EXHIBIT 10.41
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into as
of the 28th day of February, 1998 by and between Xxxxxx Telecom, Inc., a
Delaware corporation ("Buyer"), Argos Adriatic Corporation, a California
corporation ("Seller"), Xxxxxx Xxxxxxxx ("Xxxxxxxx") and Xxxxx Xxxxxxxx
("Xxxxxxxx") (Xxxxxxxx and Xxxxxxxx being sometimes individually referred to as
"Stockholder" or collectively as "Stockholders").
R E C I T A L S
- - - - - - - -
WHEREAS, Seller is engaged in the business of selling and providing, among
other things, labor, payroll, and information technology services such as
project work and training (the "Business"); and
WHEREAS, Buyer wishes to purchase and Seller wishes to sell, the assets and
Business of Seller specified in this Agreement;
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for and in consideration of the mutual promises herein made,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ACQUIRED ASSETS
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1.1 Acquired Assets. Subject to the terms and conditions of this Agreement
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and in reliance on the representation, warranties and agreements set forth
herein, at the Closing (as defined in Section 2), Seller shall sell, convey,
transfer, assign and deliver to Buyer, and Buyer shall purchase from Seller all
of Sellers's right, title and interest in and to all of the assets of
Seller of every kind, tangible and intangible, wherever located, excepting only
those assets specifically excluded in Section 1.2 hereof, and including, without
limitation:
(a) the office furniture and equipment, computers, and leasehold
improvements listed in Schedule 1.1 A;
(b) all computer software owned by Seller and Seller's interest in any
other computer software licensed by it from others;
(c) all office supplies;
(d) the client agreements, purchase orders, request, requirements,
correspondence, memoranda and inquiries from or with past and present
customers, all subcontractor agreements and arrangements past or
present including, but not limited to, those set forth in Schedule 1.1
B ("Client Agreements");
(e) the office leases, equipment leases, agreements with firms based in
the country of India related to recruitment of consultants, and other
agreements, contracts and instruments listed in Schedule 1.1C;
(f) all prepayments and deposits including without limitation, security
deposit under leases;
(g) the corporate name Argos Adriatic Corporation, all assumed names
relating thereto, all logos, trademarks, service marks, domain names,
trade names and copyrights and registrations in applications for
registration of any of them and any other intellectual property rights
of Seller, including, but not limited to, those all of which are
listed in Schedule 1.1 D;
(h) originals of all books and records of Seller pertaining to the assets
referred to in this Agreement, including customer lists and credit
files, and all those pertaining to Seller's employees who are hired by
Buyer pursuant to the Agreement;
(i) all permits, licenses, approvals and other governmental authorizations
relating to Seller's Business which are transferable to Buyer
including, but not limited to, those listed in Schedule 1.1 E;
(j) any other assets not to referred to in Section 1.2 which are used by
Seller in connection with its Business, including, without limitation,
all telephone and facsimile numbers and e-mail addresses used by
Seller in connection with such business;
(k) employee loans and advances, listed in Schedule 1.1F;
(l) all goodwill pertaining to Seller's Business; and
(m) all agreements, rights to employ and information for or with respect
to Seller's current or former employees including, without limitation
all tangible and electronic manifestations, files, resumes, payroll,
employee information and other such information relating to employees
and consultants.
All as the same exist on the date hereof and shall exist on the Closing Date
(as hereinafter defined) subject only to changes occurring in the ordinary
course of business of Seller. All such assets to be acquired are referred
together as the "Acquired Assets".
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1.2 Excluded Assets. The following assets of Seller are excluded from the
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Acquired Assets;
(a) the rights that accrue to Seller under this Agreement, including the
consideration payable to Seller by Buyer hereunder;
(b) any cash and cash equivalent owned by Seller;
(c) Seller's accounts receivables;
(d) any tax refund of Seller;
(e) any of Seller's unbilled revenue;
(f) all of Seller's vehicles;
(g) any treasury stock held by Seller;
(h) the corporate stock certificate books, ledger, minute books and
similar corporate records of Seller; and
(i) all records and correspondence relating to the foregoing excluded
assets.
