STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated as of
November 8, 2000, by, between and among CALIFORNIA SOFTWARE
CORPORATION, a Nevada corporation ("Buyer"), UNIBOL, LTD, a
United Kingdom corporation ("Company"), ICS COMPUTING GROUP LTD,
a United Kingdom corporation ("Shareholder"), and UNICOMP, INC.,
a Colorado corporation ("Parent").
R E C I T A L S
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A. Company is engaged in the business of IBM Midrange
migration software product development, marketing and sales (the
"Business"). Parent owns or controls all the issued and
outstanding shares of capital stock of Shareholder and
Shareholder owns all the issued and outstanding share capital of
the Company ("Shares") through its ownership of [1 ordinary share
of L1 each] ("Common Shares").
B. Buyer desires to purchase the Shares from Shareholder
and Shareholder desires to sell the Shares to Buyer, upon the
terms and conditions herein set forth.
NOW THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, and intending to be legally
bound hereby, the parties hereto agree as follows.
1. PURCHASE AND SALE OF SHARES.
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Subject to the terms and conditions of this Agreement, on
the Closing Date (as hereinafter defined) Parent shall cause
Shareholder to sell to Buyer and Buyer shall purchase from
Shareholder all the Shares.
2. PURCHASE PRICE - PAYMENT.
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2.1 Purchase Price. The purchase price for the Shares is Three
Million Dollars (the "Purchase Price") and shall be payable as
follows:
(a) $1,000,000, cash payable on the Closing Date;
(b) $500,000, cash payable in equal monthly installments over
four (4) months; each installment payment shall be due on or
before the first of each month beginning with the second month
after that in which the Closing Date falls (e.g., if the Closing
Date is November 8, 2000, then the first installment is due on or
before December 1, 2000); and
(c) $1,500,000, payable in Buyer's common stock valued as of the
date this final payment is due on the six (6) month anniversary
of the Closing Date which payment shall be expressly conditioned
upon the execution, delivery and closing of the Merger Agreement
by Parent and Buyer.
2.2 Payment. All cash payments under this Section 2 shall be
made in the form of Buyer's check payable to the order of the
recipient. At Parent's election, the payment required by Section
2.1(a) shall be made by wire transfer pursuant to instructions
from Parent reasonably in advance of the Closing Date (as
hereinafter defined).
3. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF PARENT,
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SHAREHOLDER AND COMPANY.
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Parent, Shareholder and Company, jointly and severally, make
the following representations and warranties to Buyer, each of
which, except as disclosed in the Disclosure Schedule, is true
and correct on the date hereof, shall remain true and correct to
and including the Closing Date, and shall survive the Closing of
the transactions provided for herein as set forth in Section 8.5.
3.1 Corporate.
(a) Organization. Company is a private company limited by
shares and duly incorporated under the laws of the United
Kingdom.
(b) Corporate Power. Company has all requisite corporate power
and authority to own, operate and use its properties and to carry
on its business as and where such is now being conducted.
(c) Qualification. Company is duly licensed or qualified to do
business as a foreign corporation, and is in good standing, in
each jurisdiction wherein the character of the properties owned
or leased by it, or the nature of its business, makes such
licensing or qualification necessary. The countries and states
in which Company is licensed or qualified to do business are
listed in Schedule 3.1(c).
(d) Subsidiaries. Company does not own any interest in any
corporation, partnership or other entity.
(e) Corporate Documents, etc. The certified copies of the
Articles of Association and Memorandum of Association of the
Company, including any amendments thereto, have been delivered by
Shareholder to Buyer, and are true, correct and complete copies
of such instruments as presently in effect. The corporate minute
book and statutory records of the Company have been furnished to
Buyer for inspection, and are true, correct and complete and
accurately reflect all material corporate action taken by the
Company. The directors and officers of the Company are listed in
Schedule 3.1(e).
(f) Capitalization of the Company. As of the Closing Date, the
authorized capital stock of the Company consists entirely of 1
ordinary share of L1 each fully paid. The Shares constitute the
whole of the allotted and issued share capital of the Company.
All such shares of the Company are validly issued, fully paid and
nonassessable. There are no (a) securities convertible into or
exchangeable for any of the Company's share capital or other
securities, (b) options, warrants or other rights to purchase or
subscribe to share capital or other securities of the Company or
securities which are convertible into or exchangeable for capital
stock or other securities of the Company, or (c) contracts,
commitments, agreements, understandings or arrangements of any
kind relating to the issuance, sale or transfer of any share
capital or other equity securities of the Company, any such
convertible or exchangeable securities or any such options,
warrants or other rights.
3.2 Shareholder; Parent.
(a) Power. (i) Shareholder has full power, legal right and
authority to enter into, execute and deliver this Agreement and
the other agreements, instruments and documents contemplated
hereby (such other documents sometimes referred to herein as
"Ancillary Instruments"), and to carry out the transactions
contemplated hereby; (ii) Parent has full power, legal right and
authority to enter into, execute and deliver this Agreement and
the other agreements, instruments and documents contemplated
hereby (such other documents sometimes referred to herein as
"Ancillary Instruments"), and to carry out the transactions
contemplated hereby.
(b) Validity. (i) This Agreement has been duly and validly
executed and delivered by Shareholder and is, and when executed
and delivered each Ancillary Instrument will be, the legal, valid
and binding obligation of Shareholder, enforceable in accordance
with its terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors'
rights generally, and by general equitable principles; (ii) This
Agreement has been duly and validly executed and delivered by
Parent and is, and when executed and delivered each Ancillary
Instrument will be, the legal, valid and binding obligation of
Parent, enforceable in accordance with its terms, except as such
may be limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors' rights generally, and by general
equitable principles.
(c) Title. Shareholder has, and at Closing Buyer will receive,
good and marketable title to the Shares to be sold by Shareholder
hereunder, free and clear of all liens, security interests,
pledges, assessments, levies, restrictions, options, voting
trusts or agreements, proxies, encumbrances, marital or community
property interests or other claims or charges of any nature
whatsoever.
3.3 No Violation. Except as set forth on Schedule 3.3,neither
the execution and delivery of this Agreement or the Ancillary
Instruments nor the consummation by Parent, Company and
Shareholder of the transactions contemplated hereby and thereby
(a) will violate any statute or law or any rule, regulation,
order, writ, injunction or decree of any court or governmental
authority of the United States, Ireland, the United Kingdom or
any other jurisdiction or country in which the Company may be
domiciled or doing business, (b) will require any authorization,
consent, approval, exemption or other action by or notice to any
court, administrative or governmental agency, instrumentality,
commission, authority, board or body (including, without
limitation, under any "plant-closing" or similar law) of the
United States, Ireland, the United Kingdom or any other
jurisdiction or country in which the Company may be domiciled or
doing business, or (c) subject to obtaining the consents referred
to in Schedule 3.3, will violate or conflict with, or constitute
a material default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or will result
in the termination of, or accelerate the performance required by,
or result in the creation of any Lien (as defined in Section
3.12) upon any of the assets of Company (or the Shares) under,
any term or provision of the Articles of Association and
Memorandum of Association of the Company or of any contract,
commitment, understanding, arrangement, agreement or restriction
of any kind or character to which Parent, Company or Shareholder
is a party or by which Parent, Company or Shareholder or any of
its or their assets or properties may be bound or affected which
would result in a material adverse affect on the Company's
business operations.
3.4 Financial Statements. Included as Schedule 3.4 are true and
complete copies of (i) an unaudited balance sheet of Company as
of October 31, 2000, and the related unaudited statements of
income for the months then ended (if applicable, including the
notes and schedules contained therein or annexed thereto if
applicable) (the "Recent Financial Statements"), and, (ii) an
unaudited balance sheet of Company as of October 31, 2000, and
related unaudited statements of income for the year then ended
(if applicable, including the notes contained therein or annexed
thereto if applicable) (the "Financial Statements"). The Recent
Financial Statements have been prepared from, and are consistent
with, the books and records of the Company and are in compliance
with appropriate governing standards. Except as set forth on
Schedule 3.4, the Recent Financial Statements and the Financial
Statements have been prepared in accordance with the books and
records of Company, and consistently present, the assets,
liabilities and financial position, the results of operations and
cash flows of the Company as of the date indicated and for the
periods indicated. All of such financial statements (if
applicable, including all notes and schedules contained therein
or annexed thereto if applicable) are true, complete and
accurate.
3.5 Tax Matters.
(a) Provision For Taxes. The provision made for taxes on the
Recent Financial Statements is sufficient for the current and
deferred payment of all federal (concerning the country in which
Company is domiciled), state, foreign, county, local and other
income, ad valorem, excise, profits, franchise, occupation,
property, payroll, sales, use, gross receipts and other taxes
(and any interest and penalties) and assessments, whether or not
disputed, at the date of the Recent Financial Statements and for
all years and periods prior thereto. Since the date of the
Recent Financial Statements, Company has not incurred any taxes
other than taxes incurred in the ordinary course of business
consistent in type and amount with past practices of Company.
(b) Tax Returns Filed. All federal (concerning the country in
which Company is domiciled), state, foreign, county, local and
other tax returns required to be filed by or on behalf of Company
have been timely filed and when filed were true and correct in
all material respects, and the taxes shown as due thereon were
paid or adequately accrued. True and complete copies of all tax
returns or reports filed by Company for each of its three (3)
most recent fiscal years have been delivered to Buyer. Company
has duly withheld and paid all taxes which it is required to
withhold and pay relating to salaries and other compensation
heretofore paid to the employees of Company.
(c) Tax Audits. The income tax returns of Company have been
audited by the appropriate governmental taxing authorities for
the periods and the extent set forth in Schedule 3.5(c), and
Parent, Shareholder and Company have not received from any such
tax authorities at any level, any notice of underpayment of taxes
or other deficiency which has not been paid nor any objection to
any return or report filed by Company. There are outstanding no
agreements or waivers extending the statutory period of
limitations applicable to any tax return or report.
