Exhibit 2.1
AMENDED AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDED AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is
entered into as of this 7th. day of April, 2006 (the "AGREEMENT DATE"), by and
among VillageEDOCS, a California corporation ("VEDO"), VEDO Merger Sub, Inc., a
Florida corporation and wholly-owned subsidiary of VEDO ("MERGER SUB"), and
GoSolutions, Inc., a Florida corporation ("GOSOLUTIONS").
RECITALS
A. The parties intend that, subject to the terms and conditions
hereinafter set forth, GoSolutions will merge with Merger Sub, with GoSolutions
continuing as the Surviving Corporation of the merger, as defined below, and
becoming a wholly-owned subsidiary of VEDO (the "MERGER"), all pursuant to the
terms and conditions of this Agreement, Articles of Merger in the form to be
agreed to by VEDO and GoSolutions prior to the closing of the Merger (the
"ARTICLES OF MERGER") and the applicable provisions of the laws of the State of
Florida.
B. The respective Boards of Directors of GoSolutions, Merger Sub and
VEDO have each (i) determined that the Merger is in furtherance of the short and
long-term business strategy of each of the parties, (ii) approved this
Agreement, the Merger and the other transactions contemplated by this Agreement,
and (iii) determined to recommend that the respective stockholders of
GoSolutions, Merger Sub and VEDO adopt and approve this Agreement and the
Merger.
C. Concurrently with the execution of this Agreement, GoSolutions
Equity, LLC, and GoSolutions stockholders, who together own at least 50.21% of
the issued and outstanding capital stock of GoSolutions (the "PRINCIPAL
GOSOLUTIONS STOCKHOLDERS"), each of whom are listed on EXHIBIT A hereto, are
entering into Merger Voting Agreements with VEDO in the form attached as EXHIBIT
B hereto (the "MERGER VOTING AGREEMENT"), pursuant to which each of such
Principal GoSolutions Stockholders have agreed (i) not to sell, transfer or
otherwise dispose of their shares of GoSolutions capital stock, (ii) to vote in
favor of the Merger, this Agreement and transactions provided for herein and
against any alternative transaction, and (iii) prior to the Effective Time (as
defined below) to exercise any GoSolutions Stock Options (as defined below) held
by such Principal GoSolutions Stockholder.
D. Upon the effectiveness of the Merger, and subject to the terms
hereof, (i) the outstanding shares of GoSolutions Common Stock, $0.001 par value
per share ("GOSOLUTIONS COMMON STOCK") and GoSolutions Series A Convertible
Redeemable Preferred Stock, $0.001 par value per share ("GOSOLUTIONS CLASS A
PREFERRED STOCK") will be converted into shares of VEDO Common Stock, no par
value per share ("VEDO STOCK"); and (ii) all stock options, warrants,
convertible notes, or compensation plan or other arrangement or agreement of
GoSolutions pursuant to which GoSolutions has granted any rights to purchase any
class of GoSolutions equity securities (collectively, the "GOSOLUTIONS STOCK
OPTIONS"), whether or not vested, shall fully accelerate and be
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terminated and extinguished upon the Effective Time (as defined in Section 1.2),
and the holders of such GoSolutions Stock Options shall have no further rights
with respect to such GoSolutions Stock Options.
E. The Merger is intended to be treated as a tax-free reorganization
pursuant to the provisions of Section 368(a) of the Internal Revenue Code of
1986, as amended (the "CODE").
In consideration of the foregoing and the representations, warranties,
covenants and agreements set forth in this Agreement, the parties agree as
follows:
ARTICLE I
PLAN OF REORGANIZATION
1.1 The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time, Merger Sub shall merge with and into GoSolutions in
accordance with the applicable provisions of the laws of the State of Florida
(the "FLORIDA LAW"), the separate corporate existence of Merger Sub shall cease,
and GoSolutions shall continue as the Surviving Corporation. GoSolutions, in its
capacity as the corporation surviving the Merger, is sometimes referred to
herein as the "SURVIVING CORPORATION."
1.2 Effective Time. On the Closing Date (as defined below), VEDO and
GoSolutions shall cause the Merger to be consummated by filing a duly executed
and delivered Articles of Merger with the Florida Department of State, in such
form as required by, and executed in accordance with the relevant provisions of,
the Florida Law (the "FLORIDA LAW") (the time of such filing being the
"EFFECTIVE TIME").
1.3 Merger Consideration.
1.3.1 Conversion of GoSolutions Capital Stock
1.3.1.1 Common Stock. Each share of GoSolutions
Common Stock issued and outstanding immediately prior to the Effective
Time, other than shares, if any, for which appraisal rights have been
or will be perfected in compliance with applicable law, and except for
shares cancelled pursuant to Section 1.6(g) hereof, will by virtue of
the Merger and at the Effective Time, and without further action on the
part of any holder thereof, be converted into the right to receive (i)
that number of fully paid and nonassessable shares of VEDO Common Stock
which is equal to the quotient of 15,667,770 divided by the GoSolutions
Fully Diluted Common Shares (as defined below), (ii) that number of
Escrow Shares (as provided for herein and as defined below) which is
equal to the quotient of the number of Escrow Shares released pursuant
to the terms of the Escrow Agreement divided by the GoSolutions Fully
Diluted Common Shares, and (iii) that number of Penalty Shares, if any,
which is equal to the quotient of the number of Penalty Shares issued
pursuant to Section 1.11 divided by the GoSolutions Fully Diluted
Common Shares.
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1.3.1.2 Class A Preferred Stock. Each share of
GoSolutions Class A Preferred Stock issued and outstanding immediately
prior to the Effective Time, other than shares, if any, for which
appraisal rights have been or will be perfected in compliance with
applicable law, and except for shares cancelled pursuant to Section
1.6(g) hereof, will by virtue of the Merger and at the Effective Time,
and without further action on the part of any holder thereof, be
converted into the right to receive (i) that number of fully paid and
nonassessable shares of VEDO Common Stock which is equal to the
quotient of 44,332,230 divided by the GoSolutions Fully Diluted
Preferred Shares (as defined below), (ii) that number of Escrow Shares
(as provided for herein and as defined below) which is equal to the
quotient of the number of Escrow Shares released pursuant to the terms
of the Escrow Agreement divided by the GoSolutions Fully Diluted
Preferred Shares, and (iii) that number of Penalty Shares, if any,
which is equal to the quotient of the number of Penalty Shares issued
pursuant to Section 1.11 divided by the GoSolutions Fully Diluted
Preferred Shares.
1.3.2 Conversion of Merger Sub Capital Stock. Each share of
common stock of Merger Sub ("MERGER SUB COMMON STOCK"), issued and outstanding
immediately prior to the Effective Time by virtue of the Merger and at the
Effective Time and without further action of the part of any holder thereof
shall be converted into and become one fully paid and nonassessable share of
GoSolutions Common Stock.
1.3.3 Dissenting Shares. Holders of shares of GoSolutions
Common Stock and GoSolutions Series A Preferred Stock who have complied with all
requirements for perfecting stockholders' appraisal rights, as set forth under
the Florida Law, shall be entitled to their rights under the Florida Law with
respect to such shares ("GOSOLUTIONS DISSENTING SHARES").
1.3.4 Escrow Shares. At the Closing, VEDO will escrow
6,000,000 shares of VEDO Common Stock (the "ESCROW SHARES") subject to the terms
of the Escrow Agreement (the "ESCROW AGREEMENT") in the form attached hereto as
EXHIBIT C. The Escrow Shares shall be withheld, on a pro rata basis, from the
shares of VEDO Common Stock to be issued to the GoSolutions shareholders at
Closing. GoSolutions Equity, LLC shall be the shareholder representative (the
"SHAREHOLDER REPRESENTATIVE") with full power and authority to act on behalf of
the GoSolutions shareholders for purposes of responding to and coordinating the
defense against any Liability Claims (as defined below) which Liability Claims
could reasonably be expected to result in a claim by VEDO against the Escrow
Shares. The Escrow Shares shall be held, administered and distributed strictly
in accordance with the terms of the Escrow Agreement with respect to any
indemnification matter under Article XI of this Agreement. To the extent there
is any inconsistency between the terms of this Agreement and the terms of the
Escrow Agreement, the terms of the Escrow Agreement shall control.
1.4 Fractional Shares/Share Adjustment. No fractional shares of VEDO
Stock will be issued in connection with the Merger, but in lieu thereof each
fractional share to which a holder of GoSolutions Common Stock or Class A
Preferred Stock would otherwise be entitled to receive will be rounded (up or
down) to the nearest whole share.
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If at any time prior to the date upon which Escrow Shares or Penalty Shares are
required to be issued pursuant to this Agreement, the number of outstanding
shares of VEDO Stock is increased or decreased, or are changed into or exchanged
for a different number or kind of shares or securities or other forms of
property (including cash) or rights, as a result of one or more reorganizations,
recapitalizations, spin-offs, stock splits, reverse stock splits, stock
dividends or the like, appropriate adjustments shall be made in the number
and/or kind of Escrow Shares or Penalty Shares issuable pursuant to this
Agreement.
1.5 Options, Warrants and Convertible Notes. At and as of the Effective
Time, all GoSolutions Stock Options outstanding immediately prior to the
Effective Time, whether or not vested, shall fully accelerate and be terminated
and extinguished upon the Effective Time, and the holders of such GoSolutions
Stock Options shall have no further rights with respect to such GoSolutions
Stock Options.
1.6 Effects of the Merger. At and upon the Effective Time:
(a) GoSolutions will be merged with Merger Sub and GoSolutions
will be the surviving corporation, pursuant to the terms of this Agreement and
the Articles of Merger, and the separate existence of Merger Sub will cease;
(b) the Amended and Restated Articles of Incorporation of
GoSolutions as in effect immediately prior to the Effective Time, will be
amended and restated to be the Amended and Restated Articles of Incorporation
attached hereto as EXHIBIT D;
(c) the Bylaws of GoSolutions as in effect immediately prior
to the Effective Time will be amended and restated to be the Restated Bylaws of
the Surviving Corporation substantially in the form attached hereto as EXHIBIT E
(the "RESTATED BYLAWS");
(d) the Board of Directors of GoSolutions initially will have
three (3) directors, consisting of Xxxx X. Xxxxxxxxxx, K. Xxxxx Xxxxxx, and
Xxxxxxx X. Xxxxxxx;
(e) each share of GoSolutions Common Stock (and all unpaid
dividends accrued thereon) and each share of GoSolutions Class A Preferred Stock
outstanding immediately prior to the Effective Time will be converted as
provided in Sections 1.3 and 1.4;
(f) each GoSolutions Stock Option outstanding immediately
prior to the Effective Time will be terminated and extinguished as provided in
Section 1.5;
(g) each share of GoSolutions Common Stock or GoSolutions
Class A Preferred Stock held by GoSolutions or any direct or indirect
wholly-owned subsidiary of GoSolutions immediately prior to the Effective Time
shall be canceled and extinguished without any conversion thereof;
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(h) each share of Merger Sub Common Stock outstanding
immediately prior to the Effective Time will be converted as provided in Section
1.3.3; and
(j) the Merger will, from and after the Effective Time, have
all of the effects provided by applicable law.
1.7 Further Assurances. Each party agrees that if, at any time after
the Effective Time, GoSolutions or VEDO considers or is advised that any further
deeds, assignments or assurances are reasonably necessary or desirable to vest,
perfect or confirm the rights and titles set forth in this Agreement, each of
VEDO and GoSolutions and their respective proper officers and directors may
execute and deliver all such proper deeds, assignments and assurances and do all
other things necessary or desirable to vest, perfect or confirm title to such
property or rights in VEDO and GoSolutions and otherwise to carry out the
purpose of this Agreement, in the name of VEDO, GoSolutions or otherwise.
1.8 Xxxx-Xxxxx-Xxxxxx Matters.If required, each of VEDO, Merger Sub and
GoSolutions shall comply promptly with the notification and reporting
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR ACT") and use all commercially reasonable best efforts to
obtain early termination of the waiting period under the HSR Act. The Parties
shall promptly substantially comply with any additional requests for
information, including requests for production of documents and production of
witnesses for interviews or depositions, by any antitrust authority.
1.9 Tax Free Reorganization. The parties intend to adopt this Agreement
as a tax-free plan of reorganization and to consummate the Merger in accordance
with the provisions of Section 368(a) of the Code. The parties believe that the
value of the VEDO Stock to be received in the Merger is equal, in each instance,
to the value of the GoSolutions Common Stock to be surrendered in exchange
therefor. The VEDO Stock issued in the Merger will be issued solely in exchange
for the GoSolutions Common Stock, and no other transaction other than the Merger
represents, provides for or is intended to be an adjustment to, the
consideration paid for the GoSolutions Common Stock. Except for GoSolutions
Dissenting Shares, no consideration that could constitute "other property" is
being paid by VEDO for the GoSolutions Common Stock in the Merger. The parties
have neither taken nor shall take a position on any tax returns inconsistent
with this Section 1.9.
1.10 Purchase Accounting. The parties intend that the Merger be
treated as a purchase for accounting purposes.
1.11 Registration of VEDO Common Stock. The shares of VEDO Common
Stock to be issued on the Closing Date pursuant to the terms of this Article I
shall not, as of the Closing Date, be registered with the U.S. Securities and
Exchange Commission (the "COMMISSION"). Notwithstanding the foregoing, VEDO
shall prepare and file with the Commission, a Registration Statement (the
"REGISTRATION STATEMENT") covering the resale of all shares of VEDO Common Stock
issued on the Closing Date (the "REGISTRABLE SHARES") for an offering to be made
on a continuous basis pursuant to Rule 415 pursuant to the terms of the
Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT") in the form
attached hereto as EXHIBIT F.
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If VEDO has not fully complied with the terms and conditions of the Registration
Rights Agreement and the Registration Statement required pursuant thereto has
not been declared effective by the Commission by the close of business on
December 31, 2006, VEDO shall issue, as liquidated damages and not a penalty,
2,000,000 shares of VEDO Common Stock (the "INITIAL PENALTY SHARES"). For each
calendar month beginning in January 2007 until such time as the Registration
Statement has been declared effective, VEDO shall issue, as additional
liquidated damages and not a penalty, 200,000 shares (and pro-rata for each
partial month thereafter) of VEDO Common Stock (the "ADDITIONAL PENALTY SHARES",
collectively with the Initial Penalty Shares, the "PENALTY SHARES"), provided,
however, that in no event shall the aggregate number of Penalty Shares that VEDO
is obligated to issue exceed 3,200,000. The Penalty Shares shall be subject to
"piggyback" registration rights as set forth in the Registration Rights
Agreement.
1.12 Designation of Director. At Closing, the Principal GoSolutions
Stockholders shall identify to VEDO an individual, acceptable to VEDO, for
service on VEDO's Board of Directors (the "GOSOLUTIONS DESIGNEE"). The Principal
GoSolutions Stockholders shall forward such recommendation to VEDO's Board of
Directors, who shall nominate and recommend, in the same manner as for any other
nominee of the Board of Directors, the GoSolutions Designee for election by
VEDO's stockholders during VEDO's next regularly scheduled election of
directors. The Principal VEDO Stockholders, as defined below, shall execute and
deliver at Closing, a Voting Agreement in the form attached hereto as EXHIBIT G
(the "PRINCIPAL VEDO STOCKHOLDERS VOTING AGREEMENT") pursuant to which the
Principal VEDO Stockholders shall agree to vote affirmatively for the election
of the GoSolutions Designee to the VEDO Board of Directors. "PRINCIPAL VEDO
STOCKHOLDERS" shall mean Xxxxxx Partners, LP and C. Xxxx and Xxxx X. Xxxxxxxx.
1.13 Definition. The following definition applies for purposes of
this Agreement:
"GOSOLUTIONS FULLY DILUTED COMMON SHARES" means that number
of shares of GoSolutions' Common Stock that are issued and outstanding
immediately prior to the Effective Time.
"GOSOLUTIONS FULLY DILUTED PREFERRED SHARES" means that number
of shares of GoSolutions' Class A Preferred Stock that are issued and
outstanding immediately prior to the Effective Time.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF GOSOLUTIONS
GoSolutions hereby represents and warrants that, except as set forth on
the GoSolutions Disclosure Schedules delivered to VEDO and Merger Sub herewith
as EXHIBIT H (the "GOSOLUTIONS DISCLOSURE SCHEDULES"), which Exhibit may be
updated to reflect immaterial changes that occur after signing and prior to the
Closing, each of the representations, warranties and statements contained in the
following sections of this Article II is true and correct as of the Agreement
Date and will be true and correct on and as of the Closing Date.
2.1 Organization and Good Standing. GoSolutions and each of its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, has the corporate
power and authority to own, operate and lease its properties and to carry on its
business as now conducted and as proposed to be conducted, and is duly qualified
or licensed to do business and is in good standing as a foreign corporation in
each jurisdiction where the nature of its business or ownership or leasing of
its properties makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed could not reasonably be expected to
result in a Material Adverse Effect (as defined below) on GoSolutions. Except as
listed in Schedule 2.1, GoSolutions does not, other than in the state of
Florida, own or lease any real property, has no employees and does not maintain
a place of business in any foreign country or in any other state of the United
States.
2.2 Power, Authorization and Validity.
2.2.1 GoSolutions has all requisite right, power, legal
capacity and authority to enter into and perform its obligations under this
Agreement and all GoSolutions Ancillary Agreements, and all of the transactions
contemplated by this Agreement. The execution and delivery of this Agreement and
the GoSolutions Ancillary Agreements and the performance of all of GoSolutions's
obligation hereunder and thereunder, have been duly and validly approved and
authorized by GoSolutions's Board of Directors as required by applicable law and
GoSolutions's Amended and Restated Articles of Incorporation and Bylaws. For
purposes of this Agreement, "GOSOLUTIONS ANCILLARY AGREEMENTS" means all
agreements, certificates and other documents required to be delivered by
GoSolutions under this Agreement, including the Articles of Merger and the
Merger Voting Agreement.
