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Exhibit 10.13
MERGER AGREEMENT
This MERGER AGREEMENT (this "Agreement") is entered into as of June 1,
2000 by and among VIASOURCE COMMUNICATIONS, INC., a New Jersey Company
("ViaSource"), EX ACQUISITION, INC., a Delaware corporation and wholly-owned
subsidiary of ViaSource (the "Merger Sub" and, together with ViaSource, the
"ViaSource Companies"), EXCALIBUR CABLE COMMUNICATIONS, LTD., a Kentucky
corporation (the "Company") and KONRAD XXXX XXXX, a resident of the Commonwealth
of Virginia ("Xxxx"), THE XXXXXX XXXXXXX XXXX 2000 TRUST (the "Trust") and XXXX
X. XXXXXXX, XXXXXX X. XXXXXXXX, XXXXX X. XXXX, XXXXX X. XXXX, XXXX XXXXX,
XXXXXXXX X. FIELD, XXXXXX X. XXXXXX, XXXXXXX X. XXXXXXX, XXXXXX X. XXXXX, XXXX
XXXXXXXX, XXXXXXX XXXXXXXX, XXXXXXX X. XXXXXXXXX, XXXX XXXXXXXX, XXX XXXXX, XXXX
X. XXXXXXX, XXXXX X. XXXXXXXXX and XXXXX X. XXXXXXXXX (each referred to as an
"Employee Shareholder" and collectively referred to as the "Employee
Shareholders") (Xxxx, the Trust and the Employee Shareholders constitute the
sole shareholders of the Company and are referred to as the "Shareholders").
Certain other capitalized terms used herein are defined in Article XI and
throughout this Agreement.
RECITALS
A. The Company is engaged in the business of providing cable television
and satellite dish installation, construction and maintenance services in the
cable television, telephony and direct broadcast satellite television industries
in Washington, D.C. and other geographical areas in the United States (the
"Business");
B. The Shareholders are the owners of all of the capital stock of the
Company;
C. ViaSource and the Company have determined that it is in the best
interests of their respective shareholders for ViaSource to acquire all of the
issued and outstanding capital stock of the Company. In order to effectuate the
acquisition, ViaSource has organized the Merger Sub as a wholly-owned
subsidiary, and the parties have agreed, subject to the terms and conditions set
forth in this Agreement, to merge the Company with and into the Merger Sub so
that Merger Sub continues as a surviving Company and wholly-owned subsidiary of
ViaSource, that the Merger Sub shall change its name to Excalibur Cable
Communications, Inc., and the Shareholders will be issued certain cash,
promissory notes and shares of common stock of ViaSource, in exchange for the
issued and outstanding equity interests of the Company.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
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ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this Agreement,
and in accordance with the business corporation laws of the State of Delaware
(the "Delaware General Corporation Law") and the Commonwealth of Kentucky (the
"Kentucky Business Corporation Act"), at the Effective Time (as defined below),
the Company will be merged with and into the Merger Sub (the "Merger"), with
Merger Sub being the surviving company in the Merger and remaining a
wholly-owned subsidiary of ViaSource, and the separate corporate existence of
the Company shall cease.
ARTICLE II
PURCHASE PRICE/CONVERSION OF SECURITIES
2.1 PURCHASE PRICE. Subject to the terms and conditions set forth
herein, the purchase price for all of the issued and outstanding shares of the
capital stock of the Company shall be $16,000,000 (the "Purchase Price") payable
as set forth in Section 2.2. The Purchase Price shall be subject to adjustment,
as set forth in Section 7.12.
2.2 CONVERSION OF SECURITIES. At the Effective Time, by virtue of the
Merger and without any action on the part of the Company, ViaSource, or the
Shareholders, the shares of common stock of the Company, no par value per share,
issued and outstanding immediately prior to the Effective Time (the "Company
Shares"), shall be converted into the right to receive: (a) 3,200,000 shares of
ViaSource Common Stock (the "Stock Consideration"); (b) the sum of Four Million
and 00/100 Dollars ($4,000,000) (the "Cash Consideration"), payable as provided
in Section 3.5 herein; and (c) the sum of Four Million and 00/100 Dollars
($4,000,000) in the form of a subordinated promissory note (the "Note"),
substantially in the form attached hereto as Exhibit A.
ARTICLE III
CLOSING
3.1 TIME AND PLACE. Subject to the terms and conditions of this
Agreement, the Closing shall take place at the opening of business on or before
June 1, 2000, at the offices of the Company or the Company's counsel, or such
other time and place as the parties may otherwise agree. The date on which the
Closing occurs shall be referred to as the "Closing Date."
3.2 FILING OF PLAN OF MERGER. At the Closing, the parties shall cause
the Merger to be consummated by filing: (i) a duly executed Certificate of
Merger with the Secretary of State of the State of Delaware; and (ii) duly
executed Articles of Merger with the Secretary of State of the Commonwealth of
Kentucky, in such form as ViaSource and the Company determine is required by and
in accordance with the relevant provisions of the Delaware General Corporation
Law and the
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Kentucky Business Corporation Act (the date and time of such filings is referred
to herein as the "Effective Date" or "Effective Time").
3.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided under the Delaware General Corporation Law and the
Kentucky Business Corporation Act. Without limiting the generality of the
foregoing, at the Effective Time:
(a) all property, rights, privileges, policies and franchises
of the Company and the Merger Sub shall vest in the Merger Sub and all debts,
liabilities and duties of the Company and the Merger Sub shall become the debts,
liabilities and duties of the Merger Sub.
(b) the Certificate of Incorporation and Bylaws of the Merger
Sub, as in effect immediately prior to the Effective Time, shall remain its
Certificate of Incorporation and Bylaws thereafter, unless and until amended in
accordance with their terms and as provided by law;
(c) the directors and officers of the Merger Sub at the
Effective Time shall remain the directors and officers of the Merger Sub, each
to hold a directorship or office in accordance with the Certificate of
Incorporation and Bylaws of the Merger Sub, and until his or her respective
successor is duly elected and qualified; and
(d) the name of the Merger Sub shall be changed to Excalibur
Cable Communications, Inc.
3.4 TAX AND ACCOUNTING TREATMENT. The parties hereto acknowledge and
agree that the Merger contemplated hereby shall be treated for accounting
purposes as a purchase and for tax purposes as a tax free reorganization under
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"). A
Section 338 election will not be filed with respect to the transaction.
3.5 PROCEDURE AT THE CLOSING. At the Closing, the parties agree that
the following shall occur:
(a) The Company and the Shareholders shall have satisfied each
of the conditions set forth in Article X and shall deliver to ViaSource the
documents, certificates, opinions, consents and letters required by Article X.
(b) The ViaSource Companies shall have satisfied each of the
conditions set forth in Article XI and shall deliver to the Company or the
Shareholders, as the case may be, the documents, certificates, consents and
letters required by Article XI.
(c) ViaSource shall issue the shares of ViaSource Common Stock
issuable pursuant to Section 2.2, registered in the names of the Shareholders
and shall deliver such shares in the following manner: (i) ViaSource shall set
aside and hold in accordance with Section 8.3 stock certificates representing
ten percent (10%) of the Stock Consideration (the "Held Back Shares"), and (ii)
ViaSource shall deliver stock certificates representing the balance of the
shares of ViaSource Common Stock issuable in accordance with Schedule 2.1 to the
Shareholders. The shares of ViaSource Common Stock issuable pursuant to Section
2.2, including the Held Back Shares and any
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additional shares of ViaSource Common Stock subsequently issued pursuant to
Section 7.12, are referred to herein as the "ViaSource Shares."
(d) ViaSource shall (i) set aside and hold in accordance with
Section 8.3 ten percent (10%) of the Cash Consideration (the "Held Back Cash"),
and (ii) deliver cash representing the balance of the Cash Consideration to the
Shareholders in immediately available funds in accordance with Schedule 2.1.
(e) ViaSource shall issue Notes to the Shareholders,
substantially in the form of Exhibit A hereto, in accordance with Schedule 2.1.
Such Notes shall be delivered in the following manner: (i) ViaSource shall set
aside and hold in accordance with Section 8.3 promissory notes having a
principal value representing ten percent (10%) of the total principal value of
the Notes (the "Held Back Notes"), and (ii) ViaSource shall deliver Notes
representing the remaining principal balance of the Notes in accordance with
Schedule 2.1 to the Shareholders. The Notes issued pursuant to Section 2.2,
including the Held Back Notes and any additional Notes subsequently issued
pursuant to Section 7.12, are referred to herein as the "Promissory Notes."
(f) Options. In connection with the transactions contemplated
hereby, ViaSource shall deliver at the Closing 384,000 options to purchase
common stock of ViaSource under its 1999 stock incentive plan to employees of
the Company (other than Xxxx) as directed by Xxxx.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE VIASOURCE COMPANIES
As a material inducement to the Company and the Shareholders to enter
into this Agreement and to consummate the transactions contemplated hereby, the
ViaSource Companies make the following representations and warranties to the
Company and the Shareholders:
4.1 CORPORATE STATUS. Each of the ViaSource Companies is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite power and authority to
own or lease its properties and to carry on its business as presently conducted.
Each of the ViaSource Companies is legally qualified to do business as a foreign
company in each of the jurisdictions where the nature of its properties and the
conduct of its business requires such qualification (all of which jurisdictions
are set forth in Schedule 4.1), which represent all jurisdictions where the
nature of its properties and the conduct of its business requires such
qualification, and is in good standing in each of the jurisdictions in which it
is so qualified. Each of the ViaSource Companies has fully complied with all of
the requirements of any statute governing the use and registration of fictitious
names, and has the legal right to use the names under which it operates its
businesses. There is no pending or threatened proceeding for the dissolution,
liquidation, insolvency or rehabilitation of any of the ViaSource Companies. All
names under which either of the ViaSource Companies does business as of the date
hereof are specified on Schedule 4.1. Except as otherwise disclosed in Schedule
4.1, neither of the ViaSource Companies has changed its name
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or used any assumed or fictitious name, or been the surviving entity in a
merger, acquired any business or changed its principal place of business or
chief executive office, within the past three years.
4.2 CORPORATE POWER AND AUTHORITY. Each of the ViaSource Companies has
the corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. Each of the ViaSource Companies has taken all corporate
action necessary to authorize its execution and delivery of this Agreement, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby.
4.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by each of the ViaSource Companies and constitutes a legal, valid and binding
obligation of each of the ViaSource Companies, enforceable against each of the
ViaSource Companies in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
4.4 VIASOURCE COMMON STOCK: CAPITALIZATION. Schedule 4.4 sets forth,
with respect to each of the ViaSource Companies the number and classes of all
authorized, issued and outstanding shares of its capital stock. ViaSource is the
sole record and beneficial owner of all of the capital stock of Merger Sub. All
of the issued and outstanding shares of ViaSource Common Stock (i) have been
duly authorized and validly issued and are fully paid and non-assessable, (ii)
were issued in compliance with all applicable state and federal securities laws,
(iii) were not issued in violation of any preemptive rights or rights of first
refusal, (iv) were issued for not less than fair market value in exchange for
lawful consideration, and (v) no preemptive rights or rights of first refusal
exist, and no such rights arise by virtue of or in connection with the
transactions contemplated hereby. Except as set forth on Schedule 4.4, there are
no outstanding or authorized rights, options, warrants, convertible securities,
subscription rights, conversion rights, exchange rights or other agreements or
commitments of any kind that could require either of the ViaSource Companies to
issue or sell any shares of its capital stock (or securities convertible into or
exchangeable for shares of its capital stock). There are no outstanding stock
appreciation, phantom stock, profit participation or other similar rights with
respect to either of the ViaSource Companies. There are no proxies, voting
rights or other agreements or understandings with respect to the voting or
transfer of the shares of either of the ViaSource Companies. Except as set forth
on Schedule 4.4, (A) neither of the ViaSource Companies is obligated to redeem
or otherwise acquire any of the ViaSource Common Stock and (B) there has been no
transaction or action taken with respect to the equity ownership of either of
the ViaSource Companies in contemplation of the transactions described in this
Agreement. Upon consummation of the transactions contemplated hereby and the
issuance and delivery of certificates representing the ViaSource Shares to the
Company, the ViaSource Shares will be validly issued, fully paid and
non-assessable shares of ViaSource Common Stock.
4.5 NO VIOLATION; CONSENTS AND APPROVALS. Except for any approvals or
consents identified in Schedule 4.5 as requiring the consent of third parties,
the execution and delivery of this
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Agreement by the ViaSource Companies, the performance by the ViaSource Companies
of their obligations hereunder and the consummation by them of the transactions
contemplated by this Agreement will not (a) contravene any provision of the
Certificates of Incorporation or Bylaws of either of the ViaSource Companies,
(b) violate or conflict with any law, statute, ordinance, rule, regulation,
decree, writ, injunction, judgment or order of any Governmental Authority or of
any arbitration award which is either applicable to, binding upon or enforceable
against either of the ViaSource Companies, (c) conflict with, result in any
breach of, or constitute a default (or an event which would, with the passage of
time or the giving of notice or both, constitute a default) under, or give rise
to a right of payment or right to terminate, amend, modify, abandon or
accelerate, any Contract which is applicable to, binding upon or enforceable
against either of the ViaSource Companies, (d) result in or require the creation
or imposition of any Lien upon or with respect to any of the properties or
assets of either of the ViaSource Companies, (e) give to any individual or
entity a right or claim against either of the ViaSource Companies or (f) require
the consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, any court or tribunal or any other
Person, except for any applicable filings required under the HSR Act and any
filings required o be made by the Company or the Shareholders.
4.6 RECORDS OF THE VIASOURCE COMPANIES. The copies of the Certificates
of Incorporation, Bylaws, and other documents and agreements of the ViaSource
Companies which were provided to the Company and the Shareholders are true,
accurate and complete and reflect all amendments made through the date of this
Agreement. All material corporate actions taken by the ViaSource Companies have
been duly authorized or ratified. All accounts, books, ledgers and official and
other records of the ViaSource Companies are substantially complete and fairly,
fully and accurately reflect all matters contained therein.
4.7 FINANCIAL STATEMENTS. ViaSource has delivered to the Company and
the Shareholders the financial statements of ViaSource for the years ended
January 3, 1998, January 2, 1999 and January 1, 2000, including the notes
thereto, (collectively, the "Financial Statements"), copies of which are
attached hereto as Schedule 4.7. The Financial Statements have been audited by
Xxxxxx Xxxxxxxx, LLP, have been prepared in accordance with generally accepted
accounting principles ("GAAP"), consistently applied, and fairly present the
financial position of ViaSource at each of the balance sheet dates and the
results of operations for the periods covered thereby. The books and records of
ViaSource fully and fairly reflect all transactions, properties, assets and
liabilities of ViaSource. There are no material special or non-recurring items
of income or expense during the periods covered by the Financial Statements, and
the Current Balance Sheet does not reflect any write-up or revaluation
increasing the book value of any assets, except as specifically disclosed in the
notes thereto. The Financial Statements reflect all adjustments necessary for a
fair presentation of the financial information contained therein.
