PURCHASE AND SALE OF ASSETS AGREEMENT
among
COTELLIGENT, INC.,
THE XXXXX COMPANIES, INC.
XXXXX CONSULTING, INC.
XXXXX PROCESSING, INC.
XXXXX INSTITUTE, INC.
OPTIMUM ADMINISTRATIVE RESOURCES, INC.
AND
XXX XXXXX
November 30, 1998
TABLE OF CONTENTS
Page
ARTICLE 1. SALE OF ASSETS.........................................................................................1
Section 1.1. Assets..........................................................................................1
Section 1.2. Non-Assignment of Certain Contracts.............................................................3
Section 1.3. Excluded Assets.................................................................................3
ARTICLE 2. PURCHASE PRICE.........................................................................................3
Section 2.1. Consideration...................................................................................3
Section 2.2. Determination and Payment of Stockholder's Equity Adjustment Amount.............................4
ARTICLE 3. NON-ASSUMPTION OF LIABILITIES; INDEMNIFICATION.........................................................5
Section 3.1. Non-Assumption of Liabilities...................................................................5
Section 3.2. Assumption of Certain Obligations...............................................................6
Section 3.3. Indemnification by Sellers and Stockholder......................................................7
Section 3.4 Indemnification by Buyer....................................................................8
Section 3.5 Procedure for Indemnification of Third Party Claims.........................................9
Section 3.6 Limitation on Indemnification...............................................................9
Section 3.7 Strict Liability...........................................................................10
ARTICLE 4. CLOSING...............................................................................................10
Section 4.1. Time and Place of Closing......................................................................10
Section 4.2. Deliveries by Sellers and Stockholder..........................................................10
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLERS AND STOCKHOLDER.............................................11
Section 5.1. Representations and Warranties.................................................................11
(a) Authority..................................................................................11
(b) Compliance with Law........................................................................12
(c) Approvals..................................................................................12
(d) Contracts..................................................................................12
(e) Title to the Assets........................................................................13
(f) Litigation.................................................................................13
(g) Employees..................................................................................13
(h) Employee Relations and Benefit Plans.......................................................14
(i) Financial Statements; Gross Revenues; Records and Customer Lists...........................16
(j) Accounts Receivable........................................................................17
(k) Taxes......................................................................................17
(l) Environmental Matters......................................................................18
(m) Absence of Changes.............................................................................18
(n) Relations with Governments.................................................................20
(o) Future Plans and Commitments...............................................................20
(p) Prospectus Delivery........................................................................20
(q) Intellectual Property......................................................................20
(r) Xxxx-Xxxxx-Xxxxxx Matters..................................................................21
(s) Disclosure.................................................................................21
Section 5.2. Survival.......................................................................................21
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF BUYER...............................................................21
Section 6.1. Representations and Warranties.................................................................21
(a) Corporate Organization.....................................................................22
(b) Authorization..............................................................................22
Section 6.2. Representations Related to the Cotelligent Stock...............................................22
(a) Common Stock to be Received by the Stockholder.............................................22
(b) NYSE Listing...............................................................................22
Section 6.3 Governmental Authorization.................................................................22
Section 6.4 Survival...................................................................................23
ARTICLE 7. NONCOMPETITION........................................................................................23
Section 7.1. Restrictions...................................................................................23
Section 7.2. Materiality....................................................................................24
Section 7.3. Specific Performance...........................................................................24
Section 7.4. Reasonable Restraint...........................................................................24
Section 7.5. Severability...................................................................................24
Section 7.6. Independent Covenants..........................................................................24
ARTICLE 8. CERTAIN POST-CLOSING COVENANTS OF SELLER, STOCKHOLDER AND BUYER.......................................24
Section 8.1. Payment of Taxes; Filing of Returns............................................................24
Section 8.2. Name Change....................................................................................25
Section 8.3. Restrictions on Transfer.......................................................................25
Section 8.4 Severance Payments.........................................................................25
ARTICLE 9. GENERAL...............................................................................................26
Section 9.1. Further Assurance..............................................................................26
Section 9.2. Notices........................................................................................26
Section 9.3. Entire Agreement...............................................................................27
Section 9.4. Broker's Commission............................................................................27
Section 9.5. Modification; Remedies Cumulative..............................................................27
Section 9.6. Severability...................................................................................27
Section 9.7. Availability of Records........................................................................27
Section 9.8. Allocation of Purchase Price...................................................................27
Section 9.9. Construction...................................................................................27
Section 9.10. Attorney's Fees............................................................................28
Section 9.11. Waiver.....................................................................................28
Section 9.12. Counterparts...............................................................................28
Section 9.13. Time is of the Essence.....................................................................28
Section 9.14. Governing Law..............................................................................28
Definitions
Agreement - Preamble
Assets - Section 1.1
Assumed Liabilities - Section 3.2 Balance Sheet - Section 5.1(i) Balance Sheet
Date - Section 5.1(i) Benefit Plan - Section 5.1(h) Xxxx of Sale - Section
4.2(a) Business - Premises Buyer - Preamble Cash Payment - Section 2.1(a)
Closing - Section 4.1 Closing Date - Section 4.1 Closing Date Balance Sheets -
Section 2.2(b) Conferences - Section 2.2(b) Contracts - Section 1.1(i)
Cotelligent - Preamble Cotelligent Stock - Section 2.1(a) Customer Contracts -
Section 1.1(i) Environmental Laws - Section 5.1(l) ERISA - Section 5.1(h)
Excluded Assets - Section 1.3 Financial Statements - Section 5.1(i) GAAP-
Section 5.1(i) HSR Act - Section 5.1(r) Indemnified Party - Section 3.5
Indemnifying Party - Section 3.5 Intellectual Property - Section 5.1(q) IRCA -
Section 5.1(g) IRS - Section 5.1(h) Liens - Section 1.1 Losses - Section 3.3
Minimum Indemnification Threshold - Section 3.5(a) Notice - Section 3.5 Pension
Plans - Section 5.1(h) Permitted Liens - Section 1.1 Purchase Price - Section
2.1(a) Seller - Preamble Sellers -Preamble Specified Warranties - Section 3.6(a)
Stock Payment - Section 2.1(a) Stockholder - Preamble Stockholder's Equity -
Section 2.2(a) Stockholder's Equity Adjustment Amount - Section 2.2(a) Territory
- Section 7.1(a) Third Person - Section 3.5 WARN ACT - Section 6.1(c) Welfare
Plans - Section 5.1(h)
PURCHASE AND SALE OF ASSETS AGREEMENT
THIS PURCHASE AND SALE OF ASSETS AGREEMENT (the "Agreement") is
executed and effective as of the thirtieth day of November, 1998, among
Cotelligent, Inc., a Delaware corporation ("Cotelligent"), The Xxxxx Companies,
Inc., a Florida corporation ("Buyer"), and Xxxxx Consulting, Inc., Xxxxx
Processing, Inc., Optimum Administrative Resources, Inc. and Xxxxx Institute,
Inc., each a Florida corporation (each, a "Seller" and collectively referred to
herein as "Sellers") and Xxx Xxxxx ("Stockholder").
P R E M I S E S:
Sellers are engaged in the business of providing consulting services,
technical support, computer and programming assistance and similar types of
advisory and other services to customers and clients (collectively, the
"Business"). Sellers desire to sell to Buyer, and Buyer desires to acquire from
Sellers, substantially all of Sellers' assets, in accordance with and subject to
the terms set forth in this Agreement.
Stockholder owns 100% of the outstanding capital stock of each Seller,
and joins in this Agreement for the purposes of making certain representations
and warranties to, and entering into certain covenants with, Buyer in connection
with the transactions set forth herein.
In consideration of the mutual promises and covenants herein contained
and other good and valuable consideration, received to the full satisfaction of
each of them, the parties hereby agree as follows:
A G R E E M E N T:
ARTICLE 1.
SALE OF ASSETS
Section 1.1. Assets. Subject to and upon the terms and conditions set
forth in this Agreement, at the Closing (as hereinafter defined), each of the
Sellers will sell, transfer, convey, assign and deliver to the Buyer, and the
Buyer will purchase or acquire from the Sellers free and clear of all Liens
(other than Permitted Liens (as hereinafter defined)), all of the right, title
and interest of each such Seller in and to the properties, assets and rights of
such Sellers, or any of them, wherever located, including without limitation
such assets of the types listed below (all of the foregoing assets to be
conveyed to Buyer are collectively referred to as the "Assets"):
(a) all equipment, furniture, furnishings, computers and
office and other supplies, and all leasehold interests in such assets
that are leased by Sellers and identified as leased items on Schedule
1.1(a);
(b) all rights in and to any systems or processes under
research or development by any and all Sellers prior to or on the
Closing Date (as herein defined);
(c) all credits, prepaid expenses, deferred charges, advance
payments, security deposits and prepaid items (and, in each case,
security interests from third parties relating thereto);
(d) all accounts receivable and notes receivable, ledger
xxxxxxxx, bonds and other evidences of indebtedness and rights to
receive payments from any person owing to any and all Sellers,
including, but not limited to, any rights with respect to third party
collection procedures or any other actions, suits or proceedings which
have been commenced in connection therewith;
(e) all software, programs, customer and client lists and
information, inventions, processes, designs, formulae, trade secrets,
know-how, computer programs, confidential business information and all
documents and other materials related to the foregoing and all
documents, disks and other media on which any of the foregoing is
stored;
(f) all books, records, manuals and other materials (in any
form or medium), advertising matter, catalogues, price lists,
correspondence, mailing lists, lists of customers, distribution lists,
photographs, production data, sales and promotional materials and
records, purchasing materials and records, personnel records,
blueprints, research and development files, records and data books,
media materials and plates, accounting records and sales order files;
(g) all rights to causes of action, lawsuits, judgments,
claims and demands of any nature existing in favor of, available to or
being pursued by any and all Sellers whether arising by way of
counterclaim or otherwise (other than any rights, actions, claims or
demands in favor of Sellers, or any of them, that they may assert
directly by way of counterclaim arising out of or in connection with
the lawsuit styled Xxxxx X. Xxxxxxx x. Xxxxx Consulting, Inc., Case No.
