ASSET PURCHASE AGREEMENT by and between Iceweb Virginia, Inc., a Virginia corporation(“Purchaser”), True North Solutions, Inc., a Delaware corporation (“Seller”), and American Systems Corporation, a Virginia corporation ("American Systems"), and...
by
and between
True
North Solutions, Inc., a Delaware corporation (“Seller”),
and
American Systems Corporation, a Virginia corporation ("American Systems"),
and
ASC-Acquisition,
TNS, Inc., a Virginia corporation (the “Shareholder”)
THIS
ASSET PURCHASE AGREEMENT (this “Agreement”),
made
and entered into effective as of the ____ day of _________________, 2006
(the
“Effective
Date”),
by
and between Iceweb Virginia, Inc., a Virginia corporation (“Purchaser”), True
North Solutions, Inc., a Delaware corporation (“Seller”), American Systems
Corporation, a Virginia corporation (“American Systems”); and ASC
Acquisition-TNS, Inc., a Virginia corporation (the “Shareholder”).
RECITALS:
R-1. Seller
was previously engaged in the provision of preferred information security
solutions for commercial and federal clients (the “Business”);
R-2. Seller
previously sold substantially all of Seller’s assets used in the portion of
Seller’s business that related to the provision of preferred information
security solutions to commercial and non-governmental professional services
clients only (the “Commercial Business”), while retaining the governmental
customer business (the “Government Business”);
R-3. Seller
desires to sell, and Purchaser desires to purchase, all or substantially
all of
Seller’s assets used in the Government Business.
R-4. American
Systems, through its wholly owned subsidiary, the Shareholder, beneficially
owns
all of the issued and outstanding shares of the capital stock of Seller.
NOW,
THEREFORE, in consideration of the premises and mutual representations,
warranties and covenants herein contained, and other good and valuable
consideration, the receipt, adequacy and legal sufficiency of which are hereby
acknowledged, the parties agree as follows:
Article
I
PURCHASE
AND SALE OF ASSETS
1.1 Purchase
and Sale of Assets.
Upon
the terms and subject to the conditions of this Agreement, Purchaser agrees
to
purchase, accept, and acquire from Seller, and Seller agrees to sell, transfer,
assign, convey, and deliver to Purchaser, at the Closing (as defined in Section
9.1), all right, title, and interest of Seller in and to the Government
Business, which is hereby defined and limited to (i) the Vendor Agreements
listed on Schedule
1.1(a),
and
(ii) all of those rights and assets, tangible or intangible, exclusively
used in
the performance of day to day business operations, as owned or held by Seller
and as identified on Schedule
1.1(b).
The
foregoing rights and assets shall hereinafter collectively be referred to
as the
“Assets.”
Without in any way limiting the generality of the foregoing, the Assets shall
include all right and interest owned or held by Seller in the
following:
(a) Vendor
Agreements and Vendor Benefits.
The
Vendor Agreements, including all documents and files relating to Seller’s
relationship that resulted in the execution of the Vendor Agreements, and
further includes all authorizations to sell Vendor products from Seller’s GSA
Schedule and authorizations to otherwise sell Vendor products to local, state,
and federal governments and to international agencies. Included with said
Vendor
Agreements will be all data in Seller’s possession regarding rebates, credits,
SPIFFs, special pricing arrangements, marketing funds available to Seller
(collectively, the “Vendor Benefits”), and similar or comparable contract rights
to Vendor Benefits. A list of the Vendor Agreements and Vendor Benefits is
set
forth in Schedule 1.1(a). Seller and Shareholder shall retain those records
required for Seller's and Shareholder's accounting, audit, compliance and
tax
reporting purposes, provided, that Purchaser shall have reasonable access
thereto if the original or a copy thereof is not otherwise provided to
Purchaser.
(b) Tangible
Assets.
The
Tangible Assets are listed on Schedule 1.1(b).
(c)
Other
Assets.
Other
Assets include and are limited to:
1.
