ASSET PURCHASE AGREEMENT
dated as of
April 30, 1997
by and between
Datamax of Connecticut, Inc.
and
VY Inc., formerly known as
Datamax, Inc.
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS................................................... 1
Section 1.01. Definitions.............................................. 1
ARTICLE II PURCHASE AND SALE............................................ 2
2.01. Purchase and Sale................................................ 2
2.02. Excluded Assets.................................................. 4
2.03. Assumption of Liabilities........................................ 4
2.04. Excluded Liabilities............................................. 4
2.05. Assignment of Contracts and Rights............................... 5
2.06. Purchase Price: Allocation of Purchase Price..................... 6
2.07. Closing.......................................................... 6
2.08. Purchase Price Adjustment........................................ 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER.................... 7
3.01. Corporate Existence and Power.................................... 7
3.02. Corporate Authorization.......................................... 7
3.03. Governmental Authorization....................................... 8
3.04. Non-Contravention................................................ 8
3.05. Required and Other Consents...................................... 8
3.06. Financial Statements............................................. 8
3.07. Absence of Certain Changes....................................... 8
3.08. Properties....................................................... 9
3.09. Sufficiency of Purchased Assets.................................. 11
3.10. Title to Purchased Assets........................................ 11
3.11. No Undisclosed Material Liabilities.............................. 11
3.12. Limitation....................................................... 11
3.13. Material Contracts............................................... 11
3.14. Licenses and Permits............................................. 11
3.15. Insurance Coverage............................................... 11
3.16. Compliance with Laws............................................. 12
3.17. Inventories...................................................... 12
3.18. Receivables...................................................... 12
3.19. Proprietary Rights............................................... 12
3.20. Employees........................................................ 14
3.21. Products......................................................... 14
3.22. Reserved......................................................... 14
3.23. Other Information................................................ 14
3.24. Reserved......................................................... 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER...................... 15
4.01. Organization and Existence....................................... 15
4.02. Corporate Authorization.......................................... 15
4.03. Broker's Fees.................................................... 15
4.04. Non-Contravention................................................ 15
ARTICLE V COVENANTS OF SELLER........................................... 15
5.01. Notices of Certain Events........................................ 15
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5.02. Noncompetition................................................... 16
5.03. Confidentiality.................................................. 16
5.04 Trademarks; Tradenames........................................... 16
5.05 No Transfer of the Shares........................................ 16
ARTICLE VI RESERVED...................................................... 16
ARTICLE VII COVENANTS OF BOTH PARTIES................................... 16
7.01. Further Assurances............................................... 16
ARTICLE VIII TAX MATTERS................................................. 17
8.01. Tax Definitions.................................................. 17
8.02. Tax Matters...................................................... 17
8.03. Tax Cooperation; Allocation of Taxes............................. 17
ARTICLE IX EMPLOYEE BENEFITS............................................. 18
9.01 Representations.................................................. 18
9.02. Employees and Offers of Employment............................... 19
9.03. Seller's Employee Benefit Plans.................................. 20
9.04. No Third Party Beneficiaries..................................... 20
ARTICLE X CONDITIONS TO CLOSING.......................................... 21
10.01. Conditions to the Obligations of Each Party...................... 21
ARTICLE XI SURVIVAL; INDEMNIFICATION..................................... 21
11.01. Survival......................................................... 21
11.02. Indemnification.................................................. 21
11.03. Reserved......................................................... 22
11.04. Procedures; No Waiver; Exclusivity............................... 22
ARTICLE XII RESERVED..................................................... 22
ARTICLE XIII MISCELLANEOUS............................................... 23
13.01. Notices......................................................... 23
13.02. Amendments; No Waivers.......................................... 23
13.03. Expenses........................................................ 24
13.04. Successors and Assigns.......................................... 24
13.05. Governing Law................................................... 24
13.06. Counterparts; Effectiveness..................................... 24
13.07. Entire Agreement................................................ 24
13.08. Bulk Sales Laws................................................. 24
13.09. Reserved........................................................ 24
13.10. Captions........................................................ 24
Exhibits
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Exhibit A - Forms of Ancillary Agreement
Exhibit B - Form of Assumption and Assignment Agreement
Exhibit B1 - Form of Xxxx of Sale and General Assignment
Schedule 2.03 Assumed Liabilities
Schedule 2.06 Purchase Price Calculation
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Schedule 2.08 Purchase Price Adjustment
Schedule 3.05(a) Required Consents
Schedule 3.05(b) Other Consents
Schedule 3.06 Financial Statements
Schedule 3.06(A) Working Capital
Schedule 3.06(B) Financial Projections
Schedule 3.08(a) Real Property
Schedule 3.08(b) Personal Property
Schedule 3.11 Liabilities
Schedule 3.12 Litigation
Schedule 3.13 Contracts
Schedule 3.14 Licenses and Permits
Schedule 3.15 Insurance
Schedule 3.18 Receivables
Schedule 3.19 Intellectual Property
Schedule 3.20 Employees
Schedule 9.01 Employee Benefits
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Exhibit 2.4
ASSET PURCHASE AGREEMENT
AGREEMENT dated as of April 30 1997, by and between Datamax of Connecticut,
Inc., a Delaware corporation ("Buyer"), and VY, Inc., formerly known as Datamax,
Inc., a Connecticut corporation, ("Seller").
WITNESSETH:
WHEREAS, Seller conducts a business (the "Business") that provides, among
other things, network consulting, information technology service, P.C. support,
systems integration, and the resale of hardware, software, and networking
products.
WHEREAS, Buyer desires to purchase substantially all of the assets of the
Business from Seller, and Seller desires to sell substantially all of the assets
of the Business to Buyer, upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The following terms, as used herein, have
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the following meanings:
"Affiliate" means with respect to any Person, any Person directly or
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indirectly controlling, controlled by, or under common control with such other
Person.
"Ancilliary Agreements" means the Stockholders' Agreement dated as of April
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__, 1997, by and among Antares Networks, Inc., a Delaware corporation
("Antares"), Xxxxxxx Xxxxx, an individual ("Yenko"), Seller, COW, Inc., a
Connecticut corporation ("COW') and the other stockholders of Antares
signatories thereto, as the same may be amended, modified or supplemented from
time to time (the "Stockholders' Agreement"), the Consulting Agreement dated as
of April 1997 by and between Buyer and COW, as the same may be amended, modified
or supplemented from time to time (the "Consulting Agreement") and the Non-
Competition Agreement dated as of April 1997 by and among Yenko, Buyer, Antares.
COW and Seller, as the same may be amended, modified or supplemented from time
to time (the "Non-Compete Agreement").
"Balance Sheet" means the balance sheet of the Seller as of December 1,
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1996, found in the Financial Statements of the Seller and set forth in Schedule
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3.06.
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"Balance Sheet Date" means December 31, 1996.
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"Closing Date" means the date of the Closing.
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"Lien" means, with respect to any asset, any mortgage, lien, pledge,
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charge, security interest or encumbrance of any kind in respect of such asset.