1.3 Purchase Price. (a) As consideration for the sale, conveyance,
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transfer, assignment and delivery to Buyer of the Acquired Assets, Buyer shall
pay to Seller a purchase price of $5,083,000 dollars (the "Unadjusted Price")
plus the Earnout Payments hereinafter defined:
(i) on the Closing Date, Five Million Eighty Three Thousand Dollars
($5,083,000), in immediately available funds.
(ii) the earnout payments payable by Buyer to Seller shall be made as
follows:
(a) on May 30, 1999, for the twelve month period ending February
28, 1999, an amount equal to 70% of the first $1.429 million
of EBITA (hereafter defined) and 30% of EBITA in excess of
$1.429 million;
(b) on May 30, 2000 for the twelve month period ending February
29, 2000 an amount equal to 70% of the first $1.429 million
of EBITA and 30% of EBITA in excess on $1.429 million;
(c) on May 30, 2001, for the twelve month period ending February
28, 2001, an amount equal to 70% of the first $1.429 million
of EBITA and 30% of EBITA in excess of $1.429 million.
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Each of the payments referred to above in subsections (a), (b), and (c), are
referred to as the ("Earnout Payments"). Each of three consecutive 12 month
periods is referred to herein as an "Earnout Period".
Each of the Earnout Payments will be paid 75% in cash and 25% in such number
of shares of Xxxxxx International, Inc. ("BI") common stock ("BI Common Stock")
as is determined by dividing the 25% amount of said Earnout Payment by the
Average Price (such BI Common Stock shall be called "Earnout Shares").
Notwithstanding the above, at each Earnout Payment Date, if BI's common stock is
not then listed on the NASDAQ National Market System, or on any national
securities exchange, the Earnout Payment will be paid 100% in cash. The
"Average Price" is defined as the average of the closing bid and closing asked
prices of the BI Common Stock on the NASDAQ National Market System for each of
the twenty (20) trading days immediately prior to the Earnout Payment Dates (the
"Measurement Period"). Earnout Shares will be subject to restrictions on resale
under the Securities Act of 1933 as amended (the "Act"), the rules and
regulations promulgated thereunder and applicable state laws. The Seller will
be required to hold the Earnout Shares for a minimum of 1 year from the date of
issue. Notwithstanding anything to the contrary contained herein, no Earnout
Payments will apply or will be due to Seller for any Earnout Period unless the
EBITA for such Earnout Period exceeds eight hundred and fifty thousand dollars
($850,000).
For purposes of this Agreement, "EBITA" means revenue from Seller's Business
less all direct branch expenses such as staff, compensation and related fringes,
payroll taxes, commissions, office expense, advertising, telephone, travel
(excluding travel requested by Buyer's corporate office), postage, lease
expense, H1 processing, all consultant related costs, litigation and related
costs net of any insurance proceeds pertaining directly to the operations of the
Business, (excluding any litigation costs related to dispute between or among
Buyer and Seller or Buyer and the Stockholders), workers compensation,
government penalties, and interest on accounts receivable greater than 60 days
outstanding. The interest rate applied to accounts receivable greater than 60
days outstanding will be the interest rate Buyer is charged on its credit
facility with GE Capital or any successor organization providing credit
facilities similar to the credit facility provided by GE Capital (described in
Section 3.4 hereof) to the Buyer. The Stockholders will continue to approve all
expenses charged to the branch established by Buyer for the Seller's operations.
It is agreed that the Business being purchased hereunder by Buyer will be
covered by the Buyer's group general liability insurance program and no general
liability insurance premium costs will be allocated to the Business. EBITA will
be calculated in accordance with generally accepted accounting principles.
1.4 Acquired Assets Free of Liens. The Acquired Assets to be transferred
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hereunder shall be transferred free and clear of all liens, claims,
encumbrances, mortgages, pledges, restrictions or rights of others of every kind
and description, including, without limitation, tax liens, environmental liens,
and ERISA obligations.