98-585-CA-15-E in the Eighteenth Judicial Circuit Court of Seminole
County, Florida (the "Xxxxxxx Lawsuit").
(h) all guarantees, warranties, indemnities and similar rights in
favor of any and all Sellers;
(i) all of the rights of any and all Sellers under all
contracts, leases, commitments and other agreements (collectively, the
"Contracts"), including, but not limited to, (i) employment, consulting
and similar agreements regarding personnel, (ii) confidentiality
agreements with respect to the Business, the Assets or the Assumed
Liabilities, (iii) purchase and sale orders for the purchase or sale of
services or goods ("Customer Contracts"); (iv) furniture and equipment
leases; and (v) real estate leases.
(j) all of the goodwill related to the Business;
(k) all other tangible and intangible assets whatsoever of
each Seller used in or related to the Business, except for those
specific assets listed as Excluded Assets on Schedule 1.3; and
(l) all assets of the Benefit Plans sponsored or maintained by
the Sellers as listed in Schedule 5.1(h).
All of such Assets shall be delivered free and clear of any liens,
claims, pledges, security interests, mortgages or encumbrances of any kind
("Liens") other than Permitted Liens. The sale, conveyance, assignment, transfer
and delivery of the Assets shall be effected by bills of sale, endorsements,
assignments, or other instruments in such reasonable or customary form as shall
be requested by Buyer and its counsel. Each Seller shall at any time from and
after the Closing Date, upon the reasonable request of Buyer and at such
Seller's expense, execute, acknowledge and deliver such additional conveyances,
assignments, transfers or other instruments, as may be reasonably required to
assign, transfer or convey the Assets to Buyer, or vest ownership of such Assets
in Buyer, as contemplated by this Agreement. A "Permitted Lien," for purposes of
this Agreement, means (i) any lien for taxes not yet due or delinquent or being
contested in good faith by appropriate proceedings, (ii) any statutory lien
arising in the ordinary course of business by operation of law with respect to
an obligation or liability that is not yet due or delinquent, or (iii) the liens
set forth on Schedule 1.1 hereto.
Section 1.2. Non-Assignment of Certain Contracts. Notwithstanding
anything to the contrary in this Agreement, to the extent that the assignment
hereunder of any Contract shall require the consent of any third party, neither
this Agreement nor any action taken pursuant to its provisions shall constitute
an assignment or an agreement to assign if such assignment or attempted
assignment would constitute a breach thereof or result in the termination, loss
or diminution thereof; provided, however, that in each such case, the applicable
Seller or Sellers shall use its or their commercially reasonable efforts to
obtain the consent of such other party to such assignment to Buyer. Attached
hereto as Schedule 1.2 is a list of all Contracts requiring consent to their
assignment.
Section 1.3. Excluded Assets. The Buyer shall not acquire pursuant to this
Agreement any of the Excluded Assets. "Excluded Assets" means the assets set
forth on Schedule 1.3.
ARTICLE 2.
PURCHASE PRICE
Section 2.1. Consideration.
(a) In consideration of the sale, conveyance, transfer and
delivery of the Assets, Buyer shall (i) pay Sellers by wire transfer in
immediately available funds at the Closing an aggregate amount of
$19,530,000 (the "Cash Payment") and (ii) deliver to Sellers 500,544
shares of Common Stock of Cotelligent (the "Cotelligent Stock") on the
Closing Date or as soon as practical thereafter (but in no event later
than five (5) business days after the Closing) such amount being equal
to the number of shares determined by dividing $9,210,000 by the
average per share closing sale price of such Common Stock on the New
York Stock Exchange for the five (5) trading days ending on and
including November 24, 1998 (the "Stock Payment"). Such Cash Payment,
together with the Stock Payment, the Net Asset Adjustment Amount (as
defined below) and Buyer's assumption of the Assumed Liabilities,
constitutes the entire consideration payable by Buyer in connection
with its acquisition of the Assets (the "Purchase Price").
(b) The Purchase Price shall be paid to Xxxxx Consulting, Inc.
and shall be allocated among the Sellers by agreement among the
Sellers.
(c) The Cash Payment shall be paid on the Closing Date by wire
transfer of immediately available funds to an account specified in
writing by Sellers to Cotelligent at least two (2) business days prior
to the Closing.
Section 2.2. Determination and Payment of Net Asset Adjustment Amount.
(a) For purposes of this Section 2.2, the following terms
shall be defined as set forth below:
(i) "Net Assets" shall mean, as of the Closing Date,
the aggregate net value of Sellers' Assets transferred to
Buyer hereunder determined by subtracting the liabilities of
the Sellers assumed by Buyer from the book value of the Assets
transferred pursuant to this Agreement. Net Assets shall be
determined in accordance with GAAP on a basis consistent with
the practices of accounting and disclosure then applied in the
preparation of audited financial statements of Cotelligent.
(ii) "Net Assets Adjustment Amount" shall mean (i) in
the event Net Assets is greater than $1,500,000, then the
amount of Net Assets less $1,500,000; and (ii) in the event
Stockholder's Equity is less than $1,000,000, then the amount
equal to $1,000,000 less Net Assets.
(b) Within sixty (60) days after the Closing, Buyer shall in
good faith calculate the amount of the Net Assets based upon a balance
sheets of each of the Sellers prepared in a manner consistent with
Section 2.2 (a)(i), and shall be (i) dated as of the Closing Date and
(ii) prepared substantially in the format set forth on Schedule 2.2(b)
(the "Closing Date Balance Sheet"). The Closing Date Balance Sheet
shall set forth and reflect as an obligation of Sellers eleven-twelfths
(11/12ths) of all unpaid non-reimbursed costs or expenses of or related
to the conference in New York, New York on December 4, 1998
("Conference").
(c) If the Sellers agree with Buyer's calculation and the
Stockholder's Equity is greater than $1,500,000, within 5 days of
Sellers' notice of agreement, Buyer shall pay to Sellers an amount
equal to the Stockholder's Equity Adjustment Amount, as so calculated
by Buyer.
(d) If the Sellers agree with Buyer's calculation and the
Stockholder's Equity is less than $1,000,000, within 5 days of Sellers'
notice of agreement, each Seller shall return to Buyer such Seller's
pro rata portion of an amount equal to the Stockholder's Equity
Adjustment Amount, as so calculated by Buyer.
(e) If Sellers disagree with Buyer's calculation of the
Stockholder's Equity Adjustment Amount, Sellers may, within 30 days
after delivery of the calculation, deliver notice to Buyer disagreeing
with such calculation and setting forth Sellers' calculation of such
amount. Any such notice of disagreement shall specify the items or
amounts as to which Sellers disagree.
(f) If a notice of disagreement shall be delivered pursuant to
Section 2.2(e), the parties shall, during the 30 days following such
delivery of notice, use their best efforts to reach agreement on the
disputed items or amounts in order to determine, as may be required,
the correct amount of the Stockholder's Equity Adjustment Amount. If,
during such period, the parties are unable to reach such agreement,
they shall submit their disagreement for resolution in accordance with
the provisions set forth in Section 2.2(g).
(g) The parties agree that they will cooperate with and assist
each other in the calculation of Stockholder's Equity Adjustment
Amount, including, without limitation, making available, to the extent
necessary, books, records, workpapers and personnel. To the extent
Buyer and Sellers are unable to reach an agreement with respect to the
determination of the Stockholder's Equity Adjustment Amount, they shall
promptly select a mutually acceptable "big five" accounting firm with
no material relationship to any of them and submit their dispute to
such accounting firm for a binding resolution. Fees and expenses of
such accounting firm shall be paid one-half by Sellers and one-half by
Buyer. Within 5 days of a resolution of the amount of the Stockholder's
Equity Adjustment Amount, in the event Stockholder's Equity is greater
than $1,500,000, Buyer shall pay to Seller the Stockholder's Equity
Adjustment Amount; and in the event Stockholder's Equity is less than
$1,000,000, Sellers shall promptly refund to Buyer the Stockholder's
Equity Adjustment Amount.
ARTICLE 3.