"Material Adverse Change" means a material adverse change in the business,
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assets, condition (financial or otherwise), results of operations or prospects
of the Business taken as a whole.
"Material Adverse Effect" means a material adverse effect on the business,
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assets, condition (financial or otherwise), results of operations or prospects
of the Business taken as a whole.
"Person" means an individual, corporation, partnership, association, trust
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or other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof
"Proprietary Rights" means all (A) patents, patent applications, patent
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disclosures and all related continuation, continuation-in-part, divisional,
reissue, reexamination, utility, model, certificate of invention and design
patents, patent applications, registrations and applications for registrations,
(B) trademarks, service marks, trade dress, logos, tradenames, service names and
corporate names and registrations and applications for registration thereof, (C)
copyrights and registrations and applications for registration thereof, (D) mask
works and registrations and applications for registration thereof, (E) computer
software, data and documentation, (F) trade secrets and confidential business
information, whether patentable or nonpatentable and whether or not reduced to
practice, know-how, manufacturing and product processes and techniques, research
and development information, copyrightable works, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information and telephone and telefax numbers,
(G) other proprietary rights relating to any of the foregoing (including without
limitation associated goodwill and remedies against infringements thereof and
rights of protection of an interest therein under the laws of all jurisdictions)
and (H) copies and tangible embodiments thereof.
"Seller's Proprietary Rights" means all Proprietary Rights relating to the
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Business that are owned by Seller or an Affiliate, or that are used in the
operation of the Business or necessary for the operation of the Business
ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale. Upon the terms and subject to the conditions of
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this Agreement, Buyer agrees to purchase from Seller and Seller agrees to sell,
transfer, assign and deliver, or cause to be sold, transferred, assigned and
delivered, to Buyer at Closing, free and
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clear of all Liens other than Permitted Liens, all of the assets, properties and
business, other than the Excluded Assets, of every kind and description,
wherever located, real, personal or mixed, tangible or intangible, owned, held
or used by Seller or any Affiliate of Seller as the same shall exist on the
Closing Date, including all assets shown on the Balance Sheet and Financial
Statements and not disposed of in the ordinary course of business, and all
assets of the Business thereafter acquired by Seller (the "Purchased Assets"),
and including, without limitation, all right, title and interest of Seller and
its Affiliates in, to and under such of the foregoing as are more specifically
described below:
(i) all real property and leases of, and other interests in, real
property, in each case together with all buildings, fixtures, and
improvements erected thereon, including without limitation the items listed
on Schedule 3.08(a);
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(ii) all personal property and interests therein, including
machinery, equipment, furniture, office equipment, communications
equipment, vehicles, storage tanks, spare and replacement parts, fuel and
other tangible property, including without limitation the items listed on
Schedule 3.08(b);
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(iii) all raw materials, work-in-process, finished goods, supplies
and other inventories, wherever situated, including, without limitation,
those set forth in the Financial Statements.
(iv) all rights under all contracts, agreements, leases, licenses,
commitments, sales and purchase orders and other instruments, including
without limitation the items listed on Schedule 3.13 (collectively, the
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"Contracts");
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(v) all accounts, notes and other receivables including, without
limitation, those set forth on Schedule 3.18.
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(vi) all prepaid expenses and deposits including without limitation
ad valorem taxes, leases and rentals;
(vii) all xxxxx cash located at operating facilities of the Business
("Xxxxx Cash");
(viii) all of Seller's rights, claims, credits, causes of action or
rights of setoff against third parties relating to the Purchased Assets,
including, without limitation, unliquidated rights under manufacturers' and
vendors' warranties;
(ix) all Proprietary Rights owned or licensed, or used in the
Business, by Seller or its Affiliates, including without limitation the
items listed on Schedule 3.19;
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(x) all transferable licenses, permits or other governmental
authorizations affecting, or relating in any way to, the Business,
including without limitation the items listed on Schedule 3.14;
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(xi) all books, records, files and papers, whether in hard copy or
computer format, including, without limitation, engineering information,
sales and promotional literature, manuals and data, sales and purchase
correspondence, lists of present and former suppliers, lists of present and
former customers, personnel and employment records, and any information
relating to Tax imposed on the Purchased Assets;
(xii) all goodwill associated with the Business or the Purchased
Assets, together with the right to represent to third parties that Buyer is
the successor to the Business; and
(xiii) all bank accounts, deposits (cleared or uncleared) as of May
1, 1997, of the Business.
2.02. Excluded Assets. Buyer expressly understands and agrees that the
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loan to the Seller from Yenko in the principal amount of Fifty Thousand Dollars
($50,000) shall be excluded from the Purchased Assets (the "Excluded Assets").
2.03. Assumption of Liabilities. Upon the terms and subject to the
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conditions of this Agreement, Buyer agrees, effective at the time of Closing, to
assume the following liabilities (the "Assumed Liabilities"):
(i) liabilities accrued on the Financial Statements;
(ii) liabilities incurred in the ordinary course of Business since the
Closing Date.
(iii) liabilities and obligations of Seller arising under the Contracts
(other than liabilities or obligations attributable to any
failure by Seller to comply with the terms thereof); and
(iv) all claims or expenses of Seller in respect of products sold or
services rendered by the Business through the Closing Date, but only
to the extent of the reserve therefor shown in the Financial
Statements for Block Time and Service Contracts.
2.04. Excluded Liabilities. Notwithstanding any provision in this
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Agreement or any other writing to the contrary, Buyer is assuming only the
Assumed Liabilities and is not assuming any other liability or obligation of
Seller or any Affiliate of Seller (or any predecessor owner of all or part of
its business and assets) of whatever nature whether presently in existence or
arising or asserted hereafter. All such other liabilities and obligations shall
be retained by and remain obligations and liabilities of Seller or its Affiliate
(all such liabilities and obligations not being assumed being herein referred to
as the "Excluded Liabilities"). Without limiting the foregoing, none of the
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following shall be Assumed Liabilities for the purposes of this Agreement:
(i) any obligation or liability for Tax arising from or with respect to
the Purchased Assets or the operation of the Business which is
incurred in or attributable to any Pre-Closing or Closing Actions;
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(ii) except to the extent provided in Article IX, any liabilities or
obligations relating to employee benefits or compensation arrangements
existing as of the end of the day on the day preceding the Closing
Date, including, without limitation, any liabilities or obligations
under any of Seller's employee benefit agreements, plans or other
arrangements listed in Schedule 9.01;
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(iii) any liability or obligation relating to an Excluded Asset;
(iv) any liability or obligation relating to the sales returns and
allowances policies of Seller or its Affiliates with respect to
products or services sold prior to the Closing Date, except to the
extent of any accrual therefor in the Financial Statements in the
Block Time and Service Contract descriptions.
(v) any liability or obligation for death, personal injury or property
damage (whether based on negligence, breach of warranty, strict
liability or any other theory) caused by or arising out of or
resulting from, directly or indirectly, the sale by Seller or its
Affiliates of any products or services prior to the Closing Date;
and
(vi) any claims for refunds based on any warranty, express or implied,
for products or services sold prior to the Closing Date in excess of
reserves provided therefor in the Financial Statements in the Block
Time and Service Contract descriptions.