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1.5 Assumption of Liabilities. As additional consideration for the purchase
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of the Acquired Assets, Buyer shall assume and agree to pay, perform and
discharge in full the following debts, contracts, obligations and liabilities of
Sellers ("Assumed Liabilities"), and no others, as and when due, and to
indemnify Seller and the Stockholders harmless therefrom:
(a) all obligations and liability of Seller accruing and arising after the
Closing Date under its office lease for 00000 Xxxxxxxxxx Xxxxxx,
Xxxxxxx, XX;
(b) all obligations and liabilities accruing and arising after the Closing
Date under the client agreements and arrangements set forth in
Schedule 1.1 B and in the equipment leases and other agreements,
contracts and instruments set forth in Schedule 1.1 C; and
(c) all employee benefit plan obligations, as listed in clause 2.12(a) of
the Disclosure Schedule, arising after the Closing Date.
Notwithstanding the above, with respect to accrued vacation pay, such
obligations shall be assumed both before and after the Closing Date.
1.6 Liabilities Not Assumed. Notwithstanding the assumption of liabilities
-----------------------
referred to in the foregoing Section 1.5, Buyer shall not assume or be deemed to
have assumed any of the liabilities or obligations of Seller or any kind
together (the "Unassumed Liabilities"), including, without limitation:
(a) any public or other liability claims with respect to the Business and
affairs of Seller and the acts and omission of its officers,
directors, employees, and agents before the Closing date;
(b) any obligation or liability of Seller to any of the Stockholders or
any other officer or director of Seller;
(c) any obligation or liability for Federal, State, local or foreign
income taxes;
(d) any obligation or liability arising out of or relating, directly or
indirectly, to the operation of Seller's Business prior to the Closing
Date, including any rebates, discounts, offsets or concessions
attributable to amounts invoiced to Sellers clients prior to the
Closing Date;
(e) any obligation or liability to Seller's employees for salary, wages or
other compensation or benefits, including any obligation or liability
with respect to retirement plans, sick and holidays time and pay,
including any liabilities of Seller contemplated by this Agreement;
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(f) any liabilities of Seller with respect to any pension, retirement,
savings, profit sharing or other benefit plans;
(g) any obligation or liability which is inconsistent with any
representation or warranty of Seller or the Stockholders;
(h) any liability arising out of, and any expenses relating to, any claim,
action, dispute, or litigation involving the operation of Seller's
Business before the Closing Date;
(i) any liability of Seller for fines, penalties, or damages payable to
any government or governmental agency or instrumentality involving the
operation of Seller's Business before the Closing Date, including, but
not limited to, any liability of Seller for fines, penalties, or
damages payable to any government or governmental agency or
instrumentality arising out of any violation of 8 USC 1101 et.seq.
prior to the Closing Date;
(j) any obligation or liability of Seller or the Stockholders for the
expenses incurred in preparing or negotiating this Agreement and
consummating the transactions contemplated hereunder.
Seller and Stockholders, jointly and severally, agree to discharge and
indemnify, defend and hold harmless Buyer, BI, and their respective officers,
directors, employees, agents, and stockholders from all Unassumed Liabilities,
whether or not known, liquidated or contingent.
1.7 Allocation Of Purchase Price. The purchase price for the Acquired Assets
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and the Assumed Liabilities by Buyer in accordance with Sections 1.3 and 1.5
hereof as finally determined shall be allocated among the Acquired Assets as
described on Schedule 1.6. No party to this Agreement will take a position on
any federal or state tax return, before any governmental agency charged with the
collection of any income tax, or in any judicial proceeding that is in any way
inconsistent with Schedule 1.6.
1.8 Sales and Use Taxes on the Acquired Assets. Buyer will pay the cost of
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any sales, use, transfer or similar taxes payable in connection with the sale,
assignment, and transfer of the Acquired Assets.