Website. The
rights of Seller in the content of Seller’s website related to the Government
Business, provided, that the Purchaser will not obtain any rights to and
will
not be able to use the trade names "True North, True North Solutions, or
any
variation thereof, and Purchaser will not acquire any right, title or interest
in the domain name xxxxxxxxxxxxxxxxxx.xxx or any variation thereof and will
be
required to refrain from use of such tradename, and together with all electronic
files and other documentation and agreements relating thereto. At Closing
Seller
will cause Fishnet, the purchaser of the Commercial Business, to remove the
Government Business web pages and links from the website previously transferred
to Fishnet.
2.
Databases. The
rights of Seller in all electronic databases relating to the descriptions
and
pricing of the products for sale, including without limitation all prior
and
current databases and all modifications thereto.
3.
GSA Schedule and Other Government Contracts. Seller's GSA
Schedule and all electronic files and access and other documentation of Seller
relating to the GSA Associated Government Fee Report System, and all other
federal government contracts, buying schedules, and purchasing vehicles under
which goods and services provided by or through Seller are or may be purchased
by agencies of the federal government. A copy of the GSA Schedule is attached
as
Schedule
1.1(c)(3)
.
4.
Federal Client List. The
listing of Federal Clients the Government Business has done business with
or has
identified in writing as federal agencies which Seller would seek to do business
with in the future. The Federal Client list is set forth on Schedule
1.1(c)(4)
5.
Intellectual
Property.
Seller's
intellectual property rights, trade secrets and other proprietary information
exclusively used in the performance of the Government Business as owned or
held
by Seller and as specifically listed on Schedule
1.1(c)(5)
(the
“Intellectual
Property”).
6.
Quotes in Process. All
quotes for the sale of hardware, software and professional services to Federal
Clients by Seller, in process on and after the Effective Date. A list of
quotes
in process is set forth on Schedule
1.1(c)(6).
7.
Contracts in Process. All
of
Seller's contracts for the sale of hardware, software and professional services
to Federal Clients, in process on and after the Effective Date but not fully
executed as of the Effective Date. A list of contracts in process is set
forth
on Schedule
1.1(c)(7).
Article
II
ASSUMPTION
OF LIABILITIES
2.1
Except
for the gsa schedule being assigned and novated, there
are
no liabilities being assumed by buyer. All assets being sold are free and
clear
of liabilities.
Article
III
PRICE
AND PAYMENT
3.1 Purchase
Price.
The
aggregate purchase price for the Assets shall be Three Hundred Fifty Thousand
and NO/100 Dollars ($350,000.00). Two
Hundred Fifty Thousand Dollars of the Purchase Price (the "Closing Cash
Payment") shall be paid in cash at Closing, and the balance shall be evidenced
by a promissory note (the "Deferred Purchase Money Note"), secured by collateral
pledge of the Assets, payable immediately upon accomplishment of the novation
of
the GSA Schedule pursuant to Section 10.1. The Deferred Purchase Money Note
and
the security agreement and other instruments to perfect Seller's collateral
interest shall be of a form and substance reasonably acceptable to Purchaser
and
Seller and containing terms and conditions customary for commercial finance
transactions of a similar nature in the Commonwealth of Virginia.
Article
IV
REPRESENTATIONS
AND WARRANTIES OF SELLER,
American Systems AND SHAREHOLDER
Seller,
American Systems and Shareholder hereby represent and warrant to Purchaser
as
follows:
4.1 Organization.
Seller,
American Systems and Shareholder are corporations validly existing and in
good
standing under the laws of their respective states of incorporation, with
the
corporate power and authority to conduct their respective businesses (including
the performance of the Vendor Agreements and under the GSA Schedule) and
to own
and lease their respective properties and assets (including the
Assets).
4.2 Power
and Authority.
Seller
has the power and authority to execute, deliver, and perform this Agreement
and
the other agreements and instruments to be executed and delivered by it in
connection with the transactions contemplated hereby and thereby, has taken
all
necessary corporate action to authorize the execution and delivery of this
Agreement and such other agreements and instruments and the consummation
of the
transactions contemplated hereby and thereby. This Agreement is, and the
other
agreements and instruments to be executed and delivered by Seller in connection
with the transactions contemplated hereby shall be, the legal, valid, and
binding obligations of Seller, enforceable in accordance with their terms,
except as limited by bankruptcy, moratorium, or similar laws for the protection
of creditors generally.