4.8 INVESTMENT. ViaSource has had the opportunity to discuss the
transactions contemplated hereby with the Company and the Shareholders and has
had the opportunity to obtain such information pertaining to the Company as has
been requested. ViaSource is a sophisticated purchaser and has sufficient
experience in requesting information, evaluating and acquiring companies similar
to the Company that it is capable of evaluating the risks of purchasing, owning
and operating the Company.
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4.9 NO COMMISSIONS. Neither of the ViaSource Companies has incurred any
obligation for any finder's or broker's or agent's fees or commissions or
similar compensation in connection with the transactions contemplated hereby.
4.10 COMPANY DUE DILIGENCE. Neither of the ViaSource Companies knows of
any event that has occurred or state of facts that exists which would constitute
a breach of any of the representations and warranties made by the Company or the
Shareholders pursuant to Article V of this Agreement.
4.11 ACCURACY OF INFORMATION FURNISHED. No representation, statement or
information made or provided by either of the ViaSource Companies contained in
this Agreement (including, without limitation, the various Schedules attached
hereto) or any agreement executed in connection herewith or in any certificate
delivered pursuant hereto or thereto, contains or shall contain any untrue
statement of a material fact or omits or shall omit any material fact necessary
to make the information contained therein not misleading. The ViaSource
Companies have provided the Shareholders with true, accurate and complete copies
of all documents listed or described in the various Schedules attached hereto.
4.12 DISCLOSURE. No information furnished by or on behalf of the
ViaSource Companies to the Shareholders and the Company, including but not
limited to the Disclosure Statement, contains any untrue statement of a material
fact or omits to state any fact necessary to make the information disclosed not
misleading.
4.13 TAX MATTERS. Neither of the ViaSource Companies has taken any
action prior to the date hereof, and will not take any action after the date
hereof and after the Effective Time which would cause the Merger to fail to
qualify as a tax-free reorganization under Section 368(a) of the Code.
4.14 SENIOR INDEBTEDNESS. The Senior Indebtedness (as defined in the
Note) of the ViaSource Companies consists only of debt incurred in connection
with the Amended and Restated Credit Agreement dated March 10, 2000 among the
Company and General Electric Capital Corporation ("GECC"), together with all
amendments, modifications, increases or refinancings thereof, and all
obligations of the Company under that Subordinated Promissory Note dated March
10, 2000 from the Company to GECC.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE SHAREHOLDERS
As a material inducement to the ViaSource Companies to enter into this
Agreement and to consummate the transactions contemplated hereby, the Company
and the Shareholders, jointly and severally, make the following representations
and warranties to the ViaSource Companies:
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5.1 CORPORATE STATUS. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Kentucky and has the requisite power and authority to own or lease its
properties and to carry on its business as now being conducted. The Company is
legally qualified to do business as a foreign company in each of the
jurisdictions where the nature of its properties and the conduct of its business
requires such qualification (all of which jurisdictions are set forth in
Schedule 5.1), which represent all jurisdictions where the nature of its
properties and the conduct of its business requires such qualification, and is
in good standing in each of the jurisdictions in which it is so qualified. The
Company has fully complied with all of the requirements of any statute governing
the use and registration of fictitious names, and has the legal right to use the
names under which it operates its businesses. There is no pending or threatened
proceeding for the dissolution, liquidation, insolvency or rehabilitation of the
Company. All names under which the Company does business as of the date hereof
are specified on Schedule 5.1. Except as otherwise disclosed in Schedule 5.1,
the Company has not changed its name or used any assumed or fictitious name, or
been the surviving entity in a merger, acquired any business or changed its
principal place of business or chief executive office, within the past three
years.
5.2 POWER AND AUTHORITY. The Company has the corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The Company
has taken all corporate action necessary to authorize the execution and delivery
of this Agreement, the performance of its obligations hereunder and the
consummation of the transactions contemplated hereby. The Shareholders have the
requisite competence and authority to execute and deliver this Agreement, to
perform their obligations hereunder and to consummate the transactions
contemplated hereby.
5.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by the Company and each Shareholder, and constitutes the legal, valid and
binding obligation of each of them, enforceable against each of them in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at law
or in equity.
5.4 SHAREHOLDERS AND OFFICERS OF THE COMPANY; CAPITALIZATION. Schedule
5.4 sets forth, with respect to the Company (a) the name, address and federal
taxpayer identification/social security number of, and the number of outstanding
shares of each class of its capital stock owned by, the shareholders of record
as of the close of business on the date of this Agreement, (b) the name, address
and federal taxpayer identification number of, and number of shares of each
class of its capital stock beneficially owned by, the beneficial owners of
outstanding shares of capital stock (to the extent that record and beneficial
ownership of any such shares are different), and (c) the name and title of each
officer of the Company. The Shareholders are the sole record and beneficial
owners of all of the Company Shares, and own the Company Shares free and clear
of all Liens, restrictions and claims of any kind. All of the Company Shares (i)
have been duly authorized and validly issued and are fully paid and
non-assessable, (ii) were issued in compliance with all applicable state and
federal securities laws, (iii) were not issued in violation of any preemptive
rights or rights of first refusal, (iv) were issued for not less than fair
market value in exchange for lawful consideration. Except as set forth in
Schedule 5.4, no preemptive rights or rights of first refusal exist with respect
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to the Company Shares, and no such rights arise by virtue of or in connection
with the transactions contemplated hereby and there are no outstanding or
authorized rights, options, warrants, convertible securities, subscription
rights, conversion rights, exchange rights or other agreements or commitments of
any kind that could require the Company to issue or sell any shares of its
capital stock (or securities convertible into or exchangeable for shares of its
capital stock). Except as set forth in Schedule 5.4, there are no outstanding
stock appreciation, phantom stock, profit participation or other similar rights
with respect to the Company. Except as set forth in Schedule 5.4, there are no
proxies, voting rights or other agreements or understandings with respect to the
voting or transfer of the shares of the Company. Except as set forth on Schedule
5.4, (A) the Company is not obligated to redeem or otherwise acquire any of the
Company Shares and (B) there has been no transaction or action taken with
respect to the equity ownership of the Company since December 31, 1999.
5.5 NO VIOLATION; CONSENTS AND APPROVALS. Except for any approvals or
consents required under the Material Contracts (as defined in Section 5.22)
identified in Schedule 5.22 as requiring the consent of third parties, the
execution and delivery of this Agreement by the Company and the Shareholders,
the performance by the Company and the Shareholders of their obligations
hereunder and the consummation by them of the transactions contemplated by this
Agreement will not (a) contravene any provision of the Articles of Incorporation
or Bylaws of the Company, (b) violate or conflict with any law, statute,
ordinance, rule, regulation, decree, writ, injunction, judgment or order of any
Governmental Authority or of any arbitration award which is either applicable
to, binding upon or enforceable against the Company or of the Shareholders, (c)
conflict with, result in any breach of, or constitute a default (or an event
which would, with the passage of time or the giving of notice or both,
constitute a default) under, or give rise to a right of payment or right to
terminate, amend, modify, abandon or accelerate, any Contract which is
applicable to, binding upon or enforceable against the Company or the
Shareholders, (d) result in or require the creation or imposition of any Lien
upon or with respect to any of the properties or assets of the Company, (e) give
to any individual or entity a right or claim against the Company or the
Shareholders or (f) require the consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Authority, any court or
tribunal or any other Person, except any applicable filings required under the
HSR Act and any filings required to be made by the ViaSource Companies.
5.6 RECORDS OF THE COMPANY. The copies of the Articles of
Incorporation, Bylaws, and other documents and agreements of the Company which
were provided to ViaSource are true, accurate and complete and reflect all
amendments made through the date of this Agreement. The minute books for the
Company made available to ViaSource for review were correct and complete in all
material respects as of the date of such review, except as set forth in Schedule
5.6, no further entries have been made through the date of this Agreement, such
minute books contain the true signatures of the persons purporting to have
signed them, and such minute books contain an accurate record of all material
corporate actions of the shareholders and/or the board of directors (and any
committees thereof) of the Company taken by written consent or at a meeting
since incorporation. All material corporate actions taken by the Company have
been duly authorized or ratified. All accounts, books, ledgers and official and
other records of the Company are substantially complete and fairly, fully and
accurately reflect all matters contained therein. The stock ledgers of the
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Company, as previously made available to ViaSource, contain accurate and
complete records of all issuances, transfers and cancellations of shares of the
capital stock of the Company.
5.7 FINANCIAL STATEMENTS. The Company has delivered to ViaSource the
financial statements of the Company for the years ended December 31, 1997, 1998
and 1999, including the notes thereto, (collectively, the "Financial
Statements"), copies of which are attached hereto as Schedule 5.7. The balance
sheet dated as of December 31, 1999 of the Company included in the Financial
Statements is referred to herein as the "Current Balance Sheet." The 1998 and
1999 Financial Statements have been audited by X.X. Xxxxxxxx and Company and
Xxxxxx Xxxxxxxx, LLP, respectively, have been prepared in accordance with
generally accepted accounting principles ("GAAP"), consistently applied, and
fairly present the financial position of the Company at each of the balance
sheet dates and the results of operations for the periods covered thereby. The
books and records of the Company fully and fairly reflect all transactions,
properties, assets and liabilities of the Company. Except as set forth in the
Financial Statements, there are no material special or non- recurring items of
income or expense during the periods covered by the Financial Statements, and
the Current Balance Sheet does not reflect any write-up or revaluation
increasing the book value of any assets, except as specifically disclosed in the
notes thereto. The Financial Statements reflect all adjustments necessary for a
fair presentation of the financial information contained therein.
5.8 SUBSIDIARIES. The Company does not presently own, and since its
incorporation has not owned any subsidiary.
5.9 LIABILITIES OF THE COMPANY. The Company does not have any
liabilities or obligations, whether accrued, absolute, contingent or otherwise,
except as set forth on Schedule 5.9. Schedule 5.9 includes all indebtedness owed
by the Company as of the date hereof to a bank or any other Person, including,
without limitation, indebtedness for borrowed money (including principal and
accrued but unpaid interest) and remaining payments on capitalized equipment
leases, of the Company. Schedule 5.9 also includes all contingent liabilities of
the Company (and the amount of such liabilities) including, without limitation,
those resulting from deposits, fees or any other form of payments, in cash or
kind, previously received by the Company for services which have not been
completed or otherwise provided.
5.10 LITIGATION. Except as set forth on Schedule 5.10, there is no
action, suit, or other legal or administrative proceeding or governmental
investigation pending, anticipated, contemplated or, to the knowledge of the
Company threatened against, by or affecting the Company or the Shareholders, or
any of the Company's properties or assets, or which question the validity or
enforceability of this Agreement or the transactions contemplated hereby, and
there is no basis for any of the foregoing. There are no outstanding orders,
decrees or stipulations issued by any Governmental Authority in any proceeding
to which the Company is or was a party which have not been complied with in full
or which continue to impose any material obligations on the Company.
5.11 ENVIRONMENTAL MATTERS.
(a) (i) All Permits required under Environmental Laws that are
necessary for the operations of the Business ("Environmental Permits") have been
obtained and are in full force and
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effect, and the Company is unaware of any basis for revocation or suspension of
any such Environmental Permits; (ii) no Environmental Laws impose any obligation
upon the Shareholders, the Company or the Company's Affiliates, as a result of
any transaction contemplated hereby, to provide any prior notification to any
governmental entity of the transactions contemplated hereby; and (iii) the
Business has at all times been operated in full compliance with all such
Environmental Permits and within the production levels or emission levels
specified in such Environmental Permits.
(b) The Shareholders (with respect to the Business) and the
Company have at all times complied with all applicable Environmental Laws.
(c) There are no existing, pending or, to the knowledge of the
Company or the Shareholders, threatened actions, suits, claims, investigations,
inquiries or proceedings by or before any Governmental Body directed against the
Company, and the Company is not subject to any orders, judgments, decrees or
settlements, and none of the Shareholders or the Company has received or is
otherwise aware of any notices, claims or other communications alleging any
potential liability of the Company, which pertain or relate to Environmental
Laws, including, without limitation, (i) any remedial obligations at any
location under any Environmental Law, (ii) violations of any Environmental Law
at any location, (iii) personal injury or property damage claims relating to a
Release of Hazardous Materials at any location, or (iv) Environmental
Remediation Costs.
(d) There has been no Release of any Hazardous Materials by
the Company or, to the knowledge of the Company or the Shareholders, any other
Person, on, to, from or underlying any real property owned or leased by the
Company.
(e) To the knowledge of the Company or the Shareholders, no
asbestos-containing materials or polychlorinated biphenyls are present in, on or
to the knowledge of the Company, underlying any real property owned or leased by
the Company.
(f) The Company has not owned or operated, nor to the
knowledge of the Company, or the Shareholders, has any other Person owned or
operated, any underground storage tanks, sumps or septic fields, active or
abandoned, at any real property owned or leased by the Company.
(g) ViaSource has been provided with all engineering,
geologic, environmental reports and other documents in the possession or control
of the Company or the Shareholders relating to any real property owned or leased
by the Company, including, without limitation, those relating to (i) any
Environmental Conditions existing on any real property owned or leased by the
Company and (ii) any violations of any Environmental Laws.
(h) All Hazardous Materials generated, used, stored,
transported, treated, disposed of or otherwise handled by or on behalf of the
Company have been generated, used, stored, transported, treated, disposed of and
otherwise handled in compliance with all applicable Environmental Laws.
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(i) The Shareholders (with respect to the Business) have no
current liability, nor is there any liability on the part of the Shareholders
(with respect to the Business), the Company, or ViaSource which may be
reasonably anticipated, for Environmental Remediation Costs at any location.
(j) None of the Shareholders (with respect to the Business)
nor the Company has any current liability, nor is there any liability on the
part of the Shareholders (with respect to the Business), the Company or
ViaSource which may be reasonably anticipated, under Environmental Laws
(including, without limitation, for the violation of any Environmental Law or
Environmental Remediation Costs) in connection with any businesses or properties
previously owned, leased, operated or otherwise used by the Company or any of
its predecessors.
(k) Except as set forth on Schedule 5.11(k), the Company has
never performed or authorized the performance of vehicle fueling, maintenance,
or, except as performed in compliance with Environmental Law, washing at any
location owned, leased, or operated by any of them.
5.12 REAL ESTATE
(a) Except as set forth on Schedule 5.12(a), the Company does
not own any real property or any interest therein (including without limitation
any option or other right or obligation to purchase any real property or any
interest therein). The Shareholders do not own any real property (or any
interest therein, including leasehold interests) used by the Company.
(b) Schedule 5.12(b) sets forth a list of all real estate
leases, licenses or similar agreements ("Leases") to which the Company is a
party, which are for the use or occupancy of real estate owned by a third party
(copies of which have previously been furnished to ViaSource), and in each case,
setting forth (A) the lessor and lessee thereof and the commencement date, term
and renewal rights of each of the Leases, and (B) the street address or legal
description of each property covered thereby (the "Leased Premises").
