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AGREEMENT AND PLAN OF REORGANIZATION
Among each of the Stockholders
of
Frontier Media Group, Inc., as Transferors,
and
Icon CMT Corp., as Transferee
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Dated as of May 20, 1998
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TABLE OF CONTENTS
Section Page
1. Certain Definitions...................................................1
2. Exchange of Frontier Shares for Icon Shares...........................5
2.1. Exchange Transaction.........................................5
2.2. Escrow.......................................................5
3. Closing Matters.......................................................5
3.1. The Closing..................................................5
3.2. Deliveries by the Transferors................................6
3.3. Deliveries by the Transferee.................................7
4. The Transferors' Representations and Warranties.......................8
4.1. Power and Authority..........................................8
4.2. Consents.....................................................9
4.3. Litigation...................................................9
4.4. Organization.................................................9
4.5. Capitalization...............................................9
4.6. Securities Owned............................................10
4.7. Financial Statements; No Undisclosed Liabilities............10
4.8. No Adverse Change...........................................10
4.9. Assets......................................................11
4.10. Material Contracts..........................................11
4.11. [INTENTIONALLY OMITTED].....................................12
4.12. Accounts....................................................12
4.13. Real Property...............................................12
4.14. Environmental Matters.......................................13
4.15. Bank Accounts...............................................13
4.16. Governmental Licenses and Consents..........................13
4.17. Taxes.......................................................14
4.18. Trade Rights................................................15
4.19. Employees; Labor Disputes...................................15
4.20. Directors, Officers and Employees...........................15
4.21. Employee Benefits...........................................16
4.22. Suppliers and Customers.....................................17
4.23. Insurance...................................................17
4.24. Brokers or Finders..........................................18
4.25. No Misrepresentation by the Transferors.....................18
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TABLE OF CONTENTS (cont'd)
Section Page
4.26. Accounting Matters..........................................18
4.27. Year 2000...................................................18
4.28. Acquisition for Investment..................................19
4.29. Power and Authority of the Identified Transferors...........19
4.30. Consents of the Identified Transferors......................19
4.31. Litigation Affecting the Identified Transferors.............19
4.32. Ownership of Frontier Shares by the Identified Transferors..20
4.33. Brokers or Finders of the Identified Transferors............20
4.34. Passive Stockholders........................................20
4.35. Acquisition for Investment..................................20
5. The Transferee's Representations and Warranties......................20
5.1. Organization................................................20
5.2. Power and Authority.........................................20
5.3. Consents....................................................21
5.4. Litigation..................................................21
5.5. Capitalization..............................................21
5.6. Financial Statements and Other Corporate Information........22
5.7. No Material Adverse Change..................................22
5.8. No Registration Required....................................22
5.9. Acquisition for Investment..................................22
5.10. Listing of Icon Common Stock ...............................22
5.11. Brokers or Finders..........................................22
6. Covenants............................................................22
6.1. Best Efforts................................................22
6.2. Company to Conduct Business in the Ordinary Course..........23
6.3. Further Information.........................................24
6.4. Public Announcements........................................24
6.5. Confidentiality.............................................24
6.6. Lien Searches...............................................25
6.7. Termination of SAR Plan.....................................25
6.8. Tax Returns and Payments....................................25
6.9. Pooling and Tax-Free Reorganization Treatment...............28
6.10. No-Shop.....................................................28
6.11. Financial Statements........................................29
6.12. Certain Lease Obligations...................................29
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TABLE OF CONTENTS (cont'd)
Section Page
7. Conditions to Closing................................................29
7.1. Conditions of the Transferee's Obligation to Close..........29
7.2. Conditions of the Transferors' Obligation to Close..........30
8. Investment Undertaking; Registration Rights..........................31
8.1. Investment Undertaking......................................31
8.2. Registration Rights.........................................31
9. Additional Covenants of the Transferors and the Transferee...........31
9.1. Confidentiality.............................................31
9.2. Listing of Icon Shares......................................32
10. Termination..........................................................32
10.1. Termination.................................................32
10.2. Effect of Termination.......................................32
11. Indemnification......................................................32
11.1. Indemnification by Certain of the Transferors...............32
11.2. Indemnification by the Identified Transferors...............33
11.3. Indemnification by the Transferee...........................33
11.4. Indemnification Procedures..................................34
11.5. Survival of Representations and Warranties..................35
11.6. Indemnification Threshold, Limitations and Termination......35
11.7. Set-Off Against Escrowed Shares.............................36
12. Miscellaneous........................................................36
12.1. Limitation of Authority.....................................36
12.2. Transferors' Representative.................................36
12.3. Fees and Expenses...........................................37
12.4. Notices.....................................................37
12.5. Amendment...................................................38
12.6. Waiver......................................................38
12.7. Governing Law...............................................38
12.8. Jurisdiction................................................38
12.9. Remedies....................................................38
12.10. Severability................................................39
12.11. Further Assurances..........................................39
12.12. Assignment..................................................39
12.13. Binding Effect..............................................39
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TABLE OF CONTENTS (cont'd)
Section Page
12.14. Incorporation by Reference..................................40
12.15. Entire Agreement............................................40
12.16. Counterparts................................................40
INDEX TO EXHIBITS AND SCHEDULES...............................................44
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AGREEMENT AND PLAN OF REORGANIZATION
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AGREEMENT AND PLAN OF REORGANIZATION, dated as of May 20, 1998 (this
"Agreement"), among ICON CMT CORP., a Delaware corporation having its principal
place of business at 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (the
"Transferee"), and each of the Persons listed on Schedule 2.1 hereto (each, a
"Transferor" and, collectively, the "Transferors").
W I T N E S S E T H:
WHEREAS, the Transferors own all of the issued and outstanding
shares of capital stock of Frontier Media Group, Inc., a Pennsylvania
corporation (the "Company");
WHEREAS, the Company is engaged in the business of designing and
developing interactive multimedia applications for marketing, training and
communications, and all related business operations and activities (the
"Business");
WHEREAS, the Transferors desire to exchange the Frontier Shares for
the Icon Shares (the "Reorganization"), and the Transferee is willing to issue
and deliver the Icon Shares to the Transferors solely in exchange for the
Frontier Shares;
WHEREAS, for federal income tax purposes, it is intended that the
Reorganization shall qualify as a tax-free reorganization under Section
368(a)(1)(B) of the Code; and
WHEREAS, for accounting purposes, it is intended that the
Reorganization shall be accounted for as a "pooling of interests";
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
1. Certain Definitions. Capitalized terms used but not defined
elsewhere in this Agreement are defined as follows:
1.1. "Account" means any account receivable, note, draft or other
instrument and any other right to payment arising in the Business from the sale
of merchandise or services or any other sale, lease, exchange or other
disposition by, or for the account of, the Company of any assets of the Company,
whether or not in the ordinary course of business.
1.2. "Affiliate" of a Person means another Person directly or
indirectly controlling, controlled by, or under common control with, such
Person; for this purpose, "control" of a Person means the power (whether or not
exercised) to direct the policies, operations or activities of such
Person by or through the ownership of, or right to vote, or direct the manner of
voting of, securities of such Person, or pursuant to agreement or Law or
otherwise.
1.3. "Assets" means the assets owned by the Company.
1.4. "Closing" has the meaning set forth in Section 3.1 hereof.
1.5. "Closing Date" means the date of the Closing.
1.6. "Code" means the Internal Revenue Code of 1986, as amended,
and the Treasury regulations promulgated thereunder.
1.7. "Consent" means any approval, authorization, consent or
ratification by or on behalf of any Person that is not a party to this
Agreement, or any waiver of, or exemption or variance from, any License or
Order.
1.8. "Contract" means any written or oral contract, agreement,
arrangement or understanding, including without limitation any loan agreement or
indenture, purchase, sales, supply or service order or agreement, real property,
equipment or other lease, or license of Trade Rights, to which the Company is a
party or by which the Company, the Business or any of the Assets are bound.
1.9. "Employee Plan" means an "employee benefit plan" as defined in
Section 3(3) of ERISA, including a Multiemployer Plan.
1.10. "Environmental Law" means any Law relating to environmental
protection or natural conservation, including without limitation the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. ss.6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. ss.9601 et seq., as amended by the Superfund Amendments and
Reauthorization Act of 1986, the Hazardous Materials Transportation Act, 49
U.S.C. ss.1801 et seq., the Federal Water Pollution Control Act, 33 U.S.C.
ss.1251 et seq., the Clean Air Act, 42 U.S.C. ss.7401 et seq., the Toxic
Substances Control Act, 15 U.S.C. ss.ss.2601-2629, and the Safe Drinking Water
Act, 42 U.S.C. ss.300 et seq.
1.11. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.12. "Escrow Agent" means Klehr, Harrison, Xxxxxx, Xxxxxxxxx &
Xxxxxx LLP, a Pennsylvania limited liability partnership.
1.13. "Frontier Common Stock" means the Company's common stock, no
par value per share.
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1.14. "Frontier Shares" has the meaning set forth in Section 2.1
hereof.
1.15. "GAAP" means generally accepted accounting principles in
effect from time to time within the United States.
1.16. "Governmental Authority" means any federal, state, local or
foreign government or governmental authority, agency or instrumentality, or any
court or arbitration panel of competent jurisdiction, or any recognized
professional or industry association or organization which establishes policies
or standards or otherwise regulates or supervises services and activities
related to the Business or the Assets.
1.17. "Hazardous Material" means any contaminant, pollutant or toxic
or hazardous waste, effluent or other substance or material, including without
limitation any radioactive, explosive, flammable, corrosive or infectious
substance or material or any substance or material containing asbestos,
polychlorinated biphenyls or urea formaldehyde or which is subject to regulation
under any Environmental Law or any License or Order relating thereto.
1.18. "Icon Common Stock" means the Transferee's common stock, par
value $.001 per share.
1.19. "Icon Shares" has the meaning set forth in Section 2.1 hereof.
1.20. "Identified Transferors" means Xxxx Xxxxxx, Xxxxxxxx Xxxxxx
and Xxxxxxx Xxxxxx.
1.21. "Law" means any statute, rule, regulation or ordinance of any
Governmental Authority or any applicable common law.
1.22. "Lease" means a lease of Leased Real Property.
1.23. "Leased Real Property" means Real Property leased by the
Company, as tenant.
1.24. "License" means any license, permit, certification,
qualification or franchise issued or granted by any Governmental Authority.
1.25. "Lien" means any security interest, conditional sale or other
title retention agreement, mortgage, pledge, lien, charge, encumbrance or other
adverse claim or interest.
1.26. "Lien Report" means a report in customary form of the Lien
search or survey conducted pursuant to Section 6.6 hereto.
1.27. "Multiemployer Plan" means a "multiemployer plan" as defined
in Section 3(37) of ERISA.
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1.28. "Order" means any judgment, order, writ, decree, award,
directive, ruling or decision of any Governmental Authority.
1.29. "Permitted Encumbrances" has the meaning set forth in Section
4.9 hereof.
1.30. "Person" includes, without limitation, a natural person,
corporation, joint stock company, limited liability company, partnership, joint
venture, association, trust, Governmental Authority, or any group of the
foregoing acting in concert.
1.31. "Pre-Closing Period" means any Tax period ending on or before
the Closing Date and, in the case of any Tax period that begins on or before the
Closing Date and ends after the Closing Date, the portion of such period through
and including the Closing Date.
1.32. "Proceeding" means any action, suit, investigation, audit,
claim or other proceeding, at law or in equity, before or by any Governmental
Authority.
1.33. "Real Property" means all the real property described on
Schedule 4.13 hereto.
1.34. "Tax" means any tax, fee, levy, assessment or other charge
imposed by any Governmental Authority (including, without limitation, any
income, franchise, gross receipts, property, sales, use, excise, services, value
added, ad valorem, withholding, social security, estimated, accumulated
earnings, transfer, license, privilege, payroll, profits, capital stock,
employment, unemployment, severance, stamp, recording, occupancy, customs or
occupation tax), including, without limitation, any liability therefor as a
result of Treasury Regulation ss.1.1502-6 (or any comparable state, local or
foreign Tax provision), as a transferee (including, without limitation, under
Section 6901 of the Code or any comparable state, local or foreign Tax
provision) or as a result of any Tax sharing or similar agreement, and any
interest, additions to tax and penalties in connection therewith.
1.35. "Tax Return" means any return, amended return, declaration,
report, estimate, claim for refund or credit, information return or statement
(including any related or supporting information or schedule), and any amendment
thereto, regarding Tax which is filed or required to be filed under applicable
Law, whether on a consolidated, combined, unitary or separate basis or
otherwise.