3.6 Accounts Receivable and Costs in Excess of Xxxxxxxx. Except
as disclosed in Schedule 3.6-1, all accounts receivable of
Company reflected on the Recent Financial Statements ("Closing
Receivables"), represent arm's length sales actually made in the
ordinary course of business; are collectible (net of the reserve
shown on the Recent Financial Statements for doubtful accounts
("Closing Reserve")) in the ordinary course of business without
the necessity of commencing legal proceedings; are subject to no
counterclaim or set-off; and are not in dispute. Schedule 3.6-1
contains an aged schedule of accounts receivable included in the
Recent Financial Statements. The amount of Closing Receivables
which exceed the Closing Reserve, as of the 90th day after the
Closing Date, shall be conclusively deemed to be uncollectible
and shall provide Buyer a right of set-off in such amount against
the Purchase Price.
3.7 Work-in-Process. Except as disclosed in Schedule 3.7, (i)
all work-in-process and contracts underway ("Work-In-Process")
constitute work performed pursuant to fully executed written
contracts or sales orders taken in the ordinary course of
business, from customers of Company with no recent history of
credit problems with respect to Company; (ii) neither Company nor
any such customer is in material breach of the terms of any
obligation to the other, and no valid grounds exist for any set-
off of amounts billable to such customers on the completion of
orders to which Work-In-Process relates; (iii) all Work-In-
Process is of a quality ordinarily produced in accordance with
the requirements of the orders to which such Work-In-Process is
identified, and will require no rework with respect to services
performed prior to Closing; (iv) all Work-In-Process is being
conducted pursuant to fully executed written contracts, orders
and change orders issued within the terms of the relationship
pursuant to which such Work-In-Process is being conducted; and
(v) all Work-In-Process set forth on Schedule 3.7 (which as of
the date hereof reflects Work-In-Process as of the date of the
Recent Financials, shall be updated to include the schedules
supporting the Disclosure Schedule) could be completed in
compliance with the contracts to which each such Work-In-Process
relates if managed consistently with the past practices of the
Company (and in compliance with industry standards and good
practices) without having a material adverse affect, in the
aggregate when complete, the profitability of the Company.
3.8 Absence of Certain Changes. Except as and to the extent set
forth in Schedule 3.8, since the date of the Recent Financial
Statements there has not been:
(a) No Adverse Change. Any adverse change in the financial
condition, assets, liabilities, business, prospects or operations
of Company;
(b) No Damage. Any loss, damage or destruction, whether covered
by insurance or not, affecting Company's business or properties;
(c) No Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become payable to
any employee or agent of Company (including, without limitation,
any increase or change pursuant to any bonus, pension, profit
sharing, retirement or other plan or commitment), or any bonus or
other employee benefit granted, made or accrued;
(d) No Labor Disputes or Loss of Key Employees. Any labor
dispute, disturbance or organizing activity, other than routine
individual grievances which are not material to the business,
financial condition or results of operations of Company or any
loss of any employee deemed "key" or "material" to the operation
of the Company;
(e) No Commitments. Any commitment or transaction by Company
(including, without limitation, any borrowing or capital
expenditure) other than in the ordinary course of business
consistent with past practice;
(f) No Dividends. Any declaration, setting aside, or payment of
any dividend or any other distribution in respect of Company's
capital stock; any redemption, purchase or other acquisition by
Parent, Shareholder or Company of any capital stock of Company,
or any security relating thereto; or any other payment to any
shareholder of Company as such a shareholder;
(g) No Disposition of Property. Any sale, lease or other
transfer or disposition of any properties or assets of Company,
except for the sale of inventory items in the ordinary course of
business;
(h) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by Company;
(i) No Liens. Any mortgage, pledge, lien or encumbrance made on
any of the properties or assets of Company;
(j) No Amendment of Contracts. Any entering into, amendment or
termination by Company of any contract, or any waiver of material
rights thereunder, other than in the ordinary course of business;
(k) Loans and Advances. Any loan or advance (other than
advances to employees in the ordinary course of business) to or
from any person including, but not limited to, any Affiliate (for
purposes of this Agreement, the term "Affiliate" shall mean and
include Parent, Shareholder, directors and officers of Parent,
Company and Shareholder; the spouse of any such person; any
person who would be the heir or descendant of any such person if
he or she were not living; and any entity in which any of the
foregoing has a direct or indirect interest, except through
ownership of less than 5% of the outstanding shares of any entity
whose securities are listed on a national securities exchange or
traded in the national over-the-counter market);
(l) Credit. Any grant of credit to any customer or distributor
on terms or in amounts more favorable than those which have been
extended to such customer or distributor in the past, any other
change in the terms of any credit heretofore extended, or any
other change of Company's policies or practices with respect to
the granting of credit; or
(m) No Unusual Events. Any other event or condition not in the
ordinary course of business of Company.
3.9 Absence of Undisclosed Liabilities. Except as and to the
extent specifically disclosed in the Recent Financial Statements,
Company has no liabilities, commitments or obligations (secured
or unsecured, and whether accrued, absolute, contingent, direct,
indirect or otherwise), other than commercial liabilities and
obligations incurred since the date of the Recent Financial
Statements in the ordinary course of business and consistent with
past practice and none of which has or will have a material
adverse effect on the business, financial condition or results of
operations of Company. There is no basis for the assertion
against Parent, Shareholder, or Company of any liability or of
any circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may give rise to
liabilities, except commercial liabilities and obligations
incurred in the ordinary course of Company's business and
consistent with past practice.
3.10 No Litigation. There is no action, suit, arbitration
proceeding, investigation or inquiry pending or threatened
against Company, its directors (in such capacity), its business
or any of its assets, nor is there any basis for any such
proceedings, investigations or inquiries. Schedule 3.10
identifies all such actions, suits, proceedings, investigations
and inquiries to which Company or any of its directors have been
parties within the last three (3) years. Except as set forth in
Schedule 3.10, neither Company nor its business or assets is
subject to any judgment, order, writ or injunction of any court,
arbitrator or federal (concerning the country in which the
Company is domiciled), state, foreign, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality of any country in which it is domiciled or doing
business.
3.11 Compliance With Laws.
(a) Compliance. The Company (including each and all of its
operations, practices, properties and assets) is in compliance
with all federal (concerning the country in which Company is
domiciled), state, local and foreign laws, ordinances, orders,
rules and regulations of any country in which it is domiciled or
doing business for which it is required to be in compliance in
order to conduct its business as is currently being conducted
(collectively, "Laws"), including without limitation, those
applicable to discrimination in employment, sexual harassment,
occupational safety and health, trade practices, competition and
pricing, product warranties, zoning, building and sanitation,
employment, retirement and labor relations, product advertising
and laws relating to pollution or protection of the environment,
including Laws relating to emissions, discharges, generation,
storage, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic, hazardous or
petroleum or petroleum-based substances or wastes into the
environment. Parent, Shareholder and Company have not received
notice of any Company violation or alleged violation of, and is
subject to no liability (whether accrued, absolute, contingent,
direct or indirect) for past or continuing violation of, any
Laws. Shareholder and Parent have no actual knowledge of any
reports and returns (i) required to be filed by Company with any
governmental authority not having been filed, and (ii) being
other than accurate and complete when filed.
(b) Licenses and Permits. Company has all licenses, permits,
approvals, authorizations and consents of all governmental and
regulatory authorities and all certification organizations
required for the conduct of the Company's business (as presently
conducted and as proposed to be conducted) and operation of the
facilities (as presently operated) in any country in which it is
domiciled or doing business. All such licenses, permits,
approvals, authorizations and consents are described in Schedule
3.11(b), are in full force and effect and will not be affected or
made subject to loss, limitation or any obligation to reapply as
a result of the transactions contemplated hereby. Company
(including its operations, properties and assets) is and has been
in material compliance with all such permits and licenses,
approvals, authorizations and consents.
3.12 Title to and Condition of Properties.
(a) Marketable Title. Company has good and marketable title to
all of Company's assets, business and properties necessary in
conducting the Business (as is currently conducted), including,
without limitation, all such properties (tangible and intangible)
reflected in the Recent Financial Statements and all assets which
are fully depreciated or used under license, including but not
limited to, software, databases, reference materials and other
intellectual property, in all cases free and clear of all
mortgages, liens, (statutory or otherwise) security interests,
claims, pledges, licenses, equities, options, conditional sales
contracts, assessments, levies, easements, covenants,
reservations, restrictions, rights-of-way, exceptions,
limitations, charges or encumbrances of any nature whatsoever
(collectively, "Liens") except those described in Schedule
3.12(a). None of the Company's assets, business or properties
are subject to any restrictions with respect to the
transferability thereof; and the Company's title thereto will not
be affected in any way by the transactions contemplated hereby.
Condition. All property and assets owned or utilized by
Company are in good operating condition and repair, free
from any defects (except such minor defects as do not
interfere with the use thereof in the conduct of the normal
operations of Company), have been maintained consistent with
the standards generally followed in the industry and are
sufficient to carry on the business of Company as conducted
during the preceding twelve (12) months.
(b) Real Property. Schedule 3.12(c) sets forth all real
property owned, used or occupied by Company (the "Real
Property"), including a description of all land, and all
encumbrances, easements or rights of way of record (or, if not of
record, of which Company has notice or knowledge) granted on or
appurtenant to or otherwise affecting such Real Property, the
zoning classification thereof, and all plants, buildings or other
structures located thereon. Schedule 3.12(c) also sets forth,
with respect to each parcel of Real Property which is leased, the
material terms of such lease. All buildings, plants and other
structures owned or otherwise utilized by Company are in good
condition and repair and have no structural defects or defects
affecting the plumbing, electrical, sewerage, or heating,
ventilating or air conditioning systems. There are now in full
force and effect duly issued certificates of occupancy permitting
the Real Property and improvements located thereon to be legally
used and occupied as the same are now constituted. Shareholder
and Parent have no actual knowledge of any fact or condition
exists which would prohibit or adversely affect the ordinary
rights of use by the Company of the Real Property. Neither
Parent, Company nor Shareholder has notice or knowledge of any
(i) planned or proposed increase in assessed valuations of any
Real Property, (ii) governmental agency or court order requiring
repair, alteration, or correction of any existing condition
affecting any Real Property or the systems or improvements
thereat, (iii) condition or defect which could give rise to an
order of the sort referred to in "(ii)" above, (iv) underground
storage tanks, or any structural, mechanical, or other defects of
material significance affecting any Real Property or the systems
or improvements thereat (including, but not limited to,
inadequacy for normal use of mechanical systems or disposal or
water systems at or serving the Real Property), or (v) work that
has been done or labor or materials that has or have been
furnished to any Real Property during the period of six (6)
months immediately preceding the date of this Agreement for which
liens could be filed against any of the Real Property.