(c) Except as set forth on Schedule 5.12(c), and except for
those Leases set forth on Schedule 5.22 for which consents to assignment have
not been obtained prior to Closing and for which such failure to obtain consents
would constitute a default, neither the Company nor any of the other parties to
any Lease is in default under any of the Leases and no amount due under the
Leases remains unpaid. No material controversy, claim, dispute or disagreement
exists between the Company and any other party to the Leases, nor does there
exist any event or condition which, with notice or lapse of time or both, would
constitute a default or event of default by the Company as lessee, except with
respect to any defaults which may arise upon the Closing as a result of a
consent to assignment as set forth on Schedule 5.22 not having been obtained.
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5.13 GOOD TITLE TO AND CONDITION OF ASSETS.
(a) The Company is the true and lawful owner of the assets of
the Business (the "Assets"), free and clear of all Liens, except as set forth on
Schedule 5.13(a) or the vehicle liens set forth on Schedule 5.22(a) and Schedule
5.22(d).
(b) Schedule 5.13(b) sets forth all personal property included
(or that will be included) on the Current Balance Sheet, all personal property
of the Company with a value in excess of $5,000 and acquired since the date of
the Current Balance Sheet, and all leases for personal property to which the
Company is a party involving personal property having a value in excess of
$2,500, including, in each case, complete and correct copies of all such leases
and including an indication as to which personal property is currently owned, or
was formerly owned, by the Shareholders or the Company or their Affiliates.
Except as set forth in Schedule 5.13(b), (i) all of the personal property of the
Company is in good working order and condition, ordinary wear and tear excepted,
and has been maintained in accordance with all applicable specifications and
warranties, and (ii) all personal property loans set forth in Schedule 5.13(b)
are in full force and effect and constitute valid and binding agreements of the
Company and the other parties thereto in accordance with their respective terms.
(c) The Assets constitute all the properties, assets and
rights forming a part of, used, held or intended to be used in, and all such
properties, assets and rights as are necessary in the conduct of the Business of
the Company.
(d) The Company has the complete and unrestricted power and
unqualified right to sell, assign, transfer, convey and deliver the Assets to
ViaSource without penalty or other adverse consequences free and clear of all
Liens, except as set forth in Schedule 5.13(a).
5.14 COMPLIANCE WITH LAWS. Except as set forth in Schedule 5.14, each
of the Company, the Shareholders and all Affiliates of the Company is and has
been in compliance with all laws, regulations and orders applicable to the
Company, its business and operations (as conducted by it now and in the past),
the Assets and the Leased Premises and any other properties and assets (in each
case owned or used by it now or in the past). Except as set forth in Schedule
5.14, the Company has not been cited, fined or otherwise notified of any
asserted past or present failure to comply with any laws, regulations or orders
and no proceeding with respect to any such violation is pending or threatened.
Neither the Company, the Shareholders nor any of their respective employees or
agents, has made any payment of funds in connection with their business which is
prohibited by law, and no funds have been set aside to be used in connection
with their business for any payment prohibited by law. Neither the Company nor
the Shareholders are subject to any Contract, decree or injunction in which any
of them is a party which restricts the continued operation of any business or
the expansion thereof to other geographical areas, customers and suppliers or
lines of business.
5.15 LABOR AND EMPLOYMENT MATTERS. Schedule 5.15 sets forth the name,
address, social security number and current rate of compensation of each of the
employees of the Company. The Company is not a party to or bound by any
collective bargaining agreement or any other agreement with a labor union, and
there has been no effort by any labor union during the twenty-four (24) months
prior to the date hereof to organize any employees of the Company into one or
more collective bargaining
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14
units. There is no pending or, to the knowledge of the Company or the
Shareholders, threatened labor dispute, strike or work stoppage which affects or
which may affect the business of the Company or which may interfere with its
continued operations. Neither the Company nor any agent, representative or
employee thereof has within the last twenty-four (24) months committed any
unfair labor practice as defined in the National Labor Relations Act, as
amended, and there is no pending or threatened charge or complaint against the
Company by or with the National Labor Relations Board or any representative
thereof. There has been no strike, walkout or work stoppage involving any of the
employees of the Company during the twenty-four (24) months prior to the date
hereof. The Shareholders are not aware of any executive or key employee or group
of employees has any plans to terminate his, her or their employment with the
Company as a result of the Merger or otherwise. Schedule 5.15 contains a list
of, or a copy of, each contract, agreement or plan of the following nature,
whether formal or informal, and whether or not in writing, to which the Company
is a party or under which it has an obligation: (i) employment agreements, (ii)
employee handbooks, policy statements and similar plans, (iii) noncompetition
agreements and (iv) consulting agreements. The Company has complied with
applicable laws, rules and regulations relating to employment, civil rights and
equal employment opportunities, including but not limited to, the Civil Rights
Act of 1964, the Fair Labor Standards Act, and the Americans with Disabilities
Act, as amended.
5.16 EMPLOYEE BENEFIT PLANS.
(a) Employee Benefit Plans. Except as set forth in Schedule
5.16, the Company has no employee benefit plans or arrangements, including but
not limited to employee pension benefit plans, as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
multiemployer plans, as defined in Section 3(37) of ERISA, employee welfare
benefit plans, as defined in Section 3(1) of ERISA, deferred compensation plans,
stock option plans, bonus plans, stock purchase plans, hospitalization,
disability and other insurance plans, severance or termination pay plans and
policies, whether or not described in Section 3(3) of ERISA, in which employees,
their spouses or dependents, of the Company participate ("Employee Benefit
Plans").
(b) Controlled Group Liability. Neither the Company, nor any
entity that would be aggregated with it under Code Section 414(b), (c), (m) or
(o): (i) has ever terminated or withdrawn from an employee benefit plan under
circumstances resulting (or expected to result) in liability to the Pension
Benefit Guaranty Company ("PBGC"), the fund by which the employee benefit plan
is funded, or any employee or beneficiary for whose benefit the plan is or was
maintained (other than routine claims for benefits); (ii) has any assets subject
to (or expected to be subject to) a lien for unpaid contributions to any
employee benefit plan; (iii) has failed to pay premiums to the PBGC when due;
(iv) is subject to (or expected to be subject to) an excise tax under Code
Section 4971; (v) has engaged in any transaction which would give rise to
liability under Section 4069 or Section 4212(c) of ERISA; or (vi) has violated
Code Section 4980B or Section 601 through 608 of ERISA.
(c) Other Liabilities. Except as set forth in Schedule 5.16,
(i) the Company is not under any obligation to pay separation, severance,
termination or similar benefits solely as a result of any transaction
contemplated by this Agreement or solely as a result of a "change of control"
(as such term is defined in Section 280G of the Code) and (ii) all required or
discretionary (in accordance with historical
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15
practices) payments, premiums, contributions or reimbursements for all periods
ending prior to or as of the date hereof shall have been made.
(d) Termination of Employment. Except as may be required under
applicable law or as set forth in Schedule 5.16, the Company is not obligated
under any Employee Benefit Plan to provide medical or death benefits with
respect to any employee or former employee of the Company or its predecessors
after termination of employment. The Company has complied with the notice and
continuation of coverage requirements of Section 4980B of the Code, and the
regulations thereunder, and Part 6 of Title I of ERISA ("COBRA") and has
complied with the Health Insurance Portability and Accountability Act of 1996
("HIPAA") with respect to any group health plan within the meaning of Section
5000(b)(1) of the Code.
(e) Compliance. Each Employee Benefit Plan is in compliance
with all applicable laws and regulations and has been operated in accordance
with its terms and provisions. With respect to each employee benefit plan there
are no actions claims or disputes pending by any third party and no audits,
proceedings, claims or demands pending by any governmental authority. Except as
set forth in Schedule 5.16, all amendments required to bring any employee
benefit plan into conformity with any applicable provisions of ERISA and the
Code have been duly adopted.
5.17 TAX MATTERS.
(a) All Tax Returns required to be filed by, on behalf of or
with respect to the Company or any Affiliated Group of which the Company is or
was a member have been prepared in the manner required by applicable law and
duly and timely filed with the appropriate taxing authorities in all
jurisdictions in which such Tax Returns are required to be filed (after giving
effect to any valid extensions of time in which to make such filings), and all
such Tax Returns are true, complete and correct in all material respects. Except
with respect to the IRS audit of the Company's 1996 Federal income tax return,
with respect to which the "no change" letter attached as Schedule 5.17(a) has
been received, no such Tax Returns have been audited, or are currently being
audited and no notice of an audit has been received with respect to such Tax
Returns.
(b) All Taxes payable, whether or not shown (or required to be
shown) on a Tax Return, by, on behalf of or with respect to the Company, or any
Affiliated Group of which the Company is or was a member, or in respect of their
income, assets or operations (including interest and penalties) have been fully
and timely paid, and adequate reserves or accruals for Taxes (without regard to
deferred Tax assets and liabilities) have been provided in the Financial
Statements with respect to any Taxable Period for which Tax Returns have not yet
been filed or for which Taxes are not yet due and owing (the "Tax Reserve"). The
Company has made all required estimated tax payments for the fiscal year ended
December 31, 1999 to avoid any underpayment penalty.
(c) The Company has not executed or filed with any taxing
authority any agreement, waiver or other document or arrangement extending or
having the effect of extending the period for assessment or collection of Taxes
(including, but not limited to, any applicable statute of limitation), and no
power of attorney with respect to any Tax matter is currently in force.
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(d) The Company has complied in all material respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes, including, without limitation, the withholding and reporting
requirements under Sections 1441 through 1464, 3401 through 3406 and 6041
through 6049 of the Code, and has duly and timely withheld from employee
salaries, wages and other compensation and has paid over to the appropriate
taxing authorities all amounts required to be so withheld and paid over for all
periods under all applicable laws.
(e) The Company has made available to ViaSource true and
complete copies of (i) all U.S. federal, state, local and foreign income or
franchise Tax Returns of the Company relating to the taxable periods since
January 1, 1995 and (ii) any audit report issued within the last three years
relating to Taxes due from or with respect to the Company, or its income, assets
or operations. Except as set forth in Schedule 5.17(a), none of the income and
franchise Tax Returns filed by, on behalf of or with respect to the Company for
the taxable years ended on the respective dates set forth in Schedule 5.17(e)
have been examined by the relevant taxing authority.
(f) Schedule 5.17(f)(1) and Schedule 5.17(f)(2) list all
material types of Taxes paid and material types of Tax Returns filed by, on
behalf of or with respect to the Company and indicates those Taxes with respect
to which the Company is or has been a member of an Affiliated Group for any Tax
purpose since January 1, 1996. No claim has been made by a taxing authority in a
jurisdiction where the Company does not file Tax Returns such that it is or may
be subject to taxation by that jurisdiction.
(g) All deficiencies asserted or assessments made as a result
of examinations by any taxing authority of the Tax Returns of or covering or
including the Company have been fully paid, and, except as set forth on Schedule
5.14, there are no other audits or investigations by any taxing authority or
proceedings in progress, nor has Xxxx or the Company received any notice from
any taxing authority that it intends to conduct such an audit or investigation.
No issue has been raised in writing by a U.S. federal, state, local or foreign
taxing authority in any current or prior examination which, by application of
the same or similar principles, could reasonably be expected to result in a
proposed adjustment or deficiency for any subsequent Taxable Period. The results
of any settlement and the necessary adjustments resulting therefrom are properly
reflected in the Financial Statements.
(h) Neither the Company, or any other Person (including any of
the Shareholders) on behalf of the Company has (i) filed a consent pursuant to
Section 341 (f) of the Code or agreed to have Section 341 (f)(2) of the Code
apply to any disposition of a subsection (f) asset (as such term is defined in
Section 341 (f)(4) of the Code) owned by the Company, (ii) agreed to or is
required to make any adjustments pursuant to Section 481 (a) or Section 482 of
the Code or any similar provision of state, local or foreign law by reason of a
change in accounting method initiated by the Company or otherwise or has any
knowledge that the Internal Revenue Service has proposed any such adjustment or
change in accounting method, or has any application pending with any taxing
authority requesting permission for any changes in accounting methods that
relate to the business or operations of the Company, or has otherwise taken any
action that would have the effect of deferring any liability for Taxes from any
Taxable Period ending on or before the Closing Date to any Taxable Period ending
thereafter, (iii) executed or entered into a closing agreement pursuant to
Section 7121 of the Code or any predecessor provision thereof or any similar
provision of state, local or foreign law with respect to the Company, or
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(iv) requested any extension of time within which to file any Tax Return, which
Tax Return has since not been filed.
(i) No property owned by the Company (i) is property required
to be treated as being owned by another Person pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately prior to the enactment of the Tax Reform Act of 1986, (ii)
constitutes "tax-exempt use property" within the meaning of Section 168(h)(1) of
the Code or (iii) is "tax-exempt bond financed property" within the meaning of
Section 168(g) of the Code.
(j) The Company is not a party to any tax sharing or similar
agreement or arrangement (whether or not written) relating to allocating or
sharing the payment of, or liability for, Taxes with respect to any Taxable
Period.
(k) There is no contract, agreement, plan or arrangement
covering any person that, individually or collectively, or when taken together
with any payment that may be made under this Agreement or any agreements
contemplated hereby, could give rise to the payment of any amount that would not
be deductible by the Company or any of its Affiliates by reason of Section 280G
of the Code, or would constitute compensation in excess of the limitation set
forth in Section 162(m) of the Code.
(l) The Company has substantial authority for the treatment of
or has disclosed (in accordance with Section 6662(d)(2)(B)(ii) of the Code) on
its federal income Tax Returns all positions taken therein that could give rise
to a substantial understatement of federal income tax within the meaning of
Section 6662(d) of the Code.
(m) The Company is not subject to any private letter ruling of
the Internal Revenue Service or comparable rulings of other taxing authorities.
(n) There are no security interests or liens as a result of
any unpaid Taxes upon any of the assets of the Company or any of its
subsidiaries.
(o) All material Tax elections of the Company are clearly set
forth in the Tax Returns described in Section 5.17(e). The Company has no
elections in effect for U.S. federal income tax purposes under Sections 108,
168, 338, 441, 463, 473, 1017, 1033 or 4977 of the Code.
(p) The Company has never been a member of any Affiliated
Group of Companies for any Tax purposes. The Company has no liability for Taxes
of any person (other than the Company) under Section 1.1502-6 of the Treasury
regulations under the Code (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract or otherwise. Except as
otherwise set forth in the Disclosure Schedule, the Company owns no interest in
any entity that is treated as a partnership for U.S. federal income tax purposes
or could be treated as a pass-through or transparent entity for any Tax purpose.
(q) None of the Shareholders is a foreign person within the
meaning of Section 1445 of the Code.
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(r) The Company has not filed an election pursuant to Revenue
Procedure 95-11, 1995-1 C.B. 505 or under Treasury regulation Section 1. 1
502-75(c) or any similar provision of foreign, national, international, state or
local law.
(s) Since December 31, 1999, the Company has not incurred any
liability for Taxes outside of the ordinary course of business.
