STOCK PURCHASE AGREEMENT DATED AS OF NOVEMBER [12], 2007, BY AND AMONG CABLE & CO WORLDWIDE, INC. ANDREW PERLMUTTER AND DAVID WEISS
Execution
Copy
DATED
AS
OF NOVEMBER [12], 2007,
BY
AND
AMONG
CABLE
& CO WORLDWIDE, INC.
XXXXXX
XXXXXXXXXX
AND
XXXXX
XXXXX
TABLE
OF
CONTENTS
This
Table of Contents is not part of the Agreement to which it is attached but
is
inserted for convenience only.
Page
|
||
ARTICLE
I
|
||
SALE
OF SHARES AND CLOSING
|
1
|
|
1.01
|
Purchase
and Sale
|
1
|
1.02
|
Purchase
Price
|
1
|
1.03
|
Payment
of Purchase Price; Security
|
1
|
1.04
|
Closing
|
2
|
ARTICLE
II
|
||
REPRESENTATIONS
AND WARRANTIES OF THE SHAREHOLDERS
|
2
|
|
2.01
|
Due
Incorporation and Authority
|
2
|
2.02
|
No
Conflicts
|
3
|
2.03
|
Capitalization;
Ownership of Shares
|
3
|
2.04
|
Financial
Statements
|
4
|
2.05
|
Undisclosed
Liabilities
|
4
|
2.06
|
Title
and Condition
|
4
|
2.07
|
Litigation
and Compliance with Laws
|
4
|
2.08
|
Insurance
|
5
|
2.09
|
Contracts
|
5
|
2.10
|
Intellectual
Property
|
6
|
2.11
|
Tax
Matters
|
6
|
2.12
|
No
Brokers
|
7
|
2.13
|
Affiliated
Entities
|
7
|
2.14
|
Powers
of Attorney
|
7
|
2.15
|
Certificate
of Incorporation and By-laws
|
7
|
2.16
|
Customers
and Suppliers
|
7
|
2.17
|
Labor
Matters; Officers, Managers and Employees
|
7
|
2.18
|
ERISA
|
8
|
2.19
|
Environmental
Compliance
|
10
|
2.20
|
No
Undisclosed Liabilities
|
11
|
2.21
|
Accredited
Investor
|
11
|
2.22
|
Full
Disclosure
|
11
|
ii
ARTICLE
III
|
||
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
|
12
|
|
3.01
|
Due
Incorporation
|
12
|
3.02
|
Authority
|
12
|
3.03
|
No
Conflicts
|
12
|
3.04
|
Investment
Representation
|
13
|
3.05
|
SEC
Reports
|
13
|
3.06
|
Investment
Company
|
13
|
ARTICLE
IV
|
||
COVENANTS
OF SHAREHOLDERS
|
13
|
|
4.01
|
Regulatory
and Other Approvals
|
13
|
4.02
|
Conduct
of Business
|
14
|
4.03
|
Fulfillment
of Conditions
|
14
|
4.04
|
Confidentiality
|
14
|
ARTICLE
V
|
||
COVENANTS
OF PURCHASER
|
14
|
|
5.01
|
Regulatory
and Other Approvals
|
15
|
5.02
|
Fulfillment
of Conditions
|
15
|
5.03
|
Confidentiality
|
15
|
ARTICLE
VI
|
||
CONDITIONS
TO OBLIGATIONS OF PURCHASER
|
15
|
|
6.01
|
Representations
and Warranties
|
16
|
6.02
|
Performance
|
16
|
6.03
|
Deliveries
|
16
|
6.04
|
Orders
and Laws
|
17
|
6.05
|
Regulatory
Consents and Approvals
|
17
|
6.06
|
Third
Party Consents
|
17
|
6.07
|
Employment
Agreement
|
17
|
ARTICLE
VII
|
||
CONDITIONS
TO OBLIGATIONS OF SHAREHOLDERS
|
17
|
|
7.01
|
Representations
and Warranties
|
17
|
7.02
|
Performance
|
17
|
iii
7.03
|
Deliveries
|
17
|
7.04
|
Orders
and Laws
|
18
|
7.05
|
Regulatory
Consents and Approvals
|
18
|
7.06
|
Third
Party Consents
|
18
|
ARTICLE
VIII
|
||
POST
CLOSING COVENANTS
|
18
|
|
8.01
|
Tax
Matters and Regulatory Filings
|
18
|
8.02
|
Indemnification
|
19
|
8.03
|
Survival
of Representations and Covenants
|
19
|
8.04
|
Confidentiality;
Non-Competition.
|
19
|
ARTICLE
IX
|
||
TERMINATION
|
20
|
|
9.01
|
Termination
|
20
|
9.02
|
Effect
of Termination
|
20
|
ARTICLE
X
|
||
DEFINITIONS
|
20
|
|
10.01
|
Definitions
|
20
|
ARTICLE
XI
|
||
MISCELLANEOUS
|
23
|
|
11.01
|
Notices
|
23
|
11.02
|
Entire
Agreement
|
24
|
11.03
|
Expenses
|
24
|
11.04
|
Public
Announcements
|
24
|
11.05
|
Further
Assurances; Post-Closing Cooperation
|
24
|
11.06
|
Waiver
|
24
|
11.07
|
Amendment
|
25
|
11.08
|
No
Third Party Beneficiary
|
25
|
11.09
|
No
Assignment; Binding Effect
|
25
|
11.10
|
Headings
|
25
|
11.11
|
Invalid
Provisions
|
25
|
11.12
|
Governing
Law
|
25
|
11.13
|
Counterparts
|
26
|
iv
This
Stock Purchase Agreement (this “Agreement”)
is
made and entered into as of this [12th]
day of
November, 2007 by and among Cable & Co Worldwide, Inc., a Delaware
corporation, (“Purchaser”),
Xxxxxx Xxxxxxxxxx, a resident of the State of New Jersey (“Xxxxxxxxxx”), and
Xxxxx Xxxxx, a resident of the State of Connecticut (“Xxxxx”
and
together with Xxxxxxxxxx, each a “Shareholder”
and
collectively, the “Shareholders”).
Capitalized terms not otherwise defined herein have the meanings set forth
in
Article X.
RECITALS:
WHEREAS,
the Shareholders collectively own all of the shares of Common Stock (the
“Shares”)
of
InMarketing Corp., a New Jersey corporation (the “Company”),
which
Shares represent 100% of the total shares of capital stock of the Company on
a
fully diluted basis for the consideration and upon the terms and conditions
set
forth in this Agreement;
WHEREAS,
the Shareholders desire to sell, transfer, convey and assign the Shares to
Purchaser and Purchaser desires to purchase and acquire the Shares for the
consideration and upon the terms and conditions set forth in this Agreement;
and
WHEREAS,
before the Closing, Purchaser shall amend its Certificate of Incorporation
to,
among other things, change its legal name to Market & Research
Corp.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
in
this Agreement, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
SALE
OF SHARES AND CLOSING
1.01 Purchase
and Sale.
At the
Closing, the Shareholders agree to sell to Purchaser, and Purchaser agrees
to
purchase from the Shareholders, all of the right, title and interest of the
Shareholders in and to the Shares on the terms and subject to the conditions
set
forth in this Agreement.
1.02 Purchase
Price.
The
purchase price for the Shares shall be $6,121,185.00 (the “Purchase
Price”).
The
Purchase Price shall be an amount equal to the product of five (5) times the
Company’s EBITDA (inclusive of all non-recurring expenses of the Company for the
fiscal year ended December 31, 2007, as reasonably determined by Company’s
management and Purchaser).
1.03 Payment
of Purchase Price.
On the
Closing Date, Purchaser shall: (a) pay fifty percent (50%) of the Purchase
Price, $3,060,592.50 to the Shareholders (the “Cash
Portion”)
and
(b) issue the Shareholders each a promissory note on even date herewith
(collectively, as the same may be amended, restated, supplemented, replaced
or
otherwise modified, the “Notes”)
for
the remaining principal amount of the Purchase Price. Purchaser shall pay each
Shareholder its pro rata share of the Cash Portion based on such Shareholder’s
percentage ownership of the Shares and shall issue the Shareholders the Notes
in
such principal amounts based on each Shareholder’s percentage ownership of the
Shares. The Notes shall be in the form of Exhibit
A
annexed
hereto.