1.36. "Trade Right" means a patent, copyright, trademark, trade
name, brand name, service xxxx, logo, symbol, trade dress, design or
representation or expression of any thereof, or registration or application for
registration thereof, or any other invention, trade secret, technical
information, know-how, proprietary right or intellectual property.
1.37. "Transaction Documents" means this Agreement and the
Registration Rights Agreement.
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2. Exchange of Frontier Shares for Icon Shares.
2.1. Exchange Transaction. At the Closing, each Transferor shall
convey, transfer, assign and deliver to Transferee the shares of Frontier Common
Stock owned by such Transferor as set forth on Schedule 2.1 hereto
(collectively, the "Frontier Shares"), free and clear of all Liens, which
Frontier Shares shall constitute all of the issued and outstanding shares of
capital stock of the Company on the Closing Date. In exchange for the Frontier
Shares, at the Closing, the Transferee shall issue and deliver (a) to the
Transferors certificates representing an aggregate of 655,493 authorized but
previously-unissued shares of Icon Common Stock registered in the names of the
Transferors in the respective amounts set forth on Schedule 2.1 hereto
(collectively, the "Closing Shares"), and (b) to the Escrow Agent certificates
representing an aggregate of 72,832 authorized but previously-unissued shares of
Icon Common Stock registered in the names of the Transferors in the respective
amounts set forth on Schedule 2.1 hereto (collectively, the "Escrowed Shares"
and, collectively with the Closing Shares, the "Icon Shares").
2.2. Escrow. The Escrowed Shares to be delivered by the Transferee
to the Escrow Agent shall be held in escrow by the Escrow Agent, together with
appropriate stock powers (the "Stock Powers") with respect to the Escrowed
Shares executed in blank by each of the Transferors (which Stock Powers the
Transferors shall deliver to the Escrow Agent at the Closing), to be held by the
Escrow Agent in accordance with an Escrow Agreement in the form of Exhibit A
hereto (the "Escrow Agreement"), which Escrow Agreement the Transferors, the
Transferee and the Escrow Agent shall enter into at the Closing. The purpose of
the Escrowed Shares is to serve as a source of funds to satisfy the obligations
of each Transferor to the Transferee under this Agreement.
3. Closing Matters.
3.1. The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall be held at the offices of Xxxxxx Xxxxxx
Flattau & Klimpl, LLP, counsel to the Company, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 on May 27, 1998, or at such other place or on such other
date, and at such time, as the parties hereto may agree. The execution and/or
delivery of each document to be executed and/or delivered at the Closing and
each other action to be taken at the Closing shall be subject to the condition
that every other document to be executed and/or delivered at the Closing is so
executed and/or delivered and every other action to be taken at the Closing is
so taken, and all such documents and actions shall be deemed to be executed
and/or delivered or taken, as the case may be, simultaneously. When all such
documents are so executed and/or delivered and all such actions are so taken,
the closing of the transactions provided for herein shall be effective as of the
opening of business on the Closing Date.
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3.2. Deliveries by the Transferors. At the Closing, each Transferor
shall:
(a) deliver to the Transferee a certificate representing the
Frontier Shares being transferred by him, duly endorsed, or together with a duly
executed stock power, for transfer to the Transferee;
(b) deliver to the Transferee (i) a Non-Competition
Agreement executed by Xxxxxxx Xxxxxx, in form and substance satisfactory to the
Transferee, and (ii) a Non-Competition Agreement executed by each of Xxx Xxxxx,
Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxx and Xxxx Xxxx, in each case in form and
substance satisfactory to the Transferee;
(c) in the case of Xxxxxx X. Xxxxxx, deliver to the
Transferee an Employment Agreement executed by him, substantially in the form of
Exhibit C hereto (the "Xxxxxx Employment Agreement");
(d) deliver to the Transferee an Employment Agreement
executed by Xxxxxx Xxxxxxxx, substantially in the form of Exhibit D hereto (the
"Xxxxxxxx Employment Agreement");
(e) deliver to the Transferee an amendment to the existing
employment agreement of each of Xxxxx Xxxxx and Xxxxx Xxxxxxxx (collectively,
the "Identified Frontier Employees") executed by such Identified Frontier
Employee, substantially in the form of Exhibits E-1 and E-2 hereto, respectively
(collectively, the "Amendment Agreements");
(f) execute and deliver to the Transferee the Escrow
Agreement;
(g) execute and deliver to the Transferee a Registration
Rights Agreement, substantially in the form of Exhibit F hereto (the
"Registration Rights Agreement");
(h) execute and deliver to the Transferee a certificate of
non-foreign status in the form required by Section 1445 of the Code (which
certificate shall be retained by the Transferee and be made available to the
Internal Revenue Service upon request);
(i) deliver to the Transferee the Lien Report;
(j) deliver to the Transferee Forms UCC-3 date stamped as
"filed" with respect to, or other evidence, reasonably acceptable to the
Transferee, of the release and termination of, any Liens (other than the
Permitted Encumbrances) included in the Lien Report or otherwise known to
Transferor;
(k) deliver to the Transferee a certificate executed by the
Secretary of the Company, certifying (i) that the attached copies of the
Certificate of Incorporation and By-laws of the Company, and, if applicable,
resolutions of the Board of Directors of the Company approving
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the Transaction Documents to which it is a party and the transactions
contemplated thereby are all true, complete and correct and remain unamended and
in full force and effect, and (ii) the incumbency and specimen signature of each
officer of the Company executing any Transaction Document to which it is a party
or any other document delivered in connection therewith on behalf of the
Company;
(l) deliver to the Transferee a certificate executed by each
Transferor and by the Chief Executive Officer of the Company certifying that (i)
the representations and warranties made by the Transferors herein are true and
correct in all material respects on and as of the Closing Date, and (ii) all the
conditions to closing set forth in Section 7.1 hereof have been satisfied;
(m) deliver to the Transferee an agreement substantially in
the form of Exhibit G hereto (the "Affiliate Agreement"), executed by each of
the Company's "affiliates" (as (i) defined for the purposes of Rule 144 of the
General Rules and Regulations promulgated by the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii) used in and for the purposes of Accounting Series
Release Nos. 130 and 135, as amended, promulgated by the SEC), relating to the
disposition of the Frontier Shares held by him and the Icon Shares issuable to
him pursuant to this Agreement;
(n) execute and deliver a Stock Power to the Escrow Agent;
(o) deliver to the Transferee the legal opinion of Klehr,
Harrison, Xxxxxx, Branburg & Xxxxxx LLP, counsel to the Company, substantially
in the form of Exhibit H hereto; and
(p) deliver to the Transferee a resignation, effective as of
the Closing Date, executed by each officer and director of the Company (other
than Xxxxxx X. Xxxxxx, in his capacity as President of the Company).
3.3. Deliveries by the Transferee. At the Closing, the Transferee
shall:
(a) issue and deliver to each Transferor the Closing Shares
to which such Transferor is entitled;
(b) issue and deliver to the Escrow Agent the Escrowed
Shares;
(c) execute and deliver to the Transferors the Escrow
Agreement;
(d) execute and deliver to Xxxxxx X. Xxxxxx the Xxxxxx
Employment Agreement;
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(e) execute and deliver to each Transferor the Registration
Rights Agreement;
(f) deliver to the Transferors a certificate executed by the
Secretary of the Transferee, certifying (i) that the attached copies of the
Certificate of Incorporation and By-laws of the Transferee, and resolutions of
the Board of Directors of the Transferee approving the Transaction Documents to
which it is a party and the transactions contemplated thereby are all true,
complete and correct and remain unamended and in full force and effect, and (ii)
the incumbency and specimen signature of each officer of the Transferee
executing any Transaction Document to which it is a party or any other document
delivered in connection therewith on behalf of the Transferee;
(g) deliver to the Transferors a certificate of the Chief
Executive Officer of the Transferee to the effect that (i) the representations
and warranties made by the Transferee herein are true and correct in all
material respects on and as of the Closing Date, and (ii) all the conditions to
closing set forth in Section 7.2 hereof have been satisfied; and
(h) deliver to the Transferors the legal opinion of Xxxxxx
Xxxxxx Flattau & Klimpl, LLP, counsel to the Transferee, substantially in the
form of Exhibit I hereto.
4. The Transferors' Representations and Warranties.
(A) Each Transferor, other than the Identified Transferors, hereby
jointly and severally represents and warrants to the Transferee as follows:
4.1. Power and Authority. The Company has full corporate power and
authority to execute and deliver each of the Transaction Documents to which it
is a party and to assume and perform its obligations hereunder and thereunder.
Each Transferor has full legal capacity, power and authority to execute and
deliver each of the Transaction Documents and to assume and perform his
obligations hereunder and thereunder. Each of the Transaction Documents has been
duly executed and delivered by the Company (solely with respect to this
Agreement) and each Transferor, and is a legally valid and binding obligation of
the Company and each Transferor, as the case may be, enforceable against it or
him in accordance with its terms, subject to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) equitable principles limiting
the availability of certain remedies. The execution and delivery by the Company
and each Transferor of each of the Transaction Documents to which it or he is a
party do not, and the performance by the Company and each Transferor of its or
his obligations hereunder and thereunder, will not, violate any provision of the
Company's Certificate of Incorporation or By-laws, or violate any Law, and do
not and will not conflict with or result in any breach of any condition or
provision of, or constitute a default under, or create or give rise to any
adverse right of termination or cancellation by, or excuse the performance of,
any other Person under, any Contract, or result in the creation or imposition of
any Lien upon any of the Assets or the Frontier Shares or have an adverse effect
by
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reason of the terms of, any Contract, Lien or Order to which any Transferor or
the Company is a party or is subject or which is or purports to be binding upon
him or it.
4.2. Consents. Except as set forth on Schedule 4.2 hereto, no
Consent of, or notice to, any Person is required as to any Transferor or the
Company in connection with the Company's or such Transferor's execution and
delivery of any of the Transaction Documents or the performance of the Company's
and each Transferor's obligations hereunder and thereunder, where the failure to
obtain that Consent or give that notice would have an adverse effect upon the
Company, the Assets or the Business or prohibit, invalidate, or make unlawful,
in whole or in part, any of the Transaction Documents, or the carrying out of
the provisions hereof or thereof or the transactions contemplated hereby or
thereby.
4.3. Litigation. Except as disclosed on Schedule 4.3 hereto, no
Proceeding is pending or, to the best of each Transferor's knowledge, threatened
against or affecting any Transferor or the Company in which an unfavorable
outcome would have an adverse effect upon the Company, the Business or the
Assets or prohibit, invalidate, or make unlawful, in whole or in part, any of
the Transaction Documents, or the carrying out of the provisions hereof or
thereof or the transactions contemplated hereby or thereby. No Transferor nor
the Company is in default in respect of any Order, nor is there any such Order
enjoining any Transferor in respect of, or the effect of which is to prohibit or
curtail the Company's or any Transferor's performance of, its or his obligations
under any of the Transaction Documents.
4.4. Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania and has full power and authority to own the Assets and carry on the
Business in the manner and places where such Assets are now owned and such
Business is now being conducted. Complete and correct copies of the Company's
Certificate of Incorporation, including all amendments thereto, certified by the
Secretary of State of the Commonwealth of Pennsylvania, and the Company's
By-laws, including all amendments thereto, certified by the Secretary of the
Company, have been delivered to the Transferee. The Company is Licensed to
transact business as a foreign corporation in each jurisdiction where such
License is required under applicable law in light of the location or character
of the Assets or the operation of the Business, and each such jurisdiction is
listed on Schedule 4.4 hereto.
4.5. Capitalization. The entire authorized capital of the Company
consists of 2,800,000 shares of Frontier Common Stock, of which only the
Frontier Shares are currently outstanding. All of the Frontier Shares are duly
authorized, validly issued, fully paid and nonassessable. Each Transferor owns
the Frontier Shares set forth opposite his name on Schedule 2.1 hereto
beneficially and of record, free and clear of all Liens whatsoever. No shares of
Frontier Common Stock are reserved for issuance, and there are no agreements,
commitments or arrangements providing for the issuance or sale of any capital
stock of the Company, or any issued or outstanding options, warrants or rights
to purchase, or any security or instrument convertible into or exchangeable for,
any capital stock of the Company.
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4.6. Securities Owned. Except as set forth on Schedule 4.6 hereto,
the Company does not own, directly or indirectly, any capital stock of, or other
equity interest or participation in, any other Person or any option, warrant or
other right to purchase, or any security or instrument convertible into or
exchangeable for, any such capital stock or other equity interest or
participation.