(c) No Condemnation or Expropriation. Neither the whole nor any
portion of the property or any other assets of Company is subject
to any governmental decree or order to be sold or is being
condemned, expropriated or otherwise taken by any public
authority with or without payment of compensation therefor, nor
has any such condemnation, expropriation or taking been proposed.
3.13 Insurance. Set forth in Schedule 3.13 is a complete and
accurate list and description of all policies of fire, liability,
errors and omissions, workers compensation, health and other
forms of insurance presently in effect with respect to the
business and properties of Company, true and correct copies of
which have heretofore been delivered to Buyer. Schedule 3.13
includes, without limitation, the carrier, the description of
coverage, the limits of coverage, retention or deductible
amounts, amount of annual premiums, date of expiration and the
date through which premiums have been paid with respect to each
such policy, and any pending claims in excess of $10,000. All
such policies are valid, outstanding and enforceable policies and
provide insurance coverage for the properties, assets and
operations of Company, and are of the kinds, and in amounts and
against the risks customarily maintained by organizations
similarly situated; and no such policy (nor any previous policy)
provides for or is subject to any currently enforceable
retroactive rate or premium adjustment, loss sharing arrangement
or other actual or contingent liability arising wholly or
partially out of events arising prior to the date hereof.
Schedule 3.13 indicates each policy as to which (a) the coverage
limit has been reached or (b) the total incurred losses to date
equal 50% or more of the coverage limit. No notice of
cancellation or termination has been received with respect to any
such policy, and neither Parent, Company nor Shareholder has
knowledge of any act or omission of Company which could result in
cancellation of any such policy prior to its scheduled expiration
date. Company has not been refused any insurance with respect to
any aspect of the operations of the business nor has its coverage
been limited by any insurance carrier (other than the initial
policy limit) to which it has applied for insurance or with which
it has carried insurance during the last three (3) years.
Company has duly and timely made all material claims it has been
entitled to make under each policy of insurance. At all times
during the last three (3) years, all errors and omissions and
general liability policies maintained by or for the benefit of
Company have been "occurrence" policies and not "claims made"
policies. There is no claim by Company pending under any such
policies as to which coverage has been questioned, denied or
disputed by the underwriters of such policies, and neither
Parent, Company nor Shareholder knows of any basis for denial of
any claim under any such policy. Company has not received any
written notice from or on behalf of any insurance carrier issuing
any such policy that insurance rates therefor will hereafter be
substantially increased (except to the extent that insurance
rates may be increased for all similarly situated risks) or that
there will hereafter be a cancellation or an increase in a
deductible (or an increase in premiums in order to maintain an
existing deductible) or nonrenewal of any such policy. Such
policies are sufficient in all material respects for compliance
by Company with all requirements of applicable law and with the
requirements of all material contracts to which Company is a
party.
3.14 Contracts and Commitments.
(a) Real Property Leases. Except as set forth in Schedule
3.12(c), Company has no leases of real property.
(b) Personal Property Leases. Except as set forth in Schedule
3.14(b), Company has no leases of personal property involving
consideration or other expenditure in excess of $5,000,
individually, or involving performance over a period of more than
twelve (12) months.
(c) Purchase Commitments. Except as set forth in Schedule
3.14(c), Company has no purchase commitments for inventory,
equipment items or supplies that, together with amounts on hand,
constitute in excess of two (2) months normal usage.
(d) Sales Commitments. Except as set forth on Schedule 3.14(d),
Company has no sales contracts or commitments to customers or
distributors which aggregate in excess of $10,000 to any one
customer or distributor (or group of affiliated customers or
distributors). Company has no sales contracts or commitments
except those made in the ordinary course of business, at arm's
length, and no such contracts or commitments are for a sales
price which would result in a loss to the Company.
(e) Contracts With Affiliates and Certain Others. Except as set
forth in Schedule 3.14(e), Company has no agreement,
understanding, contract or commitment (written or oral) with any
Affiliate or any employee, agent, consultant, distributor, dealer
or franchisee that is not cancelable by Company on notice of not
longer than thirty (30) days without liability, penalty or
premium of any nature or kind whatsoever.
(f) Powers of Attorney. The Company has not given a power of
attorney, which is currently in effect, to any person, firm,
corporation or any other entity for any purpose whatsoever.
(g) Collective Bargaining Agreements. Company is not a party to
or in negotiations concerning any collective bargaining
agreements with any unions, guilds, shop committees or other
collective bargaining groups.
(h) Loan Agreements. Except as set forth in Schedule 3.14(h),
Company is not obligated under any loan agreement, promissory
note, letter of credit, or other evidence of indebtedness as a
signatory, guarantor or otherwise.
(i) Guarantees. Except as disclosed on Schedule 3.14(i),
Company has not guaranteed the payment or performance of any
person, firm, corporation or any other entity, agreed to
indemnify any person or act as a surety, or otherwise agreed to
be contingently or secondarily liable for the obligations of any
person.
(j) Contracts Subject to Renegotiation. Company is not a party
to any contract with any governmental body which is subject to
renegotiation.
(k) Burdensome or Restrictive Agreements. Company is not a
party to nor is it bound by any agreement, deed, lease or other
instrument which is so burdensome as to materially affect or
impair the business operations of Company or which results in a
material adverse affect to the Company. Without limiting the
generality of the foregoing, Company is not a party to nor is it
bound by any agreement which requires the Company to assign any
interest in any trade secret or proprietary information, nor is
the Company party to any non-compete agreement or non-
solicitation agreement which would serve to restrict the current
operations of the Company.
(l) Other Material Contracts. Company has no lease, contract or
commitment of any nature involving consideration or other
expenditure in excess of $10,000, or involving performance over a
period of more than twelve (12) months, or which is otherwise
individually material to the operations of Company, except as
explicitly described in Schedule 3.14(1) or in any other
Schedule.
(m) No Default. Company is not in default under any lease,
contract or commitment, nor has any event or omission occurred
which through the passage of time or the giving of notice, or
both, would constitute a default thereunder or cause the
acceleration of any of Company's obligations or result in the
creation of any Lien on any of the assets owned, used or occupied
by Company. No third party is in default under any lease,
contract or commitment to which Company is a party, nor has any
event or omission occurred which, through the passage of time or
the giving of notice, or both, would constitute a default
thereunder or give rise to an automatic termination, or the right
of discretionary termination, thereof.
3.15 Labor Matters. Within the last five (5) years Parent,
Shareholder and Company have not experienced any labor disputes,
union organization attempts or any work stoppage due to labor
disagreements in connection with its business. Except to the
extent set forth in Schedule 3.15, (a) Company is in compliance
with all applicable laws respecting employment and employment
practices, sexual harassment, terms and conditions of employment
and wages and hours, and is not engaged in any unfair labor
practice; (b) there is no unfair labor practice charge or
complaint against Company pending or threatened; (c) there is no
labor strike, dispute, request for representation, slowdown or
stoppage actually pending or threatened against or affecting
Company nor any secondary boycott with respect to products of
Company; (d) no question concerning representation has been
raised or is threatened respecting the employees of Company; (e)
no grievance which might have a material adverse effect on
Company, nor any arbitration proceeding arising out of or under
collective bargaining agreements, is pending and no such claim
therefor exists; and (f) there are no administrative charges or
court complaints against Company concerning alleged employment
discrimination or other employment related matters pending or
threatened before the U.S. Equal Employment Opportunity
commission or any state or federal court or agency or any similar
governmental body, agency or entity in any country in which
Company is domiciled or doing business.
3.16 Employee Benefit Plans.
(a) Disclosure. Schedule 3.16(a) sets forth all pension,
thrift, savings, profit sharing, retirement, incentive bonus or
other bonus, medical, dental, life, accident insurance, benefit,
employee welfare, disability, group insurance, stock purchase,
stock option, stock appreciation, stock bonus, executive or
deferred compensation, hospitalization and other similar fringe
or employee benefit plans, programs and arrangements, and any
employment or consulting contracts, "golden parachutes,"
collective bargaining agreements, severance agreements or plans,
vacation and sick leave plans, programs, arrangements and
policies, all employee manuals, and all written or binding oral
statements of policies, practices or understandings relating to
employment, which are provided to, for the benefit of, or relate
to, any persons ("Company Employees") employed by Company. The
items described in the foregoing sentence are hereinafter
sometimes referred to collectively as "Employee
Plans/Agreements," and each individually as an "Employee
Plan/Agreement." True and correct copies of all the Employee
Plans/Agreements, including all amendments thereto, have
heretofore been provided to Buyer. Each of the Employee
Plans/Agreements is identified on Schedule 3.16(a), to the extent
applicable, as one or more of the following: an "employee pension
benefit plan" (as defined in Section 3(2) of ERISA), a "defined
benefit plan" (as defined in Section 414 of the Code), an
"employee welfare benefit plan" (as defined in Section 3(1) of
ERISA), and/or as a plan intended to be qualified under Section
401 of the Code. No Employee Plan/Agreement is a "multiemployer
plan" (as defined in Section 4001 of ERISA), and Company has
never contributed nor been obligated to contribute to any such
multiemployer plan.