2.2.2 To the knowledge of GoSolutions, no filing,
authorization, registration, order, consent, notice or approval, governmental or
otherwise, is necessary to enable GoSolutions to enter into and deliver this
Agreement and the GoSolutions Ancillary Agreements, or to perform any of its
obligations hereunder and thereunder, except where the failure to give such
notice, to file or to obtain any authorization, consent or approval would not
have a Material Adverse Effect on GoSolutions and except for (a) the filing of
the Articles of Merger with the Florida Department of State, and the filing of
appropriate documents with the relevant authorities of other states in which
GoSolutions is qualified to do business, if any, (b) such filings as may be
required to comply with federal, state and foreign securities laws, (c) the
approval of the GoSolutions Stockholders of the transactions contemplated
hereby, and (d) if required, the filings required by the HSR Act.
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2.2.3 Subject to approval of this Agreement and the Merger by
the GoSolutions Stockholders, this Agreement has been, and the GoSolutions
Ancillary Agreements are, or when executed by GoSolutions will be, valid and
binding obligations of GoSolutions enforceable in accordance with their
respective terms, except as to the effect, if any, of (a) applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting the
rights of creditors generally from time to time in effect, (b) rules of law
governing specific performance, injunctive relief and other equitable remedies
and (c) the enforceability of provisions requiring indemnification in connection
with the offering, issuance or sale of securities (collectively, the "GENERAL
ENFORCEABILITY EXCEPTIONS"); PROVIDED, HOWEVER, that the Articles of Merger will
not be effective until filed with the Florida Department of State. This
Agreement has been, and when executed, the GoSolutions Ancillary Agreements will
be, duly executed and delivered by GoSolutions.
2.3 Capitalization.
2.3.1 Authorized and Outstanding Capital Stock. The authorized
capital stock of GoSolutions consists of 80,000,000 shares of Common Stock,
$0.001 par value per share, of which 6,381,775 shares are issued and
outstanding; 15,000,000 shares of Series A Convertible Redeemable Preferred
Stock, $0.001 par value per share, of which 10,000,000 shares are issued and
outstanding ("GOSOLUTIONS CLASS A PREFERRED STOCK"); 1,020,000 shares of Series
B Convertible Redeemable Preferred Stock, $0.001 par value per share, of which
no shares are issued and outstanding ("GOSOLUTIONS CLASS B PREFERRED STOCK");
and 4,000,000 undesignated shares of preferred stock, $0.001 par value per
share, of which no shares are issued and outstanding. Schedule 2.3.1 contains a
correct and complete list, as of the date hereof, of each GoSolutions
Stockholder by class and series of shares, including the name of the
stockholder, the number of shares held and any vesting schedule applicable to
the shares.
All issued and outstanding shares of GoSolutions Common Stock and GoSolutions
Class A Preferred Stock have been duly authorized and were validly issued, are
fully paid and nonassessable, are not subject to any right of rescission, are
not subject to preemptive rights by statute, the Amended and Restated Articles
of Incorporation or Bylaws of GoSolutions, or any agreement or document to which
GoSolutions is a party or by which it is bound, and all such shares have been
offered, issued, sold and delivered by GoSolutions in compliance with all
registration or qualification requirements (or applicable exemptions therefrom)
of applicable federal, state and foreign securities laws. GoSolutions is not
under any obligation to register under the Securities Act any of its presently
outstanding securities. There is no liability for dividends accrued but unpaid
with respect to GoSolutions's outstanding securities.
2.3.2 GoSolutions Stock Options. An aggregate of 655,000
shares of GoSolutions Common Stock are reserved and authorized for issuance
pursuant to outstanding GoSolutions Stock Options. All GoSolutions Stock Options
have been duly authorized and were validly granted in compliance with applicable
exemptions under federal and state securities laws. Schedule 2.3.2 contains a
correct and complete list of each GoSolutions Stock Option outstanding as of the
date hereof. All GoSolutions Stock Options will be exercised or cancelled at or
prior to the Effective Time.
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2.4 Subsidiaries. Other than GoSolo Technologies, Inc., a
Florida corporation and GoSolutions Canada, Inc., a Federal corporation,
GoSolutions does not have any subsidiaries or any interest, direct or indirect,
in any corporation, partnership, joint venture or other business entity,
organization or enterprise. GoSolutions is not obligated to make and is not
bound by any agreement or obligation to make any investment in or capital
contribution in or on behalf of any other entity.
2.5 No Violation of Existing Agreements. Neither the execution and
delivery of this Agreement nor any GoSolutions Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach, default, impairment or violation of (a) any provision of
the Amended and Restated Articles of Incorporation or Bylaws of GoSolutions, as
currently in effect, or (b) in any material respect, any material lease,
contract or instrument to which GoSolutions is a party or by which GoSolutions
or any of its assets or properties is bound, or (c) to the knowledge of
GoSolutions any federal, state, local or foreign judgment, writ, decree, order,
statute, rule or regulation or any permit, franchise or concession applicable to
GoSolutions or its assets or properties. Except as set forth in Schedule 2.5,
the consummation of the Merger will not require the consent or approval of or
notice to any third party.
2.6 Litigation. Schedule 2.6 sets forth each instance in which
GoSolutions (i) is subject to any outstanding injunction, judgment, order,
decree, ruling, or charge, or (ii) is a party to any action, suit, proceeding,
hearing, or investigation of, in or before any court or quasi-judicial or
administrative agency of any federal, state, local or foreign jurisdiction,
except where the injunction, judgment, order, decree, ruling, charge, action,
suit, proceeding, hearing or investigation would not have a Material Adverse
Effect on GoSolutions. There is, to GoSolutions's knowledge, no reasonable basis
for any stockholder or former stockholder of GoSolutions, or any other person,
firm, corporation, or entity, to assert a claim against GoSolutions based upon
GoSolutions's violation of any statutory or contractual right with respect to
(a) ownership or rights to ownership of any shares of GoSolutions Common Stock,
(b) any rights as a GoSolutions Stockholder, including any option or preemptive
rights or rights to notice or to vote, or (c) any rights under any agreement
among GoSolutions and its stockholders.
2.7 Taxes. Except as set forth in Schedule 2.7, GoSolutions has timely
filed all federal, state, local and foreign tax and information returns required
to be filed by it, has timely paid all taxes required to be paid by it for which
payment is due, has established an adequate accrual or reserve for the payment
of all taxes payable in respect of the periods subsequent to the periods covered
by its most recent applicable tax returns (which accrual or reserve as of the
GoSolutions Balance Sheet Date (as defined in Section 2.10 below) is fully
reflected on the GoSolutions Balance Sheet (as defined in Section 2.8 below) and
in any more recent balance sheet of GoSolutions provided by GoSolutions to VEDO
on or before the Agreement Date), has made all necessary estimated tax payments,
and has no liability for taxes in excess of the amount so paid and accruals or
reserves so established. Except as set forth in Schedule 2.7, all such returns
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and reports are true, correct and complete, and GoSolutions has provided VEDO
with true and correct copies of such returns and reports. Except as set forth in
Schedule 2.7, GoSolutions is not delinquent in the payment of any tax or in the
filing of any tax returns, and no deficiencies for any tax have been threatened,
claimed, proposed or assessed against GoSolutions, or any of the officers,
employees or agents of GoSolutions in their capacity as such. GoSolutions has
not received any notification from the Internal Revenue Service or any other
taxing authority regarding any material issues that: (a) are currently pending
before the Internal Revenue Service or any other taxing authority (including,
but not limited to, any sales or use tax authority) regarding GoSolutions, or
(b) have been raised by the Internal Revenue Service or other taxing authority
and not yet finally resolved. No tax return of GoSolutions is under audit by the
Internal Revenue Service or any state or local taxing agency or authority and
any such past audits (if any) have been completed and fully resolved to the
satisfaction of the applicable tax authority conducting such audits and all
taxes and any penalties or interest determined by such audits to be due from
GoSolutions have been paid in full to the applicable taxing authorities. No tax
liens are currently in effect against any assets of GoSolutions other than liens
which arise by operation of law for taxes not yet due and payable. Except as set
forth in Schedule 2.7, there is not in effect any waiver by GoSolutions of any
statute of limitations with respect to any taxes or any extension of time for
filing any tax return which has not been filed, and GoSolutions has not
consented to extend to a date later than the date hereof the period in which any
tax may be assessed or collected by any taxing authority. GoSolutions is not a
party to a tax sharing or indemnity agreement. GoSolutions has withheld with
respect to each of its employees and independent contractors all taxes,
including, but not limited to, federal and state income taxes, FICA, Medicare,
FUTA and other taxes, required to be withheld, and paid such withheld amounts to
the appropriate tax authority within the time prescribed by law.
To the knowledge of GoSolutions, there is no agreement, plan or
arrangement to which GoSolutions is a party, including this Agreement and the
agreements entered into in connection with this Agreement, covering any employee
or former employee of GoSolutions or any of its subsidiaries that, individually
or collectively, would be reasonably likely to give rise to the payment of any
amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of
the Code.
For the purposes of this Agreement, the terms "TAX" and "TAXES" include
all federal, state, local and foreign income, alternative or add-on minimum
income, gains, franchise, excise, property, property transfer, sales, use,
employment, license, payroll, ad valorem, documentary, stamp, withholding,
occupation, recording, value added or transfer taxes, governmental charges,
fees, customs duties, levies or assessments (whether payable directly or by
withholding), and, with respect to any such taxes, any estimated tax, interest,
fines and penalties or additions to tax and interest on such fines, penalties
and additions to tax.
2.8 GoSolutions Financial Statements. GoSolutions has delivered to VEDO
as part of Schedule 2.8 (i) GoSolutions' audited balance sheet as of December
31, 2004 and 2003 and audited statements of income, stockholders' equity and
cash flows for the years ended December 31, 2004 and 2003, and (ii) an audited
balance sheet as of
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September 30, 2005, and GoSolutions's audited statements of income,
stockholders' equity and cash flows for the nine-month period ended September
30, 2005 (collectively, the "GOSOLUTIONS FINANCIAL STATEMENTS"). Except as set
forth in Schedule 2.8, the GoSolutions Financial Statements have been prepared
according to generally accepted accounting principles applied on a basis
consistent with prior periods ("GAAP"). For the purposes of this Agreement, all
financial statements referred to in this paragraph shall include any notes or
schedules to such financial statements. The GoSolutions Financial Statements (a)
are in accordance with the books and records of GoSolutions, and (b) fairly
present the financial condition of GoSolutions at the date therein indicated and
the results of operations for the period therein specified. Except as set forth
in Schedule 2.8, GoSolutions has no material debt, liability or obligation of
any nature, whether accrued, absolute, contingent or otherwise, and whether due
or to become due, that is not reflected or reserved against in the GoSolutions
Balance Sheet, except for those (i) that may have been incurred after the date
of the GoSolutions Financial Statements in the ordinary course of its business,
consistent with past practice and that are not material in amount either
individually or collectively, or (ii) that would not reasonably be required in
accordance with GAAP to be included in a balance sheet or notes thereto.
2.9 Title to Properties. Except as set forth in Schedule 2.9,
GoSolutions has good and marketable title to all of its assets and properties
shown on the GoSolutions Financial Statements, free and clear of all liens,
charges, restrictions, pledges or encumbrances (other than (i) liens for taxes
not yet due and payable, and (ii) minor imperfections of and encumbrances on
title, if any, that do not materially detract from the value of or interfere
with the use of such property). All machinery and equipment included in such
properties is in good condition and repair, normal wear and tear excepted, and
all leases of real or personal property to which GoSolutions is a party are
valid, binding and enforceable against GoSolutions, and fully effective and
afford GoSolutions peaceful and undisturbed possession of the subject matter of
the lease, subject to the General Enforceability Exceptions. To its knowledge,
GoSolutions is not in violation of any zoning, building, safety or environmental
ordinance, regulation or requirement or other law or regulation applicable to
the operation of owned or leased properties (the violation of which would have a
Material Adverse Effect on its business), or has received any notice of
violation with which it has not complied. Schedule 2.9 sets forth a complete and
accurate list of all tangible personal property owned or leased by GoSolutions.
2.10 Absence of Certain Changes. Except as set forth in Schedule 2.10,
since December 31, 2005 (the "GOSOLUTIONS BALANCE SHEET DATE"), there has not
been with respect to GoSolutions:
(a) any change in the financial condition, properties, assets,
employees, liabilities, business or operations thereof which change by itself or
in conjunction with all other such changes, whether or not arising in the
ordinary course of business, has had or could reasonably be expected to have a
Material Adverse Effect on GoSolutions;
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(b) any contingent liability incurred by GoSolutions as
guarantor or otherwise with respect to the obligations of others;
(c) any mortgage, trust, pledge, encumbrance or lien placed on
any of the assets or properties of GoSolutions (except as permitted under
Section 2.9)
(d) any material obligation or liability incurred by
GoSolutions, other than obligations and liabilities incurred in the ordinary
course of business;
(e) any purchase or sale or other disposition, or any
agreement or other arrangement for the purchase, sale or other disposition, of
any of the properties or assets of GoSolutions other than in the ordinary course
of business in amounts which are not material to GoSolutions and other than the
sale or disposition of inventory in the ordinary course of business;
(f) any damage, destruction or loss, whether or not covered by
insurance, that has or could reasonably be expected to result in a Material
Adverse Effect on GoSolutions;
(g) any declaration, setting aside or payment of any dividend
on, or the making of any other distribution in respect of, the capital stock of
GoSolutions, any split, combination or recapitalization of the capital stock of
GoSolutions or any direct or indirect redemption, purchase or other acquisition
of the capital stock of GoSolutions;
(h) any labor dispute or claim of unfair labor practices, any
change in the compensation payable or to become payable to any of GoSolutions's
officers, employees, consultants or agents (except normal annual merit or cost
of living increases made in the ordinary course of business and consistent with
past practice which are not material in amount), or any bonus payment or
arrangement made to or with any of such officers, employees, consultants or
agents;
(i) any payment or discharge of a material lien or liability
of GoSolutions which lien or liability was not either shown on the GoSolutions
Balance Sheet or incurred in the ordinary course of business thereafter
consistent with past practice;
(j) any obligation or liability incurred by GoSolutions to any
of its officers, directors, employees or stockholders or any loans or advances
made by GoSolutions to any of its officers, directors, employees or stockholders
except normal compensation;
(k) any issuance of shares of GoSolutions Common Stock or
grant or issuance of any options, warrants or other rights to acquire
GoSolutions Common Stock from GoSolutions, or any offer, issuance or sale by
GoSolutions of any debt or equity securities of GoSolutions (except for the
issuance of GoSolutions Common Stock upon exercise of outstanding options or
warrants of GoSolutions or exercise of conversion privileges of preferred
shares);
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(l) any agreement, action or omission not otherwise referred
to in subsections (a) through (k) that has resulted in a Material Adverse Effect
on GoSolutions; or
(m) any agreement, whether in writing or otherwise, to take
any of the actions specified in the foregoing subsections (a) through (l).
2.11 Contracts. Schedule 2.11 sets forth a list of all:
(a) written contracts and other written agreements to which
GoSolutions is a party and the performance of which will involve consideration
in excess of $25,000;
(b) any contract or commitment in which GoSolutions has
granted or received most favored customer pricing provisions or exclusive
marketing, distribution, sales or other rights relating to any product or
service, group of products or services, market or geographic territory;
(c) any joint venture or partnership contract or agreement or
other agreement which has involved, or is reasonably expected to involve, a
sharing of profits, expenses or losses with any other party;
(d) any contract or commitment for or relating to the
employment or retention of any officer, employee or consultant of GoSolutions or
any other type of contract or understanding with any officer, employee or
consultant of GoSolutions that is not terminable by GoSolutions on less than 30
days notice without cost or other liability;
(e) any indenture, mortgage, trust deed, promissory note, loan
agreement, security agreement, line of credit, equipment lease, guarantee or
other agreement or commitment for the borrowing of money, for a line of credit
or for a leasing transaction of a type required to be capitalized in accordance
with Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board;
(f) any lease or other agreement under which GoSolutions is
lessee of or holds or operates any items of tangible personal property or real
property owned by any third party and under which payments to such third party
exceed $25,000 per annum;
(g) any agreement that restricts GoSolutions from engaging or
competing in any business in any market or geographic area or with respect to
any product or service;
(h) any GoSolutions IP Rights Agreement (as defined in Section
2.13);
(i) any agreement relating to the offer, sale, issuance,
grant, exercise, award, purchase, repurchase or redemption of any shares of
capital stock or other securities of GoSolutions or any options, warrants or
other rights to purchase or otherwise acquire any such shares of capital stock,
other securities or options, warrants or other rights therefor;
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(j) any contract with or commitment to any labor union;
(k) any agreement or other commitment to sell or otherwise
dispose of consigned inventory; and
(l) any other agreement, contract, commitment or instrument
that is material to the business of GoSolutions or that involves a future
commitment by GoSolutions in excess of $25,000.
A true and complete copy of each agreement or document, as amended through the
date hereof, required by subsections (a) through (l) of this Section to be
listed in Schedule 2.11 (such agreements and documents being hereinafter
collectively referred to as the "GOSOLUTIONS MATERIAL AGREEMENTS") has been
delivered or made available to VEDO. All GoSolutions Material Agreements are
valid and in full force and effect. GoSolutions is not in material breach or
default under any GoSolutions Material Agreement and has not received any notice
or other communication regarding any actual or possible violation or breach of,
or default under, any GoSolutions Material Agreement. To the knowledge of
GoSolutions, no party to any GoSolutions Material Agreement is in beach or
default of, or intends to terminate, cancel, modify or amend, any GoSolutions
Material Agreement.