2.05. Assignment of Contracts and Rights. Anything in this Agreement to
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the contrary notwithstanding, this Agreement shall not constitute an agreement
to assign any Purchased Asset or any claim or right or any benefit arising
thereunder or resulting therefrom if an attempted assignment thereof, without
consent of a third party thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights of Buyer or
Seller thereunder Seller and Buyer will use their best efforts (but without any
payment of money by Seller or Buyer) to obtain the consent of the other parties
to any such Purchased Asset or claim or right or any benefit arising thereunder
for the assignment thereof to Buyer as Buyer may request. If such consent is
not obtained, or if an attempted assignment there would be ineffective or would
adversely affect the rights of Seller thereunder so that Buyer would not in fact
receive all such rights, Seller and Buyer will cooperate in a mutually agreeable
arrangement under which Buyer would obtain the benefits and assume the
obligations thereunder in accordance with this Agreement, including
subcontracting, sublicensing, or subleasing to Buyer, or under which Seller
would enforce for the benefit of Buyer, with Buyer assuming Seller's
obligations, any and all rights of Seller against a third party thereto. Seller
will promptly pay to Buyer when received all monies received by Seller under any
Purchased Asset or any claim or right or any benefit arising thereunder, except
to the extent the same represents an Excluded Asset. In such event, Seller and
Buyer shall, to the extent the benefits therefrom and obligations thereunder
have not been provided by alternate arrangements satisfactory to Buyer and
Seller, negotiate in good faith an adjustment in the consideration paid by Buyer
for the Purchased Assets, to the extent not otherwise adjusted pursuant to
Section 2.08.
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2.06. Purchase Price: Allocation of Purchase Price. (a) The purchase price
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for the Purchased Assets and the Ancillary Agreements (the "Purchase Price") is
$300,000 to be paid with (a) 3,000 shares of common stock, par value one cent
($.01) per share, of Antares (the "Shares"), which shares are held by Buyer and
will, upon the consummation of the transactions contemplated hereby, be
transferred to each of the Seller, COW and Yenko in the amounts set forth in
Schedule 2.06; and (b) the assumption of the negative Closing Working Capital in
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the amount of $16,987 set forth in Schedule 3.06A. Schedule 2.06 sets forth the
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calculation of the Purchase Price.
(b) The Seller and Buyer agree to report an allocation of such Purchase
Price among the Purchased Assets in a manner entirely consistent with the
preparation of financial statements and filing of all tax returns (including,
without limitation, filing Form 8594 with its Federal income tax return for the
taxable year that includes the date of the Closing) and in the course of any tax
audit, tax review or tax litigation relating thereto.
2.07. Closing. The closing (the "Closing") of the purchase and sale of
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the Purchased Assets and the assumption of the Assumed Liabilities hereunder
shall take place at the office of Xxxxx Xxxxxxxxxx, 0000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000.
(a) Buyer shall deliver to Seller the Shares, which Shares shall bear
the following legend:
"The securities represented by this certificate have
not been registered under the Securities Act of 1933, as
amended (the "Act"). The transfer of the securities
represented by this certificate (including, without
limitation, through the exercise of a pledge) is subject to
the conditions and restrictions specified in the
Stockholders' Agreement dated as of April , 1997, among the
issuer (the "Company") and certain investors, and the
Company reserves the right to refuse the transfer of such
securities until such conditions have been fulfilled with
respect to such transfer. A copy of such conditions will be
furnished by the Company to the holder hereof upon written
request and without charge. In addition, such securities may
not be sold or transferred except in compliance with the
Act."
(b) Seller and Buyer shall enter into an Assignment and Assumption
Agreement substantially in the form attached hereto as Exhibit B, and Seller
shall deliver to Buyer such full warranty deeds, bills of sale, endorsements,
consents, assignments and other good and sufficient instruments of conveyance
and assignment (the "Conveyance Documents") as the parties and their respective
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counsel shall deem reasonably necessary or appropriate to vest in Buyer all
right, title and interest in, to and under the Purchased Assets.
(c) Seller and Buyer shall enter into the Ancillary Agreements.
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2.08. Purchase Price Adjustment.
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(a) General. As an adjustment to the Purchase Price, each of Seller, Yenko
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and COW, jointly and severally, agrees to pay Buyer the amount, if any, by which
Closing Working Capital is less than Realized Closing Working Capital.
(b) Definitions. The terms, as used herein, have the following meanings:
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Closing Working Capital means $16,987 Dollars ($_______) as set
forth in Schedule 3.06(A).
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"Realized Closing Working Capital" means ($16,987), as set forth
in Schedule 3.06A.
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If Seller's Realized Closing Working Capital as of the close of
business on the last day of its fiscal year of 1997, is below $16,987, any
amount below $16,987 shall be (i) first, deducted from any future profit sharing
to be paid to COW pursuant to paragraph 3.B of the Consulting Agreement and (ii)
thereafter, as set forth in Section 11.02 of this Agreement (the "Purchase Price
Adjustment").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller hereby represents and warrants to Buyer that:
3.01. Corporate Existence and Power. Seller is a corporation duly
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incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Seller is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
make such qualification necessary, except for those jurisdictions where failure
to be so qualified would not, individually or in the aggregate, have a Material
Adverse Effect. Seller has heretofore delivered to Buyer true and complete
copies of the corporate charter and bylaws of Seller as currently in effect.
3.02. Corporate Authorization. The execution, delivery and performance by
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Seller of this Agreement and each of the Ancillary Agreements, and the
consummation by Seller of the transactions contemplated hereby and thereby are
within Seller's corporate powers and have been duly authorized by all necessary
corporate action on the part of Seller. This Agreement and each of the
Ancillary Agreements to which Seller is a party constitute valid and binding
agreements of Seller.
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3.03. Governmental Authorization. The execution delivery and performance
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by Seller of this Agreement and each of the Ancillary Agreements do not require
any action by or in respect of, or filing with, any governmental body, agency,
official or authority.
3.04. Non-Contravention. The execution, delivery and performance by
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Seller of this Agreement and each of the Ancillary Agreements do not and shall
not (i) contravene or conflict with the corporate charter or bylaws of Seller,
(ii) assuming compliance with the matters referred to in Section 3.03,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment,, injunction, order or decree binding upon or
applicable to Seller or the Business; (iii) assuming the receipt of all Required
and Other Consents, constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of Seller
or to a loss of any benefit relating to the Business to which Seller is entitled
under any provision of any agreement, contract or other instrument binding upon
Seller or by which any of the Purchased Assets is or may be bound, or any Permit
or (iv) result in the creation or imposition of any Lien on any Purchased Asset,
other than Permitted Liens.
3.05. Required and Other Consents. (a) Schedule 3.05(a) sets forth each
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agreement. contract or other instrument binding upon Seller or any Permit
requiring a consent as a result of the execution, delivery and performance of
this Agreement and the Ancillary Agreements or the consummation of the
transactions contemplated hereby and thereby, except such consents as would not,
individually or in the aggregate, have a Material Adverse Effect if not received
by the Closing Date (each such consent, a "Required Consent").