(t) The Company has no deferred income reportable for a period
ending after the Closing Date but that is attributable to a transaction (e.g.,
an installment sale) occurring in, or resulting from a change of accounting
method for, a period ending on or prior to the Closing Date.
(u) The Company has not distributed the stock of any Company
in a transaction satisfying the requirements of Section 355 of the Code since
April 16, 1997. The stock of the Company has not been distributed in a
transaction satisfying the requirements of Section 355 of the Code since April
16, 1997.
(v) There are no outstanding options, warrants, securities
convertible into stock, or other contractual obligations that might be treated
for U.S. federal income tax purposes as stock or another equity interest in the
Company.
(w) None of the indebtedness of the Company constitutes
"corporate acquisition indebtedness" (as defined in Section 279(b) of the Code)
with respect to which any interest deductions may be disallowed under Section
279 of the Code.
(x) Neither the Shareholders nor the Company has taken any
action prior to the date hereof, and will not take any action prior to the
Effective Time, which would cause the Merger to fail to qualify as a tax-free
reorganization under Section 368(a) of the Code.
5.18 INSURANCE. The Company is covered by valid, outstanding and
enforceable policies of insurance issued to it by reputable insurers covering
its properties, assets and businesses against risks of the nature normally
insured against by companies in the same or similar lines of business and in
coverage amounts typically and reasonably carried by such companies (the
"Insurance Policies"). Such Insurance Policies are in full force and effect, and
all premiums due thereon have been paid. As of the Effective Time, each of the
Insurance Policies will be in full force and effect. None of the Insurance
Policies will lapse or terminate as a result of the transactions contemplated by
this Agreement. The Company has complied with the provisions of such Insurance
Policies and has not caused a termination of such policies. Schedule 5.18
contains (i) a complete and correct list of all Insurance Policies and all
amendments and riders thereto (copies of which have been provided to ViaSource)
and (ii) a detailed description of each pending claim under any of the Insurance
Policies for an amount in excess of $5,000 that relates to loss or damage to the
properties, assets or businesses of the Company. The Company has not failed to
give, in a timely manner, any notice required under any of the Insurance
Policies to preserve its rights thereunder.
5.19 RECEIVABLES. All of the Receivables (as hereinafter defined) are
valid and legally binding, represent bona fide transactions and arose in the
ordinary course of business of the Company. All of the
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Receivables are good and collectible receivables, and will be collected in full
in accordance with the terms of such receivables (and in any event within six
months following the date hereof) without setoff or counterclaims, subject to
the allowance for doubtful accounts set forth in Schedule 5.19. For purposes of
this Agreement, the term "Receivables" means all receivables of the Company,
including, without limitation, all trade account receivables arising from the
provision of goods and/or services, notes receivable and insurance proceeds
receivable. There is no contest, claim or right of set-off under any Contract
with any obligor of any Receivable of the Company relating to the amount or
validity of such Receivable.
5.20 LICENSES AND PERMITS. The Company possesses all licenses,
approvals, permits or authorizations from governmental authorities
(collectively, the "Permits") for the operation of the Business and Schedule
5.20 sets forth a true, complete and accurate list of all such Permits and all
applications for Permits. All such Permits are valid and in full force and
effect, the Company is in full compliance with the respective requirements
thereof, and no proceeding is pending or threatened to revoke or amend any of
them.
5.21 INTELLECTUAL PROPERTY.
(a) Schedule 5.21 contains a true and complete list of the
Company's patents, patent applications, trademarks, trademark applications,
trademark registrations, trade names, service marks, service xxxx applications,
Internet domain names, service xxxx registrations, Internet domain name
applications, copyrights and copyright registrations and applications and other
filings and formal actions made or taken pursuant to federal, state, local and
foreign laws by the Company to protect its interests therein (the "Intellectual
Property").
(b) The Intellectual Property consists solely of items and
rights which are: (i) owned Intellectual Property or (ii) in the public domain.
The Assets include all rights in Intellectual Property necessary to conduct the
Business, including without limitation, to the extent required to make, use,
reproduce, modify, adopt, create derivative works based on, translate,
distribute (directly and indirectly), transmit, display and perform publicly,
license, rent and lease and assign and sell, the Intellectual Property. No
payments are required for the continued use of the Intellectual Property.
(c) The Company's reproduction, manufacturing, distribution,
licensing, sublicensing, sale or the exercise of any other rights in any
Intellectual Property or product, work, technology or process as now used in the
conduct of the Business or offered or proposed for use in the conduct of the
Business, does not infringe on any copyright, trade secret, trademark, service
xxxx, trade name, trade dress, firm name, Internet domain name, logo, trade
dress of any person or the patent of any person. No claims have been asserted or
are threatened by any person, nor are there any valid grounds for any bona fide
claim (i) challenging the validity, effectiveness or ownership by the Company of
any of the Intellectual Property, or (ii) to the effect that the Company's use,
distribution, licensing, sublicensing, sale or any other exercise of rights in
any product, work, technology or process as now used or offered or proposed for
use in the conduct of the Business, infringes or will infringe on any
intellectual property or other proprietary right of any person . All registered,
granted or issued patents, trademarks, Internet domain names and copyrights held
by the Company are enforceable and subsisting. There is no
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20
unauthorized use, infringement or misappropriation of any of the Intellectual
Property owned by the Company by any third party, employee or former employee.
(d) All personnel, including employees, agents, consultants
and contractors, who have contributed to or participated in the conception and
development of the Intellectual Property owned by the Company on behalf of the
Company (i) have been a party to a "work-for-hire" arrangement or agreements
with the Company in accordance with applicable national and state law that has
accorded the Company full, effective, exclusive and original ownership of all
tangible and intangible property thereby arising, or (ii) have executed
appropriate instruments of assignment in favor or the Company as assignee that
have conveyed to the Company effective and exclusive ownership of all tangible
and intangible property thereby arising.
(e) The Company is not, nor as a result of the execution or
delivery of this Agreement or performance of the Company's obligations
hereunder, will the Company be, in violation of any license, sublicense,
agreement or instrument to which the Company is a party or otherwise bound, nor
will execution or delivery of this Agreement, or performance of the Company's
obligations hereunder, cause the diminution, termination or forfeiture of any
Intellectual Property.
(f) Schedule 5.21(f) contains a true and complete list of all
of the Company's software programs (the "Software Programs"). The Company owns
full and unencumbered right and good, valid and marketable title to such
Software Programs free and clear of all mortgages, pledges, liens, security
interests, conditional sales agreements, encumbrances or charges of any kind.
(g) The source code and system documentation relating to the
Software Programs (i) have at all times been maintained in strict confidence,
(ii) have been disclosed by the Company only to employees who have a "need to
know" the contents thereof in connection with the performance of their duties to
the Company and (iii) have not been disclosed to any third party.
5.22 CONTRACTS. Schedule 5.22 sets forth a list of each Material
Contract (as defined below), true, correct and complete copies of which have
been provided to ViaSource. Schedule 5.22 identifies all of the Material
Contracts identified therein that require the Consents of third parties to the
transactions contemplated hereby. All consents set forth in Schedule 5.22 have
been obtained, unless otherwise indicated on such schedule. The copy of each
Material Contract furnished to ViaSource is a true, correct and complete copy of
the document it purports to represent and reflects all amendments thereto made
through the date of this Agreement. Except for those Material Contracts set
forth on Schedule 5.22 for which consents to assignment have not been obtained
at or prior to Closing, the Company has not violated any of the terms or
conditions of any Material Contract or any term or condition which would permit
termination or material modification of any Material Contract, all of the
covenants to be performed by any other party thereto have been fully performed,
and there are no claims for breach or indemnification or notice of default or
termination under any Material Contract. No event has occurred which
constitutes, or after notice or the passage of time, or both, would constitute,
a default by the Company or any other party under any Material Contract except
with respect to any defaults which may arise upon Closing as a result of a
consent to assignment or transfer or a release having not been obtained. The
Company is not subject to any liability or payment resulting from renegotiation
of amounts paid under any Material Contract. As used in this Section 5.22
"Material Contracts" shall mean formal or
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informal, written or oral, (a) loan agreements, indentures, mortgages, pledges,
hypothecations, deeds of trust, conditional sale or title retention agreements,
security agreements, equipment financing obligations or guaranties, or other
sources of contingent liability in respect of any indebtedness or obligation to
any other Person, or letters of intent or commitment letters with respect to
same; (b) contracts obligating the Company to provide or obtain products or
services; (c) leases of real property; (d) leases of personal property; (e)
distribution, sales agency or franchise or similar agreements; (f) agreements
providing for an independent contractor's services; (g) employment agreements,
management service agreements, consulting agreements, confidentiality
agreements, non-competition agreements, employee handbooks, policy statements
and any other agreements relating to any employee, officer or director of the
Company; (h) licenses, assignments or transfers of trademarks, trade names,
service marks, patents, copyrights, trade secrets or know how, or other
agreements regarding proprietary rights or intellectual property; (i) other
contracts relating to pending capital expenditures by the Company exceeding
$5,000 per contract; (j) non-competition agreements restricting the Company or
any Shareholder in any manner, (k) any contracts obligating the Company to make
payments in excess of $5,000, in the aggregate per contract, over the remaining
term of such contract; and (l) all other Contracts or understandings which are
material to the Company, or the Business, assets or properties, irrespective of
subject matter and whether or not in writing. The continuation, validity and
effectiveness of all the Material Contracts will not be effected by their
transfer to ViaSource under this Agreement, except as set forth on Schedule
5.22.
5.23 INVESTMENT INTENT; ACCREDITED INVESTOR STATUS; SECURITIES
DOCUMENTS. Each Shareholder is acquiring the ViaSource Shares hereunder for his
own account for investment and not with a view to, or for the sale in connection
with, any distribution of any of the ViaSource Shares, except in compliance with
applicable state and federal securities laws. The Shareholders have had the
opportunity to discuss the transactions contemplated hereby with ViaSource and
has had the opportunity to obtain such information pertaining to ViaSource as
has been requested. Except as provided on Schedule 5.23, each Shareholder is an
"accredited investor" within the meaning of Regulation D promulgated under the
Securities Act, and has such knowledge and experience in business or financial
matters that he is capable of evaluating the merits and risks of an investment
in the ViaSource Shares. The Shareholders hereby represent that they can bear
the economic risk of losing his/her investment in the ViaSource Shares and has
adequate means for providing for his/her current financial needs and
contingencies.
5.24 NO COMMISSIONS. Neither the Company nor the Shareholders have
incurred any obligation for any finder's or broker's or agent's fees or
commissions or similar compensation in connection with the transactions
contemplated hereby.
5.25 BANK ACCOUNTS; BUSINESS LOCATIONS. Schedule 5.25(a) sets forth all
accounts of the Company with any bank, broker or other depository institution,
and the names of all persons authorized to withdraw funds from each such
account. As of the date hereof, the Company has no office or place of business
other than as identified in Schedule 5.25(b) and the Company's principal places
of business and chief executive offices are indicated in Schedule 5.25(b). All
locations where the equipment, inventory, chattel paper and books and records of
the Company are located as of the date hereof are fully identified on Schedule
5.25(b).
5.26 ACCURACY OF INFORMATION FURNISHED. No representation, statement or
information made or provided by the Company and/or the Shareholders contained in
this Agreement (including, without
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limitation, the various Schedules attached hereto) or any agreement executed in
connection herewith or in any certificate delivered pursuant hereto or thereto,
contains or shall contain any untrue statement of a material fact or omits or
shall omit any material fact necessary to make the information contained therein
not misleading. The Company has provided ViaSource with true, accurate and
complete copies of all documents listed or described in the various Schedules
attached hereto.
5.27 YEAR 2000 COMPLIANCE.
(a) All computer hardware, software, systems and equipment
utilized by the Company shall, as currently designed, fully operate during and
after the calendar year 2000. Without limiting the foregoing, such computer
hardware and software shall during and after the calendar year 2000:
(i) Operate without error relative to date or time
data;
(ii) Record, store, process, and present calendar
dates falling on or after January 1, 2000, in the same manner, and with
the same functionality as on or before December 31, 1999;
(iii) Maintain functionality with respect to the
introduction of records containing dates falling on or after January 1,
2000;
(iv) Maintain functionality with respect to date and
time date handling, including but not limited to date and time data
century recognition, calculations which accommodate same century,
single-century, and multi-century formulas and data values, and date
and time data interface values that reflect century;
(v) Include the indication of century in all
date-related interface functions and data fields;
(vi) Include the appropriate logic for leap year
determination;
(vii) Be interoperable with other product(s) used by
Company.
5.28 RELATED PARTY TRANSACTIONS. To the best knowledge of the Company
and the Shareholders, no officer, director, shareholder, employee or, except as
disclosed on Schedule 5.28, former officer, director or shareholder of the
Company, and no affiliate or relative of any of them:
(A) owns, directly or indirectly, any
interest in (excepting not more than five percent share
holdings for investment purposes in securities of publicly
held and traded companies), or is in an officer, partner,
director, employee or consultant of, or otherwise receives
remuneration in excess of $5,000 from, any person which is, or
is engaged in business as, a competitor, lessor, lessee,
customer or supplier of the Company;
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23
(B) owns, directly or indirectly, in whole
or in part, any tangible or intangible property, the use of
which is necessary for the conduct of the Business; or
(C) owes any amount to the Company, or has
any cause of action or other claim against the Company.
5.29 CHANGES SINCE THE CURRENT BALANCE SHEET. Except as specifically
set forth in Schedule 5.29, since the date of the Current Balance Sheet, the
Company has not (a) issued any capital stock or other securities; (b) made any
distribution of or with respect to its capital stock or other securities or
purchased or redeemed any of its securities; (c) (1) paid any bonus to or
increased the rate of compensation of any employee earning more than $50,000 per
year, or amended any other terms of employment of any such person, or (2) paid
bonuses to all employees earning $50,000 or less per employee per year of more
than $30,000 in the aggregate or increased the rate of compensation of such
employees by more than $130,000 in the aggregate on an annual basis; (d) sold,
leased or transferred any of its properties or assets other than in the ordinary
course of business consistent with past practice; (e) made or obligated itself
to make capital expenditures out of the ordinary course of business consistent
with past practice; (f) made any payment in respect of its liabilities other
than in the ordinary course of business consistent with past practice; (g)
incurred any obligations or liabilities (including any indebtedness) or entered
into any transaction or series of transactions involving in excess of $5,000 in
the aggregate out of the ordinary course of business, except for this Agreement
and the transactions contemplated hereby; (h) waived, cancelled, compromised or
released any rights having a value in excess of $5,000 in the aggregate; (i)
made or adopted any change in its accounting practice or policies; (x) made any
adjustment to its books and records other than in respect of the conduct of its
business activities in the ordinary course consistent with past practice; (j)
entered into any transaction with any Affiliate other than intercompany
transactions in the ordinary course of business consistent with past practice;
(k) entered into any employment agreement; (l) terminated, amended or modified
any agreement involving an amount in excess of $5,000; (m) imposed any security
interest or other Lien on any of its Assets; (n) delayed paying any account
payable which is due and payable except to the extent being contested in good
faith; (o) made or pledged any charitable contribution; (p) entered into any
other transaction or was subject to any event which had or may have a Material
Adverse Effect on the Corporation or the Business; (q) engaged in any
transaction out of the ordinary course of the Business; (r) suffered or incurred
any work interruptions, labor grievances, or claims filed, or any similar event
which has or would have a Material Adverse Effect on the Company or the
Business; or (s) agreed to do or authorized any of the foregoing.
