EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is made and entered into as of July 31,
2003, by and between MARKET CENTRAL, INC., a Delaware corporation ("Buyer");
and PLIANT TECHNOLOGIES, INC., a Delaware corporation ("Seller").
WITNESSETH:
WHEREAS, Seller is engaged in the business of developing,
marketing, licensing and selling software solutions that automate the capture,
search, workflow management and information mining of all types of unstructured
and structured data and providing services related thereto (the "Business");
and
WHEREAS, Seller desires to sell, transfer and assign to
Buyer, and Buyer desires to purchase and acquire from Seller, substantially all
of the assets of Seller relating to the operation of the Business, all on the
terms and conditions set forth herein; and
NOW, THEREFORE, for and in consideration of the premises, the
mutual covenants contained herein, and other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree as follows:
ARTICLE I
Purchase and Sale of Assets
1.1 Assets, Properties and Business to be Transferred. Subject to
the terms and conditions of this Agreement, and on the basis of the
representations and warranties hereinafter set forth, at the Closing (as
hereinafter defined) Seller will sell, transfer, assign, convey and deliver to
Buyer, and Buyer will purchase from Seller, all of the rights, properties and
assets of Seller described in Schedule 1.1 annexed hereto, but excluding the
"Excluded Assets" described in Section 1.2 hereof (collectively, the "Purchased
Assets"), in each case free and clear of all mortgages, liens, charges,
security interests, claims and encumbrances of every nature, kind and character
(collectively, "Liens") other than the Lien created by the Security Agreement
and the Liens described on Schedule 5.14 annexed hereto.
1.2 Excluded Assets. The parties to this Agreement expressly
acknowledge and agree that there shall be excluded from the assets, rights,
properties and business to be transferred to Buyer hereunder the assets,
rights, properties and business described on Schedule 1.2 annexed hereto
(hereinafter collectively referred to as the "Excluded Assets").
ARTICLE II
Purchase Consideration
2.1 Purchase Consideration. The total consideration to be paid by
Buyer for the Purchased Assets (the "Purchase Consideration") shall include:
(a) $1,000; (b) the assumption by Buyer of Seller's obligation to discharge the
indebtedness (the "Bridge Note Indebtedness")
represented by those certain 12% Promissory Notes (the "Bridge Notes") issued
by Seller and secured pursuant to that certain Security Agreement, dated as of
March 13, 2003, between Seller and R. Xxxxxxx Xxxxxx (successor to Xxxxx
Xxxxxxx), as Collateral Agent, as amended (the "Security Agreement"), such
Bridge Notes being listed on Schedule 2.1; (c) the assumption by Buyer of the
Seller's obligations to pay Xxxxxxx & Xxxxx, L.L.P., Odyssey Capital, LLC and
Xxx Xxxxx, X.X., Ph.D (collectively, the "Professional Services Creditors"),
respectively, for professional services rendered in connection with the
transactions contemplated by this Agreement, the amount of each such obligation
being more fully described on Schedule 2.1 (the "Professional Services
Obligations"); and (d) the assumption by Buyer of the Assumed Liabilities
pursuant Section 3.1 below.
2.2 Allocation of Purchase Consideration. The parties hereto
acknowledge and agree that the transactions contemplated hereunder must be
reported in accordance with Section 1060 of the Internal Revenue Code of 1986
(the "Code"). The parties hereto agree to report the transactions contemplated
hereunder for all purposes in accordance with a purchase consideration
allocation to be established by Buyer, in its sole discretion. All the parties
hereto agree to share information and to cooperate to the extent necessary to
permit the transactions to be properly, timely, and consistently reported.
ARTICLE III
Assumption of Liabilities
3.1 Liabilities Assumed by Buyer. In addition to the Purchase
Consideration described in Section 2.1 above, at the Closing, Buyer shall by
written instrument assume, and after Closing shall fully and timely perform and
discharge when due in accordance with their terms, the liabilities and
obligations of Seller under the contracts and leases included in those certain
Purchased Assets specifically identified in Schedule 1.1 (other than contracts
or agreements with current or former employees or independent contractors of
Seller) and identified on Schedule 3.1, but only to the extent any required
third party consents to the assignment and transfer thereof to Buyer has been
obtained and only to the extent such liabilities and obligations relate to
periods subsequent to the Closing and do not arise from Seller's acts or
omissions (the "Assumed Liabilities"). The undertakings of Buyer referred to in
this Section 3.1 shall not in any way limit Buyer's right of recourse as set
forth in this Agreement for any breach of the covenants, representations or
warranties of Seller contained herein. The assumption by Buyer of the Assumed
Liabilities shall not enlarge any rights or remedies of any third parties under
any contracts or arrangements with Seller. Nothing herein shall prevent Buyer
from contesting with a third party in good faith any of the Assumed
Liabilities.
3.2 Liabilities Not Assumed by Buyer. Except for the Assumed
Liabilities, Buyer shall not assume or incur, and Seller shall remain liable to
pay, perform and discharge, all liabilities and obligations of Seller
including, without limitation, all liabilities and obligations of Seller (i)
with respect to federal, state and local taxes of every kind and character
including income, property, intangibles, ad valorem, franchise, sales or use
taxes or employment or payroll taxes (including but not limited to FICA,
withholding obligations, and unemployment insurance premiums) resulting from or
in any way connected with the operation of Seller's business (including any
state or local taxes resulting from or in any way connected with the
transactions contemplated by this Agreement), (ii) arising out of or in any way
connected with pending or threatened litigation resulting from or in any way
connected with the operation of the Business prior to the Closing, whether or
not disclosed to Buyer, including accrued fees, if any, of counsel in respect
thereof, (iii) for violation by Seller of
2
any statute, ordinance, regulation, order, judgment or decree, (iv) under any
contract, lease or usufruct of Seller as to which Seller's rights, benefits and
privileges are not transferred and assigned to Buyer at the Closing, pursuant
to the terms of this Agreement, (v) under any contract or lease of Seller as to
which Seller's rights, benefits and privileges are transferred and assigned to
and assumed by Buyer at the Closing, which relate to periods prior to the
Closing, (vi) arising out of or in respect of any transaction of Seller
accruing after the Closing, (vii) for costs incurred, whether or not then due,
for utilities services rendered or furnished to Seller, including without
limitation all water, gas and sewage treatment services prior to the Closing,
(viii) owed to its stockholders or any affiliate of Seller or its stockholders,
(ix) arising out of Seller's breach of this Agreement including any
representation or warranty contained herein, (x) with respect to accrued or
contingent benefits under any "employee welfare benefit plan" or "employee
pension benefit plan", as such terms are defined in the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), maintained by Seller, (xi)
arising from or relating to any claims by or on behalf of present or former
employees of Seller in respect of severance pay or benefits or termination pay
or benefits and similar obligations relating to the termination of such
employees' employment with Seller or Buyer's refusal to hire the same, or (xii)
any of Seller's accounts payable.
ARTICLE IV
Closing of Purchase and Sale
4.1 Closing. Closing of the purchase and sale provided for herein
(the "Closing") shall take place at the offices of Xxxxx, Xxxxxxxx & Xxxxxxx,
LLP, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, beginning
at ___, a.m., on _______________, 2003, or at such other time and place as the
parties shall mutually agree upon. The actual date on which the Closing occurs
is hereinafter referred to as the "Closing Date."