NON-ASSUMPTION OF LIABILITIES; INDEMNIFICATION
Section 3.1. Non-Assumption of Liabilities. Except as explicitly set
forth in Section 3.2 below, Buyer shall not, by the execution and performance of
this Agreement or otherwise, assume, become responsible for or incur any
liability or obligation of any nature of any Seller, whether legal or equitable,
matured or contingent, known or unknown, foreseen or unforeseen, ordinary or
extraordinary, patent or latent, whether arising out of occurrences prior to, at
or after the date of this Agreement, including, without limiting the generality
of the foregoing, any liability or obligation arising out of or relating to:
(a) an occurrence or circumstance (whether known or unknown)
which occurs or exists on or prior to the date of this Agreement and
which constitutes, or which by the lapse of time or giving notice (or
both) would constitute, a breach or default under any lease, contract,
or other instrument or agreement (whether written or oral);
(b) an injury to or death of any person or damage to or
destruction of any property, whether based on negligence, breach of
warranty, or any other theory, other than injury, death, damage or
destruction caused by Buyer or its employees or agents after the date
hereof in connection with their operation of the Business (without
limiting the generality of the foregoing, it is expressly agreed that
any liability or obligation of any and all Sellers, including
obligations and liabilities in connection with the Xxxxxxx Lawsuit and
all other obligations and liabilities occurring or arising in
connection with the operation of the Business through 11:59 p.m. local
time on the Closing Date, shall remain liabilities and obligations of
such Seller or Sellers, and are not assumed by Buyer);
(c) a violation of the requirements of any governmental
authority or of the rights of any third person, including, without
limitation, any requirements relating to the reporting and payment of
federal, state, local or other income, sales, use, franchise, excise or
property tax liabilities of any and all Sellers;
(d) the generation, collection, transportation, storage or
disposal by Sellers of any materials, including, without limitation,
hazardous materials.
(e) any agreement or arrangement between any Seller and the
employees of such Seller or any labor or collective bargaining unit
representing any such employees;
(f) any severance pay obligation of any Seller (other than
obligations to X. Xxxxxx);
(g) any indebtedness, accounts payable or other obligations,
including without limitation obligations in respect of federal, state
or local taxes, of any and all Sellers;
(h) the liabilities or obligations of any Seller or
Stockholder for brokerage or other commissions relative to this
Agreement or the transactions contemplated hereunder; and
(i) any liability of Sellers or Stockholder, or any of them,
to Xxxxxx Xxxxx in connection with their acquisition of capital stock
of certain Seller formerly held by him, including any amount evidenced
by that certain promissory note of July 15, 1997 payable to him; and
(j) any other liability arising out of or attributable to the
operation of the Business prior to the Closing Date (including, without
limitation, any obligations in respect of taxes and accounts payable),
except to the extent expressly assumed by Buyer pursuant to Section 3.2
hereof.
Sellers and Stockholder jointly and severally agree to indemnify
Cotelligent, Buyer, and their respective successors and assigns from and against
all the above non-assumed liabilities and obligations in accordance with Section
3.3.
Section 3.2. Assumption of Certain Obligations. Pursuant to this
Agreement, and as part of the consideration paid by Buyer hereunder, Buyer
assumes and undertakes to discharge and perform Sellers' obligations (a) shown
as liabilities of Sellers on the Closing Date Balance Sheets (provided, that all
such assumed obligations are of the type and category set forth on Schedule
3.2(a); and provided further, that Buyer shall have no liability in connection
with any such obligation in any amount in excess of the amount of such
obligation shown on the Closing Date Balance Sheet and taken into account in
determining Net Assets (except that Buyer assumes the obligations for all unpaid
non-reimbursed cost or expenses of or related to the Conference in the amount
set forth on the Closing Date Balance Sheet plus an additional amount equal to
one-eleventh (1/11th) of the amount accrued); (b) pursuant to the express terms
of those written Contracts set forth on Schedule 3.2(b); (c) the written
summaries of oral Customer Contracts provided by Sellers to Buyer and listed on
Schedule 3.2(c); provided, that in each case under the foregoing Sections 3.2(b)
and (c), (i) Buyer shall assume only such written Contracts and obligations
pursuant to Customer Contracts so summarized in writing by Sellers, and only to
the extent such obligations are first required to be performed subsequent to the
close of business on the Closing Date and (ii) in no event shall Buyer assume
any obligation (A) in connection with any claims that arise in connection with
any Seller's pre-Closing performance or non-performance of any Contract (where
deliverables are delivered on or prior to the Closing Date) or (B) to perform
services for, or assume any other liability to, any party to a contract to the
extent such party has paid Sellers in advance for such performance and Sellers
have not remitted such payment to Buyer pursuant to Section 1.1(c); and (d)
post-closing obligations under Benefit Plans sponsored or maintained by the
Sellers as listed in Schedule 5.1(h) (the foregoing referred to as the "Assumed
Liabilities").
Section 3.3. Indemnification by Sellers and Stockholder.
Notwithstanding any investigation at any time made by or on behalf of Buyer or
Cotelligent, each Seller and Stockholder jointly and severally agree to defend,
indemnify and hold harmless Cotelligent, Buyer, their respective officers,
shareholders, directors, divisions, subdivisions, affiliates, parent, employees,
agents, successors and assigns from and against all losses, claims, actions,
causes of action, damages, liabilities, expenses and other costs of any kind or
amount whatsoever (including, without limitation, reasonable attorneys' fees),
whether equitable or legal, matured or contingent, known or unknown, foreseen or
unforeseen, ordinary or extraordinary, patent or latent, which result, either
before or after the date of this Agreement (any and all of the foregoing
collectively referred to herein as "Losses"), from or in connection with any:
(a) inaccuracy in or breach of any representation or warranty
made by any Seller or Stockholder in this Agreement;
(b) failure of any or all Sellers or Stockholder duly to
perform and observe any term, provision, covenant, agreement or
condition under this Agreement;
(c) material misrepresentation in or omission from any Schedule
to this Agreement;
(d) failure of any Seller to use commercially reasonable
efforts to obtain any required consent to a Contract requiring such
consent as listed in Schedule 1.2 (including, without limitation,
reimbursement to Buyer of the value of such nonassigned Contract);
(e) liability of any or all Sellers resulting from one or more
pending or threatened lawsuits whether or not listed on Schedule
5.1(f);
(f) liability of any or all Sellers to creditors of such
Seller or Sellers which is imposed on Buyer whether as a result of
bankruptcy proceedings or otherwise and whether as an account payable
by any Seller, (other than those included in the Assumed Liabilities)
or as a claim of alleged preferential payments within the meaning of
the United States Bankruptcy Code or otherwise;
(g) liability of any or all Sellers or Stockholder, including
liabilities for taxes, of any type other than the Assumed Liabilities
whether or not disclosed herein;
(h) the existence of creditors of any or all Sellers which are
not disclosed to Buyer; or
(i) any of the matters set forth in Section 3.1(a) - (i) hereof.
--------------------
Buyer shall be deemed to have suffered such Loss or to have paid or to have
become obligated to pay any sum or amount with respect to the matters referred
to in subparagraphs (a) - (j) of this Section 3.3 if the same shall be suffered,
paid or incurred by Buyer or any parent, subsidiary, affiliate, or successor of
Buyer. The amount of the Loss deemed to be suffered, paid or incurred by Buyer
shall be an amount equal to the Loss, suffered, paid or incurred by such parent,
subsidiary, affiliate, or successor. The foregoing indemnity shall fully apply
to any claim or action that seeks or results in any injunction or other
direction or restriction on the free and unfettered use of the Assets by Buyer,
and each of the Sellers and Stockholder shall jointly and severally indemnify
and hold harmless Buyer from all Losses, directly or indirectly related to, or
caused by, Buyer's compliance with any such injunction, direction or
restriction. In the event Buyer, in its sole discretion, elects to seek recovery
from an insurance company or other third party with respect to any claim for
indemnification hereunder, to the extent Buyer actually receives payment with
respect to such claim from such third party, the amount of the Loss shall be
reduced by the amount of such insurance payment received, net of any increase in
premiums for such insurance related to such claim that are payable within two
years of the date such claim is made.
Section 3.4 Indemnification by Buyer. Buyer agrees to defend, indemnify
and hold harmless Sellers, Stockholder, their respective officers, directors,
divisions, affiliates, employees, agents, successors and assigns from and
against all Losses from or in connection with any:
(a) inaccuracy in, or material breach of, any representation or
warranty made by Buyer in this Agreement;
(b) failure of Buyer in any material respect to perform and
observe any term, provision, covenant, agreement or condition under
this Agreement;
(c) failure of Buyer to perform or pay any Assumed Liability
or any obligation arising out of the operation of the Business by Buyer
after the Closing Date; and
(d) failure of Buyer to comply with the representation and
warranty of Buyer set forth in Section 6.1(c) relating to compliance
with the WARN Act.
In the event such Seller or Stockholder elects to seek recovery from an
insurance company or other third party with respect to any claim for
indemnification under this Section 3.4, to the extent any Seller or Stockholder
actually receives payment with respect to such claim from such third party, the
amount of any Loss shall be reduced by the amount of such insurance payment
received, net of any increase in premiums for such insurance related to such
claim that are payable within two years of the date such claim is made.
Section 3.5 Procedure for Indemnification of Third Party Claims. After
a party hereto (hereinafter the "Indemnified Party") has received notice of or
has knowledge of any claim by a person not a party to this Agreement ("Third
Person") or the commencement of any action or proceeding by a Third Person, the
Indemnified Party shall, in connection with making a claim with respect thereto
against any party obligated to provide indemnification pursuant to this
Agreement (hereinafter the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or the commencement of such action or proceeding
(the "Notice"). The Notice shall state the nature and the specific basis of such
claim and a reasonable estimate of the amount thereof. The Indemnified Party's
failure to give notice pursuant to this Section to the Indemnifying Party shall
not relieve the Indemnifying Party of any liability the Indemnifying Party may
have to the Indemnified Party pursuant hereto. The Indemnifying Party, after
receipt of the Notice, shall defend and settle, at its own expense and by its
own counsel, each such matter; provided, however, that the Indemnifying Party
will not consent to the entry of any judgment or enter into any settlement with
respect to the third party claim without the prior written consent of the
Indemnified Party. Notwithstanding the foregoing, the Indemnified Party shall
have the right to participate in any matter through counsel of its own choosing.
