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EXHIBIT INDEX
Agreement and Plan of Merger
Among XxXxxxx, Inc, XxXxxxx-OCS, Inc.
And Open Cellular Systems, Inc.
Dated February 9, 1999
Exhibit No.
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A Form of Convertible Note - Omitted
B Certificate of Merger - Omitted
C Exceptions to Representations and Warranties - Omitted
D Financial Statements - Omitted
E Form of Opinion of Counsel to OCS - Omitted
F Voting Agreement - Omitted
G Xxxxxx Xxxxxxxx Employment and Non-Competition Agreement - Omitted
H Xxxxxx Xxxxxx Employment and Non-Competition Agreement - Omitted
I Form of Agreement of Holders of Excluded Shares - Omitted
J Form of Opinion of Counsel to XxXxxxx and Acquisition Subsidiary -
Omitted
Schedule I Formula for calculation of net income - Omitted
Disclosure Schedule - Exceptions to Representations and Warranties - Omitted
** XXXXXXX AGREES TO FURNISH, SUPPLEMENTALLY, A COPY OF ANY OMITTED SCHEDULE
OR EXHIBIT TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST.
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EXHIBIT 10.14
AGREEMENT AND PLAN OF MERGER
Agreement entered into as of February 9, 1999, by and among XxXxxxx,
Inc., a Delaware corporation ("XxXxxxx"); XxXxxxx-OCS, Inc., a Delaware
corporation ("Acquisition Sub") and Open Cellular Systems, Inc., a Delaware
corporation ("OCS"). XxXxxxx, Acquisition Sub and OCS are referred to
collectively herein as the "Parties".
This Agreement contemplates a merger of OCS with and into Acquisition
Sub.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. Definitions.
"Acquisition Sub" has the meaning set forth in the preface above.
"Acquisition Sub Common Share" means any share of the Acquisition Sub
Common Stock, $0.001 par value.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of
Code ss. 1504(a).
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"Certificate of Merger" has the meaning set forth in ss. 2(b)(i)
below.
"Closing" has the meaning set forth in ss. 2(b)(ii) below.
"Closing Date" has the meaning set forth in ss. 2(b)(ii) below.
"COBRA" means the requirements of Part 6 of Subtitle B of Title I of
ERISA and Code ss. 4980B.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Confidential Information" means any information concerning the
businesses and affairs of OCS that is not already generally available to the
public.
"Controlled Group" has the meaning set forth in Code ss. 1563.
"Convertible Notes" means the promissory notes of XxXxxxx in the form
of Exhibit A hereto, which shall bear interest at the rate of 7.5% per annum
payable annually; if earned, the holder of each Convertible Note will be
entitled to receive a pro rata portion of the Participation Payments; the
Convertible Notes will be subordinated to all senior indebtedness of XxXxxxx.
"Debentures" means the subordinated debentures of OCS bearing interest
at the rate of 8% per annum.
"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.
"Disclosure Schedule" has the meaning set forth in ss. 4 below.
"Effective Time" has the meaning set forth in ss. 2(b)(i) below.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan), or (d)
Employee Welfare Benefit Plan or material fringe benefit or other retirement,
bonus, or incentive plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
ss. 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in
ERISA ss. 3(1).
"Environmental, Health, and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"ERISA Affiliate" means each entity which is treated as a single
employer with OCS for purposes of Code ss. 414.
"Excess Loss Account" has the meaning set forth in Reg. ss. 1.1502-19
adopted pursuant to the Code.
"Excluded Shares" has the meaning set forth in ss. 2(d) below.
"External System" means all services which are provided to OCS by third
parties and which are dependent on information technology, including, but not
limited to, any external payroll, accounting, or tax filing services, or any
checking, savings or other financial services.
"Fiduciary" has the meaning set forth in ERISA ss. 3(21).
"Financial Statement" has the meaning set forth in ss. 4(h) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Indemnified Party" has the meaning set forth in ss. 8(d)(i) below.
"Indemnifying Party" has the meaning set forth in ss. 8(d)(i) below.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Internal System" means all technology products and systems generally
operated or controlled in-house by OCS, or its employees, agents or independent
contractors including, but not limited to, computers, computer networks,
telephone systems, voicemail systems, intercom systems, pager systems, and
software applications.
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"IRS" means the Internal Revenue Service.
"Knowledge" means actual knowledge after reasonable investigation.
"XxXxxxx" has the meaning set forth in the preface above.
"XxXxxxx Common Stock" means any share of the Common Stock, $.01 par
value per share, of XxXxxxx.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Licensed System" means all products and systems developed by or for
OCS which are licensed, sold, distributed or otherwise transferred by OCS to
third parties.
"Merger" has the meaning set forth in ss. 2(a) below.
"Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in
ss. 4(h) below.
"Most Recent Fiscal Month End" has the meaning set forth in ss. 4(h)
below.
"Most Recent Fiscal Year End" has the meaning set forth in ss. 4(h)
below.
"OCS" has the meaning set forth in the preface above.
"OCS Common Share" means any share of the Common Stock, $0.001 par
value per share, of OCS.
"OCS Investor" means any person who, immediately prior to the Effective
Time, (i) is an OCS Stockholder or (ii) the holder of OCS Options or Warrants.
"OCS Options" means options to purchase OCS Common Shares held by
employees of OCS.
"OCS Preferred Share" means any share of the Convertible Preferred
Stock, $0.001 per share, of OCS.
"OCS Stockholder" means any Person who or which holds any OCS Common or
Preferred Shares.
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"OCS Warrants" means warrants to purchase OCS Common Shares.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Participation Payments" means with respect to each of the fiscal years
of XxXxxxx ending in June, 1999 through 2003 the amount (if any) which the
product of (i) 35% of the net income of Acquisition Sub for such year
(calculated as provided on Schedule I hereto) as determined by the independent
accountants then auditing XxXxxxx'x financial statements times (ii) a fraction,
the numerator of which is the aggregate principal amount of Convertible Notes
outstanding at the end of such fiscal year, and the denominator of which is $5.8
million (the "Fraction") exceeds the product of $435,000 times the Fraction.
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA ss. 406 and
Code ss. 4975.
"Reportable Event" has the meaning set forth in ERISA ss. 4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for taxes not yet due and payable or for taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Surviving Corporation" has the meaning set forth in ss. 2(a) below.
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"System" means any, all or any combination of any Internal System,
External System or Licensed System.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in ss. 8(d)(ii) below.
"Year 2000 Compliant" means, with respect to each System, that each
System is designed to be used before, during, and after January 1, 2000, and
will accurately accept date input and process, store and output date data and
date-related data, including, without limitation, calculating, comparing,
sorting and sequencing such data and calculating leap years before, during and
after January 1, 2000 without any manual intervention.
2. Basic Transaction.
(a) The Merger. Subject to the terms and conditions set
forth in this Agreement, on the Closing Date (as hereinafter defined), OCS will
merge with and into Acquisition Sub (the "Merger") pursuant to the provisions of
the Delaware General Corporation Law whereupon the separate corporate existence
of OCS shall cease. Acquisition Sub shall be the surviving corporation of the
Merger (sometimes referred to herein as the "Surviving Corporation") and shall
continue to be governed by the laws of the State of Delaware.
(b) Method of Effecting Merger and Closing. The Merger
shall be effected as follows:
(i) Subject to the satisfaction or waiver of all
other conditions to the Closing (as hereinafter defined), a
Certificate of Merger, in substantially the form attached
hereto as Exhibit B ( the "Certificate of Merger"), duly
executed by the proper officers of OCS and Acquisition Sub,
shall be filed with the Secretary of State of Delaware on the
Closing Date. The Merger shall become effective and be
consummated immediately upon the filing of the Certificate of
Merger. The date and time of such filing is herein referred to
as the "Effective Time."