4.2 Actions to be Taken at Closing by Seller. At the Closing,
Seller shall:
(a) deliver to Buyer written evidence (in recordable
form where necessary) of all consents, approvals or waivers of lessors,
landlords, mortgagees and other third parties relating to the assignment by
Seller to Buyer of the leases, usufructs, contracts or agreements listed on
Schedule 1.1 annexed hereto.
(b) execute and deliver to Buyer any and all warranty
deeds, bills of sale, assignments of contracts and other such documents and
instruments as Buyer's counsel may deem necessary to convey the Purchased
Assets to Buyer, in each case in a form satisfactory to Buyer's counsel.
(c) deliver to Buyer all such certified resolutions,
certificates, documents or instruments with respect to Seller's corporate
existence and authority as Buyer's counsel may have reasonably requested prior
to the Closing Date.
(d) deliver to Buyer appropriate receipts from the
revenue authority in Texas showing that all sales and use taxes and withholding
taxes owed by Seller to such revenue authority have been paid or the
appropriate certificates from such revenue authority stating that no such
taxes, interest, or penalties are due.
4.3 Actions to be Taken at Closing by Buyer. At the Closing,
Buyer shall:
3
(a) execute and deliver to Seller an instrument whereby
Buyer assumes the Bridge Note Indebtedness and the Professional Services
Obligations, said instrument to be in form and substance reasonably
satisfactory to Seller's counsel.
(b) execute and deliver to Seller an instrument whereby
Buyer assumes the Assumed Liabilities, said instrument to be in form and
substance reasonably satisfactory to Seller's counsel.
(c) deliver to Seller a check for the cash portion of
the Purchase Consideration.
ARTICLE V
Representations and Warranties of Seller
As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, and with the knowledge that
Buyer shall rely thereon, Seller hereby represents and warrants to Buyer the
following (as of the date hereof and as of the Closing):
5.1 Corporate Status and Good Standing. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and authority under its charter
documents and by-laws to own and lease its properties, to operate and to
conduct its business as the same exist at the date hereof, and Seller is duly
qualified to do business and is in good standing in Texas and every other
jurisdiction in which the nature of its business makes such qualification
necessary.
5.2 Authorization. Seller has full corporate power and authority
under its certificate of incorporation and by-laws, and the Board of Directors
and stockholders of Seller have taken all necessary action to authorize Seller
to execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to take all actions required to be taken by Seller
pursuant to the provisions hereof, and this Agreement constitutes the valid and
binding obligation of Seller enforceable against Seller in accordance with its
terms.
5.3 Non-Contravention. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
(including but not limited to the assignment to Buyer of any contract or
lease), does or will violate, conflict with, result in breach of any material
provision of, constitute a default under, result in the termination of or
permit any third party to terminate (with or without notice, lapse of time or
pursuant to any legal or equitable principle) or accelerate the performance
required on the part of Seller by the terms of, any material agreement or
instrument (including but not limited to any contract or lease) to which Seller
is a party or by which Seller or any of its assets is subject or bound, or
result in the creation or imposition of any Lien on, or restriction on the use
of, any of the Purchased Assets.
5.4 Governmental Approvals. No filing with, consent of, or
approval by any governmental, administrative or regulatory body, agency or
commission is required in connection with the sale and transfer of the
Purchased Assets by Seller as contemplated hereby.
5.5 Indebtedness, Guaranties and Suretyships. Schedule 5.5
annexed hereto contains a complete and accurate list of all indebtedness for
money borrowed and owed by Seller or to which any of its assets or properties
are subject, including a general description of the terms thereof and all
4
assets pledged or otherwise subject thereto. A true and correct copy of each
note, loan, credit or other similar instrument pursuant to which any such
indebtedness was incurred has been furnished to Buyer by Seller. Except as set
forth on Schedule 5.5 Seller has not incurred, and none of its assets or
properties are subject to any liability or obligations (accrued, absolute,
contingent or otherwise), whether or not such liabilities are normally shown or
reflected on a balance sheet prepared in a manner consistent with generally
accepted accounting principles. Except as set forth on Schedule 5.5, there are
no guaranties or suretyships by which Seller is bound or to which any of its
assets or properties are subject. Except as set forth on Schedule 5.5, Seller
is not in default in respect of any term or condition of any such indebtedness.
Each of the Professional Services Obligations represents an amount owed by
Seller for services rendered to Seller by the applicable Professional Services
Creditor in connection with the negotiation and consummation of the
transactions contemplated by this Agreement and does not represent any amounts
owed for services rendered in connection with any other transaction or matter.
The Bridge Notes listed on Schedule 2.1 constitute all of the obligations
secured by the lien granted by Seller under the Security Agreement.
5.6 Litigation. Except as disclosed on Schedule 5.6, there is no
governmental investigation or proceeding or governmental or private litigation
pending, or, to the knowledge of Seller, threatened, against Seller or any of
the Purchased Assets or relating to the Business of Seller, nor to the
knowledge of Seller is there any basis therefor and there are no outstanding
judgments, orders, writs, injunctions or decrees of any court, government or
governmental agency against or affecting Seller or any of the Purchased Assets.
No pending governmental investigation or proceeding or governmental or private
litigation pending or threatened could, if decided adversely to Seller, have a
material adverse affect on Seller, the Purchased Assets or the conduct by Buyer
of the Business with the Purchased Assets.
5.7 Taxes. Except as set forth on Schedule 5.7, Seller has filed
all federal, state, and local tax returns required to be filed by Seller and
has made timely payment of all taxes shown by those returns to be due and
payable, including any and all employment taxes of every nature, kind and
character and there exists no tax liens or other encumbrances on any of the
Purchased Assets being sold pursuant to this Agreement.
5.8 Contracts. Schedule 5.8 annexed hereto sets forth a complete
and accurate list of all material contracts to which Seller is a party or which
affect or relate to the Business of Seller or are used or useful in the
Business as a going concern. Except as set forth in Schedule 5.8, Seller is not
a party to any (i) contract not made in the ordinary course of business, (ii)
employment contract not terminable at will without penalty or liability, (iii)
contract with any labor union or association, or (iv) continuing contract for
the future purchase of materials, supplies, inventory or equipment in excess of
the reasonable foreseeable requirements of its business and for normal
operating inventory. As used herein, the term "contract" includes any written
or oral agreement, commitment, understanding or arrangement. Seller has
performed in all respects all contractual obligations required to be performed
by it to date and is not in default in any respect under any contract to which
it is a party or by which it is bound and, to the best knowledge of Seller, no
other party to any such contract is in material default in the performance of
its obligations thereunder or has taken any action which constitutes, or with
notice or lapse of time would constitute, a breach or anticipatory breach
thereof. Except as specifically disclosed in Schedule 5.8, all contracts
included in the Purchased Assets are assignable to Buyer without modification
of the terms thereof and without the consent of any party other than Seller who
is a party thereto.
5
5.9 Fixed Assets. Set forth on Schedule 5.9 annexed hereto is a
complete and accurate list of all the vehicles, tools, furniture, machinery and
equipment, trade fixtures and other personal property or fixed assets material
to the Business or necessary or useful to the continued operation of Seller's
business (hereinafter collectively the "Fixed Assets"). At the Closing Seller
will have good and marketable title to all of the Fixed Assets, free and clear
of any and all Liens whatsoever. The Fixed Assets of Seller are in good
operating condition and repair, subject only to ordinary and reasonable wear
and tear from normal use thereof.