4.7. Financial Statements; No Undisclosed Liabilities.
(a) The Company has delivered to the Transferee balance
sheets of the Company at December 31, 1995, 1996 and 1997 (the "Balance Sheets")
and the related statements of income, retained earnings (deficit) and cash flows
for each of the Company's fiscal years then ended (collectively, the "Financial
Statements"), all of which (i) are complete and correct, (ii) present fairly the
financial position of the Company at such dates and the results of its
operations and cash flows for each of the periods then ended in conformity with
GAAP, consistently applied throughout such periods and (iii) in the case of the
Financial Statements as of and for the years ended December 31, 1996 and 1997,
have been audited by Ernst & Young LLP, independent certified public
accountants, and in the case of the Financial Statements as of and for the year
ended December 31, 1995, have been reviewed by such firm.
(b) Except as set forth on the Company's audited balance
sheet as of December 31, 1997 referred to in Section 4.7 hereof or as set forth
on Schedule 4.7 hereto or the unaudited balance sheet of the Company at March
31, 1998 attached to such Schedule 4.7, the Company did not have, on the date
hereof does not have, and at the Closing will not have, any liabilities or
obligations of any kind, whether known or unknown, or whether absolute, accrued
contingent, matured or otherwise, except liabilities or obligations that arose
in the ordinary course of business.
4.8. No Material Adverse Change. Since December 31, 1997, there has
been no material adverse change in the Business, the Assets or the financial or
other condition of the Company, and the Company has not:
(a) incurred any damage, destruction or similar loss,
whether or not covered by insurance, materially adversely affecting the Business
or the Assets;
(b) other than in the ordinary course of business, sold,
assigned or transferred any of the Assets or any interest therein;
(c) incurred any obligation or liability (including any
guaranty, indemnity, make-whole agreement for or with respect to any obligation
or liability of another Person), or paid, satisfied or discharged any obligation
or liability prior to the due date or maturity thereof, except obligations and
liabilities in the ordinary course of business;
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(d) other than in the ordinary course of business, created,
incurred, assumed, granted or suffered to exist any Lien (other than the
Permitted Encumbrances) on any of the Assets;
(e) other than in the ordinary course of business, waived
any right of value or canceled, forgiven or discharged any debt owed to it or
claim in its favor;
(f) declared, set aside or paid any dividend or made or
committed to make any other distribution in respect of the Shares, except for
(i) a tax distribution in the amount of $201,111 paid to the Transferors in
January, 1998 with respect to 1997 income Taxes and (ii) a distribution in the
amount of $108,000 paid to the Transferors during April, 1998 with respect to
1998 income Taxes;
(g) effected any material change in its business policies or
practices, accounting methods, conventions, principles or assumptions (except
for changes in the classification of certain items on the Company's balance
sheet at March 31, 1998 attached to Schedule 4.7 hereto requested by the
Transferee, none of which changes are considered by the Transferors to be
material), nature of the business relationships with its customers, suppliers or
independent contractors or entered into any transaction not in the ordinary
course of business; or
(h) except as set forth on Schedule 4.8 hereto, acquired the
business or assets, substantially as a whole, of any other Person or made any
capital expenditure in excess of $25,000.
4.9. Assets. Except as set forth on Schedule 4.9 hereto, the Assets
include all assets of every kind whatsoever used to conduct the Business in the
manner in which it is currently being conducted, and no other assets are used or
required to be used in connection with the Business. The Company owns all of the
Assets free and clear of all Liens other than the Liens listed on Schedule 4.9
hereto (the "Permitted Encumbrances"). All of the Permitted Encumbrances were
created in the ordinary course of business. All Assets consisting of equipment
or other tangible property are in good operating condition and in a good state
of maintenance and repair, ordinary wear and tear excepted, and except for
matters that can be remedied by routine maintenance and repair.
4.10. Material Contracts. All material Contracts in effect on the
date hereof that are not listed on another Schedule to this Agreement are listed
on Schedule 4.10 hereto. For this purpose, a Contract is "material" if (a) it
relates to a transaction or series of transactions involving the expenditure or
receipt by the Company of an amount in excess of $50,000 (or the transfer of
property with a fair market value in excess of $50,000), (b) a breach or default
thereunder would have a material adverse effect on the Business, the Assets or
the financial or other condition of the Company, (c) it relates to any
transaction not in the ordinary course of business or (d) any Affiliate of the
Company is a party thereto. All such Contracts are in full force and effect and
there is no breach or default thereunder by the Company or, to the best of the
Transferors'
-11-
knowledge, any other party thereto. No party to any such Contract has advised
the Company, formally or informally, and each of the Transferors has no reason
to believe, that any party to any such Contract intends to terminate such
Contract by reason of the transactions contemplated by this Agreement or
otherwise. True and complete copies of all such Contracts have been delivered or
made available to the Transferee.
4.11. [INTENTIONALLY OMITTED]
4.12. Accounts. The Accounts result from bona fide sales to
non-Affiliate customers in the ordinary course of business and are properly
recordable in accordance with GAAP. To the best of each Transferor's knowledge,
there is no contest, claim or right of set-off with respect to any Account
relating to the amount or validity of such Account.
4.13. Real Property.
(a) Schedule 4.13 hereto contains a list and description of
all Real Property included in the Assets (including, where available, the legal
description by metes and bounds, the addresses thereof and a brief description
of all buildings and other structures located on such Real Property), whether
owned, leased or otherwise used or occupied by the Company and, as to all such
Real Property not owned by the Company, the annual rental payable and the
remaining term of the lease relating thereto. There is no real property of any
kind whatsoever used in the Business, except for the Leased Real Property.
(b) The Company has a valid and enforceable leasehold
interest, free and clear of all Liens, other than the Permitted Encumbrances, in
each parcel or tract of Leased Real Property. The Company has delivered to the
Transferee a complete and correct copy of each Lease (including all amendments)
relating to Leased Real Property. Each Lease is valid and enforceable in
accordance with its terms, is in full force and effect and has not been
canceled, terminated or modified in any way. The Company is not in default under
any of the Leases and there is no event which has occurred which with due notice
or lapse of time or both would constitute a default by the Company under any of
the Leases. The Company has timely performed all of the obligations required to
be performed by the tenant under the Leases and possesses and quietly enjoys the
Leased Real Property demised under each of the Leases. The Company has not
entered into any sublease of all or any portion of the Leased Real Property and
no Person has any right to occupy the Leased Real Property other than the
Company.
(c) To the best of the Transferors' knowledge, all of the
buildings, structures and improvements on the Leased Real Property, including,
without limitation, all structural features and building systems, are in good
condition and repair and no extraordinary repair or improvement expense with
respect thereto is anticipated during the balance of the term of the Lease
related thereto (without regard to any provision for early termination or
extension or renewal thereof).
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(d) No Transferor is a "foreign person" for purposes of
Section 1445 of the Code.
4.14. Environmental Matters. Except as set forth on Schedule 4.14
hereto, no Hazardous Material has been generated, used, treated, stored or
disposed of at, or transported to or from, or released into the air, soil,
surface or ground waters at, on or under, the Real Property or any other real
property at any time owned, leased, operated or used (including, without
limitation, for off-site storage or disposal) by the Company, or in connection
with the Business that could result in any liability to the Company (provided,
however, that with respect to off-site storage space leased by the Company, the
foregoing representation and warranty shall only relate to the period during
which the applicable property has been occupied by the Company). No such
generation, use, treatment, storage, release, disposal or transportation of any
Hazardous Material has been in violation of any applicable Environmental Law and
no Governmental Authority or any other Person has asserted or alleged any such
violation. The Company has all required Licenses and is in compliance with all
Licenses and Orders to which it or the Business or Assets are subject relating
to Environmental Laws. The Company is not currently engaged or participating in,
or contributing to, any clean-up or remediation, pursuant to any Environmental
Law. No Law, License, Order or Proceeding applicable to the Company or the
Assets requires, and no Governmental Authority or other Person has taken, or, to
the best of each Transferor's knowledge, has threatened or proposed to take, any
action which would require, any clean-up or remediation or participation in or
contribution to any such clean-up or remediation by the Company, or any payment
to be made or expense or liability to be incurred or assumed or other action to
be taken by the Company on account of any actual or alleged loss, damage or
liability suffered by any other Person.
4.15. Bank Accounts. Schedule 4.15 hereto is a complete and correct
list of the names and locations of all banks and other depository institutions
at which the Company has an account relating to the Business, the number of each
such account and the names of all Persons authorized to draw thereon.
4.16. Governmental Licenses and Consents. The Company has all
Licenses and all Consents of Governmental Authorities required for it to conduct
the Business as presently conducted. All such Licenses and Consents are in full
force and effect and neither any Transferor nor the Company has received notice
of any pending cancellation or suspension of any thereof nor, to the best of
each Transferor's knowledge, is any pending cancellation or suspension thereof
threatened. Except as set forth on Schedule 4.16 hereto, the applicability and
validity of each such License or Consent will not be adversely affected by the
consummation of the transactions contemplated by this Agreement. Except as set
forth on Schedule 4.16 hereto, the Company is in compliance in all material
respects with each Law applicable to it and the Business, including, without
limitation, each Environmental Law and each Law with respect to occupational
safety, and employment practices.
-13-
4.17. Taxes.
(a) The Company has elected to be treated as an "S"
corporation for federal income Tax purposes at all times since its date of
incorporation and such election is effective for each year thereafter up to and
including the Closing Date. Schedule 4.17 hereto sets forth each other
jurisdiction for which the Company has made an "S" election (or similar
election), or for which an "S" election (or similar election) is effective,
including the date of the election, its effective date, the date of any
termination of such election, if any, and the cause of such termination. Except
as set forth on Schedule 4.17, such election is effective for each year from its
effective date up to and including the Closing Date.
(b) The Company (i) has duly filed or caused to be filed on
a timely basis with the appropriate Governmental Authorities all Tax Returns of
or relating to the Company or its income, assets or business which are required
to be filed on or before the date hereof, which Tax Returns are true, complete
and correct , (ii) has duly paid on a timely basis to the appropriate
Governmental Authorities all Taxes required to be paid on or before the date
hereof, except for Taxes being contested by the Company in good faith and
described on Schedule 4.17 hereto, and (iii) has duly and timely collected or
withheld, paid over and reported all Taxes required to have been collected or
withheld by it on or before the date hereof.
(c) Except as set forth on Schedule 4.17 hereto, (i) no
Governmental Authority has asserted any adjustment that could result in an
additional Tax for which the Company is or may be liable or that could adversely
affect the Company's Tax liability, (ii) there is no pending Proceeding relating
to any Tax for which the Company is or may be liable or that could adversely
affect the Company's Tax liability and, to the best of each Transferor's
knowledge, no Governmental Authority is contemplating such a Proceeding, (iii)
no statute of limitations with respect to any Tax for which the Company is or
may be liable has been waived or extended, (iv) there is no outstanding power of
attorney authorizing anyone to act on behalf of the Company in connection with
any Tax, Tax Return or Proceeding relating to any Tax, (v) there is no
outstanding closing agreement, ruling request, request to consent to a change in
method of accounting, subpoena or request for information with or by any
Governmental Authority with respect to the Company, its income, assets or
business, or any Tax for which the Company is or may be liable, (v) the Company
is not and has never been included in any consolidated, combined or unitary Tax
Return, (vi) the Company is not required to include any adjustment under Code
Section 481 (or similar provision of applicable law) in computing its taxable
income, and (vii) the Company is not a party to any Tax sharing or Tax
allocation agreement, arrangement or understanding. Schedule 4.17 hereto sets
forth a list of each jurisdiction in which the Company has filed or is required
to file a Tax Return, the type of Tax and type of Tax Return filed or required.
The Transferors have provided the Transferee with a copy of each Tax Return
filed by the Company or which includes the Company within the last three (3)
years.
(d) The Company has properly accrued and reflected on its
books and records all Taxes which have accrued but are not yet payable.
-14-
(e) The Company is not a "consenting corporation" within the
meaning of Section 341(f) of the Code (or any comparable state, local or foreign
Tax provision). The Company is not a party to any Contract or plan that,
individually or collectively, could give rise to any payment that would not be
deductible by reason of Section 162, 280G or 404 of the Code (or any comparable
state, local or foreign Tax provision). The Company does not have any
"tax-exempt bond financed property" or "tax-exempt use property" within the
meaning of Section 168(g) or 168(h), respectively, of the Code (or any
comparable state, local or foreign Tax provision). None of the assets of the
Company is required to be treated as being owned by any other Person pursuant to
the "safe harbor" leasing provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as in effect prior to the repeal of said provision (or any
comparable state, local or foreign Tax provision). The Company has never made or
been required to make an election under Section 338 of the Code.