(b) Terminations, Proceedings, Penalties, etc. With respect to
each employee benefit plan (including, without limitation, the
Employee Plans/Agreements) that is subject to the provisions of
Title IV of ERISA and with respect to which the Company or any of
its assets may, directly or indirectly, be subject to any
liability, contingent or otherwise, or the imposition of any lien
(whether by reason of the complete or partial termination of any
such plan, the funded status of any such plan, any "complete
withdrawal" (as defined in Section 4203 of ERISA) or "partial
withdrawal" (as defined in Section 4205 of ERISA) by any person
from any such plan, or otherwise):
(i) no such plan has been terminated so as to subject, directly
or indirectly, any assets of Company to any liability, contingent
or otherwise, or the imposition of any lien under Title IV of
ERISA;
(ii) no proceeding has been initiated or threatened by any person
(including the Pension Benefit Guaranty Corporation ("PBGC") to
terminate any such plan;
(iii) no condition or event currently exists or currently is
expected to occur that could subject, directly or indirectly, any
assets of Company to any liability, contingent or otherwise, or
the imposition of any lien under Title IV of ERISA, whether to
the PBGC or to any other person or otherwise on account of the
termination of any such plan;
(iv) if any such plan were to be terminated as of or prior to the
Closing Date, no assets of Company would be subject, directly or
indirectly, to any liability, contingent or otherwise, or the
imposition of any lien under Title IV of ERISA;
(v) no "reportable event" (as defined in Section 4043 of ERISA)
has occurred with respect to any such plan;
(vi) no such plan which is subject to Section 302 of ERISA or
Section 412 of the Code has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412
of the Code, respectively), whether or not waived; and
(vii) no such plan is a multiemployer plan or a plan
described in Section 4064 of ERISA.
(c) Prohibited Transactions, etc. There have been no
"prohibited transactions" within the meaning of Section 406 or
407 of ERISA or Section 4975 of the Code for which a statutory or
administrative exemption does not exist with respect to any
Employee Plan/Agreement, and no event or omission has occurred in
connection with which the Company or any of its assets or any
Employee Plan/Agreement, directly or indirectly, could be subject
to any liability under ERISA, the Code or any other law,
regulation or governmental order applicable to any Employee
Plan/Agreement, or under any agreement, instrument, statute, rule
of law or regulation pursuant to or under which Company has
agreed to indemnify or is required to indemnify any person
against liability incurred under, or for a violation or failure
to satisfy the requirements of, any such statute, regulation or
order.
(d) Full Funding. The funds available under each Employee
Plan/Agreement which is intended to be a funded plan exceed the
amounts required to be paid, or which would be required to be
paid if such Employee Plan/Agreement were terminated, on account
of rights vested or accrued as of the Closing Date (using the
actuarial methods and assumptions then used by Company's
actuaries in connection with the funding of such Employee
Plan/Agreement).
(e) Controlled Group; Affiliated Service Group; Leased
Employees. Company is not and never has been a member of a
controlled group of corporations as defined in Section 414(b) of
the Code or in common control with any unincorporated trade or
business as determined under Section 414(c) of the Code. Company
is not and never has been a member of an "affiliated service
group" within the meaning of Section 414(m) of the Code. There
are not and never have been any leased employees within the
meaning of Section 414(n) of the Code who perform services for
Company, and no individuals are expected to become leased
employees with the passage of time.
(f) Payments and Compliance. With respect to each Employee
Plan/Agreement, (i) all payments due from Company to date have
been made and all amounts properly accrued to date as liabilities
of Company which have not been paid have been properly recorded
on the books of Company and are reflected in the Recent Financial
Statements; (ii) Company has complied with, and each such
Employee Plan/Agreement conforms in form and operation to, all
applicable laws and regulations, including but not limited to
ERISA and the Code, in all respects and all reports and
information relating to such Employee Plan/Agreement required to
be filed with any governmental entity have been timely filed;
(iii) all reports and information relating to each such Employee
Plan/Agreement required to be disclosed or provided to
participants or their beneficiaries have been timely disclosed or
provided; (iv) each such Employee Plan/Agreement which is
intended to qualify under Section 401 of the Code has received a
favorable determination letter from the Internal Revenue Service
with respect to such qualification, its related trust has been
determined to be exempt from taxation under Section 501(a) of the
Code, and nothing has occurred since the date of such letter that
has or is likely to adversely affect such qualification or
exemption; (v) there are no actions, suits or claims pending
(other than routine claims for benefits) or threatened with
respect to such Employee Plan/Agreement or against the assets of
such Employee Plan/Agreement; and (vi) no Employee Plan/Agreement
is a plan which is established and maintained outside the United
States primarily for the benefit of individuals substantially all
of whom are nonresident aliens.
(g) Post-Retirement Benefits. No Employee Plan/Agreement
provides benefits, including, without limitation, death or
medical benefits (whether or not insured) with respect to current
or former Company employees beyond their retirement or other
termination of service other than (i) coverage mandated by
applicable law, (ii) death or retirement benefits under any
Employee Plan/Agreement that is an employee pension benefit plan,
(iii) deferred compensation benefits accrued as liabilities on
the books of Company (including the Recent Financial Statements),
(iv) disability benefits under any Employee Plan/ Agreement that
is an employee welfare benefit plan and which have been fully
provided for by insurance or otherwise or (v) benefits in the
nature of severance pay.
(h) No Triggering of Obligations. The consummation of the
transactions contemplated by this Agreement will not (i) entitle
any current or former employee of Company to severance pay,
unemployment compensation or any other payment, except as
expressly provided in this Agreement, (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due to
any such employee or former employee or (iii) result in any
prohibited transaction described in Section 406 of ERISA or
Section 4975 of the Code for which an exemption is not available.
(i) Delivery of Documents. There has been delivered to Buyer,
with respect to each Employee Plan/Agreement:
(i) a copy of the annual report, if required under ERISA, with
respect to each such Employee Plan/Agreement for the last two (2)
years;
(ii) a copy of the summary plan description, together with each
summary of material modifications, required under ERISA with
respect to such Employee Plan/Agreement, all material employee
communications relating to such Employee Plan/Agreement, and,
unless the Employee Plan/Agreement is embodied entirely in an
insurance policy to which Company is a party, a true and complete
copy of such Employee Plan/Agreement;
(iii) if the Employee Plan/Agreement is funded through a
trust or any third party funding vehicle (other than an insurance
policy), a copy of the trust or other funding agreement and the
latest financial statements thereof; and
(iv) the most recent determination letter received from the
Internal Revenue Service with respect to each Employee
Plan/Agreement that is intended to be a "qualified plan" under
Section 401 of the Code.
(v) With respect to each Employee Plan/Agreement for which an
annual report has been filed and delivered to Buyer pursuant to
clause (i) of this Section 3.16(i), no material adverse change
has occurred with respect to the matters covered by the latest
such annual report since the date thereof.
(j) Future Commitments. Company has no announced plan or
legally binding commitment to create any additional Employee
Plans/Agreements or to amend or modify any existing Employee
Plan/Agreement.
3.17 Employment Compensation. Schedule 3.17 contains a true and
correct list of all employees to whom Company is paying
compensation and the compensation paid thereto during the twelve
month period ending as of the date of the Recent Financial
Statements, including bonuses and incentives (such as auto
allowances, company supplied autos, life insurance and other
benefits), and listing the current annual rate of compensation
for each employee.
3.18 Trade Rights. Schedule 3.18 lists all Trade Rights (as
defined below) in which Company now has any interest, specifying
whether such Trade Rights are owned, controlled, used or held
(under license or otherwise) by Company, and also indicating
which of such Trade Rights are registered. All Trade Rights
shown as registered in Schedule 3.18 have been properly
registered, all pending registrations and applications have been
properly made and filed and all maintenance, renewal and other
fees relating to registrations or applications are current. In
order to conduct the business of Company, as such is currently
being conducted or proposed to be conducted, Company does not
require any Trade Rights that it does not already have. Company
is not infringing and has not infringed any Trade Rights of
another in the operation of the business of Company, nor is any
other person infringing the Trade Rights of Company. Company has
not granted any license or made any assignment of any Trade Right
listed on Schedule 3.18, nor does Company pay any royalties or
other consideration for the right to use any Trade Rights of
others. There are no inquiries, investigations or claims or
litigation challenging or threatening to challenge Company's
right, title and interest with respect to its continued use and
right to preclude others from using any Trade Rights of Company.
All Trade Rights of Company are valid, enforceable and in good
standing, and there are no equitable defenses to enforcement
based on any act or omission of Company. The consummation of the
transactions contemplated hereby will not alter or impair any
Trade Rights owned or used by Company. As used herein, the term
"Trade Rights" shall mean and include: (i) all trademark rights,
business identifiers, trade dress, service marks, trade names and
brand names, all registrations thereof and applications therefor
and all goodwill associated with the foregoing; (ii) all
copyrights, copyright registrations and copyright applications,
and all other rights associated with the foregoing and the
underlying works of authorship; (iii) all patents and patent
applications, and all international proprietary rights associated
therewith; (iv) all contracts or agreements granting any right,
title, license or privilege under the intellectual property
rights of any third party; (v) all inventions, mask works and
mask work registrations, know-how, discoveries, improvements,
designs, trade secrets, shop and royalty rights, employee
covenants and agreements respecting intellectual property and non-
competition and all other types of intellectual property; and
(vi) all claims for infringement or breach of any of the
foregoing.
3.19 Major Customers and Suppliers.
(a) Major Customers. Schedule 3.19(a) contains a list of the 10
largest customers of Company for each of the two (2) most recent
fiscal years (determined on the basis of the total dollar amount
of net sales) showing the total dollar amount of net sales to
each such customer during each such year. Company, Parent and
Shareholder have no knowledge or information of any facts
indicating, or have any other reason to believe, (i) that the
Company's relationship with any of the customers listed on
Schedule 3.19(a) is other than that which is likely to give rise
to a positive recommendation by such customer of the Company to
others, or (ii) that to the extent any Customer listed on
Schedule 3.19(a) would have recurring projects, that such
Customer would be other than likely to retain the Company to
perform such project.
(b) Major Suppliers. Schedule 3.19(b) contains a list of the 10
largest suppliers of services and goods (including major
subcontractors) to Company for each of the two (2) most recent
fiscal years (determined on the basis of the total dollar amount
of purchases) showing the total dollar amount of purchases from
each such supplier during each such year. Company, Parent and
Shareholder have no knowledge or information of any facts
indicating, or have any other reason to believe, that any of the
suppliers listed on Schedule 3.19(b) will not continue to be
suppliers to the business of Company after the Closing and will
not continue to supply the business with substantially the same
quantity and quality of goods at competitive prices. There are
no agreements between the Company and any subcontractor or
supplier requiring Company to use the services or goods of such
subcontractor or supplier with respect to any further Company
business.