4.3 No
Conflict.
Neither
the execution and delivery of this Agreement and the other agreements and
instruments to be executed and delivered in connection with the transactions
contemplated hereby or thereby, nor the consummation of the transactions
contemplated hereby or thereby, will violate or conflict with (1) except
for the
Required Government Consents (as defined in Section 4.4), any federal, state,
or
local law, regulation, ordinance, zoning requirement, governmental restriction,
order, judgment, or decree applicable to Seller or the Assets, (2) any provision
of any charter, bylaw or other governing or organizational instrument of
Seller,
or (3) except insofar as Required Contract Consents (as defined in Section
4.5)
are to be procured prior to Closing, any mortgage, indenture, license,
instrument, trust, contract, agreement, or other commitment or arrangement
to
which Seller is a party or by which Seller or any of the Assets is
bound.
4.4 Required
Government Consents.
Except
for (1) the novation of the GSA Schedule Contract pursuant to Federal
Acquisition Regulation (“FAR”)
Subpart 42.12, and/or any other applicable FAR, GSA regulations, and/or the
United States Code, no approval, authorization, certification, consent,
variance, permission, license, or permit to or from, or notice, filing, or
recording to or with, federal, state, or local governmental authorities is
(a)
necessary for the execution and delivery of this Agreement and the other
agreements and instruments to be executed and delivered in connection with
the
transactions contemplated hereby or thereby by Seller or the consummation
by
Seller of the transactions contemplated hereby or thereby, or (b) the ownership
and use of the Assets and the performance of the Assigned Contracts (including
by Purchaser).
4.5 Title
to Personal Property.
Except
as set forth on Schedule
4.5,
Seller
has, or will deliver as of Closing, good and marketable title to all of the
Assets, free and clear of all liens, claims, encumbrances, options, pledges,
restrictions on transfer, title defects, security interests, or other
encumbrances of any kind or nature whatsoever (the “Liens”). Purchaser at
Closing shall obtain good and marketable title to all of the Assets, free
and
clear of all Liens.
4.6 Title
to Intellectual Property.
Purchaser shall receive all of Seller's rights in the Intellectual Property
at
Closing free and clear of all title defects, liens, restrictions, claims,
charges, security interests, or other encumbrances of any nature whatsoever
(except for liens for taxes not yet due and payable), and the Intellectual
Property includes, all intellectual property rights, trade secrets, and other
proprietary information reasonably necessary for the ownership and use of
the
Assets.
4.7 Investigations.
To the
Seller’s knowledge, there is no irregularity, misstatement, act or omission
arising under or relating to Assigned Contracts that has led or could reasonably
be expected to lead, either before or after the Closing Date, to any
administrative, civil (including, but not limited to, claims made under the
False Claims Act, 18 U.S.C.§ 287) or criminal investigation, indictment or
information, audit or internal investigation or to any other damage, penalty
assessment, recoupment of payment, or disallowance of cost; and, with respect
to
performance under the GSA Schedule or any other sale of goods and/or services
to
Federal Clients, there has not been and there is no basis for the commencement
of any proceedings to suspend or disbar Seller from doing business with any
agency of the federal government.
4.8 Claims
and Disputes.
Seller
has no interest in any pending or potential claim or request for equitable
adjustment against the Government or any subcontractor, vendor or other third
party arising under or relating to the Assigned Contracts or any Team Member
Agreement. There are no outstanding claims against Seller either by the
Government or any subcontractor, vendor or other third party arising out
of or
relating to the Assigned Contracts or any Team Member Agreement, and to Seller’s
knowledge, there are no facts that might give rise to or result in such a
claim.
There exist no disputes between Seller and the Government or any subcontractor,
vendor or other third party, arising out of or relating to the Assigned
Contracts or any Team Member Agreement or outstanding Active Proposal, and
to
Seller’s knowledge, there are no facts that might give rise to or result in such
a dispute.