4.18. Trade Rights. The Trade Rights included in the Assets are
adequate for the Company to conduct the Business as now operated. Except as set
forth on Schedule 4.18 hereto, the Company is not a licensor or a licensee in
respect of any such Trade Right, and no such Trade Right is the subject of any
federal, state or local registration or application for registration. No such
Trade Right conflicts with or infringes on, and there has been no
misappropriation or unauthorized use by the Company of, any Trade Right of any
other Person, and, to the best of each Transferor's knowledge, except as set
forth on Schedule 4.18, no Trade Right of any other Person conflicts with or
infringes on, and there has been no misappropriation or unauthorized use by any
other Person of, any Trade Right of the Company.
4.19. Employees; Labor Disputes. Except as set forth on Schedule
4.19 hereto, the Company is not a party to any collective bargaining, union
representation or other labor contract or arrangement; the Company has not
received any notice from any labor union or group of employees that such union
or group represents or intends to represent any of the employees of the Company;
and, to the best of each of the Company's knowledge, no strike or work
interruption by any of its employees is planned, under consideration, threatened
or imminent. At no time during the past five years has the Company experienced
any strikes, work stoppages or demands for collective bargaining by any union or
labor organization or any other group of employees, or been involved in or the
subject of any grievance, dispute or controversy by or with any union or labor
organization or any other group of employees or any pending or threatened
Proceeding based on or related to any employment grievance, dispute or
controversy or received any notice of any of the foregoing, other than
immaterial disputes with employees in the ordinary course of business.
4.20. Directors, Officers and Employees. Schedule 4.20 hereto is a
complete and correct list of the names and current annual salary, commission and
perquisite arrangements, written or unwritten, for each director and officer and
each other employee of the Company as of April 30, 1998, and the bonus, if any,
paid to each such director, officer or other employee during 1997 (other than
Xxxxxx X. Xxxxxx, with respect to whom such information has previously been
provided to the Transferee). Except as set forth on Schedule 4.20 hereto, to the
best of each Transferor's knowledge, no employee listed thereon intends to
terminate his employment
-15-
relationship with the Company. Except as set forth on Schedule 4.20 hereto, no
director, officer, stockholder or Affiliate of the Company or any relative,
associate or agent of such director, officer, stockholder or Affiliate has any
interest in any property owned by the Company or used in the Business or is a
party, directly or indirectly, to any contract for employment or otherwise or
any lease or has entered into any transaction with the Company, including,
without limitation, any contract for the furnishing of services by, or rental of
real or personal property from or to, or requiring payments to, any such
Affiliate. Schedule 4.20 hereto sets forth all memberships in country clubs or
other resort, recreational or entertainment facilities or organizations owned or
paid for, or the dues for which are borne, by the Company, and all vehicles,
apartments and other facilities owned, leased or operated by the Company and not
listed on any other Schedule hereto. The Company has delivered to the Transferee
complete and correct copies of all agreements referred to on Schedule 4.20
hereto, other than letters offering employment to certain past and present
employees of the Company pursuant to which the Company has no severance or
similar obligation to any such employees (other than draws and commissions
payable to salesmen).
4.21. Employee Benefits.
(a) Schedule 4.21 hereto sets forth a complete and correct
list of all Employee Plans either maintained or to which contributions have been
made by the Company (which for purposes hereof shall include any subsidiary or
trade or business that together with the Company or any of its subsidiaries
would be deemed a "single employer" within the meaning of Section 4001 of
ERISA).
(b) The Company has never maintained or contributed to any
Employee Plan subject to Title IV of ERISA. Except as set forth on Schedule 4.21
hereto, the Company has no liability on account of any Employee Plan, including
without limitation for (a) contributions accruing or due under any such Employee
Plan with respect to periods prior to the date hereof; (b) fiduciary breaches by
the Company, any employee of the Company or, to the best of each Transferor's
knowledge, any other Person under ERISA or any other applicable Law; or (c)
income Taxes by reason of non-qualification of any Employee Plan.
(c) Each of the Employee Plans which is intended to qualify
under Section 401(a) of the Code has received, favorable and unrevoked
determination letters from the Internal Revenue Service that it qualifies and is
exempt from taxation pursuant to Section 501(a) of the Code. The Company has
complied in all material respects with all requirements under Section 4980B of
the Code and any proposed or final regulations promulgated thereunder. With
respect to each Employee Plan, (a) the Company is in compliance in all material
respects with the requirements prescribed by all applicable Laws, including
without limitation ERISA and the Code, and Orders, and (b) there is no
Proceeding (other than routine claims for benefits) pending or, to the best of
each Transferor's knowledge, threatened, with respect to any Employee Plan or
against the assets of any Employee Plan.
-16-
(d) The Company neither contributes to nor maintains, nor
has ever contributed to nor maintained, any Employee Plan that is a defined
benefit plan under Section 3(35) of ERISA or a Multiemployer Plan.
(e) The Company has taken no action and has not made any
filing to terminate any of the Employee Plans. A partial termination has not
occurred with respect to any of the Employee Plans.
(f) No Employee Plan provides benefits, including without
limitation, death, health or medical benefits (whether or not insured), with
respect to current or former employees of the Company beyond their retirement or
other termination of service (other than (i) coverage mandated by applicable
law, (ii) deferred compensation benefits accrued as liabilities on the books of
the Company or of any Employee Plan, or (iii) benefits the full cost of which is
borne by the current or former employee (or his beneficiary)).
(g) Except as set forth on Schedule 4.21 hereto, with
respect to each such Employee Plan, the Company has delivered or made available
to Transferee copies of (a) the plan, related trust documents and amendments
thereto, (b) the most recent summary plan description, Internal Revenue Service
favorable determination letter and annual report, and (c) the most recent
actuarial valuation.
(h) No event has occurred for which, and there exists no
condition or set of circumstances under which, (a) the Company, in respect of
any Employee Plan, or any Employee Plan, could be subject to or incur any
material liability under any applicable Law, including without limitation ERISA
and the Code, or Order.
4.22. Suppliers and Customers. Schedule 4.22 hereto is a complete
and correct list of the names and addresses of the ten (10) largest suppliers,
ten (10) largest customers and ten (10) largest independent contractors of the
Company during the Company's fiscal year ended December 31, 1997 (the "1997
Fiscal Year") and the total sales to or purchases from such customers or
suppliers made by the Company, during the 1997 Fiscal Year. No supplier or
customer of the Company representing in excess of 5% of the Company's purchases
or sales during the 1997 Fiscal Year has advised the Company, formally or
informally, and no Transferor has any reason to believe, that any such supplier
or customer intends to terminate, discontinue or substantially reduce its
business with the Company (in the case of such customers, only with respect to
their existing contractual commitments with the Company) by reason of the
transactions contemplated by this Agreement or otherwise.
4.23. Insurance. Schedule 4.23 hereto is a complete and correct list
and a brief description (including the insurer, policy number, type of
insurance, coverage limits, deductibles, current premium, expiration dates and
any special cancellation conditions) of all insurance maintained by the Company.
Such insurance (a) provides coverage against hazards and risks customarily
insured against by comparable businesses, and (b) is in full force and effect.
To the
-17-
best of each Transferor's knowledge, no insurer intends to cancel or to refuse
to renew any insurance listed on Schedule 4.23 hereto and there is no basis for
any such cancellation or non-renewal. No insurer has disputed or, to the best of
each Transferor's knowledge, intends to dispute any claim made under any policy
listed on Schedule 4.23 hereto, and, to the best of each Transferor's knowledge,
no event has occurred and no circumstance exists which would excuse the
performance by any insurer of any of its obligations under any such policy with
respect to such claim. The Company has never been refused any insurance for
which it has applied, nor has any insurance carried by the Company been canceled
(other than at the Company's request).
4.24. Brokers or Finders. Neither the Company nor any Transferor has
employed or engaged any Person to act as a broker, finder or other intermediary
in connection with the transactions contemplated hereby, and no Person is
entitled to any fee, commission or other compensation from the Transferee or the
Company relating to any such employment or engagement by the Company or any
Transferor.
4.25. No Misrepresentation by the Transferors. No representation or
warranty by any Transferor in this Agreement or in any instrument, certificate,
schedule or other document furnished pursuant hereto or in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements or facts
contained herein or therein not misleading. No Transferor knows of any fact,
event or circumstance that has occurred or exists, or that is likely to occur or
exist, and that has had or may have a material adverse effect on the Business,
the Assets or the financial or other condition of the Company, except such
facts, events or circumstances as have been disclosed in this Article 4.
4.26. Accounting Matters. To the best knowledge of the Transferors,
neither the Company nor any of its Affiliates has taken or agreed to take any
action that (without giving effect to any actions taken or agreed to be taken by
the Transferee or any of its Affiliates) would prevent the Transferee from
accounting for the Reorganization as a "pooling-of-interests" for accounting
purposes.
4.27. Year 2000. All of the Company's equipments systems, software
(other than shrinkwrap software available to retail customers generally), data
and databases (other than data provided to it by its customers), and
applications designed for each of its customers (to the extent represented by
the Company in the applicable contract with such customer) (collectively, the
"Systems"), is Year 2000 Compliant (as hereinafter defined). For purposes of
this Agreement, "Year 2000 Compliant" shall mean: (a) the occurrence in or use
by the Systems of dates before, on or after January 1, 2000 will not adversely
affect the performance of the Systems with respect to date-dependent data,
computations, output or other functions, including, without limitation,
calculating, comparing and sequencing; (b) the Systems will not abnormally end
or provide invalid or incorrect results as a result of date-dependant data; and
(c) the Systems can accurately recognize, manage, accommodate and manipulate
date-dependant data, including, without limitation, single century formulas and
leap years.
-18-
4.28. Acquisition for Investment. Each Transferor is acquiring the
Icon Shares for his own account, for investment and with no present intention of
distributing, reselling or otherwise disposing of the Icon Shares. Each
Transferor is a sophisticated investor and he either (i) has such knowledge and
experience in financial and business matters such that he is capable of
evaluating the merits and risks of his investment in the Icon Shares, or (ii)
has obtained independent professional financial advice sufficient to enable him
to evaluate the merits and risks of his investment in the Icon Shares.
(B) Each Identified Transferor hereby represents and warrants, solely as
to himself or herself, to the Transferee as follows:
4.29. Power and Authority of the Identified Transferors. Such
Identified Transferor has full legal capacity, power and authority to execute
and deliver each of the Transaction Documents and to assume and perform his
obligations hereunder and thereunder. Each of the Transaction Documents has been
duly executed and delivered by such Identified Transferor, and is a legally
valid and binding obligation of such Identified Transferor, enforceable against
such Identified Transferor in accordance with its terms, subject to (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) equitable
principles limiting the availability of certain remedies. The execution and
delivery of each of the Transaction Documents do not, and the performance by
such Identified Transferor of his obligations hereunder and thereunder, will
not, conflict with or result in any breach of any condition or provision of, or
constitute a default under, or create or give rise to any adverse right of
termination or cancellation by, or excuse the performance of, any other Person
under, any Contract, or result in the creation or imposition of any Lien upon
any of the Frontier Shares owned by such Identified Transferor under the terms
of, any Contract, Lien or Order to which such Identified Transferor is a party
or is subject or which is or purports to be binding upon him.
4.30. Consents of the Identified Transferors. Except as set forth on
Schedule 4.30 hereto, no Consent of, or notice to, any Person is required as to
such Identified Transferor in connection with such Identified Transferor's
execution and delivery of any of the Transaction Documents or the performance of
such Identified Transferor's obligations hereunder and thereunder, where the
failure to obtain that Consent or give that notice would have an adverse effect
upon the Company, the Assets or the Business or prohibit, invalidate, or make
unlawful, in whole or in part, any of the Transaction Documents, or the carrying
out of the provisions hereof or thereof or the transactions contemplated hereby
or thereby.
4.31. Litigation Affecting the Identified Transferors. No Proceeding
is pending or, to the best of such Identified Transferor's knowledge, threatened
against or affecting such Identified Transferor in which an unfavorable outcome
would have an adverse effect upon the Company, the Business or the Assets or
prohibit, invalidate, or make unlawful, in whole or in part, any of the
Transaction Documents, or the carrying out of the provisions hereof or thereof
or the transactions contemplated hereby or thereby. Such Identified Transferor
is not in default in
-19-
respect of any Order, nor is there any such Order enjoining such Identified
Transferor in respect of, or the effect of which is to prohibit or curtail such
Identified Transferor's performance of, his obligations under any of the
Transaction Documents.
4.32. Ownership of Frontier Shares by the Identified Transferors.
Such Identified Transferor owns the Frontier Shares set forth opposite his name
on Schedule 2.1 hereto beneficially and of record, free and clear of all Liens
whatsoever.
4.33. Brokers or Finders of the Identified Transferors. Such
Identified Transferor has not employed or engaged any Person to act as a broker,
finder or other intermediary in connection with the transactions contemplated
hereby, and no Person is entitled to any fee, commission or other compensation
from the Transferee or the Company relating to any such employment or engagement
by such Identified Transferor.