1.04 Closing.
The
Closing will take place at the offices of Xxxxxxxx & Xxxx LLP, 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, or at such other place as the parties
mutually agree, at 10:00 A.M. local time, on the Closing Date. At the Closing,
Purchaser will: (a) pay the Cash Portion of the Purchase Price by wire transfer
of immediately available funds to such account(s) as the Shareholders may
reasonably direct by written notice delivered to Purchaser at least two (2)
business days before the Closing Date, and (b) issue the Notes to the respective
Shareholder. Simultaneously, the Shareholders will transfer to Xxxxxxxx &
Xxxx LLP (the “Escrow
Agent”),
to
hold on behalf of and in the name of Purchaser pursuant to the terms of that
certain escrow agreement between Purchaser, the Escrow Agent, and the
Shareholders in the form of Exhibit
B
annexed
hereto, good and valid title in and to the Shares, free and clear of all Liens,
claims and encumbrances, by delivering to the Escrow Agent certificate(s)
representing the Shares and one or more duly executed transfer instruments
for
all of the Shares in favor of Purchaser and/or its nominees. The parties hereto
acknowledge and agree that either at or prior to the Closing Date, Purchaser
shall have changed its legal name to Market & Research Corp.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE SHAREHOLDERS
As
an
inducement to Purchaser to enter into and perform this Agreement, and in
consideration of the covenants and agreements of Purchaser contained herein,
the
Shareholders jointly and severally represent and warrant to Purchaser the
statements contained in this Article II (which warranties and
representations shall survive the Closing regardless of any examination,
inspections, audits and other investigations that Purchaser has heretofore
made
or may hereafter make, with respect to such warranties and representations
or
otherwise), as follows.
2.01 Due
Incorporation and Authority.
(a)
The
Company is a company duly incorporated, validly existing and in good standing
under the Laws of the State of New Jersey and has the corporate power and lawful
authority to (i) own its properties and to transact the business in which it
is
currently engaged and (ii) approve this Agreement and to perform its obligations
contemplated hereby. The Shareholders have caused the Company to be duly
qualified to do business and to be in good standing as a corporation in each
jurisdiction where the Company owns or leases real property and where the nature
of its business requires it to be so qualified, except for jurisdictions where
the failure to be so qualified has not had and could not reasonably be expected
to have a material adverse effect on the business, assets and financial
condition of the Company; and
(b) Each
Shareholder has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement and each other agreement, document
or instrument required to be executed and delivered by such Shareholder in
connection with this Agreement or at the Closing (the “Ancillary
Documents”).
This
Agreement and any Ancillary Documents are binding upon, and enforceable against,
the Company and the Shareholders in accordance with their terms, subject, as
to
enforcement, to bankruptcy, insolvency, reorganization and other Laws affecting
creditors' rights generally and by general principles of equity (whether in
a
proceeding at Law or in equity).
2
2.02 No
Conflicts.
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby, nor compliance by the Company and by the
Shareholders with any of the provisions hereof, will:
(a) violate,
or conflict with, or result in a material breach of any provisions of, or
constitute a material default (or an event which, with notice or lapse of time
or both, would constitute a default) under, or result in the termination of,
or
accelerate the performance required by, or result in the creation of any Lien
upon any of the properties or assets of the Company or the Shares, under any
of
the terms, conditions or provisions of the certificate of incorporation or
by-laws of the Company, or any note, bond, mortgage, indenture, deed of trust,
license agreement, lease or other agreement, instrument or obligation to which
the Company or a Shareholders is a party, or by which the Company or the
Company's properties or assets or the Shareholders may be bound or
affected;
(b) except
as
set forth in Section
2.02 of the Disclosure Schedule,
require
the consent or approval of, or the making of any filing with, any third Person,
including any Governmental or Regulatory Authority; or
(c) violate
any Law or Order applicable to the Company or the Shareholders or any of the
properties or assets of the Company.
2.03 Capitalization;
Ownership of Shares.
(a)
The
Company has, and on the Closing Date will have, total authorized share capital
of 1000 shares of Common Stock, each share having no par value. Immediately
prior to the purchase of the Shares by Purchaser pursuant to this Agreement,
the
number of shares of each class of capital stock issued and outstanding, and
the
number of options, warrants and securities convertible into any capital stock
will be as set forth on the capitalization table set forth in Section
2.03 of the Disclosure Schedule
hereto.
(b) The
Shares are validly issued, fully paid and nonassessable and except as disclosed
in Section
2.03 of the Disclosure Schedule,
are not
subject to any preemptive rights, and there are no voting trust agreements,
shareholders’ agreements, proxies, restraints on transfer or other contracts,
agreements or arrangements restricting voting or dividend rights or
transferability with respect to the Shares.
(c) The
Shareholders each own the Shares free and clear of any Liens, pledges,
restrictions, contractual obligations, charges, encumbrances or restraints
on
transfer and Purchaser will acquire good and marketable title to the Shares
free
and clear of all Liens. The Shareholders are the sole record and beneficial
owners of the Shares. Upon endorsement by the Shareholders of the certificates
representing the Shares and delivery thereof to the Escrow Agent at Closing,
the
Shares, and good and marketable title thereto, will have been duly transferred
to Escrow Agent to hold on behalf of and in the name of Purchaser, free and
clear of any Liens, pledges, restrictions, contractual obligations, charge,
encumbrance or restraint on transfer whatsoever created by the Company or the
Shareholder, and Purchaser will be the sole record and beneficial owner of
the
Shares.
3
(d) Except
as
disclosed in Section
2.03 of the Disclosure Schedule,
there
are no outstanding options, rights to purchase, warrants, rights, privileges
or
other arrangements, preemptive, contractual or otherwise, to acquire or to
compel the sale of any shares of capital stock or other securities of, or equity
interests in the Company.
2.04 Financial
Statements.
The
Financial Statements attached hereto as Exhibit
C:
(a)
were prepared in accordance with the books and records of the Company; (b)
present fairly the financial position and results of operations of the Company
at the dates and for the periods indicated therein; and (c) have been prepared
in accordance with generally accepted accounting principles, applied on a
consistent basis.
2.05 Undisclosed
Liabilities.
On the
Balance Sheet Date, the Company did not have any debts, liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise),
which were not fully disclosed, reflected or reserved against in the Balance
Sheet or the notes thereto, except as disclosed in Section
2.05 of the Disclosure Schedule.
Except
for current liabilities or obligations which have been incurred since the
Balance Sheet Date in the ordinary course of business, since the Balance Sheet
Date, the Company has not incurred any debt, liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise) which is material
to
the condition (financial or otherwise) of the assets, properties, business
or
prospects of the Company.
2.06 Title
and Condition.
(a)
The
Company has good and marketable title to all assets and properties reflected
on
the Balance Sheet and all assets and properties acquired since the Balance
Sheet
Date, free and clear of all Liens, except for (i) Liens reflected on the Balance
Sheet, and (ii) sales and dispositions of inventory since the Balance Sheet
Date
in the ordinary course of business.
(b) All
of
the buildings, fixtures, leasehold improvements and other improvements,
machinery, equipment, tools and other tangible personal property constituting
part of the Company’s assets and property have been well maintained and are in
good operating condition and repair, wear and tear excepted, and are free from
defects other than such minor defects as do not interfere with the intended
use
thereof in the conduct of the Company's business or adversely affect the resale
value thereof.
2.07 Litigation
and Compliance with Laws.
There
is no action at Law or in equity, no arbitration proceeding, and no action,
proceeding, complaint or investigation before or by any Governmental or
Regulatory Authority, pending or threatened against or affecting the
Shareholders, the Company or the Company's operations, business or affairs,
or
any of the Shareholders’ and/or the Company's assets or any material portion of
the Shareholders’ and/or the Company's right to own his or its respective assets
and properties or operate its business, the enforcement of which would have
a
material adverse effect on the results of operations, condition (financial
or
otherwise), assets, properties, business or prospects of the Company or any
of
the Shareholders; and the Shareholders have no knowledge of any state of facts
or contemplated events which may reasonably be expected to give rise to any
such
claim, action, suit, proceeding, complaint or investigation. Neither any
Shareholder nor the Company is subject to any Order. There are no claims,
actions, suits, proceedings or investigations pending or threatened, by or
against the Company or any of the Shareholders with respect to this Agreement,
the Shares or in connection with the transactions contemplated hereby, and
the
Shareholders have no knowledge of a valid basis for any such claim, action,
suit, proceeding or investigation.
4
2.08 Insurance.
Section
2.08 of the Disclosure Schedule
sets
forth and describes all policies of insurance which are owned or held by the
Company and all of such policies of insurance are in full force and effect
in
accordance with their terms. The Company has not been refused any insurance
with
respect to any of its assets, properties or business, and its coverage has
not
been limited by any insurance carrier to which it has applied for any such
insurance or with which it has carried.