4.9 AGF.
Seller
has filed all reports related to and paid all Associated Government Fees
required to be paid by Seller under the Assigned Contracts through the Effective
Date, including Industrial Funding Fees (“IFF”) or other fees, taxes, penalties
or other exactions by or for the US General Services
Administration.
4.10 Litigation.
Except
as listed on Schedule 4.10,
no
claim, action, suit, proceeding, inquiry, hearing, arbitration, administrative
proceeding, or investigation (collectively, “Litigation”)
is
pending, or, to Seller’s knowledge, threatened against Seller, its present or
former directors, officers, or employees affecting, involving, or relating
to
any of the Assets.
4.11 Court
Orders, Decrees, and Laws.
There
is no outstanding or, to Seller’s knowledge, threatened order, writ, injunction,
or decree of any court, governmental agency, or arbitration tribunal against
Seller affecting, involving, or relating to the Assets. Seller is not in
violation of any applicable federal, state, or local law, regulation, ordinance,
zoning requirement, governmental restriction, order, judgment, or decree
affecting, involving, or relating to the Assets.
4.12 Broker’s
or Finder’s Fees.
Seller
has not authorized any person to act as broker or finder or in any other
similar
capacity in connection with the transactions contemplated by this Agreement
in
any manner that may or will impose liability on Purchaser.
4.13 Disclosure.
No
representation, warranty, or statement made by Seller in this Agreement or
in
any document or certificate furnished or to be furnished to Purchaser pursuant
to this Agreement contains or will contain any untrue statement, or omits
or
fails to state any fact necessary to make the statements contained herein
or
therein not misleading.
Article
V
REPRESENTATIONS
AND WARRANTIES OF BUYER
Purchaser
hereby represents and warrants to Seller as follows:
5.1 Organization.
Purchaser is a corporation validly existing and in good standing under the
laws
of the Commonwealth of Virginia, with the corporate power and authority to
conduct its business and to own and lease its properties and assets. Purchaser
is duly qualified or licensed to do business and is in good standing as a
foreign corporation in each state in which the failure to be so qualified
or
licensed would have a material adverse effect on its financial condition
or
operations.
5.2 Power
and Authority.
Purchaser has the power and authority to execute, deliver, and perform this
Agreement and the other agreements and instruments to be executed and delivered
by it in connection with the transactions contemplated hereby and thereby,
and
Purchaser has taken all necessary corporate action to authorize the execution
and delivery of this Agreement and such other agreements and instruments
and the
consummation of the transactions contemplated hereby and thereby. This Agreement
is, and, when such other agreements and instruments are executed and delivered,
the other agreements and instruments to be executed and delivered by Purchaser
in connection with the transactions contemplated hereby and thereby shall
be,
the legal, valid, and binding obligation of Purchaser, enforceable in accordance
with their terms, except as limited by bankruptcy, moratorium, or similar
laws
for the protection of creditors generally.
5.3 No
Conflict.
Neither
the execution and delivery by Purchaser of this Agreement and of the other
agreements and instruments to be executed and delivered by Purchaser in
connection with the transactions contemplated hereby or thereby, nor the
consummation by Purchaser of the transactions contemplated hereby or thereby
will violate or conflict with (1) any federal, state, or local law, regulation,
ordinance, governmental restriction, order, judgment, or decree applicable
to
Purchaser, or (2) any provision of any charter, bylaw, or other governing
or
organizational instrument of Purchaser.
Article
VI
COVENANTS
OF SELLER AND BUYER PRIOR TO CLOSING
6.1 Access.
From
the date of this Agreement to the Closing Date, Seller shall provide Purchaser
with such information and access to such records as Purchaser may from time
to
time reasonably request with respect to the Active Proposals and related
Team
Member Agreements. Any investigation shall be conducted in such a manner
as not
to interfere unreasonably with the operation of the business of
Seller.
6.2 Approvals
of Third Parties.
Seller
and Purchaser shall make good faith efforts, and shall cooperate with one
another, to secure all Required Contract Consents that may be required by
Vendors, provided, that the ability to secure any such Require Contract Consents
shall not be
a
condition to Closing.
6.3 Subcontract
Agreement; Other Transition Requirements.