4.34. Passive Stockholders. Such Identified Transferor has at all
times acted as a passive investor and stockholder in the Company, and has never
been involved in any aspect of the management or operations of the Company or
the conduct of the Business.
4.35. Acquisition for Investment. Such Transferor is acquiring the
Icon Shares for his own account, for investment and with no present intention of
distributing, reselling or otherwise disposing of the Icon Shares. Such
Transferor is a sophisticated investor and he either (i) has such knowledge and
experience in financial and business matters such that he is capable of
evaluating the merits and risks of his investment in the Icon Shares, or (ii)
has obtained independent professional financial advice sufficient to enable him
to evaluate the merits and risks of his investment in the Icon Shares.
5. The Transferee's Representations and Warranties. The Transferee
hereby represents and warrants to each Transferor as follows:
5.1. Organization. The Transferee is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full power and authority to own its assets and carry on its business in
the manner and places where such assets are now owned and such business is now
being conducted. Complete and correct copies of the Transferee's Certificate of
Incorporation, including all amendments thereto, certified by the Secretary of
State of the State of Delaware, and the Transferee's By-laws, including all
amendments thereto, certified by the Secretary of the Transferee, have been
delivered to Transferor. The Transferee is Licensed to transact business as a
foreign corporation in each jurisdiction where such License is required under
applicable law in light of the location or character of its assets or the
operation of its business, except where the failure to be so Licensed would not
have a material adverse effect on the Transferee.
5.2. Power and Authority. The Transferee has full corporate power
and authority to execute and deliver each of the Transaction Documents and to
assume and perform its
-20-
obligations hereunder and thereunder. The execution and delivery of each of the
Transaction Documents by the Transferee and the performance of its obligations
hereunder and thereunder have been duly authorized by all requisite corporate
action on the part of the Transferee. Each of the Transaction Documents has been
duly executed and delivered by the Transferee, and is a legally valid and
binding obligation of the Transferee, enforceable against the Transferee in
accordance with its terms, subject to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) equitable principles limiting
the availability of certain remedies. The execution and delivery of each of the
Transaction Documents do not, and the performance by the Transferee of its
obligations hereunder and thereunder will not, violate any provision of the
Transferee's Certificate of Incorporation or By-laws and do not and will not
conflict with or result in any breach of any condition or provision of, or
constitute a default under, or create or give rise to any adverse right of
termination or cancellation by, or excuse the performance of, any other Person,
or result in the creation or imposition of any Lien upon the Transferee or any
of its assets or the acceleration of the maturity or date of payment or other
performance of any obligation of the Transferee by reason of the terms of, any
agreement, indenture, instrument, license, lease, Lien or Order to which the
Transferee is a party or is subject or which is or purports to be binding upon
it.
5.3. Consents. Except as set forth on Schedule 5.3 hereto, no
Consent of, or notice to, any Person is required as to the Transferee in
connection with the Transferee's execution and delivery of any of the
Transaction Documents or the performance of the Transferee's obligations
hereunder and thereunder, where the failure to obtain that Consent or give that
notice would have an adverse effect upon the Transferee or its assets or
business or prohibit, invalidate, or make unlawful, in whole or in part, any of
the Transaction Documents, or the carrying out of the provisions hereof or
thereof or the transactions contemplated hereby or thereby.
5.4. Litigation. No Proceeding is pending or, to the best of the
Transferee's knowledge, threatened against or affecting the assets, operations
or financial or other condition of the Transferee in which an unfavorable Order
would prohibit, invalidate, or make unlawful, in whole or in part, any of the
Transaction Documents, or the carrying out of the provisions hereof or thereof
or the transactions contemplated hereby or thereby. The Transferee is not in
default in respect of any Order, nor is there any such Order enjoining the
Transferee in respect of, or the effect of which is to prohibit or curtail the
Transferee's performance of, its obligations under any of the Transaction
Documents.
5.5. Capitalization. The authorized capital stock of the Transferee
consists of 50,000,000 shares of Icon Common Stock, and 1,000,000 shares of
preferred stock, par value $.01 per share ("Icon Preferred Stock"), of which, at
March 31, 1998, 15,025,285 shares of Icon Common Stock and no shares of Icon
Preferred Stock were issued and outstanding. The Icon Shares have been duly
authorized and, upon the delivery at the Closing of the Icon Shares to the
Transferors and the Escrow Agent, as applicable, in exchange for the Frontier
Shares, will be validly issued, fully paid and non-assessable, with no personal
liability attaching to the ownership thereof.
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5.6. Financial Statements and Other Corporate Information. The
Transferee has furnished to the Transferors copies of the Annual Report on Form
10-K of the Transferee for the fiscal year ended December 31, 1997 and Quarterly
Report on Form 10-Q of the Transferee for the quarter ended March 31, 1998, each
as filed with the SEC. The financial statements of the Transferee contained in
the aforesaid report fairly presents the financial position of the Transferee as
at the date specified and the results of operations and cash flows of the
Transferee for the period specified, in conformity with generally accepted
accounting principles consistently applied (except as described in the notes
thereto). Such report, as of the respective date on which it was filed with the
SEC, did not contain any untrue statement of a material fact or fail to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
5.7. No Material Adverse Change. Since December 31, 1997, there has
been no material adverse change in the condition (financial or other), business,
assets or results of operations of the Transferee and no event has occurred that
has been or is required to be reported in a Current Report on Form 8-K and filed
with the SEC.
5.8. No Registration Required. The issuance of the Icon Shares
pursuant to this Agreement will be exempt from registration under the Securities
Act and applicable state securities laws.
5.9. Acquisition for Investment. The Frontier Shares acquired by
the Transferee pursuant to this Agreement are being acquired for investment only
and not with a view to the distribution thereof, and the Transferee will not
offer to sell or otherwise dispose of the Frontier Shares so acquired by it in
violation of any of the registration requirements of the Securities Act or any
applicable state securities or blue sky laws.
5.10. Listing of Icon Common Stock. The shares of Icon Common Stock
currently outstanding currently are listed on the NASDAQ National Market and no
Proceeding is pending or, to the Transferee's knowledge, threatened seeking to
delist the Icon Common Stock from such market.
5.11. Brokers or Finders. Except for The Xxxxx Group, the Transferee
has not employed or engaged any Person to act as a broker, finder or other
intermediary in connection with the transactions contemplated hereby, and no
Person is entitled to any fee, commission or other compensation from the
Transferee or the Company relating to any such employment or engagement by the
Transferee, other than The Xxxxx Group and with respect to which the Transferee
shall be solely responsible.
6. Covenants.
6.1. Best Efforts. From and after the date hereof and until the
Closing, the Transferee and the Transferors shall use their respective best
efforts, and shall cooperate with
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each other, to cause the consummation of the transactions contemplated hereby in
accordance with the terms and conditions hereof.
6.2. Company to Conduct Business in the Ordinary Course. From and
after the date hereof and until the Closing, except as otherwise provided
elsewhere herein or as the Transferee may otherwise consent (which consent shall
not be unreasonably withheld), the Transferors shall cause the Company:
(a) to conduct the Business in ordinary course;
(b) to preserve the Business and Assets and use its best
efforts to maintain the Company's relationship with customers and other Persons
with which it has business dealings;
(c) not to sell, lease, transfer or dispose of any Asset,
other than sales of merchandise from inventory in the ordinary course of
business, or terminate any material Contract;
(d) to use its best efforts to maintain all Licenses and
Consents listed on Schedule 4.16 hereto;
(e) to use its best efforts to maintain all insurance listed
on Schedule 4.23 hereto in full force and effect;
(f) except as required under a Contract, not to increase the
compensation or other employment benefits payable to or for the benefit of any
employee of the Company; provided, however, the Company may accrue bonuses to
employees in an aggregate amount not to exceed $475,000 and to be paid upon the
terms and conditions previously disclosed to the Transferee;
(g) not to amend its Certificate of Incorporation or
By-laws;
(h) not to merge or consolidate with any other Person or
effect any capital reorganization;
(i) not to declare, set aside or pay any dividend or make or
commit to make any other distribution in respect of the Frontier Shares, except
for distributions to each Transferor in an amount sufficient to pay estimated
Taxes attributable to such Transferor's pro rata share of the Company's income;
(j) not to issue (i) any shares of any class of capital
stock of the Company, or (ii) any securities convertible into or otherwise
providing any Person with the right to acquire any shares of any class of
capital stock of the Company; and
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(k) not to acquire the business or assets, substantially as
a whole, of any other Person or make any capital expenditure in excess of
$25,000.
6.3. Further Information. From and after the date hereof and until
the Closing, the Transferors shall furnish to the Transferee such information
with respect to the Company, as the Transferee may from time to time reasonably
request and shall permit the Transferee and its authorized representatives
access during regular business hours and upon reasonable notice to conduct, at
the Transferee's sole expense, a physical inventory of the Assets, to inspect
the Real Property, to examine the books and records of the Company (which the
Company shall assemble and maintain at its principal executive offices) and to
make inquiries of responsible Persons designated by the Transferors with respect
thereto; provided that any information so disclosed to the Transferee shall not
constitute an additional representation or warranty of the Transferors beyond
those expressly set forth in Article 4; and provided further that all such
information shall be subject to Section 6.5 hereof.
6.4. Public Announcements. From and after the date hereof and until
the Closing, neither the Transferee, on the one hand, nor any Transferor, on the
other hand, shall make any press release or other public announcement with
respect to this Agreement or the transactions contemplated hereby, without the
prior written consent of the other party (which consent shall not be
unreasonably withheld), unless such announcement is required by Law (including,
without limitation, as to the Transferee, any notice or announcement in
accordance with any applicable federal or state securities Law), in which case
the other party shall be given notice of such requirement prior to such
announcement and the parties shall consult with each other as to the scope and
substance of such disclosure.
6.5. Confidentiality.
(a) The Transferee acknowledges that all information
relating to or concerning the Business and affairs of the Company, including,
without limitation, all product information, customer and supplier lists,
marketing and sales data, personnel and financing and Tax matters is proprietary
to the Company and that its confidentiality is absolutely essential to the
operation of the Business. Accordingly, from and after the date hereof and until
the Closing (as well as following the proposed Closing Date, in the event that
this Agreement is terminated pursuant to Section 10 hereof), the Transferee
shall not use or disclose to any Person any such information, without Xxxxxx X.
Xxxxxx'x or the Company's prior written consent, except as may be necessary in
order to effect the transactions contemplated hereby (provided that any Person
to whom any such information is disclosed shall agree in writing to be bound by
the provisions of this Section 6.5(a)) or as may be required by Law (in which
case the Transferee shall promptly give notice to the Company and the
Transferors of any demand, subpoena, order or legal process requiring disclosure
so that the Company and the Transferors may seek a protective order or other
confidential treatment of such information), unless, with respect to disclosure
of such information to a third-party, the Transferee can demonstrate that such
information was already
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publicly available or known to such Person without any breach or violation of
any confidentiality agreement for the benefit of the Transferors or the Company;
and
(b) The Company and each Transferor acknowledge that all
information relating to or concerning the business and affairs of the
Transferee, including, without limitation, all product information, customer and
supplier lists, marketing and sales data, personnel and financing and Tax
matters is proprietary to the Transferee and that its confidentiality is
absolutely essential to the operation of the Transferee's business. Accordingly,
from and after the date hereof and until the Closing (as well as following the
Closing, in the event that this Agreement is terminated pursuant to Section 10
hereof), neither the Company nor any Transferor shall use or disclose to any
Person any such information, without the Transferee's prior written consent,
except as may be necessary in order to effect the transactions contemplated
hereby (provided that any Person to whom any such information is disclosed shall
be bound by the provisions of this Section 6.5(b)) or as may be required by Law
(in which case the Company or such Transferor, as the case may be, shall
promptly give notice to the Transferee of any demand, subpoena, order or legal
process requiring disclosure so that the Transferee may seek a protective order
or other confidential treatment of such information), unless, with respect to
disclosure of such information to a third-party, the Company or such Transferor,
as the case may be, can demonstrate that such information was already known to
such Person without any breach or violation of any confidentiality agreement for
the benefit of the Transferee.
6.6. Lien Searches. Prior to the Closing, the Transferors shall
conduct, or cause to be conducted by a nationally recognized service company, as
of a date or dates as late as reasonably practicable prior to the Closing Date,
a search or survey of Liens, including without limitation security interests and
other notice filings under the Uniform Commercial Code, Tax Liens and judgment
Liens, of record in each jurisdiction where Assets are located or in which the
Company conducts the Business, upon, against or affecting the Assets.