2.09 Contracts.
(a)
Section
2.09(a) of the Disclosure Schedule
contains
a true and complete list of all Contracts or other commitments to which the
Company is a party or is bound, including, but not limited to, purchase and
sale
or other commitments, distributorship, franchise or similar agreements, patent
or trademark license agreements (either as licensor or licensee), lease or
sublease agreements (either as lessor or lessee), equipment leases, employment
agreements (including, but not limited to, agreements entered into by employees
of the Company relating to the transfer and/or safeguarding of intellectual
property rights), consulting agreements and union or collective bargaining
agreements, guarantees, loan agreements, mortgages, indentures, security
agreements, pledge agreements, non-competition agreements, severance agreements,
letters of credit, joint venture or partnership agreements, supply or
requirements contracts, except
those
contracts, agreements and commitments entered into in the ordinary course of
business which either: (a) have a term of one (1) year or less and involve
an
aggregate consideration over the remaining term of less than $5,000.00; or
(b)
may be terminated by the Company by not more than sixty (60) days' prior notice
without penalty.
(b) Section
2.09(b) of the Disclosure Schedule
contains
a true and complete list of all Contracts or other commitments to which any
Shareholder is a party to or is bound by relating to the Company or to such
Shareholder’s capacity as an owner of the Shares, including, but not limited to,
purchase and sale or other commitments, stockholders agreements, warrants,
option contracts, proxies, employment agreements (including, but not limited
to,
agreements entered into by employees of the Company relating to the transfer
and/or safeguarding of intellectual property rights), consulting agreements,
guarantees, loan agreements, mortgages, indentures, security agreements, pledge
agreements, non-competition agreements, severance agreements, letters of credit,
joint venture or partnership agreements, supply or requirements
contracts.
(c) All
contracts, agreements and commitments (whether oral or written) to which the
Company is a party, or under which the Company may be obligated, or to which
the
Company or any of its respective rights, properties or assets may be subject
or
bound, are valid, binding and enforceable against the other Person thereto
in
accordance with their terms.
5
(d) Neither
the Company, nor any other Person is in breach of, or default under, any
contract, agreement or commitment to which the Company is a party; and no event
or action has occurred, is pending, or is threatened, which after the giving
of
notice, or the lapse of time, or otherwise, would constitute or result in a
breach or default by the Company, or any other Person under any contract,
agreement or commitment to which the Company is a party.
2.10 Intellectual
Property.
(a)
Section
2.10(a) of the Disclosure Schedule
contains
a true and complete list and brief description of all registered patents and
copyrights, and all pending applications therefor, and all trademarks, trade
names, and service marks (whether or not such trademarks, trade names, and
service marks are registered), owned by the Company, or in which the Company
has
any interest, together with copies of all licenses, assignments and agreements
relating thereto.
(b) Other
than as set forth in Section
2.10(b) of the Disclosure Schedule,
no
other patents, trademarks, trade names, service marks or copyrights are
necessary for the conduct of the business of the Company as presently
operated.
(c) Other
than as set forth in Section
2.10(c) of the Disclosure Schedule,
there
is not now and has not been during the past three (3) years any infringement,
misuse or misappropriation by the Company of any valid patent, trademark, trade
name, service xxxx, copyright or trade secret which relates to the business
of
the Company and which is owned by any third party, and there is not now any
existing or threatened claim against the Company of infringement, misuse or
misappropriation of any patent, trademark, trade name, service xxxx, copyright
or trade secret owned by any third party.
(d) Other
than as set forth in Section
2.10(d) of the Disclosure Schedule,
there
is no pending or threatened claim by the Company against a third party for
infringement, misuse or misappropriation of any patent, trademark, trade name,
service xxxx, copyright or trade secret owned by the Company.
(e) Neither
the Shareholders nor any Affiliate, officer or director of the Company owns,
directly or indirectly, in whole or in part, any invention, patent, proprietary
right, trademark, service xxxx, trade name, brand name or copyright or
application therefor: (i) which the Company is presently using; (ii) the use
of
which is necessary for the business of the Company; or (iii) which pertains
to
the business in which the Company is engaged.
2.11 Tax
Matters.
(a)
For
purposes of this Agreement, “Company
Taxes”
means
all income, capital gains, gross income, gross receipts, sales, use, transfer,
ad valorem, franchise, profits, licenses, withholding, payroll, employment,
excise, severance, stamps, occupation, premium, property, windfall profits
or
other taxes or customs duties, or any interest, any penalties, additions to
tax
or additional amounts assessed or similarly charged by any taxing authority
(domestic or foreign) upon the Company.
(b) The
Company has timely filed true, correct and complete Tax Returns (including,
but
not limited to, Tax Returns with respect to employee tax withholding and social
security and unemployment taxes) required to be filed with respect to the
Company for any period ending on or prior to the Closing Date (taking into
account any extension of time to file granted to or obtained on behalf of the
Shareholders or the Company), and all such Tax Returns were prepared in
accordance with applicable Laws. All Company Taxes, shown to be due and payable
in respect of such Tax Returns have been or will be paid, and there is no
liability, contingent or otherwise, for any Company Taxes due in connection
with
any such Tax Return.
6
2.12 No
Brokers.
There
are no claims for investment banking fees, brokerage commissions, broker’s or
finder’s fees or similar compensation (exclusive of professional fees to lawyers
and accountants) in connection with the transactions contemplated by this
Agreement payable by the Company or based on any arrangement or agreement made
by or on behalf of the Company or the Shareholders.
2.13 Affiliated
Entities.
Section
2.13 of the Disclosure Schedule
sets
forth the name and percentage of ownership, if any, by the Company of each
Affiliate of the Company.
2.14 Powers
of Attorney.
There
is not in existence any power of attorney given by the Company which remains
in
force.
2.15 Certificate
of Incorporation and By-laws.
The
copies of the certificate of incorporation and by-laws of the Company provided
by the Company or the Shareholders to Purchaser are true and up-to-date copies
incorporating all amendments thereto.
2.16 Customers
and Suppliers.
(a)
Section
2.16(a) of the Disclosure Schedule
sets
forth a true and complete list of the top twenty customers of the Company (based
on the revenue from each such customer during the 12-month period ended December
31, 2006).
(b)
Section
2.16(b) of the Disclosure Schedule
sets
forth a true and complete list of the top twenty suppliers of the Company (based
on amounts paid or payable by the Company to each such supplier during the
12-month period ended December 31, 2006).
(c)
As of
the date of this Agreement, none of the customers listed in Section
2.16(a) of the Disclosure Schedule
and none
of the suppliers listed in Section
2.16(b) of the Disclosure Schedule,
(i) has
cancelled or otherwise terminated any contract with the Company prior to the
expiration of the contract term, or (ii) has threatened, or indicated its
intention, to cancel or otherwise terminate its relationship with the Company
or
to reduce substantially its purchase from or sale to the Company of any
products, equipment, goods or services, and to the Company’s knowledge there is
no reasonable basis for any of the matters set forth in (i) or (ii) of this
sentence to occur.
(d)
Except as set forth in Section
2.16(d) of the Disclosure Schedule,
no
customer or supplier of the Company, per contract or otherwise, has the express
right to solicit or hire Company employees.
2.17 Labor
Matters; Officers, Managers and Employees.
(a)
The
Company is not a party to or otherwise bound by any labor or collective
bargaining agreement, and there exist no labor or collective bargaining
agreements that pertain to its employees. No labor organization or group of
employees of the Company have made a pending demand for recognition, and, within
the preceding six years, there have been no representation or certification
proceedings, or petitions seeking a representation proceeding, pending or,
threatened to be brought or filed with the National Labor Relations Board or
any
other labor relations tribunal or Governmental or Regulatory Authority. Within
the preceding six years, there have been no organized activities involving
the
Company pending or, threatened by any labor organization or group of employees
of the Company.
7
(b) There
are
no pending or, threatened investigations of, or relating to, the Company by
any
Governmental or Regulatory Authority responsible for the enforcement of labor
or
employment Laws.
(c) There
have never been any arbitrations, grievances, unfair labor practice charges
or
complaints or other labor disputes pending
or
involving the Company or threatened against the Company, and there are no facts
or circumstances which could form the basis for any of the
foregoing.
(d) The
Company is in material compliance with all Laws and Orders relating to the
employment of labor, including all such Laws and Orders relating to wages,
hours, collective bargaining, discrimination, civil rights, occupational safety
and health, workers' compensation and the collection and payment of withholding
and/or social security taxes and other taxes. There are no actions against
the
Company pending or threatened to be brought or filed with any Governmental
or
Regulatory Authority or arbitrator based on, arising out of, in connection
with,
or otherwise relating to the employment or termination of employment or services
by Company of any individual, including but not limited to the Civil Rights
laws, Americans with Disabilities Act, Age Discrimination in Employment Act
(as
amended by the Older Workers Benefit Protection Act), Pregnancy Discrimination
Act, Equal Pay Act, Fair Labor Standards Act, WARN, and Family and Medical
Leave
Act, and there are no facts or circumstances which could form the basis for
any
of the foregoing.