The
parties acknowledge that FAR Subpart 42.12 requires the Closing to occur
prior
to the novation of the GSA Schedule Contract to Purchaser. Throughout the
novation process Purchaser and Seller will each use reasonable efforts, and
will
cooperate with each other, to obtain GSA’s approval of the Subcontract Agreement
pursuant to FAR § 52.244-2 to allow Purchaser to perform throughout the novation
process.
Seller
and Purchaser will (a) cooperate throughout the novation process, (b) honor
all
outstanding quotes, and (c) fulfill all delivery orders and purchase orders.
From and after the Closing Date Purchaser will, at Purchaser’s sole expense,
continue the government business without interruption and in the ordinary
course, serving as Seller’s subcontractor until the novation process is
completed. Purchaser will hold Seller harmless from any liability in connection
with this Government Business from and after the Closing Date.
6.4 Hiring
Employees. Seller
will cooperate with all requests made by Purchaser for the purpose of allowing
Purchaser to hire those employees of Seller designated by Purchaser and working
in the Business, such employment to be effective as of the Closing Date;
provided, however, that nothing in this Section 6.5 and no actions pursuant
to
this Section 6.5 will require Purchaser to hire any employee of
Seller.
6.5 Cancel
Unfulfilled Purchase Orders with Vendors. Immediately
following the Closing, Seller and Shareholder shall take all steps necessary
to
cancel any unfilled purchase orders with vendors with respect to the Business
unless Purchaser assumes such obligations and accepts delivery of performance
by
such vendors.
6.6 Name
Change. Upon closing, Purchaser shall change the name under which it conducts
the Government Business to a name other than one that would conflict with
or
could be confused with the names “True North”, “Solutions”, or “True North
Solutions, Inc.”
Article
VII
CONDITIONS
TO SELLER’S OBLIGATIONS
Each
of
the obligations of Seller to be performed hereunder shall be subject to the
satisfaction of (or waiver by) Seller at or prior to the Closing Date of
each of
the following conditions:
7.1 Representations
and Warranties True at Closing Date.
Purchaser’s representations and warranties contained in this Agreement shall be
true on and as of the Closing Date with the same force and effect as though
made
on and as of such date, and Purchaser shall have delivered to Seller a
certificate dated the Closing Date and signed by a duly authorized officer
of
Purchaser to such effect.
7.2 Performance.
Purchaser shall have complied with the covenants and agreements set forth
herein
to be performed by it on or before the Closing Date; and Purchaser shall
have
delivered to Seller a certificate dated the Closing Date and signed by a
duly
authorized officer of Purchaser to such effect.
7.3 Litigation.
No
Litigation shall be threatened or pending against Purchaser or Seller before
any
court or governmental agency that, in the reasonable opinion of counsel for
Seller, could result in the restraint or prohibition of any such party, or
the
obtaining of damages or other relief from such party, in connection with
this
Agreement or the consummation of the transactions contemplated
hereby.
7.4 Documents
Satisfactory in Form and Substance.
All
agreements, certificates, and other documents delivered by Purchaser to seller
hereunder shall be in form and substance satisfactory to counsel for Seller,
in
the exercise of such counsel’s reasonable judgment.
Article
VIII
CONDITIONS
TO BUYER’S OBLIGATIONS
Each
of
the obligations of Purchaser to be performed hereunder shall be subject to
the
satisfaction of (or waiver by) Purchaser at or prior to the Closing Date
of each
of the following conditions:
8.1 Representations
and Warranties True at Closing Date.
Seller’s representations and warranties contained in this Agreement shall be
true on and as of the Closing Date with the same force and effect as though
made
on and as of such date, and Seller shall have delivered to Purchaser a
certificate dated the Closing Date and signed by a duly authorized officer
of
Seller to such effect.
8.2 No
Litigation.
Except
as set out on Schedule 8.2 no Litigation shall be threatened or pending against
Purchaser or Seller before any court or governmental agency that, in the
reasonable opinion of counsel for Purchaser, could result in the restraint
or
prohibition of any such party, or the obtaining of damages or other relief
from
such party, in connection with this Agreement or the consummation of the
transactions contemplated hereby.