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(b) Schedule 3.05(b) sets forth every other consent (each such consent,
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an "Other Consent") under such agreements, contracts or other instruments or
such Permits that is necessary with respect to the execution, delivery and
performance of this Agreement and the Ancillary Agreements and the consummation
of the transactions contemplated hereby and thereby.
3.06. Financial Statements. The Seller has previously furnished Buyer
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with a true . and complete copy of (i) the tax returns, balance sheets, and the
statements of operations of the Seller for the fiscal years then ended December
31, 1996 and 1995; and (ii) the Accounts Receivable, Accounts Payable, Invoice
Register, Outstanding Block-Time and Service Contract Orders, and Property and
Equipment List and estimated May 1, 1997 Balance Sheet of the Seller for the
interim periods ended April 1997; and (iii) the calculation of Closing Working
Capital (as set forth on Schedule 3.06(A) (collectively, the "Financial
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Statements "which are attached hereto as Schedule 3.06). The Financial
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Statements fairly presents in all material respects the financial position of
the Seller for the periods therein set forth. Schedule 3.06(B) contains the
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Financial Projections developed and agreed to by the Buyer and Seller.
3.07. Absence of Certain Changes. Since the Balance Sheet Date, Seller
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has conducted the Business in the ordinary course consistent with past
practices, and there has not been:
(a) Any Material Adverse Change;
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(b) any incurrence, assumption or guarantee by Seller of any indebtedness
for borrowed money with respect to the Business;
(c) any creation or other incurrence of any Lien on any Purchased Asset
other than in the ordinary course of business consistent with past
practices;
(d) any damage, destruction or other casualty loss (whether or not covered
by insurance) affecting the Business or any Purchased Asset which,
individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect;
(e) any transaction, contract, agreement or other instrument entered into,
or commitment made, by Seller relating to the Business or any
Purchased Asset (including the acquisition or disposition of any
assets) or any relinquishment by Seller of any contract or other
right, in either case, other than transactions and commitments in the
ordinary course of business consistent with past practices and those
contemplated by this Agreement;
(f) any change in any method of accounting or accounting practice by
Seller with respect to the Business;
(g) any (i) grant of any severance or termination pay to any employee of
the Business, (ii) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any employee of the Business, (iii) increase
in benefits payable under an existing severance or termination pay
policies or employment agreements or (iv) increase in compensation,
bonus or other benefits payable to employees of the Business; or
except as set forth in Schedule 3.20; or
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(h) any commitment for a capital expenditure additions or improvements to
property, plant and equipment.
3.08. Properties. (a) Seller owns, leases or subleases all real property
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used in the Business. Schedule 3.08(a) describes all real property used in the
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Business included in the Purchased Assets (the "Real Property"), any title
insurance policies and surveys with respect thereto, and any Liens thereon,
specifying in the case of leases or subleases. the name of the lessor or
sublessor, the lease term and basic annual rent.
(b) Schedule 3.08(b) describes all personal property used in the
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Business included in the Purchased Assets, including but not limited to
machinery, equipment, furniture, vehicles, storage tanks, spare and replacement
parts, fuel and other trade fixtures and fixed assets, and any Liens thereon,
specifying in the case of leases or subleases, the name of the lessor or
sublessor, the lease term and basic annual rent.
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(c)(i) The Seller has good and marketable, indefeasible, fee simple title
to, or in the case of leased Real Property has valid leasehold interests in, all
Purchased Assets (whether real, personal, tangible or intangible) reflected on
the Balance Sheet, Financial Statements or acquired after the Balance Sheet
Date.
(ii) The Real Property includes all real property, and only such real
property, as is used or held for use in connection with the conduct of the
business and operations of the Business as heretofore conducted.
(iii) All leases of Real Property or personal property are in good
standing and are valid, binding and enforceable in accordance with their
respective terms, and there does not exist under any such lease of real property
or personal property any material default or any event that, with notice or
lapse of time or both, would constitute a material default.
(iv) The plants, buildings, structures and equipment included in the
Purchased Assets have no material defects, are in good operating condition and
repair and have been reasonably maintained consistent with standards generally
followed in the industry (giving due account to the age and length of use of
same, ordinary wear and tear excepted), are suitable for their present uses and,
in the case of plants, buildings and other structures (including without
limitation, the roofs thereof), are structurally sound.
(v) The plants, buildings and structures included in the Purchased
Assets currently have access to (A) public roads or valid easements over private
streets or private property for such ingress to an egress from all such plants,
buildings and structures and (B) water supply, storm and sanitary sewer
facilities, telephone, gas and electrical connections, fire protection, drainage
and other public utilities, as is necessary for the conduct of the Business.
(vi) None of the material structures on the Real Property encroaches upon
real property of another person, and no structure of any other Person
substantially encroaches upon any Real Property.
(d) No Purchased Asset is subject to any Lien, except Liens disclosed in
the Financial Statements.
(e) No violation of any law, regulation or ordinance (including, without
limitation, laws, regulations or ordinances relating to zoning, environmental,
city planning or similar matters) relating to the Business or any Purchased
Asset currently exists or has existed at any time since March 15, 199'). except
for violations that have not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. There are no
developments affecting any of the Purchased Assets pending or, to the knowledge
of Seller threatened, which might materially detract from the value of such
Purchased Assets, materially interfere with any present or intended use of any
such Purchased Assets or materially adversely affect the marketability of such
Purchased Assets.
10
3.09. Sufficiency of Purchased Assets. The Purchased Assets and the
-------------------------------
Excluded Assets together constitute, and on the Closing Date will constitute,
all of the assets or property used or held for use in the Business.
3.10. Title to Purchased Assets. Upon consummation of the transactions
-------------------------
contemplated hereby, Buyer will have acquired good and marketable title in and
to, or a valid leasehold interest in, each of the Purchased Assets, free and
clear of all Liens, except for Permitted Liens.
3.11. No Undisclosed Material Liabilities. Except as set forth in
-----------------------------------
Schedule 3.1 1. there are no liabilities of the Business of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of circumstances which
could reasonably be expected to result in such a liability.
3.12. Limitation. Except as set forth in Section 3.12, there is no
---------- ------------
action, suit, investigation or proceeding (or any basis therefor) pending
against, or to the knowledge of Seller, threatened against or affecting, the
Business or any Purchased Asset before any court or arbitrator or any
governmental body, agency, official or authority or that in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated hereby.
3.13. Material Contracts. (a) All the Seller's Contracts are disclosed in
------------------
Schedule 3.13.
-------------
(b) Each Contract disclosed in any Schedule to this Agreement or required
to be disclosed pursuant to Section 3.13(a) is valid and binding agreement of
Seller and is in full force and effect, and neither Seller nor, to the knowledge
of Seller, any other party thereto is in default in any material respect under
the terms of any such Contract, nor, to the knowledge of Seller, has any event
or circumstance occurred that, with notice or lapse of time or both, would
constitute any event of default thereunder.