(e) Section
2.17(e) of the Disclosure Schedule
contains
a correct and complete list of all of the employees of the Company, including
the date and location of employment, current title, annual rate of compensation,
and compensation and other benefits accrued as of the date of the Balance Sheet
Date.
2.18 ERISA.
(a) Section
2.18 of the Disclosure Schedule
sets
forth a true and complete list of: (i) each “employee pension benefit plan” as
defined in Section 3(2) of ERISA; (ii) each “employee welfare benefit plan” as
defined in Section 3(1) of ERISA; and (iii) each bonus or other incentive
compensation, or equity-related award, deferred compensation, profit-sharing,
severance pay, change in control, retention, salary continuation, sick leave,
vacation pay, leave of absence, paid time off, loan, educational assistance,
legal assistance, and other material fringe benefit plan, program, agreement
or
arrangement, in each case which is maintained or contributed to by the Company
or any ERISA affiliate for the benefit of any current or former employee or
manager of the Company (and any eligible dependent and beneficiary thereof)
(collectively, the “Benefit
Plans”).
With
respect to each Benefit Plan, true, correct and complete copies of
the following documents (if applicable), have been delivered to Purchaser
or its counsel: (i) the most recent plan document constituting the Benefit
Plan and all amendments thereto, and any related trust documents; (ii) the
most recent summary plan description and all related summaries of material
modifications; (iii) the Form 5500 and attached schedules filed with the
Internal Revenue Service for the past three (3) fiscal years; (iv) the
financial statements and actuarial valuations for the past three (3) fiscal
years (including Financial Accounting Standards Board report nos. 87, 106 and
112); (v) the most recent Internal Revenue Service determination letter;
and (vi) a description of any non-written Benefit Plan.
8
(b) The
Company has performed and complied in all material respects with all of its
respective obligations under or with respect to the Benefit Plans, and each
Benefit Plan complies and has been administered and operated in compliance
in
all material respects in accordance with its terms and with all applicable
Laws,
including but not limited to the Code and ERISA. All amendments and actions
required to bring each of the Benefit Plans into conformity in all material
respects with all of the applicable provisions of ERISA, the Code and other
applicable Laws have been made or taken except to the extent that such
amendments or actions are not required by Law to be made or taken until a date
after the date hereof. No individual who has performed services for the Company
has been improperly excluded from participation in any Benefit Plan. There
are
no audits or proceedings initiated pursuant to the Employee Plans Compliance
Resolution System or similar proceedings pending with the Internal Revenue
Service or the United States Department of Labor with respect to any Benefit
Plan. There is no material violation of ERISA or the Code with respect to the
filing of applicable reports, documents and notice regarding the Benefit Plans
with the Secretary of Labor and the Secretary of Treasury or the furnishing
of
such documents to the participants or beneficiaries of the Benefit
Plans.
(c) None
of
the Benefit Plans is a “multiemployer plan” within the meaning of Section 3(37)
of ERISA, and neither the Company nor any of its ERISA affiliates have
maintained, been required to contribute to or been required to pay any amount
with respect to a “multiemployer plan” at any time in the past six years. None
of the Benefit Plans is subject to Title IV of ERISA or to the funding
requirements of Section 412 of the Code or Section 302 of ERISA, and neither
the
Company nor any of its ERISA affiliates have ever had any obligation to or
liability for (contingent or otherwise) with respect to any such Benefit Plan.
Each Benefit Plan and its related trust intended to be qualified under Sections
401(a) and 501(a) of the Code, respectively, has so qualified and has received
a
favorable determination letter from the Internal Revenue Service and nothing
has
occurred with respect to such Benefit Plan since the date of such determination
letter which could cause the loss of such qualification or the imposition of
any
material liability, penalty or tax under ERISA or the Code. There is no pending
or threatened Action relating to the Benefit Plans, the assets of any trust
under any Benefit Plan, or the plan sponsor, plan administrator or any fiduciary
of any Benefit Plan with respect to the administration or operation of such
Benefit Plan, other than routine claims for benefits, and there are no facts
or
circumstances which could form the basis for any such Action. Neither the
Company, nor any “party in interest” or “disqualified person” with respect to
any Benefit Plan, has engaged in a “prohibited transaction” within the meaning
of Section 406 of ERISA or Section 4975 of the Code with respect to any Benefit
Plan that could result in a material tax or penalty.
No
Benefit Plan or any fiduciary of any such Benefit Plan has (i) engaged in any
transaction prohibited by ERISA or the Code, (ii) breached any fiduciary duty
owed by it with respect to the plans, or (iii) engaged in any transaction as
a
result of which the Company would be subject to any liability pursuant to
Sections 406 or 409 of ERISA or to either a civil penalty assessed pursuant
to
Section 502(i) or Section 502(l) of ERISA or a tax imposed pursuant to Sections
4975 through 4980 of the Code.
9
(d) All
contributions and premiums (including all employer contributions and employee
salary reduction contributions) that are due with respect to any Benefit Plan
have been made within the time periods prescribed by applicable Law or by the
terms of such Benefit Plan or any agreement relating thereto to the respective
Benefit Plan, and all contributions, Liabilities or expenses of any Benefit
Plan
(including workers' compensation) for any period ending on or before the date
hereof which are not yet due will have been paid or accrued on the relevant
balance sheet in accordance with generally acceptable accounting principles
on
or prior to the date hereof.
(e) Except
for health care continuation requirements under Section 4980B of the Code and
Part 6 of Subtitle I of ERISA (“COBRA”)
or
applicable state law, the Company does not have any obligations for retiree
health or retiree life benefits (whether or not insured) to any current or
former employee or manager after his or her termination of employment or service
with the Company. All
group
health plans of the Company have been operated in compliance in all material
respects with the applicable requirements of COBRA.
(f) The
consummation of this Agreement and the Ancillary Documents will not, either
alone or in combination with any other event: (i) result in any payment becoming
due, or increase the amount of compensation due, to any current or former
employee or manager of the Company; (ii) increase any benefits payable under
any
Benefit Plan; or (iii) result in any acceleration of the time of payment or
vesting of any such compensation or benefits. Further, the Company has not
announced any type of plan or binding commitment to create any additional
Benefit Plan, to enter into any agreement with any current or former employee
or
manager, or to amend or modify any existing Benefit Plan or agreement with
any
current or former employee or manager.
(g) Section
2.18(g) of the Disclosure Schedule
identifies each Benefit Plan that is a “nonqualified deferred compensation plan”
within the meaning of Section 409A of the Code and associated Treasury
Department guidance, including IRS Notice 2005-1 and Proposed Treasury
Regulations at 70 Fed. Reg. 57930 (October 4, 2005) (each a “NQDC
Plan”).
With
respect to each NQDC Plan, it either (i) has been operated in full compliance
with Code Section 409A since January 1, 2005, or (ii) does not provide for
the
payment of any benefits that have or will be deferred or vested after December
31, 2004 and since October 3, 2004, it has not been “materially modified” within
the meaning of Section 409A of the Code and associated Treasury Department
guidance, including IRS Notice 2005-1, Q&A 18 and the proposed regulations
at 70 Fed. Reg. 57930 (October 4, 2005).
2.19 Environmental
Compliance.
Except
as disclosed on Section
2.19 of the Disclosure Schedule:
(a) the
use
of the real property leased or formerly leased by the Company or any of its
predecessors, the occupancy and operation thereof by the Company or any of
its
predecessors and the conduct of operations and other activities at such
locations by the Company or any of its predecessors are in compliance in all
material respects with all applicable environmental Laws;
10
(b) the
Company holds and is in material compliance with all authorizations required by
any Governmental or Regulatory Authority under environmental Laws applicable
to
the conduct of the business of the Company as presently conducted;
(c) the
Company has not received any written notice of any action by any Person or
Governmental or Regulatory Authority alleging a violation of or liability under
any environmental Law arising from the lease, operation or occupation of any
real property by the Company or any of its predecessors, or any real property
previously leased or operated by the Company or any of its predecessors, or
the
conduct of operations and other activities at such locations by the Company
or
any of its predecessors;
(d) there
has
been no release of any hazardous substance in, on, under or emanating from
any
real property leased, occupied or operated by the Company or any of its
predecessors, or in, on, under or emanating from any real property previously
leased, occupied or operated by the Company or any of its predecessors, that
is
in violation of or is reasonably likely to lead to any liability arising under
any environmental Law; and
(e) neither
the Company nor, any of its predecessors have transported or arranged for the
treatment, storage or disposal of any hazardous substances to any off-site
location that has resulted in liability or is reasonably likely to lead to
any
liability to the Company under applicable environmental Laws.
