Common Stock held by them at the Effective
Time. Such individuals hold an aggregate of 567,000 shares of
ONSS Common Stock as of the date hereof.
(h) Notwithstanding any provision of this Agreement to the
contrary, each share of ONSS Common Stock held in the treasury
of ONSS immediately prior to the Effective Time shall be
canceled and extinguished without conversion thereof.
(i) Each share of common stock, par value $0.01 per share, of
Newco issued and outstanding immediately prior to the
Effective Time shall be converted into and become one share of
common stock, par value $0.01 per share, of the Surviving
Corporation.
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SECTION 3.2 EXCHANGE OF ONSS COMMON STOCK CERTIFICATES.
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(a) USXX's registrar and transfer agent, or such other bank or
trust company as may be selected by USXX that is reasonably
acceptable to ONSS, will act as paying agent ("Paying Agent")
for the holders of ONSS Common Stock in connection with the
Merger, pursuant to an agreement providing for the matters set
forth in this Section 3.2 and such other matters as may be
appropriate and the terms of which shall be reasonably
satisfactory to USXX and ONSS.
(b) At the Effective Time of the Merger, USXX will instruct the
Paying Agent to promptly, and in any event not later than five
(5) business days following the Effective Time, mail (and to
make available for collection by hand) to each holder of
record of a certificate or certificates, which immediately
prior to the Effective Time represented outstanding shares of
ONSS Common Stock (the "Certificates"), whose shares of ONSS
Common Stock were converted pursuant to Section 3.1(a) into
the right to receive the Merger Consideration (and cash in
lieu of fractional shares) (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Paying Agent and shall be
in such form and have such other provisions consistent with
this Agreement as USXX may reasonably specify), (ii)
instructions (which shall provide that at the election of the
surrendering holder Certificates may be surrendered, and
payment therefor collected, by hand delivery) for use in
effecting the surrender of the Certificates in exchange for
payment of the Merger Consideration (and cash in lieu of
fractional shares) and (iii) a form of election (the "Form of
Election") to holders of record of shares of ONSS Common Stock
as of the Closing Date to allow holders to elect either Cash
Consideration, Stock Consideration or a combination thereof.
Any election to receive Cash Consideration contemplated by
Section 3.1(c) will have been properly made only if the Paying
Agent shall have received at its designated office or offices,
by 4:00 p.m., Eastern Time, on the twentieth business day
after the Closing Date (the "Election Deadline"), a Form of
Election properly completed, as set forth in such Form of
Election. An election may be revoked only by written notice
received by the Paying Agent prior to the Election Deadline.
USXX shall have the discretion, which it may delegate in whole
or in part to the Paying Agent, to determine whether Forms of
Election have been properly completed, signed and submitted or
revoked pursuant to this Section 3.2(b), and to disregard
immaterial defects in Forms of Election, provided such
discretion shall be exercised reasonably. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such
other agent or agents as may be appointed by USXX, together
with such letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange
therefor the Merger Consideration for each share of ONSS
Common Stock formerly represented by such Certificate (and
cash in lieu of fractional shares). Holders of Certificates
electing to receive solely Stock Consideration, or whose Cash
Election is received after the Election Deadline, shall be
mailed (or made available for collection by hand if so elected
by the surrendering holder) their Merger Consideration within
five (5) business days of receipt of their letter of
transmittal. Holders of Certificates electing to receive any
portion or all of their Merger Consideration as Cash
Consideration
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prior to the Election Deadline shall be mailed (or made
available for collection by hand if so elected by the
surrendering holder) their Merger Consideration within ten
business days after the Election Deadline. All Certificates
surrendered shall be forthwith canceled. If payment of the
Merger Consideration (and cash in lieu of fractional shares)
is to be made to a Person other than the Person in whose name
the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered shall
be properly endorsed or shall be otherwise in proper form for
transfer and that the Person requesting such payment shall
have paid any transfer and other Taxes required by reason of
the payment of the Merger Consideration (and cash in lieu of
fractional shares) to a Person other than the registered
holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation
that such Tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 3.2, each
Certificate (other than Certificates representing ONSS Common
Stock held by USXX or Dissenting Shares) shall be deemed at
any time after the Effective Time to represent only the right
to receive the Merger Consideration (and cash in lieu of
fractional shares) as contemplated by this Section 3.2.
(c) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or
destroyed, the Paying Agent will issue in exchange for such
lost, stolen or destroyed Certificate the Merger Consideration
(and cash in lieu of fractional shares) deliverable in respect
thereof as determined in accordance with this Article III,
provided that the Person to whom the Merger Consideration (and
cash in lieu of fractional shares) is paid shall, as a
condition precedent to the payment thereof, give the Paying
Agent a bond in such sum as it may ordinarily require and
indemnify the Surviving Corporation in a manner satisfactory
to it against any claim that may be made against the Surviving
Corporation with respect to the Certificate claimed to have
been lost, stolen or destroyed.
(d) After the Effective Time, the stock transfer books of ONSS
shall be closed and there shall be no transfers on the stock
transfer books of the Surviving Corporation of shares of ONSS
Common Stock that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be canceled
and exchanged for the Merger Consideration (and cash in lieu
of fractional shares) as provided in this Article III.
(e) Neither USXX nor the Surviving Corporation shall be liable to
any holder of ONSS Common Stock for Merger Consideration (and
cash in lieu of fractional shares) properly delivered to a
public official pursuant to any applicable abandonment,
escheat or similar law. Any amounts remaining unclaimed by
holders of any such shares of ONSS Common Stock seven years
after the Effective Time (or such earlier or later date
immediately prior to the time at which such amounts would
otherwise escheat to or become property of any Governmental
Body) shall, to the extent permitted by
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applicable law, become the property of USXX, free and clear of
any claims or interest of any such holders or their
successors, assigns or personal representatives previously
entitled thereto.
SECTION 3.3 DISSENTING SHARES. Notwithstanding any provision of
this Agreement to the contrary, the shares of any holder of ONSS Common Stock
who has demanded and perfected appraisal rights for such shares in accordance
with the DGCL and who, as of the Effective Time, has not effectively withdrawn
or lost such appraisal rights ("Dissenting Shares"), shall not be converted into
or represent a right to receive the Merger Consideration (and cash in lieu of
fractional shares) pursuant to Section 3.1, but the holder thereof shall only be
entitled to such rights as are granted by the DGCL. Notwithstanding the
foregoing, if any holder of shares of ONSS Common Stock who demands appraisal of
such shares under the DGCL shall effectively withdraw the request for appraisal
or lose the right to appraisal, then, as of the later of the Effective Time and
the occurrence of such event, such holder's shares shall automatically be
converted into and represent only the right to receive the Merger Consideration
and cash in lieu of fractional shares, without interest thereon, upon surrender
of the certificate representing such shares. ONSS shall give USXX prompt notice
of any demands received by ONSS for appraisal of ONSS Common Stock, and, prior
to the Effective Time, USXX shall have the right to participate in all
negotiations and proceedings with respect to such demands. Prior to the
Effective Time, ONSS shall not, except with the prior written consent of USXX,
make any payment with respect to or offer to settle, any such demands.
SECTION 3.4 ONSS OPTIONS AND THE XXXXXXXX WARRANT. Each
outstanding option to purchase shares of ONSS Common Stock or other similar
interest (collectively, the "ONSS Options") granted under any stock option plans
or under any other plan or arrangement of ONSS, and the Xxxxxxxx Warrant,
together with the applicable exercise prices, are disclosed in Section 5.2 of
the ONSS Disclosure Schedule. ONSS Options, to the extent not exercised prior to
the Effective Time, shall be converted into such number of options to purchase
shares of USXX Common Stock as set forth in Section 3.6(a). Each outstanding
Xxxxxxxx Warrant, to the extent not exercised prior to the Effective Time, shall
be converted into such number of options as set forth in Section 3.6(b).
SECTION 3.5 ONSS PUBLICLY TRADED WARRANTS. Each outstanding
publicly traded warrant (separately or as part of the Units that include shares
of ONSS Common Stock) to purchase shares of ONSS Common Stock for $6.00 per
share (collectively, the "ONSS Public Warrants") which are not exercised prior
to the date on which the Effective Time occurs shall be converted into such
number of warrants to purchase shares of USXX Common Stock as set forth in
Section 3.6(a).
SECTION 3.6 CONVERSION OF ONSS OPTIONS, ONSS PUBLIC WARRANTS AND
THE XXXXXXXX WARRANT.
(a) At the Effective Time, each ONSS Option and ONSS Public
Warrant (each individually, an "ONSS Convertible Securities")
then outstanding shall be automatically converted, without any
further action on the part of any holder, into an option or
warrant, as applicable, to purchase shares of USXX Common
Stock. The expiration date of the warrants into which the ONSS
Public Warrants are converted
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at the Effective Time shall be extended one year from the
current expiration date of the ONSS Public Warrants. The
number of shares of ONSS Common Stock that such holder shall
be entitled to purchase upon exercise of such ONSS Convertible
Security shall be equal to the number of shares of USXX Common
Stock, rounded down to the nearest whole number, which is
equal to the number of shares of ONSS Common Stock that were
subject to such ONSS Convertible Security immediately prior to
the Effective Time multiplied by the Exchange Ratio, at an
exercise price equal to the per share exercise price of each
such ONSS Convertible Security immediately prior to the
Effective Time divided by the Exchange Ratio. Upon such
exercise, a cash payment shall be made in lieu of any
fractional share to which any holder otherwise would have been
entitled to receive pursuant to this subsection (a).
(b) At the Effective Time, each Xxxxxxxx Warrant then outstanding
shall be automatically converted, without any further action
on the part of any holder, into an option, with an exercise
price equal to the exercise price per unit immediately prior
to the Effective Time for such Xxxxxxxx Warrant, to purchase a
new USXX unit consisting of (i) the number of shares of USXX
Common Stock equal to two times the Exchange Ratio, rounded
down to the nearest whole number, and (ii) a warrant to
purchase the number of shares of USXX Common Stock equal to
the Exchange Ratio, rounded down to the nearest whole number,
at an exercise price in the case of such warrant equal to the
per share exercise price of the warrant included in the
Xxxxxxxx Warrant immediately prior to the Effective Time
divided by the Exchange Ratio. The expiration date of the
options into which the Xxxxxxxx Warrants are converted at the
Effective Time (and the expiration date of the underlying
warrants to be included in such options) shall be extended one
year from the current expiration date of the Xxxxxxxx Warrants
(and the current expiration date of the underlying warrants
included in the Xxxxxxxx Warrants). Upon any such exercise, a
cash payment shall be made in lieu of any fractional share to
which any holder otherwise would have been entitled to receive
pursuant to this subsection (b).
(c) Promptly after the Effective Time, USXX will file with the SEC
(i) a registration statement on Form S-8, registering the
shares of USXX Common Stock issuable upon exercise of options
into which the ONSS Options are converted pursuant to Section
3.6(a) and (ii) to the extent not included in the Registration
Statement, an additional registration statement to register
the shares of USXX Common Stock issuable upon the exercise of
warrants into which the ONSS Public Warrants are converted
pursuant to Section 3.6(a) and the new USXX units referenced
in Section 3.6(b) and will use commercially reasonably efforts
to cause such registration statements to remain effective for
so long as such units, options and warrants remain
outstanding.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF USXX
USXX, as to USXX and its Subsidiaries, represents and warrants to ONSS
that:
SECTION 4.1 ORGANIZATION, EXISTENCE AND QUALIFICATION. Each of
USXX and Newco is a corporation duly incorporated, validly existing, and in good
standing under the laws of the State of Delaware, with full corporate power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, to perform its
obligations under all Contracts to which it is a party, and to execute and
deliver this Agreement. Each of USXX and Newco is duly qualified to do business
as a foreign corporation and is in good standing under the laws of each state or
other jurisdiction in which either the ownership or use of the properties owned
or used by it, or the nature of the business conducted by it, requires such
qualification as a foreign corporation, except for such failures to be so
qualified or in good standing as are not, individually or in the aggregate,
reasonably likely to have a USXX Material Adverse Effect.
SECTION 4.2 CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of USXX consists of (i) 40,000,000 shares of USXX
Common Stock, of which 29,059,286 shares were outstanding as of the close of
business on September 26, 2000, and (ii) 10,000,000 shares of Preferred Stock,
par value $0.02 per share, 1,000,000 shares of which are authorized as Series A
Convertible Preferred Stock (the "Series A Stock"), 112,000 shares of which are
authorized as Series B Mandatorily Convertible Preferred Stock (the "Series B
Stock") and 8,750 shares of which are authorized as Series C Mandatorily
Convertible Preferred Stock (the "Series C Stock," and, together with the Series
A Stock and the Series B Stock, the "PREFERRED STOCK"). There are 625,000 shares
of Series A Stock issued and outstanding, 112,000 shares of Series B Stock
issued and outstanding and 5,184 shares of Series C Stock issued and
outstanding. The issued and outstanding shares of USXX Common Stock and
Preferred Stock have been validly issued and are fully paid and nonassessable.
The shares of USXX Common Stock to be issued as the Merger Consideration,
subject to the approval by the stockholders of USXX, and the effectiveness, of
the Charter Amendment (as defined herein), have been duly authorized and
reserved for issuance pursuant to this Agreement, and when issued and delivered
in accordance with the terms of this Agreement, will have been validly issued
and will be fully paid and nonassessable and the issuance thereof is not subject
to any preemptive or other similar right. Except as set forth in Section 4.2 of
the USXX Disclosure Schedule, as of the date of this Agreement, no shares of
USXX Common Stock are held, in treasury or otherwise, by USXX or any of its
Subsidiaries, and there are no outstanding (i) securities convertible into USXX
Common Stock or other capital stock of USXX or any of its material Subsidiaries,
(ii) warrants or options to purchase USXX Common Stock or other securities of
USXX or any of its material Subsidiaries or (iii) commitments to issue shares of
USXX Common Stock (other than pursuant to the Merger) or other securities of
USXX or any of its material Subsidiaries.
SECTION 4.3 SUBSIDIARIES; INVESTMENTS. Except as set forth in
Section 4.3 of the USXX Disclosure Schedule, as of the date of this Agreement,
USXX has no Subsidiaries or investments in
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any Person except for marketable securities reflected in the USXX SEC Documents
delivered to ONSS prior to the date of this Agreement, and USXX, either directly
or through E2Enet, Inc., is the registered owner and holder of all of the issued
and outstanding shares of capital stock of its Subsidiaries and has good title
to such shares. The outstanding capital stock of each material Subsidiary of
USXX has been validly issued and is fully paid and nonassessable.