Such separate representation shall be at the cost and expense of the Indemnified
Party as long as the Indemnifying Party is pursuing the defense of such matter
diligently, reasonably and in good faith. If the Indemnifying Party within
fifteen (15) days fails to acknowledge in writing to the Indemnified Party its
obligation to defend any such matter or does not assume the defense hereunder
within fifteen (15) days diligently, reasonably and in good faith, the
Indemnified Party may undertake such defense through counsel of its choice and
at the Indemnifying Party's expense. Notwithstanding the foregoing, if a claim
relates to any environmental condition, or to an injunction or other equitable
relief with respect to the operation or condition of the Business, or in Buyer's
opinion would affect the operation or condition of the Business, Buyer shall
nevertheless notify the Indemnified Party but Buyer may take all such actions as
it deems advisable in respect of such matter, and may defend such claim with
Buyer's own personnel and counsel, consultants and other parties of its own
choosing. Sellers and Stockholder shall reimburse Buyer for such defense by
Buyer for all losses, damages and liabilities, including but not limited to,
fees of attorneys, consultants or other third parties engaged by Sellers,
Stockholder or Buyer in respect of any such claim or proceeding or litigation or
settlements resulting therefrom.
Section 3.6 Limitation on Indemnification.
(j) Pursuant to Section 3.3, none of the Sellers or
Stockholder shall be required to indemnify any of the persons specified
in Section 3.3, as the case may be, with respect to a Loss incurred as
a result of a breach of a representation or warranty until the amount
of such Loss, when aggregated with all other Losses, shall exceed
$100,000 (the "Minimum Indemnification Threshold"), at which time all
Losses may be asserted, including amounts under the Minimum
Indemnification Threshold, and indemnification in respect of all Losses
shall thereafter be available; provided, however, that the foregoing
Minimum Indemnification Threshold shall not apply to any Loss that
results from or arises out of (i) a write-off or write-down of an
account receivable in an amount greater than $10,000, (ii) a breach of
the representations or warranties set forth in Sections 5.1(a), 5.1(e),
5.1(f), 5.1(h), or 5.1(k) (the "Specified Warranties"), or (iii) a
breach, on the part of any of the Sellers or Stockholder, of any
covenant set forth in this Agreement (except for covenants regarding
indemnification in respect of representations and warranties other than
the Specified Warranties).
(k) In addition to the foregoing, the maximum amount of
damages that the Buyer or Cotelligent on the one hand, or Sellers and
Stockholders, on the other hand, may recover from the other parties
hereto as a result of such other parties' breaches of their
representations and warranties hereunder (other than the Specified
Warranties) pursuant to this Article 3 hereof shall be $28,740,000.
(l) In the event Buyer or Cotelligent is indemnified for any
breach of any representation related to the accounts receivable of any
Seller, Buyer shall transfer to the applicable Indemnifying Party,
without recourse, any uncollected accounts receivable for which Buyer
has received indemnification hereunder. Such Indemnifying Party may
collect the account receivable for its own account.
Section 3.7 Strict Liability. WITHOUT LIMITING OR ENLARGING THE SCOPE
OF THE INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS AGREEMENT, THE PARTIES
HERETO SHALL BE ENTITLED TO INDEMNIFICATION IN ACCORDANCE WITH THE TERMS HEREOF,
REGARDLESS OF WHETHER THE LOSS OR CLAIM GIVING RISE TO SUCH INDEMNIFICATION
OBLIGATION IS THE RESULT OF THE STRICT LIABILITY OF THE PARTY INDEMNIFIED. THE
PARTIES AGREE THAT THIS PARAGRAPH CONSTITUTES A CONSPICUOUS LEGEND.
ARTICLE 4.
CLOSING
Section 4.1. Time and Place of Closing. The closing (the "Closing") of
the purchase and sale of the Assets shall take place at 10:00 a.m. on November
30, 1998 at the offices of Xxxxx & Hosteltler LLP, located at 000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, unless an alternative time and place
is mutually agreed to by Buyer and Sellers. All documents may be exchanged by
mail, carrier, or other means. The date of the Closing is referred to herein as
the "Closing Date."
Section 4.2. Deliveries by Sellers and Stockholder. On the Closing Date,
Sellers and Stockholder will deliver the following:
(a) a Xxxx of Sale, Assignment and Assumption of Liabilities
Agreement, in form and substance satisfactory to Buyer and Cotelligent,
conveying, selling, transferring and assigning to Buyer all of the
Assets (the "Xxxx of Sale");
(b) a certificate confirming that the representations and
warranties of the Sellers set forth herein were true and correct on and
as of the Closing Date and that all covenants to be performed by the
Sellers as of such date had been fully performed and complied with;
(c) an employment agreement between Buyer and Stockholder in
form and substance satisfactory to Buyer, Cotelligent and Stockholder;
(d) an opinion of Sellers' counsel in form and substance
satisfactory to Buyer and Cotelligent; and
(e) such other additional instruments of sale, assignment or
transfer as may be reasonably required by Buyer.
Section 4.3. Deliveries by Buyer. On the Closing Date, Buyer will deliver
to Sellers the following:
(a) the Cash Payment and the Stock Payment;
(b) a certificate confirming that the representations and
warranties of the Buyer set forth herein were true and correct on and
as of the Closing Date and that all covenants to be performed by the
Buyer as of such date have been fully performed and complied with;
(c) an assumption agreement regarding Buyer's assumption of
the Assumed Liabilities consistent with the terms hereof;
(d) an employment agreement between Buyer and Stockholder in
form and substance satisfactory to Buyer, Cotelligent and Stockholder;
and
(e) an opinion of Buyer's counsel in form and substance
satisfactory to Sellers and Stockholder.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF SELLERS AND STOCKHOLDER
Section 5.1. Representations and Warranties. Each Seller and Stockholder
jointly and severally represent and warrant to Buyer that:
(a) Authority. Sellers have full power and capacity, is under
no legal restraint, and has all necessary authority to enter into this
Agreement, perform Sellers' obligations hereunder and consummate the
transactions contemplated hereby. Each Seller is a corporation duly
organized and constituted and in good standing under the laws of the
State of Florida. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the compliance
by Sellers with the terms of this Agreement do not and will not
conflict with or result in a breach of any terms of, or constitute a
default under, each respective Seller's Articles of Incorporation or
Bylaws or, any material agreement or instrument to which such Seller is
a party or by which it is bound, except as would not be reasonably
expected to have a material adverse effect on the results of operations
or financial condition of the Business. This Agreement constitutes a
valid obligation of each Seller enforceable in accordance with its
terms except as limited by (i) bankruptcy, insolvency, reorganization
or other such laws concerning the rights of creditors and (ii) general
principles of equity. Stockholder is the sole record and beneficial
owner of all capital stock and equity securities of Sellers, and no
party has any option or right to acquire any such stock or securities.
Stockholder has full power and capacity to enter into this Agreement,
perform Stockholder's obligations hereunder and consummate the
transactions contemplated hereby.
(b) Compliance with Law. To the best of Stockholder's
knowledge, each Seller is in compliance with all applicable federal,
state or local laws, statutes, ordinances, permits, licenses, orders,
approvals, variances, rules or regulations or judicial or
administrative decisions, except for insignificant instances of
non-compliance that would not, individually or in the aggregate, have
material adverse effect upon the Assets or the operation or financial
condition of the Business. No Seller has received any notice of an
alleged violation of any of the foregoing matters other than as set
forth in Schedule 5.1(b). Sellers have been granted all licenses,
permits, consents, authorizations and approvals from federal, state and
local government regulatory bodies necessary or desirable to carry on
the Business, all of which are (i) listed on Schedule 5(b) and (i)
currently in full force and effect. To the best of Stockholder's
knowledge each of the Assets complies in all respects with all federal,
state and local laws, statutes, ordinances, permits, licenses,
approvals, rules and regulations applicable thereto.
(c) Approvals. No authorization, consent or approval of, or
registration or filing with, any Governmental Authority (as hereinafter
defined) or any other person is or was required to be, and has not
been, obtained or made by any Seller or Stockholder in connection with
the execution, delivery or performance of this Agreement.
(d) Contracts.
(i) Contracts. A complete and accurate set of all
Contracts, certified as such, has been delivered to Buyer
simultaneously with the execution of this Agreement. True and
complete copies of each written Contract, and accurate and
complete written summaries of each oral Contract, have been
provided to Buyer prior to the execution of this Agreement.
(ii) Customer Contracts. Except as set forth on
Schedule 1.2, the applicable Seller is currently providing
services pursuant to each Customer Contract; and all Customer
Contracts are (and will be immediately following the Closing
Date) in existence and in full force and effect and are valid,
binding and enforceable against the respective parties thereto
in accordance with their respective provisions. Sellers have
in all material respects performed all obligations required to
be performed by them under the Contracts prior to the Closing
Date, and to the best of Stockholder's knowledge, no other
party to such Contracts has in any material respect breached
any such Contract or is in any material respect in default
thereunder.