2.20 No
Undisclosed Liabilities.
Except
as reflected in the Financial Statements, and except for current liabilities
incurred by the Company with or with respect to the Company’s business in the
ordinary course since the date of the Financial Statements, the Company has
no
debts, liabilities or obligations of any nature or kind (whether absolute,
accrued, contingent, unliquidated or otherwise, whether or not known, whether
due or to become due and regardless of when asserted) of the type required
to be
reflected as liabilities on a balance sheet prepared in accordance with
generally acceptable accounting principles.
2.21 Accredited
Investor.
Each
Shareholder is an “accredited investor” within the meaning of Securities and
Exchange Commission Rule 501 of Regulation D, as presently in effect.
Each Shareholder is a sophisticated purchaser and has made its own
investigation, review and analysis regarding Purchaser and Purchaser’s issuance
of the Notes contemplated hereby. The Shareholders are not relying on any
statement, representation or warranty, oral or written, express or implied,
made
by Purchaser or Purchaser's affiliates or representatives, except as expressly
set forth in this Agreement. The Shareholders have no knowledge or reason to
believe that any of the representations or warranties made by Purchaser as
of
the date hereof are untrue, incomplete or inaccurate.
2.22 Full
Disclosure.
This
Agreement, the Financial Statements, Sections
2.02, 2.03, 2.05, 2.08, 2.09, 2.10, 2.13, 2.16, 2.17, 2.18, and 2.19 of the
Disclosure Schedule,
and all
other certificates, documents and instruments furnished by the Company or any
of
its shareholders, directors, officers or employees in connection with this
Agreement, or any other transaction contemplated by this Agreement, are true
and
complete in all material respects, and neither this Agreement, the Financial
Statements, Sections
2.02, 2.03, 2.05, 2.08, 2.09, 2.10, 2.13, 2.16, 2.17, 2.18, and 2.19 of the
Disclosure Schedule,
nor any
other certificate, document or instrument furnished by the Company or any of
its
shareholders, directors, officers or employees in connection with this
Agreement, contains an untrue statement of a material fact or omits to state
a
material fact necessary in order to make the statements included herein or
therein not misleading in light of the circumstances under which they were
made.
11
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
As
an
inducement to the Shareholders to enter into and perform their obligations
under
this Agreement, and in consideration of the covenants of the Shareholders
contained herein, Purchaser warrants and represents to and covenants to the
Shareholders as follows, as of the Closing:
3.01 Due
Incorporation.
Purchaser is a corporation duly organized, validly existing and in good standing
under the Laws of its jurisdiction of incorporation, and has the corporate
power
and lawful authority to own its properties and to transact its business as
now
conducted. This Agreement is binding upon, and enforceable against, Purchaser
in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other Laws affecting creditors rights generally
and by general principles of equity (whether in a proceeding at Law or in
equity).
3.02 Authority.
Purchaser has taken all requisite corporate action to approve this Agreement
and
consummation of the transactions contemplated hereby.
3.03 No
Conflicts.
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby, nor compliance by Purchaser with any of the
provisions hereof, will:
(a) violate,
or conflict with, or result in a material breach of any provisions of, or
constitute a material default (or an event which, with notice or lapse of time
or both, would constitute a default) under, or result in the termination of,
or
accelerate the performance required by, or result in the creation of any Lien
upon any of the properties or assets of Purchaser, under any of the terms,
conditions or provisions of the charter documents of Purchaser, or any note,
bond, mortgage, indenture, deed of trust, license, agreement, lease or other
agreement, instrument or obligation to which Purchaser is a party, or by which
Purchaser or its properties or assets may be bound or affected;
(b) except
as
set forth in Section
3.03 of the Disclosure Schedule,
require
the consent or approval of, or the making of any filing with, any third Person,
including any Governmental or Regulatory Authority; or
(c) violate
any Law or Order applicable to Purchaser or any of the properties or assets
of
Purchaser.
12
3.04 Investment
Representation.
Purchaser is acquiring the Shares from the Shareholders for its own account
for
investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same; and, except as contemplated by this Agreement and the agreements
contemplated herein, Purchaser has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing
for
the disposition thereof.
3.05 SEC
Reports.
(a)
Purchaser has timely filed all forms, reports and documents required to be
filed
by Purchaser with the Securities and Exchange Commission (the “SEC”).
All
such required forms, reports and documents (including those that by Purchaser
may file subsequent to the date hereof) are referred to herein as the
“Purchaser
SEC Reports”).
As of
their respective dates, Purchaser SEC Reports (i) were prepared in accordance
and complied in all material respects with the requirements of the Securities
Act of 1933, as amended or the Securities Exchange Act of 1934, as amended,
as
the case may be, and the rules and regulations of the SEC thereunder applicable
to such Purchaser SEC Reports and (ii) did not at the time they were filed
contain any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) To
the
extent any Purchaser SEC Reports shall include reference to either the Company
or any of the Shareholders, Purchaser shall use commercially reasonable efforts
to provide a draft version of such Purchaser SEC Report to the Shareholders
prior to its public release and publication.
3.06 Investment
Company.
Purchaser is not, and is not an Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
ARTICLE
IV
COVENANTS
OF SHAREHOLDERS
The
Shareholders covenant and agree with Purchaser that, at all times from and
after
the date hereof until the Closing, the Shareholders will comply with all
covenants and provisions of this Article IV, except to the extent Purchaser
may
otherwise consent in writing.
4.01 Regulatory
and Other Approvals.
The
Shareholders will (a) take all commercially reasonable steps necessary or
desirable, and proceed diligently and in good faith and use commercially
reasonable efforts to, as promptly as practicable, obtain all consents,
approvals or actions of, to make all filings with and to give all notices to
Governmental or Regulatory Authorities or any other Person required of the
Shareholders to consummate the transactions contemplated hereby,
(b) provide such other information and communications to such Governmental
or Regulatory Authorities or other Persons as such Governmental or Regulatory
Authorities or other Persons may reasonably request and (c) provide
reasonable cooperation to Purchaser in obtaining all consents, approvals or
actions of, making all filings with and giving all notices to Governmental
or
Regulatory Authorities or other Persons required of Purchaser to consummate
the
transactions contemplated hereby. The Shareholders will provide prompt
notification to Purchaser when any such consent, approval, action, filing or
notice referred to in clause (a) above is obtained, taken, made or given, as
applicable, and will advise Purchaser of any communications (and, unless
precluded by Law or confidentiality obligations with respect thereto, provide
copies of any such communications that are in writing) with any Governmental
or
Regulatory Authority or other Person regarding any of the transactions
contemplated by this Agreement.
13
4.02 Conduct
of Business.
The
Shareholders will not take any action to cause the Company not to conduct
business in the ordinary course. The Company will not pay any disbursements,
dividends or make any distributions or bonus issues on its shares, nor change
the compensation payable to the employees, except in the ordinary course of
business. Prior to Closing, the Company will continue to engage principally
in
the business now conducted by the Company. Prior to Closing, the Shareholders
will ensure that the Company will keep in full force and effect its corporate
existence. Prior to Closing, the Company will maintain all properties necessary
in the conduct of its business in good repair, working order and
condition.
4.03 Fulfillment
of Conditions.
The
Shareholders will take all commercially reasonable steps necessary or desirable
and proceed diligently and in good faith and use all commercially reasonable
efforts to satisfy each condition to the obligations of Purchaser contained
in
this Agreement and will not take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any such condition
consistent with past practice.
4.04 Confidentiality.
In
connection with the negotiation of this Agreement and the preparation for the
consummation of the transactions contemplated by this Agreement, the
Shareholders will have access to Confidential Information of Purchaser. The
Shareholders hereby acknowledge and agree that they: (i) shall treat and
hold as confidential any Confidential Information of Purchaser with at least
the
same degree of care as they normally exercise to protect their own Confidential
Information but in no event shall such degree of care be less than a reasonable
standard of care; (ii) shall not disclose, copy reproduce or use any such
Confidential Information except in connection with this Agreement; (iii) shall
restrict disclosure of such Confidential Information to the Shareholders’
Representatives with a need to know, provided the Shareholders makes their
Representatives aware of the confidential nature of the Confidential Information
and direct them not to disclosure to any other person the content of the
Confidential Information, and the Shareholders shall be responsible for any
breach of this Section 4.04 by their Representatives; and (iv) if this
Agreement is terminated for any reason whatsoever, shall return to Purchaser
all
tangible embodiments (and all copies) thereof which are in their
possession.
ARTICLE
V
COVENANTS
OF PURCHASER
Purchaser
covenants and agrees with the Shareholders that, at all times from and after
the
date hereof until the Closing, Purchaser will comply with all covenants and
provisions of this Article V, except to the extent the Shareholders may
otherwise consent in writing.