SECTION 4.4 AUTHORITY RELATIVE TO THIS AGREEMENT AND BINDING
EFFECT. The execution, delivery and performance of this Agreement and the
Related Documents by USXX and Newco have been duly authorized by all requisite
corporate action, except as of the date of this Agreement, for the USXX
Stockholders' Approval and except as set forth in Section 4.18 of the USXX
Disclosure Schedule. Subject to receipt of the USXX Stockholders' Approval and
except as set forth in Section 4.18 of the USXX Disclosure Schedule, the
execution, delivery and performance of this Agreement and the Related Documents
by USXX and Newco will not result in a violation or breach of any term or
provision of, constitute a default, or require a consent, approval or
notification, or accelerate the performance required under, the Organizational
Documents of USXX or Newco, any indenture, mortgage, deed of trust, security
agreement, loan agreement, or other Contract to which USXX or Newco is a party
or by which its assets are bound, or violate any Order, with such exceptions as
are not, individually or in the aggregate, reasonably likely to have a USXX
Material Adverse Effect. This Agreement constitutes, and the Related Documents
to be executed by USXX when executed and delivered will constitute, valid and
binding obligations of USXX and Newco, enforceable against USXX and Newco in
accordance with their terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, reorganization or moratorium or other similar laws from
time to time in effect affecting the enforcement of creditors' rights generally,
including the effect of statutory and other laws regarding fraudulent conveyance
and preferential transfers and (ii) general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
SECTION 4.5 GOVERNMENTAL APPROVALS. Except as set forth herein or
in Section 4.5 of the USXX Disclosure Schedule, no approval or authorization of
any Governmental Body with respect to performance under this Agreement or the
Related Documents by USXX and Newco is required to be obtained by USXX in
connection with the execution and delivery by USXX and Newco of this Agreement
or the Related Documents or the consummation by USXX and Newco of the
transactions contemplated hereby or thereby, the failure to obtain which are,
individually or in the aggregate, reasonably likely to have a USXX Material
Adverse Effect.
SECTION 4.6 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS.
(a) Except as set forth in Section 4.6 of the USXX Disclosure
Schedule or specifically described in the USXX SEC Documents
delivered to ONSS prior to the date of this Agreement, to the
Knowledge of USXX, USXX is not in violation of any Legal
Requirement that is applicable to it, to the conduct or
operation of its business, or to the ownership or use of any
of its assets, other than such violations, if any, which are
not, individually or in the aggregate, reasonably likely to
have a USXX Material Adverse Effect.
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(b) Except as set forth in Section 4.6 of the USXX Disclosure
Schedule, and except for violations that could not reasonably
be expected to have individually or in the aggregate, a
Material Adverse Effect, USXX has, and is in compliance with,
all Governmental Authorizations necessary to conduct its
business and to own, operate and use all of its assets as
currently conducted.
SECTION 4.7 LEGAL PROCEEDINGS; ORDERS. Except as set forth in
Section 4.7 of the USXX Disclosure Schedule or as specifically described in the
USXX SEC Documents delivered to ONSS prior to the date of this Agreement, there
is no pending Proceeding:
(a) that has been commenced by or against, or that otherwise
relates to, USXX that is reasonably likely to have a USXX
Material Adverse Effect; or
(b) as of the date of this Agreement, to the Knowledge of USXX,
that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering in any
material respect with, the Merger or any of the transactions
contemplated hereby.
To the Knowledge of USXX, no such Proceedings, audits or investigations
have been Threatened that are, individually or in the aggregate, reasonably
likely to have a USXX Material Adverse Effect. As of the date of this Agreement,
USXX is not subject to any Orders that are, individually or in the aggregate,
reasonably likely to have a USXX Material Adverse Effect.
SECTION 4.8 SEC DOCUMENTS. USXX has made (and, with respect to
such documents filed after the date hereof through the Closing Date, will make)
available to ONSS a true and complete copy of each report, schedule,
registration statement (other than on Form S-8), and definitive proxy statement
filed by USXX with the SEC since December 31, 1999 and through the Closing Date
in substantially the form filed with the SEC (the "USXX SEC Documents"). Except
as set forth in Section 4.8 of the USXX Disclosure Schedule, as of their
respective dates, the USXX SEC Documents, including without limitation any
financial statements or schedules included therein, complied (or will comply
when filed), in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations of
the SEC thereunder applicable to such USXX SEC Documents, and did not (or will
not when filed) contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited consolidated financial statements and unaudited
interim financial statements of USXX included in the USXX SEC Documents
(collectively, the "USXX Financial Statements") were (or will be when filed)
prepared in accordance with GAAP applied on a consistent basis (except as may be
indicated therein or in the notes thereto and except with respect to unaudited
statements as permitted by Form 10-Q) and fairly present (or will fairly present
when filed) in all material respects the financial position of USXX as of the
respective dates thereof or the results of operations and cash flows for the
respective periods then ended, as the case may be, subject, in the case of
unaudited interim financial statements, to normal, recurring adjustments which
are not material in the aggregate.
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SECTION 4.9 TAXES. Except as set forth in Section 4.9 of the USXX
Disclosure Schedule:
(a) USXX and its Subsidiaries have timely filed all United States
federal, state and local income Tax Returns required to be
filed by or with respect to them or requests for extensions to
file such Tax Returns have been timely filed, granted and have
not expired, and USXX and its Subsidiaries have timely paid
and discharged all Taxes due in connection with or with
respect to the periods or transactions covered by such Tax
Returns and have paid all other Taxes as are due or made
adequate provision therefor in accordance with GAAP except
where the failures to so file, pay or discharge are not,
individually or in the aggregate, reasonably likely to have a
USXX Material Adverse Effect. As of the date of this
Agreement, there are no pending audits or other examinations
relating to any Tax matters. There are no Tax liens on any
assets of USXX or its Subsidiaries. As of the date of this
Agreement, USXX and its Subsidiaries have not granted any
waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of, any Tax. The
accruals and reserves (including deferred taxes) reflected in
the USXX Balance Sheet are in all material respects adequate
to cover all material Taxes accruable through the date thereof
(including interest and penalties, if any, thereon and Taxes
being contested) in accordance with GAAP.
(b) Except for the proposed sale of its Prison Industry
Enhancement business, USXX has no present plan or intention
after the Merger to (i) sell or otherwise dispose of any of
the assets of the Surviving Corporation, including the assets
of ONSS acquired pursuant to the Merger, except for
dispositions made in the ordinary course of business or to a
corporation controlled by the Surviving Corporation within the
meaning of Section 368(a)(2)(C) of the IRC, or (ii) reacquire
any of the USXX Common Stock included in the Merger
Consideration, other than repurchases in the open market
pursuant to stock repurchase plans undertaken for reasons
unrelated to the transactions contemplated by this Agreement.
SECTION 4.10 INTELLECTUAL PROPERTY. USXX has no Knowledge of (i) any
infringement or claimed infringement by it of any patent rights or copyrights of
others or (ii) any infringement of the patent or patent license rights,
trademarks or copyrights owned by or under license to it, except for any such
infringements of the type described in clause (i) or (ii) that are not,
individually or in the aggregate, reasonably likely to have a USXX Material
Adverse Effect.
SECTION 4.11 CONTRACTS. Except as described in Section 4.11 of the USXX
Disclosure Schedule or as specifically described in the USXX SEC Documents
delivered to ONSS prior to the date of this Agreement, and with such exceptions
as are not, individually or in the aggregate, reasonably likely to have a USXX
Material Adverse Effect, all of USXX's Contracts are in full force and effect
and neither USXX nor, to the Knowledge of USXX, any other party thereto is in
default thereunder nor has any event occurred or is any event occurring that,
with notice or the passage of time or otherwise, is reasonably likely to give
rise to an event of default thereunder by any party thereto.
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SECTION 4.12 INDEBTEDNESS. All outstanding principal amounts of
indebtedness for borrowed money of USXX as of the date of this Agreement are set
forth in Section 4.12 of the USXX Disclosure Schedule.
SECTION 4.13 EMPLOYEE BENEFIT PLANS.
(a) Except as set forth in Section 4.13 of the USXX Disclosure
Schedule, each of the USXX Benefit Plans has been operated and
administered in all material respects in accordance with its
governing documents and applicable federal and state laws
(including, but not limited to, ERISA and the IRC). For
purposes of this Agreement, "USXX Benefit Plans" shall mean
all employee retirement, welfare, stock option, stock
ownership, deferred compensation, bonus or other benefit
plans, agreements, practices, policies, programs, or
arrangements that are applicable to any employee, director or
consultant of USXX or its Subsidiaries or maintained by or
contributed to by USXX or its Subsidiaries.
(b) Except as set forth in Section 4.13 of the USXX Disclosure
Schedule, as to any USXX Benefit Plan subject to Title IV of
ERISA, there is no event or condition which presents the
material risk of plan termination, no accumulated funding
deficiency, whether or not waived, within the meaning of
Section 302 of ERISA or Section 412 of the IRC has been
incurred for which any liability is outstanding, no reportable
event within the meaning of Section 4043 of ERISA (for which
the notice requirements of Regulation ss.4043 promulgated by
the Pension Benefit Guaranty Corporation ("PBGC") have not
been waived) has occurred within the last six years, no notice
of intent to terminate the USXX Benefit Plan has been given
under Section 4041 of ERISA, no proceeding has been instituted
under Section 4042 of ERISA to terminate the USXX Benefit
Plan, there has been no termination or partial termination of
the USXX Benefit Plan within the meaning of Section 411(d)(3)
of the IRC within the last six years, no event described in
Sections 4062 or 4063 of ERISA has occurred, all PBGC premiums
have been timely paid and no liability to the PBGC has been
incurred, except for PBGC premiums not yet due.
(c) There is no matter pending (other than qualification
determination applications and filings and other required
periodic filings) with respect to any of the USXX Benefit
Plans before the IRS, the Department of Labor, the PBGC or
before any other Governmental Body.
(d) Except as set forth in Section 4.13 of the USXX Disclosure
Schedule, each trust funding a USXX Benefit Plan, which trust
is intended to be exempt from federal income taxation pursuant
to Section 501(c)(9) of the IRC, has, whenever required by
law, received a favorable determination letter from the IRS
regarding such exempt status, and to the Knowledge of USXX has
not, since receipt of the most recent favorable determination
letter, been amended or operated in any way which would
adversely affect such exempt status.
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(e) Except as set forth in Section 4.13 of the USXX Disclosure
Schedule, with respect to any USXX Benefit Plan or any other
"employee benefit plan" as defined in Section 3(3) of ERISA
under which USXX has any current liabilities or, to the
Knowledge of USXX, with respect to any such plan which within
six years prior to the Closing Date, USXX or its Subsidiaries
or any corporation, trade, business or entity under common
control or being a part of an affiliated service group with
USXX, within the meaning of Section 414(b), (c) or (m) of the
IRC or Section 4001 of ERISA ("USXX Commonly Controlled
Entity"), have had any liabilities, (i) no withdrawal
liability, within the meaning of Section 4201 of ERISA, has
been incurred, which withdrawal liability has not been
satisfied and no such withdrawal liability is reasonably
expected to be incurred, (ii) no liability under Title IV of
ERISA (including, but not limited to, liability to the PBGC)
has been incurred by USXX or any USXX Commonly Controlled
Entity, which liability has not been satisfied (other than for
PBGC premiums not yet due), (iii) no accumulated funding
deficiency, whether or not waived, within the meaning of
Section 302 of ERISA or Section 412 of the IRC has been
incurred for which any liability is outstanding, (iv) there
has been no failure to make any contribution (including
installments) to such plan required by Section 302 of ERISA
and Section 412 of the IRC which has resulted in a lien under
Section 302 of ERISA or Section 412 of the IRC and for which
any liability is currently outstanding, (v) to the Knowledge
of USXX, no action, omission or transaction has occurred with
respect to any such plan or any other USXX Benefit Plan which
could subject USXX or the plan or trust forming a part thereof
to a material civil liability or penalty under ERISA or other
applicable laws, or a material Tax under the IRC, (vi) any
such plan which is a Group Health Plan has complied in all
material respects with the provisions of Part 6 of ERISA and
Section 4980B of the IRC, (vii) there are no pending or, to
the Knowledge of USXX, Threatened claims by or on behalf of
any such plan or any other USXX Benefit Plan, by any
employees, former employees or plan beneficiaries covered by
such plan or otherwise by or on behalf of any person involving
any such plan (other than routine claims for benefits) which
could result in a material liability to USXX and its
Subsidiaries, taken as a whole, and (viii) neither USXX nor
any USXX Commonly Controlled Entity has engaged in, or is a
successor or parent corporation to any entity or person that
has engaged in, a transaction described in Section 4069 of
ERISA.
(f) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not
(i) increase the amount of benefits otherwise payable under
any USXX Benefit Plan, (ii) result in the acceleration of the
time of eligibility to participate in any USXX Benefit Plan,
or of any payment, exercisability, funding or vesting of any
benefit under any USXX Benefit Plan, (iii) result in payment
becoming due or with respect to any current or former
employee, director or consultant, or (iv) result in any
payment becoming due in the event of a termination of
employment or service of any employee, director or consultant.
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(g) USXX is not a party to any Contract nor has it established any
policy or practice, which would require USXX to make a payment
or provide any other form of compensation or benefit to any
Person performing (or who within the past twelve months
performed) services for USXX during or upon termination of
such services which would not be payable or provided in the
absence of the consummation of the transactions contemplated
by this Agreement.
(h) Except as otherwise set forth in Section 4.13 of the USXX
Disclosure Schedule, each USXX Benefit Plan which is an
"employee welfare benefit plan," as such term is defined in
Section 3(1) of ERISA, may by its terms be unilaterally
amended or terminated in its entirety without any liability
being incurred by USXX or any Affiliate of USXX, except as to
benefits accrued thereunder prior to such amendment or
termination.
(i) As of the date of this Agreement, USXX has not contributed nor
been obligated to contribute to any "multi-employer plan"
within the meaning of Section 3(37) of ERISA within the last
six years and has no outstanding liability with respect to any
such plan.
(j) Section 4.13 of the USXX Disclosure Schedule contains a true
and complete list of each USXX Benefit Plan, and any
management, employment, deferred compensation, severance
(including any payment, right or benefit resulting from a
change in control), bonus, or other contract for personal
services with respect to which USXX has any liabilities with
any current or former officer, director or employee, any
consulting contract with any person who prior to entering this
such contract was a director or officer or owner of 5% or more
of the stock of USXX or family member of any such director,
officer or stockholder, or any plan, agreement, arrangement or
understanding similar to any of the foregoing. Except as set
forth in Section 4.2 of the USXX Disclosure Schedule, there
are no outstanding options to purchase USXX capital stock or
other securities. USXX has made available to ONSS a complete
and correct copy of each USXX Benefit Plan (or written summary
of any unwritten USXX Benefit Plan), and with respect to each
USXX Benefit Plan, the current summary plan description,
related trust agreements, related insurance contracts, the
latest IRS determination letter, the last three annual reports
on Form 5500 series (including all required schedules), and
the most recent actuarial report and annual financial
statements.