2.12 No Consent Required; No Restrictions. Except as set forth in
Schedule 2.12, no consent, notice or approval of any third party is required to
ensure that, following the Effective Time, any GoSolutions Material Agreement
will continue to be in full force and effect without any breach or violation
thereof caused by virtue of the Merger or by any other transaction contemplated
by this Agreement or any GoSolutions Ancillary Agreement. Except as set forth in
Schedule 2.12, GoSolutions is not a party to, and no asset or property of
GoSolutions is bound or affected by, any judgment, injunction, order, decree,
contract, covenant or agreement (noncompete or otherwise) that restricts or
prohibits, or purports to restrict or prohibit, GoSolutions or, following the
Effective Time, the surviving corporation, from freely engaging in any business
now conducted by GoSolutions or from competing anywhere in the world (including,
without limitation, any contracts, covenants or agreements restricting the
geographic area in which GoSolutions may sell, license, market, distribute or
support any products or technology or provide services, or restricting the
markets, products, customers or industries that GoSolutions may address in
operating its business), or includes any grants by GoSolutions of exclusive
rights or licenses. To the knowledge of GoSolutions, no event has occurred, and
no circumstance or condition exists, that (with or without notice or lapse of
time) will, or would reasonably be expected to, (a) result in a material
violation or breach of any of the provisions of any GoSolutions Material
Agreement, or (b) give any third party (i) the right to declare a material
default or exercise any material remedy under any GoSolutions Material
Agreement, (ii) the right to a rebate, chargeback or penalty under any
GoSolutions Material Agreement, (iii) the right to accelerate the maturity or
performance of any obligation of GoSolutions in excess of $25,000 under any
GoSolutions Material Agreement, or (iv) the right to cancel, terminate or modify
any GoSolutions Material Agreement, except in each such case for such defaults,
acceleration rights, termination rights and other rights that have not had, and
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on GoSolutions.
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2.13 Intellectual Property. Except as set forth in Schedule 2.13,
GoSolutions owns or has the right to use, sell or license all material
Intellectual Property Rights (as defined below) necessary or required for the
conduct of its business as presently conducted (such Intellectual Property
Rights being hereinafter collectively referred to as the "GOSOLUTIONS IP
RIGHTS") and such rights to use, sell or license are reasonably sufficient for
such conduct of its business. To the knowledge of GoSolutions, the execution,
delivery and performance of this Agreement and the GoSolutions Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby will not constitute a material breach of any instrument or agreement
governing any GoSolutions IP Right (the "GOSOLUTIONS IP RIGHTS AGREEMENTS"),
will not cause the forfeiture or termination or give rise to a right of
forfeiture or termination of any GoSolutions IP Right or materially impair the
right of GoSolutions to use, sell or license any GoSolutions IP Right or portion
thereof (except where such breach, forfeiture, termination or impairment would
not have a Material Adverse Effect on GoSolutions). There are no royalties,
honoraria, fees or other payments payable by GoSolutions to any person by reason
of the ownership, use, license, sale or disposition of the GoSolutions IP Rights
(other than as set forth in the GoSolutions IP Rights Agreements listed in
Schedule 2.11). To the knowledge of GoSolutions, neither the manufacture,
marketing, license, sale or intended use of any product currently licensed or
sold, or any service offered by, GoSolutions or currently under development by
GoSolutions violates any license or agreement between GoSolutions and any third
party or infringes any Intellectual Property Right of any other party; and there
is no pending or, to the knowledge of GoSolutions, threatened claim or
litigation against GoSolutions contesting the validity or ownership of, or
GoSolutions's right to use, sell, license or dispose of, any GoSolutions IP
Right, nor has GoSolutions received any notice asserting that any GoSolutions IP
Right or the proposed use, sale, license or disposition thereof conflicts or
will conflict with the rights of any other party, nor, to the knowledge of
GoSolutions, is there any basis for any such assertion. GoSolutions has taken
reasonable steps designed to safeguard and maintain the secrecy and
confidentiality of, and its proprietary rights in, all material GoSolutions IP
Rights. Schedule 2.13 contains a list of all applications, registrations,
filings and other formal actions made or taken pursuant to federal, state and
foreign laws by GoSolutions to perfect or protect its interest in GoSolutions IP
Rights, including, without limitation, all patents, patent applications,
trademarks, trademark applications and service marks, copyrights and copyright
applications. As used herein, the term "INTELLECTUAL PROPERTY RIGHTS" shall mean
all worldwide industrial and intellectual property rights, including, without
limitation, patents, patent applications, patent rights, trademarks, trademark
applications, trade names, service marks, service xxxx applications, copyrights,
copyright applications, franchises, licenses, inventories, know-how, trade
secrets, customer lists, proprietary processes and formulae, all source and
object code, algorithms, architecture, structure, display screens, layouts,
inventions, development tools and all documentation and media constituting,
describing or relating to the above, including, without limitation, manuals,
memoranda and records.
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2.14 Compliance with Laws. GoSolutions has complied and is in full
compliance, in all material respects, with all applicable laws, ordinances,
regulations, and rules, and all orders, writs, injunctions, awards, judgments,
and decrees applicable to it or its assets, properties, and business (the
violation of which would have a Material Adverse Effect upon its business). To
the knowledge of GoSolutions, GoSolutions has received all permits, licenses,
commissions, consents and approvals from, and has made all filings with, third
parties, including government agencies, bodies and authorities, that are
necessary for its business as currently conducted ("GOSOLUTIONS GOVERNMENTAL
PERMITS"), except where the failure to obtain any such GoSolutions Governmental
Permit is not reasonably expected to have a Material Adverse Effect on
GoSolutions. To the knowledge of GoSolutions, there are no legal or
administrative proceedings or investigations pending or threatened in writing,
that, if enacted or determined adversely to GoSolutions, would result in any
Material Adverse Effect on GoSolutions. Schedule 2.14 sets forth a list of each
GoSolutions Governmental Permit. A true and complete copy of each GoSolutions
Governmental Permit listed in Schedule 2.14 has been delivered or made available
to VEDO or its counsel.
2.15 Certain Transactions and Agreements. Except as set forth in
Schedule 2.15, no officers, directors or other affiliate ("AFFILIATE"), as
defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT") of GoSolutions has had or has, either directly or indirectly, a
material interest in (i) any person or entity which purchases from or sells,
licenses or furnishes to GoSolutions any goods, products, property, technology
or intellectual or other property rights or provides any services for or to
GoSolutions; or (ii) any contract or agreement or informal arrangement to which
GoSolutions is a party or by which it may be bound or affected, except for
normal compensation for services as an officer, director or employee of
GoSolutions. None of said Affiliates has any interest in any property, real or
personal, tangible or intangible, including inventions, patents, copyrights,
trademarks or trade names or trade secrets, used in the business of GoSolutions,
except for the normal rights of a stockholder or warrantholder.
2.16 Employees, ERISA and Other Compliance.
2.16.1 Except as set forth in Schedule 2.16.1, GoSolutions has
no employment contracts or consulting agreements currently in effect that are
not terminable at will (other than agreements with the sole purpose of providing
for the confidentiality of proprietary information or assignment of inventions).
2.16.2 GoSolutions (i) has never been and is not now subject
to a union organizing effort, (ii) is not subject to any collective bargaining
agreement with respect to any of its employees, (iii) is not subject to any
other contract, written or oral, with any trade or labor union, employees'
association or similar organization, or (iv) has no current labor disputes.
2.16.3 Schedule 2.16.3 identifies (i) each "employee benefit
plan," as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and (ii) all other material written or formal
plans or agreements involving direct or indirect compensation or benefits
(including any employment
16
agreements entered into between GoSolutions and any employee of GoSolutions, but
excluding workers' compensation, unemployment compensation and other
government-mandated programs) currently or previously maintained, contributed to
or entered into by GoSolutions or any ERISA Affiliate (as defined below) under
which either has any present or future material obligation or liability
(collectively, the "GOSOLUTIONS EMPLOYEE PLANS"). For purposes of this Section
2.16, "ERISA AFFILIATE" shall mean any entity which is a member of (A) a
"controlled group of corporations," as defined in Section 414(b) of the Code,
(B) a group of entities under "common control," as defined in Section 414(c) of
the Code, or (C) an "affiliated service group," as defined in Section 414(m) of
the Code, or treasury regulations promulgated under Section 414(o) of the Code,
any of which includes GoSolutions. Copies of all GoSolutions Employee Plans
(and, if applicable, related trust agreements) and all amendments thereto and
written interpretations thereof (including summary plan descriptions) have been
delivered or made available to VEDO or its counsel, together with the most
recent annual reports (Form 5500, including, if applicable, Schedule B thereto)
prepared in connection with any such GoSolutions Employee Plan. All GoSolutions
Employee Plans which individually or collectively would constitute an "employee
pension benefit plan," as defined in Section 3(2) of ERISA (collectively, the
"GOSOLUTIONS PENSION PLANS"), are identified as such in Schedule 2.16.3. All
contributions due from GoSolutions with respect to any of the GoSolutions
Employee Plans which are GoSolutions Pension Plans have been made as required
under ERISA or have been accrued on GoSolutions's financial statements as of the
GoSolutions Balance Sheet Date. To the knowledge of GoSolutions, each
GoSolutions Employee Plan has been maintained substantially in compliance with
its terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations, including, without limitation, ERISA and the Code, which
are applicable to such GoSolutions Employee Plans, except where the failure to
comply with any such statutes, orders, rules and regulations would not have a
Material Adverse Effect on GoSolutions. No GoSolutions Employee Plan will be
subject to any material surrender fees or service fees upon termination other
than normal and reasonable administrative fees associated with the termination
of benefits plans.
2.16.4 No GoSolutions Pension Plan constitutes, or has since
the enactment of ERISA constituted, a "multiemployer plan," as defined in
Section 3(37) of ERISA and GoSolutions has no obligations under any
multiemployer plan. No GoSolutions Pension Plans are subject to Title IV of
ERISA. To the knowledge of GoSolutions, no "prohibited transaction," as defined
in Section 406 of ERISA or Section 4975 of the Code, has occurred with respect
to any GoSolutions Employee Plan which is covered by Title I of ERISA which
would result in a material liability to GoSolutions, excluding transactions
effected pursuant to a statutory or administrative exemption. To the knowledge
of GoSolutions, nothing done or omitted to be done and no transaction or holding
of any asset under or in connection with any GoSolutions Employee Plan has or
will make GoSolutions or any officer or director of GoSolutions subject to any
material liability under Title I of ERISA or liable for any material tax (as
defined in Section 2.7) or penalty pursuant to Sections 4972, 4975, 4976 or 4979
of the Code or Section 502 of ERISA.
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2.16.5 Any GoSolutions Pension Plan which is intended to be
qualified under Section 401(a) of the Code (a "GOSOLUTIONS 401(A) PLAN") (i) has
obtained from the Internal Revenue Service an opinion letter or favorable
determination letter as to its initial qualified status under the Code, (ii) may
rely on an opinion letter issued to a prototype plan sponsor with respect to a
standardized plan adopted by GoSolutions in accordance with the requirements for
such reliance, or (iii) has applied to the Internal Revenue Service for such a
determination letter (or has time remaining to apply for such a determination
letter) prior to the expiration of the requisite period under applicable
Treasury Regulations or Internal Revenue Service pronouncements in which to
apply for such a determination letter and to make any amendments necessary to
obtain a favorable determination with respect to all periods since the date of
adoption of such GoSolutions Pension Plan. GoSolutions has delivered or made
available to VEDO or its counsel a complete and correct copy of the most recent
Internal Revenue Service determination letter with respect to each GoSolutions
401(a) Plan.
2.16.6 Schedule 2.16.6 lists and GoSolutions has provided or
made available to VEDO or its counsel each material employment, severance or
other similar contract, arrangement or policy and each plan or arrangement
(written or oral) providing for insurance coverage (including any self-insured
arrangements), workers' benefits, vacation benefits, severance benefits,
disability benefits, death benefits, hospitalization benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock options, stock
purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or benefits for
employees, consultants or directors which (A) is not a GoSolutions Employee
Plan, (B) is entered into, maintained or contributed to, as the case may be, by
GoSolutions and (C) covers any employee or former employee of GoSolutions. Such
contracts, plans and arrangements as are described in this Section 2.16.6 are
herein referred to collectively as the "GOSOLUTIONS BENEFIT ARRANGEMENTS." To
the knowledge of GoSolutions, each GoSolutions Benefit Arrangement has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations which are
applicable to such GoSolutions Benefit Arrangement, except where the failure to
comply with any such statutes, orders, rules and regulations would not have a
Material Adverse Effect on GoSolutions.
2.16.7 There has been no amendment to, written interpretation
or announcement (whether or not written) by GoSolutions relating to, or change
in employee participation or coverage under, any GoSolutions Employee Plan or
GoSolutions Benefit Arrangement that would increase materially the expense of
maintaining such GoSolutions Employee Plan or GoSolutions Benefit Arrangement
above the level of the expense incurred in respect thereof for the fiscal year
ended December 31, 2005.
2.16.8 To the knowledge of GoSolutions, the group health plans
(as defined in Section 4980B(g) of the Code) that benefit employees of
GoSolutions are in compliance, in all material respects, with the continuation
coverage requirements of Section 4980B of the Code and Sections 601 through 608
of ERISA, the Americans with Disabilities Act of 1990, as amended and the Family
Medical Leave Act of 1993, as amended, and the regulations thereunder, as such
requirements affect GoSolutions and its
18
employees, except where the failure to comply would not have a Material Adverse
Effect on GoSolutions. To the knowledge of GoSolutions, there are no material
outstanding violations under the Consolidation Omnibus Budget Reconciliation Act
of 1985, as amended ("COBRA"), with respect to any of GoSolutions Benefit
Arrangements, covered employees, or qualified beneficiaries.
2.16.9 To the knowledge of GoSolutions, GoSolutions is in
compliance in all material respects with all applicable laws, agreements and
contracts relating to employment, employment practices, wages, hours, and terms
and conditions of employment, including, but not limited to, employee
compensation matters, but not including ERISA. GoSolutions has no material
obligations under COBRA or any similar state law with respect to any former
employees or qualifying beneficiaries thereunder. There are no controversies
pending or, to the knowledge of GoSolutions, threatened, between GoSolutions and
any of its employees or former employees, which controversies have or could
reasonably be expected to have a Material Adverse Effect on GoSolutions.
GoSolutions is not a party to any collective bargaining agreement or other labor
union contract nor does GoSolutions have knowledge of any activities or
proceedings of any labor union or other group to organize any such employees. To
the knowledge of GoSolutions, GoSolutions has not incurred any liability under,
and has complied in all respects with, the Worker Adjustment Retraining
Notification Act (the "WARN ACT"), and to the knowledge of GoSolutions, no fact
or event exists that could give rise to liability under the WARN Act. Schedule
2.16.9 contains a list of all employees who are currently on a leave of absence
(whether paid or unpaid), the reasons therefor, and whether reemployment of such
employee is guaranteed by contract or statute, and a list of all employees who
have requested a leave of absence to commence at any time after the date of this
Agreement, the reason therefore, the expected length of such leave, and whether
reemployment of such employee is guaranteed by contract or statute.
2.16.10 Except as set forth in Schedule 2.16.10, GoSolutions
is not a party to any (a) agreement with any executive officer or other key
employee of GoSolutions (i) the benefits of which are contingent, or the terms
of which are materially altered, upon the occurrence of any of the transactions
contemplated by this Agreement and the Articles of Merger, (ii) providing any
term of employment or compensation guarantee, or (iii) providing severance
benefits or other benefits after the termination of employment of such employee
regardless of the reason for such termination of employment, or (b) agreement or
plan, including, without limitation, any stock option agreement or plan, stock
appreciation rights plan, stock purchase plan, stock restriction agreement,
restricted stock purchase agreement or employment agreement, any of the benefits
of which will be increased, or the vesting of benefits (including contingent
rights to equity or payments) of which will be accelerated, by the occurrence of
any of the transactions contemplated by this Agreement and the Articles of
Merger or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement and the Articles
of Merger.
2.17 Inventories. Except as set forth in Schedule 2.17, all inventories
of GoSolutions reflected in the GoSolutions Balance Sheet consist of items of
merchantable quality and quantity usable and salable at its carrying value in
the ordinary course of business, consistent with past practice.
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2.18 Receivables. The accounts receivables and other receivables
reflected on the GoSolutions Balance Sheet, and those arising in the ordinary
course of business after the date thereof, are valid receivables that have
arisen from bona fide transactions in the ordinary course of business.
2.19 Orders, Commitments and Returns. All accepted and unfulfilled
orders for the sale of products and the performance of services entered into by
GoSolutions and all outstanding contracts or commitments for the purchase of
supplies, materials and services by or from GoSolutions were made in bona fide
transactions in the ordinary course of business. There are no material claims
against GoSolutions to return products by reason of alleged over-shipments,
defective products or otherwise, or of products in the hands of customers,
retailers or distributors under an understanding that such products would be
returnable.
2.20 Relations with Suppliers and Customers. No material current
supplier of GoSolutions has canceled any contract or order for provision of,
and, to the knowledge of GoSolutions's officers, there has been no threat in
writing by any such supplier not to provide, raw materials, products, supplies
or services to the businesses of GoSolutions either prior to or following the
Effective Time. Schedule 2.20 lists each supplier to GoSolutions that is the
source of a particular material, product, supply or service with respect to
which locating and qualifying a replacement source would, to GoSolutions'
knowledge, involve significant cost or delay.