3.20 Warranty and Product Liability. Schedule 3.20 contains a
true, correct and complete copy of Company's standard warranty or
warranties and, except as stated therein, there are no
warranties, commitments or obligations with respect to the
Company's products and services. Schedule 3.20 sets forth the
estimated aggregate annual cost to Company of performing warranty
obligations for customers for each of the five (5) preceding
fiscal years and the current fiscal year to the date of the
Recent Financial Statements. Schedule 3.20 contains a
description of all product liability claims and/or errors and
omission claims and similar claims, actions, litigation and other
proceedings relating to services rendered, which are presently
pending or which to Parent's, Company's or Shareholder's
knowledge are threatened, or which have been asserted or
commenced against Company within the last five (5) years, in
which a party thereto either requests injunctive relief or
alleges damages (whether or not covered by insurance).
3.21 Bank Accounts. Schedule 3.21 sets forth the names and
locations of all banks, trust companies, savings and loan
associations and other financial institutions at which the
Company maintains a safe deposit box, lock box or checking,
savings, custodial or other account of any nature, the type and
number of each such account and the signatories therefore, a
description of any compensating balance arrangements, and the
names of all persons authorized to draw thereon, make withdrawals
therefrom or have access thereto.
3.22 Affiliates, Relationships to Company.
(a) Contracts With Affiliates. All leases, contracts,
agreements or other arrangements between Company and any
Affiliate, Parent or Shareholder are described on Schedule
3.22(a).
(b) No Adverse Interests. Parent, Shareholder and any Affiliate
have no direct or indirect interest in (i) any entity which does
business with Company or is competitive with Company's business,
or (ii) any property, asset or right which is used by Company in
the conduct of its business.
(c) Obligations. All obligations of Parent, Shareholder or any
Affiliate to Company, and all obligations of Company to Parent,
Shareholder or any Affiliate, are listed on Schedule 3.22(c).
3.23 No Brokers or Finders. Except as set forth in Schedule
3.23, neither Company, Parent, Shareholder, nor any of its
directors, officers, employees, shareholders or agents have
retained, employed or used any broker or finder in connection
with the transaction provided for herein or in connection with
the negotiation thereof.
3.24 Disclosure. No representation or warranty by Parent or
Shareholder in this Agreement, nor any statement, certificate,
schedule, document or exhibit hereto furnished or to be furnished
by or on behalf of Parent or Shareholder pursuant to this
Agreement or in connection with transactions contemplated hereby,
contains or shall contain any untrue statement of material fact
or omits or shall omit a material fact necessary to make the
statements contained therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
---------------------------------------
Buyer makes the following representations and warranties to
Parent and Shareholder, each of which is true and correct on the
date hereof, shall remain true and correct to and including the
Closing Date, shall be unaffected by any investigation heretofore
or hereafter made by Shareholder or any notice to Shareholder,
and shall survive the Closing of the transactions provided for
herein.
4.1 Corporate.
(a) Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Nevada.
(b) Corporate Power. Buyer has all requisite corporate power to
enter into this Agreement and the other documents and instruments
to be executed and delivered by Buyer and to carry out the
transactions contemplated hereby and thereby.
4.2 Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered
by Buyer pursuant hereto and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the
Board of Directors of Buyer. No other corporate act or
proceeding on the part of Buyer or its shareholders is necessary
to authorize this Agreement or the other documents and
instruments to be executed and delivered by Buyer pursuant hereto
or the consummation of the transactions contemplated hereby and
thereby. This Agreement constitutes, and when executed and
delivered, the other documents and instruments to be executed and
delivered by Buyer pursuant hereto will constitute, valid and
binding agreements of Buyer, enforceable in accordance with their
respective terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors'
rights generally, and by general equitable principles.
4.3 No Brokers or Finders. Except as set forth on Schedule 4.3,
neither Buyer nor any of its directors, officers, employees or
agents have retained, employed or used any broker or finder in
connection with the transaction provided for herein or in
connection with the negotiation thereof.
4.4 Disclosure. No representation or warranty by Buyer in this
Agreement, nor any statement, certificate, schedule, document or
exhibit hereto furnished or to be furnished by or on behalf of
Buyer pursuant to this Agreement or in connection with
transactions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein
not misleading.
4.5 Investment Intent. The Shares are being acquired by Buyer
for investment only and not with the view to resale or other
distribution.
5. COVENANTS.
---------
5.1 Disclosure Schedule. Parent, Shareholder and Company shall
have a continuing obligation to promptly notify Buyer in writing
with respect to any matter hereafter arising or discovered which,
if existing or known at the date of this Agreement, would have
been required to be set forth or described in the Disclosure
Schedule, but no such disclosure shall cure any breach of any
representation or warranty which is inaccurate.
5.2 Noncompetition. Subject to the Closing, and as an
inducement to Buyer to execute this Agreement and complete the
transactions contemplated hereby, and in order to preserve the
goodwill associated with the business of Company being acquired
pursuant to this Agreement, Parent and Shareholder hereby
covenants and agrees that for a period of two (2) years from the
Closing Date, Parent and Shareholder will not directly or
indirectly through any employee, agent or otherwise:
(a) engage in, continue in or carry on any business which
competes with the Business or is substantially similar thereto,
including owning or controlling any financial interest in any
corporation, partnership, firm or other form of business
organization which is so engaged;
(b) consult with, advise or assist in any way, whether or not
for consideration, any corporation, partnership, firm or other
business organization which is now or becomes a competitor of
company or Buyer in any aspect with respect to the Business,
including, but not limited to, advertising or otherwise endorsing
the products of any such competitor; soliciting customers or
otherwise serving as an intermediary for any such competitor;
loaning money or rendering any other form of financial assistance
to or engaging in any form of business transaction on other than
an arm's length basis with any such competitor;
(c) offer employment to an employee of Company, without the
prior written consent of Buyer; or
(d) engage in any practice the purpose of which is to evade the
provisions of this covenant not to compete or to commit any act
which adversely affects the Business; provided, however, that the
foregoing shall not prohibit the ownership of securities of
corporations which are listed on a national securities exchange
or traded in the national over-the-counter market in an amount
which shall not exceed 5% of the outstanding shares of any such
corporation, nor shall any of the foregoing prohibit Parent from
conducting any business, whether planned or existing, which is
not currently being conducted exclusively by Company. The
parties agree that the geographic scope of this covenant not to
compete shall extend to the United States, Mexico, Europe and
Canada. The parties agree that Buyer may sell, assign or
otherwise transfer this covenant not to compete, in whole or in
part, to any person, corporation, firm or entity that purchases
all or part of the business of the Company. In the event a court
of competent jurisdiction determines that the provisions of this
covenant not to compete are excessively broad as to duration,
geographical scope or activity, it is expressly agreed that this
covenant not to compete shall be construed so that the remaining
provisions shall not be affected, but shall remain in full force
and effect, and any such over broad provisions shall be deemed,
without further action on the part of any person, to be modified,
amended and/or limited, but only to the extent necessary to
render the same valid and enforceable in such jurisdiction.
5.3 Confidentiality. As an inducement to Buyer to execute this
Agreement and complete the transactions contemplated hereby, and
in order to preserve the goodwill associated with the business of
the Company, Parent and Shareholder hereby covenants and agrees
as follows:
(a) Covenant of Confidentiality. Parent and Shareholder shall
not at any time subsequent to the Closing, except as explicitly
requested by Buyer, (i) use for any purpose, (ii) disclose to any
person, or (iii) keep or make copies of documents, tapes, discs
or programs containing, any confidential information concerning
Company. For purposes hereof, "confidential information" shall
mean and include, without limitation, all Trade Rights in which
Company has an interest, all customer lists and customer
information, and all other information concerning Company's
processes, apparatus, equipment, packaging, products, marketing
and distribution methods, not previously disclosed to the public
directly by Company.
(b) Equitable Relief for Violations. Parent and Shareholder
agree that the provisions and restrictions contained in Section
5.2 and this Section 5.3 are necessary to protect the legitimate
continuing interests of Buyer in acquiring the Shares, and that
any violation or breach of these provisions will result in
irreparable injury to Buyer for which a remedy at law would be
inadequate and that, in addition to any relief at law which may
be available to Buyer for such violation or breach and regardless
of any other provision contained in this Agreement, Buyer shall
be entitled to injunctive and other equitable relief as a court
may grant after considering the intent of Section 5.2 and this
Section 5.3.
5.4 General Releases. At the Closing, Parent and Shareholder
shall deliver, or cause to be delivered, general releases to
Buyer, in form and substance satisfactory to Buyer and its
counsel, releasing Company and the directors, officers, agents
and employees of Company from all claims to the Closing Date,
except (i) as may be described in written contracts disclosed in
the Disclosure Schedule (as that term is defined in Section 11.1
herein) and expressly described and excepted from such releases,
and (ii) in the case of persons who are employees of the Company,
compensation for current periods expressly described and excepted
from such releases.
5.5 Nonsolicitation. In order to protect the trade secrets and
propriety know-how of Parent and Shareholder, Buyer agrees for a
period of two (2) years from the Closing Date, that Buyer will
not directly or indirectly through any employee, agent, or
otherwise, offer, solicit, or accept any employment from an
employee of Parent and Shareholder.
5.6 Access to Information and Records. During the period prior
to the Closing, Parent shall cause Company to give Buyer, its
counsel, accountants and other representatives (i) access during
normal business hours to all of the properties, books, records,
contracts and documents of Company for the purpose of such
inspection, investigation and testing as Buyer deems appropriate
(and Company shall furnish or cause to be furnished to Buyer and
its representatives all information with respect to the business
and affairs of Company as Buyer may request); (ii) access to
employees, agents and representatives for the purposes of such
meetings and communications as Buyer reasonably desires; and
(iii) with the prior consent of Company in each instance (which
consent shall not be unreasonably withheld), access to vendors,
customers, manufacturers of its machinery and equipment, and
others having business dealings with Company.