SECTION 4.14 ENVIRONMENTAL MATTERS. Except as set forth in Section 4.14
of the USXX Disclosure Schedule or as specifically described in the USXX SEC
Documents delivered to ONSS prior to the date of this Agreement, and with such
other exceptions as are not, individually or in the aggregate, reasonably likely
to have a USXX Material Adverse Effect:
(a) To the Knowledge of USXX, USXX and any Person for whose
conduct USXX is reasonably likely to be held responsible, is
currently and at all times has been, in
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material compliance with any Environmental Law. USXX has not
received any Order, notice, or other communication from (i)
any Governmental Body or private citizen acting in the public
interest, or (ii) the current or prior owner or operator of
any Facilities, of any violation or failure to comply with any
Environmental Law by USXX, or of any obligation to undertake
or bear the cost of any environmental cleanup, or with respect
to any property or Facility at which Hazardous Materials
generated by USXX or any other Person for whose conduct USXX
may be held responsible were transported for disposal; and
(b) There are no pending, or to the Knowledge of USXX Threatened,
claims against USXX arising under or pursuant to any
Environmental Law with respect to or affecting any of the
Facilities or any other properties and assets (whether real,
personal, or mixed) in which USXX has or had a direct or
indirect interest (including by ownership or use).
SECTION 4.15 NO MATERIAL ADVERSE CHANGE. Except as described in the
USXX SEC Documents that have been provided to ONSS prior to the date of this
Agreement, since the date of the USXX Balance Sheet, there has not been any USXX
Material Adverse Effect, except that any USXX Material Adverse Effect that
results from or relates to (a) general business or economic conditions, (b)
conditions generally affecting the industries in which USXX operates or (c) the
announcement of the transactions contemplated by this Agreement shall be
disregarded.
SECTION 4.16 BROKERS. Except as set forth in Section 4.16 of the USXX
Disclosure Schedule, USXX is not a party to, or in any way obligated under any
Contract, and there are no outstanding claims against USXX, for the payment of
any broker's or finder's fees in connection with the origin, negotiation,
execution or performance of this Agreement.
SECTION 4.17 PROXY STATEMENT; REGISTRATION STATEMENT. None of the
information supplied or to be supplied to ONSS by or on behalf of USXX for
inclusion in the proxy statement, in definitive form, relating to the ONSS
Meeting to be held in connection with the Merger (the "ONSS Proxy Statement"),
supplied or to be supplied by or on behalf of USXX in the proxy statement(s), in
definitive form, relating to the USXX Meeting(s) (as defined in Section
6.2(k)(1)) to be held in connection with the Charter Amendment and, if USXX in
its sole discretion determines it is advisable, the Merger (individually or
collectively, the "USXX Proxy Statement"), or supplied by or on behalf of USXX
in the Registration Statement on Form S-4 (and any amendments thereto) to be
filed by USXX with the SEC pursuant to the Securities Act to register the shares
of USXX Common Stock constituting the Stock Consideration (the "Registration
Statement") will, in the case of the Registration Statement, at the effective
time of the Registration Statement, at any time the Registration Statement is
amended or supplemented, at the date the ONSS Proxy Statement is first mailed to
ONSS' stockholders, at any time the ONSS Proxy Statement is amended or
supplemented, at the time of the ONSS Meeting and at the Effective Time, and in
the case of the ONSS Proxy Statement, at the date the ONSS Proxy Statement is
first mailed to ONSS' stockholders, at any time the ONSS Proxy Statement is
amended or supplemented and at the time of the ONSS Meeting, and in the case of
the USXX Proxy Statement, at the date the USXX Proxy Statement is first mailed
to
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USXX's shareholders, at any time the USXX Proxy Statement is amended or
supplemented and at the time of the USXX Meeting (giving effect to any documents
incorporated by reference therein), contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Registration Statement will
comply as to form and in substance in all material respects with the applicable
provisions of the Securities Act and the rules and regulations thereunder. The
USXX Proxy Statement will comply as to form and in substance in all material
respects with the applicable provisions of the Exchange Act and the rules and
regulations thereunder.
SECTION 4.18 VOTES REQUIRED. The Board of Directors of USXX has adopted
resolutions approving the Charter Amendment and recommending the approval of
such amendment to the USXX stockholders. Holders representing a majority of the
Series A Stock have adopted resolutions approving the Charter Amendment, this
Agreement and the transactions contemplated hereby. At the USXX Meeting(s), USXX
will seek the approval by the holders of a majority of the outstanding shares of
USXX Common Stock of the Charter Amendment and, if USXX in its sole discretion
determines it is advisable, the Merger (collectively, the "USXX Stockholders'
Approval") and, except as set forth in Section 4.18 of the USXX Disclosure
Schedule, no other vote of the holders of any class or series of the capital
stock of USXX is required to approve the Charter Amendment, this Agreement and
the Merger.
SECTION 4.19 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE IV, USXX MAKES NO
OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AND USXX HEREBY
DISCLAIMS ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES, WHETHER BY USXX, ANY
SUBSIDIARY OF USXX, OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR REPRESENTATIVES, OR ANY OTHER PERSON, WITH RESPECT TO THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR
DISCLOSURE TO ONSS OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
REPRESENTATIVES, OR ANY OTHER PERSON, OF ANY DOCUMENTATION OR OTHER INFORMATION
BY USXX, ANY SUBSIDIARY OF USXX, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR REPRESENTATIVES, OR ANY OTHER PERSON, WITH RESPECT TO ANY
OF THE FOREGOING.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ONSS.
ONSS represents and warrants to USXX as follows:
SECTION 5.1 ORGANIZATION, EXISTENCE AND QUALIFICATION. ONSS is a
corporation duly incorporated, validly existing, and in good standing under the
laws of the State of Delaware, with full corporate power and authority to
conduct its business as it is now being conducted, to own or use
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the properties and assets that it purports to own or use, and to perform all its
obligations under all Applicable Contracts. ONSS is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the business conducted by it,
requires such qualification as a foreign corporation, except for such failures
to be so qualified or in good standing as are not, individually or in the
aggregate, reasonably likely to have an ONSS Material Adverse Effect.
SECTION 5.2 CAPITALIZATION. The capital stock of ONSS consists of
20,000,000 shares of ONSS Common Stock, of which as of the close of business on
September __, 2000, 4,841,125 shares are issued and outstanding, and 1,000,000
shares of Preferred Stock, $0.01 par value per share, none of which are issued
or outstanding. The issued and outstanding shares of ONSS Common Stock have been
validly issued and are fully paid and nonassessable. Except as set forth in
Section 5.2 of the ONSS Disclosure Schedule, no shares of ONSS Common Stock are
held, in treasury or otherwise, by ONSS and there are no outstanding (i)
securities convertible into ONSS Common Stock or other capital stock of ONSS,
(ii) warrants or options to purchase ONSS Common Stock or other securities of
ONSS or (iii) other commitments to issue shares of ONSS Common Stock or other
securities of ONSS or any of its Subsidiaries.
SECTION 5.3 SUBSIDIARIES; INVESTMENTS. ONSS has no Subsidiaries or
investments in any Person (except for marketable securities disclosed to USXX
prior to the date of this Agreement). All such capital stock owned by ONSS is
free and clear of any Encumbrance (except for any Encumbrance disclosed in the
ONSS SEC Documents delivered to USXX prior to the date of this Agreement, or
created or incurred by this Agreement in favor of USXX, or imposed by federal or
state securities laws).
SECTION 5.4 AUTHORITY RELATIVE TO THIS AGREEMENT AND BINDING EFFECT.
The execution, delivery and performance of this Agreement and the Related
Documents by ONSS have been duly authorized by all requisite corporate action,
except, as of the date of this Agreement, for the ONSS Stockholders' Approval.
Subject to receipt of the ONSS Stockholders' Approval and except as set forth in
Section 5.4 of the ONSS Disclosure Schedule, the execution, delivery and
performance of this Agreement and the Related Documents by ONSS will not result
in a violation or breach of any term or provision of, or constitute a default,
require a consent, approval or notification, or accelerate the performance
required under, the Organizational Documents of ONSS, any indenture, mortgage,
deed of trust, security agreement, loan agreement, or other Applicable Contract
to which ONSS is a party or by which its assets are bound, or violate any Order,
with such exceptions as are not, individually or in the aggregate, reasonably
likely to have a ONSS Material Adverse Effect. This Agreement constitutes and
the Related Documents to be executed by ONSS, when executed and delivered, will
constitute valid and binding obligations of ONSS, enforceable against it in
accordance with their terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, reorganization or moratorium or other similar laws from
time to time in effect affecting the enforcement of creditors' rights generally,
including the effect of statutory and other laws regarding fraudulent conveyance
and preferential transfers and (ii) general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
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SECTION 5.5 GOVERNMENTAL APPROVALS. Except as set forth in Section 5.5
of the ONSS Disclosure Schedule, no approval or authorization of any
Governmental Body with respect to performance under this Agreement or the
Related Documents by ONSS is required to be obtained by ONSS in connection with
the execution and delivery by ONSS of this Agreement or the Related Documents,
the failure to obtain which are, individually or in the aggregate, reasonably
likely to have a ONSS Material Adverse Effect.
SECTION 5.6 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS.
(a) Except as set forth in Section 5.6 of the ONSS Disclosure
Schedule or as specifically described in the ONSS SEC
Documents delivered to USXX prior to the date of this
Agreement, to the Knowledge of ONSS, ONSS is not in violation
of any Legal Requirement that is applicable to it, to the
conduct or operation of its business, or to the ownership or
use of any of its assets, other than such violations, if any,
which are not, individually or in the aggregate, reasonably
likely to have a ONSS Material Adverse Effect.
(b) Except as set forth in Section 5.6 of the ONSS Disclosure
Schedule, and except for violations that could not reasonably
be expected to have, individually or in the aggregate, an ONSS
Material Adverse Effect, ONSS has, and is in compliance with,
all Governmental Authorizations necessary to conduct its
business and to own, operate and use all of its assets as
currently conducted.
SECTION 5.7 LEGAL PROCEEDINGS; ORDERS. Except as set forth in Section
5.7 of the ONSS Disclosure Schedule or as specifically described in the ONSS SEC
Documents delivered to USXX prior to the date of this Agreement, there is no
pending Proceeding:
(a) that has been commenced by or against, or that otherwise
relates to, ONSS that is reasonably likely to have a ONSS
Material Adverse Effect; or
(b) as of the date of this Agreement, to the Knowledge of ONSS,
that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering in any
material respect with the Merger or any of the transactions
contemplated hereby.
To the Knowledge of ONSS, except as set forth in Section 5.7 of the ONSS
Disclosure Schedule, as of the date of this Agreement, no such Proceedings,
audits or investigations have been Threatened that are, individually or in the
aggregate, reasonably likely to have a ONSS Material Adverse Effect. As of the
date of this Agreement, ONSS is not subject to any Orders that are, individually
or in the aggregate, reasonably likely to have a ONSS Material Adverse Effect.
SECTION 5.8 SEC DOCUMENTS. ONSS has made (and, with respect to such
documents filed after the date hereof through the Closing Date, will make)
available to USXX a true and complete copy of each report, schedule,
registration statement (other than on Form S-8), and definitive proxy
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statement filed by ONSS with the SEC since June 30, 2000 through the Closing
Date in substantially the form filed with the SEC (the "ONSS SEC Documents"). As
of their respective dates, the ONSS SEC Documents, including without limitation
any financial statements or schedules included therein, complied (or will comply
when filed), in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations of
the SEC thereunder applicable to such ONSS SEC Documents, and did not (or will
not when filed) contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited financial statements and unaudited interim financial
statements of ONSS included in the ONSS SEC Documents (collectively, the "ONSS
Financial Statements") were (or will be when filed) prepared in accordance with
GAAP (except as may be indicated therein or in the notes thereto and except with
respect to unaudited statements as permitted by Form 10-Q) and fairly present
(or will fairly present when filed) in all material respects the financial
position of ONSS, as of the respective dates thereof or the results of
operations and cash flows for the respective periods then ended, as the case may
be, subject, in the case of unaudited interim financial statements, to normal,
recurring adjustments which are not material in the aggregate.
SECTION 5.9 TAXES. Except as set forth in Section 5.9 of the ONSS
Disclosure Schedule, ONSS has timely filed all United States federal, state and
local income Tax Returns required to be filed by or with respect to it or
requests for extensions to file such Tax Returns have been timely filed, granted
and have not expired, and ONSS has timely paid and discharged all Taxes due in
connection with or with respect to the periods or transactions covered by such
Tax Returns and has paid all other Taxes as are due or made adequate provision
therefor in accordance with GAAP except where failures to so file, pay or
discharge are not, individually or in the aggregate, reasonably likely to have a
ONSS Material Adverse Effect. There are no pending audits or other examinations
relating to any Tax matters. There are no Tax liens on any assets of ONSS. As of
the date of this Agreement, ONSS has not granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of,
any Tax. The accruals and reserves (including deferred taxes) reflected in the
ONSS Balance Sheet are in all material respects adequate to cover all material
Taxes accruable through the date thereof (including interest and penalties, if
any, thereon and Taxes being contested) in accordance with GAAP.
SECTION 5.10 INTELLECTUAL PROPERTY. ONSS owns or possesses the rights
to use the trademarks, trade names, patents, licenses and proprietary or other
confidential information currently used by it in connection with its business,
except where the failure to so own or possess could not reasonably be expected
to have, individually or in the aggregate, an ONSS Material Adverse Effect. ONSS
has no Knowledge of (i) any infringement or claimed infringement by it of any
patent rights or copyrights of others or (ii) any infringement of, or conflict
with, the patent or patent license rights, trade names, licenses, trademarks or
copyrights owned by or under license to it, except for any such infringements of
the type described in clause (i) or (ii) that are not, individually or in the
aggregate, reasonably likely to have an ONSS Material Adverse Effect.
SECTION 5.11 TITLE TO ASSETS. Except (i) as set forth in Section 5.11
of the ONSS Disclosure Schedule, (ii) as specifically described in the ONSS SEC
Documents delivered to USXX prior to the
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date of this Agreement, (iii) as set forth in Section 5.19 of this Agreement or
(iv) as set forth in Section 5.19 of the ONSS Disclosure Schedule, none of ONSS'
assets are subject to any Encumbrance other than ONSS Permitted Liens.
SECTION 5.12 INDEBTEDNESS. All outstanding principal amounts of
indebtedness for borrowed money of ONSS as of the date of this Agreement are set
forth in Section 5.12 of the ONSS Disclosure Schedule.
SECTION 5.13 MACHINERY AND EQUIPMENT. Except for normal wear and tear,
and with such exceptions as are not, individually or in the aggregate,
reasonably likely to have a ONSS Material Adverse Effect, the machinery and
equipment of ONSS necessary for the conduct by it of its businesses as presently
conducted are in good operating condition and in a state of reasonable
maintenance and repair.