6.7. Termination of SAR Plan. Prior to or concurrently with the
Closing, the Transferors shall cause the Company to terminate its Stock
Appreciation Rights Plan (the "SAR Plan") and make the required payments to
participants thereunder in an aggregate amount not to exceed $10,000 (the
"Closing SAR Payments").
6.8. Tax Returns and Payments.
(a) Prior to the Closing, no Transferor shall take or fail
to take any action or permit the Company to take or fail to take any action
which could result in the termination of any "S" corporation election (or
similar election) of the Company. The Transferors shall duly file or cause to be
filed on a timely basis all Tax Returns of, relating to or which include the
Company, its income, assets or business, for all Pre-Closing Periods. Such Tax
Returns shall be true, correct and complete, shall be filed on a basis
consistent with prior Tax Returns of or relating to the Company, its income,
assets or business, and shall not make, amend or terminate any election by the
Company (or to which the Company is subject) or change any Tax accounting
method,
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practice or procedure of the Company, without the Transferee's prior written
consent. The Transferors shall give the Transferee a copy of each such Tax
Return for its review with sufficient time for comments and corrections prior to
filing. The Transferors shall cause the Company to timely and properly withhold
and collect, pay over and report all Taxes required to be withheld or collected
by the Company on or before the Closing Date. After the Closing, the Transferors
and the Transferee shall cooperate with each other (and with the Company) at all
reasonable times in connection with the preparation and filing of any Tax
Return, making any determination under this Agreement and verifying issues
relating to Taxes.
(b) Subject to the provisions of Section 11.5 hereof, the
Transferors shall be responsible for and shall timely pay all Taxes, including,
without limitation, any Taxes resulting from a Proceeding for which the Company
is or may be liable with respect to any Pre-Closing Period, except to the extent
that such amount has been accrued and provided for in the Company's financial
statements through the Closing Date. In addition, subject to the provisions of
Sections 6.8(g) and 6.8(h) hereof, the Transferors shall be entitled to receive
all refunds of Taxes with respect to any Pre-Closing Period, to the extent that
such Taxes were originally paid by the Transferors. Subject to the provisions of
Section 11.5 hereof, the Transferors shall indemnify the Company, the Transferee
and their respective Affiliates, as the case may be (collectively, the
"Taxpayer"), and hold the Taxpayer harmless, on an after-Tax basis, from and
against any (i) Taxes with respect to a Pre-Closing Period for which the
Taxpayer is or may be liable, (ii) the effect, if any, on the Taxpayer in any
period that ends after the Closing Date of an adjustment with respect to a
Pre-Closing Period and (iii) fees and expenses (including, without limitation,
reasonable attorneys' fees) incurred by the Transferee, the Company or their
Affiliates in connection therewith or in enforcing its rights or collecting any
amounts due hereunder. This indemnity shall apply notwithstanding any
investigation made by the Transferee in connection with the transactions
contemplated by this Agreement or, its receipt, examination, filing of or
commenting on any Tax Return, and shall be separate and independent of any other
indemnity between the parties hereto.
(c) The Transferee shall promptly forward to the Transferors
a copy of all written communications from any Governmental Authority received by
the Taxpayer relating to any Pre-Closing Period. The Transferors shall promptly
forward to the Transferee a copy of all written communications from any
Governmental Authority received by any Transferor relating to any Pre-Closing
Period for which the Taxpayer is or may be liable.
(d) The Transferee shall not settle or make any payment of
any amount claimed to be due with respect to a proposed adjustment described
above for at least 15 days after giving notice thereof to the Transferors under
Section 6.8(c) hereof. If, within such 15-day period, the Transferee receives
from a majority in interest of the Transferors in writing a request that the
proposed adjustments be contested, which includes a reasonable basis in fact or
in law for such contest, and acknowledges their liability under this indemnity,
the Taxpayer shall contest such proposed adjustments in good faith and agrees to
consult with such Transferor regarding the contest and to keep such Transferor
informed as to its progress, all at such Transferor's expense.
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The Transferors shall cooperate with the Taxpayer in connection with any
Proceeding. The Transferors may participate in the Proceeding at their own
expense; provided, however, that the Taxpayer shall retain full control over the
Proceeding. The decision of a court of competent jurisdiction as to the outcome
of such contest which has become final shall be conclusive and binding on the
parties. The Taxpayer shall not be required to appeal.
(e) Any Taxes for a period which includes but does not end
on the Closing Date shall be allocated between the Pre-Closing Period and the
balance of the period in accordance with this Section 6.8(e). To the extent
permitted under applicable Law, the parties shall elect to treat the Tax period
as ending at the close of business on the Closing Date. Where applicable Law
does not permit such an election to be made, the taxable income or other Tax
base for the entire period shall be allocated between the Pre-Closing Period and
the balance of the period on the basis of an interim closing of the books at the
close of the Closing Date, except that exemptions, allocations and deductions
calculated on an annual basis shall be apportioned on the basis of the relative
number of days in the Pre-Closing Period and in the balance of the period.
Notwithstanding the foregoing, any real estate or personal property Taxes shall
be allocated on the basis of the relative number of days in the Pre-Closing
Period and in the balance of the applicable period.
(f) The Transferors shall timely file all required stock
transfer, real or personal property transfer, sales, use and other transfer Tax
Returns and pay when due any such Taxes in connection with the transactions
contemplated by this Agreement.
(g) Notwithstanding anything to the contrary contained in
Section 6.8(b) hereof, (i) to the extent that the aggregate amount of all
dividends and other distributions made by the Company to the Transferors during
the period commencing on January 1, 1998 and continuing through and including
the Closing Date (the "Stub Period"), excluding the distribution in the amount
of $201,111 made during January 1998, is less than 43.8% of the Company's
Taxable Income (as defined below) with respect to the Stub Period (the
"Deficiency Amount"), the Transferee shall cause the Company to, following the
Closing, pay to the Transferors the Deficiency Amount, and (ii) to the extent
that the aggregate amount of all dividends and other distributions made by the
Company to the Transferors during the Stub Period is greater than 43.8% of the
Company's Taxable Income with respect to the Stub Period (the "Surplus Amount"),
the Transferors shall pay to the Company the Surplus Amount, all in accordance
with the provisions of Section 6.8(h).
(h) Following the Closing, Ernst & Young LLP ("E&Y") shall,
at the sole cost and expense of the Company, prepare the Company's Federal
income tax return with respect to the Stub Period (the "Stub Period Tax Return")
and a calculation of any Deficiency Amount or Surplus Amount, as the case may
be. The Transferors shall promptly thereafter deliver a copy of the Stub Period
Tax Return and the calculation of the Deficiency Amount or Surplus Amount to the
Transferee. The Transferee shall have a period of thirty (30) days following the
Transferees receipt thereof to deliver to the Transferors written notice of any
objection to the Deficiency
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Amount or the Surplus Amount determined by E&Y. In the event of such a dispute,
the Transferors and the Transferee shall attempt to reconcile their differences
and any resolution by them as to any disputed amount shall be final, binding and
conclusive on the parties. If the Transferors and the Transferees are unable to
reach a resolution as to any disputed amount within thirty (30) days of the date
of receipt by the Transferors of the written notice of dispute from the
Transferee, the items remaining in dispute shall be submitted for resolution to
an independent "big six" certified public accounting firm (other than E&Y or
Price Waterhouse LLP) upon which the Transferors and the Transferee shall
mutually agree (the "Arbitrator"), who shall, within thirty (30) days of such
submission, determine and report to the Transferors and the Transferee upon such
remaining disputed items, and such report shall be final, binding and conclusive
on the parties hereto. The fees and disbursements of the Arbitrator shall be
borne equally by the Transferors, on the one hand, and the Transferee, on the
other hand. Except as otherwise provided in the first sentence of this Section
6.8(h), the Transferors and the Transferee shall each bear the fees and
disbursements of their own accountants and other advisors in connection with the
matters that are the subject of this Section 6.8(h). Within ten (10) days
following the final determination of the Deficiency Amount or Surplus Amount, as
the case may be, after resolution of any disputes as provided above, the
Transferee shall cause the Company to pay the Deficiency Amount to the
Transferors, or the Surplus Amount shall be paid by the Transferors to the
Transferee in accordance with instructions provided by the recipient(s) at that
time. For purposes hereof, the term "Taxable Income" shall mean the Company's
taxable income as indicated on the Stub Period Tax Return.
6.9. Pooling and Tax-Free Reorganization Treatment. Neither the
Company nor any of the Transferors shall intentionally take or cause to be taken
any action, whether or not at, prior to or after the Closing, which would
disqualify the Reorganization as a "pooling of interests" for financial
accounting purposes or as a tax-free "reorganization" within the meaning of
Section 368(a) of the Code.
6.10. No-Shop. From and after the date hereof and continuing until
the Closing or the earlier termination of this Agreement pursuant to Section 10
hereof, the Company and each Transferor hereby covenants and agrees that it will
not, and will not authorize any officer, director, employee or agent of the
Company or any Affiliate of the Company to, or authorize any investment banker,
attorney, accountant or other representative retained by the Company, any
Transferor or any Affiliate of the Company to, directly or indirectly, without
the written consent of the Transferee, solicit or encourage, furnish any
information with respect to the Company to any Person in connection with, or
engage in any discussions with any other Person in connection with any proposal
for a merger or other business combination involving the Company or for the
acquisition of a substantial equity interest in the Company or a substantial
portion of the Company's assets, other than as contemplated by this Agreement.
The Company and each Transferor hereby covenants and agrees that it will
promptly advise the Transferee of any offer, solicitation or request for
information received by it from any Person, including the identity of the Person
making such offer, solicitation or request and the nature and terms (if any) of
any such offer, solicitation or request. Additionally, the Company will
immediately request in writing that
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all materials concerning the Company previously provided to any Person in
connection with any such negotiations or discussions be returned to the Company
as soon as possible. Without in any way limiting the generality of the
foregoing, in the event that (a) this Agreement is terminated pursuant to
Article 10 hereof and the Transferee was not then in breach or default under
this Agreement, and (b) within eight (8) months following the date hereof,
either the Company or any Transferor enters into a definitive agreement with
respect to any transaction or series of related transactions relating to the
acquisition of a majority of the shares of the Company's capital stock or a
majority of the Company's assets or business, whether through direct purchase,
merger, consolidation or other business combination (a "Sale Transaction"),
then, immediately upon the consummation of such Sale Transaction, the
Transferors shall pay, or cause the Company to pay, to the Transferee a sum
equal to the greater of (i) $1,000,000 or (ii) 50% of the amount (if any) by
which the purchase price paid in connection with such Sale Transaction exceeds
$12,000,000.
6.11. Financial Statements. From and after the date hereof and until
the Closing, the Transferors shall cause the Company to prepare and deliver to
the Transferee, within ten (10) days of the end of each month, monthly financial
statements concerning the Company consistent with the manner in which such
statements have been customarily prepared by the Company prior to the date
hereof.
6.12. Certain Lease Obligations. From and after the Closing, the
Transferee shall indemnify and defend Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxxx
(collectively, the "Coopers") against, and hold the Coopers harmless from, any
damage, loss, liability, obligation, or expense (including, without limitation,
reasonable attorneys' fees and disbursements) which the Coopers may suffer or
incur based upon or resulting from the failure of the Company to satisfy any of
its obligations under any of the equipment leases set forth on Schedule 6.12
hereto (the "Identified Leases"); provided, however, that the foregoing
indemnification with respect to any Indemnified Lease shall not apply to the
extent that the Company is in default under such Indemnified Lease as of the
Closing Date. In addition, following the Closing, the Transferee shall use its
commercially reasonable efforts to cause the Coopers to be released as soon as
reasonably practicable from all personal guaranties they have previously
provided in favor of the applicable lessors with respect to the Identified
Leases.
7. Conditions to Closing.
7.1. Conditions of the Transferee's Obligation to Close. The
obligation of the Transferee to consummate the Reorganization in accordance
herewith shall be subject to the satisfaction (or waiver) prior to or at the
Closing of each of the following conditions:
(a) the representations and warranties made by the
Transferors herein shall be true and correct in all material respects on and as
of the Closing Date (provided that the Transferee's participation in the Closing
shall not in any way be deemed to waive any claim it may have for breach of any
representation or warranty whether or not such breach was material);
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(b) the Transferors shall have, in all material respects,
performed and complied with all obligations and conditions to be performed or
complied with by them hereunder;
(c) no Order or Law shall be in effect which prohibits the
Transferee from consummating the transactions contemplated hereby;
(d) each Consent of, or notice to, any Governmental
Authority or other Person required to be obtained or made by the Company or any
Transferor for the consummation of the transactions contemplated hereunder and
for the Transferee to conduct the Business shall have been obtained or given;
(e) the Assets shall be free and clear of all Liens;
(f) there shall not have been any material adverse change in
the Business since the date of this Agreement;
(g) the Transferors shall have delivered to the Transferee a
letter, dated the Closing Date, from Ernst & Young LLP as to their concurrence
with management of the Company to the effect that if the Reorganization is
consummated in accordance with the terms and provisions of this Agreement the
Reorganization shall qualify for "pooling of interests" accounting treatment;
(h) the Company shall have terminated the SAR Plan, made the
Closing SAR Payments and delivered to the Transferee such written evidence
thereof as the Transferee shall reasonably request; and
(i) the Transferors shall execute and/or deliver at the
Closing all of the documents so to be executed and/or delivered by the
Transferors pursuant to Section 3.2 hereof.