(iii) Certain Contracts. No Seller has entered into
any noncompetition agreements (including any Customer
Contracts that in any respect purport to limit Sellers', or
any of their affiliates', rights or abilities to provide any
services to any customers that may compete with the other
party to such Customer Contract) or any agreements requiring
the confidentiality of any information (other than the
confidentiality agreements contained in or entered into in
connection with the Customer Contracts) nor has outstanding
any powers of attorney or similar agreements or arrangements.
(e) Title to the Assets. Each of the Sellers has good and
marketable title to its Assets, free and clear of all Liens (other than
Permitted Liens). By virtue of the grant, conveyance, sale, transfer,
and assignment of the Assets hereunder, Buyer shall receive good and
marketable title to the Assets, free and clear of all Liens other than
Permitted Liens. The Assets include all of the permits, licenses,
franchises, consents and other approvals necessary or desirable to
conduct the Business. The Assets that are tangible Assets are in good
working condition, ordinary wear and tear excepted.
(f) Litigation. Except as set forth on Schedule 5.1(f) hereof,
there is no claim, litigation, action, suit or proceeding,
administrative or judicial, pending or threatened against any Seller or
otherwise involving the Assets, the Business or the transactions set
forth herein, at law or in equity, before any federal, state or local
court or regulatory agency, or other governmental authority. Sellers
have received no notice of any of the above and no facts or
circumstances exist which would, with the passage of time or giving of
notice (or both), give rise to any of the above.
(g) Employees.
(i) Attached as Schedule 5.1(g)(i) hereof is a
complete list of all employees of Sellers and their respective
rates of compensation (including a breakdown of the portion
thereof attributable to salary, bonus and other compensation,
respectively) as of the Closing Date. Each such employee is an
employee at will, and Buyer shall be under no obligation to
employ, or continue to employ, any such employee after the
Closing, or to provide any compensation to any such person
upon termination of employment.
(ii) Each Seller has fully complied with the
verification requirements and the recordkeeping requirements
of the Immigration Reform and Control Act of 1986 ("IRCA"); to
the best of Stockholder's knowledge, the information and
documents on which each Seller relied in complying with IRCA
are true and correct; and there have not been any
discrimination complaints filed against any Seller pursuant to
IRCA.
(iii) No employee of any Seller are represented by
any labor union or covered by any collective bargaining
agreement nor, to the best of Stockholder's knowledge, is any
campaign to establish such representation in progress.
(iv) Except as set forth on Schedule 5.1(g)(iv), no
Seller has received or been notified of any complaint by any
employees, applicant, union, or other party of any
discrimination or other conduct forbidden by law.
(v) Each Seller has filed all required reports and
information that are due prior to the Closing Date and
otherwise has complied with all applicable regulatory
requirements within the jurisdiction of the United States
Equal Employment Opportunity Commission, United States
Department of Labor and state and local human rights and/or
civil rights agencies.
(vi) No Seller has received or been notified of any
intention by any of its employees to terminate his or her
employment or to seek a modification in the terms of his or
her employment, individually or collectively with other
employees.
(h) Employee Relations and Benefit Plans.
(i) Schedule 5.1(h) contains a list of all employee
pension benefits plans (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA") (sometimes referred to in this Section 5.1(h) as
"Pension Plans"), employee welfare benefit plans (as defined
in Section 3(1) of ERISA) (sometimes referred to in this
Section 5.1(h) as "Welfare Plans") and all other Benefit
Plans, as defined below, currently maintained in whole or in
part, contributed to by any or all Sellers for the benefit of
any present or former officer, employee or director of such
Sellers. For purposes of this Agreement, the term "Benefit
Plan" shall mean any collective bargaining agreement or any
bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, vacation, severance, disability, death
benefit, hospitalization, medical, dependent care, cafeteria,
employee assistance, scholarship or other plan, program,
arrangement or understanding maintained in whole or in part,
contributed to, or required to be contributed to by any Seller
for the benefit of any present or former officer, employee or
director of such Seller which is not a Pension Plan or Welfare
Plan. Each Seller has delivered to Buyer to the extent that
such documents exist and are in the possession of the Seller,
true, complete and correct copies of (a) each Pension Plan,
Welfare Plan and Benefit Plan (or, in the case of any
unwritten Benefit Plans, descriptions thereof) and all
amendments, (b) the most recent annual report on Form 5500
filed with the Internal Revenue Service ("IRS") with respect
to each Pension Plan or Welfare Plan (if any such report was
required), (c) the most recent IRS determination letter
request for each Pension Plan intended to be qualified under
Section 401(a) of the Code and all rulings or determinations
concerning such Pension Plan requested of the IRS subsequent
to the date of that letter, (d) the most recent summary plan
description for each Pension Plan for which such summary plan
description is required by ERISA and each summary of material
modifications prepared, as required by ERISA, after the last
summary plan description, and (e) each trust agreement and/or
group annuity contract relating to any Benefit Plan.
Each Pension Plan maintained and each pension plan
formerly maintained that is or was intended to be qualified
under Section 401(a) of the Code has been the subject of a
determination letter from the IRS to the effect that such plan
is qualified under Section 401(a) of the Code or can still be
submitted in a timely manner to the IRS for such a letter, and
no such determination letter has been revoked nor has
revocation of any such letter been threatened, nor has any
such plan been amended since the date of its most recent
determination letter or application therefor in any respect
that would adversely affect its qualification or materially
increase its costs, and nothing has occurred or failed to
occur which would cause the loss of such qualification; and
all amendments required to be adopted before the Closing Date
for any such Pension Plan to continue to be so qualified have
been or will be duly and timely adopted; provided however,
that to the extent that this representation applies to
terminated pension plans, this representation refers to the
qualified status of any such plan through the time of its
termination.
There are no voluntary employee benefit associations
maintained by any and all Sellers intended to be exempt from
federal income tax under Section 501(c)(9) of the Code by the
IRS.
The execution of this Agreement or the consummation
of the transactions contemplated by this Agreement will not
give rise to any, or trigger any, change of control, severance
or other similar provisions in any Pension Plan, Welfare Plan
or Benefit Plan other than as disclosed in Schedule 5.1(h).
The consummation of any transaction contemplated by this
Agreement will not result in any (A) payment (whether of
severance pay or otherwise) becoming due from any Seller to
any officer, employee, former employee or director thereof or
to the trustee under any "rabbi trust" or similar arrangement;
(B) benefit under any Benefit Plan of any Seller or Buyer
being established or becoming accelerated, vested or payable;
or (C) payment or series of payments by any Seller or Buyer,
directly or indirectly, or any person that would constitute a
"parachute payment" within the meaning of Section 280G of the
Code.
No Seller provides post-retirement medical, health,
disability or death protection coverage or contributes to or
maintains any employee welfare benefit plan which provides for
medical, health, disability or death benefit coverage
following termination of employment by any officer, director
or employee except as is required by Section 4980B(f) of the
Code or other applicable statute, nor has it made any
representations, agreements, covenants or commitments to
provide that coverage.
No Pension Plan is subject to Title IV of ERISA. None
of the Sellers, any officer of any Seller or any of the
Pension Plan or Welfare Plans (including the Pension Plans and
prior pension plans) which are subject to ERISA, or any trusts
created thereunder, or any trustee or administrator thereof,
has engaged in a "prohibited transaction" (as such term is
defined in Section 406, 407 or 408 of ERISA or Section 4975 of
the Code) or any other breach of fiduciary responsibility that
could subject Buyer or any of its respective officers to the
tax or penalty on prohibited transactions imposed by such
Section 4975 of the Code or to any liability under Section
502(i) or (l) of ERISA which would have a material adverse
effect on Buyer.
With respect to any Welfare Plan, (A) each such
Welfare Plan that is a group health plan, as such term is
defined in Section 5000(b)(1) of the Code, complies in all
material respects with any applicable requirements of Part 6
of Title I of ERISA and Section 4980B(f) of the Code and (B)
each such Welfare Plan (including any such plan covering
retirees or other former employee) may be amended or
terminated with respect to health benefits without material
liability to any Seller or Buyer on or at any time after the
Closing Date.
All contributions required by law or other agreement
to be made under the Pension Plan, Welfare Plan or Benefit
Plans with respect to all periods through the Closing Date,
including a pro rata share of contributions due for the
current plan year, will have been made by such date or
provided for by adequate reserves by each Seller. No changes
in contribution rates or benefit levels have been implemented
or negotiated (but not yet implemented), with respect to any
Pension Plan, Welfare Plan or Benefit Plan since the date on
which the information provided in the attached schedule has
been provided, and no such changes are scheduled to occur.
No Seller nor Buyer have or will have any material
liability or obligation for taxes, penalties, contributions,
losses, claims, damages, judgments, settlement costs,
expenses, costs or any other liability or liabilities of any
nature whatsoever arising out of or in any manner relating to
any Pension Plan, Welfare Plan or Benefit Plan that has been,
or is, contributed to by any entity, whether or not
incorporated, which is deemed to be under common control (as
defined in Section 414 of the Code), with any Seller.