14
5.01 Regulatory
and Other Approvals.
Purchaser will (a) take all commercially reasonable steps necessary or
desirable, and proceed diligently and in good faith and use all commercially
reasonable efforts, as promptly as practicable to obtain all consents, approvals
or actions of, to make all filings with and to give all notices to Governmental
or Regulatory Authorities or any other Person required of Purchaser to
consummate the transactions contemplated hereby, (b) provide such other
information and communications to such Governmental or Regulatory Authorities
or
other Persons as such Governmental or Regulatory Authorities or other Persons
may reasonably request and (c) provide reasonable cooperation to the
Shareholders and the Company in obtaining all consents, approvals or actions
of,
making all filings with and giving all notices to Governmental or Regulatory
Authorities or other Persons required of the Shareholders or the Company to
consummate the transactions contemplated hereby. Purchaser will provide prompt
written notification to the Shareholders when any such consent, approval,
action, filing or notice referred to in clause (a) above is obtained, taken,
made or given, as applicable, and will advise the Shareholders in writing of
any
communications (and, unless precluded by Law or confidentiality obligations
with
respect thereto, provide copies of any such communications that are in writing)
with any Governmental or Regulatory Authority or other Person regarding any
of
the transactions contemplated by this Agreement.
5.02 Fulfillment
of Conditions.
Purchaser will take all commercially reasonable steps necessary or desirable
and
proceed diligently and in good faith and use all commercially reasonable efforts
to satisfy each condition to the obligations of the Shareholders contained
in
this Agreement and will not take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any such
condition.
5.03 Confidentiality.
In
connection with the negotiation of this Agreement and the preparation for the
consummation of the transactions contemplated by this Agreement, Purchaser
will
have access to Confidential Information of the Company. Purchaser hereby
acknowledges and agrees that it: (i) shall treat and hold as confidential
any Confidential Information of the Company with at least the same degree of
care as it normally exercises to protect its own Confidential Information but
in
no event shall such degree of care be less than a reasonable standard of care;
(ii) shall not disclose, copy reproduce or use any such Confidential
Information except in connection with this Agreement; (iii) shall restrict
disclosure of such Confidential Information to Purchaser’s Representatives with
a need to know, provided Purchaser makes its Representatives aware of the
confidential nature of the Confidential Information and directs them not to
disclosure to any other person the content of the Confidential Information,
and
Purchaser shall be responsible for any breach of this Section 5.03 by its
Representatives; and (iv) if this Agreement is terminated for any reason
whatsoever, shall return to the Company all tangible embodiments (and all
copies) thereof which are in its possession.
ARTICLE
VI
CONDITIONS
TO OBLIGATIONS OF PURCHASER
The
obligations of Purchaser hereunder are subject to the fulfillment, at or before
the Closing, of each of the following conditions (all or any of which may be
waived in whole or in part by Purchaser in its sole discretion):
15
6.01 Representations
and Warranties.
The
representations and warranties made by the Shareholders in this Agreement taken
as a whole, shall be true and correct, on and as of the Closing Date as though
made on and as of the Closing Date or, in the case of representations and
warranties made as of a specified date earlier than the Closing Date, on and
as
of such earlier date.
6.02 Performance.
The
Shareholders shall have performed and complied with, the agreements, covenants
and obligations required by this Agreement to be so performed or complied with
by the Shareholders at or before the Closing or will hinder or impede the
consummation of the transactions contemplated by this Agreement.
6.03 Deliveries.
The
Shareholders shall have delivered, or shall have caused to be delivered, to
Purchaser, all in form and substance reasonably satisfactory to Purchaser,
the
following:
(a) duly
executed transfers for all of the Shares in favor of Purchaser and/or its
nominees together with the relevant certificate(s)
representing all of the Shares;
(b) written
resignations, effective on the Closing Date, of those officers and directors
of
the Company that Purchaser shall have requested not less than ten (10) days’
prior to the Closing;
(c) the
certificate of incorporation, by-laws, minute books, share register, common
seal, share certificates and all books and records of the Company including,
without limitation all cancelled and un-issued share certificates and signed
minutes of the Company;
(d) without
limiting Section 6.03(c) above, all corporate and other records of the Company,
including but not limited to, books of account, leases and contracts,
Tax Returns, reports and relevant workpapers, financial records and personnel
records;
(e) an
opinion of counsel of the Shareholders, dated as of the Closing Date, in form
and substance reasonably satisfactory to Purchaser;
(f) certified
copies of minutes or unanimous written consents of the Board of Directors of
the
Company approving the execution, delivery and performance of this Agreement,
the
consummation of the transactions contemplated under this Agreement,
the
share transfers referred to in Section 6.03(a), revoking all existing banking
mandates of the Company and substituting therefor such banking mandates as
Purchaser shall direct;
(g) the
Financial Statements; and
(h) such
other documents required to be delivered by the Shareholders hereunder or as
Purchaser or its counsel may reasonably request to carry out the purposes of
this Agreement.
16
6.04 Orders
and Laws.
There
shall not be in effect on the Closing Date any Order or Law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any
of
the transactions contemplated by this Agreement.
6.05 Regulatory
Consents and Approvals.
All
consents, approvals and actions of, filings with and notices to any Governmental
or Regulatory Authority necessary to permit Purchaser and the Shareholders
to
perform their obligations under this Agreement and to consummate the
transactions contemplated hereby and thereby shall have been duly obtained,
made
or given and shall be in full force and effect, and all terminations or
expirations of waiting periods imposed by any Governmental or Regulatory
Authority necessary for the consummation of the transactions contemplated by
this Agreement shall have occurred.
6.06 Third
Party Consents.
The
consents (or in lieu thereof waivers) listed in Section 2.02
of the Disclosure Schedule
shall
have been obtained and shall be in full force and effect.
6.07 Employment
Agreement.
The
Shareholders and Purchaser shall have entered into the Employment Agreement
on
terms and in a form reasonably satisfactory to Purchaser.
ARTICLE
VII
CONDITIONS
TO OBLIGATIONS OF SHAREHOLDERS
The
obligations of the Shareholders hereunder are subject to the fulfillment, at
or
before the Closing, of each of the following conditions (all or any of which
may
be waived in whole or in part by the Shareholders in their sole
discretion):
7.01 Representations
and Warranties.
The
representations and warranties made by Purchaser in this Agreement, taken as
a
whole, shall be true and correct in all material respects on and as of the
Closing Date as though made on and as of the Closing Date.
7.02 Performance.
Purchaser shall have performed and complied with, in all material respects,
the
agreements, covenants and obligations required by this Agreement to be so
performed or complied with by Purchaser at or before the Closing or will hinder
or impede the consummation of the transactions contemplated by this
Agreement.
7.03 Deliveries.
Purchaser shall have delivered, or shall have caused to be delivered, to the
Shareholders, all in form and substance reasonably satisfactory to the
Shareholders, the following:
(a) a
wire
transfer of immediately available funds in respect of the Cash Portion;
and
(b) certified
copies of minutes or unanimous written consents of the Board of Directors of
Purchaser approving the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated under this
Agreement.
17
7.04 Orders
and Laws.
There
shall not be in effect on the Closing Date any Order or Law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any
of
the transactions contemplated by this Agreement.
7.05 Regulatory
Consents and Approvals.
All
consents, approvals and actions of, filings with and notices to any Governmental
or Regulatory Authority necessary to permit the Shareholders and Purchaser
to
perform their obligations under this Agreement and to consummate the
transactions contemplated hereby and thereby, shall have been duly obtained,
made or given and shall be in full force and effect, and all terminations or
expirations of waiting periods imposed by any Governmental or Regulatory
Authority necessary for the consummation of the transactions contemplated by
this Agreement shall have occurred.
7.06 Third
Party Consents.
The
consents (or in lieu thereof waivers) listed in Section 3.03
of the Disclosure Schedule
shall
have been obtained and shall be in full force and effect.
ARTICLE
VIII
POST
CLOSING COVENANTS
8.01 Tax
Matters and Regulatory Filings.
(a)
Purchaser, the Company and the Shareholders shall provide each other with such
assistance as may reasonably be requested by the others in connection with
the
preparation of any Tax Return, any audit or other examination by any
Governmental or Regulatory Authorities, any judicial or administrative
proceedings relating to liabilities for Company Taxes, or any filings required
by Governmental or Regulatory Authorities. Such assistance shall include: (i)
making employees available on a mutually convenient basis to provide additional
information or explanation of material provided hereunder; (ii) providing copies
of relevant Tax Returns and supporting material; and (iii) providing reasonable
cooperation to the others in making all filings with and giving all notices
to
Governmental or Regulatory Authorities. Purchaser, the Company and the
Shareholders will retain all Tax Returns, schedules and work papers and all
material records and other documents relating to Company Tax matters for one
hundred eighty (180) days after the expiration of any applicable statute of
limitations including any extensions thereof.