3.14. Licenses and Permits. Schedule 3.14 correctly described each
-------------------- -------------
license, franchise, permit or other similar authorization affecting, or relating
in any way to, the Business, together with the name of the government agency or
entity issuing such license or permit (the "Permits"). Except as set forth on
----------
the Schedule 3.14, such Permits are valid and in full force and effect and,
-------------
assuming the related Required Consents and Other Consents have been obtained
prior to the Closing Date, are transferable by Seller and will not be terminated
or impaired or become terminable as a result of the transactions contemplated
hereby. Upon consummation of such transactions, Buyer will, assuming the
related Required Consents and Other Consents have been obtained prior to the
Closing Date, have all of the right. title and interest in all the Permits.
3.15. Insurance Coverage. Seller has furnished to Buyer a list of, and
------------------
true and complete copies of, all insurance policies and fidelity bonds covering
the Purchased Assets, the business and operations of the Business and its
employees. There is no claim by Seller pending under any of such policies or
bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds. All premiums payable under all such
policies and bonds have been paid and Seller is otherwise in full compliance
with the terms and conditions of all such policies and bonds. Such policies of
insurance and bonds (or other policies and bonds
11
providing substantially similar insurance coverage) have been effect since March
15, 1993 and remain in full force and effect. Such policies of insurance and
bonds are of the type and in amounts customarily carried by persons conducting
businesses similar to the Business.
3.16. Compliance with Laws. Seller is not in violation of, has not since
--------------------
March 15, 1993 violated, and to Seller's knowledge is not under investigation
with respect to and has not been threatened to be charged with or given notice
of any violation of, any law, rule, ordinance or regulation, or judgment, order
or decree entered by any court, arbitrator or governmental authority, domestic
or foreign, applicable to the Purchased Assets or the conduct of the Business.
3.17. Inventories. The inventories set forth in the Financial Statements
-----------
were properly stated therein at the lesser of cost or fair market value
determined in accordance with generally accepted accounting principles
consistently maintained and applied by Seller. Since the Balance Sheet Date,
the inventories related to the Business have been maintained in the ordinary
course of business. All such inventory is owned free and clear of all Liens.
All of the inventory recorded in the Financial Statements consists of, and all
inventory related to the Business on the Closing Date will consist of, items
usable or salable in the normal course of Business consistent with past
practices and are and will be in a quantity sufficient for the normal operation
of the Business in accordance with past practice.
3.18. Receivables. All accounts, notes receivable and other receivables
-----------
set forth in Schedule 3.18 and reflected in the Financial Statements are, and
-------------
all accounts and notes receivable arising from or otherwise relating to the
Business at the Closing Date will be, valid, genuine and fully collectible in
the aggregate amount thereof, subject to normal and customary trade discounts,
less any reserves for doubtful accounts recorded in the Financial Statements or
specifically described as uncollectible, doubtful, disputed or barter. All
accounts, notes receivable and other receivables arising out of or relating to
the Business have been included in the Financial Statements, and all accounts,
notes receivable and other receivables arising out of or relating to the
Business at the Closing Date will be included in the Financial Statements, in
accordance with generally accepted accounting principles applies on a consistent
basis.
3.19. Proprietary Rights.
------------------
(a) Schedule 3.19 contains a list of all of the following that are
-------------
included in Seller's Proprietary Rights: (i) patents and patent applications;
(ii) trademarks, tradenames and service marks and registrations thereof and
applications therefor; and (iii) registered copyrights and applications for
copyright registration; as well as licenses relating to any of the foregoing.
Schedule 3.19 identifies the owner of each item listed thereon and, in the case
-------------
of registrations and applications, the application or registration number and
date.
(b) Seller owns or has the right to use all of Seller's Proprietary
Rights. Upon execution and delivery by Seller to Buyer of the instruments of
conveyance contemplated by this Agreement, each item of Seller's Proprietary
Rights will be owned or available for use by Buyer on identical terms and
conditions immediately following the Closing, except as otherwise indicated on
Schedule 3.19. Seller has taken reasonable measures to protect the proprietary
-------------
12
nature of Seller's Proprietary Rights and to maintain in confidence the trade
secrets and confidential information that it owns or uses in the Business. To
Seller's knowledge, no other Person or has any rights to any item of Seller's
Proprietary Rights or has any rights to any of the Seller's Proprietary Rights,
except that the items of Seller's Proprietary Rights identified on Schedule 3.19
-------------
as licensed to Seller are owned by the respective owners identified on Schedule
--------
3.19, and, to Seller's knowledge, no other Person is infringing, violating or
----
misappropriating any of Seller's Proprietary Rights, except as otherwise
indicated on Schedule 3.19.
-------------
(c) Except as set forth in Schedule 3.19, to Seller's knowledge, none of
-------------
the activities or business presently conducted by the Business or conducted by
the Business at any time since March 15, 1993 infringes or violates, or
constitutes a misappropriation of, any Proprietary Rights of any other person or
entity. Except as set forth in Schedule 3.19, neither Seller, any Asset Seller
-------------
nor any Foreign Company has received any complaint, claim or notice alleging any
such infringement, violation or misappropriation.
(d) Except as set forth in Schedule 3.19, with respect to each item of
-------------
Seller's Proprietary Rights:
(i) Seller possesses all right, title and interest in and to such
item;
(ii) such item is not subject to any outstanding judgment, order,
decree, stipulation or injunction; and
(iii) Seller has not agreed, except in the ordinary course of
business consistent with past practices in conjunction with product sales,
to indemnify any person or entity for or against any infringement,
misappropriation or other conflict with respect to such item.
(e) Schedule 3.19 identifies each item of Seller's Proprietary Rights used
-------------
in the operation of the Business that is owned by a party other than Seller.
All licenses or other agreements pursuant to which Seller uses such items are
listed on Schedule 3.19. Except as set forth in Schedule 3.19, with respect to
------------- -------------
each such item:
(i) the license or other agreement, covering such item is legal,
valid, binding, enforceable and in full force and effect with respect to
Seller, and, to Seller's knowledge, with respect to every other party
thereto;
(ii) except as set forth in Schedule 3.19, each such license or other
-------------
agreement to which Seller is a party is assignable by Seller to Buyer
without the consent or approval of or any payment to any party, and all
such licenses and other agreements will continue to be legal, valid,
binding, enforceable and in full force and effect immediately following the
Closing in accordance with the terms thereof as in effect immediately prior
to the Closing, and the consummation of the transactions contemplated
herein will not conflict with, result in a violation or breach of or
constitute a default under (or would result in a
13
violation, breach or default with the giving of notice or the passage of
time or both) any such license or other agreement;
(iii) except as set forth in Schedule 3.19, neither Seller, nor, to
----
Seller's knowledge, any other party is in breach or default under any such
license or other agreement, and no event has occurred which, with notice
and/or lapse of time, would constitute such a breach or default or permit
termination, modification or acceleration thereunder;
(iv) to Seller's knowledge, the underlying item of Seller's
Proprietary Rights is not subject to any outstanding judgment. order,
decree, stipulation or injunction; and
(v) Seller has not agreed, except in the ordinary course of
business consistent with past practices in conjunction with product sales,
to indemnify any Person for or against any interference, infringement,
misappropriation or other conflict with respect to such item.