2.21 Product Liability Claims. Except as set forth in Schedule 2.21,
GoSolutions has never received a claim, or, to its knowledge, incurred any
uninsured or insured liability, for or based upon breach of product warranty
(other than warranty service and repair claims incurred in the ordinary course
of business and expensed as warranty expense on the Financial Statements for the
period in which such claims were incurred), strict liability in tort, general
negligence, negligent manufacture of product or any other allegation of
liability, including or resulting in, but not limited to, product recalls,
arising from the materials, design, testing, manufacture, packaging, labeling
(including instructions for use) or sale of its products ("PRODUCT LIABILITY
CLAIM").
2.22 Warranties. To the knowledge of GoSolutions, all products
manufactured or sold, and all services provided, by GoSolutions have materially
complied, and are in material compliance with all contractual requirements,
warranties or covenants applicable thereto. No product or service manufactured,
sold, delivered or performed by GoSolutions is subject to any guaranty, warranty
or other indemnity beyond the applicable standard terms and conditions set forth
in Schedule 2.22. Schedule 2.22 sets forth or references the terms of all
standard and all material non-standard product and service warranties and
product return, sales credit, discount, warehouse allowance, advertising
allowance, demo sales and credit policies of GoSolutions. GoSolutions has
delivered or made available to VEDO prior to the date hereof complete and
accurate copies of all such warranties and policies.
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2.23 Corporate Documents. GoSolutions has made available to VEDO for
examination all documents and information listed in the GoSolutions Disclosure
Schedules or other Exhibits and Schedules called for by this Agreement which
have been requested by VEDO's legal counsel, including, without limitation, the
following: (a) copies of GoSolutions' Amended and Restated Articles of
Incorporation and Bylaws as currently in effect; (b) its Minute Book containing
all records of all proceedings, consents, actions, and meetings of the
stockholders, the board of directors and any committees thereof; (c) its stock
ledger and journal reflecting all stock issuances and transfers; and (d) all
material permits, orders, and consents issued by any regulatory agency with
respect to GoSolutions, or any securities of GoSolutions, and all applications
for such permits, orders, and consents.
2.24 No Brokers. Neither GoSolutions nor any of the GoSolutions
Stockholders is obligated for the payment of fees or expenses of any investment
banker, broker or finder in connection with the origin, negotiation or execution
of this Agreement or the Articles of Merger or in connection with any
transaction contemplated hereby or thereby.
2.25 Disclosure. Neither this Agreement, its exhibits and schedules,
nor any of the certificates or documents to be delivered by GoSolutions to VEDO
under this Agreement, taken together, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which such statements were made, not misleading.
2.26 Books and Records.
2.26.1 The books, records and accounts of GoSolutions (a) are
in all material respects true, complete and correct, (b) have been maintained in
accordance with good business practices on a basis consistent with prior years,
(c) are stated in reasonable detail and accurately reflect the transactions and
dispositions of the assets of GoSolutions, and (d) accurately reflect the basis
for the Financial Statements.
2.26.2 GoSolutions has devised and maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
specific authorization; (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with generally accepted
accounting principles or any other criteria applicable to such statements, and
(ii) to maintain accountability for assets, and (c) the amount recorded for
assets on the books and records of GoSolutions is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
2.27 Insurance. GoSolutions currently maintains and at all times during
the prior three years has maintained fire and casualty, general liability,
business interruption and product liability insurance which it believes to be
reasonably prudent for similarly sized and similarly situated businesses.
21
2.28 Environmental Matters. During the period that GoSolutions has
leased or owned its properties or owned or operated any facilities, there have
been no disposals, releases or threatened releases of Hazardous Materials (as
defined below) on, from or under such properties or facilities. GoSolutions has
no knowledge of any presence, disposals, releases or threatened releases of
Hazardous Materials on, from or under any of such properties or facilities,
which may have occurred prior to GoSolutions having taken possession of any of
such properties or facilities. For the purposes of this Agreement, the terms
"DISPOSAL," "RELEASE," and "THREATENED RELEASE" shall have the definitions
assigned thereto by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. ss. 9601 et seq., as amended ("CERCLA"). For
the purposes of this Agreement "HAZARDOUS MATERIALS" shall mean any hazardous or
toxic substance, material or waste which is or becomes prior to the Closing
regulated under, or defined as a "hazardous substance," "pollutant,"
"contaminant," "toxic chemical," "hazardous materials," "toxic substance" or
"hazardous chemical" under (1) CERCLA; (2) any similar federal, state or local
law; or (3) regulations promulgated under any of the above laws or statutes.
2.29 No Knowledge of Misrepresentations or Omissions. GoSolutions has
no knowledge that the representations and warranties of VEDO in this Agreement
and the Schedules attached hereto are not true and correct in all material
respects, and GoSolutions has no knowledge of any material errors in, or
material omissions from, any Schedule to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VEDO
Each of VEDO and Merger Sub hereby represents and warrants that, except
as set forth on the VEDO Disclosure Schedules delivered to GoSolutions herewith
as EXHIBIT I (the "VEDO DISCLOSURE SCHEDULES"), which Exhibit may be updated to
reflect immaterial changes that occur after signing and prior to the Closing,
each of the representations, warranties and statements contained in the
following sections of this Article III is true and correct as of the Agreement
Date and will be true and correct on and as of the Closing Date.
3.1 Organization and Good Standing. VEDO and each of its subsidiaries
(including Merger Sub) is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, has the
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted and as proposed to be conducted. Each of
VEDO and Merger Sub is duly qualified or licensed to do business and is in good
standing as a foreign corporation in each jurisdiction where the nature of its
business or ownership or leasing of its properties makes such qualification or
licensing necessary except where the failure to be so qualified or licensed
could not reasonably be expected to result in a Material Adverse Effect on VEDO.
22
3.2 Power, Authorization and Validity.
3.2.1 Each of VEDO and Merger Sub has all requisite right,
power, legal capacity and authority to enter into and perform its obligations
under this Agreement and all VEDO Ancillary Agreements, and all of the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the VEDO Ancillary Agreements and the performance of all of VEDO's
and Merger Sub's obligations hereunder and thereunder, have been duly and
validly approved and authorized by their respective Board of Directors as
required by applicable law and their respective Certificate of Incorporation or
Articles of Incorporation (as the case may be) and their respective Bylaws. For
purposes of this Agreement, "VEDO ANCILLARY AGREEMENTS" means all agreements,
certificates and other documents required to be delivered by VEDO or Merger Sub
under this Agreement, including the Articles of Merger and the Merger Voting
Agreement.
3.2.2 To the knowledge of VEDO, no filing, authorization,
registration, order, consent, notice or approval, governmental or otherwise, is
necessary to enable VEDO or Merger Sub to enter into and deliver this Agreement
and the VEDO Ancillary Agreements, or to perform any of their respective
obligations hereunder and thereunder, except where the failure to give such
notice, to file or to obtain any authorization, consent or approval would not
have a Material Adverse Effect on VEDO and except for (a) the filing of the
Articles of Merger with the Florida Department of State, and the filing of
appropriate documents with the relevant authorities of other states in which
VEDO is qualified to do business, if any, (b) such filings as may be required to
comply with federal, state and foreign securities laws, (c) the approval of the
transactions contemplated hereby by VEDO, as the sold Merger Sub Stockholder,
(d) the filings, if any, required by the HSR Act.
3.2.3 Subject to approval of this Agreement and the Merger by
VEDO as the sole Merger Sub Stockholder, this Agreement has been, and the VEDO
Ancillary Agreements are, or when executed by VEDO and Merger Sub will be, valid
and binding obligations of VEDO and Merger Sub enforceable in accordance with
their respective terms, except as to the effect, if any, of (a) applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting the rights of creditors generally from time to time, (b) rules of law
governing specific performance, injunctive relief and other equitable remedies
and (c) the enforceability of provisions requiring indemnification in connection
with the offering, issuance or sale of securities; PROVIDED, HOWEVER, that the
Articles of Merger will not be effective until filed with the Florida Department
of State. This Agreement has been, and when executed the VEDO Ancillary
Agreement will be, duly executed and delivered by VEDO and Merger Sub.
3.3 Capitalization.
3.3.1 Authorized and Outstanding Capital Stock. The authorized
capital stock of VEDO consists of 400,000,000 shares of Common Stock, no par
value per share, of which 94,319,190 shares were issued and outstanding as of
July 31, 2005, and 48,000,000 shares of Series A Convertible Preferred Stock,
$.001 par value per share, none of which are issued and outstanding.
23
All issued and outstanding shares of VEDO Common Stock have been duly authorized
and were validly issued, are fully paid and nonassessable, are not subject to
any right of rescission, are not subject to preemptive rights by statute, the
Certificate of Incorporation or Bylaws of VEDO, or any agreement or document to
which VEDO is a party or by which it is bound, and all such shares have been
offered, issued, sold and delivered by VEDO in compliance with all registration
or qualification requirements (or applicable exemptions therefrom) of applicable
federal, state and foreign securities laws. VEDO is not under any obligation to
register under the Securities Act any of its presently outstanding securities or
any securities that may be subsequently issued. There is no liability for
dividends accrued but unpaid with respect to VEDO's outstanding securities.
3.3.2 VEDO Options, Warrants and Notes. Except as set forth in
Schedule3.3.2, VEDO does not have outstanding any securities convertible into
capital stock, nor any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock or securities convertible into its capital stock.
3.3.3 Merger Sub Capital Stock. The authorized capital stock
of Merger Sub consists of 1,000 shares of Merger Sub Common Stock, all of which
are issued and outstanding and fully paid and nonassessable. All of the issued
and outstanding capital stock of Merger Sub is, and at the Effective Time will
be, owned by VEDO, and there are (i) no shares of capital stock or voting
securities of Merger Sub, (ii) no securities of Merger Sub convertible into or
exchangeable for shares of capital stock or voting securities of Merger Sub and
(iii) no options or other rights to acquire from Merger Sub, and no obligations
of Merger Sub to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of
Merger Sub. Merger Sub has not conducted any business prior to the date hereof
and has no, and prior to the Effective Time will have no, assets, liabilities or
obligations of any nature other than those incident to its formation and
pursuant to this Agreement and the Merger and the other transactions
contemplated by hereby or thereby.
3.4 Subsidiaries. Except as set forth in Schedule 3.4, VEDO does not
have any subsidiaries or any interest, direct or indirect, in any corporation,
partnership, joint venture or other business entity, organization or enterprise.
VEDO is not obligated to make and is not bound by any agreement or obligation to
make any investment in or capital contribution in or on behalf of any other
entity.
3.5 No Violation of Existing Agreements. Neither the execution and
delivery of this Agreement nor any VEDO Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach, default, impairment or violation of (a) any provision of
the Certificate of Incorporation or Bylaws of VEDO, as currently in effect, (b)
in any material respect, any material, lease, contract or instrument to which
VEDO is a party or by which VEDO or any of its assets or properties is bound, or
(c) to
24
the knowledge of VEDO, any federal, state, local or foreign judgment, writ,
decree, order, statute, rule or regulation or any permit, franchise or
concession applicable to VEDO or its assets or properties. The consummation of
the Merger will not require the consent or approval of or notice to any third
party.
3.6 Litigation. Schedule 3.6 sets forth each instance in which VEDO (i)
is subject to any outstanding injunction, judgment, order, decree, ruling, or
charge, or (ii) is a party to any action, suit, proceeding, hearing, or
investigation of, in or before any court or quasi-judicial or administrative
agency of any federal, state, local or foreign jurisdiction, except where the
injunction, judgment, order, decree, ruling, charge, action, suit, proceeding,
hearing or investigation would not have a Material Adverse Effect on
GoSolutions. There is, to VEDO's knowledge, no reasonable basis for any
stockholder or former stockholder of VEDO, or any other person, firm,
corporation, or entity, to assert a claim against VEDO based upon violation of
any statutory or contractual right with respect to: (a) ownership or rights to
ownership of any shares of VEDO Stock, (b) any rights as a VEDO Stockholder,
including any option or preemptive rights or rights to notice or to vote, or (c)
any rights under any agreement among VEDO and its stockholders.
3.7 Taxes. Except as set forth in Schedule 3.7, VEDO has timely filed
all federal, state, local and foreign tax and information returns required to be
filed by it, has timely paid all taxes required to be paid by it for which
payment is due, has established an adequate accrual or reserve for the payment
of all taxes payable in respect of the periods subsequent to the periods covered
by its most recent applicable tax returns (which accrual or reserve as of the
VEDO Balance Sheet Date (as defined in Section 3.10 below) is fully reflected on
the VEDO Balance Sheet (as defined in Section 3.8 below) and in any more recent
balance sheet of VEDO provided by VEDO to GoSolutions on or before the Agreement
Date), has made all necessary estimated tax payments, and has no liability for
taxes in excess of the amount so paid and accruals or reserves so established.
All such returns and reports are true, correct and complete, and VEDO has
provided GoSolutions with true and correct copies of such returns and reports.
VEDO is not delinquent in the payment of any tax or in the filing of any tax
returns, and no deficiencies for any tax have been threatened, claimed, proposed
or assessed against VEDO, or any of the officers, employees or agents of VEDO in
their capacity as such. VEDO has not received any notification from the Internal
Revenue Service or any other taxing authority regarding any material issues
that: (a) are currently pending before the Internal Revenue Service or any other
taxing authority (including, but not limited to, any sales or use tax authority)
regarding VEDO, or (b) have been raised by the Internal Revenue Service or other
taxing authority and not yet finally resolved. No tax return of VEDO is under
audit by the Internal Revenue Service or any state or local taxing agency or
authority and any such past audits (if any) have been completed and fully
resolved to the satisfaction of the applicable tax authority conducting such
audits and all taxes and any penalties or interest determined by such audits to
be due from VEDO have been paid in full to the applicable taxing authorities. No
tax liens are currently in effect against any assets of VEDO other than liens
which arise by operation of law for taxes not yet due and payable. There is not
in effect any waiver by VEDO of any statute of limitations with respect to any
taxes or any extension of time for filing any tax return which has not been
25
filed, and VEDO has not consented to extend to a date later than the date hereof
the period in which any tax may be assessed or collected by any taxing
authority. VEDO is not and has never been a party to a tax sharing or indemnity
agreement. VEDO has not filed any election under Section 341(f) of the Code.
VEDO has withheld with respect to each of its employees and independent
contractors all taxes, including, but not limited to, federal and state income
taxes, FICA, Medicare, FUTA and other taxes, required to be withheld, and paid
such withheld amounts to the appropriate tax authority within the time
prescribed by law.
3.8 SEC Documents/VEDO Financial Statements. Except as set forth in
Schedule 3.8, VEDO has timely filed and will timely file prior to the Effective
Time, all forms, reports and documents required to be filed with the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "SECURITIES ACT") in the past twelve (12) months. VEDO has
furnished or made available to GoSolutions true and complete copies of all
reports or registration statements filed by it with the SEC, all in the form so
filed (all of the foregoing being collectively referred to herein as the "SEC
DOCUMENTS"). As of their respective filing dates, the SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, except to the extent
corrected by a document subsequently filed with the SEC and furnished to
GoSolutions in accordance with this Section 3.8. The consolidated financial
statements of VEDO, including the notes thereto, included in the SEC Documents
(the "VEDO FINANCIAL STATEMENTS") have been prepared in accordance with GAAP
consistently applied (except as may be indicated in the notes thereto or, in the
case of unaudited statements, as permitted by SEC rule) and present fairly, in
all material respects, the consolidated financial position of VEDO at the dates
thereof and the consolidated results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
3.9 Title to Properties. VEDO has good and marketable title to all of
its assets and properties shown on the VEDO Financial Statements, free and clear
of all liens, charges, restrictions, pledges or encumbrances (other than (i)
liens for taxes not yet due and payable, and (ii) minor imperfections of and
encumbrances on title, if any, that do not materially detract from the value of
or interfere with the use of such property). All machinery and equipment
included in such properties is in good condition and repair, normal wear and
tear excepted, and all leases of real or personal property to which VEDO is a
party are valid, binding and enforceable against VEDO, and fully effective and
afford VEDO peaceful and undisturbed possession of the subject matter of the
lease, subject to the General Enforceability Exceptions. To its knowledge, VEDO
is not in violation of any zoning, building, safety or environmental ordinance,
regulation or requirement or other law or regulation applicable to the operation
of owned or leased properties (the violation of which would have a Material
Adverse Effect on its business), or has received any notice of violation with
which it has not complied.
3.10 Absence of Certain Changes. Except as set forth in Schedule 3.10,
since September 30, 2005 (the "VEDO BALANCE SHEET DATE") there has not been with
respect to VEDO:
26
(a) any change in the financial condition, properties, assets,
employees, liabilities, business or operations thereof which change by itself or
in conjunction with all other such changes, whether or not arising in the
ordinary course of business, has had or could reasonably be expected to have a
Material Adverse Effect on VEDO;
(b) any contingent liability incurred by VEDO as guarantor or
otherwise with respect to the obligations of others;
(c) any mortgage, trust, pledge, encumbrance or lien placed on
any of the assets or properties of VEDO (except as permitted under Section 3.9)
(d) any material obligation or liability incurred by VEDO,
other than obligations and liabilities incurred in the ordinary course of
business;
(e) any purchase or sale or other disposition, or any
agreement or other arrangement for the purchase, sale or other disposition, of
any of the properties or assets of VEDO other than in the ordinary course of
business in amounts which are not material to VEDO and other than the sale or
disposition of inventory in the ordinary course of business;
(f) any damage, destruction or loss, whether or not covered by
insurance, that has or could reasonably be expected to result in a Material
Adverse Effect on VEDO;
(g) any declaration, setting aside or payment of any dividend
on, or the making of any other distribution in respect of, the capital stock of
VEDO, any split, combination or recapitalization of the capital stock of VEDO or
any direct or indirect redemption, purchase or other acquisition of the capital
stock of VEDO;
(h) any labor dispute or claim of unfair labor practices, any
change in the compensation payable or to become payable to any of VEDO's
officers, employees, consultants or agents (except normal annual merit or cost
of living increases made in the ordinary course of business consistent with past
practice which are not material in amount), or any bonus payment or arrangement
made to or with any of such officers, employees, consultants or agents;
(i) any payment or discharge of a material lien or liability
of VEDO which lien or liability was not either shown on the VEDO Balance Sheet
or incurred in the ordinary course of business thereafter consistent with past
practice;
(j) any obligation or liability incurred by VEDO to any of its
officers, employees, directors or stockholders or any loans or advances made by
VEDO to any of its officers, employees, directors or stockholders except normal
compensation and expense allowances payable to officers;
27
(k) any issuance of shares of VEDO Stock or grant or issuance
of any options, warrants or other rights to acquire VEDO Stock from VEDO, or any
offer, issuance or sale by VEDO of, any debt or equity securities of VEDO
(except for the issuance of VEDO Stock upon exercise of outstanding options or
warrants of VEDO);
(l) any agreement, action or omission not otherwise referred
to in subsections (a) through (k) that resulted in a Material Adverse Effect on
VEDO; or
(m) any agreement, whether in writing or otherwise, to take
any of the actions specified in the foregoing subsections (a) through (l).