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(ii) The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the
offices of Xxxxxxxxx Xxxxxxxx LLP in St. Louis, Missouri,
commencing at 9:00 a.m. local time on the business day
following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to
actions the respective Parties will take at the Closing
itself) or such other date as the Parties may mutually
determine (the "Closing Date").
(c) Actions at the Closing. At the Closing, (i) OCS will
deliver to XxXxxxx the various certificates, instruments, and documents referred
to in ss. 6(a) below, and (ii) XxXxxxx will deliver to OCS the various
certificates, instruments, and documents referred to in ss. 6(b) below.
(d) Conversion of OCS Common Shares. At the Effective
Time, by virtue of the Merger and without any action on the part of the holder
thereof, (i) each OCS Common Share that is issued and outstanding immediately
prior to the Effective Time (other than (A) OCS Common Shares ("Excluded
Shares") issued to OCS employees prior to the Effective Time upon their exercise
of OCS Options and (B) OCS Common Shares owned by XxXxxxx or an affiliate of
XxXxxxx) shall be converted into the right to receive Convertible Notes in a
principal amount of $4.25 and each such OCS Common Share shall be canceled, (ii)
each Excluded Share shall be converted into one share of common stock of the
Surviving Corporation, (iii) each Warrant outstanding immediately prior to the
Effective Time shall become a warrant to purchase Convertible Notes in an
aggregate principal amount equal to the principal amount of Convertible Notes
into which OCS Common Shares issuable upon exercise of such Warrant would have
been converted at the Effective Time had such Warrant been exercised prior
thereto, (iv) each Option held by an employee of OCS immediately prior to the
Effective Time shall remain outstanding and exercisable according to its terms,
except that each Option will become an option to purchase a number of shares of
common stock of the Surviving Corporation equal to the number of OCS Common
Shares subject to such Option immediately prior to the Effective Time; (v) each
share of common stock of Acquisition Sub issued and outstanding immediately
prior to the Effective Time shall remain outstanding; and (vi) each OCS Common
Share owned by XxXxxxx shall be canceled. No OCS Common Share outstanding prior
to the Effective Time shall be deemed to be outstanding or to have any rights
after the Effective Time. Immediately after the Effective Time and upon
presentation to XxXxxxx of certificates for such OCS Common Shares accompanied
by duly executed letters of transmittal, XxXxxxx will furnish to the former
holders of OCS Common Shares the Convertible Notes in the principal amounts (or,
in the case of Excluded Shares, certificates for the number of shares of common
stock of the Surviving Corporation) that they have the right to receive upon the
conversion of OCS Shares described above.
(e) Effect of Merger.
(i) Upon consummation of the Merger and pursuant to
this Agreement, the Surviving Corporation shall possess all
the rights, privileges, immunities and franchises, as well as
of a public as of a private nature, of Acquisition Sub and
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OCS; and all property, whether real, personal or mixed, and
all debts due on whatever account, including subscriptions to
shares and all other choses in action, and all and every other
interest, of or belonging or due to each of the merging
corporations, shall be taken and deemed to be transferred to
and vested in the Surviving Corporation without further act or
deed; and the title to any real estate, or any interest
therein, vested in either of such corporations shall not
revert or be in any way impaired by reason of the Merger. The
Merger shall have all further effects as specified in all
applicable corporate laws of the State of Delaware.
(ii) The Certificate of Incorporation and By-Laws of
Acquisition Sub in effect immediately prior to the Effective
Time shall be the Certificate of Incorporation and By-Laws of
the Surviving Corporation, except to the extent amended in the
Certificate of Merger in accordance with their respective
provisions and applicable law.
(iii) The officers and members of the Board of
Directors of Acquisition Sub immediately prior to Effective
Time shall be the officers and members of the Board of
Directors of the Surviving Corporation, and such persons will
serve until their respective successors are duly elected and
qualified.
(f) Notice to Holders. As soon as practicable after the
Effective Time, the Surviving Corporation shall provide written notice that the
Merger has been consummated to each former holder of OCS Common Shares, and each
holder of an OCS Warrant and each holder of an OCS Option (collectively,
"Holders"). Such notice shall be accompanied by the following:
(i) Written instructions to each Holder as to how
to deliver their certificates for OCS Common Shares, Warrants and Options to the
Surviving Corporation for exchange;
(ii) A form of letter of transmittal to be executed
by Holders and delivered to the Surviving Corporation with
certificates for OCS Common Shares, Warrants and Options.
(g) Exchange Procedures. On or after the Closing Date,
holders of OCS Common Shares shall deliver to the Surviving Corporation stock
certificates representing such Shares, together with the Letter of Transmittal
and such other transfer documents as the Surviving Corporation may deem
necessary or appropriate. In exchange therefor, holders of OCS Common Shares
shall be entitled to receive the Convertible Notes (or, in the case of Excluded
Shares, certificates for common stock of the Surviving Corporation) described in
ss. 2(d). After the Effective Time, there shall be no further transfer on the
records of OCS of certificates representing shares of OCS Common Shares and
after certificates are presented to OCS for transfer, they shall be canceled
against delivery of the Convertible Notes provided therefor in this Agreement.
On or after the Closing Date, holders of Warrants and Options shall deliver to
the
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Surviving Corporation their Warrant and Option Agreements, together with the
Letter of Transmittal. In exchange therefor, holders of Warrants shall be
entitled to receive warrants to purchase the Convertible Notes described in
ss. 2(d) and holders of Options shall receive the Options to purchase shares of
common stock of the Surviving Corporation described in ss. 2(d).
(h) Transfer Restrictions; Closing of Stock Transfer
Books. The stock transfer books of OCS shall be closed at the close of business
on the date hereof (except with respect to OCS Common Shares issued upon
exercise of Options and Warrants). In the event of a transfer of ownership of
OCS Common or Preferred Shares which is not registered in the transfer records
prior to the closing of such records, the Convertible Notes issuable in
conversion of such stock pursuant to this Agreement may be delivered to a
transferee, if the certificate representing such OCS Common is presented to the
Surviving Corporation, accompanied by all documents required to evidence and
effect such transfer and all applicable stock transfer taxes are paid. The
Surviving Corporation shall be entitled to rely upon the stock transfer books of
OCS to establish the identity of OCS Stockholders, which books shall be
conclusive with respect to the ownership of such shares.
3. Representations and Warranties of XxXxxxx. XxXxxxx represents
and warrants to OCS that the statements contained in this ss. 3 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this ss. 3, except as set
forth in Exhibit C attached hereto.
(a) Organization of XxXxxxx. XxXxxxx is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Authorization of Transaction. XxXxxxx has full power
and authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of XxXxxxx, enforceable in
accordance with its terms and conditions. XxXxxxx need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
(c) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which XxXxxxx is subject or
any provision of its charter or by-laws or (B) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which XxXxxxx is a party or by which it is bound or to which any
of its assets is subject.
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(d) Brokers' Fees. XxXxxxx has no Liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which OCS or its
stockholders could become liable or obligated.
(e) Litigation. Neither XxXxxxx nor Acquisition Sub is a
defendant in 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 or before any arbitrator.
(f) Filings with the SEC. XxXxxxx has made all filings with
the SEC that it has been required to make within the past three years under the
Securities Act and the Securities Exchange Act (collectively the "Public
Reports"). Each of the Public Reports has complied with the Securities Act and
the Securities Exchange Act in all material respects. None of the Public
Reports, as of their respective dates, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. XxXxxxx has delivered to OCS a correct and complete copy
of each Public Report.