5.30 SUPPLIERS AND CUSTOMERS.
(a) Schedule 5.30 lists (i) all suppliers to which the Company
made payments during the year ended December 31, 1999, in excess of five percent
(5%) of the cost of sales as reflected on the Company's statement of operations
for the year ended December 31, 1999 and (ii) all customers that paid the
Company during the year ended December 31, 1999, more than five percent (5%) of
the Company's sales revenues as reflected on its statement of operations for the
year ended December 31, 1999 ("Customers").
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(b) None of the Customers or suppliers listed in Schedule 5.30
has terminated or discontinued their business with the Company and the Company
has no knowledge which might reasonably indicate that any of the Customers or
suppliers listed in Schedule 5.30 intend to cease purchasing from, selling to,
or dealing with, the Company, nor has any information been brought to the
Shareholder' attention which might reasonably lead them to believe any such
customer or supplier intends to alter in any material respect the amount of such
purchases, sales or the extent of dealings with the Company or would alter in
any material respect such purchases, sales or dealings in the event of the
consummation of the transactions contemplated by this Agreement. The Company has
no knowledge which might reasonably indicate, nor has any information been
brought to the Shareholders' attention which might reasonably lead them to
believe that, (i) any supplier will not be able to fulfill outstanding or
currently anticipated purchase orders placed by the Company, or (ii) any
customer will cancel outstanding or currently anticipated purchase orders placed
with the Company.
5.31 ORDINARY COURSE. Since December 31, 1999, except as set forth in
Schedule 5.29 or Schedule 5.31, the Company has conducted its business only in
the ordinary course and consistent with its prior practices.
5.32 EQUIPMENT. As of the date hereof and on the Closing Date, all
equipment owned or leased by the Company and used in connection with the
operation of the Business shall be in good condition and working order, subject
to such routine maintenance and repairs thereto as may be required in the
ordinary course of the business of the Company, except as would not have,
individually or in the aggregate, a Material Adverse Change on the Business.
5.33 DISCLOSURE. No information furnished by or on behalf of either of
the Shareholders or the Company to ViaSource contains any untrue statement of a
material fact or omits to state any fact necessary to make the information
disclosed not misleading.
5.34 NO ILLEGAL OR IMPROPER TRANSACTIONS. To the knowledge of the
Company or the Shareholders, neither the Company nor any shareholder, officer,
director, employee, agent or Affiliate of any of them has offered, paid or
agreed to pay to any Person (including any governmental official) or solicited,
received or agreed to receive from any Person, directly or indirectly, any money
or thing of value for the purpose or with the intent of (a) obtaining or
maintaining business for the Company, (b) facilitating the purchase or sale of
any product or service, or (c) avoiding the imposition of any fine or penalty,
in any such case in any manner which is in violation of any applicable
ordinance, regulation or law; and there have been no false or fictitious entries
made in the books or records of the Company.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE CLOSING
6.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE CLOSING. The Company
and the Shareholders, jointly and severally, covenant and agree that, except as
otherwise expressly required or permitted by the terms of this Agreement,
between the date of this Agreement and the Closing, the business of the Company
shall be conducted only in, and the Company shall not take any action except
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in the ordinary course of business consistent with past practice. The Company
and the Shareholders shall use its or their reasonable best efforts to preserve
intact the Company's business organizations, to keep available the services of
its current officers, employees and consultants, and to preserve its present
relationships with customers, suppliers and other Persons with which it has
business relations. By way of amplification and not limitation, the Company
shall not, except as expressly required or permitted by the terms of this
Agreement between the date of this Agreement and the Closing, directly or
indirectly, do or propose or agree to do any of the following without the prior
written consent of ViaSource:
(a) amend or otherwise change its charter or bylaws;
(b) issue, sell, pledge, dispose of, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of any of its
assets, tangible or intangible, except in the ordinary course of business
consistent with past practice; or any shares of its capital stock of any class,
or any options, warrants, convertible securities or other rights of any kind to
acquire any shares of such capital stock;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock or other securities;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock or other
securities;
(e) sell, lease or transfer any of its properties or assets
(other than in the ordinary course of business consistent with past practice),
or acquire (including, without limitation, for cash or shares of stock, by
merger, consolidation or acquisition of stock or assets) any interest in any
corporation, partnership or other business organization or division thereof or
any assets; or make any investment either by purchase of stock or securities,
contributions of capital or property transfer, or purchase any property or
assets of any other Person (except in the ordinary course of business consistent
with past practice); make or obligate itself to make capital expenditures out of
the ordinary course of business consistent with past practice; other than in the
ordinary course of business consistent with past practice, incur any obligations
or liabilities including, without limitation, any indebtedness for borrowed
money, issue any debt securities or assume, guarantee or endorse or otherwise as
an accommodation become responsible for, the obligations of any Person, or make
any loans or advances, modify, terminate, amend or enter into any Contract other
than as expressly required or permitted herein or in the ordinary course of
business consistent with past practice, or impose any security interest or other
Lien on any of its assets other than in the ordinary course of business
consistent with past practice;
(f) pay any bonus to its officers or employees, or increase
the compensation payable or to become payable to its officers or employees or,
except as presently bound to do, grant any severance or termination pay to, or
enter into any employment or severance agreement with, any of its directors,
officers or employees, or establish, adopt, enter into or amend or take any
action to accelerate any rights or benefits which any collective bargaining,
bonus, profit sharing trust, compensation, stock option, restricted stock
pension, retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the benefit of
any directors, officers or employees;
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(g) take any action with respect to accounting policies or
procedures other than in the ordinary course of business and in a manner
consistent with past practices;
(h) pay, discharge or satisfy any existing claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of due and payable
liabilities reflected or reserved against in the Financial Statements, as
appropriate, or liabilities incurred after the date thereof in the ordinary
course of business and consistent with past practice or delay paying any amount
payable beyond forty-five (45) days following the date on which it is due,
except to the extent being contested in good faith;
(i) enter into any transaction or agreement with the
Shareholder or an Affiliate thereof except for such transactions or agreements
expressly permitted herein;
(j) make or pledge any charitable contributions in excess of
$5,000 in the aggregate; or
(k) agree, in writing or otherwise, to take or authorize any
of the foregoing actions or any action which would make any representation or
warranty in Article V untrue or incorrect in any respect.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby.
7.2 COMPLIANCE WITH COVENANTS. The Shareholders shall cause the Company
to comply with all of the covenants of the Company under this Agreement.
7.3 CONFIDENTIALITY; PUBLICITY. Except as may be required by law or as
otherwise permitted or expressly contemplated herein, no party hereto or their
respective Affiliates, employees, agents and representatives shall disclose to
any third party this Agreement, the subject matter or terms hereof or any
confidential information or other proprietary knowledge concerning the business
or affairs of the other party which it may have acquired from such party in the
course of pursuing the transactions contemplated by this Agreement without the
prior consent of the other party hereto; provided, that any information that is
otherwise publicly available, or has been obtained from a third party, without
breach of this provision, shall not be deemed confidential information. No press
release or other public announcement related to this Agreement or the
transactions contemplated hereby shall be issued by the Company or the
Shareholders without the prior approval of ViaSource and Xxxx.
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7.4 RESTRICTIVE COVENANT. In order to assure that the ViaSource
Companies will realize the benefits of this transaction, the Company and Xxxx
agree with the ViaSource Companies that Xxxx will not:
(a) for a period of three (3) years from the date hereof,
directly or indirectly, alone or as a partner, joint venturer, officer,
director, member, employee, consultant, agent, independent contractor or
shareholder of, or lender to, any company or business, engage in any Competitive
Activity. As used herein "Competitive Activity" shall consist of the sale,
solicitation for sale, marketing, licensing, servicing, distributing of, or
other business activity of whatsoever kind or nature relating to the Business,
including but not limited to the provision of services to media or
communications companies or their customers, which competes, directly or
indirectly, with the business, technology, products or services of ViaSource and
its Affiliates in the United States.
(b) for a period of three (3) years from the date hereof,
directly or indirectly (i) induce any Person that is a customer of ViaSource or
any Affiliate of ViaSource to patronize any business directly or indirectly
engaged in any Competitive Activity; (ii) canvass, solicit or accept from any
Person which is a customer of ViaSource or any Affiliate of ViaSource any
Competitive Business; or (iii) request or advise any Person which is a customer
or supplier of ViaSource or any Affiliate of ViaSource to withdraw, curtail or
cancel any such customer's or supplier's business with ViaSource or any
Affiliate of ViaSource, or its or their successors;
(c) for a period of three (3) years from the date hereof,
directly or indirectly employ, or knowingly permit any company or business
directly or indirectly controlled by him, to employ, any person who was employed
by ViaSource or any Affiliate of ViaSource at or within the six (6) month period
immediately preceding the date of such employment, or in any manner seek to
induce any such person to leave his or her employment;
(d) except in connection with his or her employment at
ViaSource, at any time following the date hereof, directly or indirectly, in any
way utilize, disclose, copy, reproduce or retain in his/her possession
ViaSource's or any ViaSource Affiliates' proprietary rights or records,
including, but not limited to, any of its or their customer lists.
The Company and Xxxx agree and acknowledge that the restrictions contained in
this Section 7.4 are reasonable in scope and duration and are necessary to
protect ViaSource after the date hereof. If any provision of this Section 7.4 as
applied to any party or to any circumstance is adjudged by a court to be invalid
or unenforceable, the same will in no way affect any other circumstance or the
validity or enforceability of this Agreement. If any such provision, or any part
thereof, is held to be unenforceable because of the duration of such provision
or the area covered thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision, and/or to delete specific words or phrases, and in its reduced form,
such provision shall then be enforceable and shall be enforced. The parties
agree and acknowledge that the breach of this Section 7.4 will cause irreparable
damage to ViaSource and upon breach of any provision of this Section 7.4,
ViaSource shall be entitled to injunctive relief, specific performance or other
equitable relief; provided, however, that, this shall in no way limit any other
remedies which ViaSource may have (including, without limitation, the right to
seek monetary damages).
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7.5 TAX MATTERS.
(a) Tax Returns. Xxxx shall duly prepare, or cause to be
prepared, and file, or cause to be filed, and the Shareholders shall pay or
cause to be paid, on a timely basis, all Tax Returns and taxes due for or by the
Company for any period ending on or before the Closing Date. Xxxx shall prepare
and provide ViaSource with a copy of the short year tax return within ninety
(90) days of the date hereof or by fifteen (15) days prior to the due date,
whichever is sooner. All other tax returns shall be prepared and submitted by
ViaSource. The Shareholder shall not file any amended Tax Returns with respect
to the Company without the prior written consent of ViaSource.
(b) Tax Cooperation. Each party shall provide the other
parties with such information and records and access to such of its officers,
directors, employees and agents as may be reasonably required by such other
parties in connection with the preparation of any tax return or any audit or
other proceeding relating to the Company or the transactions contemplated
herein. Each party shall cooperate fully, as and to the extent reasonably
requested by any other party, in connection with the filing of Tax Returns
pursuant to this Section and any claim, audit, litigation or other proceeding
with respect to Taxes. Such cooperation shall include the retention and (upon
any other party's request) the provision of records and information which are
reasonably relevant to any such claim, audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.
(c) Best Efforts. The parties further agree, upon request, to
use their best efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby) unless the result of
such effort shall result in any unreasonable or unreimbursed cost or expense to
any party.
(d) Tax Audits. Xxxx shall have the sole right to represent
the Company's interests in any tax proceeding relating to Taxable Periods of the
Company ended on or prior to the Closing Date and to employ counsel of its
choice at its own expense; provided, however, that Xxxx'x choice of counsel
shall be subject to the approval of The ViaSource Companies, which approval
shall not be unreasonably withheld; provided, however, that the ViaSource
Companies shall have the right to consult with Xxxx regarding such tax
proceedings and that any settlement or other disposition of any such tax
proceeding may only be made with the consent of the ViaSource Companies, which
consent shall not be unreasonably withheld. The ViaSource Companies shall have
the sole right to represent the Company's interests in any tax proceeding
relating to Taxable Periods ending after the Closing Date and to employ counsel
of its choice at its expense, subject to the ViaSource Companies' right to
indemnification hereunder. The ViaSource Companies shall keep Xxxx informed of
all material developments and events relating to such tax proceeding to the
extent that such material developments and events relate to Taxable Periods
ending on or prior to the Closing Date. The ViaSource Companies and Xxxx each
agree to cooperate fully with the other and its or their respective counsel in
the defense against or compromise of any claim in any tax proceeding.
(e) Reporting Requirements. The Shareholders, Company and
ViaSource all agree to comply with the reporting requirements of Treasury
Regulation Section 1.368-3.
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7.6 DELIVERY OF PROPERTY RECEIVED BY THE SHAREHOLDERS AFTER CLOSING.
The Shareholders agree that they will transfer or deliver to ViaSource, promptly
after the receipt thereof, any cash or other property which any Shareholder
receives on behalf of the Company after the Closing Date in respect of any
claims, contracts, licenses, leases, commitments, sales orders, purchase orders,
receivables of any character or any other items transferred or intended to be
transferred to ViaSource.
7.7 EMPLOYMENT AND NON-COMPETITION AGREEMENT. Xxxx shall enter into an
Employment and Non-Competition Agreement with ViaSource in the form set forth on
Exhibit B. No portion of the Purchase Price shall be allocated to Xxxx'x rights
and duties under the Employment and Non-Competition Agreement.
7.8 SHAREHOLDERS AND DIRECTOR VOTE. Each Shareholder, in executing this
Agreement, consents as a director and/or shareholder (as applicable) of the
Company to the Merger and waives notice of any meeting in connection therewith.
7.9 RELEASE BY THE SHAREHOLDERS. The Shareholders do hereby for
themselves and for their respective heirs, personal representatives, successors
and assigns (collectively, the "Releasors") release, remise and forever
discharge the Company, from any and all debts, sums of money, accounts, claims,
actions, causes of action, suits, damages, judgments, losses, contracts,
demands, expenses (including attorneys' fees and costs) and/or liabilities of
any kind which any of the Releasors ever had, now have or which they can, shall
or may have for, upon or by reason of any matter, cause or thing whatsoever,
from the beginning of the world to the day of this Agreement, against the
Company.
7.10 USE OF THE INTELLECTUAL PROPERTY. The Shareholders shall not use
any of the Intellectual Property after the Closing Date, except in connection
with employment by ViaSource.