7.2. Conditions of the Transferors' Obligation to Close. The
obligation of the Transferors to consummate the sale of the Shares in accordance
herewith shall be subject to the satisfaction (or waiver) prior to or at the
Closing of each of the following conditions:
(a) the representations and warranties made by the
Transferee herein shall be true and correct in all material respects on and as
of the Closing Date (provided that the Transferors' participation in the Closing
shall not in any way be deemed to waive any claim any of them may have for
breach of any representation or warranty whether or not such breach was
material);
(b) the Transferee shall have, in all material respects,
performed and complied with all obligations and conditions to be performed or
complied with by it hereunder;
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(c) no Order or Law shall be in effect which prohibits the
Transferors from consummating the transactions contemplated hereby; and
(d) the Transferee shall execute and/or deliver at the
Closing all the documents so to be executed and/or delivered by Transferor
pursuant to Section 3.3 hereof.
8. Investment Undertaking; Registration Rights.
8.1. Investment Undertaking. Each Transferor confirms his
understanding that the Icon Shares to be issued to him pursuant to this
Agreement will be "restricted securities" within the meaning of Rule 144 of the
General Rules and Regulations under the Securities Act, and acknowledges that he
will acquire such shares for his own account for investment and not with a view
to the distribution thereof. Each Transferor agrees that he will not sell,
transfer or otherwise dispose of any of such shares unless (a) a registration
statement under the Securities Act with respect to such shares has become, and
is at the time of disposition, effective or (b) in the opinion of counsel for
the Transferee or other counsel satisfactory to the Transferee (the Transferee
hereby acknowledging that, for purposes of this Section 8.1, Klehr, Harrison,
Xxxxxx, Xxxxxxxxx & Xxxxxx LLP shall be deemed satisfactory counsel) the
proposed disposition may be made in accordance with the provisions of such Rule
144 or another exemption from registration without constituting a violation of
the Securities Act or of any other applicable federal or state securities laws.
Except as provided in the immediately preceding sentence and in the Escrow
Agreement and the Affiliate Agreement, however, nothing contained in this
Agreement shall restrict the rights of any Transferor to enter into any
transaction following the Closing with respect to the Icon Shares, including,
without limitation, a "collar", "hedge" or similar transaction. The Transferee
acknowledges and agrees that, subject to the provisions of the Affiliate
Agreement, the pledge of Icon Shares by any Transferor shall not constitute a
violation of this Agreement. Each Transferor further agrees that the Transferee
may place on all certificates representing the Icon Shares delivered to him
pursuant to this Agreement (or shares issued in replacement thereof) a legend to
the effect that the shares represented by such certificates have not been
registered under the Securities Act and that the sale, transfer or other
disposition of such shares is subject to the provisions of the Securities Act
and of this Agreement, a copy of which shall be available for inspection at the
office of the Transferee in Weehawken, New Jersey; provided, however, such
legend shall state that pledges of the Icon Shares represented thereby are
permitted, subject to the restrictions contained in the Affiliate Agreement.
8.2. Registration Rights. Each of the Transferors shall have
registration rights with respect to the Icon Shares issued to the Transferors
hereunder as set forth in the Registration Rights Agreement.
9. Additional Covenants of the Transferors and the Transferee.
9.1. Confidentiality. From and after the Closing Date, each
Transferor shall keep absolutely confidential all information relating to or
concerned with the Company, including,
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without limitation, all Trade Rights, products and services information,
customer and supplier lists, marketing and sales data, personnel and financing
and Tax matters. Each Transferor acknowledges that the confidentiality of all
such information is absolutely essential to the operation of the Business. No
Transferor shall, at any time after the date hereof, use or disclose to any
Person any such information, without the Transferee's prior written consent,
except as may be required by Law (in which case such Transferor shall promptly
give notice to the Transferee of any demand, subpoena, order or legal process
requiring disclosure so that the Transferee may seek a protective order or other
confidential treatment of such information), unless, with respect to disclosure
of such information to a third-party, such Transferor can demonstrate that such
information was already in the public domain or known to such Person without any
breach or violation of any confidentiality agreement for the benefit of the
Transferee.
9.2. Listing of Icon Shares. Promptly following the Closing, the
Transferee shall take all action necessary to qualify the Icon Shares for
listing on The Nasdaq Stock Market's National Market. The Transferee shall use
its best efforts to maintain the listing of the Icon Common Stock on such market
or such other national stock exchange or over-the-counter market as the
Transferee's Board of Directors shall determine.
10. Termination.
10.1. Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by the mutual agreement of the Transferee and all of the
Transferors;
(b) by the Transferee or the Transferors (if such party is
not in breach of or default under this Agreement) giving written notice to such
effect to the other party if the Closing shall not have occurred on or before
June 30, 1998, or such later date as the parties shall have agreed upon prior to
the giving of such notice; or
(c) by either the Transferee or the Transferors in the event
of a material breach by or default of the other party hereto.
10.2. Effect of Termination. Upon termination of this Agreement
pursuant to Section 10.1 hereof, all obligations of the parties shall terminate
except those under Sections 6.5 and 6.10 and Articles 11 and 12 hereof; provided
that no such termination shall relieve any Transferor of any liability to the
Transferee, or the Transferee of any liability to any Transferor, by reason of
any breach of or default under this Agreement.
11. Indemnification.
11.1. Indemnification by Certain of the Transferors. Each
Transferor, other than the Identified Transferors, shall indemnify and defend
the Transferee against, and hold the Transferee
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harmless from, any damage (including, without limitation, any diminution in
value), loss, liability, obligation or expense (including, without limitation,
reasonable attorneys' and consultants' fees and disbursements) which the
Transferee or any stockholder, director, officer, employee or agent of the
Transferee may suffer or incur, including, without limitation, incidental to any
claim or any Proceeding against the Transferee or any stockholder, director,
officer, employee or agent of the Transferee, based upon or resulting from:
(a) the failure of any representation or warranty made by
any Transferor to be true on the date hereof and on the Closing Date (provided,
however, that the Transferors shall not be required to indemnify the Transferee
for any amount of a claim related to a product liability to the extent the
Transferee receives insurance proceeds with respect to that claim);
(b) any Transferor's failure to perform or to comply with
any covenant or condition required of Transferor to be performed or complied
with hereunder; or
(c) the ownership or operation of the Business or Assets
prior to the Closing Date in violation of, or in a manner giving rise to any
loss, damage or liability under, any Environmental Law.
11.2. Indemnification by the Identified Transferors. Each Identified
Transferor shall indemnify and defend the Transferee against, and hold the
Transferee harmless from, any damage (including, without limitation, any
diminution in value), loss, liability, obligation or expense (including, without
limitation, reasonable attorneys' and consultants' fees and disbursements) which
the Transferee or any stockholder, director, officer, employee or agent of the
Transferee may suffer or incur, including, without limitation, incidental to any
claim or any Proceeding against the Transferee or any stockholder, director,
officer, employee or agent of the Transferee, based upon or resulting from:
(a) the failure of any representation or warranty made by
such Identified Transferor to be true on the date hereof and on the Closing
Date; or
(b) such Identified Transferor's failure to perform or to
comply with any covenant or condition required of such Identified Transferor to
be performed or complied with hereunder.
11.3. Indemnification by the Transferee. The Transferee shall
indemnify and defend each Transferor against, and hold each Transferor harmless
from, any damage, loss, liability, obligation, damage or expense (including,
without limitation, reasonable attorneys' and consultants' fees and
disbursements) which such Transferor may suffer or incur, including, without
limitation, incidental to any claim or any Proceeding against such Transferor,
based upon or resulting from:
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(a) the failure of any representation or warranty made by
the Transferee to be true on the date hereof and on the Closing Date; or
(b) the Transferee's failure to perform or to comply with
any covenant or condition required of the Transferee to be performed or complied
with hereunder.
11.4. Indemnification Procedures. Promptly after notice to an
indemnified party of any claim or the commencement of any Proceeding by a third
party involving any loss, liability, obligation, damage or expense referred to
in Section 11.1, 11.2 or 11.3 hereof, such indemnified party shall, if a claim
for indemnification in respect thereof is to be made against an indemnifying
party pursuant to this Article 11, give written notice to the latter of the
commencement of such claim or Proceeding, setting forth in reasonable detail the
nature thereof, the basis upon which such party seeks indemnification hereunder
and, an estimate, if possible, of the amount of the potential losses,
liabilities, obligations, damages and expenses with respect to which
indemnification is being sought; provided that the failure of any indemnified
party to give such notice shall not relieve the indemnifying party of its
obligations under such Section, except to the extent that the indemnifying party
is actually prejudiced by the failure to give such notice. In case any such
Proceeding is brought against an indemnified party, and provided that proper
notice is duly given, the indemnifying party shall assume the defense thereof
insofar as such proceeding involves any loss, liability, obligation, damage or
expense in respect of which indemnification may be sought hereunder, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its assumption of the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof (but the indemnified party shall have the
right, but not the obligation, to participate at its own cost and expense in
such defense by counsel of its own choice) or for any amounts paid or foregone
by the latter as a result of the settlement or compromise thereof (without the
written consent of the indemnifying party), except that, if both the
indemnifying party and the indemnified party are named as parties or subject to
such Proceeding and either such party determines with advice of counsel that
there may be one or more legal defenses available to it that are different from
or additional to those available to the other party or that a material conflict
of interest between such parties may exist in respect of such Proceeding, the
indemnifying party may decline to assume the defense on behalf of the
indemnified party or the indemnified party may retain the defense on its own
behalf, and, in either such case, after notice to such effect is duly given
hereunder to the other party, the indemnifying party shall be relieved of its
obligation to assume the defense on behalf of the indemnified party, but shall
be required to pay any legal or other expenses, including without limitation
reasonable attorneys' fees and disbursements, incurred by the indemnified party
in such defense; provided, however, that the indemnifying party shall not be
liable for such expenses on account of more than one separate firm of attorneys
(and, if necessary, local counsel) at any time representing such indemnified
party in connection with any Proceeding or separate Proceedings in the same
jurisdiction arising out of or based upon substantially the same allegations or
circumstances. If the indemnifying party shall assume the defense of any such
Proceeding, the indemnified party shall cooperate fully with the indemnifying
party and shall
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appear and give testimony, produce documents and other tangible evidence, allow
the indemnifying party access to the books and records of the indemnified party
and otherwise assist the indemnifying party in conducting such defense. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement or compromise which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
of such claim or Proceeding. Provided that proper notice is duly given, if the
indemnifying party shall fail promptly and diligently to assume the defense
thereof, the indemnified party may respond to, contest and defend against such
Proceeding (but the indemnifying party shall have the right to participate at
its own cost and expense in such defense by counsel of its own choice) and may,
with the prior written consent of the indemnifying party (which consent shall
not be unreasonably withheld), make in good faith any compromise or settlement
with respect thereto, and recover the entire cost and expense thereof, including
without limitation reasonable attorneys' fees and disbursements and all amounts
paid or foregone as a result of such Proceeding, or the settlement or compromise
thereof, from the indemnifying party. The indemnification required hereunder,
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills or invoices are received or
loss, liability, obligation, damage or expense is actually suffered or incurred.
11.5. Survival of Representations and Warranties. The
representations and warranties of each party herein shall survive the Closing,
notwithstanding any investigation or inquiry made by the other party, and
continue until the first anniversary of the Closing Date.
11.6. Indemnification Threshold, Limitations and Termination.
(a) Any other provision hereof notwithstanding, no party
hereto shall be required to indemnify any Person pursuant to this Article 11
unless and until the aggregate amount of loss, liability, obligation, damage or
expense as to which indemnification would be required from such party (but for
the provisions of this Section 11.6) exceeds $50,000, and thereafter such party
shall be required, in the manner and to the extent otherwise provided in this
Section, to indemnify any Person and to pay all amounts required to be paid by
such party in respect to the loss, liability, obligation, damage or expense
suffered or incurred by such Person to the extent such amounts exceed $50,000 in
the aggregate.