(g) Organization of Acquisition Sub. Acquisition Sub is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation.
(h) Authorization of Transaction. Acquisition Sub has full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of Acquisition
Sub, enforceable in accordance with its terms and conditions. Acquisition Sub
need not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(i) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which Acquisition Sub is
subject or any provision of its charter or by-laws or (B) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which Acquisition Sub is a party or by which it is bound or
to which any of its assets is subject.
(j) Capitalization. The entire authorized capital stock of
Acquisition Sub consists of 1,600,000 Acquisition Sub Common Shares, of which
1,190,000 are issued and outstanding. All of the issued and outstanding
Acquisition Sub Common Shares have been duly authorized, are validly issued,
fully paid, and nonassessable. Except as contemplated by this
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Agreement, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require Acquisition Sub to issue, sell, or
otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to Acquisition Sub. There are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of Acquisition Sub.
(k) Brokers' Fees. Acquisition Sub has no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which OCS or its
stockholders could become liable or obligated.
(l) Convertible Notes and XxXxxxx Common Stock. The
Convertible Notes to be delivered in the Merger will be, as of the Effective
Time, valid and binding obligations of XxXxxxx enforceable according to their
terms and the XxXxxxx Common Stock issuable upon conversion of the Convertible
Notes will, when so issued, be duly and validly issued, fully paid and
nonassessable.
(m) Disclosure. The representations and warranties contained
in this ss. 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this ss. 3 not misleading.
4. Representations and Warranties Concerning OCS. OCS represents
and warrants to XxXxxxx that the statements contained in this ss. 4 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this ss. 4), except as set
forth in the disclosure schedule delivered by OCS to XxXxxxx on the date hereof
and initialed by the Parties (the "Disclosure Schedule"). Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein, however, unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. Notwithstanding the foregoing, any
exception to any representation or warranty as to which XxXxxxx has Knowledge
prior to Closing shall be deemed to have been disclosed adequately regardless of
the form of disclosure in the Disclosure Schedule. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to disclose an exception to
a representation or warranty made herein (unless the representation or warranty
has to do with the existence of the document or other item itself). The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this ss. 4.
(a) Organization, Qualification, and Corporate Power. OCS is
a corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. OCS is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required. OCS has full corporate power and authority and all
material licenses, permits, and authorizations necessary to carry on the
businesses
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in which it is engaged and to own and use the properties owned and used by it.
ss. 4(a) of the Disclosure Schedule lists the directors and officers of OCS. OCS
has delivered to XxXxxxx correct and complete copies of the charter and by-laws
of OCS (as amended to date). The minute books (containing the records of
meetings of the stockholders, the board of directors, and any committees of the
board of directors), the stock certificate books, and the stock record books of
OCS are correct and complete. OCS is not in default under or in violation of any
provision of its charter or by-laws.
(b) Capitalization. The entire authorized capital stock of
OCS consists of (i) 1,600,000 OCS Common Shares, of which 940,000 OCS Common
Shares are issued and outstanding; (ii) 250,000 OCS Preferred Shares, of which
250,000 OCS Preferred Shares are issued and outstanding; (iii) employee stock
options to purchase an aggregate of 310,000 OCS Common Shares as set forth on
the Disclosure Schedule; and (iv) warrants to purchase an aggregate of 10,000
OCS Common Shares at a purchase price of $3.00 per OCS Common Shares. All of the
issued and outstanding OCS Common and Preferred Shares have been duly
authorized, are validly issued, fully paid, and nonassessable, and are held of
record by the persons set forth in ss. 4(b) of the Disclosure Schedule. All of
the OCS Common Shares subject to employee options and warrants will, upon
exercise of such options and warrants, be validly issued, fully paid, and
nonassessable; all such employee options and warrants are held by the persons
set forth in ss. 4(b) of the Disclosure Schedule. Except as set forth in ss.
4(b) of the Disclosure Schedule, there are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require OCS to issue, sell,
or otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to OCS. There are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting of the capital stock of OCS.
(c) Authorization of Transaction. OCS has full power and
authority (including full corporate power and authority) to execute and deliver
the Agreement and, subject to shareholder approval, to perform its obligations
thereunder. The Agreement constitutes the valid and legally binding obligation
of OCS, enforceable in accordance with its terms and conditions.
(d) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which OCS is subject or any provision of the
charter or by-laws of OCS or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which OCS is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Security Interest upon any of its
assets). OCS need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of
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any government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement.
(e) Brokers' Fees. OCS has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(f) Title to Assets. OCS has good and marketable title to,
or a valid leasehold interest in, the properties and assets used by it, located
on its premises, or shown on the Most Recent Balance Sheet or acquired after the
date thereof, free and clear of all Security Interests, except for properties
and assets disposed of in the Ordinary Course of Business since the date of the
Most Recent Balance Sheet.
(g) Subsidiaries. OCS has no Subsidiaries.
(h) Financial Statements. Attached hereto as Exhibit D are
the following financial statements (collectively the "Financial Statements"):
(i) audited balance sheets and statements of income, changes in stockholders'
equity, and cash flow as of and for the fiscal years ended December 31, 1997
(the "Most Recent Fiscal Year End") for OCS; and (ii) unaudited balance sheets
and statements of income, changes in stockholders' equity, and cash flow (the
"Most Recent Financial Statements") as of and for the year ended December 31,
1998 (the "Most Recent Fiscal Month End") for OCS. The Financial Statements
(including the notes thereto) have been prepared in accordance with GAAP applied
on a consistent basis throughout the periods covered thereby, present fairly the
financial condition of OCS as of such dates and the results of operations of OCS
for such periods, are correct and complete, and are consistent with the books
and records of OCS (which books and records are correct and complete); provided,
however, that the Most Recent Financial Statements are subject to normal
year-end adjustments (which will not be material individually or in the
aggregate) and lack footnotes and other presentation items.
(i) Events Subsequent to Most Recent Financial Statements.
Since the Most Recent Financial Statements, there has not been any material
adverse change in the business, financial condition, operations, results of
operations, or future prospects of OCS. Without limiting the generality of the
foregoing, since that date:
(i) OCS has not sold, leased, transferred, or
assigned any of its assets, tangible or intangible, other than
for a fair consideration in the Ordinary Course of Business;
(ii) OCS has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts,
leases, and licenses) either involving more than $10,000 or
outside the Ordinary Course of Business;
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(iii) no party (including OCS) has accelerated,
terminated, modified, or canceled any agreement, contract,
lease, or license (or series of related agreements, contracts,
leases, and licenses) involving more than $10,000 to which OCS
is a party or by which any of them is bound;
(iv) OCS has not imposed any Security Interest upon
any of its assets, tangible or intangible;
(v) OCS has not made any capital expenditure (or
series of related capital expenditures) either involving more
than $10,000 or outside the Ordinary Course of Business;
(vi) OCS has not made any capital investment in, any
loan to, or any acquisition of the securities or assets of,
any other Person (or series of related capital investments,
loans, and acquisitions) either involving more than $10,000 or
outside the Ordinary Course of Business;
(vii) OCS has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease
obligation either involving more than $10,000 singly or in the
aggregate;
(viii) OCS has not delayed or postponed the payment
of accounts payable and other Liabilities outside the Ordinary
Course of Business;
(ix) OCS has not canceled, compromised, waived, or
released any right or claim (or series of related rights and
claims) either involving more than $10,000 or outside the
Ordinary Course of Business;
(x) OCS has not granted any license or sublicense of
any rights under or with respect to any Intellectual Property;
(xi) there has been no change made or authorized in
the charter or by-laws of OCS;
(xii) OCS has not declared, set aside, or paid any
dividend or made any distribution with respect to its capital
stock (whether in cash or in kind) or redeemed, purchased, or
otherwise acquired any of its capital stock;
(xiii) OCS has not experienced any damage, destruction,
or loss (whether or not covered by insurance) to its property;
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(xiv) OCS has not made any loan to, or entered into
any other transaction with, any of its directors, officers,
and employee;
(xv) OCS has not entered into any employment contract
or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract or agreement;
(xvi) OCS has not granted any increase in the base
compensation of any of its directors, officers, and employees;
(xvii) OCS has not adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or
other plan, contract, or commitment for the benefit of any of
its directors, officers, and employees (or taken any such
action with respect to any other Employee Benefit Plan);
(xviii) OCS has not made any other change in employment
terms for any of its directors, officers, or employees;
(xix) OCS has not made or pledged to make any
charitable or other capital contribution outside the Ordinary
Course of Business;
(xx) there has not been any other material occurrence,
event, incident, action, failure to act, or transaction
involving OCS; and
(xxi) OCS has not committed to any of the foregoing.