(i) Financial Statements; Gross Revenues; Records and Customer
Lists. Copies of the following financial statements (the "Financial
Statements") of each of the Sellers are attached hereto as Schedule
5.1(i):
(i) Each Seller's audited balance sheet as of
December 31, 1997 and statements of earnings, cash flows and
retained earnings for the year then ended; and
(ii) Each Seller's unaudited balance sheet (the
"Balance Sheet") as of September 30, 1998 (hereinafter
referred to as the "Balance Sheet Date") and statements of
earnings for the ten (10) month period then ended.
Such Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated ("GAAP"), except that such unaudited
financial statements do not contain the information and disclosures to
be found in notes to financial statements prepared in accordance with
GAAP, and interim statements included within such financial statements
are subject to normal year-end adjustments. Such balance sheets present
fairly the financial condition of the Sellers as of the dates indicated
thereon, and such statements of earnings, and cash flows and retained
earnings present fairly the results of its operations for the periods
indicated thereon. The gross revenues of Sellers in respect of the
Business during the year ended December 31, 1997 and during the
ten-month period ended October 31, 1998 were at least $_____________
and $________________, respectively. Sellers have provided Buyer copies
of their respective books, ledgers and accounting records and such
books, ledgers and records are correct and complete and accurately
reflect all transactions of the applicable Seller. The books, ledgers
and records provided to Buyer contain a correct and complete list of
each of the customers of Sellers who has purchased goods and/or
services during the three-year period ending on the Closing Date. No
Seller has supplied or sold the customer list to any other party and no
third party has obtained any Seller's customer list.
(j) Accounts Receivable. Each Seller has delivered to Buyer an
accurate list as of the Closing Date of the accounts receivable. Such
accounts are collectible in the amount shown on such list.
(k) Taxes. With respect to each Seller, to the best of
Stockholder's knowledge, (i) all tax returns and all similar filings
required to be filed on or before the Closing Date by any and all
Sellers (true and correct copies of which have been furnished to Buyer)
with respect to any taxes have been timely filed with the appropriate
governmental agencies in all jurisdictions in which such tax returns
are required to be filed, and all such tax returns correctly reflect in
all material respects the liability of the applicable Seller or Sellers
for taxes for the periods, properties or events covered thereby; (ii)
all taxes payable with respect to the tax returns, and all taxes
accruable with respect to events occurring through the Closing Date or
otherwise arising in connection with any periods prior to and including
the Closing Date, whether disputed or not, and whether or not shown on
any tax return, have been paid in full prior to the Closing Date, or
adequate provisions and reserves shall have been made in respect
thereof in Sellers' financial statements attached hereto as Schedule
5.1(i); (iii) no deficiency in respect of any taxes which has been
assessed against any Seller remains unpaid and there are no unassessed
tax deficiencies or any audits or investigations pending or threatened
against any Seller with respect to any taxes, (iv) there is in effect
no extension for the filing of any tax return and no Seller has
extended or waived the application of any statute of limitations of any
jurisdiction regarding the assessment or collection of any tax; (v) no
claim has ever been made by any tax authority in a jurisdiction in
which any Seller does not file tax returns that it is or may be subject
to taxation by that jurisdiction; (vi) there are no liens for taxes
upon any asset of any Seller except for liens for current taxes not yet
due; (vii) no issues have been raised in any examination by any tax
authority with respect to any Seller which, by application of similar
principles, reasonably could be expected to result in a proposed
deficiency for any other period not so examined; (viii) no Seller is a
party to any tax allocation or sharing agreement or otherwise under any
obligation to indemnify any person with respect to any taxes; (ix) no
Seller is a party to any joint venture, partnership or other
arrangement that is treated as a partnership for federal income tax
purposes; (x) there are no accounting method changes or proposed
accounting method changes of any Seller that could give rise to an
adjustment under section 481 of the Internal Revenue Code of 1986, as
amended (the "Code"), for periods after the Closing Date; (xi) there
are no requests for rulings in respect of any tax pending between
Sellers and any tax authority; (xii) no Seller has ever been a member
of any affiliated group as defined in Section 1504 of the Code; (xiii)
each Seller has timely made all deposits required by law to be made
with respect to employees' withholding and other employment taxes;
(xiv) no Seller has filed any consent under Section 341(f) of the Code;
and (xv) none of the Assets (A) is treated as owned by any other person
under the "safe harbor lease" provisions of former Section 168(f)(8) of
the Code, (B) constitutes "tax-exempt use property" within the meaning
of Section 168(h)(1) of the Code or (C) is tax-exempt bond financed
property within the meaning of Section 168(g) of the Code. The Assets
transferred to Buyer pursuant to this Agreement constitute the entire
operating assets of any and all Sellers, and therefore each Seller's
sale of the Assets to Buyer hereunder will not result in any sales, use
or similar tax. Should any governmental authority elect to assess any
sales, use or similar tax as a result of the conveyance made herein
(but not with regard to any transfers or conveyances made prior to the
Closing Date), Sellers shall pay same and hold Buyer harmless
therefrom. In the case of each Seller, a valid S election (as described
in Section 1326(a) of the Code) is in effect.
(l) Environmental Matters. To the best of Shareholder's
knowledge, each of the Sellers and all of the Assets are in compliance
with, and are not subject to any liability under, applicable federal,
state and local environmental and public or occupational health or
safety law, regulation or code or requirements relating to manufacture,
storage, transport, generation, use, treatment, disposal or handling of
pollutants, contaminants, hazardous, toxic or other wastes, substances,
or materials ("Environmental Laws"). Each Seller holds all permits and
registrations required by the Environmental Laws for the operation of
its business. Sellers have not received any notice, oral or written, of
any environmental or public health or safety liability or violation. No
Seller has buried, dumped, disposed of, spilled or released any
pollutants, contaminants or hazardous or toxic wastes, substances or
materials, including paint and similar substances, which would
constitute a violation of the Environmental Laws.
(m) Absence of Changes. Except as disclosed in Schedule
5.1(m), since September 30, 1998 there has not been:
(i) any material adverse change in the financial
condition, assets, liabilities (contingent or otherwise),
income or business of any Seller;
(ii) any material damage, destruction or loss
(whether or not covered by insurance) materially adversely
affecting the properties or Business of any Seller;
(iii) any material increase in the compensation,
bonus, sales commission, fringe benefits or fee arrangement
payable or to become payable by any Seller to any of its
officers, directors, employees, consultants or agents, or any
change in the method by which sales commissions are calculated
and paid;
(iv) to the best of Stockholder's knowledge, any work
interruptions, labor grievances or claims filed, proposed law
or regulation or any event or condition of any character,
materially adversely affecting the business or future
prospects of any or all Sellers;
(v) any sale or transfer, or any agreement to sell or
transfer, any material assets, property or rights of any
Seller to any person, other than in the ordinary course of
business including, without limitation, the Stockholder and
her affiliates;
(vi) any cancellation, or agreement to cancel, any
material indebtedness or other obligation owing to any Seller,
including without limitation any indebtedness or obligation of
Stockholder or any of her affiliates;
(vii) any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in any
of the assets, property or rights of any Seller or requiring
consent of any party to the transfer and assignment of any
such assets, property or rights other than rights of Buyer;
(viii) any material purchase or acquisition, or
agreement, plan or arrangement to purchase or acquire, any
property, rights or assets;
(ix) to the best of Stockholder's knowledge, any
waiver of any material rights or claims of any Seller;
(x) to the best of Stockholder's knowledge, any
breach, amendment or termination of any material contract,
agreement, license, permit or other right to which any Seller
is a party;
(xi) any material transaction by any Seller outside the
ordinary course of its business;
(xii) any dividend or other distribution by any
Seller, except for any distributions necessary to enable
Stockholder to pay taxes attributable to Sellers' Business; or
(xiii) any authorization, approval, agreement or
commitment to do any of the foregoing.
(n) Relations with Governments. Neither any Seller,
Stockholder nor, to any Seller's and Stockholder's knowledge, any
director, officer, agent, employee or other person acting on behalf of
any such Seller, has used any funds of any Seller for improper or
unlawful contributions, payments, gifts or entertainment, or made any
improper or unlawful expenditures relating to political activity to
domestic or foreign government officials or others. No Seller,
Stockholder nor, to any Seller's or Stockholder's knowledge, any
director, officer, agent, employee or other person acting on behalf of
any Seller, has accepted or received any unlawful contributions,
payments, gifts or expenditures. Each Seller has at all times complied,
and is in compliance, with the Foreign Corrupt Practices Act and with
all foreign laws and regulations relating to prevention of corrupt
practices.
(o) Future Plans and Commitments. Schedule 5.1(o) contains a
summary description of all plans or projects involving the opening of
new operations, expansion of any existing operations or the acquisition
of any real or personal property or existing business, to which any
Seller has committed any material funds in the two year period prior to
the date of the Agreement, which if pursued by such Seller would
require additional expenditures of significant efforts or capital.
(p) Prospectus Delivery. Each Seller represents and
acknowledges that such Seller has been provided with a Prospectus dated
May 29, 1998.