3.11 Contracts. Schedule 3.11 sets forth a list of all material
contracts, agreements, commitments, licenses or other instruments, written or
oral, to which VEDO is a party or to which VEDO or any of its assets or
properties is bound (such agreements and documents being hereinafter
collectively referred to as the "VEDO MATERIAL AGREEMENTS"). A true and complete
copy of each agreement or document, as amended through the date hereof, required
by this Section 3.11 to be listed in Schedule 3.11 has been made available to
GoSolutions. All VEDO Material Agreements are valid and in full force and
effect. VEDO is not in material breach or default under any VEDO Material
Agreement, and has not received any notice or other communication regarding any
actual or possible violation or breach of, or default under, any VEDO Material
Agreement. To the knowledge of VEDO, no party to any VEDO Material Agreement is
in beach or default of, or intends to terminate, cancel, modify or amend, any
VEDO Material Agreement.
3.12 No Consent Required; No Restrictions. Except as set forth in
Schedule 3.12, no consent, notice or approval of any third party is required to
ensure that, following the Effective Time, any VEDO Material Agreement will
continue to be in full force and effect without any breach or violation thereof
caused by virtue of the Merger or by any other transaction contemplated by this
Agreement or any VEDO Ancillary Agreement. VEDO is not a party to, and no asset
or property of VEDO is bound or affected by, any judgment, injunction, order,
decree, contract, covenant or agreement (noncompete or otherwise) that restricts
or prohibits, or purports to restrict or prohibit, VEDO or, following the
Effective Time, the surviving corporation, from freely engaging in any business
now conducted by VEDO or from competing anywhere in the world (including,
without limitation, any contracts, covenants or agreements restricting the
geographic area in which VEDO may sell, license, market, distribute or support
any products or technology or provide services, or restricting the markets,
products, customers or industries that VEDO may address in operating its
business), or includes any grants by VEDO of exclusive rights or licenses. To
the knowledge of VEDO, no event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time) will, or would reasonably
be expected to, (a) result in a material violation or breach of any of the
provisions of any VEDO Material Agreement, or (b) give any third party (i) the
right to declare a material default or exercise any material remedy under any
VEDO Material Agreement, (ii) the right to a rebate, chargeback or penalty under
any VEDO Material Agreement, (iii) the right to accelerate the maturity or
performance of any obligation of VEDO in excess of $25,000 under any VEDO
Material
28
Agreement, or (iv) the right to cancel, terminate or modify any VEDO Material
Agreement, except in each such case for such defaults, acceleration rights,
termination rights and other rights that have not had, and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on VEDO.
3.13 Intellectual Property. Except as set forth in Schedule 3.13, VEDO
owns or has the right to use, sell or license all material Intellectual Property
Rights necessary or required for the conduct of its business as presently
conducted (such Intellectual Property Rights being hereinafter collectively
referred to as the "VEDO IP RIGHTS") and such rights to use, sell or license are
reasonably sufficient for such conduct of its business. To the knowledge of
VEDO, the execution, delivery and performance of this Agreement and the VEDO
Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby will not constitute a material breach of any instrument or
agreement governing any VEDO IP Right (the "VEDO IP RIGHTS AGREEMENTS"), will
not cause the forfeiture or termination or give rise to a right of forfeiture or
termination of any VEDO IP Right or materially impair the right of VEDO to use,
sell or license any VEDO IP Right or portion thereof (except where such breach,
forfeiture, termination or impairment would not have a Material Adverse Effect
on VEDO). There are no royalties, honoraria, fees or other payments payable by
VEDO to any person by reason of the ownership, use, license, sale or disposition
of the VEDO IP Rights. To the knowledge of VEDO, neither the manufacture,
marketing, license, sale or intended use of any product currently licensed or
sold, or any service offered by, VEDO or currently under development by VEDO
violates any license or agreement between VEDO and any third party or infringes
any Intellectual Property Right of any other party; and there is no pending or,
to the knowledge of VEDO, threatened claim or litigation against VEDO contesting
the validity or ownership of, or VEDO's right to use, sell, license or dispose
of, any VEDO IP Right, nor, except as set forth in Schedule 3.13, has VEDO
received any notice asserting that any VEDO IP Right or the proposed use, sale,
license or disposition thereof conflicts or will conflict with the rights of any
other party, nor, to the knowledge of VEDO, is there any basis for any such
assertion. VEDO has taken reasonable steps designed to safeguard and maintain
the secrecy and confidentiality of, and its proprietary rights in, all material
VEDO IP Rights.
3.14 Compliance with Laws. VEDO has complied and is in full compliance,
in all material respects with all applicable laws, ordinances, regulations, and
rules, and all orders, writs, injunctions, awards, judgments, and decrees
applicable to it or its assets, properties, and business. To the knowledge of
VEDO, VEDO has received all permits, licenses, commissions, consents and
approvals from, and has made all filings with, third parties, including
government agencies, bodies and authorities, that are necessary for its business
as currently conducted ("VEDO GOVERNMENTAL PERMITS"), except where the failure
to obtain any such VEDO Governmental Permit is not reasonably expected to have a
Material Adverse Effect on VEDO. To knowledge of VEDO, there are no legal or
administrative proceedings or investigations pending or threatened in writing,
that, if enacted or determined adversely to VEDO, would result in any Material
Adverse Effect on VEDO.
29
3.15 Certain Transactions and Agreements. No Affiliate of VEDO has had
or has, either directly or indirectly, a material interest in (i) any person or
entity which purchases from or sells, licenses or furnishes to VEDO any goods,
products, property, technology or intellectual or other property rights or
provides any services for or to VEDO; or (ii) any contract or agreement or
informal arrangement to which VEDO is a party or by which it may be bound or
affected, except for normal compensation for services as an officer, director or
employee of VEDO. None of said Affiliates has any interest in any property, real
or personal, tangible or intangible, including inventions, patents, copyrights,
trademarks or trade names or trade secrets, used in the business of VEDO, except
for the normal rights of a stockholder or warrantholder.
3.16. Employees, ERISA and Other Compliance.
3.16.1 Except as set forth in Schedule 3.16.1, VEDO has no
employment contracts or consulting agreements currently in effect that are not
terminable at will (other than agreements with the sole purpose of providing for
the confidentiality of proprietary information or assignment of inventions).
3.16.2 VEDO (i) has never been and is not now subject to a
union organizing effort, (ii) is not subject to any collective bargaining
agreement with respect to any of its employees, (iii) is not subject to any
other contract, written or oral, with any trade or labor union, employees'
association or similar organization, or (iv) has no current labor disputes.
3.16.3 Schedule 3.16.3 identifies i) each "employee benefit
plan," as defined in ERISA, and (ii) all other material written or formal plans
or agreements involving direct or indirect compensation or benefits (including
any employment agreements entered into between VEDO and any employee of VEDO,
but excluding workers' compensation, unemployment compensation and other
government-mandated programs) currently or previously maintained, contributed to
or entered into by VEDO or any ERISA Affiliate (as defined below) under which
either has any present or future material obligation or liability (collectively,
the "VEDO EMPLOYEE PLANS"). For purposes of this Section 3.16, "ERISA AFFILIATE"
shall mean any entity which is a member of (A) a "controlled group of
corporations," as defined in Section 414(b) of the Code, (B) a group of entities
under "common control," as defined in Section 414(c) of the Code, or (C) an
"affiliated service group," as defined in Section 414(m) of the Code, or
treasury regulations promulgated under Section 414(o) of the Code, any of which
includes VEDO. Copies of all VEDO Employee Plans (and, if applicable, related
trust agreements), and all amendments thereto and written interpretations
thereof (including summary plan descriptions) have been delivered or made
available to GoSolutions or its counsel, together with the most recent annual
reports (Form 5500, including, if applicable, Schedule B thereto) prepared in
connection with any such VEDO Employee Plan. All contributions due from VEDO
with respect to any of the VEDO Employee Plans have been made as required under
ERISA or have been accrued on VEDO's financial statements as of the VEDO Balance
Sheet Date. To the knowledge of VEDO, each VEDO Employee Plan has been
maintained substantially in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including,
without limitation, ERISA and the Code, which are applicable to
30
such VEDO Employee Plans, except where the failure to comply with any such
statutes, orders, rules and regulations would not have a Material Adverse Effect
on VEDO. No VEDO Employee Plan will be subject to any material surrender fees or
service fees upon termination other than normal and reasonable administrative
fees associated with the termination of benefit plans.
3.16.4 No VEDO Pension Plan constitutes, or has since the
enactment of ERISA constituted, a "multiemployer plan," as defined in Section
3(37) of ERISA and VEDO has no obligation under any multiemployer plan. No VEDO
Pension Plans are subject to Title IV of ERISA. To the knowledge of VEDO, no
"prohibited transaction," as defined in Section 406 of ERISA or Section 4975 of
the Code, has occurred with respect to any VEDO Employee Plan which is covered
by Title I of ERISA which would result in a material liability to VEDO,
excluding transactions effected pursuant to a statutory or administrative
exemption. To the knowledge of VEDO, nothing done or omitted to be done and no
transaction or holding of any asset under or in connection with any VEDO
Employee Plan has or will make VEDO or any officer or director of VEDO subject
to any material liability under Title I of ERISA or liable for any material tax
(as defined in Section 3.7) or penalty pursuant to Sections 4972, 4975, 4976 or
4979 of the Code or Section 502 of ERISA.
3.16.5 Any VEDO Pension Plan which is intended to be qualified
under Section 401(a) of the Code (a "VEDO 401(A) PLAN"). (i) has obtained from
the Internal Revenue Service an opinion letter or favorable determination letter
as to its initial qualified status under the Code, (ii) may rely on an opinion
letter issued to a prototype plan sponsor with respect to a standardized plan
adopted by VEDO in accordance with the requirements for such reliance, or (iii)
has applied to the Internal Revenue Service for such a determination letter (or
has time remaining to apply for such a determination letter) prior to the
expiration of the requisite period under applicable Treasury Regulations or
Internal Revenue Service pronouncements in which to apply for such a
determination letter and to make any amendments necessary to obtain a favorable
determination with respect to all periods since the date of adoption of such
VEDO Pension Plan. VEDO has delivered or made available to GoSolutions or its
counsel a complete and correct copy of the most recent Internal Revenue Service
determination letter with respect to each VEDO 401(a) Plan.
3.16.6 Schedule 3.16.6 lists and VEDO has made available to
GoSolutions or its counsel each material employment, severance or other similar
contract, arrangement or policy and each plan or arrangement (written or oral)
providing for insurance coverage (including any self-insured arrangements),
workers' benefits, vacation benefits, severance benefits, disability benefits,
death benefits, hospitalization benefits, retirement benefits, deferred
compensation, profit-sharing, bonuses, stock options, stock purchase, phantom
stock, stock appreciation or other forms of incentive compensation or
post-retirement insurance, compensation or benefits for employees, consultants
or directors which (A) is not a VEDO Employee Plan, (B) is entered into,
maintained or contributed to, as the case may be, by VEDO and (C) covers any
employee or former employee of VEDO. Such contracts, plans and arrangements as
are described in this Section 3.16.6 are herein referred to collectively as the
"VEDO BENEFIT
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ARRANGEMENTS." To the knowledge of VEDO, each VEDO Benefit Arrangement has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations which are
applicable to such VEDO Benefit Arrangement, except where the failure to comply
with any such statutes, orders, rules and regulations would not have a Material
Adverse Effect on VEDO.
3.16.7 There has been no amendment to, written interpretation
or announcement (whether or not written) by VEDO relating to, or change in
employee participation or coverage under, any VEDO Employee Plan or VEDO Benefit
Arrangement that would increase materially the expense of maintaining such VEDO
Employee Plan or VEDO Benefit Arrangement above the level of the expense
incurred in respect thereof for the fiscal year ended December 31, 2004.
3.16.8 To the knowledge of VEDO, the group health plans (as
defined in Section 4980B(g) of the Code) that benefit employees of VEDO are in
compliance, in all material respects, with the continuation coverage
requirements of Section 4980B of the Code and Sections 601 through 608 of ERISA,
the Americans with Disabilities Act of 1990, as amended and the Family Medical
Leave Act of 1993, as amended, and the regulations thereunder, as such
requirements affect VEDO and its employees, except where the failure to comply
would not have a Material Adverse Effect on VEDO. To the knowledge of VEDO,
there are no material outstanding, uncorrected violations under COBRA, with
respect to any of VEDO Benefit Arrangements, covered employees, or qualified
beneficiaries.
3.16.9 To the knowledge of VEDO, VEDO is in compliance in all
material respects with all applicable laws, agreements and contracts relating to
employment, employment practices, wages, hours, and terms and conditions of
employment, including, but not limited to, employee compensation matters, but
not including ERISA. VEDO has no material obligations under COBRA or any similar
state law with respect to any former employees or qualifying beneficiaries
thereunder. There are no controversies pending or, to the knowledge of VEDO,
threatened, between VEDO and any of its employees or former employees, which
controversies have or could reasonably be expected to have a Material Adverse
Effect on VEDO. VEDO is not a party to any collective bargaining agreement or
other labor union contract nor does VEDO have knowledge of any activities or
proceedings of any labor union or other group to organize any such employees. To
the knowledge of VEDO, VEDO has not incurred any liability under, and has
complied in all respects with, the WARN Act, and to the knowledge of VEDO, no
fact or event exists that could give rise to liability under the WARN Act.
3.16.10 Except as set forth in Schedule 3.16.10, VEDO is not a
party to any (a) agreement with any executive officer or other key employee of
VEDO (i) the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of any of the transactions contemplated
by this Agreement and the Articles of Merger, (ii) providing any term of
employment or compensation guarantee, or (iii) providing severance benefits or
other benefits after the termination of employment of
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such employee regardless of the reason for such termination of employment, or
(b) agreement or plan, including, without limitation, any stock option agreement
or plan, stock appreciation rights plan or stock purchase plan, stock
restriction agreement, restricted stock purchase agreement or employment
agreement, any of the benefits of which will be increased, or the vesting of
benefits (including contingent rights to equity or payments) of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement and the Articles of Merger or the value of any of the benefits of
which will be calculated on the basis of any of the transactions contemplated by
this Agreement and the Articles of Merger.
3.17 Inventories. Except as set forth in Schedule 3.17, all inventories
of VEDO reflected in the VEDO Balance Sheet consist of items of merchantable
quality and quantity usable and salable at its carrying value in the ordinary
course of business, consistent with past practice.
3.18 Receivables. The accounts receivables and other receivables
reflected on the VEDO Balance Sheet, and those arising in the ordinary course of
business after the date thereof, are valid receivables that have arisen from
bona fide transactions in the ordinary course of business.
3.19 Orders, Commitments and Returns. All accepted and unfulfilled
orders for the sale of products and the performance of services entered into by
VEDO and all outstanding contracts or commitments for the purchase of supplies,
materials and services by or from VEDO were made in bona fide transactions in
the ordinary course of business. There are no material claims against VEDO to
return products by reason of alleged over-shipments, defective products or
otherwise, or of products in the hands of customers, retailers or distributors
under an understanding that such products would be returnable.
3.20 Relations with Suppliers and Customers. No material current
supplier of VEDO has canceled any contract or order for provision of, and, to
the knowledge of VEDO's officers, there has been no threat in writing by any
such supplier not to provide, raw materials, products, supplies or services to
the businesses of VEDO either prior to or following the Effective Time.
3.21 Product Liability Claims. Except as set forth in Schedule 3.21,
VEDO has never received a claim, or, to its knowledge, incurred any uninsured or
insured liability, for or based upon breach of product warranty (other than
warranty service and repair claims incurred in the ordinary course of business
and expensed as warranty expense on the Financial Statements for the period in
which such claims were incurred), strict liability in tort, general negligence,
negligent manufacture of product or any other allegation of liability, including
or resulting in, but not limited to, product recalls, arising from the
materials, design, testing, manufacture, packaging, labeling (including
instructions for use) or sale of its products.
3.22 Warranties. To the knowledge of VEDO, all products manufactured or
sold, and all services provided, by VEDO have materially complied, and are in
material compliance with all contractual requirements, warranties or covenants
applicable thereto. No product or service manufactured, sold, delivered or
performed by VEDO is subject to any guaranty, warranty or other indemnity beyond
the applicable standard terms and conditions set forth in Schedule 3.22.
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3.23 No Brokers. VEDO is not obligated for the payment of fees or
expenses of any investment banker, broker or finder in connection with the
origin, negotiation or execution of this Agreement or the Articles of Merger or
in connection with any transaction contemplated hereby or thereby.
3.24 Disclosure. Neither this Agreement, its exhibits and schedules,
nor any of the certificates or documents to be delivered by VEDO to GoSolutions
under this Agreement, taken together, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which such statements were made, not misleading.