(j) Undisclosed Liabilities. OCS has no Liability (and there
is no Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability), except for (i) Liabilities set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) and (ii)
Liabilities which have arisen after the Most Recent Fiscal Month End in the
Ordinary Course of Business (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law).
(k) Legal Compliance. OCS has complied with all applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof) the failure to comply with which
would have a material adverse effect on the condition or operations of OCS, and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed, commenced or, to the Knowledge of OCS,
threatened against it alleging any failure so to comply.
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(l) Tax Matters.
(i) OCS has filed all Tax Returns that it was
required to file. All such Tax Returns were correct and
complete in all respects. All Taxes owed by OCS (whether or
not shown on any Tax Return) have been paid. OCS currently is
not the beneficiary of any extension of time within which to
file any Tax Return. No claim has ever been made by an
authority in a jurisdiction where OCS does not file Tax
Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the
assets of OCS that arose in connection with any failure (or
alleged failure) to pay any Tax.
(ii) OCS has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor,
stockholder, or other third party.
(iii) OCS does not expect any authority to assess any
additional Taxes for any period for which Tax Returns have
been filed. There is no dispute or claim concerning any Tax
Liability of OCS either (A) claimed or raised by any authority
in writing or (B) as to which OCS has Knowledge based upon
personal contact with any agent of such authority. ss. 4(k) of
the Disclosure Schedule lists all federal, state, local, and
foreign income Tax Returns filed with respect to OCS,
indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject of
audit. OCS has delivered to XxXxxxx correct and complete
copies of all federal income Tax Returns, examination reports,
and statements of deficiencies assessed against or agreed to
by OCS.
(iv) OCS has not waived any statute of limitations
in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(v) OCS has not filed a consent under Code ss. 341
(f) concerning collapsible corporations. OCS has not made any
payments, is not obligated to make any payments, and is not a
party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible
under Code ss. 280G. OCS has not been a United States real
property holding corporation within the meaning of Code
ss. 897(c)(2) during the applicable period specified in Code
ss. 897(c)(1)(A)(ii). OCS has disclosed on its federal income
Tax Returns all positions taken therein that could give rise
to a substantial understatement of federal income Tax within
the meaning of Code ss. 6662. OCS is not a party to any Tax
allocation or sharing agreement. OCS (A) has not been a member
of an Affiliated Group filing a consolidated federal income
Tax Return (other than a group the common parent of which was
OCS) or (B) has any Liability for the Taxes of any Person
(other than OCS) under Reg. ss. 1.1502-6 (or any
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similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
(vi) ss. 4(l) of the Disclosure Schedule sets forth
the following information with respect to OCS as of the most
recent practicable date (as well as on an estimated pro forma
basis as of the Closing giving effect to the consummation of
the transactions contemplated hereby): (A) the basis of OCS in
its assets; and (B) the amount of any net operating loss, net
capital loss, unused investment or other credit, unused
foreign tax, or excess charitable contribution allocable to
OCS.
(vii) The unpaid Taxes of OCS (A) did not, as of the
Most Recent Fiscal Month End, exceed the reserve for Tax
Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax
income) set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) and (B) do not exceed that
reserve as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice
of OCS in filing their Tax Returns.
(m) Real Property. OCS neither owns nor leases any real
property.
(n) Intellectual Property.
(i) OCS owns or has the right to use pursuant to
license, sublicense, agreement, or permission all Intellectual
Property necessary or desirable for the operation of its
business as presently conducted. Each item of Intellectual
Property owned or used by OCS immediately prior to the Closing
hereunder will be owned or available for use by OCS on
identical terms and conditions immediately subsequent to the
Closing hereunder. OCS has made strategic decisions regarding
maintaining and protecting each item of Intellectual Property
that it owns, including filing provisional patent applications
in the U.S. Patent and Trademark Office and maintaining trade
secrets. OCS has obtained reasonable assurances from the
owners of the Intellectual Property that it uses that each
owner maintains and protects its respective Intellectual
Property.
(ii) OCS has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and OCS has
never received any charge, complaint, claim, demand, or notice
alleging any such interference, infringement,
misappropriation, or violation (including any claim that OCS
must license or refrain from using any Intellectual Property
rights of any third party). To the Knowledge of OCS, no third
party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property
rights of OCS.
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(iii) ss. 4(n)(iii) of the Disclosure Schedule
identifies each patent or registration which has been issued
to OCS with respect to any of its Intellectual Property,
identifies each pending patent application or application for
registration which OCS has made with respect to any of its
Intellectual Property, and identifies each license, agreement,
or other permission which OCS has granted to any third party
with respect to any of its Intellectual Property (together
with any exceptions). OCS has delivered to XxXxxxx correct and
complete copies of all such patents, registrations,
applications, licenses, agreements, and permissions (as
amended to date) and has made available to XxXxxxx correct and
complete copies of all other written documentation evidencing
ownership and prosecution (if applicable) of each such item.
ss. 4(n)(iii) of the Disclosure Schedule also identifies each
trade name or unregistered trademark used by OCS in connection
with its business. With respect to each item of Intellectual
Property required to be identified in ss. 4(n)(iii) of the
Disclosure Schedule:
(A) OCS possesses all right, title, and
interest in and to the item, free and clear of any
Security Interest, license, or other restriction;
(B) the item is not subject to any
outstanding injunction, judgment, order, decree,
ruling, or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is
pending or, to the Knowledge of OCS is threatened
which challenges the legality, validity,
enforceability, use, or ownership of the item; and
(D) OCS has never agreed to indemnify any
Person for or against any interference, infringement,
misappropriation, or other conflict with respect to
the item.
(E) It is still too early to determine the
scope of the patent protection which may ultimately
be obtained, particularly since OCS contemplated
additional filings as an ongoing process to improve
and expand its Intellectual Property position.
(iv) ss. 4(n)(iv) of the Disclosure Schedule
identifies each item of Intellectual Property that any third
party owns and that OCS uses pursuant to license, sublicense,
agreement, or permission. OCS has delivered to XxXxxxx correct
and complete copies of all such licenses, sublicenses,
agreements, and permissions (as amended to date). With respect
to each item of Intellectual Property required to be
identified in ss. 4(n)(iv) of the Disclosure Schedule, OCS has
no knowledge that:
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(A) the license, sublicense, agreement, or
permission covering the item is not legal, valid,
binding, enforceable, and in full force and effect;
(B) the license, sublicense, agreement, or
permission will not continue to be legal, valid,
binding, enforceable, and in full force and effect on
identical terms following the consummation of the
transactions contemplated hereby;
(C) any party to the license, sublicense,
agreement, or permission is in breach or default, or
that any event has occurred which with notice or
lapse of time would constitute a breach or default or
permit termination, modification, or acceleration
thereunder;
(D) any party to the license, sublicense,
agreement, or permission has repudiated any provision
thereof;
(E) with respect to each sublicense, the
representations and warranties set forth in
subsections (A) through (D) above are not true and
correct with respect to the underlying license;
(F) the underlying item of Intellectual
Property is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; and
(G) any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is
pending or, to the Knowledge of OCS, is threatened
which challenges the legality, validity, or
enforceability of the underlying item of Intellectual
Property.