Article
IX
CLOSING
9.1 Closing.
Unless
this Agreement is first terminated as provided in Article XII, the closing
of
the purchase and sale of the Assets and the transfer and assumption of the
Assumed Liabilities (the “Closing”)
shall
take place at the offices of Squire, Xxxxxxx & Xxxxxxx L.L.P. (the
“Closing
Agent”),
at
0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, at 9:00 a.m.
Eastern time o’clock on the week day which is five (5) days after the Effective
Date, and if said day is not a week day, the next week day following the
day
which is thirty (30) days after the Effective Date, or on such other time,
date,
and place as the parties may agree (the “Closing
Date”).
9.2 Actions
at Closing.
At
Closing, Purchaser and Seller shall take the following actions, in addition
to
such other actions as may otherwise be required under this
Agreement:
(a) Payment
of the Closing Cash Payment.
Purchaser shall deliver the Closing Cash Payment to the Seller in full by
check
or wire transfer of immediately available funds to an account designated
by
Seller.
(b) Conveyance
Instruments.
Seller
shall deliver to Purchaser such warranty deeds, bills of sale, assignments,
and
other instruments of conveyance and transfer as Purchaser may reasonably
request
to effect the assignment to Purchaser of the Assets.
(c) Deferred
Purchase Money Note and Security Agreement. Purchaser
shall execute and deliver the Deferred Purchase Money Note, a security
agreement, and such financing statements as may be required to perfect Seller's
collateral lien in the Assets.
9.3 Further
Assurances.
At and
after the Closing, without further consideration, Seller shall take all such
other action and shall procure or execute, acknowledge, and deliver all such
further certificates, conveyance instruments, consents, and other documents
as
Purchaser or its counsel may reasonably request (1) to vest in Purchaser,
and
perfect and protect Purchaser’s right, title, and interest in, and enjoyment of,
the Assets or (2) to ensure more effectively the compliance of Seller with
its
agreements, covenants, warranties, and representatives under this
Agreement.
Article
X
COVENANTS
OF SELLER AND BUYER FOLLOWING CLOSING
10.1 Novation
of GSA Contract.
Following the Closing, Purchaser and Seller will each use reasonable efforts,
and will cooperate with each other, to novate the Assigned Contracts to
Purchaser pursuant to FAR Subpart 42.12 and will execute a novation agreement,
in such form as may be reasonably required or requested by the Government.
Seller shall render all necessary assistance to Purchaser in obtaining such
novation in such manner as Purchaser reasonably requests; provided, however,
that in seeking to obtain such novation, Seller shall not be required to
make
any additional payment or take any additional action not otherwise required
under the terms of the Novated Contract. Purchaser shall bear, pay, discharge
and satisfy all costs, expenses and considerations required to obtain the
novation of the Contract.
10.2 Transfer
Taxes.
All
sales, transfer, and similar taxes and fees (including all recording fees,
if
any) incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the party subject to such taxes under
applicable law and the parties shall cooperate to make available and provide
all
necessary documentation with respect to such taxes.
10.3 Confidentiality
Obligation of Seller Following Closing.
Following the Closing, Seller shall, and shall use its best efforts to cause
its
personnel and agents to, hold in strict confidence, not disclose to any person
without the prior written consent of Purchaser, and not use in any manner
whatsoever, any confidential business or technical information remaining
in its
possession concerning the Assets. Notwithstanding the foregoing, Seller may
disclose confidential information (1) where necessary to any regulatory
authorities or governmental agencies pursuant to legal process or (2) if
required by court order or decree. For purposes of this Agreement, information
shall not be deemed confidential (1) if such information is available in
full
from public sources; (2) if such information is received from a third party
not
under an obligation to keep such information confidential; or (3) if the
recipient can conclusively demonstrate that such information was independently
developed by the recipient.
10.4 Seller
and Shareholder’s Indemnity.