3.20. Employees. Schedule 3.20 sets forth a true and complete list of (a)
--------- -------------
the names, titles, annual salaries and other compensation of all employees of
the Business and (b) the wage rates for non-salaried employees of the Business
(by classification). None of such employees and no other key employee of the
Business has indicated to Seller that he intends to resign or retire as a result
of the transactions contemplated by this Agreement or otherwise.
3.21. Products. Each of the products produced or sold by Seller in
--------
connection with the Business (i) is, and at all times has been, in compliance in
all material respects with all applicable federal, state, local and foreign laws
and regulations and (ii) is, and at all relevant times has been, fit for the
ordinary purposes for which it is intended to be used and conforms in all
material respects to any promises or affirmation of fact made on the container
or liable for such products or in connection with its sale. There is no design
defect with respect to any of such products. and each of such products contains
adequate warnings, presented in a reasonably prominent manner, in accordance
with applicable laws and current industry practice with respect to its contents
and use.
3.22. Reserved.
--------
3.23. Other Information. None of the documents or information delivered
-----------------
to Buyer in connection with the transactions contemplated by this Agreement and
the Ancillary Agreements, including without limitation, the Financial
Statements, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein not
misleading.
3.24. Reserved.
--------
-14-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warranties to Seller that:
4.01. Organization and Existence. Buyer is a corporation duly
--------------------------
incorporated, validly existing and in good standing under the laws of Delaware
and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
4.02. Corporate Authorization. The execution, delivery and performance by
-----------------------
Buyer of this Agreement, each of the Ancillary Agreements and the consummation
by Buyer of the transactions contemplated hereby and thereby are within the
corporate powers of Buyer and have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement and each of the Ancillary
Agreements to which Seller is a party constitute valid and binding agreements of
Buyer.
4.03. Broker's Fees'. The Buyer has not (i) employed any broker, finder,
--------------
or agent, (ii) incurred any brokerage fee, finder's fee or commission with
respect to the transactions contemplated by this Agreement, or (iii) dealt with
anyone purporting to act in the capacity of a finder or broker with respect
thereof, whereby Seller may be responsible for or obligated to pay such a fee or
commission.
4.04. Non-Contravention. (i) The execution, delivery and performance by
-----------------
Buyer of this Agreement and each of the Ancillary Agreements do not and will not
contravene or conflict with the corporate charter or bylaws of Buyer and (ii)
except as disclosed herein, there is no claim or assertion made against the
Buyer by a governmental agency, instrumentality, court, board, federal, state or
municipal authority which would inhibit or prohibit the Buyer from entering into
this Agreement, Closing, and fulfilling all of the Buyer's obligations
hereunder.
ARTICLE V
COVENANTS OF SELLER
Seller agrees that:
5.01. Notices of Certain Events. Seller shall promptly notify Buyer of
-------------------------
(i) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement; and
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement.
-15-
5.02. Noncompetition. Seller covenants and agrees that it shall perform
--------------
its obligations under the Non-Compete Agreement.
5.03. Confidentiality. Seller will hold, and will use its best efforts to
---------------
cause its officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence, unless compelled to disclose by
judicial or administrative process or by other requirements of law, all
confidential documents and information concerning Buyer or the Business.
5.04 Trademarks; Tradenames. As soon as practicable after the Closing
----------------------
Date, Seller shall eliminate the use of all of the trademarks, tradenames,
service marks and service names used in the Business, in any of their forms or
spellings, on all advertising, stationery, business cards, checks, purchase
orders and acknowledgments, customer agreements and other contracts and business
documents.
5.05 No Transfer of the Shares. Seller covenants and agrees that is
-------------------------
shall not transfer, pledge, sell, assign, hypothecate or in any other way
encumber the Shares held by it, except as permitted in the Stockholders'
Agreement.
ARTICLE VI
RESERVED
ARTICLE VII
COVENANTS OF BOTH PARTIES
The parties hereto agree that:
7.01. Further Assurances. Seller hereby constitutes and appoints,
------------------
effective as of the Closing Date, Buyer and its successors and assigns as the
true and lawful attorney of Seller with full power of substitution in the name
of Buyer or in the name of Seller, but for the benefit of Buyer (i) to collect
for the account of Buyer any items of Purchased Assets and (ii) to institute and
prosecute all proceedings which Buyer may in its sole discretion deem proper in
order to assert or enforce any right, title or interest in, to or under the
Purchased Assets, and to defend or compromise any and all actions, suits or
proceedings in respect of the Purchased Assets. Buyer shall be entitled to
retain for its account any amounts collected pursuant to the foregoing powers,
including any amounts payable as interest in respect thereof.
-16-
ARTICLE VIII
TAX MATTERS
8.01. Tax Definitions. The following terms, as used herein, have the
---------------
following meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Post-Closing Tax Period" means any Tax period (or portion thereof) ending
-----------------------
on or after the Closing Date.
"Pre-Closing Tax Period" means any Tax period (or portion thereof) ending
----------------------
on or before the close of business on the date preceding the Closing Date.
"Tax" means any net income, alternative or add-on minimum tax, gross
---
income, gross receipts ` sales, use, ad valorem, franchise, capital, paid-up
capital, profits, greenmail, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any governmental authority
(domestic or foreign) responsible for the imposition of any such tax.
8.02. Tax Matters. Seller hereby represents and warrants to Buyer that:
(a) Seller has timely paid all Taxes, and all interest and penalties due
thereon and payable by it, for the Pre-Closing Tax Period which will have been
required to be paid on or prior to the Closing Date, the nonpayment of which
would result in a Lien on any Purchased Asset. would otherwise adversely affect
the Business or would result in Buyer becoming liable or responsible therefor.
(b) Seller has established, in accordance with generally accepted
accounting principles applied on a basis consistent with that of preceding
periods, adequate reserves for the payment of. and will timely pay all Tax
liabilities, assessments, interest and penalties which arise from or with
respect to the Purchased Assets or the operation of the Business and are
incurred in or attributable to the Pre-Closing Tax Period, the nonpayment of
which would result in a Lien on any Purchased Asset, would otherwise adversely
affect the Business or would result in Buyer becoming liable therefor.
8.03. Tax Cooperation; Allocation of Taxes. (a) Buyer and Seller agree to
------------------------------------
furnish or cause to be furnished to each other, upon request, as promptly as
practicable, such information and assistance relating to the Purchased Assets
and the Business as is reasonably necessary for the filing of all Tax returns,
and making of any election related to Taxes, the preparation for any audit by
any taxing authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax return. Seller and Buyer shall cooperate with
each other in the conduct of any
-17-
audit or other proceeding related to Taxes involving the Business and each shall
execute and deliver such powers of attorney and other documents as are necessary
to carry out the intent of this paragraph (a) of Section 8.03.