OCS has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or
permission.
(v) To the Knowledge of OCS, OCS will not
interfere with, infringe upon, misappropriate, or otherwise
come into conflict with, any Intellectual Property rights of
third parties as a result of the continued operation of its
businesses as presently conducted.
(vi) OCS has no Knowledge of any new products,
inventions, procedures, or methods of manufacturing or
processing that any competitors or other third parties have
developed which reasonably could be expected to supersede or
make obsolete any product or process of OCS.
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(o) Tangible Assets. OCS owns or leases all machinery,
equipment, and other tangible assets necessary for the conduct of its business
as presently conducted. Each such tangible asset is free from defects (patent
and latent), has been maintained in accordance with normal industry practice, is
in good operating condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which it presently is used.
(p) Inventory. The inventory of OCS consists of raw materials
and supplies, manufactured and purchased parts, goods in process, and finished
goods, all of which is merchantable and fit for the purpose for which it was
procured or manufactured, and none of which is slow-moving, obsolete, damaged,
or defective, subject only to the reserve for inventory writedown set forth on
the face of the Most Recent Balance Sheet (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of OCS.
(q) Contracts. ss.4(q) of the Disclosure Schedule lists the
following contracts and other agreements to which OCS is a party:
(i) any agreement (or group of related agreements)
for the lease of personal property to or from any Person
providing for lease payments in excess of $10,000 per annum;
(ii) any agreement (or group of related agreements)
for the purchase or sale of raw materials, commodities,
supplies, products, or other personal property, or for the
furnishing or receipt of services, the performance of which
will extend over a period of more than one year, result in a
material loss to OCS, or involve consideration in excess of
$10,000;
(iii) any agreement concerning a partnership or joint
venture;
(iv) any agreement (or group of related agreements)
under which it has created, incurred, assumed, or guaranteed
any indebtedness for borrowed money, or any capitalized lease
obligation, in excess of $10,000 or under which it has imposed
a Security Interest on any of its assets, tangible or
intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any agreement with Affiliates of OCS;
(vii) any profit-sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance, or other
material plan or arrangement for the benefit of its current or
former directors, officers, and employees;
(viii) any collective bargaining agreement;
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(ix) any agreement for the employment of any individual
on a full-time, part-time, consulting, or other basis
providing annual compensation in excess of $50,000 or
providing severance benefits;
(x) any agreement under which it has advanced or loaned
any amount to any of its directors, officers, and employees;
(xi) any agreement under which the consequences of a
default or termination could have a material adverse effect on
the business, financial condition, operations, results of
operations, or future prospects of OCS; or
(xii) any other agreement (or group of related
agreements) the performance of which involves consideration in
excess of $10,000.
OCS has delivered to XxXxxxx a correct and complete copy of each written
agreement listed in ss.4(q) of the Disclosure Schedule (as amended to date) and
a written summary setting forth the terms and conditions of each oral agreement
referred to in ss.4(q) of the Disclosure Schedule. With respect to each such
agreement: (A) the agreement is legal, valid, binding, enforceable, and in full
force and effect; (B) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (C) no party is in breach
or default, and no event has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (D) no party has repudiated any provision
of the agreement.
(r) Notes and Accounts Receivable. All notes and accounts
receivable of OCS are reflected properly on their books and records, are valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded amounts,
subject only to the reserve for bad debts set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of OCS.
(s) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of OCS.
(t) Insurance. ss.4(t) of the Disclosure Schedule sets forth
the following information with respect to each insurance policy (including
policies providing property, casualty, liability, and workers' compensation
coverage and bond and surety arrangements) to which OCS has been a party, a
named insured, or otherwise the beneficiary of coverage at any time:
(i) the name, address, and telephone number of the
agent;
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(ii) the name of the insurer, the name of the policyholder,
and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and
amount (including a description of how deductibles and ceilings
are calculated and operate) of coverage; and
(v) a description of any retroactive premium adjustments or
other loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is legal, valid,
binding, enforceable, and in full force and effect; (B) the policy will continue
to be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby; (C) neither OCS nor any other party to the policy is in breach or
default (including with respect to the payment of premiums or the giving of
notices), and no event has occurred which, with notice or the lapse of time,
would constitute such a breach or default, or permit termination, modification,
or acceleration, under the policy; and (D) no party to the policy has repudiated
any provision thereof. OCS has been covered during the term of its existence by
insurance in scope and amount customary and reasonable for the businesses in
which it has engaged during the aforementioned period. ss.4(t) of the Disclosure
Schedule describes any self-insurance arrangements affecting OCS.
(u) Litigation. ss.4(u) of the Disclosure Schedule sets forth each
instance in which OCS (i) is subject to any outstanding injunction, judgment,
order, decree, ruling, or charge or (ii) is a party or, to the Knowledge of OCS,
is threatened to be made 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 or before any
arbitrator. None of the actions, suits, proceedings, hearings, and
investigations set forth in ss.4(u) of the Disclosure Schedule could result in
any material adverse change in the business, financial condition, operations,
results of operations, or future prospects of OCS. OCS has no reason to believe
that any such action, suit, proceeding, hearing, or investigation may be brought
or threatened against OCS.
(v) Product Warranty. Each product manufactured, sold, leased, or
delivered by OCS has been in conformity with all applicable contractual
commitments and all express and implied warranties, and OCS has no Liability
(and there is no Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any of them
giving rise to any Liability) for replacement or repair thereof or other damages
in connection therewith, subject only to the reserve for product warranty claims
set forth on the face of the Most Recent Balance Sheet (rather than in any notes
thereto) as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of OCS. No
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product manufactured, sold, leased, or delivered by OCS is subject to any
guaranty, warranty, or other indemnity beyond the applicable standard terms and
conditions of sale or lease. ss.4(v) of the Disclosure Schedule includes copies
of the standard terms and conditions of sale or lease for each of OCS
(containing applicable guaranty, warranty, and indemnity provisions).
(w) Product Liability. OCS has no Liability (and there is no Basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against any of them giving rise to any
Liability) arising out of any injury to individuals or property as a result of
the ownership, possession, or use of any product manufactured, sold, leased, or
delivered by OCS.
(x) Employees. Except as contemplated by this Agreement, to the
Knowledge of OCS, no executive, key employee, or group of employees has any
plans to terminate employment with OCS. OCS is not a party to or bound by any
collective bargaining agreement, nor has it experienced any strikes, grievances,
claims of unfair labor practices, or other collective bargaining disputes. OCS
has not committed any unfair labor practice. OCS has no Knowledge of any
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of OCS.
(y) Employee Benefits.
(i) ss.4(y) of the Disclosure Schedule lists each
Employee Benefit Plan that OCS maintains or to which OCS
contributes or has any obligation to contribute.
(A) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) complies in form and in operation in
all respects with the applicable requirements of ERISA, the Code,
and other applicable laws.