5.10 Intellectual Property.
(a) The Purchased Assets include all Intellectual
Property (as defined below) used or held for use in the conduct of the Business
as currently conducted by Seller (the "Intellectual Property Assets"). As used
in this Agreement, the term "Intellectual Property" means all patents and
patent rights, trademarks and trademark rights, trade names and trade name
rights, domain names, service marks and service xxxx rights, service names and
service name rights, brand names, inventions, processes, methods, designs,
devices, tools, specifications, techniques, algorithms, formulae, improvements,
copyrights and copyright rights, trade dress, business and product names,
logos, slogans, trade secrets, industrial models, computer programs, software
(whether in source or object code) and related documentation, mask works,
technical information, manufacturing, engineering and technical drawings,
know-how and all pending applications for and registrations of patents,
trademarks, service marks and copyrights.
(b) Schedule 5.10(b) sets forth a list of all patents,
patent applications, copyright registrations (and applications therefor),
trademark registrations (and applications therefor) and trade names owned by
Seller and used in the Business. Each of the federal and state registrations
relating to the foregoing Purchased Assets is valid and in full force and
effect.
(c) Schedule 5.10(c) sets forth a list of all patents,
software and other technology used in the Business and for which Seller does
not own all right, title and interest (other than "shrink-wrap" software
licensed in the ordinary course of business) (collectively, the "Third Party
Technology"), and all license agreements or other contracts pursuant to which
Seller has the right to use the Third Party Technology (the "Third Party
Licenses"). Seller has the lawful right to use (free of any material
restriction not expressly set forth in the Third Party Licenses) all Third
Party Technology that is incorporated or used in the Business. Seller has not
received notice that any party to any such license intends to cancel, terminate
or refuse to renew (if renewable) such license or to exercise or decline to
exercise any option or right thereunder.
(d) Schedule 5.10(d) sets forth a list of all material
software products and tools developed, produced, marketed, sold or licensed by
Seller in the operation of the Business as of the date of this Agreement, or
during the two years prior to such date (the "Products").
(e) All the Intellectual Property Assets are owned by
Seller free and clear of all Liens, except for the Lien created by the Security
Agreement. Other than nonexclusive licenses granted in the ordinary course of
business, Seller has not granted to any third party any rights or permissions
to use any of the Intellectual Property Assets. All such non-exclusive licenses
granted by Seller are listed Schedule 5.10(e), and true and correct copies of
each agreement pursuant to which such non-exclusive licenses were granted have
been provided to Buyer. Seller has not received any notice or claim (whether
written, oral or otherwise) challenging Seller's ownership or rights in the
Intellectual Property Assets or claiming that any other person or entity has
any legal or beneficial
6
ownership with respect thereto or challenging the validity or enforceability of
the Intellectual Property Assets.
(f) Neither Seller's operation of the Business prior to
the Closing nor the Intellectual Property Assets infringe, violate or interfere
with or constitute a misappropriation of any right, title or interest
(including, without limitation, any patent, copyright, trademark or trade
secret right) held by any other person or entity. Seller has not received any
notice or claim (whether written, oral or otherwise) regarding any
infringement, misappropriation, misuse, abuse or other interference with any
third party intellectual property or proprietary rights (including, without
limitation, infringement of any patent, copyright, trademark or trade secret
right of any third party) by either Seller's operation of the Business or the
Intellectual Property Assets.
(g) To Seller's knowledge, no other person or entity is
infringing or misappropriating the Intellectual Property Assets.
(h) Except as disclosed on Schedule 5.10(h), (i) Seller
has not disclosed any source code to any person or entity; (ii) Seller has at
all times maintained and diligently enforced commercially reasonable procedures
to protect all confidential information of the Business; (iii) Seller has not
deposited any source code into any source code escrows or similar arrangements;
and (iv) each person who has worked on or participated in the development of
any of the Intellectual Property Assets has entered into an agreement with
Seller providing for the exclusive ownership of such Intellectual Property
Assets by Seller. If, as disclosed Schedule 5.10(h), Seller has deposited any
source code into source code escrows or similar arrangements, to Seller's
knowledge, no event has occurred that has or could reasonably form the basis
for a release of such source code from such escrows or arrangements.
(i) Schedule 5.10(i) sets forth a list of all Internet
domain names used by Seller in the Business (collectively, the "Domain Names").
Seller has, and following the Closing, Buyer will have, a valid registration
and all material rights (free of any material restriction) in and to the Domain
Names, including, without limitation, all rights necessary to continue to
conduct the Business as it is currently conducted.
5.11 Compliance with Law. Seller is not in violation of any
applicable law, ordinance or regulation including any Environmental Laws (as
hereinafter defined), except for violations which will not (either in any
individual case or in the aggregate) have a material adverse effect upon the
financial condition or operations of the Business or Seller. All permits,
licenses and other governmental authorizations and approvals required to
conduct the Business have been obtained and are in full force and effect and
there is no proceeding pending, or, to the knowledge of Seller, threatened,
against Seller which may result in the revocation, cancellation, suspension or
any adverse modification of any of such permits, licenses, governmental
authorizations or approvals. For purposes of this Agreement, "Environmental
Laws" shall mean the Resource, Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act (Super Fund), the Clean
Air Act, the Clean Water Act, the Toxic Substances Control Act and all other
United States Federal and state and local laws and regulations concerning
protection of the environment and the transportation, storage, treatment or
disposal of Hazardous Materials.
5.12 Labor Relations; Employees. Set forth on Schedule 5.12
annexed hereto is a complete and accurate list of the present employees and
independent contractors of the Business together with the present level of
compensation for each employee and independent contractor.
7
Except as set forth on Schedule 5.12, other than amounts which have not yet
become payable in accordance with Seller's customary practices, which will be
paid in a timely manner, (a) Seller has paid in full to its employees or
independent contractors, as the case may be, all wages, salaries, commissions,
bonuses and other direct compensation for all services performed by them to
date, and (b) Seller has paid, or will pay in a timely manner, all severance
pay and benefits, FICA, withholding taxes and vacation pay for all of its
employees or independent contractors, as the case may be, and is not subject to
any claim for non-payment or non- performance of any of the foregoing. Seller
is in compliance with all federal, state and local laws and regulations
respecting employment and employment practices, terms and conditions of
employment and wages and hours. There is no unfair labor practice complaint
against Seller pending before the National Labor Relations Board or any
comparable state or local agency. There is no labor strike, dispute, slowdown
or stoppage pending, or to the best knowledge of Seller, threatened, against or
involving Seller. No grievance which might have an adverse effect on Seller or
the conduct of the Business or proceeding alleging discriminatory practices is
pending and no claim therefor has been asserted. Seller is not a party to any
collective bargaining agreement with respect to any of its employees.
5.13 Employee Benefit Plans. Except as set forth on Schedule 5.13
annexed hereto, Seller does not maintain or contribute to any "employee welfare
benefit plan" or "employee pension benefit plan," as such terms are defined in
ERISA. None of such plans are underfunded, and none of such plans will or could
reasonably be expected to give rise to a Lien against the Purchased Assets.
Seller does not contribute, and has not contributed since its formation, to a
"multi-employer plan," as that term is defined in ERISA.