7.11 NO SHOPPING.
(a) The Company and the Shareholders covenant, jointly and
severally, that, from and after the date hereof until the termination of this
Agreement without the express written consent of ViaSource, neither the Company
nor the Shareholders shall, directly or indirectly, (i) solicit, initiate
discussions or engage in negotiations with any Person (other than ViaSource or
its Affiliates or their representatives) relating to the possible acquisition,
whether by way of merger, reorganization, purchase of shares of capital stock,
purchase of assets, management agreement, license or distribution agreement or
otherwise (any such acquisition or other transaction or agreement being referred
to herein as an "Acquisition Transaction"), of any interest in the Company
(other than inventory or obsolete, damaged or worn assets sold or otherwise
disposed of in the ordinary course of the Business and consistent with past
practice), (ii) provide information with respect to the Company to any Person
(other than ViaSource or its Affiliates or their representatives) in connection
with a possible Acquisition Transaction or (iii) enter into an agreement with
any Person (other than ViaSource or its Affiliates) concerning a possible
Acquisition Transaction. Prior to the termination of this Agreement, if the
Company or the Shareholders receives an unsolicited offer or proposal relating
to a possible Acquisition Transaction, the Company or the Shareholders, as the
case may be, shall immediately notify ViaSource and provide information to
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ViaSource as to the identity of the party making any such offer or proposal and
the specific terms of such offer or proposal (including, without limitation, the
proposed price and financing therefor).
(b) The parties recognize and acknowledge that a breach by the
Company and the Shareholders of this Section 7.11 will cause irreparable and
material loss and damage to ViaSource as to which it will not have an adequate
remedy at law or in damages. Accordingly, each Party acknowledges and agrees
that the issuance of an injunction or other equitable remedy is an appropriate
remedy for any such breach. In addition, in the event of any breach of the
foregoing which results in the acquisition by a Person other than ViaSource or
its Affiliates of a majority of the assets of the Business (measured by fair
market value) or of the capital stock of the Company, the Company and the
Shareholders shall promptly reimburse ViaSource for all fees and expenses
(including, without limitation, out-of-pocket expenses, fees and expenses of
accountants, counsel and other advisors, and the like) incurred by them in
connection with the transactions contemplated by this Agreement.
7.12 POST-CLOSING PURCHASE PRICE ADJUSTMENTS.
(a) Net-Worth Adjustment.
(i) In order to compensate for the increase or
decrease, if any, in the Net Worth of the Company for the period
beginning January 1, 2000 and ending on May 31, 2000, or the Closing
Date, whichever is later, ViaSource agrees that it shall, on or before
August 31, 2000, determine the Net Worth of the Company as though the
Merger was effective on May 31, 2000, or the actual Closing Date,
whichever is later (the "Adjusted Closing Date Net Worth"). In the
event that the Adjusted Closing Date Net Worth exceeds the Net Worth of
the Company on December 31, 1999, as set forth in Schedule 5.7,
ViaSource will make payment to the Shareholders of one hundred percent
(100%) of such excess on or before September 30, 2000. Such payment
shall be comprised of shares of ViaSource Common Stock (valued at $2.50
per share), Cash Consideration and Notes, on a pro rata basis
consistent with the allocation of the Purchase Price set forth in
Section 2.2. In the event that the Adjusted Closing Date Net Worth is
less than the Net Worth of the Company on December 31, 1999, the
Shareholders will make payment to ViaSource of one hundred percent
(100%) of such difference on or before September 30, 2000. Such payment
shall be comprised of shares of ViaSource Common Stock (valued at $2.50
per share), Cash Consideration and Notes, on a pro rata basis
consistent with the allocation of the Purchase Price set forth in
Section 2.2. The Shareholders shall, however, have the right to make
such payment in cash in lieu of pro rata in ViaSource Common Stock,
Cash Consideration and Notes. For purposes of this Section 7.12, "Net
Worth" shall, subject to Section 7.12(a)(iii) hereof, in each case be
defined as the Total Assets of the Company less its Total Liabilities
as reflected on the Company's balance sheet as of the applicable date,
as determined in accordance with GAAP, consistently applied.
(ii) In the event that Xxxx disagrees with the Net
Worth determination in Section 7.12(a)(i) above or the Income Tax
Adjustment determination in Section 7.12(b) below, then he shall
provide notice of such disagreement and its proposed Net Worth
determination to ViaSource in writing in accordance with the notice
provisions of this Agreement within fifteen (15) days of receipt of the
Net Worth determination (the "Notice of Objection"). In the event of
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a disagreement between ViaSource and Xxxx with respect to the
calculation of the Net Worth determination, which is not resolved
within thirty (30) days from the date of delivery of the Notice of
Objection, then such disagreement shall be referred to a "big five"
accounting firm not otherwise in the employ of any of the parties
hereto as of the date of this Agreement or at the time of computation
of such adjustment (the "Settlement Accountants"), and the
determination of the Net Worth by the Settlement Accountants shall be
final and shall not be subject to further review, challenge or
adjustment absent fraud. The Settlement Accountants shall use their
best efforts to reach a determination not more than thirty (30) days
after such referral. The costs and expenses of the services of the
Settlement Accountants shall be paid equally by Xxxx and ViaSource.
(iii) Notwithstanding anything in this Agreement to
the contrary, for purposes of computing Adjusted Closing Date Net
Worth:
(A) the Company's income derived from Direct TV
installations and other sources of revenues subject
to potential charge back liability shall be treated
as having been earned on the date the installations
or other services were completed and shall not be
accrued ratably over the charge back periods. No
reserve shall be created for such charge back
liability; rather, the amount of any charge back
shall be treated as an expense only if and when the
Company received notice of such charge back
liability. The adjustment for such charge back shall
be net of any deferred taxes previously paid or
reserves by the Company with respect to such items,
as appropriate. Further, any subsequent credits or
reimbursements made by Direct TV with respect to
charge backs previously charged to the Company shall
be credited to the hold back reserves or, if any such
amounts are received after the hold back amounts have
been dispersed, shall be paid to the Shareholders;
and
(B) Total Assets shall be increased by an amount
equal to the amount of the Company's tax liability
paid by the Shareholders pursuant to Section 7.5(a).
(b) Income Tax Adjustment. In order to accommodate the Company
and the Shareholders' request for a tax-free reorganization, the Purchase Price
shall be decreased by fifty percent (50%) of the present value of the increased
income tax ViaSource will incur because it cannot amortize (i.e., deduct) over
fifteen (15) years the excess of the Purchase Price over the tax basis of the
Company's Total Assets at the Closing Date, using an assumed tax rate of 40% and
a discount rate of 11% compounded at the end of each year, all in accordance
with the Schedule 7.12 (the "Income Tax Adjustment"). The Income Tax Adjustment
shall be initially determined by ViaSource no later than 15 days after the
determination of the Net Worth pursuant to Section 7.12(a) above. The
Shareholder will make payment to ViaSource of an amount equal to the Income Tax
Adjustment on or before the later of the 15th day after ViaSource issues to the
Shareholder a written notice specifying the amount of the Income Tax Adjustment
and supporting calculations or September 30, 2000. Such payment shall be
comprised 50% of shares of ViaSource Common Stock (valued at $2.50 per share),
25% of Cash Consideration and 25% of Notes.
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7.13 PARTICIPATION IN VIASOURCE BENEFIT PLANS BY EXCALIBUR EMPLOYEES.
Excalibur Employees will receive credit for prior service with Excalibur for
purposes of vesting and eligibility in retirement plans and other benefit plans
of the ViaSource Companies.
7.14 RELEASE OF GUARANTEES. Following the Closing, the ViaSource
Companies, the Company and the Shareholders shall (without expenditure of funds
by the Shareholders) use their best efforts to cause Xxxx Xxxx to be released
from all personal guarantees of the obligations identified on Schedule 7.14.
7.15 CONSENTS TO ASSIGNMENTS. Following the Closing, the ViaSource
Companies, the Company and the Shareholders shall use their best efforts to
obtain consents to the assignment to ViaSource of all material contracts as set
forth on Schedule 5.22.
ARTICLE VIII
INDEMNIFICATION
8.1 AGREEMENTS FOR INDEMNIFICATION.
(a) The Shareholders agree to indemnify and hold ViaSource,
the Company following the Closing, and their stockholders, directors, officers,
employees, attorneys and Affiliates (collectively, for purposes of this Article
VIII, the "ViaSource Indemnitees") harmless from and against, and, at the
ViaSource Indemnitees' election, in its sole discretion, the ViaSource
Indemnitees shall be entitled to recover by set off against the Held Back
Shares, the Held Back Cash and the Note in accordance with Section 8.3, the
aggregate of all expenses, losses, costs, deficiencies, liabilities and damages
(including, without limitation, related reasonable counsel and paralegal fees
and expenses) incurred or suffered by the ViaSource Indemnitees arising out of
or resulting from (i) any breach of a representation or warranty made by the
Company or the Shareholders in or pursuant to this Agreement, (ii) any breach of
the covenants or agreements made by the Company or the Shareholders in or
pursuant to this Agreement or (iii) any inaccuracy in any certificate,
instrument or other document delivered by the Company or the Shareholder as
required by this Agreement, (iv) the failure to obtain a Consent with respect to
any Material Contract, (v) any transfer taxes that may be due and owing to any
Governmental Authority with respect to matters arising prior to the Closing,
(vi) claims brought by or on behalf of any former shareholder of the Company
against any party to this Agreement or their respective officers, directors,
representatives, agents (including legal counsel), or successors in interest,
and (vii) any claims brought with respect to the Company's compliance with the
Fair Labor Standards Act (collectively, "Indemnifiable Damages").
Notwithstanding anything in this Agreement to the contrary, the Shareholders
shall have the right to prevent a set off against the Held Back Shares by making
a cash payment within 29 days from the date of the date of notice as provided
for in Section 8.3(a) below or such later date as set off would occur under
Section 8.3(b) in the event of a contest, in the amount that would otherwise be
satisfied by the set off.
(b) ViaSource agrees to indemnify and hold the Shareholders,
their personal representatives, heirs or assigns (collectively, for purposes of
this Article VIII, the "Shareholder Indemnitees") harmless from and against the
aggregate of all expenses, losses, costs, deficiencies,
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liabilities and damages (including, without limitation, related reasonable
counsel and paralegal fees and expenses) incurred or suffered by the Shareholder
Indemnitees arising out of or resulting from (i) any breach of a representation
or warranty made by the Via Source Companies, or either of them, in or pursuant
to this Agreement, (ii) any breach of the covenants or agreements made by the
ViaSource Companies in or pursuant to this Agreement or (iii) any inaccuracy in
any certificate, instrument or other document delivered by ViaSource as required
by this Agreement (collectively, "Shareholder Indemnifiable Damages").
8.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties set forth in this Agreement shall survive the
Closing or termination of this Agreement and shall remain in full force and
effect for a period of two (2) years from the Closing Date; provided, however,
that the representations and warranties and rights of indemnification with
respect to breaches thereof set forth in Sections 5.11, 5.14, 5.15, 5.16, 5.17,
5.20, 5.21 and 5.34 shall remain in full force and effect until the expiration
of the applicable statute of limitations (including any extension thereof).
Notwithstanding any knowledge of facts determined or determinable by any party
by investigation, each party shall have the right to fully rely on the
representations, warranties, covenants and agreements of the other parties
hereto contained in this Agreement or in any other documents or papers delivered
in connection herewith. Each representation, warranty, covenant and agreement
contained in this Agreement is independent of each other representation,
warranty, covenant and agreement.
8.3 SECURITY FOR SHAREHOLDERS INDEMNIFICATION OBLIGATION. As security
for the indemnification obligations contained in this Article VIII, ViaSource
shall hereby set aside and hold, and the Company and the Shareholders hereby
grant a security interest in (i) the shares represented by the certificates
representing the Held Back Shares, (ii) the Held Back Cash, and (iii) the Held
Back Note. The ViaSource Indemnitees may set off fully against (i) the Held Back
Shares, (ii) the Held Back Cash, and (iii) the Held Back Note, on a pro rata
basis consistent with the allocation of the Purchase Price set forth in Section
2.2, the Indemnifiable Damages for which the Company or the Shareholders may be
responsible pursuant to this Agreement subject, however, to the following terms
and conditions:
(a) The ViaSource Indemnitees shall give written notice to the
Company and the Shareholders of any claim for Indemnifiable Damages which notice
shall set forth (i) the amount of Indemnifiable Damages which the ViaSource
Indemnitees claims to have sustained by reason thereof, and (ii) the basis of
such claim;
(b) Such set off shall be effected on the later to occur on
the expiration of 30 days from the date of notice under Section 8.3(a) (the
"Notice of Contest Period") or, if such claim is contested, the date the dispute
is resolved, and such set off, to the extent taken with respect to the Held Back
Shares, shall be charged proportionally against the shares set aside; and
(c) For purposes of any set off against the Held Back Shares
pursuant to this Article VIII, the shares of ViaSource Common Stock shall be
valued at $2.50 per share.
(d) Notwithstanding anything in this Agreement to the
contrary, the Shareholders shall have a right to prevent a set off against the
Held Back Shares by making a cash payment within 29 days from the date of the
date of notice under Section 8.3(a) or such later date as set off would occur
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under Section 8.3(b) in the event of a contest, in the amount that would
otherwise be satisfied by the set off.
8.4 VOTING OF AND DIVIDENDS ON THE HELD BACK SHARES. Except with
respect to shares transferred pursuant to the foregoing right of set off (and in
the case of such shares, until the same are transferred), all Held Back Shares
shall be deemed to be owned by the Shareholders and the Shareholders shall be
entitled to vote the Held Back Shares in accordance with Schedule 2.1; provided,
however, that, there shall also be deposited with ViaSource subject to the terms
of this Article VIII, all shares of ViaSource Common Stock issued to the
Shareholders as a result of any stock dividend or stock split and all cash
issuable to the Shareholders as a result of any cash dividend, with respect to
the Held Back Shares. All stock issued or issuable and cash paid or payable or
paid upon the Held Back Shares shall be distributed to the person or entity
entitled to receive such Held Back Shares together with such Held Back Shares.
8.5 DELIVERY OF HELD BACK SHARES. ViaSource agrees to deliver to the
Shareholders no later than twelve (12) months after the date hereof any Held
Back Shares, Held Back Cash and Held Back Note then held by it unless there then
remains unresolved any claim for Indemnifiable Damages as to which notice has
been given, in which event any Held Back Shares remaining on deposit after such
claim shall have been satisfied shall be returned to the Shareholders promptly
after the time of satisfaction.
8.6 ADJUSTMENT TO PURCHASE PRICE. All payments for Indemnifiable
Damages made pursuant to this Article VIII shall be treated as adjustments to
the Purchase Price.
8.7 NO BAR. If the Held Back Shares, the Held Back Cash and the Held
Back Note are insufficient to set off any claim for Indemnifiable Damages made
hereunder (or have been delivered to the Shareholders prior to the making or
resolution of such claim), then the ViaSource Indemnitees may take any action or
exercise any remedy available to it by appropriate legal proceedings to collect
the Indemnifiable Damages, subject to the aggregate monetary threshold under
Section 8.9(b) hereof and the monetary cap on liability of the Shareholders
under Section 8.9(c) hereof, which limitations shall apply to any and all rights
and remedies asserted in connection with this Agreement except those expressly
excluded from such limitations pursuant to Section 8.9(c).