(B) All required reports and descriptions (including Form
5500 Annual Reports, summary annual reports, PBGC-1's, and summary
plan descriptions) have been timely filed and distributed
appropriately with respect to each such Employee Benefit Plan. The
requirements of COBRA have been met with respect to each such
Employee Benefit Plan which is an Employee Welfare Benefit Plan.
(C) All contributions (including all employer contributions
and employee salary reduction contributions) which are due have
been paid to each such Employee Benefit Plan which is an Employee
Pension Benefit Plan and all contributions for any period ending
on or before the Closing Date which are not yet due have been paid
to each such Employee Pension Benefit Plan or accrued in
accordance with the past custom and practice of
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OCS. All premiums or other payments for all periods ending on or
before the Closing Date have been paid with respect to each such
Employee Benefit Plan which is an Employee Welfare Benefit Plan.
(D) Each such Employee Benefit Plan which is an Employee
Pension Benefit Plan meets the requirements of a "qualified plan"
under Code ss.401(a), has received, within the last two years, a
favorable determination letter from the Internal Revenue Service
that it is a "qualified plan," is not aware of any facts or
circumstances that could result in the revocation of such
determination letter.
(E) The market value of assets under each such Employee
Benefit Plan which is an Employee Pension Benefit Plan (other than
any Multiemployer Plan) equals or exceeds the present value of all
vested and nonvested Liabilities thereunder determined in
accordance with PBGC methods, factors, and assumptions applicable
to an Employee Pension Benefit Plan terminating on the date for
determination.
(F) OCS has delivered to XxXxxxx correct and complete copies
of the plan documents and summary plan descriptions, the most
recent determination letter received from the Internal Revenue
Service, the most recent Form 5500 Annual Report, and all related
trust agreements, insurance contracts, and other funding
agreements which implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that OCS and any
ERISA Affiliate maintains or ever has maintained or to which any of them
contributes, ever has contributed, or ever has been required to
contribute:
(A) No such Employee Benefit Plan which is an Employee
Pension Benefit Plan (other than any Multiemployer Plan) has been
completely or partially terminated or been the subject of a
Reportable Event as to which notices would be required to be filed
with the PBGC. No proceeding by the PBGC to terminate any such
Employee Pension Benefit Plan (other than any Multiemployer Plan)
has been instituted or, to the Knowledge of OCS, threatened.
(B) There have been no Prohibited Transactions with respect
to any such Employee Benefit Plan. No Fiduciary has any Liability
for breach of fiduciary duty or any other failure to act or comply
in connection with the administration or investment of the assets
of any such Employee Benefit Plan. No action, suit, proceeding,
hearing, or investigation with respect to the administration or
the investment of the assets of any such Employee
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Benefit Plan (other than routine claims for benefits) is pending
or, to the Knowledge of OCS, threatened. has no Knowledge of any
Basis for any such action, suit, proceeding, hearing, or
investigation.
(C) OCS has not incurred, and OCS has no reason to expect
that OCS will incur, any Liability to the PBGC (other than PBGC
premium payments) or otherwise under Title IV of ERISA (including
any withdrawal liability as defined in ERISA ss. 4201) or under
the Code with respect to any such Employee Benefit Plan which is
an Employee Pension Benefit Plan.
(iii) OCS does not contribute to, never has contributed to, and
never has been required to contribute to any Multiemployer Plan or has
any Liability (including withdrawal liability as defined in ERISA ss.
4201) under any Multiemployer Plan.
(iv) OCS does not maintain and never has maintained or contribute,
never has contributed, and never has been required to contribute to any
Employee Welfare Benefit Plan providing medical, health, or life
insurance or other welfare-type benefits for current or future retired
or terminated employees, their spouses, or their dependents (other than
in accordance with COBRA).
(z) Guaranties. OCS is not a guarantor or otherwise is liable for
any Liability or obligation (including indebtedness) of any other Person.
(aa) Environmental, Health, and Safety Matters.
(i) OCS, and its predecessors and Affiliates have complied
and are in compliance with all Environmental, Health, and Safety
Requirements.
(ii) Without limiting the generality of the foregoing, OCS and its
Affiliates have obtained and complied with, and are in compliance with,
all permits, licenses and other authorizations that are required
pursuant to Environmental, Health, and Safety Requirements for the
occupation of its facilities and the operation of its business; a list
of all such permits, licenses and other authorizations is set forth on
the attached "Environmental and Safety Permits Schedule."
(iii) Neither OCS nor its predecessors or Affiliates have received
any written or oral notice, report or other information regarding any
actual or alleged violation of Environmental, Health, and Safety
Requirements, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating
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to any of them or their facilities arising under Environmental,
Health, and Safety Requirements.
(iv) None of the following exists at any property or
facility owned or operated by OCS: (1) underground storage tanks,
(2) asbestos-containing material in any form or condition, (3)
materials or equipment containing polychlorinated biphenyls, or
(4) landfills, surface impoundments, or disposal areas.
(v) Neither OCS nor its predecessors or Affiliates has
treated, stored, disposed of, arranged for or permitted the
disposal of, transported, handled, or released any substance,
including without limitation any hazardous substance, or owned or
operated any property or facility (and no such property or
facility is contaminated by any such substance) in a manner that
has given or would give rise to liabilities, including any
liability for response costs, corrective action costs, personal
injury, property damage, natural resources damages or attorney
fees, pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), the
Solid Waste Disposal Act, as amended ("SWDA") or any other
Environmental, Health, and Safety Requirements.
(vi) Neither this Agreement nor the consummation of the
transaction that is the subject of this Agreement will result in
any obligations for site investigation or cleanup, or notification
to or consent of government agencies or third parties, pursuant to
any of the so-called "transaction-triggered" or "responsible
property transfer" Environmental, Health, and Safety Requirements.
(vii) Neither OCS nor any of its predecessors or Affiliates
has, either expressly or by operation of law, assumed or
undertaken any liability, including without limitation any
obligation for corrective or remedial action, of any other Person
relating to Environmental, Health, and Safety Requirements.
(viii) No facts, events or conditions relating to the past
or present facilities, properties or operations of OCS, or any of
its predecessors or Affiliates will prevent, hinder or limit
continued compliance with Environmental, Health, and Safety
Requirements, give rise to any investigatory, remedial or
corrective obligations pursuant to Environmental, Health, and
Safety Requirements, or give rise to any other liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise)
pursuant to Environmental, Health, and Safety Requirements,
including without limitation any relating to onsite or offsite
releases or threatened releases of hazardous materials, substances
or wastes, personal injury, property damage or natural resources
damage.
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(bb) Certain Business Relationships with OCS. No officer,
director, holder of 10% or more of the Common or Preferred Shares of OCS
or their respective Affiliates have been involved in any business
arrangement or relationship with OCS within the past 12 months, and no
such person owns any asset, tangible or intangible, which is used in the
business of OCS.
(cc) Year 2000 Compliance. Each System is Year 2000
Compliant.
(dd) Certain HSR Matters. OCS represents and warrants that
neither it nor any ultimate parent entity of OCS has net sales or assets
of $100 million, within the meaning of the HSR Act.
(ee) Disclosure. The representations and warranties
contained in this ss.4 do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained in this ss.4 not misleading.
5. Covenants. The Parties agree as follows with respect to
the period from and after the execution of this Agreement:
(a) General. Each of the Parties will use its reasonable
best efforts to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of
the closing conditions set forth in ss.6 below).
(b) Notices and Consents. OCS will give any notices to third
parties, and will use its reasonable best efforts to obtain any third
party consents, that XxXxxxx reasonably may request in connection with the
matters referred to in ss.4(d) above.