5.14 Purchased Assets Complete and Lien Free. The Purchased Assets
constitute all of the material assets and rights used by Seller in the conduct
of the Business (exclusive of the Excluded Assets). Upon the transfer of the
Purchased Assets to Buyer at the Closing, Buyer will own all of the assets and
rights necessary for it to develop, license and sell any and all software and
software solutions which were licensed and sold by Seller, or which were under
development by Seller, prior to the Closing, in a manner consistent with the
manner in which Seller developed, licensed and sold such software and software
solutions prior to the Closing (exclusive of the Excluded Assets). Seller has
good and marketable title to the Purchased Assets, free and clear of any Liens,
except for the Lien created pursuant to the Security Agreement and those Liens
described on Schedule 5.14. At the Closing, Seller will convey to Buyer good
and marketable title to all of the Purchased Assets, free and clear of any and
all Liens, except for the Lien created pursuant to the Security Agreement and
those Liens described on Schedule 5.14.
5.15 Books and Records. The books and records of Seller are true,
correct and complete in all material respects, have been maintained in
accordance with good business practice and in accordance with all laws,
regulations and other requirements applicable to its business and operations.
5.16 Disclosure. Neither this Agreement nor any schedule, exhibit
or certificate delivered in accordance with the terms hereof, contains any
untrue statement of material fact, or omits any statement of a material fact
necessary in order to make the statements contained herein or therein not
misleading. There is no fact known to Seller which materially and adversely
affects the Business, or the prospects or financial condition of Seller or its
properties or assets, which has not been set forth in this Agreement or in the
schedules or certificates in writing furnished in connection with the
transactions contemplated by this Agreement, including, without limitation,
Schedule 5.16.
8
5.17 No Broker's or Finder's Fees. Except for the Professional
Services Obligation owed to Odyssey Capital, LLC and assumed by Buyer pursuant
to Section 2.1, no agent, broker, investment banker, person or firm acting on
behalf of Seller is or will be entitled to any broker's or finder's fee or any
other commission or similar fee in connection with any of the transactions
contemplated herein.
ARTICLE VI
Representations and Warranties of Buyer
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, and with the knowledge that
Seller shall rely thereon, Buyer hereby represents and warrants to Seller the
following (as of the date hereof and as of the Closing):
6.1 Corporate Status and Good Standing. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and authority under its
certificate of incorporation and by-laws to own and lease its properties and to
conduct its business as the same exists at the date hereof.
6.2 Authorization. Buyer has full corporate power and authority
under its certificate of incorporation and by-laws and has taken, or as of the
Closing will have taken, all necessary corporate action to authorize the
execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby (including, without limitation, the assumption
of the Assumed Liabilities), and this Agreement constitutes the valid and
binding obligation of Buyer enforceable in accordance with its terms.
6.3 Non-Contravention. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby does or
will violate, conflict with, result in a breach of any material provision of,
constitute a default under, result in the termination of or permit any third
party to terminate (with or without notice, lapse of time or pursuant to any
legal or equitable principle) or accelerate the performance required on the
part of Buyer by the terms of, or accelerate the maturity of or require the
prepayment of any indebtedness of Buyer under, any judgment, order, decree or
material agreement or instrument to or by which Buyer or any of its assets is
subject or bound.
ARTICLE VII
Covenants
7.1 Operation in Ordinary Course. From the date hereof to the
Closing Date, except with the prior written consent of Buyer, Seller shall (a)
conduct its business only in the ordinary course and in substantially the same
manner as conducted at the date hereof, (b) use its reasonable best efforts to
preserve its business organization intact and to retain the services of its
present officers, key employees, purchasing and sales personnel and
representatives, (c) use its reasonable best efforts to preserve favorable
relations with its employees, customers, suppliers and others having business
relations with it, (d) use its reasonable best efforts to comply with all
applicable laws, (e) refrain from entering into, amending in any material
respect or terminating any contract to which it is a party, (f) refrain from
changing in any material respect any employee's compensation or employment
benefits; (g) refrain from making any distribution to its stockholders, and (h)
conduct its business in such a
9
manner that the representations and warranties contained in Article V of this
Agreement shall continue to be true and correct on and as of the Closing Date
as if made on and as of the Closing Date. Seller shall jointly and severally
indemnify and hold Buyer harmless from and against any claim or loss incurred
by Seller, resulting from or arising out of any act or omission of Buyer under
this Section 7.1 if such act or omission was taken or made in good faith and in
a commercially reasonable manner.
7.2 Notice of Events. Seller shall promptly notify Buyer of (a)
any event, condition or circumstance occurring from the date hereof through the
Closing Date that would constitute a violation or breach of this Agreement, (b)
any event, occurrence, transaction or other item which would have been required
to have been disclosed on any schedule or certificate delivered by or on behalf
of Seller or its officers or directors hereunder had such event, occurrence,
transaction or item existed on the date hereof, and (c) any lawsuits, claims,
proceedings or investigations that after the date hereof are threatened or
commenced against Seller or any of its officers, directors, employees,
consultants, agents or stockholders with respect to the affairs of Seller.
7.3 Exclusive Dealing. During the period beginning on the date
hereof and ending on July 11, 2003 (the "Exclusivity Period"), Seller shall
refrain, and shall cause each of their respective representatives, directors,
officers, stockholders, agents or affiliates to refrain, from (i) entertaining
or discussing a possible sale, merger, recapitalization or other disposition of
Seller, any capital stock or assets of Seller or any interest therein with any
other party or provide any information to any other party in connection
therewith, or (ii) disclose to any other party the contents of this Agreement
or the details of the transactions proposed herein. In addition, Seller will
inform Buyer of, and provide Buyer with information regarding, any other offers
or expressions of interest for Seller or any of its assets.
7.4 Examinations and Investigations. Until the Closing, Buyer
shall be entitled, through its employees and representatives, including,
without limitation, its counsel and accountants, to make such investigation of
the assets, properties, business and operations of Seller, and such examination
of the books, records and financial condition of Seller as Buyer deems
necessary or advisable. Any such investigation and examination shall be
conducted at reasonable times during normal business hours and under reasonable
circumstances. No investigation by Buyer (or failure to conduct such an
investigation) shall diminish or obviate any of the representations,
warranties, covenants or agreements of Seller under this Agreement, or Buyer's
rights under Article X of this Agreement. In order that Buyer may have full
opportunity to make such business, accounting and legal review, examination or
investigation as it may wish of the business and affairs of Seller, Seller
shall furnish, the representatives of Buyer during such period with all such
information and copies of such documents concerning the affairs of Seller as
such representatives may reasonably request and cause its respective officers,
employees, consultants, agents, accountants and attorneys to cooperate fully
with such representatives in connection with such review and examination.
7.5 Payment of Seller's Obligations. With the exception of those
obligations expressly provided to be assumed by Buyer hereunder, Seller shall
pay, fulfill, perform, and discharge as and when the same are due, all
indebtedness, payables, duties and obligations of every and any nature
whatsoever arising from the acts and omissions of Seller, its business
activities and transactions, and from any state of facts in existence prior to
the Closing which could in any way give rise to a claim against Buyer, its
assets, or the Purchased Assets.