5.7 Conduct of Business Pending the Closing. From the date
hereof until the Closing, except as otherwise approved in writing
by the Buyer, Company covenants as follows, and Parent shall
cause each of the following to occur:
(a) No Changes. Company will carry on its business diligently
and in the same manner as heretofore and will not make or
institute any changes in its methods of purchase, sale,
management, accounting or operation which would have a material
adverse affect on the Business of the Company.
(b) Maintain Organization. Company will take such action as may
be necessary to maintain, preserve, renew and keep in favor and
effect the existence, rights and franchises of Company and will
use its best efforts to preserve the business organization of
Company intact, to keep available to Company the present officers
and employees, and to preserve for Company its present
relationships with suppliers and customers and others having
business relationships with Company.
(c) No Breach. Company, Parent and Shareholder will not do or
omit any act, or permit any omission to act, which may cause a
breach of any material contract, commitment or obligation, or any
breach of any representation, warranty, covenant or agreement
made by Shareholder, Parent or Company herein, or which would
have required disclosure on Schedule 3.8 had it occurred after
the date of the Recent Financial Statements and prior to the date
of this Agreement.
(d) No Material Contracts. Without the prior written consent of
Buyer, no contract or commitment will be entered into, and no
purchase of supplies, equipment and no sale of goods or services
(real, personal, or mixed, tangible or intangible) will be made,
by or on behalf of Company, except contracts, commitments,
purchases or sales which are in the ordinary course of business
and consistent with past practice, are not material to the
Company (individually or in the aggregate) and would not have
been required to be disclosed in the Disclosure Schedule had they
been in existence on the date of this Agreement.
(e) No Corporate Changes. Company shall not amend its Articles
of Association and Memorandum of Association or make any changes
in authorized or issued capital stock.
(f) Maintenance of Insurance. Company shall maintain all of the
insurance in effect as of the date hereof.
(g) Maintenance of Property. Company shall use, operate,
maintain and repair all property of Company in a normal business
manner.
(h) Interim Financials. Company will provide Buyer with interim
monthly financial statements (as of calendar month-end) and other
management reports as and when they are available.
(i) No Negotiations. Neither Company, Shareholder, nor Parent
will directly or indirectly (through a representative or
otherwise) solicit or furnish any information to any prospective
buyer, commence, or conduct presently ongoing, negotiations with
any other party or enter into any agreement with any other party
concerning the sale of Company, Company's assets or business or
any part thereof or any equity securities of Company (an
"acquisition proposal"), and Company, Shareholder, and Parent
shall immediately advise Buyer of the receipt of any acquisition
proposal.
(j) No Transfer of Shares. Shareholder shall not transfer or
attempt to transfer any of the Shares except to Buyer pursuant
hereto; and Company shall refuse to accept any certificates for
Shares to be transferred or otherwise to allow such transfers to
occur upon its books.
5.8 Consents. Parent will cause Company and Shareholder to
obtain all consents necessary for the consummation of the
transactions contemplated hereby (including, but not limited to,
any and all consents or approvals from any governmental entities,
agencies or bodies or any other entity of any kind (whether
governmental or not) of or from the United States, Ireland, the
United Kingdom or any other country in which Company is domiciled
or doing business).
5.9 Merger Agreement. Buyer and Parent shall execute an
agreement and plan of merger and reorganization (the "Merger
Agreement") simultaneously with this Agreement.
5.10 Other Action. Company, Shareholder, Parent, and Buyer shall
fulfill all of the conditions to the parties' obligations to
consummate the transactions contemplated in this Agreement.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS.
-------------------------------------------
Each and every obligation of Buyer to be performed on the
Closing Date shall be subject to the reasonable satisfaction or
waiver prior to or at the Closing of each of the following
conditions:
6.1 Representations and Warranties True as of the Closing Date.
Each of the representations and warranties made by Parent and
Shareholder in this Agreement, and the statements contained in
the Disclosure Schedule or in any instrument, list, certificate
or writing delivered by Parent, Shareholder or Company pursuant
to this Agreement, shall be true and correct when made and shall
be true and correct at and as of the Closing Date as though such
representations and warranties were made or given on and as of
the Closing Date, except for any changes permitted by the terms
of this Agreement, consented to in writing by Buyer, or which
would not have a material adverse affect on the Business of the
Company.
6.2 Compliance With Agreement. Parent, Shareholder and Company
shall have in all material respects performed and complied with
all of their agreements and obligations under this Agreement
which are to be performed or complied with by them prior to or on
the Closing Date, including the delivery of the closing documents
specified in Section 9.1.
6.3 Absence of Suit. No action, suit or proceeding before any
court or any governmental authority shall have been commenced or
threatened, and no investigation by any governmental or
regulating authority shall have been commenced, against Buyer,
Parent, Shareholder, Company or any of the Affiliates,
subsidiaries, officers or directors of any of them, with respect
to the transactions contemplated hereby.
6.4 Consents and Approvals. All approvals, consents and waivers
that are required to effect the transactions contemplated hereby
shall have been received, and executed counterparts thereof shall
have been delivered to Buyer prior to the Closing.
6.5 Third Party Consents. Parent, Shareholder, or Company shall
have delivered to Buyer on or prior to the Closing Date, consents
from landlords under each lease of Real Property to the
transactions contemplated by this Agreement. Buyer shall have
obtained all approvals, consents and waivers from its banks and
other third parties (including, but not limited to, those third
parties in a country other than the United States) from whom such
consents, approvals or waivers are required.
6.6 Termination of Qualified Plans. The Board of Directors of
the Company shall have executed a unanimous written consent
substantially in the form of Exhibit 6.6-1 hereto terminating its
401(k) plan sufficiently prior to the Closing to cause, to the
reasonable satisfaction of Buyer and its counsel, Buyer's
qualified plans not to be deemed to be successor plans, and the
Company shall amend its 401(k) plan by adopting the amendment
substantially in the form of Exhibit 6.6-2 hereto.
6.7 Satisfactory Due Diligence and Disclosure. Buyer shall have
been provided with all reasonably requested due diligence
materials and the schedules attached hereto and shall have
completed, to its reasonable satisfaction, a "due diligence"
review of the assets, liabilities, operations, financial
condition, and proprietary rights of the Company.
6.8 Satisfactory Evidence of Authority to Execute. Parent and
Shareholder shall have provided such documents or instruments as
are necessary, in the reasonable judgment of Buyer's counsel, to
establish the authority of the person or persons executing this
Agreement on behalf of Parent and Shareholder.
7. CONDITIONS PRECEDENT TO PARENT'S AND SHAREHOLDER'S
--------------------------------------------------
OBLIGATIONS.
-----------
Each and every obligation of Parent and Shareholder to be
performed on the Closing Date shall be subject to the reasonable
satisfaction or waiver prior to or at the Closing of the
following conditions:
7.1 Representations and Warranties True on the Closing Date.
Each of the representations and warranties made by Buyer in this
Agreement shall be true and correct in all material respects when
made and shall be true and correct at and as of the Closing Date
as though such representations and warranties were made or given
on and as of the Closing Date.
7.2 Compliance With Agreement. Buyer shall have in all material
respects performed and complied with all of Buyer's agreements
and obligations under this Agreement which are to be performed or
complied with by Buyer prior to or on the Closing Date, including
the delivery of the closing documents specified in Section 9.2.
7.3 Absence of Suit. No action, suit or proceeding before any
court or any governmental authority shall have been commenced or
threatened, and no investigation by any governmental or
regulating authority shall have been commenced, against Buyer,
Parent, Shareholder, Company or any of the Affiliates, officers
or directors of any of them, with respect to the transactions
contemplated hereby.
8. INDEMNIFICATION.
---------------
8.1 By Parent. Subject to the terms and conditions of this
Section 8, Parent hereby agrees to indemnify, defend and hold
harmless Buyer, its directors, officers, employees and controlled
and controlling persons (hereinafter "Buyer's Affiliates") and
the Company from and against all Claims asserted against,
resulting to, imposed upon, or incurred by Buyer, Buyer's
Affiliates or the Company, directly or indirectly, by reason of,
arising out of, resulting from or not otherwise disclosed as a
result of (a) the inaccuracy or breach of any representation or
warranty of Shareholder or Company contained in or made pursuant
to this Agreement, or (b) the breach of any covenant of
Shareholder or the Company contained in this Agreement. As used
in this Section 8, the term "Claim" shall include (i) all debts,
liabilities and obligations; (ii) all losses, damages (including,
without limitation, consequential damages), judgments, awards,
settlements, costs and expenses (including, without limitation,
interest (including prejudgment interest in any litigated
matter), penalties, court costs and attorneys fees and expenses);
and (iii) all demands, claims, suits, actions, costs of
investigation, causes of action, proceedings and assessments,
whether or not ultimately determined to be valid. Buyer may, at
its sole and absolute discretion, elect to set-off the amount or
value or any such Claim against any payments otherwise due to
Parent or Shareholder hereunder as described in Section 8.4.
8.2 By Buyer. Subject to the terms and conditions of this
Section 8, Buyer hereby agrees to indemnify, defend and hold
harmless Parent and Shareholder from and against all Claims
asserted against, resulting to, imposed upon or incurred by any
such person, directly or indirectly, by reason of or resulting
from (a) the inaccuracy or breach of any representation or
warranty of Buyer contained in or made pursuant to this
Agreement, or (b) the breach of any covenant of Buyer contained
in this Agreement, including any claim accruing after the Closing
Date and for which Shareholder and/or Parent is not otherwise
liable hereunder.
8.3 Indemnification of Third-Party Claims. The obligations and
liabilities of any party to indemnify any other under this
Section 8 with respect to Claims relating to third parties shall
be subject to the following terms and conditions:
(a) Notice and Defense. The party or parties to be indemnified
(whether one or more, the "Indemnified Party") will give the
party from whom indemnification is sought (the "Indemnifying
Party") prompt written notice of any such Claim, and the
Indemnifying Party will undertake the defense thereof by
representatives chosen by it. Failure to give such notice shall
not affect the Indemnifying Party's duty or obligations under
this Section 8, except to the extent the Indemnifying Party is
prejudiced thereby. So long as the Indemnifying Party is
defending any such Claim actively and in good faith, the
Indemnified Party shall not settle such Claim. The Indemnified
Party shall make available to the Indemnifying Party or its
representatives all records and other materials required by them
and in the possession or under the control of the Indemnified
Party, for the use of the Indemnifying Party and its
representatives in defending any such Claim, and shall in other
respects give reasonable cooperation in such defense.