8.8 REMEDIES CUMULATIVE. The remedies provided herein shall be
cumulative and shall not preclude any party entitled to indemnification
hereunder from asserting any other right, or seeking any other remedies against
any party obligated to provide indemnification hereunder, subject to the
aggregate monetary threshold under Section 8.9(b) hereof and the monetary cap on
liability of the Shareholders under Section 8.9(c) hereof, which limitations
shall apply to any and all rights and remedies asserted in connection with this
Agreement except those expressly excluded from such limitations pursuant to
Section 8.9(c).
8.9 LIMITATIONS.
(a) The indemnification obligations with respect to
representations and warranties of the Company and the Shareholders in Article V
and all covenants of the Company and the Shareholders in this Agreement are
joint and several obligations. This means that the Shareholders will
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be responsible to the extent provided in this Article VIII for the entirety of
any indemnification to which the ViaSource Indemnitees may be entitled under
this Article VIII.
(b) No party entitled to indemnification hereunder may assert any claim
for Indemnifiable Damages until such time as all such Indemnifiable Damages,
cumulatively in connection with all such claims, aggregate at least $50,000
after which time the indemnified party may assert all claims for indemnification
for those Indemnifiable Damages only to the extent they exceed the $50,000
threshold. The $50,000 threshold provided in this Section 8.9(b) shall not be
applicable to defaults by the ViaSource Companies to make payment of the
Purchase Price, adjustment thereto or interest thereon, all as set forth in this
Agreement.
(c) The indemnification obligation of Shareholders under this
Article VIII to the ViaSource Indemnitees, for all claims other than those
arising from fraud by the Company or the Shareholders against ViaSource shall be
limited to the Purchase Price (net of adjustments pursuant to Section 7.12);
provided, however, that the indemnification obligations of Xxxx set forth in
Section 8.1(a)(vi), for any claims brought by or on behalf of any former
shareholders of the Company, shall not be subject to any such limitation.
(d) Notwithstanding anything in this Agreement to the
contrary, the liability of each Employee Shareholder shall not exceed that
portion of the Purchase Price received by such Employee Shareholder.
8.10 GROSS-UP. If any indemnification payment is determined to be
taxable to the party receiving such payment by any taxing authority, the paying
party shall also indemnify the party receiving such payment for any Taxes
incurred by reason of the receipt or accrual of such payment (taking into
account any actual reduction in tax liability to the receiving party) and any
costs and expenses (including reasonable attorneys' fees) incurred by the party
receiving such payment in connection with such Taxes (or any asserted
deficiency, claim, demand, dispute, action, suit, proceeding, judgment or
assessment, including the defense or settlement thereof, relating to such
Taxes). The amount recoverable by a party entitled to indemnification hereunder
shall take into account the value of any insurance recoveries or actual
reduction in Tax liability realized by such Indemnitee, and arising from the
same incident or set of facts or circumstances giving rise to the claim for
indemnity.
ARTICLE IX
SECURITIES LAW MATTERS
The parties agree as follows with respect to the sale or other
disposition after the date hereof of the ViaSource Shares:
9.1 DISPOSITION OF SHARES.
(a) Except as set forth in the Amended and Restated
Stockholders Agreement referred to in Article X below, the Shareholders may not,
directly or indirectly, offer, sell, contract to sell, pledge,
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purchase or sell any put or call option, or participate in any derivative
transaction relating to, or otherwise dispose of the ViaSource Shares received
in connection with the Merger prior to a date that is twelve months from the
date hereof.
(b) Each Shareholder represents and warrants that the ViaSource Shares
hereafter acquired by him/her are being acquired for his/her own respective
account and will not be sold or otherwise disposed of, except pursuant to (i) an
exemption from the registration requirements under the Securities Act, (ii) in
accordance with Rule 145(d) under the Securities Act, or (iii) an effective
registration statement filed by ViaSource with the SEC under the Securities Act.
To the extent the Shareholders comply with the provisions of Rule 145(d) under
the Securities Act in effecting sales of the ViaSource Shares, ViaSource agrees
to provide its transfer agent with appropriate instructions and/or opinions of
counsel in order for them to sell, transfer and/or dispose of the ViaSource
Shares in accordance with Rule 145(d).
9.2 LEGEND. The certificates representing the ViaSource Shares shall
bear the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE. SUCH SHARES MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED BY SAID ACT OR STATE LAWS.
ViaSource may, unless a registration statement is in effect covering such
shares, place stop transfer orders with its transfer agents with respect to such
certificates in accordance with the federal securities laws.
9.3 NO REGISTRATION. Each Shareholder acknowledges that the ViaSource
Shares being delivered hereunder are not registered shares and that ViaSource
has no obligation to register the ViaSource Shares at any time, except as set
forth in the amended and restated Stockholders Agreement referred to in Article
X below.
ARTICLE X
CONDITIONS TO THE OBLIGATIONS
OF THE VIASOURCE COMPANIES
The obligations of the ViaSource Companies to effect the transactions
contemplated hereby, shall be subject to the fulfillment at or prior to the
Closing Date of the following conditions, any or all of which may be waived in
whole or in part by ViaSource:
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10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Shareholders and the Company
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date with the same force and effect as though made at
and as of that time. The Shareholders and the Company shall have performed and
complied with all of the obligations required by this Agreement to be performed
or complied with at or prior to the Closing Date, including these obligations
set forth in Article VII herein. The Shareholders and the Company shall have
delivered to ViaSource a certificate, dated as of the Closing Date, duly signed,
certifying that such representations and warranties are true and correct and
that all such obligations have been performed and complied with.
10.2 NO MATERIAL ADVERSE CHANGE. There shall not have occurred any
events that have had or are reasonably likely to have a Material Adverse Change,
with the respect to the Company or its Assets.
10.3 CERTIFICATE. The Shareholders shall have delivered to ViaSource
(i) copies of the Articles of Incorporation and Bylaws of the Company as in
effect immediately prior to the date hereof, (ii) copies of resolutions adopted
by the Board of Directors and shareholders of the Company authorizing the
transactions contemplated by this Agreement, and (iii) a certificate of good
standing of the Company issued by the Secretary of State of the Commonwealth of
Kentucky and each other state in which it is qualified to do business as of a
date not more than ten (10) days prior to the Closing Date, certified in each
case as of the date hereof by the Secretary of the Company as being true,
correct and complete.
10.4 OPINION OF COUNSEL. ViaSource shall have received an opinion,
dated as of the Closing Date, from counsel for the Company and the Shareholders
acceptable to ViaSource, in form and substance acceptable to ViaSource, to the
effect that:
(a) the Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the Commonwealth of Kentucky and
is authorized to carry on the business now conducted by it and to own or lease
the properties now owned or leased by it;
(b) the Company has obtained all necessary authorizations and
consents of its Board of Directors and shareholders to effect the transactions
contemplated hereby;
(c) all issued and outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and nonassessable;
(d) such counsel does not know of any litigation, proceeding
or investigation pending or threatened which could reasonably be expected to
have Material Adverse Effect on the Company, or which questions the validity of
this Agreement;
(e) such counsel does not know of any event that has occurred
or state of facts that exists which would constitute a breach of any of the
representations and warranties made by the Company and the Shareholders pursuant
to Article V of this Agreement;
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(f) this Agreement is a valid and binding obligation of the
Company and the Shareholders, enforceable against each of them in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally or general equitable principles; and
(g) to the knowledge of such counsel, the execution and delivery of
this Agreement by the Company and the Shareholders, the performance by the
Company and the Shareholders of their obligations hereunder and the consummation
by them of the transactions contemplated by this Agreement will not (i)
contravene any provision of the Articles of Incorporation or Bylaws of the
Company, (ii) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against the Company or the Shareholders, (iii) conflict
with, result in any breach of, or constitute a default (or an event which would,
with the passage of time or the giving of notice or both, constitute a default)
under, or give rise to a right of payment or right to terminate, amend, modify,
abandon or accelerate, any Contract which is applicable to, binding upon or
enforceable against the Company or the Shareholders, (iv) result in or require
the creation or imposition of any Lien upon or with respect to any of the
properties or assets of the Company, (v) give to any individual or entity a
right or claim against the Company or the Shareholders or (vi) require the
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Authority, any court or tribunal or any other Person.
10.5 CONSENTS. The Company and ViaSource shall have received consents
to the transactions contemplated hereby and waivers of rights to terminate or
modify any material rights or obligations of the Company from any person from
whom such consent or waiver is required under any Material Contract.
10.6 EMPLOYMENT AND NON-COMPETITION AGREEMENT. Xxxx shall enter into an
Employment and Non-Competition Agreement with ViaSource in the form set forth on
Exhibit B.
10.7 RELEASE. At the Closing, the Shareholders, and such of their
Affiliates as may be designated by ViaSource, shall deliver to ViaSource a
release (collectively, the "Releases") in such form as is satisfactory to
ViaSource, releasing all claims of any nature against the Company, including,
without limitation, any claims arising out of the Merger and the other
transactions contemplated by this Agreement.
10.8 STOCK POWERS. At the Closing, the Shareholders shall have
delivered to ViaSource, for use in connection with the Held Back Shares, ten
stock powers executed in blank, with signatures medallion guaranteed.
10.9 BOARD APPROVAL. The Board of Directors of ViaSource shall have
authorized and approved this Agreement, the Merger and transactions contemplated
hereby.
10.10 LEGAL PROHIBITION. On the Closing Date, no injunction, decree or
order shall be in effect prohibiting consummation of the transactions
contemplated hereby or which would make the consummation of such transactions
unlawful and no action, suit or proceeding shall have been instituted
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and remain pending before a court, governmental body or regulatory authority to
restrain or prohibit the transactions contemplated by this Agreement and no
adverse decision shall have been made by any such court, governmental body or
regulatory authority which constitutes, or could be reasonably anticipated to
constitute, a Material Adverse Change. Between the date hereof and the Closing
Date, no federal, state or local statute, rule or regulation shall have been
enacted or deemed applicable by any government or governmental or administrative
agency or court the effect of which would be to prohibit, restrict, impair or
delay the consummation of the transactions contemplated hereby.
10.11 STOCKHOLDERS AGREEMENT. On or before the Closing Date, the
Shareholders shall have executed the restated and amended stockholders agreement
of ViaSource substantially in the form of Exhibit C hereto (the "Stockholders
Agreement").
ARTICLE XI
CONDITIONS TO THE OBLIGATIONS OF
THE COMPANY AND THE SHAREHOLDERS
The obligations of the Company and the Shareholders to effect the
transactions contemplated hereby shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions, any or all of which may be
waived in whole or in part by the Company or the Shareholders:
11.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of the ViaSource Companies
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date with the same force and effect as though made at
and as of that time. The ViaSource Companies shall have performed and complied
in all material respects with all of its obligations required by this Agreement
to be performed or complied with at or prior to the Closing Date. The ViaSource
Companies shall have delivered to the Shareholders certificates, dated as of the
Closing Date, and signed by executive officers thereof, certifying that such
representations and warranties are true and correct, and that all such
obligations have been performed and complied with, in all material respects.
11.2 OTHER CONDITIONS. At the Closing, ViaSource shall have delivered
to Shareholders the Cash Consideration, the Notes and the ViaSource Shares
(reduced by the Held Back Shares).
11.3 OPINION OF COUNSEL. The Shareholders shall have received an
opinion, dated as of the Closing, from counsel for ViaSource and the Merger Sub,
in form and substance acceptable to the Shareholders, to the effect that:
(a) ViaSource is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of New Jersey and is
authorized to carry on the business now conducted by it and to own or lease the
properties now owned or leased by it;
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(b) Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and is
authorized to carry on the business now conducted by it and to own or lease the
properties now owned or leased by it;
(c) each of the ViaSource Companies has obtained all necessary
authorizations and consents of its respective board of directors and
shareholders to effect the transactions contemplated hereby;
(d) all issued and outstanding shares of capital stock of
ViaSource are duly authorized, validly issued, fully paid and nonassessable; and
the ViaSource Shares have been duly authorized and upon issuance in accordance
with this Agreement will be validly issued, fully paid and nonassessable.
(e) such counsel does not know of any litigation, proceeding
or investigation pending or threatened which could reasonably be expected to
have Material Adverse Effect on ViaSource, or which questions the validity of
this Agreement;
(f) such counsel does not know of any event that has occurred
or state of facts that exists which would constitute a breach of any of the
representations and warranties made by the ViaSource Companies or either of them
pursuant to Article IV of this Agreement;
(g) this Agreement is a valid and binding obligation of the
ViaSource Companies, enforceable against each of them in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally or general equitable principles; and
(h) to the knowledge of such counsel, the execution and
delivery of this Agreement by the ViaSource Companies, the performance by the
ViaSource Companies of their respective obligations hereunder and the
consummation by them of the transactions contemplated by this Agreement will not
(i) contravene any provision of the Certificates of Incorporation or Bylaws of
either of the ViaSource Companies, (ii) violate or conflict with any law,
statute, ordinance, rule, regulation, decree, writ, injunction, judgment or
order of any Governmental Authority or of any arbitration award which is either
applicable to, binding upon or enforceable against either of the ViaSource
Companies, (iii) conflict with, result in any breach of, or constitute a default
(or an event which would, with the passage of time or the giving of notice or
both, constitute a default) under, or give rise to a right of payment or right
to terminate, amend, modify, abandon or accelerate, any Contract which is
applicable to, binding upon or enforceable against either of the ViaSource
Companies, (iv) result in or require the creation or imposition of any Lien upon
or with respect to any of the properties or assets of either of the ViaSource
Companies, (v) give to any individual or entity a right or claim against either
of the ViaSource Companies or (vi) require the consent, approval, authorization
or permit of, or filing with or notification to, any Governmental Authority or
any court or tribunal.
11.4 NO MATERIAL ADVERSE CHANGE. There shall not have occurred any
events that have had or are reasonably likely to have a Material Adverse Change,
with respect to the ViaSource Companies.
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11.5 LEGAL PROHIBITION. On the Closing Date, no injunction, decree or
order shall be in effect prohibiting consummation of the transactions
contemplated hereby or which would make the consummation of such transactions
unlawful and no action, suit or proceeding shall have been instituted and remain
pending before a court, governmental body or regulatory authority to restrain or
prohibit the transactions contemplated by this Agreement and no adverse decision
shall have been made by any such court, governmental body or regulatory
authority which constitutes, or could be reasonably anticipated to constitute, a
Material Adverse Change. Between the date hereof and the Closing Date, no
federal, state or local statute, rule or regulation shall have been enacted or
deemed applicable by any government or governmental or administrative agency or
court the effect of which would be to prohibit, restrict, impair or delay the
consummation of the transactions contemplated hereby.
11.6 STOCKHOLDERS AGREEMENT. On or before the Closing Date, ViaSource
and the shareholders of ViaSource shall have executed the restated and amended
stockholders agreement of ViaSource substantially in the form of Exhibit C
hereto (the "Stockholders Agreement").