3.25 Books and Records.
3.25.1 The books, records and accounts of VEDO (a) are in all
material respects true, complete and correct, (b) have been maintained in
accordance with good business practices on a basis consistent with prior years,
(c) are stated in reasonable detail and accurately reflect the transactions and
dispositions of the assets of VEDO, and (d) accurately reflect the basis for the
Financial Statements.
3.25.2 VEDO has devised and maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (a)
transactions are executed in accordance with management's general or specific
authorization; (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with generally accepted
accounting principles or any other criteria applicable to such statements, and
(ii) to maintain accountability for assets, and (c) the amount recorded for
assets on the books and records of VEDO is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.26 Insurance. VEDO currently maintains and at all times since its
inception has maintained fire and casualty, general liability, business
interruption, product liability insurance which it believes to be reasonably
prudent for similarly sized and similarly situated businesses.
3.27 Environmental Matters. During the period that VEDO has leased or
owned its properties or owned or operated any facilities, there have been no
disposals, releases or threatened releases of Hazardous Materials (as defined
below) on, from or under such properties or facilities. VEDO has no knowledge of
any presence, disposals, releases or threatened releases of Hazardous Materials
on, from or under any of such properties or facilities, which may have occurred
prior to VEDO having taken possession of any of such properties or facilities.
For the purposes of this Agreement, the terms "DISPOSAL," "RELEASE," and
"THREATENED RELEASE" shall have the definitions assigned thereto by the
Comprehensive Environmental Response, Compensation and Liability Act
34
of 1980, 42 U.S.C. ss. 9601 et seq., as amended ("CERCLA"). For the purposes of
this Agreement "HAZARDOUS MATERIALS" shall mean any hazardous or toxic
substance, material or waste which is or becomes prior to the Closing regulated
under, or defined as a "hazardous substance," "pollutant," "contaminant," "toxic
chemical," "hazardous materials," "toxic substance" or "hazardous chemical"
under (1) CERCLA; (2) any similar federal, state or local law; or (3)
regulations promulgated under any of the above laws or statutes.
3.28 No Knowledge of Misrepresentations or Omissions. VEDO has no
knowledge that the representations and warranties of GoSolutions in this
Agreement and the Schedules attached hereto are not true and correct in all
material respects, and VEDO has no knowledge of any material errors in, or
material omissions from, any Schedule to this Agreement.
ARTICLE IV
CERTAIN PRE-CLOSING COVENANTS
During the time period from the Agreement Date until the earlier to
occur of (i) the Effective Time, or (ii) the termination of this Agreement in
accordance with the provisions of Article X, GoSolutions and VEDO each covenant
and agree with the other as follows:
4.1 Advice of Changes. Each party will promptly advise other party in
writing (a) of any event occurring subsequent to the Agreement Date that would
render any representation or warranty of a party in this Agreement, if made on
or as of the date of such event or the Closing Date, untrue or inaccurate in any
material respect, and (b) of any event that would reasonably be expected to have
a Material Adverse Effect on such party.
4.2 Maintenance of Business. Each party agrees to carry on its business
in the usual, regular and ordinary course and preserve its business and
goodwill, and its relationships with customers, suppliers, vendors,
distributors, licensee/licensors, employees and others in substantially the same
manner as it has prior to the Agreement Date, to pay its debts and taxes when
due (subject to good faith disputes over such debts and taxes) to pay or perform
all other obligations when due (subject to good faith disputes over such
obligations). If either party becomes aware of a material deterioration in the
relationship with any material customer or any supplier, vendor, distributor,
licensee/licensors or key employee, it will promptly bring such information to
the attention of the other party in writing and, if requested by such other
party, will exert its best efforts to restore such relationship.
4.3 Conduct of Business. Except as expressly contemplated by this
Agreement, no party shall, without the prior written consent of the other party:
(a) borrow or lend any money, other than reasonable and normal
advances to employees for bona fide travel expenses that are incurred in the
ordinary course of a party's business consistent with such party's past
practices;
35
(b) enter into any material transaction or agreement or take
any other action not in the ordinary course of a party's business consistent
with its past practices;
(c) grant any mortgage, deed of trust, lien, pledge, charge,
security interest, restrictions or other encumbrances on any of a party's
assets;
(d) sell, transfer or dispose of any of a party's assets,
except in the ordinary course of such party's business consistent with its past
practices;
(e) enter into any material lease or contract for the purchase
or sale of any property of a party, whether real or personal, tangible or
intangible;
(f) pay any bonus not accrued as of December 31, 2005,
increased salary or special remuneration to any officer, director, employee or
consultant of a party, or enter into any new employment or consulting agreement
with any such person; provided, however, that GoSolutions shall pay deal bonuses
in an aggregate amount not to exceed $25,000;
(g) change any of a party's accounting methods;
(h) declare, set aside or pay any cash or stock dividend or
other distribution in respect of a party's capital stock, redeem, repurchase or
otherwise acquire any of its capital stock or other securities, pay or
distribute any cash or property to any stockholder or security holder of a party
or make any other cash payment to any stockholder or security holder of a party
that is unusual, extraordinary, or not made in the ordinary course of a party's
business consistent with its past practices;
(i) amend or terminate any contract, agreement or license to
which a party or its assets and properties are bound, except for (A) amended or
waived as provided in Section 5.3, (B) those amended or terminated in the
ordinary course of a party's business, consistent with its past practices and
which are not material in amount or effect;
(j) guarantee or act as a surety for any obligation of any
third party;
(k) waive or release any material right or claim;
(l) issue, sell, create or authorize any shares of its capital
stock of any class or series or any other of its securities, or issue, grant or
create any warrants, obligations, subscriptions, options, convertible
securities, or other commitments to issue shares of its capital stock or any
securities or debt that are potentially exchangeable for, or convertible into,
shares of its capital stock, except that VEDO may grant options consistent with
its past practices and issue shares of its common stock upon conversion of
outstanding options, warrants and convertible notes;
36
(m) subdivide or split or combine or reverse split the
outstanding shares of its capital stock of any class or series or enter into any
recapitalization or reclassification affecting the number of outstanding shares
of its capital stock of any class or series or affecting any other of its
securities;
(n) merge, consolidate or reorganize with, or acquire, or
enter into any other business combination with, any corporation, partnership,
limited liability company or any other entity (other than with a party) or enter
into any agreement for such purpose;
(o) amend its charter or Bylaws (except for (i) the amendment
of GoSolutions's Amended and Restated Articles of Incorporation as provided in
Section 1.6(b) above or (ii) as required to cleanly effect this transaction);
(p) license any of its technology or Intellectual Property
Rights, or acquire any Intellectual Property Rights (or any license thereto)
from any third party except for any such license in the ordinary course of such
party's business;
(q) materially change any insurance coverage;
(r) agree to any audit or assessment by any tax authority;
(s) agree to do any of the things described in the preceding
clauses 4.3(a) through 4.3(r).
4.4 Regulatory Filings; Consents; Reasonable Efforts. Subject to the
terms and conditions of this Agreement, GoSolutions and VEDO shall use their
respective reasonable good faith efforts to (i) make all necessary filings with
respect to the Merger and this Agreement under applicable laws and obtain
required approvals and clearances with respect thereto and supply all additional
information requested in connection therewith; (ii) make merger notification or
other appropriate filings with federal, state or local governmental bodies or
applicable foreign governmental agencies and obtain required approvals and
clearances with respect thereto and supply all additional information requested
in connection therewith; (iii) obtain all consents, waivers, approvals,
authorizations and orders and deliver all notices required in connection with
the authorization, execution and delivery of this Agreement and the consummation
of the Merger; and (iv) take, or cause to be taken, all appropriate action, and
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective the transactions contemplated by this Agreement as promptly
as practicable.
4.5 Litigation. Each of GoSolutions and VEDO will notify each other in
writing promptly after either learns of any claim, action, suit, arbitration,
mediation, proceeding or investigation by or before any court, arbitrator or
arbitration panel, board or governmental agency, initiated by or against it or
any of its subsidiaries, or known by it to be threatened against GoSolutions or
VEDO or any of their respective subsidiaries or any of their officers,
directors, employees or stockholders in their capacity as such.
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4.6 Exclusivity; Superior Proposal.
(a) From and after the Agreement Date until termination of the
Agreement in accordance with Article X, each of the parties will not, nor will
it authorize or permit any of its respective officers, directors, affiliates or
employees, or any investment banker, attorney or other advisor or representative
retained by it to, directly or indirectly, (i) solicit, initiate or induce the
making, submission or announcement of any Acquisition Proposal (as defined
below), (ii) participate in any discussions or negotiations regarding, or
furnish to any person any non-public information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to, any Acquisition Proposal,
(iii) engage in discussions with any person with respect to any Acquisition
Proposal, except as to disclose the existence of these provisions, (iv) endorse
or recommend any Acquisition Proposal, or (v) enter into any letter of intent or
similar document or any contract, agreement or commitment contemplating or
otherwise relating to any Superior Proposal (as defined below); provided,
however, that, during the period prior to the adoption of Merger by the
GoSolutions Stockholders and VEDO Stockholders, this Section 4.6 shall not
prohibit each party from furnishing nonpublic information regarding such party
to, entering into a confidentiality agreement with or entering into discussions
with, any person or group in response to a Superior Proposal or any offer or
proposal that the board of directors of the party reasonably determines in good
faith is reasonably likely to lead to a Superior Proposal submitted by such
person or group (and not withdrawn), or the board of directors of the party from
recommending that its stockholders approve a Superior Proposal if (A) neither
the party nor any representative of the party shall have violated any of the
restrictions set forth in this Section 4.6, including, but not limited to,
obligations under clause (i) above, (B) the board of directors of the party
concludes in good faith, after consultation with its outside legal counsel, that
such action is consistent with the exercise of its fiduciary obligations to its
stockholders under applicable state and federal law, (C) prior to furnishing any
such nonpublic information to, or entering into discussions with, such person or
group, the party gives the other party written notice of the receipt of a
Superior Proposal and of the party's intention to furnish nonpublic information
to, or enter into discussions with, such person or group and the party receives
from such person or group an executed confidentiality agreement containing
customary limitations on the use and disclosure of all nonpublic written and
oral information furnished to such person or group by or on behalf of the party,
and (D) contemporaneously with furnishing any such nonpublic information to such
person or group, the party furnishes such nonpublic information to the other
party (to the extent such nonpublic information has not been previously
furnished by the party to the other party); provided, further, however, that the
party shall not be permitted to consummate any transaction(s) contemplated by
any Superior Proposal unless and until the party has first terminated this
Agreement pursuant to Article X. The parties will, and will cause their
respective officers, directors, affiliates, employees, investment bankers,
attorneys and other advisors and representatives to, immediately cease any and
all existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding two sentences by any officer, director or employee of a party or
any investment banker, attorney or other advisor or representative of a party
shall be deemed to be a breach of this Section 4.6 by such party.
38
(b) In addition to the obligations of the parties set forth in
subsection (a) of this Section 4.6, a party as promptly as practicable shall
advise the other party in writing of any Acquisition Proposal or of any request
for nonpublic information or other inquiry which the party reasonably believes
could lead to an Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal (to the extent known). The parties agree to keep each other
informed on a current basis of the status and details (including any material
amendments or proposed amendments) of any such request, inquiry or Acquisition
Proposal.
(c) The following definitions shall apply for purposes of this Section
4.6: (i) "ACQUISITION PROPOSAL" means any bona fide offer or proposal (other
than an offer or proposal by the other party) relating to any Acquisition
Transaction; (ii) "ACQUISITION TRANSACTION" means (a) any transaction or series
of related transactions, other than the transactions contemplated by this
Agreement, involving the purchase of all or a majority of the capital stock
(voting rights) or assets of a party, and (b) any agreement to enter into a
business combination with a party; (iii) "SUPERIOR PROPOSAL" means an
unsolicited, bona fide written offer made by a third party to consummate any of
the following transactions: (a) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving a
party pursuant to which the party's stockholders immediately preceding such
transaction hold less than fifty percent (50%) of the equity interest in the
surviving or resulting entity of such transaction; (b) a sale or other
disposition by a party of all or substantially all of its assets, or (c) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by the Company), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of fifty percent (50%) of the voting power of the then
outstanding shares of capital stock of a party, in each case on terms that the
party's board of directors determines, in its reasonable judgment (after
consultation with a financial advisor of nationally recognized reputation), to
be more favorable to the party's stockholders than the terms of the Merger
(after taking into account all relevant factors, including all conditions to the
offer, the timing of the transaction contemplated by the offer, the risk of
nonconsummation thereof and the need for any required governmental or other
consents, filings or approvals); provided, however, that any such offer shall
not be deemed to be a "SUPERIOR PROPOSAL" if any financing required to
consummate the transaction contemplated by such offer is not likely in the
reasonable judgment of the party's board of directors to be obtained by such
third party on a timely basis.
4.7 Access to Information. Until the Closing, each party will allow the
other party (and such party's agents) reasonable access to the files, books,
records and offices of such party, including, without limitation, any and all
information relating to a party's taxes, commitments, contracts, leases,
licenses, and real, personal and intangible property and financial condition.
Each party will use reasonable efforts to cause its accountants to cooperate
with the other party and its agents in making available all financial
information reasonably requested, including without limitation the right to
examine all working papers pertaining to all financial statements prepared or
audited by such accountants. All information obtained by a party or its agents
of or regarding the other party (including its business or technology) under
this Section 4.7 shall be deemed confidential information under Section 12.17
hereof.
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4.8 Satisfaction of Conditions Precedent. GoSolutions will use its
commercially reasonable efforts to satisfy or cause to be satisfied all the
conditions precedent which are set forth in Article VII, and VEDO will use its
commercially reasonable efforts to satisfy or cause to be satisfied all the
conditions precedent which are set forth in Article VIII. Each party will use
its commercially reasonable efforts to cause the transactions contemplated by
this Agreement to be consummated, and, without limiting the generality of the
foregoing, to obtain all consents and authorizations of third parties and to
make all filings with, and give all notices to, third parties that may be
necessary or reasonably required on its part in order to effect the transactions
contemplated by this Agreement. GoSolutions shall use its commercially
reasonable efforts to obtain any and all consents necessary with respect to
those GoSolutions Material Contracts listed in Schedule 2.12 of the GoSolutions
Disclosure Schedules ("GOSOLUTIONS MATERIAL CONSENTS"). VEDO shall use its
commercially reasonable efforts to obtain any and all consents necessary with
respect to those VEDO Material Contracts listed in Schedule 3.11 of the VEDO
Disclosure Schedules ("VEDO MATERIAL CONSENTS").
ARTICLE V
GOSOLUTIONS PRE-CLOSING COVENANTS
During the time period from the Agreement Date until the earlier to
occur of (i) the Effective Time, or (ii) the termination of this Agreement in
accordance with the provisions of Article X, GoSolutions covenants and agrees
with VEDO as follows:
5.1. Approval of GoSolutions Stockholders. Prior to the Closing Date
and at the earliest practicable date following the date hereof, GoSolutions will
solicit written consents from its GoSolutions Stockholders seeking, or hold a
GoSolutions Stockholders Meeting for the purpose of seeking, approval of this
Agreement, the Merger and related matters. If GoSolutions holds a GoSolutions
Stockholders Meeting, the Board of Directors of GoSolutions will solicit proxies
from GoSolutions's Stockholders to vote such stockholders' shares at the
GoSolutions Stockholders Meeting. In soliciting such written consent or proxies,
the Board of Directors of GoSolutions will recommend to the GoSolutions
Stockholders that they approve this Agreement and the Merger and shall use its
best efforts to obtain the approval of the stockholders of GoSolutions entitled
to vote on or consent to this Agreement and the Merger in accordance with
Florida Law and GoSolutions's Amended and Restated Articles of Incorporation and
Bylaws or other charter documents.
5.2 Potential GoSolutions Dissenting Shares. As promptly as practicable
after the date of the GoSolutions Stockholders Meeting or the effective date of
the written consent of GoSolutions Stockholders approving the Merger and prior
to the Closing Date, GoSolutions shall furnish VEDO with the name and address of
each GoSolutions Stockholder that dissented to the Merger and the number of
shares of owned by each stockholder.
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5.3 Amendment or Waiver of Certain Rights. Prior to and effective as of
the Closing, all GoSolutions Stock Options will be exercised or cancelled.
Except as otherwise approved in writing by VEDO or otherwise provided herein,
all GoSolutions employment agreements shall be terminated as of the Effective
Time and GoSolutions' One Million Dollar ($1,000,000) SunTrust Line of Credit
facility will be terminated as of the Closing Date.
5.4 VEDO Preferred Stock Agreements. Prior to the Closing, GoSolutions
shall execute and deliver to VEDO the Merger Voting Agreement, and shall use its
best efforts to have the holders of GoSolutions Common Stock and GoSolutions
Class A Preferred Stock listed on Exhibit A hereto execute and deliver to VEDO
such agreement.
5.5 Consents and Waivers. GoSolutions shall have obtained all consents,
permits and waivers necessary or appropriate for the consummation of the Merger
and the same shall be effective as of the Closing Date.
5.6 Payment of GoSolutons Equity, LLC Promissory Note. Prior to the
Closing, GoSolutions shall pay in full the outstanding principal amount and any
unpaid, but accrued interest on the GoSolutions Equity, LLC promissory note
dated September 1, 2001, in the principal amount of $1,000,000.
ARTICLE VI
VEDO PRE-CLOSING COVENANTS
During the time period from the Agreement Date until the earlier to
occur of (i) the Effective Time, or (ii) the termination of this Agreement in
accordance with the provisions of Article X, VEDO covenants and agrees with
GoSolutions as follows:
6.1 Consents and Waivers. VEDO shall have obtained all consents,
permits and waivers necessary or appropriate for the consummation of the Merger
and the same shall be effective as of the Closing Date.