SECTION 5.14 MATERIAL CONTRACTS. Set forth in Section 5.14 of the ONSS
Disclosure Schedule is a list as of the date hereof of all Material Contracts to
which ONSS is a party involving a total commitment by or to any party thereto of
more than $50,000 on an annual basis or more than $100,000 on its remaining term
which cannot be terminated on no more than sixty (60) days' notice without
penalty or additional cost to ONSS as the terminating party. Except as
specifically described in the ONSS SEC Documents delivered to USXX prior to the
date of this Agreement, and with such exceptions as are not, individually or in
the aggregate, reasonably likely to have an ONSS Material Adverse Effect, all
Material Contracts of ONSS set forth in Section 5.14 of the ONSS Disclosure
Schedule are in full force and effect and neither ONSS nor, to the Knowledge of
ONSS, any other party thereto is in default thereunder nor has any event
occurred or is any event occurring that with notice or the passage of time or
otherwise, is reasonably likely to give rise to an event of default thereunder
by any party thereto.
SECTION 5.15 INSURANCE. Section 5.15(a) of the ONSS Disclosure Schedule
sets forth a list of all policies of insurance held by ONSS as of the date of
this Agreement. Since June 30, 1995, the assets and the business of ONSS have
been continuously insured with what ONSS believes are reputable insurers against
all risks and in such amounts normally insured against by companies of the same
type and in the same line of business as ONSS. As of the date of this Agreement,
no notice of cancellation, non-renewal or material increase in premiums has been
received by ONSS with respect to such policies, and ONSS has no Knowledge of any
fact or circumstance that could reasonably be expected to form the basis for any
cancellation, non-renewal or material increase in premiums, except for such
cancellations, non-renewals and increases which are not, individually or in the
aggregate, reasonably likely to have a ONSS Material Adverse Effect. ONSS is not
in default with respect to any provision contained in any such policy or binder
nor has there been any failure to give notice or to present any claim relating
to the business or the assets of ONSS under any such policy or binder in a
timely fashion or in the manner or detail required by the policy or binder,
except for such defaults or failures which are not, individually or in the
aggregate, reasonably likely to have a ONSS Material Adverse Effect. As of the
date of this Agreement, there are no outstanding unpaid premiums (except
premiums not yet due and payable), and no notice of cancellation or renewal with
respect to, or disallowance of any claim under, any such policy or binder has
been received by ONSS as of the date
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hereof, except for such non-payments of premiums, cancellations, renewals or
disallowances which are not, individually or in the aggregate, reasonably likely
to have a ONSS Material Adverse Effect.
SECTION 5.16 EMPLOYEES. Section 5.16 of the ONSS Disclosure Schedule
sets forth a list as of the date of this Agreement of all the present officers
and employees of ONSS, indicating each employee's position and identifying those
who are part-time employees. Except as set forth in Section 5.16 of the ONSS
Disclosure Schedule, as of the date of this Agreement, no labor union or other
collective bargaining unit has been certified or recognized by ONSS, and, to the
Knowledge of ONSS, as of the date of this Agreement, there are no elections,
organizing drives or material controversies pending or Threatened between ONSS
and any labor union or other collective bargaining unit representing any of the
ONSS employees. There is no pending or, to the Knowledge of ONSS, Threatened
labor practice complaint, arbitration, labor strike or other material labor
dispute (excluding grievances) involving ONSS which are, individually or in the
aggregate, reasonably likely to have a ONSS Material Adverse Effect. Except as
set forth in Section 5.16 of the ONSS Disclosure Schedule, ONSS is not a party
to any written employment agreement with any employee of ONSS.
SECTION 5.17 EMPLOYEE BENEFIT PLANS. Except as set forth in Section
5.17 of the ONSS Disclosure Schedule:
(a) Each of the ONSS Benefit Plans has been operated and
administered in all material respects in accordance with its
governing documents and applicable federal and state laws
(including, but not limited to, ERISA and the IRC). For
purposes of this Agreement, "ONSS Benefit Plans" shall mean
all employee retirement, welfare, stock option, stock
ownership, deferred compensation, bonus or other benefit
plans, agreements, practices, policies, programs, or
arrangements, that are applicable to any employee, director or
consultant of ONSS or maintained by or contributed to by ONSS.
(b) As to any ONSS Benefit Plan subject to Title IV of ERISA,
there is no event or condition which presents the material
risk of plan termination, no accumulated funding deficiency,
whether or not waived, within the meaning of Section 302 of
ERISA or Section 412 of the IRC has been incurred for which
any liability is outstanding, no reportable event within the
meaning of Section 4043 of ERISA (for which the notice
requirements of Regulation ss.4043 promulgated by the PBGC
have not been waived) has occurred within the last six years,
no notice of intent to terminate the ONSS Benefit Plan has
been given under Section 4041 of ERISA, no proceeding has been
instituted under Section 4042 of ERISA to terminate the ONSS
Benefit Plan, there has been no termination or partial
termination of the ONSS Benefit Plan within the meaning of
Section 411(d)(3) of the IRC within the last six years, no
event described in Sections 4062 or 4063 of ERISA has
occurred, all PBGC premiums have been timely paid and no
liability to the PBGC has been incurred, except for PBGC
premiums not yet due.
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(c) There is no matter pending (other than qualification
determination applications and filings and other required
periodic filings) with respect to any of the ONSS Benefit
Plans before the IRS, the Department of Labor, the PBGC or
before any other Governmental Body.
(d) Each trust funding a ONSS Benefit Plan, which trust is
intended to be exempt from federal income taxation pursuant to
Section 501(c)(9) of the IRC has received a favorable
determination letter from the IRS regarding such exempt status
and to the Knowledge of ONSS has not, since receipt of the
most recent favorable determination letter, been amended or
operated in any way which would adversely affect such exempt
status.
(e) With respect to any ONSS Benefit Plan or any other "employee
benefit plan" as defined in Section 3(3) of ERISA under which
ONSS has any current liabilities, or to the Knowledge of ONSS,
with respect to any such plan which within six years prior to
the Closing Date, ONSS or any corporation, trade, business or
entity under common control or being a part of an affiliated
service group with ONSS, within the meaning of Section 414(b),
(c) or (m) of the IRC or Section 4001 of ERISA ("ONSS Commonly
Controlled Entity") has had any liabilities, (i) no withdrawal
liability, within the meaning of Section 4201 of ERISA, has
been incurred, which withdrawal liability has not been
satisfied and no such withdrawal liability is reasonably
expected to be incurred, (ii) no liability under Title IV of
ERISA (including, but not limited to, liability to the PBGC)
has been incurred by ONSS or any ONSS Commonly Controlled
Entity, which liability has not been satisfied (other than for
PBGC premiums not yet due), (iii) no accumulated funding
deficiency, whether or not waived, within the meaning of
Section 302 of ERISA or Section 412 of the IRC has been
incurred for which any liability is outstanding, (iv) there
has been no failure to make any contribution (including
installments) to such plan required by Section 302 of ERISA
and Section 412 of the IRC which has resulted in a lien under
Section 302 of ERISA or Section 412 of the IRC and for which
any liability is currently outstanding, (v) to the Knowledge
of ONSS, no action, omission or transaction has occurred with
respect to any such plan or any other ONSS Benefit Plan which
could subject ONSS, the plan or trust forming a part thereof,
or USXX to a material civil liability or penalty under ERISA
or other applicable laws, or a material Tax under the IRC,
(vi) any such plan which is a Group Health Plan has complied
in all material respects with the provisions of Part 6 of
ERISA and Section 4980B of the IRC, (vii) there are no pending
or, to the Knowledge of ONSS, Threatened claims by or on
behalf of any such plan or any other ONSS Benefit Plan, by any
employees, former employees or plan beneficiaries covered by
such plan or otherwise by or on behalf of any person involving
any such plan (other than routine claims for benefits) which
could result in a material liability to ONSS, and (viii)
neither ONSS nor any ONSS Commonly Controlled Entity has
engaged in, or is a successor or parent corporation to any
entity or person that has engaged in, a transaction described
in Section 4069 of ERISA.
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(f) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not
(i) increase the amount of benefits otherwise payable under
any ONSS Benefit Plan, (ii) result in the acceleration of the
time of eligibility to participate in any ONSS Benefit Plan,
or any payment, exercisability, funding or vesting of any
benefit under any ONSS Benefit Plan, (iii) result in any
payment becoming due to or with respect to any current or
former employee, director or consultant, or (iv) result in any
payment becoming due in the event of a termination of
employment or service of any employee, director or consultant.
(g) ONSS is not a party to any Applicable Contract nor has it
established any policy or practice, which would require it or
USXX to make a payment or provide any other form of
compensation or benefit to any Person performing (or who
within the past twelve months performed) services for ONSS
during or upon termination of such services which would not be
payable or provided in the absence of the consummation of the
transactions contemplated by this Agreement.
(h) Each ONSS Benefit Plan which is an "employee welfare benefit
plan," as such term is defined in Section 3(1) of ERISA, may
by its terms be unilaterally amended or terminated in its
entirety without any liability being incurred by ONSS, USXX or
any Affiliate of USXX, except as to benefits accrued
thereunder prior to such amendment or termination.
(i) ONSS has not contributed nor been obligated to contribute to
any "multi-employer plan" within the meaning of Section 3(37)
of ERISA within the last six years, and ONSS does not have any
outstanding liability with respect to any such plan.
(j) Section 5.17(j) of the ONSS Disclosure Schedule contains a
true and complete list of each ONSS Benefit Plan, and any
management, employment, deferred compensation, severance
(including any payment, right or benefit resulting from a
change in control), bonus, or other contract for personal
services with respect to which ONSS has any liabilities with
any current or former officer, director or employee, any
consulting contract with any person who prior to entering this
such contract was a director or officer or owner of 5% or more
of the stock of ONSS or family member of any such director,
officer or stockholder, or any plan, agreement, arrangement or
understanding similar to any of the foregoing. Except as set
forth in Section 5.2 of the ONSS Disclosure Schedule, there
are no outstanding options to purchase ONSS capital stock or
other securities. ONSS has provided to USXX a complete and
correct copy of each ONSS Benefit Plan (or written summary of
any unwritten ONSS Benefit Plan), and with respect to each
ONSS Benefit Plan, the current summary plan description,
related trust agreements, related insurance contracts, the
latest IRS determination letter, the last three annual reports
on Form 5500 series (including all required schedules), and
the most recent actuarial report and annual financial
statements.
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SECTION 5.18 ENVIRONMENTAL MATTERS. Except as set forth in Section 5.18
of the ONSS Disclosure Schedule, and with such other exceptions as are not,
individually or in the aggregate, reasonably likely to have a ONSS Material
Adverse Effect:
(a) To the Knowledge of ONSS, no Facility owned or operated by
ONSS is currently, or was at any time, listed on the National
Priorities List promulgated under CERCLA, or on any comparable
state list, and ONSS has not received any written notification
of potential or actual liability or a written request for
information from any Person under or relating to a Release
regulated under CERCLA or any comparable Legal Requirement
with respect to it or the Facilities;
(b) To the Knowledge of ONSS, ONSS and any Person for whose
conduct it is reasonably likely to be held responsible, is
currently and at all times has been, in material compliance
with any Environmental Law. ONSS has not received any Order,
notice, or other communication from (i) any Governmental Body
or private citizen acting in the public interest, or (ii) the
current or prior owner or operator of any Facilities, of any
violation or failure to comply with any Environmental Law by
ONSS, or of any obligation to undertake or bear the cost of
any environmental cleanup, or with respect to any property or
Facility at which Hazardous Materials generated by ONSS were
transported for disposal;
(c) There are no pending or, to the Knowledge of ONSS, Threatened
claims against ONSS arising under or pursuant to any
Environmental Law with respect to or affecting any of the
Facilities or any other properties and assets (whether real,
personal, or mixed) in which ONSS has or had a direct or
indirect interest (including by ownership or use); and
(d) ONSS has delivered or made available to USXX true and complete
copies and results of any environmental site assessments,
studies, analyses, tests or monitoring possessed by ONSS of
which it has Knowledge pertaining to Hazardous Materials or
Hazardous Activities in, on or under the Facilities, or
concerning compliance by ONSS or any other Person for whose
conduct ONSS is reasonably likely to be held responsible, with
Environmental Laws.
SECTION 5.19 NO MATERIAL ADVERSE CHANGE. Since the date of the ONSS
Balance Sheet, except as described in Section 5.19 of the ONSS Disclosure
Schedule, there has not been any ONSS Material Adverse Effect, except that any
ONSS Material Adverse Effect that results from or relates to (a) general
business or economic conditions, (b) conditions generally affecting the
industries in which ONSS competes or (c) the announcement of the transactions
contemplated by this Agreement shall be disregarded.
SECTION 5.20 BROKERS. ONSS is not a party to, or in any way obligated
under any Applicable Contract, and there are no outstanding claims against it,
for the payment of any broker's or finder's fees in connection with the origin,
negotiation, execution or performance of this Agreement, except
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for a Contract with Xxxxxx, Xxxxx Xxxxx, Incorporated, pursuant to which Xxxxxx,
Xxxxx Xxxxx, Incorporated is being paid a fee for the delivery of an opinion
that the Merger Consideration to be paid to ONSS is fair from a financial point
of view.
SECTION 5.21 PROXY STATEMENT; REGISTRATION STATEMENT. None of the
information supplied or to be supplied by or on behalf of ONSS in either the
ONSS Proxy Statement or supplied or to be supplied by ONSS to USXX for inclusion
in either the USXX Proxy Statement or the Registration Statement, will, in the
case of the Registration Statement, at the effective time of the Registration
Statement, at any time the Registration Statement is amended or supplemented, at
the date the ONSS Proxy Statement is first mailed to ONSS' stockholders, at any
time the ONSS Proxy Statement is amended or supplemented, at the time of the
ONSS Meeting and at the Effective Time, in the case of the ONSS Proxy Statement,
at the date the ONSS Proxy Statement is first mailed to ONSS' stockholders, at
any time the ONSS Proxy Statement is amended or supplemented and at the time of
the ONSS Meeting and in the case of the USXX Proxy Statement, at the date the
USXX Proxy Statement is first mailed to USXX's shareholders, at any time the
USXX Proxy Statement is amended or supplemented and at the time of the USXX
Meeting (giving effect to any documents incorporated by reference therein),
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The ONSS Proxy Statement will comply as to form and in substance in
all material respects with the applicable provisions of the Exchange Act and the
rules and regulations thereunder.
SECTION 5.22 VOTES REQUIRED. Other than the approval of the Merger by
the holders of a majority of the outstanding shares of ONSS Common Stock
entitled to vote on the question (the "ONSS Stockholders' Approval"), no vote of
the holders of any class or series of the capital stock of ONSS is required to
approve this Agreement and the Merger.