10
7.6 Further Assurances. Seller covenants and agrees that from and
after the Closing it will execute, deliver and acknowledge (or cause to be
executed, delivered and acknowledged), from time to time at the request of
Buyer and without further consideration, all such further instruments and take
all such further action as may be reasonably necessary or appropriate to
transfer more effectively to Buyer, or to perfect or record Buyer's title to or
interest in or to enable Buyer to use, the Purchased Assets, or otherwise to
confirm or carry out the provisions and intent of this Agreement. In addition,
at the request of Buyer, from time to time, Seller shall cooperate, and shall
use commercially reasonable efforts to cause its current and former officers,
directors, employees, attorneys and accountants to cooperate, with Buyer in the
preparation of financial statements of Seller and the Business for periods
prior to the Closing and the completion of audits with respect to such
financial statements and shall use commercially reasonable efforts to provide
any and all information regarding Seller and its operation of the Business
prior to the Closing as may be required by Buyer to complete such financial
statements and audits.
7.7 Collection of Receivables. After the Closing, Buyer shall be
empowered to collect all receivables and other items transferred to Buyer
pursuant to this Agreement, and to endorse with the name of Seller (but solely
for Buyer's benefit and account) any checks and other instruments received on
account thereof. Seller shall transfer or cause to be transferred to Buyer any
cash or other property that Seller may receive after the Closing in respect of
such receivables or other items transferred to Buyer hereunder. After the
Closing, Seller shall cooperate with Buyer in connection with the collection of
all such receivables and the pursuit of all other actions, proceedings or
disputes involving Seller based on contracts, arrangements or acts of Seller
which were in effect or occurred on or prior to the Closing Date.
ARTICLE VIII
Conditions Precedent to the Obligation of Buyer to Close
The obligation of Buyer to enter into and complete the Closing is
subject, at Buyer's option, to the fulfillment on or prior to the Closing Date
of the following conditions, any one or more of which may be waived by Buyer
only in writing:
8.1 Representations and Covenants. The representations and
warranties of Seller contained in this Agreement shall be true on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date. Seller shall have performed and complied in all material respects
with all covenants and agreements required by this Agreement to be performed or
complied with by Seller on or prior to the Closing Date. At the Closing, Seller
shall have delivered to Buyer a certificate to such effect.
8.2 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body, or instituted
or threatened against by any governmental or regulatory body, to restrain,
modify or prevent the carrying out of the transactions contemplated by this
Agreement or to seek damages or a discovery order in connection with such
transactions, or that has or could reasonably be expected to have a materially
adverse effect on the assets, properties, business, operations or financial
condition of Seller or the Business. At the Closing, Seller shall have
delivered to Buyer a certificate to such effect.
11
8.3 Governmental Permits and Approvals. All permits and approvals
from any governmental or regulatory body required for the lawful consummation
of the Closing and the continued operation of the Business by Buyer shall have
been obtained.
8.4 Third Party Consents. All consents, permits, waivers and
approvals from parties to material contracts with Seller that may be required
in connection with the performance by Seller of its obligations under this
Agreement or the continuance of such contracts with Seller without material
modification after the Closing shall have been obtained (with satisfactory
written evidence thereof, in recordable form where necessary, to be furnished
to Buyer at the Closing).
8.5 Due Diligence. Buyer shall have completed its due diligence
review of Seller and the Business and shall be satisfied with the results
thereof.
8.6 No Material Adverse Change. There shall have been no material
adverse change in the assets or liabilities, the business or condition,
(financial or otherwise) of the Business or its employees or customers
regardless of reason, including, without limitation, to those changes that are
the result of any legislative or regulatory change, the announcement of the
transactions described herein, revocation of any license or rights to do
business, fire, explosion, accident, casualty, labor trouble, flood, riot,
storm, condemnation or act of God or other public force or otherwise. At the
Closing, Seller shall have delivered to Buyer a certificate to such effect.
8.7 Books and Records. Buyer shall have received the books of
account and all books, papers, records, correspondence and instruments of, or
relating to, Seller's operation of the Business prior to the Closing.
8.8 Approval of Transactions. The Board of Directors of Buyer
shall have approved this Agreement and the transactions contemplated hereby.
The Board of Directors and stockholders of Seller shall have approved this
Agreement and the transactions contemplated hereby.
8.9 Good Standing Certificates, Etc. Seller shall have delivered
all certified resolutions, certificates, documents or instruments with respect
to Seller's corporate existence and authority as Buyer may have reasonably
requested prior to the Closing Date.
8.10 Agreement with Senior Note Holders and Professional Services
Creditors. Each holder of a Bridge Note (all such holders, collectively, the
"Senior Debt Holders") and each Professional Services Creditor shall have
executed and delivered to Buyer an agreement, pursuant to which (a) each Senior
Debt Holder shall have agreed to cancel the indebtedness represented by the
Bridge Note held by such Senior Debt Holder and to release any and all Liens
granted as security therefor, and (b) each Professional Services Creditor shall
have agreed to cancel the Professional Services Obligations owed to such
Professional Services Creditor, in each case, upon terms and conditions
mutually agreeable to such Senior Debt Holder or Professional Services
Creditor, as the case may be, and Buyer (the "Discharge Agreement").
8.11 Employment Agreements. Each of the following employees of
Seller shall have entered into an employment agreement with Buyer in form and
substance mutually agreeable to Buyer and such employee: Xxxx Xxxx, Xxxxx
Xxxxxxxx and Xxxxxx Xxxxxx.
12
8.12 Opinion of Seller's Counsel. Seller shall have delivered to
Buyer the signed opinion of Xxxxxxx & Xxxxx L.L.P., counsel to Seller, in form
and substance satisfactory to Buyer and Buyer's counsel.
8.13 Compliance with Securities Laws. Buyer shall have determined,
in its reasonable discretion, that the consummation of the transactions
contemplated by this Agreement, including without limitation, the issuance of
the Consideration Shares and the Consideration Warrants, complies with all
applicable securities laws.
ARTICLE IX
Conditions Precedent to the Obligation of Seller to Close
The obligation of Seller to enter into and complete the Closing is
subject, at Seller's option, to the fulfillment of the following conditions,
any one or more of which may be waived by Seller only in writing:
9.1 Representations and Covenants. The representations and
warranties of Buyer contained in this Agreement shall be true on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date. Buyer shall have performed and complied with in all material
respects all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date. At the
Closing, Buyer shall have delivered to Seller a certificate to such effect.
9.2 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body, or instituted
or threatened by any governmental or regulatory body, to restrain, modify or
prevent the carrying out of the transactions contemplated hereby, or to seek
damages or a discovery order in connection with such transaction. At the
Closing, Buyer shall have delivered to Seller a certificate to such effect.
9.3 Governmental Permits and Approvals. All permits and approvals
from any governmental or regulatory body required for the lawful consummation
of the Closing and the continued operation of the Business shall have been
obtained.
9.4 Approval of Transactions. The Board of Directors of Buyer
shall have approved this Agreement and the transactions contemplated hereby.
The Board of Directors and stockholders of Seller shall have approved this
Agreement and the transactions contemplated hereby.