6.2 Principal VEDO Stockholders Voting Agreement. Prior to Closing,
VEDO shall use its best efforts to have the Principal VEDO Stockholders execute
and deliver to VEDO the Principal VEDO Stockholders Voting Agreement.
ARTICLE VII
CLOSING MATTERS
7.1 The Closing. Subject to termination of this Agreement as provided
in Article X below, the Closing will take place at the offices of Johnson, Pope,
Xxxxx, Xxxxxx & Xxxxx, LLP, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 at such
time and on such date as GoSolutions and VEDO may mutually select (the "CLOSING
DATE"). Concurrently with the Closing, the Articles of Merger will be filed in
the office of the Florida Department of State.
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7.2 Exchange of Certificates.
7.2.1 As of the Effective Time, all shares of GoSolutions
Common Stock and GoSolutions Class A Preferred Stock that are outstanding
immediately prior thereto will, by virtue of the Merger and without further
action, cease to exist and will be converted into the right to receive from VEDO
the number of shares of VEDO Common Stock determined as set forth in Section
1.3.1.1 and Section 1.3.1.2, respectively, subject to Section 1.4. As soon as
practicable after the Effective Time, each holder of shares of GoSolutions
Common Stock and GoSolutions Class A Preferred Stock that are not GoSolutions
Dissenting Shares will surrender (i) the certificate(s) representing such shares
(the "GOSOLUTIONS CERTIFICATES"), duly endorsed as requested by VEDO, to VEDO
for cancellation at the Effective Time, or (ii) if such certificate(s) has been
lost, stolen or destroyed, an affidavit of lost certificate and an indemnity in
form and substance reasonably satisfactory to VEDO (the "AFFIDAVIT"). Promptly
after the Effective Time and receipt of such GoSolutions Certificates or the
Affidavit, VEDO will issue to each tendering holder a certificate for the number
of shares of VEDO Common Stock to which such holder is entitled pursuant to
Section 1.3.1.1 and 1.3.1.2, as applicable, hereof.
7.2.2 No dividends or distributions payable to holders of
record of VEDO Common Stock after the Effective Time will be paid to the holder
of any unsurrendered GoSolutions Certificate(s) until such holder surrenders
such GoSolutions Certificate(s) or the Affidavit. Subject to the effect, if any,
of applicable escheat and other laws, following surrender of any GoSolutions
Certificate or the Affidavit, there will be delivered to the person entitled
thereto, without interest, the amount of any dividends and distributions paid
with respect to VEDO Common Stock so withheld as of any date subsequent to the
Effective Time and prior to such date of delivery.
7.2.3 All VEDO Common Stock delivered upon the surrender of
GoSolutions Common Stock and GoSolutions Class A Preferred Stock in accordance
with the terms hereof will be deemed to have been delivered in full satisfaction
of all rights pertaining to such GoSolutions Common Stock and GoSolutions Class
A Preferred Stock, as applicable. There will be no further registration of
transfers on the stock transfer books of GoSolutions of the GoSolutions Common
Stock. If, after the Effective Time, GoSolutions Certificates or Affidavits are
presented for any reason, they will be canceled and exchanged as provided in
this Section 7.2. Except with respect to GoSolutions Dissenting Shares,
GoSolutions Certificates outstanding prior to the Merger are surrendered
pursuant to Section 7.2.1 above, such certificates will be deemed, for all
purposes, to evidence ownership of the number of shares of VEDO Stock into which
the GoSolutions Common Stock and GoSolutions Class A Prefererd Stock will have
been converted.
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ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF GOSOLUTIONS
GoSolutions's obligations hereunder are subject to the fulfillment or
satisfaction, on and as of the Closing, of each of the following conditions (any
one or more of which may be waived by GoSolutions, but only in a writing signed
by GoSolutions):
8.1 Accuracy of Representations and Warranties. The representations and
warranties of VEDO set forth in Article 3 (as qualified by the VEDO Disclosure
Schedules) shall be true and accurate in every material respect on and as of the
Closing with the same force and effect as if they had been made at the Closing,
except for changes contemplated by this Agreement and except for those
representations and warranties that address matters only as of a particular date
(which shall remain true and correct as of such particular date), and
GoSolutions shall receive a certificate to such effect executed by VEDO's Chief
Executive Officer.
8.2 Covenants. VEDO shall have performed and complied in all material
respects with all of its covenants contained in Articles 4 and 6 above on or
before the Closing, and GoSolutions shall receive a certificate to such effect
signed by VEDO's Chief Executive Officer.
8.3 Absence of Material Adverse Effect. There will not have occurred
any event which has a Material Adverse Effect on VEDO, whether or not such event
causes or results in a breach of any representation, warranty or covenant in
this Agreement, and GoSolutions will have received a certificate to such effect
signed by VEDO's Chief Executive Officer.
8.4 Compliance with Law. There will not be issued or enacted or
adopted, or threatened in writing by any court, agency or other governmental
body, any order, decree, temporary, preliminary or permanent injunction,
legislative enactment, statute, rule, regulation, action or proceeding, or any
judgment or ruling that prohibits or renders illegal or imposes limitations on
the Merger or any other transaction contemplated by this Agreement or any VEDO
Ancillary Agreement. No litigation or proceeding will be threatened or pending
with the probable effect of enjoining or preventing the consummation of the
Merger or any of the other transactions contemplated by this Agreement, or which
would be reasonably expected to have a Material Adverse Effect on VEDO.
8.5 Government Consents. There shall have been obtained at or prior to
the Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any legal or
regulatory requirements or authority having jurisdiction over the parties and
the actions herein proposed to be taken, including but not limited to
requirements under applicable federal and state securities laws.
8.6 Xxxx-Xxxxx-Xxxxxx Compliance. All applicable waiting periods under
the HSR Act shall have expired or early termination shall have been granted by
both the Federal Trade Commission and the United States Department of Justice.
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8.7 Escrow Agreement. VEDO shall have delivered an executed Escrow
Agreement in substantially the form attached hereto as EXHIBIT C.
8.8 Registration Rights Agreement. VEDO shall have delivered an
executed Registration Rights Agreement in substantially the form attached hereto
as EXHIBIT F.
8.9 Principal VEDO Stockholder Voting Agreement. VEDO shall have
delivered an executed Principal VEDO Stockholder Voting Agreement in
substantially the form attached hereto as EXHIBIT G.
8.10 Employment Agreements. VEDO shall have delivered executed
employment agreements for each of Xxxx Xxxxxxxxxx, Xxxxx Xxxx and Xxxx Xxxxxx
with the Surviving Entity in the form attached hereto as EXHIBIT J, EXHIBIT K,
and EXHIBIT L, respectively.
8.11 Opinion of VEDO's Counsel. GoSolutions shall have received from
counsel to VEDO, a legal opinion in the form attached hereto in EXHIBIT M.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF VEDO
The obligations of VEDO hereunder are subject to the fulfillment or
satisfaction on, and as of the Closing, of each of the following conditions (any
one or more of which may be waived by VEDO, but only in a writing signed by
VEDO):
9.1 Accuracy of Representations and Warranties. The representations and
warranties of GoSolutions set forth in Article 2 (as qualified by the
GoSolutions Disclosure Schedules) shall be true and accurate in every material
respect on and as of the Closing with the same force and effect as if they had
been made at the Closing, except for changes contemplated by this Agreement and
except for those representations and warranties that address matters only as of
a particular date (which shall remain true and correct as of such particular
date), and VEDO shall receive a certificate to such effect executed by
GoSolutions's Chief Executive Officer.
9.2 Covenants. GoSolutions shall have performed and complied in all
material respects with all of its covenants contained in Articles 4 and 5 on or
before the Closing, and VEDO shall receive a certificate to such effect signed
by GoSolutions's Chief Executive Officer.
9.3 Absence of Material Adverse Effect. There shall not have occurred
any event which has a Material Adverse Effect on GoSolutions, whether or not
such event causes or results in a breach of any representation, warranty or
covenant in this Agreement, and VEDO will have received a certificate to such
effect signed by GoSolutions's Chief Executive Officer.
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9.4. Minimum Working Capital. At the Effective Time, GoSolutions shall
have working capital of not less than negative One Million Three Hundred Seventy
Thousand and 00/100's ($(1,370,000)).
9.5 Compliance with Law. There will not be issued or enacted or
adopted, or threatened in writing by any court, agency or other governmental
body, any order, decree, temporary, preliminary or permanent injunction,
legislative enactment, statute, rule, regulation, action or proceeding, or any
judgment or ruling that prohibits or renders illegal or imposes limitations on
the Merger or any other transaction contemplated by this Agreement or any
GoSolutions Ancillary Agreement. No litigation or proceeding will be threatened
or pending with the probable effect of enjoining or preventing the consummation
of the Merger or any of the other transactions contemplated by this Agreement,
or which would be reasonably expected to have a Material Adverse Effect on
GoSolutions.
9.6 Government Consents. There shall have been obtained at or prior to
the Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any legal or
regulatory requirements or authority having jurisdiction over the parties and
the actions herein proposed to be taken, including but not limited to
requirements under applicable federal and state securities laws.
9.7 Requisite Corporate and Stockholder Approvals. This Agreement and
each of the GoSolutions Ancillary Agreements, and each of the transactions
contemplated hereby and thereby, will have been duly and validly approved and
adopted by the GoSolutions Stockholders in accordance with GoSolutions's Amended
and Restated Articles of Incorporation and Bylaws and other charter documents,
each as amended, and applicable law.
9.8 Opinion of GoSolutions's Counsel. VEDO shall have received from
counsel to GoSolutions, a legal opinion in the form attached hereto in EXHIBIT
N.
9.9 Xxxx-Xxxxx-Xxxxxx Compliance. All applicable waiting periods under
the HSR Act shall have expired or early termination shall have been granted by
both the Federal Trade Commission and the United States Department of Justice.
9.10 Closing Balance Sheet. GoSolutions shall have delivered, and VEDO
shall have accepted, the GoSolutions closing balance sheet dated as of December
31, 2005 (the GOSOLUTIONS CLOSING BALANCE SHEET").
9.11 Employment Agreements. Each of Xxxx Xxxxxxxxxx, Xxxxx Xxxx and
Xxxx Xxxxxx shall have entered into new employment agreements with the Surviving
Entity in the form attached hereto as EXHIBIT J, EXHIBIT K, and EXHIBIT L,
respectively.
9.12 Exercise or Termination of Rights. All GoSolutions Stock Options
shall have been exercised or terminated as of the Closing.
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9.13 Resignations and Appointments. VEDO shall have received the
resignations, effective as of the Closing, of all the directors and officers of
GoSolutions (but with respect to the officers, not their employment with
GoSolutions), except for such persons as shall have been designated in writing
prior to the Closing by VEDO.
9.14 GoSolutions Dissenting Shares. GoSolutions Stockholders holding no
more than the number of issued and outstanding GoSolutions voting securities
that are convertible into 1,525,000 or more shares of VEDO Common Stock shall
have voted against the Merger and exercised their dissenters' rights.
9.15 Declaration Regarding Webley Systems, Inc. Patent. GoSolutions and
VEDO shall have received the written declaration of XxxXxxxxxx, Xxxx, Chen and
Xxxx, LLP that, based on such firm's review of the actions of GoSolutions, as
stated in a GoSolutions certificate describing such actions, and assuming that
GoSolutions is found to have infringed one or more patents held by Parus
Holdings, Inc., it is more likely than not that a court would determine that
GoSolutions acted in good faith and reasonably believed that it had the right to
act in the manner that was found to be infringing.
9.16. Lock-up Agreement. GoSolutions Equity, LLC and the Xxxxxxxx Fund
entities set forth in EXHIBIT P (the "LARGE BLOCK STOCKHOLDERS") shall have
entered into a lock-up agreement in the forms attached hereto as EXHIBIT O and
EXHIBIT P, respectively, pursuant to which each such stockholder will agree not
to sell VEDO Common Stock issued pursuant to this Agreement during the period
beginning on the Closing Date and ending on December 31, 2006.
9.17 GoSolutions Certificate. GoSolutions shall have delivered to VEDO
a certificate signed on behalf of GoSolutions by its Chief Executive Officer
identifying each of the holders of GoSolutions Common Stock and GoSolutions
Class A Preferred Stock as of the Effective Time (the "GOSOLUTIONS
CERTIFICATE"), including the name of the holders and the number of shares held.
9.18 Escrow Agreement. GoSolutions shall have delivered an executed
Escrow Agreement in substantially the form attached hereto as EXHIBIT C.
9.19 Registration Rights Agreement. GoSolutions shall have delivered an
executed Registration Rights Agreement in substantially the form attached hereto
as EXHIBIT F.
ARTICLE X
TERMINATION
10.1 Termination.
10.1.1 This Agreement may be terminated at any time prior to
the Closing by the mutual written consent of each of the parties hereto.
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10.1.2 Unless otherwise agreed by the parties hereto, this
Agreement will be terminated if all conditions to the Closing have not been
satisfied or waived on or before April 30, 2006; PROVIDED, HOWEVER, that the
right to terminate this Agreement pursuant to this Section 10.1.2 shall not be
available to any party whose failure to perform in any material respect any of
its obligations or covenants under this Agreement results in the failure of any
condition set forth in Article VIII or Article IX or if the failure of such
condition results from facts or circumstances that constitute a material breach
of a representation or warranty or covenant made under this Agreement by such
party.
10.1.3 Either VEDO or GoSolutions, by giving written notice to
the other, may terminate this Agreement if a court of competent jurisdiction or
other Governmental Authority shall have issued a nonappealable final order,
decree or ruling or taken any other action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger.
10.1.4 Either VEDO or GoSolutions may terminate this Agreement
at any time prior to the Closing if the other has committed a material breach of
(a) any of its representations and warranties under Article 2 or Article 3 of
this Agreement, as applicable; or (b) any of its covenants under Article 4,
Article 5 or Article 6 of this Agreement, as applicable, and has not cured such
material breach within ten (10) business days after the party seeking to
terminate this Agreement has given the other party written notice of the
material breach and its intention to terminate this Agreement pursuant to this
Section 10.1.4.
10.1.5 Either VEDO or GoSolutions may terminate this Agreement
at any time prior to the Closing if there has been a material violation or
breach by the other party of any covenant, representation or warranty contained
in this Agreement that shall prevent the satisfaction of any condition to the
obligations of such party at the Closing, and such violation or breach has not
been waived by such party or cured within ten (10) business days after written
notice thereof from the party seeking to terminate this Agreement.
10.1.6 Either VEDO or GoSolutions may terminate this Agreement
at any time prior to the Closing in order to accept a Superior Proposal provided
that the terminating party has not breached its obligations under Section 4.8 of
this Agreement.
10.2 No Liability. In the event of termination of this Agreement
pursuant to this Section 10, this Agreement shall forthwith become void and
there shall be no further obligation or liability upon any party in favor of the
other party hereto other than the obligations provided in Section 12.17, with
respect to Confidential Information; PROVIDED, HOWEVER, that nothing herein will
limit the obligation of GoSolutions and VEDO to use their best efforts to cause
the Merger to be consummated.
10.3 Waiver. Either party to this Agreement may (a) extend the time for
the performance of any of the obligations or other acts of the other party, (b)
waive any inaccuracies in the representations and warranties of the other party
contained herein or
47
in any document delivered by the other party pursuant hereto, or (c) waive
compliance with any of the agreements or conditions of the other party contained
herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party to be bound thereby. Any waiver of any
term or condition shall not be construed as a waiver of any subsequent breach or
a subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of either party to assert any of
its rights hereunder shall not constitute a waiver of any of such rights.
ARTICLE XI
INDEMNIFICATION
11.1 Survival of Representations and Warranties. Representations and
warranties herein made by GoSolutions, VEDO or the Merger Sub hereunder shall be
deemed to be remade at and survive the Closing Date through the period ending on
December 31, 2006 (the "INDEMNIFICATION PERIOD"). If written notice of a claim
has been given prior to the expiration of the Indemnification Period, then the
relevant representations and warranties shall survive as to such claim, until
such claim has been finally resolved.
11.2. Indemnification by GoSolutions.
11.2.1 Subject to the limitations respecting the survivability
of representations and warranties contained in Section 11.1 hereof, GoSolutions
agrees to indemnify and hold VEDO and the Surviving Corporation, and their
respective directors, officers, successors and assigns (each such person a "VEDO
INDEMNIFIED PARTY") harmless from and against all liability, loss, cost or
expense, including, without limitation, reasonable attorneys' fees, expenses and
costs of litigation (individually a "LOSS" and collectively, the "LOSSES"),
which any VEDO Indemnified Party may, directly or indirectly, sustain by reason
of any of the following:
(a) Any material inaccuracy of any representation or warranty
of GoSolutions herein set forth;
(b) The inaccuracy of any certificate or Schedule to this
Agreement delivered by GoSolutions to VEDO in accordance with the provisions
hereof; or
(c) The material breach of any of the agreements or covenants
of GoSolutions contained herein or in any certificate or other document
delivered by or on behalf of GoSolutions to VEDO in accordance with the terms
hereof.
11.2.2 Notwithstanding the foregoing, the parties hereby
acknowledge and agree that GoSolutions shall not provide any indemnification to
VEDO regarding any liability arising out or related to any claims by Parus
Holdings, Inc. or its assignee, alleging infringement by GoSolutions of one or
more patents issued to, or owned by, Webley Systems, Inc. or its assignee.
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11.2.3 Further, notwithstanding any provision to the contrary
in this Agreement, GoSolutions shall not have any liability to VEDO, the Merger
Sub or any VEDO Indemnified Party hereunder to the extent that the existence of
such liability, breach, or falsity of the representation upon which such
liability would be based, is disclosed with reasonable particularity in the
Schedules to this Agreement or is otherwise disclosed in a written notice to
VEDO prior to Closing. Further, neither VEDO nor the Merger Sub (nor any other
VEDO Indemnified Person by or through them) shall have any right to
indemnification or recovery hereunder to the extent such indemnification or
demand for recovery arises out of a breach of representation or warranty
actually known to VEDO at the time such representation is made.