(q) Intellectual Property. To the best of Stockholder's
knowledge, each Seller owns or has valid, binding and enforceable
rights to use all patents, trademarks, trade names, service marks,
service names, copyrights, applications for any of the foregoing, and
licenses or other rights in respect of any of the foregoing
("Intellectual Property"), used or held for use in connection with its
Business, without any conflict with the rights of others. To the best
of Stockholder's knowledge, no Seller has received any notice from any
other person pertaining to or challenging the right of such Seller to
use any Intellectual Property or technology owned or used by or
licensed to such Seller. No Seller has granted any outstanding licenses
or other rights, and has no obligation to grant any licenses or other
rights, under, and Stockholder has no rights in or to, any of the
Intellectual Property or technology owned or used by or licensed to any
or all Sellers. No claims have been made by any Seller of any violation
or infringement by others of the rights of such Seller with respect to
any Intellectual Property or technology of such Seller, and neither
Stockholder nor any Seller knows of any basis for the making of any
such claim. To the best of Stockholder's knowledge, neither the
Stockholder nor any Seller has violated or infringed any Intellectual
Property or technology rights of others. The Stockholder has delivered
to Cotelligent on Schedule 5.1(q) a complete and correct list and
summary description of all Intellectual Property and technology owned
by, used by or licensed by any Seller. To the best of Stockholder's
knowledge, the Intellectual Property owned by Sellers and included in
the Assets sold by them to Buyer hereunder: (i) are all Intellectual
Property assets that are needed by Sellers to conduct their Business;
(ii) may be transferred to Buyer hereunder without the consent or
approval of any other party; and (iii) will not, as a result of such
transfer, be restricted, reduced or diminished in any respect, or made
subject to any additional costs or payments in respect of Buyer's use
thereof after Closing (other than ongoing payments at the same rate as
applicable to Sellers' use thereof).
(r) Xxxx-Xxxxx-Xxxxxx Matters. Stockholder is not "controlled"
by any other person, and is the "ultimate parent entity" of the
"acquired persons" in connection with the transactions contemplated
hereby, in each case as such terms are defined in the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act");
Stockholder and Sellers collectively (together, in each case, with any
entities controlled by them) do not have assets of $10,000,000 or more
according to her or its most recently prepared financial statements;
and the transactions contemplated by this Agreement do not result in
any requirement to make any notification or other filing in connection
with the HSR Act.
(s) No Material Obligations. No Seller is bound by, and none
of the Assets are subject to, any liabilities, obligations or
restrictions, imposed by, or in connection with, the federal bankruptcy
proceeding under Chapter 11 of the United States Bankruptcy Code
instituted by Xxxxx Consulting, Inc. in 1993, except for certain
obligations to make future payments to third parties that (i) are
reflected on Sellers' Balance Sheet and (ii) do not in the aggregate
exceed $10,000.
(t) Disclosure. To the best of Stockholder's knowledge, the
representations and warranties contained in this Section 5.1 do not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Section 5.1 not misleading. If any Seller or
Stockholder becomes aware of any fact or circumstance which would
change a representation or warranty of such Seller or Stockholder in
this Agreement, he or it shall immediately give notice of such fact or
circumstance to Buyer. However, such notification shall not relieve
such Seller or Stockholder of its or her obligations under this
Agreement, and at the sole option of Buyer, the truth and accuracy of
any and all warranties and representations of Sellers or Stockholder at
the date of this Agreement and on the Closing Date, shall be a
precondition to the consummation of this transaction. To the best of
Stockholder's knowledge, all information or materials provided by
Stockholder or any and all Sellers (or their respective agents or
employees) to Buyer or its agents or employees in connection with
Buyer's examination of the business, assets and prospects of such
Sellers have, in each case, been true and correct.
Section 5.2. Survival. Each of the covenants, representations and
warranties set forth in this Article 5 or elsewhere in this Agreement shall
survive the Closing Date and the transfer of the Assets and shall remain in
effect forever without any limitation as to time.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 6.1. Representations and Warranties. Buyer represents and warrants
to Sellers that:
(a) Corporate Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Florida.
(b) Authorization. Buyer and Cotelligent each have all
requisite corporate power and corporate authority to enter into this
agreement, perform their respective obligations hereunder and
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement, the consummation of the transactions
contemplated hereby and the compliance by Buyer and Cotelligent with
the terms of this Agreement do not and will not conflict with or result
in a breach of any terms of, or constitute a default under, their
respective Certificates of Incorporation or Bylaws or, in any material
respect, any material agreement or instrument to which Buyer or
Cotelligent is a party or by which either is bound. All necessary
corporate action has been taken by Buyer and Cotelligent with respect
to the execution and delivery of this Agreement, and this Agreement
constitutes a valid obligation of each of Buyer and Cotelligent
enforceable in accordance with its terms except as limited by
bankruptcy, insolvency, reorganization or other such laws concerning
the rights of creditors.
(c) WARN Act Liability. Buyer shall hire certain employees of
Sellers in order to avoid liability under the Workers Adjustment and
Retraining Notification Act (23 UCS ss.2101 et seq.) (the "WARN Act")
that may result from the termination of Seller's employees in
connection with the closing of the sale of the assets of Seller to
Buyer.
Section 6.2. Representations Related to the Cotelligent Stock
(a) Common Stock to be Received by the Stockholder. The shares
of Cotelligent Stock to be received by Sellers pursuant to this
Agreement will, when issued and delivered to Sellers, be duly and
validly issued, fully paid, nonassessable and free of preemptive rights
or other restrictions other than those imposed pursuant to securities
laws and those expressly provided for in this Agreement and will be
substantially equivalent to other shares of Cotelligent Stock. Such
shares of Cotelligent Stock when delivered to Sellers pursuant to this
Agreement will have been registered under the Securities Act, and will
be issued pursuant to an effective registration statement. Such shares
will be listed on the New York Stock Exchange, Inc. or such other
principal exchange or market on which Cotelligent's Common Stock is
traded at the time of issuance of such shares, and, subject to the
contractual restrictions on transfers set forth at Section 8.3 hereof
and any restrictions imposed under applicable federal and state
securities laws, may be resold in open market transactions.
(b) NYSE Listing. Cotelligent's Common Stock is currently duly
listed on the New York Stock Exchange, Inc. and no inquiry or
proceeding has been initiated or, to Buyer's knowledge, threatened for
the purpose of causing such listing to be terminated or restricted.
Section 6.3 Governmental Authorization. Neither the execution, delivery
or performance by Buyer of this Agreement requires any action by or in respect
of, or filing with, any governmental body, agency, official or authority.
Section 6.4 Survival. Each of the covenants, representations and
warranties set forth in this Article 6 or elsewhere in this Agreement shall
survive the Closing Date and the transfer of the Assets and shall remain in
effect forever without limitation as to time.
ARTICLE 7.
NONCOMPETITION
Section 7.1. Restrictions. Each Seller and Stockholder jointly and
severally agree that for a period of five (5) years following the date hereof,
no Seller, Stockholder nor any of their affiliates will, directly or indirectly,
through any of its employees, agents, representatives or otherwise, without the
prior express written consent of Buyer:
(a) for her or itself or on behalf or in conjunction with any
other person, persons, company, partnership, corporation or business of
whatever nature, engage, as an officer, director, employee, agent,
shareholder, owner, lender, partner, joint venturer, or in a managerial
or consulting capacity, whether as an independent contractor,
consultant or advisor, or as a sales representative, or in any other
capacity, of any business in direct or indirect competition with the
Business, Cotelligent or the Buyer located or operating within the
forty-eight "lower" United States of America (i.e., states other than
Alaska or Hawaii) (the "Territory").
(b) call upon, or cause any of its affiliates to call upon,
any person who is, at that time, an employee of any Seller, Buyer or
Cotelligent or who has been an employee thereof within one (1) year
prior to that time, for the purpose or with the intent of enticing such
employee away from or out of the employ of Buyer or Cotelligent;
(c) engage or participate in any effort or act to induce any
customer, supplier, associate, employee, sales or other agent or
independent contractor of Buyer, the Business or Cotelligent or which
has been a customer, supplier, employee, sales or other agent or
independent contractor of Buyer, the Business or Cotelligent within one
(1) year prior to that time, to terminate such persons existing
arrangements or relationships with Buyer, Cotelligent or the Business
or to take any other action which might be disadvantageous to Buyer,
the Business or Cotelligent, and shall not for any reason whatsoever,
directly or indirectly, for themselves or on behalf or in conjunction
with any other person, persons, company, partnership, corporation or
business of whatever nature call upon any prospective acquisition
candidate that Stockholder or Sellers are aware of and helped develop
for Buyer or Cotelligent, on Stockholder's or any Sellers' behalf or on
behalf of any competitor which candidate and was either called upon by
Seller, Stockholder, Buyer or Cotelligent (including the respective
subsidiaries thereof) or for which Seller, Stockholder, Buyer or
Cotelligent, made an acquisition analysis, for the purpose of acquiring
such entity; or
(d) disclose the identity of the Business', Cotelligent or
Buyer's or their respective affiliates' existing or proposed customers
to any person or entity whatsoever, for any reason or purpose
whatsoever unless compelled to disclose such information in a judicial
or administrative proceeding or by governmental or regulatory
authority, in which case the Sellers and Stockholder will use
commercially reasonable efforts to obtain reasonable assurances that
confidential treatment will be accorded such information.
Section 7.2. Materiality. Each Seller and Stockholder agree that this
agreement regarding noncompetition is a material and substantial part of the
purchase and sale of Sellers' Assets hereunder.
Section 7.3. Specific Performance. Buyer will sustain great loss and
damage as a result of the breach by any Seller or Stockholder of the covenants
in this Article 7, and because of the immediate and irreparable damage that
would be caused to Buyer by such a breach for which it would have no adequate
remedy since monetary damages alone would not be an adequate remedy, each Seller
agrees that, in the event of a breach by any Seller or Stockholder of the
covenants in this Article 7, such covenants may be enforced by Buyer by, without
limitation, injunctions and restraining orders or other equitable relief and, to
the maximum extent permitted by applicable law each Seller and Stockholder
hereby waive Buyers' obligation to post a bond or other security in seeking such
relief. This remedy is in addition to damages directly or indirectly suffered by
Buyer and reasonable attorney's fees.