(a) Subject
to the terms and conditions of this Article X, , Seller and Shareholder shall,
jointly and severally, indemnify, defend and hold harmless Purchaser, and
its
parent company Iceweb, Inc., a Delaware corporation, shareholders, employees,
officers, directors, agents, attorneys, and Affiliates from and against all
lawsuits, losses, claims, obligations, demands, assessments, penalties,
liabilities, costs, damages, reasonable attorneys’ fees, expenses, and
reasonable consulting fees (collectively, “Damages”), incurred by any or all of
them or assessed against the Purchased Assets by reason of or resulting from
or
based upon:
(i) The
material inaccuracy of any representation or warranty, or the breach or default
of or under any covenant or agreement, made by Seller or Shareholder in this
Agreement, including any of the Exhibits and Schedules hereto or in any
Ancillary Document delivered in connection with any of the transactions
contemplated by this Agreement or any of the agreements contemplated hereby;
and
(ii) Any
claims arising out of or relating to occurrences of any nature relating to
the
Government Business, the conduct thereof, or the ownership or operation of
the
Assets prior to the Closing, whether any such claims are asserted prior to
or
after the Closing;
(iii) Any
pending litigation or disputes involving Seller, the Government Business
or the
Assets, whether or not such litigation, proceeding or dispute in listed in
one
or more schedules to this Agreement;
(iv) Any
liability or claim arising out of or relating to occurrences of any nature
relating to Seller’s conduct of the Business or ownership or operation of the
Assets; or
10.5 Purchaser’s
Indemnity. Subject
to the terms and conditions of this Article X, Purchaser shall indemnify,
defend
and hold harmless Seller, American Systems, and the Shareholder and Seller’s
officers, employees, directors, agents, attorneys, and Affiliates harmless
from
and against all Damages asserted against or incurred by any or all of them
by
reason of or resulting from or based on:
(a) The
inaccuracy of any representation or warranty, or the breach or default of
or
under any covenant or agreement, made by Purchaser in this Agreement, including
any of the Exhibits and Schedules hereto or in any Ancillary Document delivered
in connection with any of the transactions contemplated by this Agreement
or any
of the agreements contemplated hereby; or
(b) Any
liability or claim arising out of or relating to occurrences of any nature
relating to the conduct of the Government Business from events occurring
after
the Closing, including, but not limited to, any loss, cost or expense that
Seller may incur as a result of acting in an intermediate contracting role
with
respect to any Assigned Contracts pending completion of the novation.
10.6 Limitations
upon Indemnification Obligations. Except
in
the case of fraud or willful misconduct, indemnification shall not include
any
punitive damages. No claims for indemnification hereunder may be brought
on or
after eighteen months from the date of Closing. No claims for indemnification
may be asserted by Purchaser against the Seller or the Shareholder until
the
aggregate amount of all Damages incurred in connection with the claims
thereunder exceeds Twenty-Five Thousand Dollars ($25,000) in the aggregate
or
Ten Thousand Dollars ($10,000) for any single claim, (the “Indemnification
Deductible”).
10.7 Non-Competition
Covenant By Seller, American Systems and Shareholder. Seller, American Systems,
and Shareholder, jointly and severally, covenant that for a period of one
(1)
years from and after the Closing Date, none of them shall compete with Purchaser
in the sale of any of the goods historically sold by Seller as the Government
Business, to agencies of the federal government to which Seller sold or marketed
goods. For purposes of this non-competition covenant, the narrowest definition
of “agencies of the federal government” will be applied that fulfills the
requirement of this covenant. By way of example only, if the United States
Navy
was a customer of Seller, but Seller only sold goods to the SPAWARs facility,
Seller would not be precluded from selling to the Naval Ship Parts Depot
in
Mechanicsburg, Pennsylvania.
Article
XI
TERMINATION
PRIOR TO CLOSING
11.1 Termination
of Agreement.
This
Agreement may be terminated at any time prior to the Closing:
(a) Mutual
Consent.
By the
mutual consent of Purchaser and Seller; or
(b) Deadline.
By
Purchaser or Seller, in writing, if the Closing shall not have occurred on
or
before December 31, 2006.
11.2 Termination
of Obligations.
Termination of this Agreement pursuant to this Article XI shall terminate
all
obligations of the parties hereunder.
Article
XII
MISCELLANEOUS
12.1 Entire
Agreement.