11.3 Maximum Liability. Notwithstanding the foregoing, the maximum
aggregate liability of GoSolutions for breaches of the representations,
warranties or covenants of GoSolutions hereunder or otherwise shall not exceed
the aggregate value of the Escrow Shares (the "MAXIMUM LIABILITY"). VEDO and the
Surviving Corporation may not make a claim against GoSolutions for any such
breach or breaches until VEDO or the Surviving Corporation have sustained Losses
aggregating at least $150,000 (the "CLAIM THRESHOLD") in connection with any
such breach or breaches, in which case GoSolutions shall be liable for all such
Losses above the Claim Threshold (with such Claim Threshold acting as a
deductible with respect to recovery thereof), but in no event shall GoSolutions
be liable for Losses exceeding the Maximum Liability. The foregoing limitation
on the recovery of Losses shall not apply to any Losses relating to or resulting
from any fraudulent representations or warranties.
11.4 Recovery from Other Sources. Prior to exercising indemnification
rights under this Article XI, a VEDO Indemnified Party shall use reasonable good
faith efforts to obtain any insurance proceeds, settlement payments, salvage,
third party recoveries or similar payments (collectively, a "RECOVERY") with
respect to the Loss for which such VEDO Indemnified Party is seeking
indemnification. Any such Recovery shall reduce the amount of any such Loss for
which the VEDO Indemnified Party shall otherwise be required to indemnification
under this Article XI, provided, however, that any expenses reasonably incurred
in seeking a Recovery shall be deemed part of the VEDO Indemnified Party 's Loss
for purposes of this Article XI.
11.5 Indemnification by VEDO.
11.5.1 Subject to the limitations respecting the survivability
of representations and warranties contained in Section 11.1 hereof, VEDO agrees
to indemnify and hold GoSolutions, its shareholders and its directors, officers,
successors and assigns (each such person a "GOSOLUTIONS INDEMNIFIED PARTY")
harmless from and against all Losses which any GoSolutions Indemnified Party
may, directly or indirectly, sustain by reason of any of the following:
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(a) Any material inaccuracy of any representation or
warranty of VEDO herein set forth;
(b) The inaccuracy of any certificate or Schedule to
this Agreement delivered by VEDO to GoSolutions in accordance with the
provisions hereof; or
(c) The material breach of any of the agreements or
covenants of VEDO contained herein or in any certificate or other document
delivered by or on behalf of VEDO to VEDO in accordance with the terms hereof.
11.5.2 Notwithstanding the foregoing, the parties hereby
acknowledge and agree that VEDO shall not provide any indemnification to
GoSolutions regarding any liability arising out or related to any claims by
Audiofax or its assignee, alleging infringement by GoSolutions of one or more
patents issued to, or owned by, Audiofax or its assignee.
11.5.3 Notwithstanding any provision to the contrary in this
Agreement, VEDO shall not have any liability to GoSolutions or any GoSolutions
Indemnified Party hereunder to the extent that the existence of such liability,
breach, or falsity of the representation upon which such liability would be
based, is disclosed with reasonable particularity in the Schedules to this
Agreement or is otherwise disclosed in a written notice to GoSolutions prior to
Closing. Further, neither GoSolutions nor any GoSolutions Indemnified Party
shall have any right to indemnification or recovery hereunder to the extent such
indemnification or demand for recovery arises out of a breach of representation
or warranty actually known to GoSolutions at the time such representation is
made.
11.6 Maximum VEDO Liability. Notwithstanding the foregoing, the maximum
aggregate liability of VEDO for breaches of the representations, warranties or
covenants of VEDO hereunder or otherwise shall not exceed the aggregate value of
$900,000 and shall be payable solely in shares of VEDO Common Stock (the
"Indemnification Shares"). The value of the Indemnification Shares issued
pursuant to this Section shall be determined as of the date such shares are
issued and shall be subject to "piggyback" registration rights as set forth in
the Registration Rights Agreement.
11.7 Notice and Opportunity to Defend.
11.7.1 Notice of Asserted Liability. As soon as is reasonably
practicable after GoSolutions becomes, on the one hand, or VEDO or the Merger
Sub becomes, on the other hand, aware of any claim (but, in any event, within
ten (10) days thereof) that it or they have under Section 11.2 that is
reasonably expected to result in a Loss to be indemnified hereunder (a
"LIABILITY CLAIM"), such party (the "INDEMNIFIED PARTY") shall give notice of
the Liability Claim (a "CLAIMS NOTICE") to the other party (the "INDEMNIFYING
PARTY"). A Claims Notice shall describe the Liability Claim in reasonable detail
shall indicate the amount (estimated, if necessary and to the extent feasible)
of the Loss that has been or may be suffered by the Indemnified Party and shall
contain copies
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of all relevant or supporting information or documentation. No delay in or
failure to give a Claims Notice by the Indemnified Party to the Indemnifying
Party pursuant to this Section 11.7.1 shall adversely affect any of the other
rights or remedies which the Indemnified Party has under this Agreement, or
alter or relieve the Indemnifying Party of its obligation to indemnify the
Indemnified Party, except and only to the extent that such delay or failure has
prejudiced the Indemnifying Party or is received by the Indemnifying Party after
the Indemnification Period.
11.7.2 Opportunity to Defend. The Indemnifying Party shall
have the right, exercisable by written notice to the Indemnified Party within
one hundred twenty (120) days after receipt of a Claims Notice from the
Indemnified Party of the commencement or assertion of any Liability Claim in
respect of which indemnity may be sought under this Article XI, to assume and
conduct the defense of such Liability Claim, in accordance with the limits set
forth in this Agreement, with counsel selected by the Indemnifying Party and
reasonably acceptable to the Indemnified Party; provided, however, that (i) the
defense of such Liability Claim by the Indemnifying Party will not, in the
reasonable judgment of the Indemnified Party, have a material adverse effect on
the Indemnified Party; (ii) the Indemnifying Party has sufficient financial
resources, in the reasonable judgment of the Indemnified Party, to satisfy the
amount of any adverse monetary judgment that is reasonably likely to result; and
(iii) the Liability Claim solely seeks (and continues to seek) monetary damages
(the conditions set forth in clauses (i) through (iii) are collectively referred
to as the "LITIGATION CONDITIONS"). If the Indemnifying Party does not assume
the defense of a Liability Claim in accordance with this Section 11.7.2, the
Indemnified Party may continue to defend the Liability Claim. If the
Indemnifying Party has assumed the defense of a Liability Claim as provided in
this Section 11.7.2, the Indemnifying Party will not be liable for any legal
expenses subsequently incurred by the Indemnified Party in connection with the
defense of the Liability Claim; provided, however, that if any of the Litigation
Conditions cease to be met, the Indemnified Party may assume its own defense,
and the Indemnifying Party shall be liable for all reasonable costs or expenses
paid or incurred by the Indemnified Party in connection with such defense at and
after the time it has provided written notice to the Indemnifying Party that it
would be assuming such defense. The Indemnifying Party or the Indemnified Party,
as the case may be, shall have the right to participate in (but not control), at
its own expense, the defense of any Liability Claim which the other is defending
as provided in this Agreement. The Indemnifying Party, if it shall have assumed
the defense of any Liability Claim as provided in this Agreement, shall not,
without the prior written consent of the Indemnified Party, consent to a
settlement of, or the entry of any judgment arising from, any such Liability
Claim which (x) does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party a complete release from
all liability in respect of such Liability Claim, or (y) grants any injunctive
or equitable relief, or (z) may reasonably be expected to have an adverse effect
on the affected business of the Indemnified Party. The Indemnified Party shall
have the right to settle any Liability Claim, the defense of which has not been
assumed by the Indemnifying Party, in any manner it reasonably may deem
appropriate and the Indemnified Party need not consult with, or obtain any
consent from the Indemnifying Party in connection therewith, as long as the
settlement amount, together with the settlement amount(s) associated with all
previously settled Liability Claims, does
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not exceed the Claim Threshold. To the extent any single Liability Claim, or any
Liability Claim when added with all other Liability Claims, exceeds the Claim
Threshold, the Indemnified Party shall not have the right to settle any
Liability Claim without the prior written consent of the Indemnifying Party,
which may not be unreasonably withheld.
11.7.3 Reimbursement. In the event that the Indemnifying Party
shall undertake, conduct or control the defense or settlement of any Liability
Claim and it is later determined that such Liability Claim was not a claim for
which the Indemnifying Party is required to indemnify the Indemnified Party
under this Article XI, the Indemnified Party shall reimburse the Indemnifying
Party for all of its costs and expenses with respect to such settlement or
defense, including reasonable attorneys' fees and disbursements.
11.8 Exclusive Remedy. The foregoing indemnification provisions in this
Article XI shall be the sole and exclusive remedy with respect to the
transactions contemplated by this Agreement; provided further that VEDO's sole
and exclusive remedy for any Losses exceeding the Claim Threshold shall be
against the Escrow Shares, such claims to be made in accordance with the
provisions of the Escrow Agreement.
ARTICLE XII
VEDO's POST-CLOSING COVENANTS
12.1 With a view to making available the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of the Restricted
Securities or Penalty Shares to the public without registration, VEDO agrees to
use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the Closing Date;
(b) File with the SEC in a timely manner all reports and other
documents required of VEDO under the Securities Act and the Exchange Act; and
(c) Take any other action reasonably within its control to
make the benefits of Rule 144 available to the recipients of the VEDO Common
Stock hereunder and refrain from taking any action reasonably within VEDO's
control which would render the benefits of Rule 144 unavailable to said
recipients.
12.2 With a view to creating a more liquid market for its securities
after the Effective Date, VEDO's Board of Directors shall use commercially
reasonable efforts to:
(a) Interview prospective investment banking firms for the
purpose of underwriting an offering of VEDO's securities;
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(b) Take such reasonable actions, including consideration of a
reverse split of its securities, as may be necessary to cause the VEDO
securities to meet the listing standards of the NASDAQ National Market or NASDAQ
Small Cap Market; and
(c) Increase exposure of VEDO securities by endeavoring to
cause one or more securites firms to publish research regarding VEDO.
ARTICLE XIII
GENERAL PROVISIONS
13.1 Governing Law; Jurisdiction. The internal laws of the State of
Florida (irrespective of its choice of law principles) will govern the validity
of this Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto. Each of the parties
hereby irrevocably consents and submits to the jurisdiction of the courts of the
state or federal courts sitting in County of Pinellas, Florida in connection
with any actions or proceedings arising out of or relating to this Agreement.
13.2 Assignment; Binding Upon Successors and Assigns. Neither party
hereto may assign any of its rights or obligations hereunder without the prior
written consent of the other party hereto. This Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
13.3 Severability. If any provision of this Agreement, or the
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision.
13.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
both parties reflected hereon as signatories.
13.5 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby or by law on such party,
and the exercise of any one remedy will not preclude the exercise of any other.
13.6 Amendment and Waivers. Any term or provision of this Agreement may
be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a
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writing signed by the party to be bound thereby. The waiver by a party of any
breach hereof or default in the performance hereof will not be deemed to
constitute a waiver of any other default or any succeeding breach or default.
The Agreement may be amended by the parties hereto at any time before or after
approval of the GoSolutions Stockholders, but, after such approval, no amendment
will be made which by applicable law requires the further approval of the
GoSolutions Stockholders and VEDO Stockholders without obtaining such further
approval.
13.7 No Waiver. The failure of any party to enforce any of the
provisions hereof will not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
13.8 Expenses. Each party will bear its respective expenses and legal
fees incurred with respect to this Agreement, and the transactions contemplated
hereby.
13.9 Attorneys' Fees. Should suit be brought to enforce or interpret
any part of this Agreement, the prevailing party will be entitled to recover, as
an element of the costs of suit and not as damages, reasonable attorneys' fees
to be fixed by the court (including without limitation, costs, expenses and fees
on any appeal).
13.10 Notices. All notices and other communications required or
permitted under this Agreement will be in writing and will be either hand
delivered in person, sent by facsimile (with confirmation of receipt), sent by
certified or registered first class mail, postage pre-paid, or sent by
nationally recognized express courier service. Such notices and other
communications will be effective upon receipt if hand delivered or sent by
facsimile (provided the sender receives confirmation of receipt), three (3) days
after mailing if sent by mail, and one (l) day after dispatch if sent by express
courier, to the following addresses:
(a) If to VEDO:
VillageEDOCS or VEDO Merger Sub, Inc.
00000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: K. Xxxxx Xxxxxx, Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy to:
Johnson, Pope, Xxxxx, Xxxxxx & Xxxxx, LLP
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: A. R. Xxxx
Facsimile No.: (000) 000-0000
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(b) If to GoSolutions:
GoSolutions, Inc.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxx, Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxx, Loop & Xxxxxxxx, LLP
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: X. Xxxxxxxx Xxxxx, III, Esq.
Fax No.: (000) 000-0000
E-mail Address: xxxxxx@xxx-xxx.xxx
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 13.10.
13.11 Construction of Agreement. This Agreement has been negotiated by
the respective parties hereto and their attorneys and the language hereof will
not be construed for or against either party. The titles and headings herein are
for reference purposes only and will not in any manner limit the construction of
this Agreement which will be considered as a whole.
13.12 Interpretation. When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated. When a reference is made in this Agreement to Schedules, such
reference shall be to a Schedule included in the applicable Disclosure Schedules
to be delivered by each of GoSolutions or VEDO (as the case may be) to the other
party in connection with the execution of this Agreement, which Disclosure
Schedules contain exceptions to the representations and warranties made by the
parties hereunder and other information called for under this Agreement. The
words "INCLUDE," "INCLUDES" and "INCLUDING" when used herein shall be deemed in
each case to be followed by the words "WITHOUT LIMITATION." When reference is
made herein to "THE BUSINESS OF" an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.
Reference to the subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity. References to an agreement shall be
deemed to include such agreement as amended, modified or supplemented.
References to a statute, rule or regulation are to such statute, rule or
regulation, as amended. For purposes of this Agreement, the term "MATERIAL
ADVERSE EFFECT" when used with respect to a party means any change, event,
circumstance or effect, whether or not caused by an event causing or resulting
in a breach of a representation, warranty, covenant or agreement of such party
in this Agreement, that is or is reasonably likely to be materially adverse to
the business, assets (including
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intangible assets), capitalization, financial condition, operations, results of
operations or employees of such entity taken as a whole with its subsidiaries,
except to the extent that any such change, event, circumstance or effect is
caused by or results from (i) changes in general economic conditions, or (ii)
changes affecting the industry generally in which such entity operates (provided
that such changes do not affect such entity in a substantially disproportionate
manner). For purposes of this Agreement the term "KNOWLEDGE" means with respect
to a party hereto, with respect to any matter in question, that any of the
officers or directors of such party has actual knowledge of such matter without
independent investigation.
13.13 No Joint Venture. Nothing contained in this Agreement will be
deemed or construed as creating a joint venture or partnership between any of
the parties hereto. No party is by virtue of this Agreement authorized as an
agent, employee or legal representative of any other party. No party will have
the power to control the activities and operations of any other and their status
is, and at all times will continue to be, that of independent contractors with
respect to each other. No party will have any power or authority to bind or
commit any other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
13.14 Further Assurances. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
13.15 Absence of Third Party Beneficiary Rights. No provisions of this
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, partner or employee of any party hereto or any
other person or entity unless specifically provided otherwise herein, and,
except as so provided, all provisions hereof will be personal solely between the
parties to this Agreement.
13.16 Public Announcement. Prior to the Closing, the parties will
consult with each other prior to making any public announcement regarding the
Merger; provided that the content and timing of any such announcement shall be
subject to the reasonable agreement of each party.
13.17 Confidentiality. GoSolutions and VEDO each recognize that they
have received and will receive confidential information concerning the other
during the course of the Merger negotiations and preparations. Accordingly, VEDO
and GoSolutions each agrees (a) to use its respective best efforts to prevent
the unauthorized disclosure of any confidential information concerning the other
that was or is disclosed during the course of such negotiations and
preparations, and (b) to not make use of or permit to be used any such
confidential information other than for the purpose of effectuating the Merger
and related transactions. The obligations of this section will not apply to
information that (i) is or becomes part of the public domain without breach of a
nondisclosure obligation to the other party, (ii) is disclosed by the disclosing
party to third parties without restrictions
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on disclosure, (iii) is received by the receiving party from a third party
without breach of a nondisclosure obligation to the other party or (iv) is
required to be disclosed by law (PROVIDED that the party being compelled to make
such disclosure of the other party's confidential information will notify such
other party and permit the other party to take legal action to resist such
disclosure). If this Agreement is terminated, all copies of documents containing
confidential information shall be returned by the receiving party to the
disclosing party. This Section 12.17 shall survive the termination or expiration
of this Agreement.
13.18 Entire Agreement. This Agreement and the exhibits hereto
constitute the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or implied,
written or oral, between the parties with respect to the subject matter hereof
other than the Confidentiality Agreement. The express terms hereof control and
supersede any course of performance or usage of trade inconsistent with any of
the terms hereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
VILLAGEEDOCS
By: /s/ K. Xxxxx Xxxxxx
-----------------------------------
K. Xxxxx Xxxxxx
Its: Chief Executive Officer
GOSOLUTIONS, INC.
By: /s/ Xxxx Xxxxxxxxxx
----------------------------------
Xxxx Xxxxxxxxxx
Its: Chief Executive Officer
VEDO MERGER SUB, INC.
By: /s/ Xxxx Xxxxxxxxxx
----------------------------------
Xxxx Xxxxxxxxxx
Its: President
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