SECTION 5.23 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE V, ONSS MAKES NO
OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AND ONSS HEREBY
DISCLAIMS ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES, WHETHER BY ONSS, OR ANY
OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES, OR ANY OTHER
PERSON, WITH RESPECT TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO USXX OR ANY OF ITS DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR REPRESENTATIVES, OR ANY OTHER PERSON, OF ANY
DOCUMENTATION OR OTHER INFORMATION BY ONSS, OR ANY OF ITS DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR REPRESENTATIVES, OR ANY OTHER PERSON, WITH RESPECT TO ANY
OF THE FOREGOING.
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ARTICLE VI
COVENANTS
SECTION 6.1 COVENANTS OF ONSS. ONSS agrees to observe and perform the
following covenants and agreements:
(a) Conduct of the Business Prior to the Closing Date. Except (i)
as contemplated in this Agreement, (ii) as required by law or
regulation, (iii) as set forth in Section 6.1 of the ONSS
Disclosure Schedule, or (iv) as otherwise expressly consented
to in writing by USXX, which consent shall not be unreasonably
withheld or delayed, prior to the Closing, ONSS will:
(1) Not make or permit any material change in the general
nature of its business as described in the ONSS
Annual Report on Form 10-K for the fiscal year ending
December 31, 1999;
(2) Maintain its Ordinary Course of Business in
accordance with prudent business judgment and
maintain its assets in good operating repair, order
and condition, reasonable wear and tear excepted,
subject to retirements in the Ordinary Course of
Business;
(3) Preserve ONSS as an ongoing business and use
reasonable efforts to maintain the goodwill
associated with it;
(4) Preserve all of its licenses, authorizations and
other governmental rights and permits necessary for
the operation of ONSS;
(5) Not enter into any Material Contract;
(6) Not purchase, sell, lease, dispose of or otherwise
transfer or make any contract for the purchase, sale,
lease, disposition or transfer of, or subject to
lien, any of the assets of ONSS other than in the
Ordinary Course of Business;
(7) Not voluntarily change in any material respect or
terminate any insurance policies disclosed on Section
5.15(a) of the ONSS Disclosure Schedule that
presently are in effect unless substantially
equivalent coverage is obtained;
(8) Except as disclosed or specifically contemplated in
this Agreement or in Section 6.1 of the ONSS
Disclosure Schedule, and with respect to budgeted
expenditures known and specifically disclosed in
writing to USXX before the date of this Agreement,
subject to adjustments in the Ordinary Course of
Business and other deviations (which in the aggregate
shall not exceed 5% on an annualized basis during the
period from the date of this Agreement until the
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Closing Date), not make any material capital
expenditure or capital expenditure commitment;
(9) Not make any changes in financial policies or
practices, or strategic or operating policies or
practices, except in the Ordinary Course of Business;
(10) Comply in all material respects with all applicable
material Legal Requirements and permits, including
without limitation those relating to the filing of
reports and the payment of Taxes due to be paid prior
to the Closing, other than those contested in good
faith;
(11) Not adopt, amend (other than amendments that reduce
the amounts payable by USXX or any of its
Subsidiaries or amendments required by law) or assume
an obligation to contribute to any ONSS Benefit Plan
or collective bargaining agreement or enter into any
written employment, consulting, severance or similar
Contract with any Person (including without
limitation, contracts with management of ONSS or any
of its Affiliates that might require payments be made
upon consummation of the transactions contemplated
hereby) or amend any such existing contracts;
(12) Except in the Ordinary Course of Business or as
required by the terms of any Contract in effect, or
ONSS Benefit Plan in existence, as of the date of
this Agreement, not grant any increase or change in
total compensation, benefits or pay any bonus to any
employee, director or consultant;
(13) Not grant or enter into or extend the term of any
Contract with respect to continued employment or
service for any employee, officer, director or
consultant, except in the Ordinary Course of
Business;
(14) Not make any loan or advance to any Person other than
to any officer, director, stockholder or employee in
the Ordinary Course of Business;
(15) Not amend any of its Organizational Documents and;
(16) Not issue or assume any note, debenture or other
evidence of indebtedness which by its terms does not
mature within one year from the date of execution or
issuance thereof, unless otherwise redeemable or
subject to prepayment at any time at the option of
ONSS on not more than thirty (30) days notice without
penalty for such redemption or prepayment.
(b) Cash Received upon exercise of Options and Warrants. All cash
received by ONSS in connection with any exercise between the
date hereof and the Closing Date of options or warrants to
purchase shares of ONSS Common Stock or ONSS Units shall be
placed in a designated account until the Closing. On the
Closing Date, USXX shall
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be entitled to use the cash in such designated account toward
the satisfaction of its obligations hereunder, including,
without limitation, its obligation under Section 7.2(k)(i)
hereunder, provided, however, that USXX shall not be entitled
to receive the cash in such designated account if this
Agreement is terminated.
(c) Access to ONSS' Offices, Properties and Records; Updating
Information.
(1) Except as may be necessary to comply with any
applicable law and subject to any applicable
privilege (including, without limitation, the
attorney-client privilege), from and after the date
hereof and until the Closing Date, ONSS shall permit
USXX and its Representatives to have, on reasonable
notice and request, and at reasonable times,
reasonable access to such of the offices, properties
and employees of ONSS, and shall disclose, and make
available to USXX and its Representatives all books,
papers and records to the extent that they relate to
the ownership, operation, obligations and liabilities
of or pertaining to ONSS, its businesses, assets and
liabilities. Without limiting the application of the
Confidentiality and Non-Disclosure Agreement dated
July 18, 2000 between ONSS and USXX (the
"Confidentiality Agreement"), all documents or
information furnished by ONSS hereunder shall be
subject to the Confidentiality Agreement and Section
10.13 hereof.
(2) ONSS will notify USXX as promptly as practicable of
any significant change in the Ordinary Course of
Business or operation of ONSS and of any material
complaints, investigations or hearings (or
communications indicating that the same may be
contemplated) by any Governmental Body, or the
institution or overt threat or settlement of any
material Proceeding involving or affecting ONSS or
the transactions contemplated by this Agreement, and
subject to any applicable privilege (including,
without limitation, the attorney-client privilege),
shall use reasonable efforts to keep USXX fully
informed of such events and permit USXX's
Representatives access to all materials prepared in
connection therewith, consistent with any applicable
Legal Requirement or Contract.
(3) As promptly as practicable after USXX's request,
subject to any applicable privilege (including,
without limitation, the attorney-client privilege),
ONSS will furnish such financial and operating data
and other information pertaining to ONSS and its
businesses and assets as USXX may reasonably request;
provided, however, that nothing herein will obligate
ONSS to take actions that would unreasonably disrupt
its Ordinary Course of Business or violate the terms
of any Legal Requirement or Contract to which it is a
party or to which any of its assets is subject in
providing such information, or to incur any costs
with respect to USXX's external auditors (or ONSS'
external auditors in the event a report by such
auditors is requested by USXX) providing accounting
services with respect to issuing an auditor's report
required by or for USXX.
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(d) Governmental Approvals; Third Party Consents. ONSS will use
its commercially reasonable best efforts to obtain all
necessary consents, approvals and waivers from any Person
required in connection with the transactions contemplated
hereby under any license, lease, permit or Contract applicable
to ONSS, including, without limitation, the approvals of those
Governmental Bodies and the consents of those third parties
listed in Section 5.5 and Section 5.6 of the ONSS Disclosure
Schedule; provided, however that ONSS shall not be required to
make any payments (other than de minimus transfer fees) with
respect to obtaining the approvals and consents contemplated
in this Section 6.1(d), except for payments for which ONSS is
obligated under agreements with third parties existing as of
the date of this Agreement with respect to such approvals and
consents.
(e) Dividends. Except as expressly consented to in writing by
USXX, ONSS shall not: (i) declare or pay any dividends on or
make other distributions in respect of any of its capital
stock; (ii) split, combine or reclassify any of its capital
stock or the capital stock of any Subsidiary or issue or
authorize or propose the issuance of any other securities in
respect of, or in substitution for, shares of its capital
stock; or (iii) redeem, repurchase or otherwise acquire any
shares of its capital stock other than redemptions,
repurchases and other acquisitions of shares of capital stock
in connec tion with the administration of employee benefit
plans as in effect on the date hereof in the ordinary course
of the operation of such plans consistent with past practice.
(f) Issuance of Securities. Except as expressly consented to in
writing by USXX or as contemplated by Section 6.1 of the ONSS
Disclosure Schedule and except for issuances of shares of ONSS
Common Stock pursuant to the exercise of ONSS Public Warrants,
Xxxxxxxx Warrants and employee stock options, ONSS shall not
issue, agree to issue, deliver, sell, award, pledge, dispose
of or otherwise encumber or authorize or propose the issuance,
delivery, sale, award, pledge, disposal or other encumbrance
of, any shares of its capital stock of any class or any
securities convertible into or exchangeable for, or any
rights, warrants or options to acquire, any such shares or
convertible or exchangeable securities.
(g) Accounting. Except as expressly consented to in writing by
USXX, ONSS shall not make any changes in its accounting
methods, principles or practices except as required by law,
rule, regulation or GAAP.
(h) No Shopping.
(1) Subject to the qualification and provisions of
Section 6.1(h)(2) below, ONSS will immediately cease
and cause to be terminated any existing solicitation,
initiation, encouragement, activity, discussion or
negotiations with any parties conducted heretofore by
ONSS or any of its representatives with respect to
any Business Combination.
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(2) ONSS shall not, and shall not authorize or permit any
of its (or any of its Subsidiaries') officers,
directors, agents, financial advisors, attorneys,
accountants or other Representatives to, directly or
indirectly, solicit, initiate or encourage submission
of proposals or offers from any Person relating to,
or that could reasonably be expected to lead to, a
Business Combination or participate in any
negotiations or discussions regarding, or furnish to
any other Person any information with respect to, or
otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort
or attempt by any other Person to do or seek a
Business Combination; provided, however, that until
the later of the ONSS Stockholders' Approval, the
USXX Stockholders' Approval, the date upon which USXX
satisfies the condition to ONSS' obligation to close
that is set forth in Section 7.2(l) hereof, and such
other date upon which USXX (which shall have no
obligation but may do so in its sole discretion)
waives in writing its condition of Closing set forth
in Section 7.1(n), ONSS may, in response to an
unsolicited written proposal from a third party with
respect to a Business Combination, (i) furnish
information to, and negotiate, explore or otherwise
engage in substantive discussions with such third
party if ONSS' Board of Directors determines, in its
good faith judgment, after consultation with and the
receipt of the advice of its financial advisor and
its outside counsel, in each case with customary
qualifications, that the failure to take any of such
actions could result in a breach of fiduciary duty by
ONSS' Board of Directors under applicable law, (ii)
in connection with any Business Combination proposal,
take and disclose to ONSS' stockholders a position in
favor of such proposal or not in favor of the
transactions contemplated hereby in connection
therewith, if ONSS' Board of Directors determines, in
its good faith judgment, after consultation with and
the receipt of the advice of its financial advisor
and its outside counsel, in each case with customary
qualifications, that such Business Combination is a
Superior Proposal and that the failure to do any of
the foregoing actions could result in a breach of the
fiduciary duties of ONSS' Board of Directors under
applicable law and (iii) make such disclosure to
ONSS' stockholders which in the good faith judgment
of ONSS' Board of Directors is required by applicable
law, based on the advice of its outside counsel.
Prior to furnishing any non-public information to,
entering into negotiations with or accepting a
Superior Proposal from such third party, ONSS will
(i) provide written notice to USXX to the effect that
it is furnishing information to or entering into
discussions or negotiations with such third party and
(ii) receive from such third party an executed
confidentiality agreement containing customary terms
and conditions for transactions of such nature.
(3) Except as expressly permitted by this Section 6.1(h),
neither the ONSS Board of Directors nor any committee
thereof may, (i) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse
to USXX, the
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approval or recommendation by such Board of Directors
or such committee of the Merger or this Agreement,
(ii) approve or recommend, or propose publicly to
approve or recommend, a Business Combination or (iii)
cause ONSS to enter into any letter of intent,
agreement in principle, acquisition agreement or
other similar agreement related to any Business
Combination. Notwithstanding the foregoing, until the
later of the ONSS Stockholders' Approval, the USXX
Stockholders' Approval, the date upon which USXX
satisfies the condition to ONSS' obligation to close
that is set forth in Section 7.2(l) hereof, and such
other date upon which USXX (which shall have no
obligation but may do so in its sole discretion)
waives in writing its condition of Closing set forth
in Section 7.1(n), in response to an unsolicited
Business Combination proposal from a third party, if
ONSS' Board of Directors determines, in its good
faith judgment, after consultation with and the
receipt of the advice of its financial advisor and
outside counsel with customary qualifications, that
such proposal is a Superior Proposal and that failure
to do any of the actions set forth in clauses (i),
(ii) or (iii) above could result in a breach of the
fiduciary duties of ONSS' Board of Directors under
applicable law, ONSS' Board of Directors may (i)
withdraw or modify its approval or recommendation of
the Merger or this Agreement, approve or recommend a
Business Combination or cause ONSS to enter into a
Business Combination and (ii) subject to ONSS having
paid to USXX the fees described in Section 8.3(a)
hereof and having entered into a definitive agreement
with respect to such Business Combination proposal,
terminate this Agreement; provided, however, that
prior to entering into a definitive agreement with
respect to a Business Combination proposal, ONSS
shall give USXX at least five (5) day's notice
thereof (which notice shall include a copy of the
proposed definitive agreement), and shall cause its
Representatives to, negotiate with USXX to make such
adjustments in the terms and conditions of this
Agreement as would enable ONSS to proceed with the
transactions contemplated herein on such adjusted
terms; provided, further, that if ONSS and USXX are
unable to reach an agreement on such adjustments
within five (5) days after such notice from ONSS,
ONSS may enter into such definitive agreement,
subject to the provisions of Article VIII.
(4) ONSS shall notify USXX orally and in writing of any
such offers or proposals (including, without
limitation, the material terms and conditions of any
such offer or proposal and the identity of the Person
making it) within one (1) business day of the receipt
thereof, and, subject to the terms and conditions of
any confidentiality agreement entered into by ONSS in
accordance with Section 6.1(h)(2), shall use
commercially reasonable efforts to keep USXX informed
of the status and details of any such offer or
proposal and shall give USXX one (1) business day
advance notice of the first delivery of non-public
information to such Person.
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(5) For purposes of this Agreement, (i) "Business
Combination" means (other than the transactions
contemplated or permitted by this Agreement) (A) a
merger, consolidation or other business combination,
share exchange, issuance of shares of capital stock,
tender offer or exchange offer, or similar
transaction involving ONSS, (B) acquisition in any
manner, directly or indirectly, of a majority
interest in the capital stock of, or an equity
interest in a material portion of the assets of,
ONSS, including any single or multi-step transaction
or series of related transactions that is structured
to permit a third party to acquire beneficial
ownership of a majority or greater equity interest in
ONSS, or (C) the acquisition in any manner, directly
or indirectly, of any material portion of the
business or assets (other than immaterial or
insubstantial assets or inventory in the Ordinary
Course of Business) of ONSS and (ii) "Superior
Proposal" means a proposed Business Combination that
ONSS' Board of Directors determines, after consulting
with ONSS' financial advisors and outside counsel, is
superior (taking into account the financial terms of
the proposed Business Combination and all other
factors that the ONSS Board of Directors determines
in good faith to be relevant) to the transactions
contemplated hereby and it appears that the party
making the proposal is reasonably likely to be able
to consummate the Business Combination, including
funding therefor.