(b) Failure to Defend. If the Indemnifying Party, within a
reasonable time after notice of any such Claim, fails to defend
such Claim actively and in good faith, the Indemnified Party
(upon further notice) has the right to undertake the defense,
compromise or settlement of such Claim or consent to the entry of
a judgment with respect to such Claim, on behalf of and for the
account and risk of the Indemnifying Party, and the Indemnifying
Party shall thereafter have no right to challenge the Indemnified
Party's defense, compromise, settlement or consent to judgment
therein.
(c) Indemnified Party's Rights. Anything in this Section 8.3 to
the contrary notwithstanding, (i) if there is a reasonable
probability that a Claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or
other money payments, the Indemnified Party shall have the right
to defend, compromise or settle such Claim, and (ii) the
Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise any Claim or consent to
the entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all
liability in respect of such Claim.
8.4 Payment. The Indemnifying Party shall promptly pay the
Indemnified Party any amount due under this Section 8, which
payment may be accomplished in whole or in part, at the option of
the Indemnified Party, by the Indemnified Party setting off any
amount owed to the Indemnifying Party by the Indemnified Party
under this Agreement. To the extent set-off is made by an
Indemnified Party in satisfaction or partial satisfaction of an
indemnity obligation under this Section 8 that is disputed by the
Indemnifying Party, upon a subsequent determination by final
judgment not subject to appeal that all or a portion of such
indemnity obligation was not owed to the Indemnified Party, the
Indemnified Party shall pay the Indemnifying Party the amount
which was set off and not owed plus fifteen percent (15%) simply
interest calculated on an annual basis, pro-forma for the time
such payment was owed and not paid. Upon judgment,
determination, settlement or compromise of any third party Claim,
the Indemnifying Party shall pay promptly on behalf of the
Indemnified Party, and/or to the Indemnified Party in
reimbursement of any amount theretofore required to be paid by
it, the amount so determined by judgment, determination,
settlement or compromise and all other Claims of the Indemnified
Party with respect thereto, unless in the case of a judgment an
appeal is made from the judgment. If the Indemnifying Party
desires to appeal from an adverse judgment, then the Indemnifying
Party shall post and pay the cost of the security or bond to stay
execution of the judgment pending appeal. Upon the payment in
full by the Indemnifying Party of such amounts, the Indemnifying
Party shall succeed to the rights of such Indemnified Party, to
the extent not waived in settlement, against the third party who
made such third party Claim.
8.5 Limitations on Indemnification. Except for any willful or
knowing breach or misrepresentation, as to which claims may be
brought without limitation as to time or amount:
(a) Time Limitation. Except as provided below, no claim or
action shall be brought under this Section 8 for breach of a
representation or warranty after the lapse of two (2) years
following the Closing:
(i) There shall be no time limitation on claims on actions
brought for breach of any representation or warranty made by
Parent and Shareholder in or pursuant to Sections 3.1 and 3.2,
and Parent and Shareholder hereby waive all applicable statutory
limitation periods with respect thereto.
(ii) Any claim or action brought for breach of any representation
or warranty made by Parent and Shareholder in or pursuant to
Section 3.5 may be brought at any time until the underlying tax
obligation is barred by the applicable period of limitation under
federal, state and foreign laws relating thereto (as such period
may be extended by waiver).
(iii) Any claim or action brought for breach of any
representation or warranty made by Parent and Shareholder in or
pursuant to Section 3.11 may be brought at any time until the
underlying claim is barred by the applicable period of limitation
under federal, state and foreign laws relating thereto (as such
period may be extended by waiver).
(iv) Any claim made by a party hereunder by filing a suit or
action in a court of competent jurisdiction or a court reasonably
believed to be of competent jurisdiction for breach of a
representation or warranty prior to the termination of the
survival period for such claim shall be preserved despite the
subsequent termination of such survival period.
(v) If any act, omission, disclosure or failure to disclose
shall form the basis for a claim for breach of more than one
representation or warranty, and such claims have different
periods of survival hereunder, the termination of the survival
period of one claim shall not affect a party's right to make a
claim based on the breach of representation or warranty still
surviving.
(b) Threshold; Ceiling.
(i) Except for claims related to ownership of the Shares, no
indemnification payment shall be required to be made pursuant to
this Section 8 until such time as the total amount of all claims
exceeds $30,000 in the aggregate. (If the total amount of such
claims exceed $30,000, then the Indemnified Party shall be
entitled to be indemnified against and compensated and reimbursed
for the total amount of such claims and not only for the portion
of such claims exceeding $30,000.)
(ii) The maximum liability for any party under this Section 8
shall be equal to $2,000,000.
8.6 No Waiver. The Closing of the transactions contemplated by
this Agreement shall not constitute a waiver by any party of its
rights to indemnification hereunder, regardless of whether the
party seeking indemnification has knowledge of the breach,
violation or failure of condition constituting the basis of the
Claim at or before the Closing, and regardless of whether such
breach, violation or failure is deemed to be "material" for
purposes of Section 10.2.
9. CLOSING.
-------
The closing of this transaction (the "Closing") shall take
place at the offices of Xxxxx & Xxxxxx, 000 Xxxxx Xxxxxxxxx,
Xxxxx 0000, Xxxxx Xxxx, Xxxxxxxxxx 00000, at 10:00 A.M. on
Thursday, November 9, or at such other time and place as the
parties hereto shall agree upon. Such date is referred to in
this Agreement as the "Closing Date."
9.1 Documents to be Delivered by Company and Shareholder. At
the Closing, Parent shall cause Company and Shareholder to
deliver to Buyer the following documents, in each case duly
executed or otherwise in proper form:
(a) Stock Certificate(s). A share certificate or certificates
representing the Shares, together with duly executed and signed
transfers in respect of the shares in favor of the purchaser.
(b) Compliance Certificate. A certificate signed by Parent and
Shareholder that each of the representations and warranties made
by Parent and Shareholder in this Agreement is true and correct
in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had
been made or given on and as of the Closing Date (except for any
changes permitted by the terms of this Agreement or consented to
in writing by Buyer), and that Parent, Company, and Shareholder
have performed and complied with all of Parent's, Company's, and
Shareholder's obligations under this Agreement which are to be
performed or complied with on or prior to the Closing Date.
(c) Certified Resolutions. Certified copies of the resolutions
of the Board of Directors and the shareholders of Company,
authorizing and approving this Agreement and the consummation of
the transactions contemplated by this Agreement.
(d) Articles of Association; Memorandum of Association. A copy
of the Memorandum of Association of Company certified by the
secretary of Company, and a copy of the Articles of Association
of Company certified by the Secretary of State (or its
equivalent) of the state or country of incorporation of Company.
(e) Incumbency Certificate. Incumbency certificates relating to
each person executing (as a corporate officer or otherwise on
behalf of another person) any document executed and delivered to
Buyer pursuant to the terms hereof.
(f) General Releases. The General Releases referred to in
Section 5.4, duly executed by the persons referred to in such
section.
(g) Resignations. The resignations of _______________ and
_______________ as officers and directors of the Company,
effective as of the Closing Date and in form satisfactory to
Buyer's counsel. Xxxxxxx Xxxxx is to be named Chairman of Unibol
upon closing.
(h) Opinion of Counsel. Parent or Company shall deliver an
opinion of _______________, counsel to the Company substantially
in the form of Exhibit 9.1(h) hereto.
(i) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at or prior to the
Closing pursuant to this Agreement and such other certificates of
authority and documents as Buyer may reasonably request.
9.2 Documents to be Delivered by Buyer. At the Closing, Buyer
shall deliver to Parent and/or Shareholder the following
documents, in each case duly executed or otherwise in proper
form:
(a) Cash. To Shareholder, Buyer's check (or confirmation of
wire transfer) as required by Section 2.1(a) hereof.
(b) Compliance Certificate. A certificate signed by the chief
financial officer of Buyer that the representations and
warranties made by Buyer in this Agreement are true and correct
on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as
of the Closing Date (except for any changes permitted by the
terms of this Agreement or consented to in writing by Shareholder
and/or Parent), and that Buyer has performed and complied with
all of Buyer's obligations under this Agreement which are to be
performed or complied with on or prior to the Closing Date.
(c) Certified Resolutions. A certified copy of the resolutions
of the Board of Directors of Buyer authorizing and approving this
Agreement and the consummation of the transactions contemplated
by this Agreement.
(d) Incumbency Certificate. Incumbency certificates relating to
each person executing any document executed and delivered to
Parent or Shareholder by Buyer pursuant to the terms hereof.
(e) Other Documents. All other documents, instruments or
writings required to be delivered to Company or Parent at or
prior to the Closing pursuant to this Agreement and such other
certificates of authority and documents as Parent may reasonably
request.
10. TERMINATION.
-----------
10.1 Right of Termination without Breach. This Agreement may be
terminated without further liability of any party at any time
prior to the Closing:
(a) by mutual written agreement of Buyer and Parent, or
(b) by either Buyer or Parent if the Closing shall not have
occurred on or before November 8, 2000, provided the terminating
party has not, through breach of a representation, warranty or
covenant, prevented the Closing from occurring on or before such
date.
10.2 Termination for Breach.
(a) Termination by Buyer. If (i) there has been a material
violation or breach by Parent, Company, or Shareholder of any of
the agreements, representations or warranties contained in this
Agreement which has not been waived in writing by Buyer, or (ii)
there has been a failure of satisfaction of a condition to the
obligations of Buyer which has not been so waived, or (iii)
Parent, Company, or Shareholder shall have attempted to terminate
this Agreement under this Section 10 or otherwise without grounds
to do so, then Buyer may, by written notice to Parent at any time
prior to the Closing that such violation, breach, failure or
wrongful termination attempt is continuing, terminate this
Agreement with the effect set forth in Section 10.2(c) hereof.