(b) All real property taxes, personal property taxes and similar ad valorem
-- -------
obligations levied with respect to the Purchased Assets for a taxable period
which includes (but does not end on) the Closing Date (collectively, the
"Apportioned Obligations") shall be apportioned between Seller and Buyer as of
-----------------------
the Closing Date based on the number of days of such taxable period included in
the Pre-Closing Tax Period and the number of days of such taxable period
included in the Post-Closing Tax Period. Seller shall be liable for the
proportionate amount of such taxes that is attributable to the Pre-Closing Tax
Period. Within 90 days after the Closing, Seller and Buyer shall present a
statement to the other setting forth the amount of reimbursement to which each
is entitled under this Section 8.03(b) together with such supporting evidence as
is reasonably necessary to calculate the proration amount. The proration amount
shall be paid by the party owing it to the other within 10 days after delivery
of such statement. Thereafter, Seller shall notify Buyer upon receipt of any
xxxx for real or personal property taxes relating to the Purchased Assets, part
or all of which are attributable to the Post-Closing Tax Period, and shall
promptly deliver such xxxx to Buyer who shall pay the same to the appropriate
taxing authority, provided that if such xxxx covers the Pre-Closing Tax Period,
Seller shall also remit prior to the due date of assessment to Buyer payment for
the proportionate amount of such xxxx that is attributable to the Pre-Closing
Tax Period. If either Seller or Buyer shall thereafter make a payment for which
it is entitled to reimbursement under this Section 8;03(b), the other party
shall make such reimbursement promptly but in no event later than 30 days after
the presentation of a statement setting forth the amount of reimbursement to
which the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement. Any payment
required under this Section and not made within 10 days of delivery of the
statement shall bear interest at the rate per annum determined, from time to
time, under the provisions of Section 6621 (a)(2) of the Code for each day until
paid.
(e) Any transfer, documentary, sales, use or other Taxes assessed upon or
with respect to the transfer of the Purchased Assets to Buyer and any recording
or filing fees with respect thereto shall be the responsibility of Seller.
ARTICLE IX
EMPLOYEE BENEFITS
9.01 Representations. Seller hereby represents and warrants to Buyer
---------------
that:
(a) Schedule 9.01 lists each employee benefit plan and each health
-------------
insurance plan that covers any employee or former employee of the Business,
copies or descriptions of all of which have previously been made available or
furnished to Buyer. With respect to each such plan, Seller has provided the
most recently filed Form 5500, if applicable, and an accurate summary
description of such plan.
-18-
(b) Except as disclosed in writing to Buyer prior to the date hereof,
there has been no amendment to, written interpretation of or announcement
(whether or not written) by Seller any employee benefit plan or health insurance
plan relating to, or change in employee participation or coverage under, any
employee benefit plan or health insurance plan that would increase materially
the expense of maintaining such any employee benefit plan or health insurance
plan above the level of the expense incurred in respect thereof for the fiscal
year ended prior to the date hereof.
(c) There is no contract, agreement, plan or arrangement covering any
employee or former employee of the Business that, individually or collectively,
could give rise to the payment of any amount that would not be deductible
pursuant to the terms of Section 280G of the Code.
(d) No tax under Section 4980B of the Code has been incurred in respect of
any employee benefit plan or health insurance plan that is a group health plan,
as defined in Section 5000(b)(1) of the Code.
(e) Except as set forth in Schedule 9.01 with respect to the employees and
-------------
former employees of the Company, there are no employee post-retirement medical
or health plans in effect.
(f) No employee of the Business will become entitled to any bonus,
retirement, severance or similar benefit or enhanced benefit solely as a result
of the transactions contemplated hereby.
(g) The Seller does not have, nor is it reasonably expected to have, any
liability under Title IV of the Employee Retirement Income Security Act of 1974,
as amended.
9.02. Employees and Offers of Employment.
----------------------------------
(a) On or prior to the Closing Date, Buyer shall offer employment to all
employees of the Business listed on Schedule 3.20; provided, that Buyer may
-------------- --------
terminate at any time after the Closing Date the employment of any employee who
accepts such offer. Any such offers shall be at such salary or wage and benefit
levels and on such other terms and conditions as Buyer shall in its sole
discretion deem appropriate. The employees who accept and commence employment
with Buyer are hereinafter collectively referred to as the "Transferred
-----------
Employees". Seller will not take any action that would impede, hinder,
---------
interfere or otherwise compete with Buyer's effort to hire any Transferred
Employees. Buyer shall not assume responsibility for any Transferred Employee
until such employee commences employment with Buyer.
(b) Seller shall use its best efforts to assist Buyer in securing an
Employment Agreement from each of the individuals listed on Schedule 3.20.
-------------
(c) Seller shall use its best efforts to assist Buyer in obtaining Non-
Competition Agreements from each Transferred Employee.
-19-
9.03. Seller's Employee Benefit Plans'. (a) Accrued benefits or account
--------------------------------
balances of Transferred Employees under any employee benefit plan or health
insurance plan shall be fully vested as of the Closing Date.
(b) With respect to the Transferred Employees (including any beneficiary
or dependent thereof, Seller shall retain (i) all liabilities and obligations
arising under any group life, accident, medical, dental or disability plan or
similar arrangement (whether or not insured) to the extent that such liability
or obligation relates to contributions or premiums accrued (whether or not
payable), or to claims incurred (whether or not reported), on or prior to the
Closing Date, (ii) all liabilities and obligations arising under any workers
compensation arrangement to the extent such liability or obligation relates to
the period prior to the Closing Date, including liability for any retroactive
xxxxxxx'x compensation premiums attributable to such period and (iii) all other
liabilities and obligations arising under any employee benefit plan or health
insurance plan to the extent any such liability or obligation relates to the
period prior to the Closing Date including, without limitation, liabilities and
obligations in respect of accruals through the Closing Date under any bonus plan
or arrangement, and any vacation plans, arrangements and policies.
(c) With respect to any Transferred Employee (including any beneficiary or
dependent thereof) who enters a hospital or is on short-term disability under
any employee benefit plan or health insurance plan on or prior to the Closing
Date and continues in a hospital or on short-term disability after the Closing
Date, Seller shall be responsible for claims and expenses incurred both before
and after the Closing Date in connection with such Person, to the extent that
such claims and expenses are covered by any employee benefit plan or health
insurance plan, until such time, (if any) that, in the case of a Transferred
Employee, such Person resumes fulltime employment with Buyer or one of its
Affiliates and, in the case of any beneficiary or dependent of a Transferred
Employee, such Person's hospitalization has terminated. With respect to any
employee benefit plan or health insurance plan covering medical expenses and
other costs relating to pregnancies and maternity leave, Seller shall be
responsible for all claims (whether or not reported) and expenses incurred
during the period prior to and ending on the Closing Date, and Buyer or one of
its Affiliates shall be responsible for such employee benefit plan or health
insurance plan covering such pregnancies and maternity leave for the period
subsequent to the Closing Date.