This
Agreement and the other certificates, agreements, and other instruments to
be
executed and delivered by the parties in connection with the transactions
contemplated hereby constitute the sole understanding of the parties with
respect to the subject matter hereof. No amendment, modification, or alteration
of the terms or provisions of this Agreement shall be binding unless the
same
shall be in writing and duly executed by the parties hereto.
12.2 Parties
Bound by Agreement; Successors and Assigns.
The
terms, conditions, and obligations of this Agreement shall inure to the benefit
of and be binding upon the parties hereto and the respective successors and
assigns thereof. Without the prior written consent of the other party, Purchaser
may assign its rights, duties, or obligations hereunder or any part thereof
to
any other person or entity, which shall thereupon become Purchaser, provided
that at the time of such assignment Purchaser unconditionally and irrevocably
guarantees the payment and performance of any duties or obligations so
assigned.
12.3 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
for
all purposes be deemed to be an original and all of which shall constitute
the
same instrument.
12.4 Headings.
The
headings of the Sections and paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement
or
to affect the construction hereof.
12.5 Modification
and Waiver.
Any of
the terms or conditions of this Agreement may be waived in writing at any
time
by the party that is entitled to the benefits thereof. No waiver of any of
the
provisions of this Agreement shall be deemed to or shall constitute a waiver of
any other provision hereof (whether or not similar).
12.6 Expenses.
Seller
and Purchaser shall each pay all costs and expenses incurred by it or on
its
behalf in connection with this Agreement and the transactions contemplated
hereby, including fees and expenses of its own financial consultants, accounts,
and counsel.
12.7 Notices.
Any
notice, request, instruction, or other document to be given hereunder by
any
party hereto to any other party hereto shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, as
follows:
if
to
Seller to:
American
Systems Corporation
00000
Xxxxxxxx Xxxxxx
Xxxxx
X
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxx, Vice President, Contracts
if
to
Purchaser to:
Iceweb
Virginia, Inc.
000
Xxx
Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxx Xxxxxxxxxx, CEO
or
at
such other address for a party as shall be specified by like notice. Any
notice
that is delivered personally in the manner provided herein shall be deemed
to
have been duly given to the party to whom it is directed upon actual receipt
by
such party (or its agent for notices hereunder). Any notice that is addressed
and mailed in the manner herein provided shall be conclusively presumed to
have
been duly given to the party to which it is addressed at the close of business,
local time of the recipient, on the fourth business day after the day it
is so
placed in the mail.
12.8 Governing
Law.
This
Agreement shall be construed in accordance with and governed by the laws
of the
Commonwealth of Virginia without giving effect to the principles of conflicts
of
law thereof.
12.9 Public
Announcements.
Seller
and Purchaser shall consult with each other before issuing any press releases
or
otherwise making any public statements with respect to this Agreement and
the
transactions contemplated hereby. Neither Seller nor Purchaser shall issue
any
such press release or make any public statement without the agreement of
the
other party, except as such party’s counsel advises in writing may be required
by law.
12.10 “Including.”
Words of
inclusion shall not be construed as terms of limitation herein, so that
references to “included” matters shall be regarded as nonexclusive,
noncharacterizing illustrations.
12.11 References.
Whenever reference is made in this Agreement to any Article or Section, such
reference shall be deemed to apply to the specified Article or Section of
this
Agreement.
[Signature
page follows]
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be
executed on its behalf as of the Effective Date.
|
American
Systems Corporation:
|
||
|
By:
|
||
|
Xxxxxxx
X. Xxxxxx
|
||
|
President
and Chief Executive Officer
|
||
|
True
North Solutions, Inc.
|
||
|
By:
|
||
|
Xxxxxxx
X. Xxxxxx
|
||
|
President
and Chief Executive Officer
|
||
|
ASC
Acquisition-TNS, Inc.
|
||
|
By:
|
||
|
Xxxxxxx
X. Xxxxxx
|
||
|
President
and Chief Executive Officer
|
||
|
Iceweb
Virginia, Inc.
|
||
|
By:
|
||
|
Xxxx
Xxxxxxxxxx, CEO
|
||