(b) Termination by Parent. If (i) there has been a material
violation or breach by Buyer of any of the agreements,
representations or warranties contained in this Agreement which
has not been waived in writing by Parent, or (ii) there has been
a failure of satisfaction of a condition to the obligations of
Parent which has not been so waived, or (iii) Buyer shall have
attempted to terminate this Agreement under this Section 10 or
otherwise without grounds to do so, then Parent may, by written
notice to Buyer at any time prior to the Closing that such
violation, breach, failure or wrongful termination attempt is
continuing, terminate this Agreement with the effect set forth in
Section 10.2(c) hereof.
(c) Effect of Termination. Termination of this Agreement
pursuant to this Section 10.2 shall not in any way terminate,
limit or restrict the rights and remedies of any party hereto
against any other party which has violated, breached or failed to
satisfy any of the representations, warranties, covenants,
agreements, conditions or other provisions of this Agreement
prior to termination hereof. In addition to the right of any
party under common law to redress for any such breach or
violation, each party whose breach or violation has occurred
prior to termination shall jointly and severally indemnify each
other party for whose benefit such representation, warranty,
covenant, agreement or other provision was made ("indemnified
party") from and against all losses, damages (including, without
limitation, consequential damages), costs and expenses
(including, without limitation, interest (including prejudgment
interest in any litigated matter), penalties, court costs, and
attorneys fees and expenses) asserted against, resulting to,
imposed upon, or incurred by the indemnified party, directly or
indirectly, by reason of, arising out of or resulting from such
breach or violation. Subject to the foregoing, the parties'
obligations under Sections 10.3 and 11.8(a) of this Agreement
shall survive termination.
10.3 Restrictions on Buyer. In the event of a termination of
this Agreement, for any reason whatsoever, in order to protect
the trade secrets and proprietary know-how of Parent, Company,
and Shareholder, Buyer agrees as follows:
(a) Covenant of Confidentiality. Buyer shall not at any time
subsequent to such termination, except as explicitly permitted by
Parent, (i) use for any purpose, (ii) disclose to any person, or
(iii) keep or make copies of documents, tapes, discs or programs
containing, any confidential information concerning Parent or
Company. For purposes hereof, "confidential information" shall
mean and include, without limitation, all Trade Rights in which
Parent and/or Company has an interest, all customer lists and
customer information of Parent and/or Company, and all other
information concerning Company's processes, apparatus, equipment,
packaging, products, marking and distribution methods, not
previously disclosed to the public directly by Company.
(b) Equitable Relief for Violations. Buyer agrees that the
provisions and restrictions contained in Section 10.3 are
necessary to protect the legitimate continuing interests of
Parent, Company, and Shareholder, and that any violation or
breach of these provisions will result in irreparable injury to
Parent, Company, and/or Shareholder for which a remedy at law
would be inadequate and that, in addition to any relief at law
which may be available to Parent, Company, or Shareholder for
such violation or breach and regardless of any other provision
contained in this Agreement, Parent, Company, and Shareholder
shall be entitled to injunctive and other equitable relief as a
court may grant after considering the intent of this Section 10.3
11. MISCELLANEOUS.
-------------
11.1 Disclosure Schedule. The Schedules have been compiled in a
bound volume (the "Disclosure Schedule"), executed by Parent and
dated and delivered to Buyer on the date of this Agreement.
Information set forth in the Disclosure Schedule specifically
refers to the article and section of this Agreement to which such
information is responsive and such information shall not be
deemed to have been disclosed with respect to any other article
or section of this Agreement or for any other purpose. The
Disclosure Schedule shall not vary, change or alter the language
of the representations and warranties contained in this Agreement
and, to the extent the language in the Disclosure Schedule does
not conform in every respect to the language of such
representations and warranties, such language in the Disclosure
Schedule shall be disregarded and be of no force or effect.
11.2 Further Assurance. Each party hereto shall execute and
cause to be delivered to each other party hereto such instruments
and other documents, and shall take such other actions, as such
other party may reasonably request (prior to, at, or after the
Closing) for the purpose of carrying out or evidencing the
transactions contemplated hereby.
11.3 Disclosures and Announcements. Announcements concerning the
transactions provided for in this Agreement by Buyer, Parent,
Company, or Shareholder shall be subject to the mutual agreement
of the other parties in all essential respects.
11.4 Assignment; Parties in Interest.
(a) Assignment. Except as expressly provided herein, the rights
and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of
the other parties. Notwithstanding the foregoing, Buyer may,
without consent of any other party, cause one or more
subsidiaries or affiliates of Buyer to carry out all or part of
the transactions contemplated hereby; provided, however, that
Buyer shall, nevertheless, remain liable for all of its
obligations, and those of any such subsidiary, to Parent and/or
Shareholder hereunder. Any permitted assignee shall be required
to execute an agreement which shall obligate such assignee to be
bound by all terms under this Agreement.
(b) Parties in Interest. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective
successors and permitted assigns of the parties hereto. Nothing
contained herein shall be deemed to confer upon any other
person any right or remedy under or by reason of this Agreement.
11.5 Law Governing Agreement; Venue. This Agreement may not be
modified or terminated orally, and shall be construed and
interpreted according to the internal laws of the State of
California, excluding any choice of law rules that may direct the
application of the laws of another jurisdiction. Any dispute,
controversy or legal action concerning this Agreement shall be
heard in the state and federal courts located in Orange County,
California.
11.6 Amendment and Modification. Buyer and Parent may amend,
modify and supplement this Agreement in such manner as may be
agreed upon in writing between Buyer and Parent.
11.7 Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be:
(a) personally delivered; (b) sent by telecopier, facsimile
transmission or other electronic means of transmitting written
documents if followed by certified mail; or (c) sent to the
parties at their respective addresses indicated herein by
registered or certified U.S. mail, return receipt requested and
postage prepaid, or by private overnight mail courier service.
The respective addresses to be used for all such notices, demands
or requests are as follows:
If to Buyer, to: California Software Corporation
0000 XxXxxx Xxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
or to such other person or address as Buyer shall furnish to
Shareholder in writing.
If to Parent, to: c/o ------------------------
------------------------
------------------------
------------------------
Facsimile:------------------
with a copy to: Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: G. Xxxxxx Xxxxxxx, Esq.
Facsimile: (404) 870- ------
If to Shareholder, to: c/o --------------------
--------------------
--------------------
--------------------
Facsimile:-------------------
or to such other person or address as Parent shall designate in
accordance with this Agreement. In addition, any notice required
to be sent to Company or Shareholder shall be sent to Parent
(together with a copy to G. Xxxxxx Xxxxxxx, Esq. at the address
set froth above), which such notice shall be deemed legally
sufficient..
If personally delivered, such communication shall be deemed
delivered upon actual receipt; if electronically transmitted
pursuant to this paragraph, such communication shall be deemed
delivered the next business day after transmission; if sent by
overnight courier pursuant to this paragraph, such communication
shall be deemed delivered upon receipt; and if sent by U.S. mail
pursuant to this paragraph, such communication shall be deemed
delivered as of the date of delivery indicated on the receipt
issued by the relevant postal service, or, if the addressee fails
or refuses to accept delivery, as of the date of such failure or
refusal. Any party to this Agreement may change its address for
the purposes of this Agreement by giving notice thereof in
accordance with this section.
11.8 Expenses. Regardless of whether or not the transactions
contemplated hereby are consummated:
(a) Expenses to be Paid by Parent. Parent shall pay, and shall
indemnify, defend and hold Buyer, Company, and Shareholder
harmless from and against, each of the following:
(i) Transfer Taxes. Any sales, use, excise, transfer or other
similar tax imposed with respect to the transactions provided for
in this Agreement, and any interest or penalties related thereto.
(ii) Professional Fees. All fees and expenses of their own and
Company's legal, accounting, tax, investment banking and other
professional counsel in connection with the transactions
contemplated hereby.
(iii) Broker's and Finder's Fees. All fees and expenses of
their own and Company's brokers and finders in connection with
the transactions contemplated hereby.
(b) Other. Except as otherwise provided herein, each of the
parties shall bear its own expenses and the expenses of its
counsel and other agents in connection with the transactions
contemplated hereby.
(c) Costs of Litigation. The parties agree that the prevailing
party in any action brought with respect to or to enforce or
interpret any right or remedy under this Agreement shall be
entitled to recover from the other party or parties all
reasonable costs and expenses of any nature whatsoever incurred
by the prevailing party in connection with such action, including
without limitation attorneys', accountants', expert witness' and
consultants' fees and prejudgment interest.
11.9 Entire Agreement. This instrument embodies the entire
agreement between the parties hereto with respect to the
transactions contemplated herein, and there have been and are no
agreements, representations or warranties between the parties
other than those set forth or provided for herein.
11.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
11.11 Headings. The headings in this Agreement are inserted
for convenience only and shall not constitute a part hereof.
11.12 Form 8-K and Securities Law Filings. Parent shall
cooperate, and shall cause Company and Shareholder to cooperate,
with and assist the Buyer to the extent reasonably requested by
the Buyer, in providing information for the preparation of the
Report on Form 8-K which may be filed by Buyer in connection with
the transactions contemplated by this Agreement.
11.13 Time of the Essence. Time is of the essence of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
BUYER: CALIFORNIA SOFTWARE CORPORATION,
a Nevada corporation
By: /s/ R. Xxxxx Xxxxxx
Printed Name: R.Xxxxx Xxxxxx
Title: Chief Executive Officer
PARENT: UNICOMP, INC.,
a Colorado corporation
By: /s/ X.X. Xxxxx
Printed Name: X.X. Xxxxx
Title: Chairman and CEO
COMPANY: UNIBOL, LTD,
a United Kingdom corporation
By: /s/ X.X. Xxxxx
Printed Name: X.X. Xxxxx
Title: Chairman
SHAREHOLDER: ICS COMPUTING GROUP LTD,
a United Kingdom corporation
By: /s/ X.X. Xxxxx
Printed Name: X.X. Xxxxx
Title: Chairman