(c) Regulatory Matters and Approvals. Each of the Parties
will give any notices to, make any filings with, and use its reasonable
best efforts to obtain any authorizations, consents, and approvals of
governments and governmental agencies in connection with the matters
referred to in ss.3(a)(ii), ss.3(b)(ii) and ss.4(d) above.
(d) Operation of Business. OCS will not engage in any
practice, take any action, or enter into any transaction outside the
Ordinary Course of Business. Without limiting the generality of the
foregoing:
(i) OCS will not authorize or effect any change in
its charter or by-laws;
(ii) OCS will not grant any options, warrants, or
other rights to purchase or obtain any of its capital stock or
issue, sell, or otherwise dispose of any of its capital stock
(except upon the conversion or exercise of options, warrants, and
other rights currently outstanding);
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(iii) OCS will not declare, set aside, or pay any dividend
or distribution with respect to its capital stock (whether in cash
or in kind), or redeem, repurchase, or otherwise acquire any of
its capital stock, in either case outside the Ordinary Course of
Business;
(iv) OCS will not issue any note, bond, or other debt
security or create, incur, assume, or guarantee any indebtedness
for borrowed money or capitalized lease obligation outside the
Ordinary Course of Business;
(v) OCS will not impose any Security Interest upon any of
its assets outside the Ordinary Course of Business;
(vi) OCS will not make any capital investment in, make any
loan to, or acquire the securities or assets of any other Person;
(vii) OCS will not make any change in employment terms for
any of its directors, officers, and employees; and
(viii) OCS will not commit to any of the foregoing.
(e) Full Access. OCS will permit representatives of XxXxxxx to
have full access to all premises, properties, personnel, books, records
(including tax records), contracts, and documents of or pertaining to each of
OCS. XxXxxxx will treat and hold as such any Confidential Information it
receives from OCS in the course of the reviews contemplated by this ss.5(e),
will not use any of the Confidential Information except in connection with this
Agreement, and, if this Agreement is terminated for any reason whatsoever,
agrees to return to OCS all tangible embodiments (and all copies) thereof which
are in its possession. XxXxxxx acknowledges that such Confidential Information
shall be subject to the Confidentiality Agreement.
(f) Notice of Developments. Each Party will give prompt written
notice to the other of any material adverse development causing a breach of any
of its own representations and warranties in ss.3 and ss.4 above. No disclosure
by any Party pursuant to this ss. 5(f), however, shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
(g) Exclusivity. OCS will not solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of all or substantially all of the capital stock or assets of OCS (including any
acquisition structured as a merger, consolidation, or share exchange). OCS shall
notify XxXxxxx immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
(h) Appraisal Rights. XxXxxxx will provide the Surviving
Corporation with sufficient funds to satisfy the obligations (if any) of the
Surviving Corporation to holders of OCS
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Common Shares who properly exercise and perfect their appraisal rights pursuant
to 262 of the Delaware General Corporation Law.
(i) Purchase of Debentures. XxXxxxx will purchase from holders of
Debentures who tender Debentures to XxXxxxx within sixty (60) days after the
Closing Date, accompanied by documents of transfer reasonably acceptable to
XxXxxxx, the Debentures so tendered for cash in an amount equal to the principal
amount thereof plus interest accrued thereon.
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of XxXxxxx and Acquisition Sub.
The obligation of XxXxxxx and Acquisition Sub to consummate the transactions to
be performed by them in connection with the Closing is subject to satisfaction
of the following conditions:
(i) this Agreement and the Merger shall have received the
approval of OCS' s. board of directors and stockholders;
(ii) OCS shall have procured all of the third party consents
specified in ss.5(b) above;
(iii) the representations and warranties set forth in ss.3 and
ss.4 above shall be true and correct in all material respects at and as
of the Closing Date;
(iv) OCS shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(v) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Surviving
Corporation to own the assets and to operate the businesses of OCS (and
no such injunction, judgment, order, decree, ruling, or charge shall be
in effect);
(vi) OCS and Xxxxxxxxxxx Xxxxxx shall have entered into a
binding Separation Agreement and General Release in form reasonably
satisfactory to XxXxxxx.
(vii) OCS shall have delivered to XxXxxxx a certificate to the
effect that each of the conditions specified above in ss.6(a)(i)-(vi)
is satisfied in all respects;
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(viii) this Agreement and the Merger shall have received the
approval of XxXxxxx board of directors;
(ix) XxXxxxx shall have received from counsel to OCS an
opinion in form and substance as set forth in Exhibit E attached
hereto, addressed to XxXxxxx, and Dated as of the Closing Date;
(x) holders of not less than 80% of the OCS Common Shares on
a fully-diluted basis (not including shares owned by XxXxxxx),
including Xxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxx and
Xxxxxxxxxxx X. Xxxxxx shall have entered into the Voting Agreement in
the form and substance as set forth in Exhibit F attached hereto and
the same shall be in full force and effect;
(xi) Messrs. Xxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxx will have
executed the Employment and Non-Competition Agreements attached hereto
as Exhibits G and H;
(xii) each holder of Excluded Shares shall have executed an
agreement substantially in the form of Exhibit I hereto providing that
such Excluded Shares may be exchanged at any time by the holder thereof
for Convertible Notes in aggregate principal amount equal to the
principal amount into which such Excluded Shares would have been
converted at the Effective Time had they not been Excluded Shares, and
agreeing that XxXxxxx may call such Excluded Shares for exchange on the
foregoing basis at any time after the first anniversary of the
Effective Time;
(xiii) there shall have been no material adverse change in the
business or condition, financial or otherwise, assets or liabilities of
OCS;
(xiv) XxXxxxx shall have completed its due diligence
investigation of OCS, its business, condition, properties, financial
results, prospects and other matters to the satisfaction of XxXxxxx;
and
(xv) all actions to be taken by OCS in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to XxXxxxx.
XxXxxxx and Acquisition Sub may waive any condition specified in this ss.6(a)
if they execute a writing so stating at or prior to the Closing.
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(b) Conditions to Obligation of OCS. The obligation of OCS to
consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) this Agreement and the Merger shall have received the
approval of XxXxxxx board of directors;
(ii) the representations and warranties set forth in ss.3
above shall be true and correct in all material respects at and as of
the Closing Date;
(iii) XxXxxxx shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Surviving
Corporation to own the former assets, to operate the former businesses
(and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
(v) XxXxxxx shall have delivered to OCS a certificate to the
effect that each of the conditions specified above in ss.6(b)(i)-(iv)
is satisfied in all respects;
(vi) OCS shall have received from counsel to XxXxxxx an
opinion in form and substance as set forth in Exhibit J attached
hereto, addressed to OCS, and dated as of the Closing Date;
(vii) there shall have been no material adverse change in the
business or condition, financial or otherwise, assets or liabilities of
XxXxxxx;
(viii) OCS shall have completed its due diligence investigation
of XxXxxxx, its business, condition, properties, financial results and
other matters to the satisfaction of OCS; and
(ix) all actions to be taken by XxXxxxx in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to OCS.
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OCS may waive any condition specified in this ss.6(b) if it executes a
writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. Either of the Parties may
terminate this Agreement with the prior authorization of its board of
directors (whether before or after stockholder approval) as provided
below:
(i) the Parties may terminate this Agreement by mutual
written consent at any time prior to the Effective Time;
(ii) XxXxxxx may terminate this Agreement by giving
written notice to OCS at any time prior to the Effective Time (A) in
the event OCS has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, XxXxxxx
has notified OCS of the breach, and the breach has continued without
cure for a period of fifteen (15) days after the notice of breach or
(B) if the Closing shall not have occurred on or before March 15, 1999,
by reason of the failure of any condition precedent under ss.6(a)
hereof (unless the failure results primarily from XxXxxxx breaching any
representation, warranty, or covenant contained in this Agreement); and
(iii) OCS may terminate this Agreement by giving written
notice to XxXxxxx at any time prior to the Effective Time (A) in the
event XxXxxxx has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, OCS has
notified XxXxxxx of the breach, and the breach has continued without
cure for a period of fifteen (15) days after the notice of breach or
(B) if the Closing shall not have occurred on or before February 28,
1999, by reason of the failure of any condition precedent under ss.6(b)
hereof (unless the failure results primarily from OCS breaching any
representation, warranty, or covenant contained in this Agreement).