11.7 RELEASE OF GUARANTEES. The ViaSource Companies and Xxxx, Xxxxxxx
X. Xxxxxxx ("Xxxxxxx"), Xxxxx X. Xxxxxxxxx ("Xxxxxxxxx") and Xxxx X. Xxxxxxx
("Xxxxxxx") shall have received releases of Poth, Kirtley, Tafralian and/or
Xxxxxxx, as appropriate, from all personal guarantees of the obligations
identified on Schedule 7.14, and the ViaSource Companies shall have executed and
delivered an indemnity of Poth, Kirtley, Tafralian and Xxxxxxx, in form and in
substance acceptable to Poth, Kirtley, Tafralian and Xxxxxxx, for all such
guarantees identified in Schedule 7.14 by Poth, Kirtley, Tafralian and Xxxxxxx,
which have not been released, at or prior to Closing.
ARTICLE XII
DEFINITIONS
12.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on
the date hereof.
"Closing" means the consummation of the transactions contemplated
hereby.
"Contaminated Site List" means any list, registry or other compilation
established by any Governmental Body of facilities or sites that
require or potentially require investigation, removal actions, remedial
actions or any other response under any Environmental Laws.
"Contract" means any agreement, contract, lease, note, mortgage,
indenture, loan agreement, franchise agreement, covenant, employment
agreement, license, instrument, purchase and sales order, commitment,
undertaking, obligation, whether written or oral, express or implied.
"Disclosure Statement" means the Confidential Private Placement
Memorandum of ViaSource delivered to the Shareholders on May 31, 2000.
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"Effective Time" means the time when the transactions contemplated by
this Agreement are consummated.
"Environmental Conditions" means any pollution, contamination,
degradation, damage or injury caused by, related to or arising from or
in connection with the generation, handling, use, treatment, storage,
transportation, disposal, discharge, Release or emission of any
Hazardous Materials.
"Environmental Laws" means all laws, treatises, compacts, settlement or
consent agreements, orders, writs, injunctions, judgments, rules,
regulations, statutes, ordinances, common law principles, decrees or
orders or other binding requirements with or of any national,
international, provincial, federal, state, municipal, local or foreign
Governmental Body relating to the environment (including, without
limitation, natural resources) or the health of humans or other living
organisms, including, without limitation, (a) the control, Release or
remediation of any Hazardous Material or potential Hazardous Material
or protection of the air, water or land, (b) generation, handling,
treatment, storage, disposal or transportation of any Hazardous
Material, or (c) exposure to hazardous, toxic or other substances
alleged to be harmful, and (d) final and binding requirements related
to the foregoing imposed by (i) the terms and conditions of any
license, permit, approval or other authorization by any Governmental
Body, and (ii) applicable judicial, administrative or other regulatory
decrees, judgments and orders of any such Governmental Body. The term
"Environmental Laws" shall include, but not be limited to, the
following statutes and the regulations promulgated thereunder, as
currently in effect or as subsequently amended: the Clean Air Act, 42
U.S.C. Section 7401 et seq.; the Clean Water Act, 33 U.S.C. Section
1251 et seq.; the Resource Conservation Recovery Act, 42 U.S.C. Section
6901 et seq.; the Superfund Amendments and Reauthorization Act, 42
U.S.C. Section I 10 11 et seq.; the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq.; the Water Pollution Control Act, 33 U.S.C.
Section 125 1, et seq.; the Safe Drinking Water Act, 42 U.S.C. Section
300 et seq.; the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq.; and any similar state,
federal, foreign or local statute or ordinance.
"Environmental Remediation Costs" means all costs and expenses of any
Person of actions or activities to (a) clean up or remove or remediate
Hazardous Materials, (b) prevent or minimize the movement, leaching or
migration of Hazardous Materials, (c) prevent, minimize or mitigate or
otherwise respond to the Release or threatened Release of Hazardous
Materials, or injury or damage from such Release, or (d) comply with
the requirements of any Environmental Laws. Environmental Remediation
Costs include, without limitation, costs and expenses payable in
connection with the foregoing for reasonable legal, engineering or
other consultant services, for investigation, testing, sampling and
monitoring (including, without limitation, medical monitoring), for
boring, excavation and construction, for removal, modification or
replacement of equipment or facilities, for labor and material, and for
proper storage, treatment and disposal of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"GAAP" means generally accepted accounting principles in effect in the
United States of America from time to time.
"Governmental Authority" means any nation or government, any state,
regional, local or other political subdivision thereof, and any entity
or official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Hazardous Materials" means any (a) toxic or hazardous materials or
substances; (b) solid, liquid or gaseous wastes, including asbestos,
buried contaminants, chemicals, flammable or explosive materials; (c)
radioactive materials; (d) petroleum wastes and Releases of petroleum
products; and (e) any other chemical, pollutant, contaminant, waste or
other substance (including, without limitation, any product) that is
regulated by or pursuant to any Environmental Law.
"Lien" means any mortgage, pledge, security interest, collateral
assignment, preemptive or refused right, equity of any kind
encumbrance, lien or charge of any kind (including, but not limited to,
any conditional sale or other title retention agreement, any lease in
the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code or comparable law
or any jurisdiction in connection with such mortgage, pledge, security
interest, encumbrance, lien or charge).
"Material Adverse Change (or Effect)" means a change (or effect), in
the condition (financial or otherwise), properties, assets, prospects,
liabilities, rights, obligations, operations, or business which change
(or effect) individually or in the aggregate, is materially adverse to
such condition, properties, assets, liabilities, rights, obligations,
operations, or business.
"Person" means an individual, partnership, Company, business trust,
joint stock Company, estate, trust, unincorporated association, joint
venture, Governmental Authority or other entity, of whatever nature.
"Register", "registered" and "registration" refer to a registration of
the offering and sale of securities effected by preparing and filing a
registration statement in compliance with the Securities Act and the
declaration or ordering of the effectiveness of such registration
statement.
"Release of Hazardous Materials" means any spilling, leaking, emitting,
discharging, injecting, leaching, dumping or disposing into the
environment of Hazardous Materials but excludes (a) any release which
results in exposure to persons solely within a workplace, (b) emissions
from the engine exhaust of a motor vehicle, rolling stock, aircraft,
vessel, or pipeline pumping station engine, and (c) the normal
application of fertilizer.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax Return" means any tax return, filing or information statement
required to be filed in connection with or with respect to any Tax.
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"Taxes" means all taxes, fees or other assessments, including, but not
limited to, income, excise, property, sales, franchise, intangible,
payroll, withholding, social security and unemployment taxes imposed by
any federal, state, local or foreign governmental agency, and any
interest or penalties related thereto, whenever they may be assessed.
12.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection with
this Agreement and the transactions contemplated hereby shall be determined in
accordance with GAAP applied on a basis consistent with prior periods, where
applicable.
(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the neuter
and feminine, where the context so permits.
ARTICLE XIII
TERMINATION
13.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing:
(a) by mutual written consent of all of the parties hereto at
any time prior to the Closing; or
(b) by ViaSource in the event of a material breach by the
Company or the Shareholders of any provision of this Agreement, including but
not limited to the provisions of Article X hereto; or
(c) by the Shareholders or the Company in the event of a
material breach by ViaSource or Merger Sub of any provision of this Agreement,
including but not limited to the provisions of Article XI hereto; or
(d) by ViaSource or the Company if the Closing shall not have
occurred by June 1, 2000.
13.2 EFFECT OF TERMINATION. Except as provided in Article VIII and for
the provisions of Section 7.3, in the event of termination of this Agreement
pursuant to Section 13.1, this Agreement shall forthwith become void; provided,
however, that nothing herein shall relieve any party from liability for
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the willful breach of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
ARTICLE XIV
MISCELLANEOUS
14.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall designate
in writing to the other party):
IF TO VIASOURCE:
0000 Xxxx Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, President
Facsimile Number: (000) 000-0000
WITH A COPY TO:
Akerman, Senterfitt & Xxxxxx, P.A.
One X.X. 0xx Xxxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile Number: (000) 000-0000
IF TO THE COMPANY TO:
Excalibur Cable Communications, Ltd.
00000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxx
Facsimile Number: (000) 000-0000
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WITH A COPY TO:
Reed, Smith, Xxxxx & Xxxxxx, LLP
0000 Xxxxxxxxxx Xxxxx -- Xxxxx 0000
XxXxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxx
Facsimile Number: (000) 000-0000
14.2 ENTIRE AGREEMENT. This Agreement (including the Schedules attached
hereto) and other documents delivered concurrently herewith, contains the entire
understanding of the parties in respect of its subject matter and supersedes all
prior agreements and understandings (oral or written) between or among the
parties with respect to such subject matter. The Schedules constitute a part
hereof as though set forth in full above.
14.3 EXPENSES. Except as otherwise provided herein, the parties shall
pay their own fees and expenses, including their own counsel fees, incurred in
connection with this Agreement or any transaction contemplated hereby.
Notwithstanding the foregoing, at the Closing ViaSource will pay or reimburse
Excalibur and the Shareholders Fifty Percent (50%) of the legal and accounting
expenses incurred by Excalibur and the Shareholders in connection with the
negotiation and documentation of this Agreement and the consummation of the
Merger and the termination of the Company's retirement plan and phantom stock
agreements (but excluding all such legal and accounting fees and expenses
relating to Xxxx'x distributions of shares of the Company to certain employees
and to a trust).
14.4 AMENDMENT; WAIVER. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
all parties. No failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege. No waiver of any breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts. The rights and remedies of the parties under this Agreement
are in addition to all other rights and remedies, at law or equity, that they
may have against each other.
14.5 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein shall be
construed to give any other person any legal or equitable rights hereunder.
Except as expressly provided herein, the rights and obligations of this
Agreement may not be assigned or delegated by the Company without the prior
written consent of ViaSource. ViaSource may assign all or any portion of its
rights hereunder.
14.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute the same instrument.
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14.7 INTERPRETATION. When a reference is made in this Agreement to an
article, section, paragraph, clause, schedule or exhibit, such reference shall
be deemed to be to this Agreement unless otherwise indicated. The headings
contained herein and on the schedules are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement or the
schedules. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." Time shall be of the essence in this Agreement.
14.8 GOVERNING LAW; INTERPRETATION. This Agreement shall be construed
in accordance with and governed for all purposes by the laws of the State of
Florida applicable to contracts executed and to be wholly performed within such
State, without regard to conflict of laws principles.
14.9 JURISDICTION. Any suit, action or proceeding against the Company
or the Shareholders arising out of, or with respect to, this Agreement or any
judgment entered by any court in respect thereof may be brought in the courts of
Broward County, Florida, or in the U.S. District Court for the Southern District
of Florida, as ViaSource (in its sole discretion) may elect, and the Company and
the Shareholders hereby irrevocably accept and consent to the nonexclusive
personal jurisdiction of those courts for the purpose of any suit, action or
proceeding. In addition, each of the Company and the Shareholders hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any judgment entered
by any court in respect thereof brought in Broward County, Florida, or the U.S.
District Court for the Southern District of Florida, as selected by ViaSource,
and hereby further irrevocably waives any claim that any suit, action or
proceedings brought in Broward County, Florida, or in such District Court has
been brought in an inconvenient forum.
14.10 ARM'S LENGTH NEGOTIATIONS. Each party herein expressly represents
and warrants to all other parties hereto that (a) before executing this
Agreement, said party has fully informed itself of the terms, contents,
conditions and effects of this Agreement; (b) said party has relied solely and
completely upon its own judgment in executing this Agreement; (c) said party has
had the opportunity to seek the advice of counsel before executing this
Agreement; (d) said party has acted voluntarily and of its own free will in
executing this Agreement; (e) said party is not acting under duress, whether
economic or physical, in executing this Agreement; and (f) this Agreement is the
result of arm's length negotiations conducted by and among the parties and their
respective counsel.
14.11 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
14.12 ANCILLARY AGREEMENTS. To the extent any agreement ancillary to
this Agreement contains any representation or warranty that provides for
different or conflicting rights, duties or obligations from those
representations and warranties contained herein, the provisions of this
Agreement will control.
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14.13 ANNOUNCEMENTS. All press releases, notices to customers and
suppliers and other announcements with respect to this Agreement and the
transactions contemplated by this Agreement shall be approved by both ViaSource
and the Company prior to the issuance thereof; provided, that either party may
make any public disclosure it believes in good faith is required by law or
regulation (in which case the disclosing party will advise the other party prior
to making such disclosure and provide the other party a reasonable opportunity
to review the proposed disclosure).
14.14 BULK SALES LAWS. The parties hereto hereby waive compliance with
the provisions of any applicable bulk sales laws, including Article 6 of the
Uniform Commercial Code as it may be in effect in any applicable jurisdiction.
This provision shall not be deemed to in any way limit the indemnity provided
for in Article VIII hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
VIASOURCE COMMUNICATIONS, INC.,
a New Jersey Corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
EX ACQUISITION, INC.,
a Delaware Corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
EXCALIBUR CABLE COMMUNICATIONS,
LTD., a Kentucky corporation
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------
Title: President and CEO
------------------------------
/s/ X. X. Xxxx
--------------------------------
KONRAD XXXX XXXX, individually
THE XXXXXX XXXXXXX XXXX 2000 TRUST
By:/s/ Xxxxx Xxx Xxxx
-------------------------
Xxxxx Xxx Xxxx, Trustee
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/s/ Xxxx X. Xxxxxxx
------------------------------
XXXX X. XXXXXXX, individually
/s/ Xxxxxx X. Xxxxxxxx
------------------------------
XXXXXX X. XXXXXXXX, individually
/s/ Xxxxx X. Xxxx
------------------------------
XXXXX X. XXXX, individually
/s/ Xxxxx X. Xxxx
------------------------------
XXXXX X. XXXX, individually
/s/ XXXX XXXXX
------------------------------
XXXX XXXXX, individually
/s/ Xxxxxxx X. Field
------------------------------
XXXXXXX X. FIELD, individually
/s/ Xxxxxx X. Xxxxxx
------------------------------
XXXXXX X. XXXXXX, individually
/S/ Xxxxxxx X. Xxxxxxx
------------------------------
XXXXXXX X. XXXXXXX, individually
/s/ Xxxxxx X. Xxxxx
------------------------------
XXXXXX X. XXXXX, individually
/s/ Xxxx Xxxxxxxx
------------------------------
XXXX XXXXXXXX, individually
/s/ Xxxxxxx Xxxxxxxx
------------------------------
XXXXXXX XXXXXXXX, individually
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/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
XXXXXXX X. XXXXXXXXX, individually
/s/ Xxxx Xxxxxxxx
------------------------------
XXXX XXXXXXXX, individually
/s/ Xxx Xxxxx
------------------------------
XXX XXXXX, individually
/s/ Duff X. Xxxxxxx
------------------------------
DUFF X. XXXXXXX, individually
/s/ Xxxxx X. Xxxxxxxxx
------------------------------
XXXXX X. XXXXXXXXX, individually
/s/ Xxxxx X. Xxxxxxxxx
------------------------------
XXXXX X. XXXXXXXXX, individually
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