(i) Solicitation of Proxies; ONSS Proxy Statement. Subject to
Section 6.1(h), ONSS shall use its commercially reasonable
efforts to solicit from its stockholders proxies in favor of
the Merger and shall take all other action necessary or
advisable to secure the ONSS Stockholders' Approval. By the
Voting Agreement and Proxy of even date herewith, the ONSS
shareholders thereto who collectively hold approximately 23%
of the voting shares of ONSS Common Stock have agreed to vote,
or cause to be voted, all of the shares of ONSS Common Stock
owned by such shareholders in favor of this Agreement, the
Merger and the other transactions contemplated by this
Agreement.
(j) ONSS Stockholders' Approval.
(1) Subject to the provisions of Section 6.1(h) and
Section 6.1(j)(2), ONSS shall, as soon as reasonably
practicable after the date hereof (i) take all steps
necessary to duly call, give notice of, convene and
hold a meeting of its stockholders (including all
adjournments thereof, the "ONSS Meeting") for the
purpose of securing the ONSS Stockholders' Approval,
(ii) distribute to its stockholders the ONSS Proxy
Statement in accordance with applicable federal and
state law and with its Organizational Documents,
(iii) subject to the fiduciary duties of its Board of
Directors, recommend to its stockholders the approval
and adoption of this Agreement and the transactions
contemplated hereby and (iv) cooperate and consult
with USXX with respect to each of the foregoing
matters.
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(2) The ONSS Meeting for the purpose of securing the ONSS
Stockholders' Approval, including any adjournments
thereof, will be held on such date or dates as ONSS
and USXX mutually determine.
(k) Rule 145 Letters. ONSS shall promptly identify to USXX all
officers and directors of ONSS and any other persons who are
"affiliates" within the meaning of such term as used in Rule
145 under the Securities Act ("Rule 145 Affiliates"), and ONSS
shall use its reasonable efforts to provide to USXX
undertakings from such persons ("Rule 145 Letters") to the
effect that no disposition of shares of USXX Common Stock
received in the Merger will be made by such persons except
within the limits and in accordance with the applicable
provisions of said Rule 145, as amended from time to time, or
except in a transaction which, in the opinion of legal counsel
satisfactory to USXX, is exempt from registration under the
Securities Act.
(l) Financing Activities. ONSS shall cooperate, to the fullest
extent commercially reasonable and practicable, with USXX's
requests with respect to refinancing by ONSS of the current
maturities of any of its indebtedness, and any repurchase,
redemption or prepayment by ONSS of any of its indebtedness
that may be required prior to or because of the Merger or that
USXX may request that ONSS effect prior to the Merger, so as
to permit USXX to have the maximum opportunity to refinance,
on or promptly after the Closing Date without any penalty
except as may be due pursuant to the terms of ONSS'
indebtedness as in effect on the date of this Agreement, any
of ONSS' indebtedness outstanding on the Closing Date;
provided, however, that ONSS shall not be required to
consummate prior to the Effective Time any such
refinancing, repurchase, redemption or repayment requested by
USXX.
(m) ONSS Disclosure Schedule. On the date hereof, ONSS has
delivered to USXX the ONSS Disclosure Schedule, accompanied by
a certificate signed by an executive officer of ONSS stating
the ONSS Disclosure Schedule is being delivered pursuant to
this Section 6.1(m). The ONSS Disclosure Schedule constitutes
an integral part of this Agreement and modifies the
representations, warranties, covenants or agreements of ONSS
contained herein to the extent that such representations,
warranties, covenants or agreements expressly refer to the
ONSS Disclosure Schedule.
SECTION 6.2 COVENANTS OF USXX. USXX agrees to observe and perform the
following covenants and agreements:
(a) Governmental Approvals; Third Party Consents. USXX will use
its commercially reasonable best efforts at USXX's sole
expense to obtain all necessary consents, approvals and
waivers from any Person required in connection with the
transactions contemplated hereby under any license, lease,
permit, Contract or agreement applicable to USXX, including,
without limitation, the approvals of those Governmental Bodies
and the consents of those third parties listed in Section 4.5
of the USXX Disclosure Schedule.
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(b) Employee Benefits. With respect to the employees of the
Surviving Corporation, except as otherwise specified herein,
USXX agrees to make up to 3,600,000 options to purchase shares
of USXX Common Stock available at Closing for grant to
employees of the Surviving Corporation (which includes
1,000,000 for Xxxxxxxxxxx Xxxxxx as contemplated by Exhibit A
hereof and 600,000 for Xxxxx Xxxxxx). The exercise price for
such options shall be $1.00 per share and such options shall
vest pro rata over four years. These grants will be made by
the Compensation Committee of the Board of Directors of USXX
after taking into consideration Xx. Xxxxxx'x recommendation.
(c) Blue Sky Permits. USXX shall use its commercially reasonable
best efforts to obtain, prior to the effective date of the
Registration Statement, all necessary state securities laws or
"blue sky" permits and approvals required to carry out the
transactions contemplated by the Agreement, and will pay all
expenses incident thereto.
(d) ONSS Indebtedness. On the Closing Date, USXX shall either pay
or refinance any indebtedness of ONSS that will become due as
a result of the transactions contemplated hereby.
(e) Officer of Surviving Corporation. From the Effective Time
until the earlier of his resignation or removal, Xxxxxxxxxxx
X. Xxxxxx shall serve as President and Chief Executive Officer
of the Surviving Corporation. On the Closing Date, USXX shall
cause the Surviving Corporation to assume Xx. Xxxxxx'x
existing employment agreement, as amended to reflect the terms
set forth on Exhibit A.
(f) USXX Disclosure Schedule. On the date hereof, USXX has
delivered to ONSS the USXX Disclosure Schedule, accompanied by
a certificate signed by an executive officer of USXX stating
that the USXX Disclosure Schedule is being delivered pursuant
to this Section 6.2(f). The USXX Disclosure Schedule
constitutes an integral part of this Agreement and modifies
the representations, warranties, covenants or agreements of
USXX contained herein to the extent that such representations,
warranties, covenants or agreements expressly refer to the
USXX Disclosure Schedule.
(g) Conduct of the Business Prior to the Closing Date. Except (i)
as contemplated in this Agreement, (ii) in connection with the
proposed sale of its Prison Industry Enhancement business,
(iii) as required by law or regulation or (iv) as otherwise
expressly consented to in writing by ONSS, which consent will
not be unreasonably withheld or delayed, prior to the Closing,
USXX will:
(1) Not make or permit any material change in the general
nature of its business;
(2) Maintain its present operations in the Ordinary
Course of Business in accordance with prudent
business judgment and consistent with past practice
and policy, and maintain its assets in good repair,
order and condition,
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reasonable wear and tear excepted, subject to
retirements in the Ordinary Course of Business;
(3) Preserve USXX as an ongoing business and use
reasonable efforts to maintain the goodwill
associated with USXX; and
(4) Preserve all of USXX' licenses, authorizations and
other governmental rights and permits necessary for
the operation of USXX.
(h) Access to USXX's Offices, Properties and Records; Updating
Information.
(1) Except as may be necessary to comply with any
applicable law and subject to any applicable
privilege (including, without limitation, the
attorney-client privilege), from and after the date
hereof and until the Closing Date, USXX and its
Subsidiaries shall permit ONSS and its
Representatives to have, on reasonable notice and
request, and at reasonable times, reasonable access
to such of the offices, properties and employees of
USXX and its Subsidiaries, and shall disclose, and
make available to ONSS and its Representatives all
books, papers and records to the extent that they
relate to the ownership, operation, obligations and
liabilities of or pertaining to USXX, its
Subsidiaries and their respective businesses and
assets. Without limiting the application of the
Confidentiality Agreement, all documents or
information furnished by USXX and its Subsidiaries
hereunder shall be subject to the Confidentiality
Agreement and Section 10.13 herein.
(2) USXX will notify ONSS as promptly as practicable of
any significant change in the Ordinary Course of
Business or operation of USXX or any of its
Subsidiaries and of any material complaints,
investigations or hearings (or communications
indicating that the same may be contemplated) by any
Governmental Body, or the institution or overt threat
or settlement of any material Proceeding involving or
affecting USXX or any of its Subsidiaries or the
transactions contemplated by this Agreement, and
subject to any applicable privilege (including,
without limitation, the attorney-client privilege),
shall use reasonable efforts to keep ONSS fully
informed of such events and permit ONSS'
Representatives access to all materials prepared in
connection therewith consistent with any applicable
Legal Requirement or Contract.
(i) Financing. Prior to the Closing Date, USXX shall use
commercially reasonable efforts to obtain financing on
commercially reasonable terms necessary for payment of (i) the
Cash Consideration at Closing and (ii) any indebtedness of
ONSS that will become due as a result of the transactions
contemplated hereby. From the Closing Date until the date
twelve months thereafter, USXX shall use its reasonable
efforts to make available to the Surviving Corporation at
least Five Million Dollars ($5,000,000). The use of such funds
would be based on requests by the Surviving Corporation's
Chief Executive
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Officer, subject to the approval of the Board of Directors of
USXX as to the application of such funds in light of the
anticipated returns on investment.
(j) Solicitation of Proxies; USXX Proxy Statement. USXX shall use
its reasonable best efforts to solicit from USXX's
shareholders proxies in favor of the Charter Amendment and, if
USXX in its sole discretion determines it is advisable, the
Merger, and shall take all other action necessary or advisable
to secure the USXX Stockholders' Approval. By the Voting
Agreement and Proxy of even date herewith, certain
stockholders of USXX who collectively hold approximately 75%
of the voting shares of USXX Common Stock (including shares of
Series A Stock and Series C Stock, which vote together with
USXX Common Stock) have agreed to vote, or cause to be voted,
all of the shares of USXX Common Stock and capital stock of
USXX owned by such stockholders in favor of this Agreement,
the Merger and the other transactions contemplated by this
Agreement (including, without limitation, the Charter
Amendment).
(k) USXX Stockholder Approval.
(1) Subject to the provisions of Section 6.2(k)(2),
USXX shall, as soon as reasonably practicable after the date
hereof (i) take all steps necessary to duly call, give notice
of, convene and hold a meeting (or meetings, if USXX in its
sole discretion determines that a separate meeting with
respect to the Merger is advisable) of its shareholders
(individually or collectively, including all adjournments
thereof, the "USXX Meeting") for the purpose of securing the
USXX Stockholders' Approval, (ii) distribute to its
shareholders the USXX Proxy Statement in accordance with
applicable federal and state law and with its Organizational
Documents, (iii) recommend to its shareholders the approval of
the Charter Amendment and, if applicable, this Agreement and
the transactions contemplated hereby, and (iv) cooperate and
consult with ONSS with respect to each of the foregoing
matters.
(2) If necessary, any USXX Meeting for the purpose of
securing the USXX Stockholders' Approval of this Agreement and
the transactions contemplated hereby, including any
adjournments thereof, will be held on such date or dates as
ONSS and USXX mutually determine.
SECTION 6.3 ADDITIONAL AGREEMENTS.
(a) The Registration Statement, the ONSS Proxy Statement and the
USXX Proxy Statement. As soon as practicable after the date
hereof, ONSS and USXX shall take such reasonable steps as are
necessary for the prompt preparation and filing with the SEC
of (i) the ONSS Proxy Statement by ONSS, (ii) the USXX Proxy
Statement by USXX and (iii) the Registration Statement, which
will include information contained in the ONSS Proxy
Statement, by USXX. The foregoing shall include without
limitation: (i) obtaining and furnishing the information
required to be included therein,
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(ii) after consultation between ONSS and USXX, responding
promptly to any comments made by the SEC with respect to the
ONSS Proxy Statement, the USXX Proxy Statement and the
Registration Statement and any amendments and preliminary
versions thereof and (iii) causing the Registration Statement
to become effective, the ONSS Proxy Statement to be mailed to
ONSS' shareholders at the earliest practicable date and the
USXX Proxy Statement to be mailed to USXX' shareholders at the
earliest practicable date. ONSS agrees, as to information with
respect to ONSS, its officers, directors, shareholders and
Subsidiaries contained in the Registration Statement, the ONSS
Proxy Statement and the USXX Proxy Statement, and USXX agrees,
as to information with respect to USXX, its officers,
directors, shareholders and Subsidiaries contained in the
Registration Statement, the ONSS Proxy Statement and the USXX
Proxy Statement, that such information, in the case of the
ONSS Proxy Statement at the time of the mailing of the ONSS
Proxy Statement and (as then amended or supplemented) at the
time of the ONSS Meeting, in the case of the USXX Proxy
Statement, at the time of the mailing of the USXX Proxy
Statement and (as then amended or supplemented) at the time of
the USXX Meeting or in the case of the Registration Statement
at the time of the mailing of the ONSS Proxy Statement (as
then amended or supplemented), at the time of the ONSS Meeting
and at the effective time of the Registration Statement, will
not contain any untrue statement of material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are
made, not misleading. No representation, warranty, covenant or
agreement is made by or on behalf of ONSS with respect to
information supplied in writing by USXX for inclusion in the
ONSS Proxy Statement, the USXX Proxy Statement or the
Registration Statement. No representation, warranty, covenant
or agreement is made by or on behalf of USXX with respect to
information supplied in writing by ONSS for inclusion in the
ONSS Proxy Statement, the USXX Proxy Statement or the
Registration Statement. No filing of, or amendment or
supplement to, the ONSS Proxy Statement, the USXX Proxy
Statement or the Registration Statement shall be made by any
party hereto without providing the other party with the
opportunity to review and comment thereon (except for any
ongoing SEC reporting required of USXX or ONSS that will be
incorporated by reference and except with respect to any USXX
Proxy Statement that does not contain a vote on the Merger).
If at any time prior to the Effective Time any information
relating to any party hereto or any of their respective
officers, directors, shareholders or Subsidiaries, should be
discovered by any party hereto which should be set forth in an
amendment or supplement to the ONSS Proxy Statement, the USXX
Proxy Statement or the Registration Statement so that the ONSS
Proxy Statement, the USXX Proxy Statement or the Registration
Statement would not include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, the party which discovers such
information shall promptly notify the other party hereto and
an appropriate amendment or supplement describing such
information shall be promptly prepared, filed with the SEC
and, to the extent required by law,
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disseminated to the shareholders of ONSS and/or the
shareholders of USXX, as may be necessary.