If this Agreement is terminated for any reason other than pursuant to
ss.7(a)(ii)(A) above, XxXxxxx shall not require payment from OCS on the demand
notes of OCS held by XxXxxxx prior to the 45th day after such termination.
(b) Effect of Termination. If any Party terminates this
Agreement pursuant to ss.7(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach).
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8. Remedies for Breach of This Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties of OCS contained in of this Agreement shall
survive the Closing and continue in full force and effect for a period of twelve
(12) months thereafter. All of the other representations and warranties of
XxXxxxx contained in ss.3 of this Agreement shall survive the Closing and be for
the benefit of the OCS Investors (even if OCS knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect for a period of twelve (12) months thereafter.
(b) Indemnification Provisions for Benefit of XxXxxxx.
(i) In the event OCS breaches (or in the event any
third party alleges facts that, if true, would mean OCS has
breached) any of its representations, warranties, and covenants
contained in this Agreement, provided that XxXxxxx makes a
written claim for indemnification against the OCS Investors
pursuant to ss.9(h) below within such survival period, then
XxXxxxx shall be entitled to indemnification from and against
the entirety of any Adverse Consequences XxXxxxx may suffer
through and after the date of the claim for indemnification
(including any Adverse Consequences XxXxxxx may suffer after the
end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach
(or the alleged breach); provided, however, that LaBarge shall
not be entitled to indemnification from and against any Adverse
Consequences resulting from, arising out of, relating to, in the
nature of, or caused by the breach (or alleged breach) of any
representation or warranty contained in ss.4 until XxXxxxx has
suffered Adverse Consequences by reason of all such breaches (or
alleged breaches) in excess of a $50,000 aggregate threshold (at
which point XxXxxxx will be entitled to indemnity from and
against all such Adverse Consequences in excess of $50,000).
(ii) Any indemnification of XxXxxxx under this
ss.8(b) shall be limited to and withheld from the amount of
unpaid interest (but not Participation Payments) on the
Convertible Notes. XxXxxxx may offset the full amount of any
Adverse Consequences as to which it is entitled to
indemnification hereunder against its obligation to pay interest
on the Convertible Notes on a pro rata basis. XxXxxxx may
withhold payment of such interest in an aggregate amount not to
exceed the aggregate amount of claims for indemnification
properly and timely asserted by XxXxxxx pursuant to this ss.8
until such claims are resolved.
(c) Indemnification Provisions for Benefit of the OCS Investors.
(i) In the event XxXxxxx breaches (or in the event
any third party alleges facts that, if true, would mean XxXxxxx
has breached) any of its
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representations, warranties, and covenants contained in this
Agreement, and, if there is an applicable survival period
pursuant to ss.8(a) above, provided that holders of 20% or more
in principal amount of the Convertible Notes make a written
claim for indemnification against XxXxxxx pursuant to ss.9(h)
below within such survival period, then XxXxxxx agrees to
indemnify the OCS Investors from and against the entirety of any
Adverse Consequences they may suffer through and after the date
of the claim for indemnification (including any Adverse
Consequences they may suffer after the end of any applicable
survival period) resulting from, arising out of, relating to, in
the nature of, or caused by the breach (or the alleged breach).
(ii) Any indemnification by XxXxxxx under this ss.8
(c) shall not exceed the aggregate indemnification amount to
which XxXxxxx would be entitled under ss.8(a) at the time a
claim for indemnification is asserted against XxXxxxx hereunder.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party
Claim") which may give rise to a claim for indemnification
against any other Party (the "Indemnifying Party") under this
ss.8, then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided, however, that
no delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced. Any such notice given
by XxXxxxx shall be given to the OCS Investors.
(ii) Any Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim
with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as (A) the Indemnifying Party
notifies the Indemnified Party in writing within fifteen (15)
days after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by
the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, (C) the
Third Party Claim involves only money damages and does not
seek an injunction or other equitable relief, (D) settlement
of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice
adverse to the continuing business interests of the
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Indemnified Party, and (E) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with
ss.8(d)(ii) above, (A) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim, (B) the Indemnified Party will
not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (not to be
withheld unreasonably), and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the
prior written consent of the Indemnified Party (not to be
withheld unreasonably).
(iv) In the event any of the conditions in ss.8(d)
(ii) above is or becomes unsatisfied, however, (A) the
Indemnified Party may defend against, and consent to the entry
of any judgment or enter into any settlement with respect to,
the Third Party Claim in any manner it may deem appropriate (and
the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith),
(B) the Indemnifying Parties will reimburse the Indemnified
Party promptly and periodically for the costs of defending
against the Third Party Claim (including attorneys' fees and
expenses), and(C) the Indemnifying Parties will remain
responsible for any Adverse Consequences the Indemnified Party
may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Third Party Claim to the fullest
extent provided in this ss.8.
(e) Exclusive Indemnification Provisions. The foregoing
indemnification provisions are the exclusive indemnification rights of the
Parties and are in lieu of all statutory, equitable, or common law remedy any
Party may have for breach of representation, warranty, or covenant.
9. Miscellaneous.
(a) Press Releases and Public Announcements. No Party shall
issue any press release or make any public announcement relating to the subject
matter of this Agreement without the prior written approval of the other Party;
provided, however, that any Party may make any public disclosure it believes in
good faith is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing Party
will use its reasonable best efforts to advise the other Party prior to making
the disclosure).
(b) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the
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extent they related in any way to the subject matter hereof; provided, however,
the Confidentiality Agreement shall survive termination of this Agreement.
(c) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Parties.
(d) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(e) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to OCS:
c/o Suelthaus & Xxxxx, P.C.
0000 Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Copy to:
Suelthaus & Xxxxx, P.C.
0000 Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
If to XxXxxxx or Acquisition Sub:
XxXxxxx, Inc.
0000X Xxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. XxXxxxx, President & CEO
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Copy to:
Xxxxxxxxx Xxxxxxxx LLP
Xxx Xxxxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Xx., Esq.
If to OCS Investors:
At their addresses reflected on the
books of OCS or (after Closing) XxXxxxx
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(g) Governing Law. Except to the extent the Merger is governed
by the General Corporation Law of Delaware, this Agreement shall be governed by
and construed in accordance with the domestic laws of the State of Missouri
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Missouri or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Missouri.
(h) Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective boards of directors. No amendment of any
provision of this Agreement shall be valid unless the same shall be in writing
and signed by both of the Parties. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(i) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(j) Expenses. Each of the Parties will bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
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(k) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word ?including? shall mean including without limitation.
(l) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
38
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
as of the date first above written.
XXXXXXX, INC.
By: /s/ Xxxxx X. XxXxxxx
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Title: CEO President
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XXXXXXX-OCS, INC.
By: /s/ Xxxxx X. XxXxxxx
--------------------------------------
Title: President
--------------------------------------
OPEN CELLULAR SYSTEMS, INC.
By: /s/ Xxx Xxxxxxxx
--------------------------------------
Title: President
--------------------------------------
39