ARTICLE X
Survival of Representations and Warranties; Indemnification
10.1 Survival of Representations and Warranties. Except as is
otherwise expressly provided for in this Section 10.1, the representations and
warranties of any party hereto set forth in this Agreement shall survive the
Closing for a period of eighteen (18) months. All representations and
warranties of Seller contained in Sections 5.7 (Taxes), 5.11 (Compliance with
Law), 5.13 (Employee Benefit Plans) and 5.14 (Purchased Assets Complete and
Lien Free) shall survive the Closing until the expiration of the applicable
statute of limitations with respect to the liability in
13
question. Any claim any party makes against another in writing prior to the
expiration of the applicable survival period provided for in this Section 10.1
shall survive the expiration of such period and the party asserting the claim
shall have the right to pursue the same in accordance with the applicable
indemnification provisions provided for in this Agreement. This Article X shall
provide the sole and exclusive remedy for any and all damages, claims, losses,
liabilities or expenses arising out of or relating to this Agreement or the
transactions contemplated herein provided, however, the provisions of this
Section 10.1 shall not in any manner diminish, restrict or otherwise limit any
party's right to obtain either (i) a remedy in addition to the indemnification
provided for in this Article X, with respect to any breach or violation or
failure to fully perform, any covenant, agreement, undertaking or obligation of
any party set forth in this Agreement based on or arising out of fraud,
fraudulent inducement or intentional misrepresentation, or (ii) injunctive or
other provisional relief as necessary or appropriate.
10.2 Indemnity Agreement of Seller. Seller shall defend, indemnify
and hold harmless Buyer and its directors, officers, employees, agents,
affiliates, successors and assigns (the "Buyer Indemnified Parties") from and
against any and all damages, fines, fees, penalties, deficiencies, losses and
expenses (including without limitation interest, court costs, fees of
attorneys, accountants and other experts or other expenses of litigation or
other proceedings or of any claim, default or assessment) ("Losses") suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to:
(a) any breach of any representation or warranty on the
part of Seller contained in this Agreement or any misrepresentation in or
omission on the part of Seller contained in any certificate furnished or to be
furnished to Buyer by Seller pursuant to this Agreement;
(b) any breach or non-fulfillment on the part of Seller
of any covenant contained in this Agreement;
(c) any failure of Seller to convey to Buyer good and
marketable title to the Purchased Assets, free and clear of all Liens;
(d) Seller's failure to timely satisfy, perform or
discharge any liability or obligation of Seller that is not an Assumed
Liability hereunder; or
(e) any claims with respect to brokers' or finders' fees
due with respect to the transactions contemplated herein and alleged to arise
from any contract entered into by Seller.
10.3 Indemnity Agreement of Buyer. Buyer shall, defend, indemnify
and hold harmless Seller from and against any and all Losses suffered, incurred
or sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to:
(a) any breach of any representation or warranty or
non-fulfillment of any covenant or agreement on the part of Buyer contained in
this Agreement, or any misrepresentation in or omission from or non-fulfillment
of any covenant on the part of Buyer contained in any certificate furnished or
to be furnished to Seller by Buyer pursuant to this Agreement;
(b) Buyer's failure to timely satisfy, perform or
discharge any Assumed Liability; or
14
(c) any claims with respect to brokers' or finders' fees
due with respect to the transactions contemplated herein and alleged to arise
from any contract entered into by Buyer.
10.4 Indemnification Procedure.
(a) With respect to any claim for indemnification under
this Agreement, the party seeking indemnification (the "Indemnitee") shall
promptly notify the indemnifying party hereunder (the "Indemnitor") in writing
of any damage, claim, loss, liability or expense or other matter which the
Indemnitee has determined has given or could give rise to a claim for which
indemnification rights are granted hereunder (such written notice referred to
as the "Notice of Claim"). The Notice of Claim shall specify, in reasonable
detail, the nature and estimated amount of any such claim giving rise to a
right of indemnification, to the extent the same can reasonably be estimated.
Any failure on the part of an Indemnitee to give timely notice to the
Indemnitor of a claim shall not affect the right of the Indemnitee to obtain
indemnification from the Indemnitor with respect to such claim unless the
Indemnitor is actually harmed by such failure to notify, and then only to the
extent of such actual harm.
(b) With respect to any matter set forth in a Notice of
Claim relating to a third party claim, the Indemnitor shall defend, in good
faith and at its expense, any such claim or demand, and the Indemnitee, at its
expense, shall have the right to participate in the defense of any such third
party claim. So long as the Indemnitor is defending any such third party claim
in good faith, the Indemnitee shall not settle or compromise such third party
claim. The Indemnitee shall make available to the Indemnitor or its
representatives all records and other materials reasonably required by them for
use in contesting any third party claim and shall cooperate fully with the
Indemnitor in the defense of all such claims. If the Indemnitor does not defend
any such third party claim or if the Indemnitor does not provide the Indemnitee
with prompt and reasonable assurances that the Indemnitor will satisfy the
third party claim, the Indemnitee may, at its option, elect to defend any such
third party claim, at the Indemnitor's expense. An Indemnitor may not settle or
compromise any claim without obtaining a full and unconditional release of the
Indemnitee, unless the Indemnitee consents in writing to such settlement or
compromise. Notwithstanding the foregoing, if there is a reasonable probability
that a third party claim for which Buyer has indemnification rights against
Seller hereunder will materially and adversely affect Buyer other than as a
result of money damages or other payments, Buyer shall be entitled to conduct
the defense of such claim at the expense of Seller.
10.5 Limits on Indemnification.
(a) The aggregate indemnification obligation of Buyer
under Section 10.3 shall be limited to an amount equal to $500,000, minus the
aggregate amount Buyer has previously paid in satisfaction of its
indemnification obligations contained in the Discharge Agreement.
(b) Notwithstanding the foregoing, the limitations set
forth in this Section 10.5 shall not apply to fraudulent misrepresentations or
intentional misconduct.
15
ARTICLE XI
Covenants Against Competition
11.1 Restrictive Covenants. To induce Buyer to purchase the
Purchased Assets, Seller covenants and agrees with Buyer that, if the
transactions contemplated hereby are closed, Seller will not for a period of
three (3) years following the Closing Date:
(a) Within the Territory (as hereinafter defined),
engage in any Competitive Activity (as hereinafter defined); or
(b) Directly or indirectly solicit the employment of, or
encourage to leave the employment of Buyer or any of its affiliates, any
employee of Buyer or any of its affiliates who was an employee of Seller
immediately prior to the Closing.
11.2 Nondisclosure of Confidential Information. To induce Buyer to
purchase the Purchased Assets, Seller covenants and agrees with Buyer that, if
the transactions contemplated herein are closed, Seller will not disclose or
use or otherwise exploit for its own benefit or for the benefit of any other
person or entity any Confidential Information (as hereinafter defined). The
covenant contained in this Section 11.2 shall survive for a period of five (5)
years following the Closing Date; provided, however, that with respect to those
items of Confidential Information which constitute trade secrets under
applicable law, the obligations of confidentiality and nondisclosure as set
forth in this Section 11.2 shall continue to survive after said five (5) year
period to the greatest extent permitted by applicable law. These rights of
Buyer are in addition to those rights Buyer has under the common law or
applicable statutes for the protection of trade secrets.
11.3 Remedies. Seller acknowledges that irreparable loss and
injury would result to Buyer upon any breach of any of the covenants contained
in Section 11.1 or Section 11.2 and that damages arising out of such breach
would be difficult to ascertain. Seller agrees that, in addition to all the
remedies provided at law or at equity, Buyer may petition and obtain, without
bond, from a court of law or equity both temporary and permanent injunctive
relief to prevent a breach by Seller of any such covenant.
11.4 Blue-Penciling. If any court determines that any one or more
of the restrictive covenants contained in Section 11.1 or 11.2, or any part
thereof, is unenforceable because of the duration of such provision or the
territory or activities covered thereby, such court shall have the power to
reduce the duration or the territory or prohibited activities of such
provision, and, in its reduced form, such provisions shall then be enforceable
and shall be enforced.