9.04. No Third Party Beneficiaries. No provision of this Article shall
----------------------------
create any third party beneficiary or other rights in any employee or former
employee (including any beneficiary or dependent thereof) of Seller in respect
of continued employment (or resumed employment) with either Buyer or the
Business or any of their Affiliates and no provision of this Article IX shall
create any such rights in any such Persons in respect of any benefits that may
be provided, directly or indirectly, under any employee benefit plan or health
insurance plan or any plan or arrangement that may be established by Buyer or
any of its Affiliates. No provision of this Agreement shall constitute a
limitation on rights to amend, modify or terminate after the Closing Date any
such plans or arrangements of Buyer or any of its Affiliates.
-20-
ARTICLE X
CONDITIONS TO CLOSING
10.01. Conditions to the Obligations of Each Party. The obligations of
-------------------------------------------
Buyer and Seller to consummate the Closing are subject to each other party (i)
executing and delivering each of the Ancillary Agreements to be entered into by
it at Closing, in each case, substantially in the form attached as an exhibit to
this Agreement; and (ii) receiving all other closing documents specified in
Section 2.07 of this Agreement.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.01. Survival. The covenants, agreements, representations and
--------
warranties of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection herewith
shall survive the Closing until the third anniversary of the Closing Date or (i)
in the case of Sections 5.03 and 5.05, indefinitely; and (ii) in the case of the
covenants, agreements, representations and warranties contained in Articles VIII
or IX, until expiration of the applicable statutory period of limitations
(giving effect to any waiver, mitigation or extension thereof), if later.
Notwithstanding the preceding sentence, any covenant, agreement, representation
or warranty in respect of which indemnity may be sought under Sections 11.02 or
11.03 shall survive the time at which it would otherwise terminate pursuant to
the preceding sentence, if notice of the inaccuracy or breach thereof giving
rise to such right to indemnity shall have been given to the party against whom
such indemnity may be sought prior to such time.
11.02. Indemnification. (a) Seller hereby indemnifies Buyer and its
---------------
Affiliates against and agrees to hold each of them harmless from any and all
damage, loss, liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) (collectively, "Loss") incurred
or suffered by Buyer or any of its Affiliates arising out of:
(i) any misrepresentation or breach of warranty, covenant or
agreement made or to be performed by Seller pursuant to this Agreement
(determined without regard to any materiality qualification contained in
any representation, warranty or covenant giving rise to the claim for
indemnity hereunder and whether or, not discovered by Buyer prior to
Closing); or
(ii) the failure of Seller to assume full responsibility for any
Excluded Liability or any obligation or liability of, the Business relating
to the Excluded Assets;
provided, that Seller shall not be liable under Section 11.02(a)(i) unless the
--------
aggregate amount of Loss with respect to all matters referred to in this Section
11.02(a)(i) exceeds $2,500 and then only to the extent of such excess; provided,
--------
further, Seller shall be responsible (without regard
-------
-21-
to the foregoing proviso) for all annual payments, dues or taxes owing to the
State of Connecticut to put the Seller in good standing, in the State of
Connecticut.
(b) Buyer hereby indemnifies Seller and its Affiliates against and agrees
to hold each of them harmless from any and all Loss incurred or suffered by
Seller or any of its Affiliates arising, out of any misrepresentation or breach
of warranty, covenant or agreement made or to be performed by the Buyer pursuant
to this Agreement; provided that Buyer shall not be liable under this Section
--------
11.02(b) unless the aggregate amount of Loss with respect to all matters
referred to in this Section 11.02(b) exceeds $2,500.
11.03. Reserved.
---------
11.04. Procedures; No Waiver; Exclusivity. (a) The party seeking
----------------------------------
indemnification under Section 11.02 or 11.03 (the "Indemnified Party") agrees to
-----------------
give prompt notice to the party against whom indemnity is sought (the
"Indemnifying Party") of the assertion of any claim, or the commencement of any
------------------
suit, action or proceeding in respect of which indemnity may be sought under
such Section. The Indemnifying Party may, and at the request of the Indemnified
Party shall, participate in and control the defense of any such third party
suit, action or proceeding at its own expense. The Indemnifying Party shall not
be liable under Section 11.02 or 11.03 for any settlement effected without its
consent of any claim, litigation or proceeding in respect of which indemnity may
be sought hereunder. Each person shall cooperate with each other person and
upon request attend hearings and trials, assist in making settlement, securing
and giving, evidence, obtaining the attendance of witnesses and in the conduct
of suits.
(b) No waiver of a closing condition by Buyer shall limit its rights under
Section 11.02.
(c) After the Closing, Section 11.02 and 11.03 will provide the exclusive
remedy for any misrepresentation, breach of warranty, covenant or other
agreement (other than those contained in Sections 2.08, 5.02, 5.05 and 13.08) or
other claim arising out of this Agreement or the transactions contemplated
hereby.
ARTICLE XII
RESERVED
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ARTICLE XIII
MISCELLANEOUS
13.01. Notices. All notices, requests and other communications to either
-------
party hereunder shall be in writing (including telex, telecopy or similar
writing) and shall be given,
if to Buyer, to:
Datamax of Connecticut, Inc.
00 Xxxx Xxx Xxx Xxxx
Xxxxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Antares Networks, Inc.
00 Xxxx Xxx Xxx Xxxx
Xxxxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
if to Seller, to:
VY, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Law Office of Xxxxx Xxxxxxxxxx
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
13.02. Amendments; No Waivers. (a)Any provisions of this Agreement may be
----------------------
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Buyer and Seller, or in the case of
a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof
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preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
13.03. Expenses. Except as otherwise provided herein, all costs and
--------
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
13.04. Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
13.05. Governing Law. This Agreement shall be construed in accordance
-------------
with and governed by the law of the State of New York, without regard to the
conflicts of law rules of such state.
13.06. Counterparts; Effectiveness. This Agreement may be signed in any
---------------------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.
13.07. Entire Agreement. This Agreement and the Ancillary Agreements
----------------
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements, understandings and
negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement, promise,
understanding, condition or warranty not set forth herein has been made or
relied upon by either party hereto. None of this Agreement or the Ancillary
Agreements nor any provision hereof or thereof, is intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
13.08. Bulk Sales Laws. Buyer and Seller each hereby waive compliance by
---------------
Seller with the provisions of the "bulk sales", "bulk transfer" or similar laws
of any state. Seller agrees to indemnify and hold Buyer harmless against any
and all claims, losses, damages, liabilities, costs and expenses incurred by
Buyer or any of its Affiliates as a result of any failure to comply with any
such "bulk sales", "bulk transfer" or similar laws.
13.09. Reserved.
---------
13.10. Captions. The captions herein are included for convenience of
--------
reference only and shall be ignored in the construction or interpretation
hereof.
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IN WITNESS WHEREOF, the parties hereto here caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
DATAMAX OF CONNECTICUT, INC.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
VY, INC.
By: /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
Title: President
Agreed and Accepted:
/s/ Xxxxxxx Xxxxx
------------------------
Xxxxxxx Xxxxx
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