Section 7.4. Reasonable Restraint. It is agreed by the parties that the
covenants in this Article 7 impose a reasonable restraint on Sellers and
Stockholders in light of the activities and business of Sellers on the date of
the execution of this Agreement and the future plans of Buyer.
Section 7.5. Severability. The covenants of each Seller in this Article
7 are severable and separate, and the unenforceability of any specific covenant
shall not affect the provisions of any other covenant. Moreover, in the event
any court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the intention of
the parties that such restrictions be enforced to the fullest extent to which
the court deems reasonable, and this Article 7 shall thereby be reformed.
Section 7.6. Independent Covenants. The covenants of Sellers and
Stockholder in this Article 7 shall be construed as independent of any other
provision of this Agreement and the purchase of the Business, and the existence
of any claim or cause of action of any Seller against Buyer, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement by Buyer of such covenants.
ARTICLE 8.
CERTAIN POST-CLOSING COVENANTS OF SELLER, STOCKHOLDER AND BUYER
Section 8.1. Payment of Taxes; Filing of Returns. (a) Each Seller shall
remain liable for the filing of all tax returns and reports and for the payment
of all federal, state and local taxes of Sellers and Stockholder relating to the
operation of any Seller or to the Assets for any period ending on or prior to
the Closing Date and Sellers and Stockholder shall remain jointly and severally
liable for the payment of all taxes attributable to or relating to the
consummation of the transactions contemplated herein, and shall indemnify and
hold Buyer harmless from and against all liability in connection therewith, and
(b) Sellers and Stockholder shall jointly and severally bear the responsibility
for sales, use or other similar taxes, if any, arising out of the consummation
of the transactions herein provided for and shall be liable for the filing of
all necessary tax returns and reports with respect to such taxes.
Section 8.2. Name Change. Promptly after the Closing Date, Seller will
take all actions necessary to change its corporate name, and to make available
to Buyer such corporate name for its use for all purposes. Seller shall adopt a
new corporate name that does not contain the name "Xxxxx" or any form thereof.
Section 8.3. Restrictions on Transfer. 62.4% of the shares of
Cotelligent Stock issued in connection with the Stock Payment may be resold or
transferred by the applicable Seller, subject to compliance with applicable
securities laws, immediately upon the issuance of such shares to such Seller.
The remaining 37.6% of such shares of Cotelligent Stock may not be transferred
or assigned until the second anniversary of the Closing Date. Each Seller and
Stockholder acknowledge agree that all shares of Cotelligent Stock issued and
subject to the two-year limitation on transfers shall bear the following legend
while such restrictions apply to the shares represented by such certificate, in
addition to any other legend required under applicable law:
"THE SHARES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS WITH REGARD
TO THE TRANSFER THEREOF PURSUANT TO RULE 145 UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND FURTHER RESTRICTIONS ON TRANSFER PURSUANT TO A
PURCHASE AGREEMENT DATED NOVEMBER 30, 1998, AND MAY NOT BE SOLD,
TRANSFERRED OR DISPOSED OF, IN WHOLE OR IN PART, UNTIL SUCH
RESTRICTIONS ON TRANSFER HAVE TERMINATED."
Each Seller and Stockholder acknowledge and agree that all other shares of
Cotelligent Stock issued pursuant to this Agreement shall bear the following
legend while such restrictions apply to the shares represented by such
certificate, in addition to any other legend required under applicable law:
"THE SHARES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS WITH REGARD
TO THE TRANSFER THEREOF PURSUANT TO RULE 145 UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF,
IN WHOLE OR IN PART, UNTIL SUCH RESTRICTIONS ON TRANSFER HAVE
TERMINATED."
Upon the written request of Stockholder, Cotelligent will cause its transfer
agent to issue one or more certificates without such legend as to any shares
that are no longer subject to such restrictions.
Section 8.4 Severance Payments. Stockholder hereby covenants and agrees
that she will take no action or fail to take any action which would cause or
give rise to any obligation on the part of Buyer or Cotelligent to make any
severance or other payments under that certain Employment Agreement with Xxxx
Xxxxxx without the authorization or prior written consent of Cotelligent.
ARTICLE 9.
GENERAL
Section 9.1. Further Assurance. From time to time after the Closing
Date, Sellers will, without further consideration, execute and deliver such
other instruments of conveyance and transfer, and take such other action
including, without limitation, assistance in connection with litigation, as
Buyer reasonably may request to more effectively convey and transfer to and vest
in Buyer and to put Buyer in possession of the Assets to be transferred
hereunder. Sellers and Shareholder hereby covenant and agree to use all
reasonable efforts to assist Cotelligent and Buyer in filing all applicable
reports and forms with the Securities and Exchange Commission (including a
Report on Form 8-K, if applicable, reporting the transactions set forth herein)
or any other governmental or regulatory entity.
Section 9.2. Notices. All notices or communications required or
permitted under this Agreement shall be given in writing and served either by
personal delivery, overnight courier or by deposit in the United States mail and
sent by first class registered or certified mail, return receipt requested,
postage prepaid:
If to any Seller: The Xxxxx Companies
000 X. Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxx
with copy to: Xxxxx & Xxxxxxxxx, LLP
Sun Trust Center
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx
If to Buyer or Cotelligent:Cotelligent, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
with copy to: Mayor, Day, Xxxxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxxxxxx
Notice shall be deemed given and effective the day personally delivered, the day
after being sent by overnight courier and three days after deposit in the U.S.
mail as provided above, or when actually received, if earlier. Any party may
change the address for notices or communications to be given to it by written
notice to the other party given as provided in this Section.
Section 9.3. Entire Agreement. This Agreement, the Schedules hereto and
the other agreements referred to herein constitute the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
supersede all prior and contemporaneous agreements and understandings, oral or
written, relative to said subject matter.
Section 9.4. Broker's Commission. If for any reason a commission or fee
shall become due, the party dealing with such dealer, broker or agent shall pay
such commission or fee and agrees to indemnify and save the other party harmless
from all claims for such commission or fee and from all attorneys' fees,
litigation costs and other expense relating to such claim.
Section 9.5. Modification; Remedies Cumulative. This Agreement may not
be changed, amended, terminated, augmented, rescinded or otherwise altered, in
whole or in part, except by a writing executed by the parties hereto. No right,
remedy or election given by any term of this Agreement shall be deemed exclusive
but each shall be cumulative with all other rights, remedies and elections
available at law or in equity.
Section 9.6. Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable and so as to most
nearly retain the intent of the parties. If such modification is not possible,
such provision shall be severed from this Agreement. In either case the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired hereby.
Section 9.7. Availability of Records. Each party shall cooperate in
providing the other party with copies of, or reasonable access to, (a) such
records as Sellers may need in connection with any audit, claim, challenge or
review of Sellers' tax liabilities and (b) such business records as Buyer may
reasonably deem relevant to its operation of the Business and the Assets.
Section 9.8. Allocation of Purchase Price. The parties agree that the
purchase price shall be allocated among the Assets (including rights of Buyer
under the covenants pursuant to Article 7 hereof) in such manner as Buyer will
specify in a written schedule delivered to Sellers as soon as is practicable
after the Closing Date.
Section 9.9. Construction. Buyer and Sellers have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by Buyer and Sellers and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
of the provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
Section 9.10. Attorney's Fees. In the event any litigation to enforce
the terms of this Agreement or in the event of arbitration, the prevailing party
shall be awarded against the non-prevailing party, its reasonable attorney's
fees and costs, including those incurred at all levels of proceedings.
Section 9.11. Waiver. The waiver of any of the terms or conditions of this
Agreement shall not be construed as a waiver of any other term or condition
hereof.
Section 9.12. Counterparts. This Agreement may be executed in several
counterparts, each of which when so executed shall be deemed to be an original,
and such counterparts shall together constitute and be one and the same
instrument.
Section 9.13. Time is of the Essence. Time is of the essence of each
and every provision of this Agreement and any exhibit, modification, or addendum
hereto.
Section 9.14. Governing Law. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
COTELLIGENT:
COTELLIGENT, INC.
By: /S/ Xxxxxxxx X. Xxxx
Name: Xxxxxxxx X. Xxxx
Title: Secretary
BUYER:
THE XXXXX COMPANIES, INC.
By: /S/ Xxxxxxxx X. Xxxx.
Name: Xxxxxxxx X. Xxxx
Title: Secretary
SELLERS:
XXXXX CONSULTING, INC.
By: /S/ Xxx Xxxxx
Name: Xxx Xxxxx
Title: President
XXXXX PROCESSING, INC.
By: /S/ Xxx Xxxxx
Name: Xxx Xxxxx
Title: President
XXXXX INSTITUTE, INC.
By: /S/ Xxx Xxxxx
Name: Xxx Xxxxx
Title: President
OPTIUM ADMINISTRATIVE
RESOURCES, INC.
By: /S/ Xxx Xxxxx
Name: Xxx Xxxxx
Title: President
STOCKHOLDER:
/S/ Xxx Xxxxx
Xxx Xxxxx