(b) The obligations to indemnify and hold harmless a party
hereto: (i) pursuant to Sections 11.1(a), 11.2(a) and 11.3(a) hereof shall
terminate when the applicable representation or warranty terminates pursuant to
Section 11.5; and (ii) pursuant to Section 11.1(b) (solely with respect to
breaches of Sections 6.1, 6.2, 6.3, 6.4, 6.6 and 6.11), 11.2(b) (solely with
respect to breaches of Sections 6.1, 6.2, 6.3, 6.4, 6.6 and 6.11) and 11.3(b)
(other than with respect to Sections 6.12 and 9.2 hereof) shall terminate at the
close of business on the first anniversary of the Closing Date.
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(c) The liability of each Transferor pursuant to Section
11.1(a), 11.1(b) (solely with respect to breaches of Sections 6.1, 6.2, 6.3,
6.4, 6.6 and 6.11), 11.2(a) and 11.2(b) hereof (solely with respect to breaches
of Sections 6.1, 6.2, 6.3, 6.4, 6.6 and 6.11) shall be limited to the total
value of the Icon Shares to be received by such Transferor pursuant to the
Reorganization as set forth on Schedule 2.1 hereto, such Icon Shares to be
valued at the closing price per share of Icon Common Stock as reported on The
Nasdaq Stock Market's National Market on the last trading day immediately prior
to the Closing Date (the "Closing Value"). In addition, each Transferor may pay
and satisfy obligations it may have to the Transferee pursuant to Sections 11.1
or 11.2, as the case may be, by assigning, transferring and delivering to the
Transferee Icon Shares to the extent that such Transferor then owns any Icon
Shares (such shares to be valued at the Closing Value).
11.7. Set-Off Against Escrowed Shares. Any indemnity payment
required to be made by any Transferor hereunder shall first be made out of, and
to the extent of, the Escrowed Shares, in accordance with the terms and
provisions of the Escrow Agreement. Except as expressly provided in the
preceding sentence, the Transferee shall in no way be limited as to any rights
or remedies that may be available to it either in law or in equity.
12. Miscellaneous.
12.1. Limitation of Authority. No provision hereof shall be deemed
to create any partnership, joint venture or joint enterprise or association
between the parties hereto, or to authorize or to empower any party hereto to
act on behalf of, obligate or bind any other party hereto (other than as
provided in Section 12.2 below with respect to the right of Xxxxxx X. Xxxxxx to
act on behalf of each of the Transferors).
12.2. Transferors' Representative. Each Transferor hereby designates
and appoints Xxxxxx X. Xxxxxx as the exclusive agent, attorney-in-fact and
representative (the "Transferors' Representative") for and on behalf of such
Transferor with full power of substitution, to:
(a) receive and accept service of any and all notices,
requests and other communications to be delivered to the Transferors in
accordance with the terms of this Agreement, including, without limitation,
service of all legal process;
(b) send to the Transferee or its successors or assigns any
and all notices, requests and other communications in accordance with the terms
of this Agreement; and
(c) be each Transferor's sole and exclusive representative
to communicate, respond, consent, confess, answer or otherwise act with respect
to any matter arising out of or involving this Agreement (including, without
limitation, all notices, requests and demands by the Transferee claiming for
indemnification under this Agreement) and the Escrow Agreement (including,
without limitation, the right to vote the Escrowed Shares). In the event of, and
from the time of, Xxxxxx X. Xxxxxx'x or any successor's resignation, death or
disability, the Transferee
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shall continue to address all notices, requests and other communications to
Xxxxxx X. Xxxxxx or such other successors as set forth in this Section 12.2,
until there is delivered to the Transferee an instrument duly executed by all of
the Transferors or their legal representatives appointing a successor to Xxxxxx
X. Xxxxxx on all of the same terms and conditions as set forth herein. Xxx Xxxxx
is hereby designated by each Transferor as successor in the event that Xxxxxx X.
Xxxxxx is unable to act.
12.3. Fees and Expenses. Each party hereto shall bear such costs,
fees and expenses as may be incurred by it in connection with this Agreement and
the transactions contemplated hereby, except that the Company shall pay all of
the costs of this Agreement and the transactions contemplated hereby incurred on
behalf of the Transferors (including, but not limited to, the fees and expenses
of the legal, tax and accounting counsel and advisors for the Transferors) up to
a maximum amount of $150,000.
12.4. Notices. Any notice or demand hereunder to or upon any party
hereto required or permitted to be given or made shall be deemed to have been
duly given or made for all purposes if (a) in writing and sent by (i) messenger
or an overnight courier service against receipt, or (ii) certified or registered
mail, postage paid, return receipt requested, or (b) sent by telegram, telecopy,
telex or similar electronic means, provided that a written copy thereof is sent
on the same day by postage paid first-class mail, to such party at the following
address:
To any Transferor: To the Transferors' Representative, at its
address set forth on Schedule 2.1 hereto
With a copy to: Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
To the Transferee: 0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Vice President, Business Affairs and
General Counsel
Fax: (000) 000-0000
With a copy to: Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
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or such other address as either party hereto may at any time, or from time to
time, direct by notice given to the other party in accordance with this Section.
The date of giving or making of any such notice or demand shall be, in the case
of clause (a)(i), the date of the receipt; in the case of clause (a)(ii), five
(5) business days after such notice or demand is sent; and, in the case of
clause (b), the business day next following the date such notice or demand is
sent.
12.5. Amendment. Except as otherwise provided herein, no amendment
of this Agreement shall be valid or effective, unless in writing and signing by
or on behalf of the parties hereto.
12.6. Waiver. No course of dealing or omission or delay on the part
of any party hereto in asserting or exercising any right hereunder shall
constitute or operate as a waiver of any such right. No waiver of any provision
hereof shall be effective, unless in writing and signed by or on behalf of the
party to be charged therewith. No waiver shall be deemed a continuing waiver or
waiver in respect of any other or subsequent breach or default, unless expressly
so stated in writing.
12.7. Governing Law. This Agreement shall be governed by, and
interpreted and enforced in accordance with, the laws of the State of New York,
without regard to principles of choice of law or conflict of laws that would
defer to the substantive laws of another jurisdiction.
12.8. Jurisdiction. Each of the parties hereto hereby irrevocably
consents and submits to the exclusive jurisdiction of the Supreme Court of the
State of New York for the County of New York and the United States District
Court for the Southern District of New York in connection with any Proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, waives any objection to venue in New York County, New York, or such
District and agrees that service of any summons, complaint, notice or other
process relating to such Proceeding may be effected in the manner provided by
clause (a)(ii) of Section 12.4 hereof.
12.9. Remedies. In the event of any actual or prospective breach or
default by either party hereto, the other party shall be entitled to equitable
relief, including remedies in the nature of rescission, injunction and specific
performance. All remedies hereunder are cumulative and not exclusive, and
nothing herein shall be deemed to prohibit or limit either party from pursuing
any other remedy or relief available at law or in equity for such actual or
prospective breach or default, including the recovery of damages; provided,
however, that the indemnification provisions of Article 11 shall be the sole and
exclusive remedy with respect to third-party claims for monetary damages.
12.10.Severability. The provisions hereof are severable and in the
event that any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall, subject to the discretion of
such court, remain in full force and effect, and any invalid or
-38-
unenforceable provision shall be deemed, without further action on the part of
the parties hereto, amended and limited to the extent necessary to render the
same valid and enforceable.
12.11. Further Assurances. Each party hereto covenants and agrees
promptly to execute, deliver, file or record such agreements, instruments,
certificates and other documents and to perform such other and further acts as
the other party hereto may reasonably request or as may otherwise be necessary
or proper to consummate and perfect the transactions contemplated hereby.
12.12. Assignment.
(a) Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assignable by any of the parties hereto
without the prior written consent of the other party, except that the rights of
the Transferee hereunder may be assigned, without the consent of the other
parties hereto, to any corporation all of the outstanding capital stock of which
is owned or controlled, directly or indirectly, by the Transferee; provided that
(i) the assignee shall assume in writing all of the Transferee's obligations
hereunder, and (ii) the Transferee shall not be released from any of its
obligations hereunder by reason of such assignment.
(b) Notwithstanding the foregoing, the Transferee (including
each subsequent assignee of the Transferee) shall have the right to assign any
or all of their rights and obligations hereunder to any other person who
acquires all or substantially all of the assets and business of the Transferee
(or a subsequent assignee of the Transferee); provided that the assignor shall
not be released from any of its obligations hereunder by reason of any such
assignment.
(c) Notwithstanding any provision of this Agreement to the
contrary, each Transferor hereby acknowledges and agrees that all of the
covenants, representations, warranties and indemnities of the Transferors under
this Agreement, and under any other Transaction Document, may be collaterally
assigned to any and all lenders to the Transferee or any of its Affiliates, any
and all of whom may enforce their rights and remedies in connection with any
such collateral assignment or realization thereon to the extent provided in the
applicable security agreements and other debt instruments or at law or in
equity.
12.13. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement is not intended, and shall not be deemed, to
create or confer any right or interest for the benefit of any Person not a party
hereto.
12.14. Incorporation by Reference. The Exhibits and Schedules hereto
are an integral part of this Agreement and are incorporated in their entirety
herein by this reference.
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12.15. Entire Agreement. This Agreement embodies the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersede any prior agreement, commitment or arrangement relating thereto.
12.16.Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Transferee, by its duly authorized officer,
and each Transferor have duly executed this Agreement as of the day and year
first above written.
The Transferee:
ICON CMT CORP.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: President & CEO
The Transferors:
/s/ Xxxxxx Xxxxxx
--------------------------------
XXXXXX XXXXXX
/s/ Xxxxxxx Xxxxxx
--------------------------------
XXXXXXX XXXXXX
U/D/T 3/18/98 FBO XXXXXX XXXX XXXXXX
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Trustee
U/D/T 3/18/98 FBO XXXXX XXXXXXXXX
XXXXXX
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Trustee
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U/D/T 3/18/98 FBO EVAN XXXXXX XXXXXX
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Trustee
/s/ Xxxxx Xxxxxxxx
--------------------------------
XXXXX XXXXXXXX
/s/ Xxxxx Xxxxx
--------------------------------
XXXXX XXXXX
/s/ Xxx Xxxxx
--------------------------------
XXX XXXXX
/s/ Xxxxx Xxxxx
--------------------------------
XXXXX XXXXX
/s/ Xxxxx Xxxxxxx
--------------------------------
XXXXX XXXXXXX
/s/ Xxxx Xxxx
--------------------------------
XXXX XXXX
/s/ Xxxx Xxxx
--------------------------------
XXXX XXXX
/s/ Xxxxxxx Xxxxxx
--------------------------------
XXXXXXX XXXXXX
/s/ Xxxx Xxxxxx
--------------------------------
XXXX XXXXXX
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/s/ Xxxxxxxx Xxxxxx
--------------------------------
XXXXXXXX XXXXXX
ACCEPTED AND AGREED, solely as to
Sections 6.5(b) and 6.10 hereof
(and Article 12 hereof to the
extent applicable thereto):
FRONTIER MEDIA GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
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INDEX TO EXHIBITS AND SCHEDULES
-------------------------------
Exhibits
--------
Exhibit A Form of Escrow Agreement
Exhibit B [INTENTIONALLY OMITTED]
Exhibit C Form of Xxxxxx Employment Agreement
Exhibit D Form of Xxxxxxxx Employment Agreement
Exhibit E-1 Form of Xxxxx Amendment Agreement
Exhibit E-2 Form of Xxxxxxxx Amendment Agreement
Exhibit F Form of Registration Rights Agreement
Exhibit G Form of Affiliate Agreement
Exhibit H Form of Xxxxx, Xxxxxxxx Legal Opinion
Exhibit I Form of Xxxxxx Xxxxxx Legal Opinion
Schedules
Schedule 2.1 Transferors, Frontier Shares, Closing Shares and Escrowed
Shares
Schedule 4.2 Transferors' Consents
Schedule 4.3 Litigation
Schedule 4.4 Foreign Qualifications
Schedule 4.6 Securities Owned
Schedule 4.7 Liabilities or Obligations since December 31, 1997
Schedule 4.8 Certain Changes
Schedule 4.9 Certain Assets and Liens
Schedule 4.10 Contracts
Schedule 4.13 Real Property
Schedule 4.14 Environmental Matters
Schedule 4.15 Bank Accounts
Schedule 4.16 Licenses and Consents
Schedule 4.17 Tax Matters
Schedule 4.18 Certain Trade Rights
Schedule 4.19 Labor Matters
Schedule 4.20 Directors, Officers and Other Employees
Schedule 4.21 ERISA Matters
Schedule 4.22 Suppliers and Customers
Schedule 4.23 Insurance
Schedule 4.30 Identified Transferors' Consents
Schedule 5.3 Transferee's Consents
Schedule 6.12 Certain Lease Obligations
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