(b) Further Assurances. Each of ONSS and USXX agrees, and USXX
agrees to cause its Subsidiaries, to take all such reasonable
and lawful action as may be necessary or appropriate in order
to effectuate the Merger in accordance with this Agreement as
promptly as possible. If, at any time after the Effective
Time, any such further action is necessary or desirable to
carry out the purpose of this Agreement and to vest the
Surviving Corporation with full right, title and possession to
all assets, property, rights, privileges, powers and
franchises of ONSS, the officers and directors of the
Surviving Corporation will be fully authorized to take, and
will take, all such lawful and necessary action.
ARTICLE VII
CONDITIONS
SECTION 7.1 CONDITIONS TO USXX'S AND NEWCO'S OBLIGATION TO EFFECT THE
MERGER. The obligation of USXX and Newco to effect the transactions contemplated
by this Agreement shall be subject to fulfillment at or prior to the Closing of
the following conditions:
(a) Representations and Warranties True as of the Closing Date.
ONSS' representations and warranties in this Agreement shall
have been accurate in all material respects as of the date of
this Agreement and shall be accurate in all material respects
as of the Closing Date as if made on the Closing Date (except
to the extent that such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties shall be accurate in all
material respects as of such earlier date); provided, however,
that any such representation or warranty that is qualified by
any standard of materiality (including, but not limited to,
ONSS Material Adverse Effect) shall have then been, and shall
then be, accurate in all respects.
(b) Compliance with Agreements. The covenants, agreements and
conditions required by this Agreement to be performed and
complied with by ONSS shall have been performed and complied
with in all material respects prior to or at the Closing Date.
(c) Certificate. ONSS shall execute and deliver to USXX a
certificate of an authorized officer of ONSS, dated the
Closing Date, stating that the conditions specified in
Sections 7.1(a) and 7.1(b) of this Agreement applicable to
ONSS have been satisfied.
(d) Governmental Approvals. All approvals, consents, opinions or
rulings of all Governmental Bodies required in order to
consummate the transactions contemplated hereby shall have
been obtained by Final Order in such form as is, and with no
conditions that are, individually or in the aggregate,
reasonably likely to have a ONSS
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Material Adverse Effect or a material adverse effect on the
business, operations, properties, financial condition or
results of operations of USXX.
(e) Third Party Consents. Each of the consents required under
Section 5.4 of this Agreement shall have been obtained to the
reasonable satisfaction of USXX, other than any such consents
which, if not obtained, are not, individually or in the
aggregate, reasonably likely to result in a ONSS Material
Adverse Effect after the Closing.
(f) Injunctions. On the Closing Date, there shall be no Orders
which operate to restrain, enjoin or otherwise prevent the
consummation of this Agreement or the Merger.
(g) Opinion of Tax Counsel. On the Closing Date, USXX shall have
received from King & Spalding, special tax counsel to ONSS, a
reliance letter authorizing USXX to rely on the opinion
contemplated in Section 7.2 (f) of this Agreement.
(h) Stockholder Approvals. The USXX Stockholders' Approval and the
ONSS Stockholders' Approval shall have been obtained.
(j) Appraisal Rights. Demand for payment for shares and appraisal
thereof by stockholders of ONSS in accordance with the DGCL
with respect to the Merger shall not equal or exceed 5 percent
of the shares of ONSS Common Stock entitled to vote on the
Merger.
(k) Rule 145 Letters. Each Rule 145 Affiliate shall have executed
and delivered to USXX a Rule 145 Letter, in form and substance
reasonably satisfactory to USXX and its counsel, which letters
also shall include a 90-day restriction on any sale or
transfer of any of their shares of USXX Common Stock received
in the Merger.
(l) Registration Statement. The Registration Statement shall have
become effective, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or
threatened by the SEC.
(m) USXX Charter Amendment. USXX's Restated Certificate of
Incorporation shall have been amended to increase to at least
500,000,000 the number of shares of USXX Common Stock
authorized (the "Charter Amendment").
(n) USXX Financing. USXX shall have obtained sufficient financing
for the payment of the Cash Consideration and any indebtedness
of ONSS that will become due as a result of the transactions
contemplated by this Agreement.
SECTION 7.2 CONDITIONS TO ONSS' OBLIGATIONS TO EFFECT THE MERGER. The
obligation of ONSS to effect the transactions contemplated by this Agreement
shall be subject to fulfillment at or prior to the Closing of the following
conditions:
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(a) Representations and Warranties True as of the Closing Date.
USXX's representations and warranties in this Agreement shall
have been accurate in all material respects as of the date of
this Agreement and shall be accurate in all material respects
as of the Closing Date as if made on the Closing Date (except
to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations
and warranties shall be accurate in all material respects as
of such earlier date); provided, however, that any such
representation or warranty that is qualified by any
standard of materiality (including, but not limited
to, USXX Material Adverse Effect) shall have then been , and
shall then be, accurate in all respects.
(b) Compliance with Agreements. The covenants, agreements and
conditions required by this Agreement to be performed and
complied with by USXX shall have been performed and complied
with in all material respects prior to or at the Closing Date.
(c) Certificate. USXX shall execute and deliver to ONSS a
certificate of an authorized officer of USXX, dated the
Closing Date, stating that the conditions specified in
Sections 7.2(a) and 7.2(b) of this Agreement applicable to
USXX have been satisfied.
(d) Governmental Approvals. All approvals, consents, opinions or
rulings of all Governmental Bodies required in order to
consummate the transactions contemplated hereby shall have
been obtained by Final Order in such form as is, and with no
conditions that are, individually or in the aggregate,
reasonably likely to have a material adverse effect on the
business, operations, properties, financial condition or
results of operations of the Surviving Corporation.
(e) Injunctions. On the Closing Date, there shall be no Orders
which operate to restrain, enjoin or otherwise prevent the
consummation of this Agreement or the Merger.
(f) Opinion of Counsel. On the Closing Date, ONSS shall have
received from King & Spalding, special tax counsel to ONSS, an
opinion to the effect that the Merger will be treated for
federal income tax purposes as a "reorganization" within the
meaning of IRC Section 368(a), and that no gain or loss will
be recognized for federal income tax purposes by the
stockholders of ONSS who receive USXX Common Stock in the
Merger upon their receipt of the Merger Consideration, except
that any realized gain will be recognized to the extent of the
amount of cash received (including cash in lieu of the
fractional shares).
(g) Stockholder Approval. The USXX Stockholders' Approval and the
ONSS Stockholders' Approval shall have been obtained.
(h) Registration Statement. The Registration Statement shall have
become effective, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or
threatened by the SEC.
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(i) USXX Charter Amendment. USXX's Restated Certificate of
Incorporation shall have been amended to increase to at least
500,000,000 the number of shares of USXX Common Stock
authorized.
(j) USXX Financing. USXX shall have obtained sufficient financing
for the payment of the Cash Consideration and any indebtedness
of ONSS that will become due as a result of the transactions
contemplated by this Agreement.
(k) ONSS Indebtedness. USXX shall have (i) paid any and all
indebtedness of ONSS that will become due as a result of the
transactions contemplated by this Agreement or (ii) made
reasonably satisfactory arrangements to pay any indebtedness
of ONSS that will become due as a result of the transactions
contemplated hereby.
(l) Portris, Inc. USXX shall have completed a $380,000 investment
(representing at least a 30% equity interest) in Portris, Inc.
ARTICLE VIII
TERMINATION
SECTION 8.1 TERMINATION RIGHTS. This Agreement may be terminated in its
entirety at any time prior to the Closing:
(a) By the mutual written consent of USXX and ONSS;
(b) By ONSS, on the one hand, or USXX, on the other hand, in
writing if there shall be in effect a non-appealable order of
a court of competent jurisdiction prohibiting the consummation
of the Merger in accordance with this Agreement;
(c) By ONSS, by written notice to USXX, if there is a breach of
any representation, warranty, covenant or agreement of USXX,
which breach cannot be cured and would cause the conditions
set forth in Section 7.2(a) or (b) to be incapable of being
satisfied;
(d) By USXX, by written notice to ONSS, if there is a breach of
any representation, warranty, covenant or agreement of ONSS,
which breach cannot be cured and would cause the conditions
set forth in Section 7.1(a) or (b) to be incapable of being
satisfied;
(e) By ONSS, by written notice to USXX in accordance with Section
6.1(h)(3); provided, however, that the termination described
in this clause (e) shall not be effective unless and until
ONSS shall have paid USXX the fee described in Section 8.3(a)
and ONSS has substantially contemporaneously entered into a
definitive agreement with respect to the proposed Business
Combination;
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(f) By ONSS, by written notice to USXX, if the ONSS Stockholders'
Approval is not obtained at the ONSS Meeting or the USXX
Stockholders' Approval is not obtained at the USXX Meeting, or
by USXX, by written notice to ONSS, if the ONSS Stockholders'
Approval is not obtained at the ONSS Meeting or the USXX
Stockholders' Approval is not obtained at the USXX Meeting;
(g) By USXX, by written notice to ONSS, if the Board of Directors
of ONSS or any committee thereof (i) withdraws or modifies, or
proposes publicly to withdraw or modify, in a manner adverse
to USXX, the approval or recommendation by the Board of
Directors or such committee of the Merger or this Agreement,
(ii) approves or recommends, or proposes publicly to approve
or recommend, a Business Combination, (iii) causes ONSS to
enter into a definitive agreement related to any Business
Combination or (iv) resolves to take any of the actions
specified in clause (i), (ii) and (iii) above;
(h) By USXX, by written notice to ONSS, if a third party,
including a group (as defined under the Exchange Act) acquires
securities representing greater than 50% of the voting power
of the outstanding voting securities of ONSS;
(i) By either party in writing at any time after 5:00 p.m.,
Eastern Time, on March 31, 2001 (the "Initial Termination
Date"), if the Closing has not occurred prior thereto;
provided, however, that the right to terminate this Agreement
under this Section 8.1(i) will not be available to any party
that is in material breach of its representations, warranties,
covenants or agreements contained herein; and provided,
further, that if Closing has not occurred by such date because
the conditions precedent to Closing set forth in Section
7.1(l) and Section 7.2(h) have not been fulfilled, then such
date shall be automatically extended to June 30, 2001; or
(j) By ONSS, if the Average Trading Price of USXX Common Stock as
of the date on which the Closing would have occurred is lower
than $0.675.
SECTION 8.2 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 8.1, this Agreement shall be of no further force and effect
and there shall be no further liability hereunder on the part of any party or
its Affiliates, directors, officers, stockholders, agents or other
Representatives; provided, however, that (i) any fee payable under Section
8.3(a) is paid to USXX and (ii) no such termination shall relieve any party of
liability for (A) any claims, damages or losses suffered by the other party as a
result of the negligent or willful failure of a party to perform any obligations
required to be performed by it hereunder on or prior to the date of termination
or (B) any willful breach of such party's representations or warranties
contained in this Agreement. Notwithstanding anything to the contrary contained
herein, the provisions of Section 8.2, Sections 10.1 through 10.6, Sections 10.8
through 10.11, and Section 10.13 of this Agreement shall survive any termination
of this Agreement.
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SECTION 8.3 TERMINATION FEE; EXPENSES.
(a) Termination Fee. If this Agreement is terminated pursuant to
Section 8.1(e), 8.1(g) or 8.1(h), then ONSS shall pay to USXX
promptly (but not later than five business days after notice
is received from USXX) an amount equal to $1.5 million in cash
and such payment shall represent a full and complete
satisfaction of all of ONSS' obligations under this Agreement.
(b) Expenses. The parties agree that the agreements contained in
this Section 8.3 are an integral part of the transactions
contemplated by this Agreement and constitute liquidated
damages and not a penalty. Notwithstanding anything to the
contrary contained in this Section 8.3, if ONSS fails to pay
promptly to USXX the fee due under Section 8.3(a), in addition
to any amounts paid or payable pursuant to Section 8.3(a),
ONSS shall pay the costs and expenses (including legal fees
and expenses) in connection with any action, including the
filing of any lawsuit or other legal action, taken to collect
payment, together with interest on the amount of any unpaid
fee calculated using an annual percentage rate of interest
equal to the prime rate published in the Wall Street Journal
on the date (or preceding business day if such date is not a
business day) such fee was required to be paid, compounded on
a daily basis using a 360-day year.
ARTICLE IX
INDEMNIFICATION; REMEDIES
SECTION 9.1 DIRECTORS' AND OFFICERS' INDEMNIFICATION.
(a) Indemnification and Insurance. For a period of six years after
the Effective Time, the Surviving Corporation will indemnify
and hold harmless the present and former officers and
directors of ONSS (the "Indemnified Parties") in respect of
acts or omissions occurring prior to the Effective Time to the
extent provided under ONSS' certificate of incorporation and
bylaws in effect on the date hereof; provided, however, that
if any claim or claims are asserted or made within such
six-year period, all rights to indemnification in respect of
such claims shall continue until the final disposition of any
and all such claims. For six years after the Effective Time,
the Surviving Corporation will use its reasonable best efforts
to provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective
Time covering each such person currently covered by ONSS'
officers' and directors' liability insurance policy on terms
with respect to coverage and amount no less favorable than
those of such policy in effect on the date hereof; provided,
however, that in satisfying its obligation under this Section,
if the annual premiums of such insurance coverage exceed 200%
of the previous year's premiums, the Surviving Corporation
will be obligated to obtain a policy with the best coverage
available, in the reasonable judgment of the Board of
Directors of the Surviving Corporation for a cost not
exceeding such amount.
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(b) Successors. In the event the Surviving Corporation or any of
its successors or assigns (i) consolidates with or merges into
any other Person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii)
transfers all or substantially all of its properties and
assets to any Person, then and in either such case, proper
provisions must be made so that the successors and assigns of
the Surviving Corporation will assume the obligations set
forth in this Section 9.1.
(c) Survival of Indemnification. To the fullest extent permitted
by law, from and after the Effective Time, all rights to
indemnification as of the date hereof in favor of the
employees, agents, directors and officers of ONSS with respect
to their activities as such prior to the Effective Time, as
provided in its Organizational Documents in effect on the date
hereof, or otherwise in effect on the date hereof, will
survive the Merger and will continue in full force and effect
except for amendments to make changes permitted by law that
would enhance the rights of past or present officers and
directors to indemnification or advancement of expenses in
respect of acts or omissions occurring prior to the Effective
Time for a period of not less than six years from the
Effective Time (or, in the case of matters occurring prior to
the Effective Time which have not been resolved prior to the
sixth anniversary of the Effective Time, until such matters
are finally resolved).
SECTION 9.2 REPRESENTATIONS AND WARRANTIES. Each and every
representation and warranty of either party shall expire at, and be terminated
and extinguished with, the Effective Time.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1 EXPENSES. Each of the parties will pay all costs and
expenses of its performance of and compliance with this Agreement, except (i) as
provided in Section 8.3 and as expressly provided otherwise herein, (ii) ONSS
shall pay all fees and expenses of counsel for ONSS, (iii) USXX shall pay all
fees and expenses of counsel for USXX and Newco and (iv) USXX and ONSS will each
pay half of the combined costs of printing and mailing to the ONSS stockholders
the prospectus that is a part of the Registration Statement, the USXX Proxy
Statement and the ONSS Proxy Statement.