11.5 Definitions. For purposes of this Article XI the following
terms shall have the meanings set forth below:
(a) The term "Confidential Information" shall mean and
include all information, data and know-how of Seller which is purchased and
transferred to Buyer pursuant to the terms hereof or relates to the Business
including without limitation, administrative procedures, sales or marketing
programs or techniques, payment plans, existing or new products of the business
purchased by Buyer from Seller hereunder, unpublished list of current or
prospective customers, information relating to the solicitation of customers
for the Business purchased by Buyer, pricing, quotations, manufacturing
techniques, software (source or object code), diagrams, mask works, or
16
know-how and any other information (whether or not constituting a trade secret)
not generally known by competitive businesses which has value to Buyer in its
operation of the Business. Confidential Information shall not include any data
or information that has been voluntarily disclosed to the public by Buyer
(except where such public disclosure has been made without authorization), or
that has been independently developed and disclosed by others, or that
otherwise enters the public domain by means other than by breach of this
Agreement by Seller, or by a breach of the Discharge Agreement by the Senior
Debt Holders, the Professional Service Creditors or their respective
affiliates.
(b) The term "Competitive Activity" shall mean and
include any activity in which Seller directly or indirectly owns, manages,
operates, controls, is employed by (either as an employee or an independent
contractor) or participates in the ownership, management, operation or control,
of any business (other than the business of Buyer or its successors or assigns)
that is competitive with the Business as conducted by Seller at any time during
two-year period ending on the Closing Date.
(c) The term "Territory" shall mean and include all
geographic areas located in the following states: Texas, California, Georgia,
North Carolina, Louisiana, Arkansas and Florida.
ARTICLE XII
Taxes, Utilities, Assessments and Similar Adjustments
12.1 Payment of Certain Taxes. Seller shall be responsible for the
payment of the following:
(a) all federal, state, and other taxes imposed upon
Seller's net income from the transactions contemplated hereunder (including but
not limited to federal taxes based upon depreciation recapture and federal
taxes based upon the recapture of investment tax credit);
(b) taxes payable by Seller on gross income from the
sale of the Purchased Assets of Buyer hereunder;
(c) all sales and use taxes imposed on the purchase,
sale, use or transfer of property by Seller prior to and as a result of the
Closing; and
(d) any penalties, interest, or similar charges with
respect to the foregoing taxes enumerated in this Section.
12.2 Proration of General Taxes. General Taxes (as hereinafter
defined) shall be prorated between Seller and Buyer, so that regardless of when
or by whom actually paid or payable, Seller shall bear any of such taxes levied
or assessed against or with respect to the Purchased Assets for or with respect
to any period prior to the Closing, and Buyer shall bear any of such taxes
levied or assessed against or with respect to the Purchased Assets for or with
respect to any period on or after the Closing. Buyer shall prepare and file any
returns for General Taxes due from and after the Closing, and Seller shall
prepare all other returns for General Taxes. Buyer and Seller shall jointly
prepare returns which determine taxes that are being prorated. As used herein,
the term "General Taxes" shall mean (i) all annual or periodic ad valorem fees
and other taxes and assessments, both general and special, and payments made in
lieu thereof, on real or personal property and (ii) all other annual or
periodic fees, taxes, and similar charges imposed by any governmental unit,
upon or in respect to the Purchased Assets, including, but not limited to,
taxes, fees, or similar charges (e.g.,
17
licenses) for the privilege of doing business. "General Taxes" shall not
include motor fuel taxes, sales and use taxes, corporate franchise taxes,
transfer taxes, income taxes, taxed based on gross income, and other taxes
described in Section 12.1 above.
12.3 Deficiencies and Refunds. In the event any deficiencies are
assessed or refunds made with respect to any of the taxes provided for in this
Article XII, deficiencies shall be the responsibility of, or refunds shall be
paid to, the party having the responsibility for the payment of the tax
pursuant to this Article XII.
12.4 Wages and Salaries. Wages and salaries of the employees of
Seller who are hired by Buyer immediately after the Closing, if any,
(collectively the "Continued Employees"), and all other payments made in
respect to the Employees (including, without limitation, employer's FICA
payments, other employment taxes, and accrued but unpaid vacation or sick
leave) shall be prorated between Seller and Buyer so that regardless of when or
by whom actually paid, Seller shall bear the cost of such wages and salaries
and other payments for work prior to the Closing, and Buyer shall bear the cost
of such wages and salaries and other payments for work after the Closing (while
employed by Buyer).
12.5 Time of Payment. Any amounts validly due and payable by one
party to the other pursuant to this Article XII shall be made within thirty
(30) days of demand.
ARTICLE XIII
Termination
13.1 Termination. This Agreement may be terminated prior to the
Closing only as follows:
(a) at the election of Seller, if any one or more of the
conditions to the obligations of Seller to close has not been fulfilled as of
the Closing Date, or if Buyer has breached in any material respect any
representation, warranty, covenant or agreement contained in this Agreement;
(b) at the election of Buyer, if any one or more of the
conditions to its obligations to close has not been fulfilled as of the Closing
Date, or if Seller, any Professional Services Creditor or any Senior Debt
Holder has breached in any material respect any representation, warranty,
covenant or agreement contained in this Agreement or the Discharge Agreement;
(c) at the election of Seller or Buyer, if any legal
proceeding is commenced or threatened by any governmental or regulatory body or
other person directed against the consummation of the Closing or any other
transaction contemplated under this Agreement or the Discharge Agreement and
either Seller or Buyer, as the case may be, reasonably and in good xxxxx xxxx
it impractical or inadvisable to proceed in view of such legal proceeding or
threat thereof;
(d) at any time on or prior to the Closing Date, by
mutual written consent of Buyer and Seller; or
18
(e) at any time after the expiration of the Exclusivity
Period, at the election of either Buyer or Seller, provided that the party
electing to terminate is not then in material breach of any representation,
warranty, covenant or agreement contained in this Agreement.
13.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 13.1 above, then except as otherwise provided herein, all
further obligations of the parties under or pursuant to this Agreement shall
immediately terminate without further liability of any party to the others;
provided, however, that (i) nothing in this Section 13.2 shall relieve the
liability or obligations hereunder of any party (the "Defaulting Party") to the
other party or parties (each, a "Non-Defaulting Party") on account of a breach
by the Defaulting Party of any covenant, agreement, representation or warranty
of the Defaulting Party contained herein; and (ii) the provisions of Section
14.1 (relating to publicity) and Section 14.4 (relating to expenses) shall
survive any such termination.
ARTICLE XIV
Miscellaneous
14.1 Publicity; Waiver for Tax Structure Disclosure. Except as
otherwise required by law (including compliance with applicable bulk transfer
laws), Seller shall not issue any press release or make any other public
statement prior to Closing, in each case relating to, or in connection with, or
arising out of this Agreement, or the matters contained herein, without
obtaining the prior written approval of Buyer as to the contents and manner of
presentation and publication thereof. Anything in this Agreement to the
contrary notwithstanding, Seller may, at any time after the execution and
delivery hereof or the public announcement of the transactions contemplated
hereby, disclose to any and all persons without limitation of any kind the tax
treatment and tax structure of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are
provided to any of them relating to such tax treatment or tax structure;
provided, however, that any such information relating to the tax treatment or
tax structure shall be kept confidential to the extent necessary to comply with
any and all federal or state securities laws that may be applicable to Buyer.