(b) From
the
date of this Agreement through and after the Closing Date, the Shareholders
shall prepare, or cause to be prepared, and file, or cause to be filed, in
a
timely manner all Tax Returns relating to the Company for any taxable period
ending on or before the Closing Date, and Purchaser shall do the same for any
taxable period ending after the Closing Date.
(c) Any
refunds received by Purchaser or the Company of Company Taxes (and any
equivalent benefit obtained through a reduction in tax liability for taxable
period or portions thereof ending after the Closing Date) relating to taxable
periods or portions thereof ending on or before the Closing Date shall be for
the account of the Shareholders, and Purchaser shall pay over to the
Shareholders any such refund or the amount of any such benefit within five
(5)
days of the earlier of receipt or entitlement thereto. Purchaser shall, if
the
Shareholders so request and at the Shareholders’ expense, file (or cause to be
filed) a claim for any refunds or equivalent amounts to which the Shareholders
are entitled hereunder.
18
(d) Any
Tax
liability incurred by Purchaser or the Company relating to the taxable period
or
portions thereof ending on or prior to the Closing Date shall be the
responsibility of the Shareholders, and the Shareholders shall pay to Purchaser
any such amounts necessary to reimburse Purchaser for such liability;
provided,
however,
that
the Shareholders shall have the right to contest and appeal any such Tax
liability.
8.02 Indemnification.
Each
Shareholder agrees to indemnify and hold Purchaser and its officers, directors,
shareholders, employees, agents and attorneys harmless from and against any
and
all damages, liabilities, losses, claims, obligations, liens, assessments,
judgments, taxes, fines, penalties, reasonable costs and expenses (including
reasonable fees of counsel), as the same are incurred, of any kind or nature
whatsoever (whether or not arising out of third-party claims and including
all
amounts paid in investigation, defense or settlement of the foregoing) which
may
be sustained or suffered by Purchaser based upon, arising out of, or by reason
of any of the following:
(a) the
breach or inaccuracy of any representation, warranty, covenant or agreement
of
any of the Shareholders contained in this Agreement or in any Ancillary
Document; and/or
(b) Purchaser’s
purchase of the Shares.
8.03 Survival
of Representations and Covenants.
The
respective representations, warranties, obligations, covenants, and agreements
of the parties shall survive the Closing.
8.04 Confidentiality;
Non-Competition. Each
Shareholder agrees that it will keep confidential and will not disclose or
divulge any Confidential Information of the Company or the terms of this
Agreement. As a material inducement and consideration for Purchaser to enter
into this Agreement, and pursuant to the terms of the Employment Agreement,
each
Shareholder will not, within the Restricted Area (as defined therein) and for
the Restricted Period (as defined therein), carry on any business, or own (in
whole or in part), operate, advise, assist or lend funds to or invest funds
in,
any person, firm, partnership, business, corporation or other entity in any
manner that would aid or assist any person, firm, partnership, business,
corporation or other entity to compete, in any material respect, with the
business of the Company or a substantially similar business. In the event of
a
breach of any of the covenants set forth in this Section 8.04, Purchaser will
be
entitled to an injunction against the Shareholders restraining such breach
in
addition to any other remedies provided by law or equity. Each of the parties
hereto agree that the scope of the provisions set forth in this Section 8.04
are
reasonable. In the event that any covenant in this Section 8.04 is held to
be
invalid, illegal or unenforceable by any court of competent jurisdiction or
any
other governmental authority, it is agreed and understood that such covenant
will not be voided but rather will be construed to impose limitations upon
the
Shareholders’ activities no greater than allowable under then applicable
law.
19
ARTICLE
IX
TERMINATION
9.01 Termination.
This
Agreement may be terminated, and the transactions contemplated hereby may be
abandoned:
(a) at
any
time before the Closing, by mutual written agreement of the Shareholders, the
Company and Purchaser;
(b) at
any
time before the Closing, by the Shareholders or Purchaser in the event that
any
Order or Law becomes effective restraining, enjoining or otherwise prohibiting
or making illegal the consummation of any of the transactions contemplated
by
this Agreement, upon written notification of the terminating party;
(c) at
any
time before the Closing, by the Shareholders upon written notification to
Purchaser by the Shareholders, if Purchaser is in material breach of any
representation, warranty, covenant or agreement under this Agreement which
is
not curable or, if curable, is not cured within thirty (30) calendar days (and
any Shareholder is not in material breach of any representation, warranty,
covenant or agreement under this Agreement); or
(d) at
any
time before the Closing, by Purchaser upon written notification to the
Shareholders by Purchaser, if any Shareholder is in material breach of any
representation, warranty, covenant or agreement under this Agreement which
is
not curable or, if curable, is not cured within thirty (30) calendar days (and
Purchaser is not in material breach of any representation, warranty, covenant
or
agreement under this Agreement).
9.02 Effect
of Termination.
If this
Agreement is validly terminated pursuant to Section 9.01, this Agreement will
forthwith become null and void, and there will be no liability or obligation
on
the part of the Shareholders, the Company or Purchaser (or any of their
respective Representatives or Affiliates), except that Sections 4.04, 5.03
and
11.03 shall survive.
ARTICLE
X
DEFINITIONS
10.01 Definitions.
(a) As
used
in this Agreement, the following defined terms shall have the meanings indicated
below:
Affiliate:
means
any Person that directly or indirectly through one of more intermediaries,
controls or is controlled by or is under common control with the Person
specified. For purposes of this definition, control of a Person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such Person whether by Contract or otherwise and, in any event
and
without limitation of the previous sentence, any Person owning more than fifty
percent (50%) of the voting securities of a second Person shall be deemed to
control that second Person.
20
Agreement:
means
this Stock Purchase Agreement and the Exhibits and the Disclosure Schedule
hereto as the same shall be amended from time to time.
Ancillary
Documents:
has the
meaning ascribed to it in Section 2.01(b).
Balance
Sheet:
shall
mean the unaudited balance sheet of the Company as of December 31, 2007,
included in the Financial Statements.
Balance
Sheet Date:
shall
mean December 31, 2007.
Benefit
Plan:
has the
meaning ascribed to it in Section 2.18.
Cash
Portion:
has the
meaning ascribed to it in Section 1.03.
Closing:
means
the closing of the transactions contemplated by Section 1.04.
Closing
Date:
means
on or about January 31, 2008.
Code:
shall
mean the Internal Revenue Code of 1986, as amended.
Company:
has the
meaning ascribed to it in the preamble.
Company
Taxes:
has the
meaning ascribed to it in Section 2.11.
Confidential
Information:
shall
mean any confidential or proprietary information of a party that is furnished
to
the other party in connection with the negotiation of this Agreement and the
consummation of the transaction contemplated hereby, including without
limitation, information relating to a party’s business activities, research,
development, plans, productions, facilities, financial condition, products,
services, equipment, marketing, processes, methodologies, software, technical
knowledge, intellectual property, data, employees, customers, prospects and/or
other information that has been identified as, or by its nature may be
reasonably determined to be, confidential; provided,
however,
that
Confidential Information shall not include any information (A) which, at
the time of disclosure, is available publicly, (B) which, after disclosure,
becomes available publicly through no fault of the receiving party,
(C) which the receiving party knew or had access to prior to disclosure as
reasonably demonstrated by such party, (D) which a party lawfully and
rightfully obtains from a third party as reasonably demonstrated by such party,
or (E) which a receiving party is required to disclose by Law, Order, rule,
regulation or Governmental or Regulatory Authority.
Contract:
means
any agreement, lease, evidence of indebtedness, mortgage, indenture, security
agreement or other contract.
Disclosure
Schedule:
means
the record attached hereto and dated as of the date hereof, containing all
lists, descriptions, exceptions and other information and materials as are
required to be included therein pursuant to this Agreement.
21
EBITDA: means,
during any accounting period, consolidated earnings for such accounting period
before provision for payment of any interest, taxes, depreciation and
amortization.
Employment
Agreement:
means
the form of Employment Agreement attached as Exhibit
C
hereto
covering each of the Shareholders.
ERISA:
shall
mean the Employee Retirement Income Security Act of 1974, as
amended.
Financial
Statements:
shall
mean those certain audited financial statements of the Company for its last
two
(2) fiscal years and any stub year, in a form reasonably satisfactory to
Purchaser and delivered by the Shareholder to Purchaser on or prior to the
Closing Date.