SECTION 10.2 NOTICES. All notices, requests and other communications
hereunder shall be in writing and shall be deemed to have been given upon
receipt if either (a) personally delivered, (b) sent by prepaid first class
mail, and registered or certified and a return receipt requested or (c) by
facsimile telecopier with completed transmission acknowledged:
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if to ONSS, to:
On-Site Sourcing, Inc.
0000 Xxxxx 00xx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx,
President and Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
King & Spalding
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
if to USXX, to:
U.S. Technologies Inc.
0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: C. Xxxxxxx Xxxxx
Co-Chairman and Co-Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxxxx and Xxxxx, L.L.P.
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
or at such other address or number as shall be given in writing by a party to
the other parties.
SECTION 10.3 ASSIGNMENT. This Agreement may not be assigned by any
party hereto without the prior written consent of the other parties hereto. Any
assignment in violation of the terms of this Agreement shall be null and void ab
initio.
SECTION 10.4 SUCCESSOR BOUND. Subject to the provisions of Section
10.3, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
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SECTION 10.5 GOVERNING LAW; FORUM; CONSENT TO JURISDICTION. This
Agreement shall be construed in accordance with and governed by the laws of the
State of Delaware without regard to its rules for conflicts of law. Each party
to this Agreement hereby irrevocably and unconditionally (i) consents to submit
to the exclusive jurisdiction of the Chancery Court of the State of Delaware for
any proceeding arising in connection with this Agreement (and each such party
agrees not to commence any such proceeding, except in such court), (ii) waives
any objection to the laying of venue of any such proceeding in the Chancery
Court of the State of Delaware, and (iii) waives and agrees not to plead or to
make, any claim that any such proceeding brought in Chancery Court of the State
of Delaware has been brought in an improper or otherwise inconvenient forum.
SECTION 10.6 WAIVER OF TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH ANY SUCH PARTY
MAY BE A PARTY ARISING OUT OF OR IN ANY WAY PERTAINING TO (I) THIS AGREEMENT,
(II) THE MERGER, (III) THE CONFIDENTIALITY AGREEMENT OR (IV) ANY RELATED
DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF
TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES WHO ARE PARTIES TO THIS
AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH
PARTY HERETO, AND EACH SUCH PARTY HEREBY REPRESENTS AND WARRANTS THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON TO INDUCE THIS
WAIVER OR TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH
PARTY TO THIS AGREEMENT FURTHER REPRESENTS AND WARRANTS THAT EACH SUCH PARTY HAS
BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF EACH SUCH PARTY'S OWN FREE
WILL, AND THAT EACH SUCH PARTY HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH COUNSEL.
SECTION 10.7 COOPERATION; FURTHER DOCUMENTS.
(a) Each of the parties hereto agrees to use its respective
commercially 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,
regulations or otherwise, to consummate and to make effective
the transactions contemplated by this Agreement, including,
without limitation, the timely performance of all actions and
things contemplated by this Agreement to be taken or done by
each of the parties hereto.
(b) Each party shall cooperate with the other party in such other
party's discharge of the obligations hereunder, which shall
include making reasonably available to the other party such of
its personnel as have relevant information, with respect
thereto.
SECTION 10.8 CONSTRUCTION OF AGREEMENT. The terms and provisions of
this Agreement represent the results of negotiations between the parties hereto
and their Representatives, each of which has been represented by counsel of its
own choosing, and neither of which has acted under
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duress or compulsion, whether legal, economic or otherwise. Accordingly, the
terms and provisions of this Agreement shall be interpreted and construed in
accordance with their usual and customary meanings, and ONSS and USXX hereby
waive the application in connection with the interpretation and construction of
this Agreement of any rule of law to the effect that ambiguous or conflicting
terms or provisions contained in this Agreement shall be interpreted or
construed against the party whose attorney prepared the executed draft or any
earlier draft of this Agreement.
SECTION 10.9 PUBLICITY; ORGANIZATIONAL AND OPERATIONAL ANNOUNCEMENTS.
No party hereto shall issue, make or cause the publication of any press release
or other announcement with respect to this Agreement or the transactions
contemplated hereby, or otherwise make any disclosures relating thereto, without
the consent of the other party, such consent not to be unreasonably withheld or
delayed; provided, however, that such consent shall not be required where such
release or announcement is required by applicable law or the rules or
regulations of a securities exchange, in which event the party so required to
issue such release or announcement shall endeavor, wherever possible, to furnish
an advance copy of the proposed release to the other party.
SECTION 10.10 WAIVER. Except as otherwise expressly provided in this
Agreement, neither the failure nor any delay on the part of any party to
exercise any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise or waiver of any such right,
power or privilege preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege available to each party at law
or in equity.
SECTION 10.11 PARTIES IN INTEREST. This Agreement (including the
documents and instruments referred to herein) is not intended to confer upon any
Person, other than the parties hereto and their successors and permitted
assigns, any rights or remedies hereunder, except that the parties hereto agree
and acknowledge that the agreements and covenants contained in Section 9.1 are
intended for the direct and irrevocable benefit of the Indemnified Parties
described therein and their respective heirs or legal representatives (each such
director or Indemnified Party, a "Third Party Beneficiary"), and that each such
Third Party Beneficiary, although not a party to this Agreement, shall be and is
a direct and irrevocable third party beneficiary of such agreements and
covenants and shall have the right to enforce such agreements and covenants
against the Surviving Corporation in all respects fully and to the same extent
as if such Third Party Beneficiary were a party hereto.
SECTION 10.12 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur to a party in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that any
party shall be entitled to an injunction or injunctions to prevent breaches of
this agreement by any other party and to enforce specifically, to the fullest
extent available, the terms and provisions hereof, including each party's
obligation to close, in any court of the United States or any state having
jurisdiction, this being in addition to any other right or remedy to which any
party is entitled at law or in equity.
SECTION 10.13 CONFIDENTIALITY. In the event that the transactions
contemplated hereby are not consummated, each party hereto will return to the
other party all information and data relating to such
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other party provided by such other party and any and all copies thereof, and in
such event, each arty agrees to take all reasonably necessary and appropriate
precautions so that none of its agents, employees, accountants, attorneys or
other representatives divulge any material information relating to the business
of the other party to a third party or use the same in any manner for the profit
or to the benefit of the party to whom the information was provided or any such
employee, agent, other representatives or a third party. The obligation of the
parties hereto to keep information confidential shall not apply to:
(a) any information which (i) was (at the time of the
disclosure thereof) generally known to the public; (ii) became known to the
public through no fault of the party or any of its agents or representatives; or
(ii) was disclosed to said party by a third party who was not bound by an
obligation of confidentiality to the other party;
(b) disclosures required to be made in accordance with any
law, regulation or order of a court or regulatory agency of competent
jurisdiction or authority or information included in filings pursuant hereto; or
(c) any disclosure of information in any action or proceeding
brought to enforce any provision of this Agreement.
SECTION 10.14 SECTION AND PARAGRAPH HEADINGS. The section and paragraph
headings in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 10.15 AMENDMENT. This Agreement may be amended only by an
instrument in writing executed by the parties hereto.
SECTION 10.16 ENTIRE AGREEMENT. This Agreement, the exhibits, annexes
and schedules hereto and the documents specifically referred to herein and the
Confidentiality Agreement constitute the entire agreement, understanding,
representations and warranties of the parties hereto with respect to the subject
matter hereof.
SECTION 10.17 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Remainder of this Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
U.S. TECHNOLOGIES INC.
By: /s/ C. Xxxxxxx Xxxxx
--------------------------------------------
Name: C. Xxxxxxx Xxxxx
Title: Co-Chairman of the Board and
Co-Chief Executive Officer
USXX ACQUISITION CORPORATION
By: /s/ C. Xxxxxxx Xxxxx
--------------------------------------------
Name: C. Xxxxxxx Xxxxx
Title: President
ON-SITE SOURCING, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
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TABLE OF CONTENTS
Page
RECITALS ..........................................................................................................1
ARTICLE I DEFINITIONS.............................................................................................1
Section 1.1 Certain Defined Terms........................................................................1
Section 1.2 Other Defined Terms..........................................................................7
ARTICLE II THE MERGER; OTHER TRANSACTIONS.........................................................................8
Section 2.1 The Merger...................................................................................8
Section 2.2 Effective Time of the Merger.................................................................8
Section 2.3 Closing......................................................................................9
Section 2.4 Certificate of Incorporation; Bylaws.........................................................9
Section 2.5 Directors and Officers.......................................................................9
ARTICLE III CONVERSION OF SHARES..................................................................................9
Section 3.1 Effect of the Merger.........................................................................9
Section 3.2 Exchange of ONSS Common Stock Certificates..................................................12
Section 3.3 Dissenting Shares...........................................................................14
Section 3.4 ONSS Options and the Xxxxxxxx Warrant.......................................................14
Section 3.5 ONSS Publicly Traded Warrants...............................................................14
Section 3.6 Conversion of ONSS Options, ONSS Public Warrants and
the Xxxxxxxx Warrant...................................................................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF USXX................................................................16
Section 4.1 Organization, Existence and Qualification...................................................16
Section 4.2 Capitalization..............................................................................16
Section 4.3 Subsidiaries; Investments...................................................................17
Section 4.4 Authority Relative to this Agreement and Binding Effect.....................................17
Section 4.5 Governmental Approvals......................................................................17
Section 4.6 Compliance with Legal Requirements; Governmental Authorizations.............................18
Section 4.7 Legal Proceedings; Orders...................................................................18
Section 4.8 SEC Documents...............................................................................18
Section 4.9 Taxes.......................................................................................19
Section 4.10 Intellectual Property.......................................................................19
Section 4.11 Contracts...................................................................................20
Section 4.12 Indebtedness................................................................................20
Section 4.13 Employee Benefit Plans......................................................................20
Section 4.14 Environmental Matters.......................................................................23
Section 4.15 No Material Adverse Change..................................................................23
Section 4.16 Brokers.....................................................................................23
Section 4.17 Proxy Statement; Registration Statement.....................................................23
Section 4.18 Votes Required..............................................................................24
Section 4.19 Disclaimer of Representations and Warranties................................................24
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Page
ARTICLE V REPRESENTATIONS AND WARRANTIES OF ONSS.................................................................25
Section 5.1 Organization, Existence and Qualification..................................................25
Section 5.2 Capitalization.............................................................................25
Section 5.3 Subsidiaries; Investments..................................................................25
Section 5.4 Authority Relative to this Agreement and Binding Effect....................................26
Section 5.5 Governmental Approvals.....................................................................26
Section 5.6 Compliance with Legal Requirements; Governmental Authorizations............................26
Section 5.7 Legal Proceedings; Orders..................................................................27
Section 5.8 SEC Documents..............................................................................27
Section 5.9 Taxes......................................................................................28
Section 5.10 Intellectual Property......................................................................28
Section 5.11 Title to Assets............................................................................28
Section 5.12 Indebtedness...............................................................................28
Section 5.13 Machinery and Equipment....................................................................28
Section 5.14 Material Contracts.........................................................................28
Section 5.15 Insurance..................................................................................28
Section 5.16 Employees..................................................................................29
Section 5.17 Employee Benefit Plans.....................................................................29
Section 5.18 Environmental Matters......................................................................32
Section 5.19 No Material Adverse Change.................................................................33
Section 5.20 Brokers....................................................................................33
Section 5.21 Proxy Statement; Registration Statement....................................................33
Section 5.22 Votes Required.............................................................................33
Section 5.23 Disclaimer of Representations and Warranties...............................................34
ARTICLE VI COVENANTS.............................................................................................34
Section 6.1 Covenants of ONSS...........................................................................34
Section 6.2 Covenants of USXX...........................................................................42
Section 6.3 Additional Agreements.......................................................................45
ARTICLE VII CONDITIONS...........................................................................................46
Section 7.1 Conditions to USXX's and Newco's Obligation to Effect the Merger...........................46
Section 7.2 Conditions to ONSS' Obligations to Effect the Merger.......................................48
ARTICLE VIII TERMINATION........................................................................................49
Section 8.1 Termination Rights..........................................................................49
Section 8.2 Effect of Termination.......................................................................51
Section 8.3 Termination Fee; Expenses...................................................................51
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Page
ARTICLE IX INDEMNIFICATION; REMEDIES.............................................................................52
Section 9.1 Directors' and Officers' Indemnification....................................................52
Section 9.2 Representations and Warranties..............................................................53
ARTICLE X GENERAL PROVISIONS.....................................................................................53
Section 10.1 Expenses..................................................................................53
Section 10.2 Notices...................................................................................53
Section 10.3 Assignment................................................................................54
Section 10.4 Successor Bound...........................................................................54
Section 10.5 Governing Law; Forum; Consent to Jurisdiction.............................................54
Section 10.6 WAIVER OF TRIAL BY JURY...................................................................54
Section 10.7 Cooperation; Further Documents............................................................55
Section 10.8 Construction of Agreement.................................................................55
Section 10.9 Publicity; Organizational and Operational Announcements...................................55
Section 10.10 Waiver....................................................................................56
Section 10.11 Parties in Interest.......................................................................56
Section 10.12 Specific Performance......................................................................56
Section 10.13 Confidentiality...........................................................................56
Section 10.14 Section and Paragraph Headings............................................................57
Section 10.15 Amendment.................................................................................57
Section 10.16 Entire Agreement..........................................................................57
Section 10.17 Counterparts..............................................................................57
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A Employment Agreement Terms
Section 3.4 ONSS Options and the Xxxxxxxx Warrant
Section 4.2 USXX Capitalization
Section 4.3 USXX Subsidiaries; Investments
Section 4.5 USXX Governmental Approvals
Section 4.6 USXX Compliance with Legal Requirements;
Governmental Authorizations
Section 4.7 USXX Legal Proceedings; Orders
Section 4.8 USXX SEC Documents
Section 4.9 USXX Taxes
Section 4.11 USXX Contracts
Section 4.12 USXX Indebtedness
Section 4.13 USXX Employee Benefit Plans
Section 4.14 USXX Environmental Matters
Section 4.16 USXX Brokers
Section 4.18 Votes Required
Section 5.2 ONSS Capitalization
Section 5.5 ONSS Governmental Approvals
Section 5.6 ONSS Compliance with Legal Requirements;
Governmental Authorizations
Section 5.7 ONSS Legal Proceedings; Orders
Section 5.9 ONSS Taxes
Section 5.11 ONSS Title to Assets
Section 5.12 ONSS Indebtedness
Section 5.14 ONSS Material Contracts
Section 5.15 ONSS Insurance
Section 5.16 ONSS Employees
Section 5.17 ONSS Employee Benefit Plans
Section 5.18 ONSS Environmental Matters
Section 5.19 ONSS Material Adverse Change
Section 6.1 Covenants of ONSS