For this purpose, "tax structure" is limited to any facts relevant to the U.S.
federal income tax treatment of the transactions contemplated hereby and does
not include information relating to the identity of the parties.
14.2 Knowledge. Where any representation or warranty contained in
this Agreement is expressly qualified by reference to the knowledge,
information and belief of an individual, such individual confirms that he or
she has made due and diligent inquiry as to the matters that are the subject of
such representations and warranties. As used in this Agreement, the terms
"knowledge", "information" and "belief", with respect to an entity or
organization, means the actual knowledge, information or belief, as the case
may be, after due inquiry of each of its officers, directors, managers,
stockholders, partners and members.
14.3 Gender. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
14.4 Expenses. Except as otherwise specifically provided herein,
Buyer and Seller shall pay their own respective expenses, including the fees
and disbursements of their respective counsel in connection with the
negotiation, preparation and execution of this Agreement and the consummation
of the transactions contemplated hereby.
19
14.5 Entire Agreement. This Agreement, including all schedules and
exhibits hereto, constitutes the entire agreement of the parties with respect
to the subject matter hereof, and may not be modified, amended or terminated
except by a written instrument specifically referring to this Agreement signed
by the party to be so bound by such modification, amendment or termination.
14.6 Waivers and Consents. All waivers and consents given
hereunder shall be in writing. No waiver by any party hereto of any breach or
anticipated breach of any provision hereof by any other party shall be deemed a
waiver of any other contemporaneous, preceding or succeeding breach or
anticipated breach, whether or not similar, on the part of the same or any
other party.
14.7 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class
postage prepaid) to the parties at the following addresses or facsimile
numbers:
If to Buyer, to:
Market Central, Inc.
0000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Chairman
With a copy in like manner (which shall not constitute
notice) to:
Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
1230 Peachtree Street, N.E.
Suite 3100, Promenade II
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: A. Xxx Xxxxxxxx, Esq.
If to Seller to:
Pliant Technologies, Inc.
00000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile: ________________________
Attention: R. Xxxxxxx Xxxxxx, President
With a copy in like manner (which shall not constitute
notice) to:
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
20
All such notices, requests and other communications will (a) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (b) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (c) if delivered by
mail in the manner described above to the address as provided in this Section,
be deemed given upon receipt (in each case regardless of whether such notice,
request or other communication is received by any other Person to whom a copy
of such notice, request or other communication is to be delivered pursuant to
this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
14.8 Rights of Third Parties. All conditions of the obligations of
the parties hereto, and all undertakings herein, are solely and exclusively for
the benefit of the parties hereto and their successors and assigns, and no
other person or entity shall have standing to require satisfaction of such
conditions or to enforce such undertakings in accordance with their terms, or
be entitled to assume that any party hereto will refuse to consummate the
purchase and sale contemplated hereby in the absence of strict compliance with
any or all thereof, and no other person or entity shall, under any
circumstances, be deemed a beneficiary of such conditions or undertakings, any
or all of which may be freely waived in whole or in part, by mutual consent of
the parties hereto at any time, if in their sole discretion they deem it
desirable to do so.
14.9 Right to Open Mail. Seller agrees and hereby authorizes and
empowers Buyer from and after the Closing (i) to receive and open mail
addressed to Seller; and (ii) to deal with the contents thereof in any manner
as Buyer sees fit, provided that such mail and the contents thereof relate to
the Business, any of the Purchased Assets, or to any of the liabilities or
obligations assumed by Buyer pursuant to this Agreement. Any mail received by
Buyer and addressed to Seller that does not relate to the Business, the
Purchased Assets, or any of the liabilities or obligations assumed by Buyer
pursuant to the terms of this Agreement, shall be forwarded to Seller at the
place designated in Section 14.7 for the sending of notices.
14.10 Headings. The Article and Section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
14.11 Governing Law. Except as expressly provided below, the
interpretation and construction of this Agreement, and all matters relating
hereto, shall be governed by the internal laws of the State of Georgia;
provided, however, that the parties acknowledge that O.C.G.A. ss. 11-6-101, et
seq., shall not apply with respect to any of the Purchased Assets not located
in the State of Georgia on the Closing Date. Notwithstanding the foregoing, the
interpretation and construction of the non-competition and confidentiality
covenants of Seller set forth in Article XI above shall be governed by the
internal laws of the State of Texas.
14.12 Arbitration.
(a) Any controversy or claim arising out of or relating
to this Agreement shall be settled by arbitration to be held at the office of
the American Arbitration Association ("AAA") in Atlanta, Georgia, U. S. A. The
arbitration shall be conducted in accordance with the United States Arbitration
Act (9 U.S.C. ss. 1 et seq.) and the AAA Commercial Arbitration Rules then in
effect; provided, however, that the parties agree that any arbitration shall be
conducted under AAA's expedited procedures then in effect, regardless of the
amount in controversy. Each party may be
21
represented by counsel in such arbitration proceeding. AAA shall select one (1)
neutral arbitrator to conduct such arbitration proceeding. The parties agree to
request the arbitrator to render a written decision within three (3) months of
the request for arbitration or within two (2) months after appointment of the
arbitrator, whichever is earlier. To the extent permitted under applicable law,
such award shall be final and binding upon both parties. Any costs, fees or
expenses incident to enforcing the award shall, to the maximum extent permitted
by law, be charged against the party resisting such enforcement. Judgment upon
an award rendered by the arbitrator may be entered in any court of competent
jurisdiction, or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the law of such
jurisdiction may require or allow. The costs and expenses of the arbitration
proceedings, including attorney's fees, shall be borne by the losing party to
the arbitration or, at the discretion of the arbitrator, may be allocated among
the parties to properly reflect any partial prevailing or losing of the parties
to the arbitration, as determined by the arbitrator.
(b) Notwithstanding subsection (a) above to the
contrary, any party may seek temporary or preliminary injunctive relief against
the other party in any court of proper jurisdiction, pending the outcome of any
arbitration proceeding.
14.13 Parties in Interest. Buyer may transfer and assign this
Agreement and its rights hereunder without the consent of Seller. Except as
expressly stated above, this Agreement may not be transferred, assigned,
pledged or hypothecated by any party hereto, other than by operation of law or
with the written consent of the other parties hereto. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and permitted assigns.
14.14 Counterparts. This Agreement may be executed in two or more
counterparts, any of which may be executed and delivered by facsimile, all of
which taken together shall constitute one instrument.
14.15 Time of the Essence. Time shall be of the essence with
respect to the performance of any obligation or duty hereunder.
14.16 Severability. In case any provision in this Agreement shall
be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
[Signatures appear on following page]
22
IN WITNESS WHEREOF, the parties have executed this Agreement, under
seal, as of the date first above written.
"BUYER"
MARKET CENTRAL, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman
Attest: Xxxxx X. Xxxx
-------------------------------
Secretary
[CORPORATE SEAL]
"SELLER"
PLIANT TECHNOLOGIES, INC.
By: R. Xxxxxxx Xxxxxx
------------------------------------
Name: R. Xxxxxxx Xxxxxx
Title: Chief Executive Officer
Attest: /s/ Xxxx X. Xxxxxx
-------------------------------
Secretary
[CORPORATE SEAL]
23