Governmental
or Regulatory Authority:
means
any court, tribunal, arbitrator, authority, agency, commission, official or
other instrumentality of the United States or any foreign government, state,
county, city or other political subdivision.
Laws:
means
all laws, statutes, rules, regulations, ordinances and other pronouncements
having the effect of Law of the United States or any foreign government, state,
county, city or other political subdivision or of any Governmental or Regulatory
Authority.
Liens:
means
any mortgage, pledge, assessment, security interest, lease, lien, adverse claim,
levy, charge or other encumbrance.
Notes:
has the
meaning ascribed to it in Section 1.03.
Order:
means
any writ, judgment, decree, injunction or similar order of any Governmental
or
Regulatory Authority (in each such case whether preliminary or final).
Payment
Date:
has the
meaning ascribed to it in Section 1.03.
Person:
means
any natural person, company, corporation, general partnership, limited
partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory
Authority.
Purchase
Price:
has the
meaning ascribed to it in Section 1.02.
Purchaser:
has the
meaning ascribed to it in the preamble.
Purchaser
SEC Reports:
has the
meaning ascribed to it in Section 3.05.
Representatives:
means a
Person's officers, directors, employees, counsel, accountants, financial
advisors, consultants and other representatives of such Person.
SEC:
has the
meaning ascribed to it in Section 3.05.
Shareholders:
has the
meaning ascribed to it in the preamble.
22
Shares:
has the
meaning ascribed to it in the Recitals.
Tax
Return:
means
any return, filing, questionnaire, information return or other document required
to be filed, including requests for extensions of time, filings made with
estimated tax payments, claims for refund and amended returns that may be filed,
for any period with any taxing authority (whether domestic or foreign) in
connection with any Company Tax (whether or not a payment is required to be
made
with respect to such filing).
Unless
the context of this Agreement otherwise requires, (i) words of any gender
include each other gender; (ii) words using the singular or plural number
also include the plural or singular number, respectively; (iii) the terms
“hereof,” “herein,” “hereby” and derivative or similar words refer to this
entire Agreement; (iv) the terms “Article” or “Section” refer to the
specified Article or Section of this Agreement; and (v) the phrase
“ordinary course of business” refers to the business of the Company. Any
representation or warranty contained herein as to the enforceability of a
Contract shall be subject to the effect of any bankruptcy, insolvency,
reorganization, moratorium or other similar Law affecting the enforcement of
creditors’ rights generally and to general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
Law).
ARTICLE
XI
MISCELLANEOUS
11.01 Notices.
All
notices, requests and other communications hereunder must be in writing and
will
be deemed to have been duly given only if delivered personally or by facsimile
transmission or mailed (first class postage prepaid) to the parties at the
following addresses or facsimile numbers:
If
to
Purchaser, to:
Cable
& Co Worldwide, Inc.
00
Xxxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxx,
Xxxxxxxxxxx 00000
Fax
No.:
000-000-0000
Attn:
Xxxxxx X. Xxxxx, Esq.
with
a
copy to:
Xxxxxxxx
& Xxxx LLP
Financial
Centre
000
Xxxx
Xxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxxxxx 00000
Fax
No.:
(000) 000-0000
Attn:
Xxxx X. Xxxx, Esq. and Xxxxxxx X. Xxxxxx, Esq.
23
If
to
Xxxxxxxxxx and/or Xxxxx, to:
InMarketing
Corp.
00
Xxxxxx
Xxxxxx Xx., Xxxxx #0
Xxxxxx,
Xxx Xxxxxx 00000
with
a
copy to:
Xxxxxx
X.
Xxxxx, Esquire
00
Xxxxxx
Xxxxxx Xx., Xxxxx #0
Xxxxxx,
Xxx Xxxxxx 00000
Fax
No.:
(000) 000-0000
All
such
notices, requests and other communications will (i) if delivered personally
to the address as provided in this Section 11.01, be deemed given upon delivery,
(ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 11.01, be deemed given upon receipt, subject to
confirmation of receipt in complete legible form, and (iii) if delivered by
mail in the manner described above to the address as provided in this Section
11.01, be deemed given upon receipt (in each case regardless of whether such
notice is received by any other Person to whom a copy of such notice, request
or
other communication is to be delivered pursuant to this Section 11.01). Any
party from time to time may change its address, facsimile number or other
information for the purpose of notices to that party by giving notice specifying
such change to the other parties hereto.
11.02 Entire
Agreement.
This
Agreement supersedes all prior discussions and agreements between the parties
with respect to the subject matter hereof.
11.03 Expenses.
Except
as otherwise expressly provided in this Agreement, whether or not the
transactions contemplated hereby are consummated, each party will pay its own
costs and expenses incurred in connection with the negotiation, execution and
closing of this Agreement and the transactions contemplated hereby.
11.04 Public
Announcements.
The
parties hereto shall advise and consult with each other prior to the making
of
any public announcement with respect to the transactions contemplated hereby
and, in any event, shall not issue any press releases, make any public
announcement or statement without the consent of the other parties, except
for
filings, or registrations which may be required by Law.
11.05 Further
Assurances; Post-Closing Cooperation.
At all
times before and after the Closing, the parties hereto shall each perform such
acts, execute and deliver such instruments and documents and do all such other
things consistent with the terms of this Agreement as may be reasonably
necessary to accomplish the transactions contemplated in this Agreement or
to
otherwise carry out the purpose of this Agreement.
11.06 Waiver.
Any
term or condition of this Agreement may be waived at any time by the party
that
is entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement
or
by Law or otherwise afforded, will be cumulative and not
alternative.
24
11.07 Amendment.
This
Agreement may be amended, supplemented or modified only by a written instrument
duly executed by or on behalf of each party hereto.
11.08 No
Third Party Beneficiary.
The
terms and provisions of this Agreement are intended solely for the benefit
of
each party hereto and their respective successors or permitted assigns, and
it
is not the intention of the parties to confer third-party beneficiary rights
upon any other Person.
11.09 No
Assignment; Binding Effect.
Neither
this Agreement nor any right, interest or obligation hereunder may be assigned
without the prior written consent of the other parties to this Agreement and
any
attempt to do so will be void; provided,
however, that
the
parties to this agreement hereby consent to the assignment by Purchaser of
its
rights and interests under this Agreement to a wholly-owned subsidiary of
Purchaser; provided,
further,
that
Purchaser shall continue to be bound by all of its obligations hereunder.
Subject to the preceding sentence, this Agreement is binding upon, inures to
the
benefit of and is enforceable by the parties hereto and their respective
successors and permitted assigns.
11.10 Headings.
The
headings used in this Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.
11.11 Invalid
Provisions.
If any
provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future Law, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable, (b) this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect
and
will not be affected by the illegal, invalid or unenforceable provision or
by
its severance herefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part
of
this Agreement a legal, valid and enforceable provision as similar in terms
to
such illegal, invalid or unenforceable provision as may be
possible.
11.12 Governing
Law.
This
Agreement and any controversy or claim arising out of or relating to this
Agreement shall be governed by the Laws of the State of New Jersey without
giving effect to the principles of conflicts of Laws. Each party to this
Agreement, on behalf of itself and its successors in interest and assigns,
hereby submits to the exclusive jurisdiction of the federal and state courts
located in the County of Bergen, State of New Jersey, in connection with any
dispute related to this Agreement or any of the matters contemplated hereby.
Each of the parties hereto irrevocably waives any objection (including, without
limitation, any objection to the laying of venue in any such court or based
on
the grounds of forum
non conveniens
or any
similar ground) which it may now or hereafter have to the bringing of any such
action or proceeding in any such court. Notwithstanding the foregoing, upon
payment in full of the Notes by Purchaser, any controversy or claim arising
out
of or relating to this Agreement shall be governed by the Laws of the State
of
Connecticut without giving effect to the principles of conflicts of Laws and
each party to this Agreement, on behalf of itself and its successors in interest
and assigns, hereby submits to the exclusive jurisdiction of the federal and
state courts located in the County of Fairfield, State of Connecticut, in
connection with any dispute related to this Agreement or any of the matters
contemplated hereby at such time.
25
11.13 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which will
be
deemed an original, but all of which together will constitute one and the same
instrument.
Signature
Page Follows
26
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly
authorized officer of each party hereto as of the date first above
written.
SHAREHOLDERS:
|
||
Xxxxxx
Xxxxxxxxxx
|
||
Xxxxx
Xxxxx
|
||
PURCHASER:
|
||
CABLE
& CO WORLDWIDE, INC.
|
||
By:
|
||
Title:
|
EXHIBIT
A
FORM
OF NOTE
EXHIBIT
B
FORM
OF ESCROW AGREEMENT
EXHIBIT
C
FORM
OF EMPLOYMENT AGREEMENT