1.9 Restriction on Transfer Of Shares Of BI Common Stock.
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(a) Subject to the provisions of this Agreement Seller understands that
Buyer and BI have no obligation to register the Earnout Shares under
the Securities Act and accordingly, the shares shall be subject to
restrictions under the Act, and the rules and regulations promulgated
thereunder and applicable state securities laws. At
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each Earnout Payment Date, Buyer shall deliver to Seller one or more
certificates in proper form in the name of Seller evidencing the
shares being issued on such dates. Each certificate shall bear an
appropriate legend as to the lack of registration of the shares and
the resulting restrictions on transfer.
(b) Subject to the provisions of this Agreement, no shares shall be
transferable except in compliance with the provisions of this Section
1.8 (b). Seller agrees that prior to any proposed transfer of any
shares, it will give Buyer notice of its intention to effect such
transfer. Such notice shall describe briefly the manner and
circumstance of the proposed transfer in sufficient detail, and shall
include such information as is reasonably necessary to enable counsel
for Buyer to render the opinion contemplated by this paragraph. If,
in the opinion of such counsel, the proposed transfer of such shares
may be effected without registration or qualification thereof under
the act or applicable state securities laws, Buyer, as promptly as
practical, shall notify Seller of such opinion, whereupon Seller shall
be entitled to transfer such shares in accordance with the terms of
its notice.
1.10 Earnout Payment Calculations. Each Earnout Payment shall be accompanied
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by a statement from an Officer of Buyer setting forth (i) a detailed itemization
of EBITA for the applicable Earnout Period (ii) the calculation of the payment
due to Seller. Such Officer's statement shall state that such computations are
accurate and have been prepared in accordance with this Agreement. Buyer shall
prepare and maintain, in accordance with generally accepted accounting
principles, complete and accurate records from which the computation of EBITA
shall be made. Seller and Stockholders shall at reasonable times and upon
reasonable notice have the right to review the books of Buyer pertaining to
Seller's Business. Each month, Buyer shall provide Seller and Stockholders with
monthly and year to date income statements with respect to Seller's Business.
1.11 Apportionments. The following items will be apportioned as of 11:59 pm
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on February 21, 1998:
(a) real estate and personal property taxes, and other state, county and
municipal taxes and assessments and charges affecting the acquired assets;
(b) rents and other payments under any of the contracts assigned
hereunder; and
(c) charges for water, electricity, and all other utilities (except to
the extent disposed of by final billing to Seller), all such items, prior to
such time, being for the account of Seller and all such items, after such time,
being for the account of Buyer. At the Closing, Seller or Buyer, as the case may
be, shall deliver to the other a check for the net amount owing under this
Section 1.10. If any such item cannot be accurately apportioned at the Closing
or if it is incorrectly apportioned at the Closing or subsequent thereto, for a
period of one year after the
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Closing Date such items shall be subject to apportionment or reapportionment, as
the case may be, as soon as practicable after the Closing Date.
1.12 Settlement of Disputes. Any controversy or claim arising out of or
----------------------
related to the Earnout Payments shall be finally resolved by arbitration
pursuant to the commercial arbitration rules of the American Arbitration
Association; provided, however, that this Section 1.11 shall not in any way
affect the right of Buyer to seek injunctive relief or any other remedies
pursuant to Section 8.2 hereof. Any such arbitration shall take place in Santa
Xxxxx County, California, before three arbitrators one of which shall be
appointed by Buyer, one by Seller and the Stockholders and the third by the
arbitrators; provided, however, that the parties may by mutual agreement
designate a single arbitrator. The parties further agree that (i) the
arbitrators shall be empowered to include arbitration costs and attorney fees in
the award to the prevailing parties in such proceedings and (ii) the award in
such proceedings shall be final and binding on the parties. The arbitrators
shall apply the law of the State of California exclusive of conflicts of laws
principles, to any dispute. Judgment on the arbitrators' award may be entered
in any court having the requisite jurisdiction. Nothing in this agreement shall
require the arbitration of disputes between the parties that arise from actions,
suits or proceedings instituted by third parties. Each party irrevocably
submits to the jurisdiction and venue of the arbitration described in the
foregoing and to the jurisdiction and venue of the Federal and State courts
sitting in California for the enforcement of any judgment on arbitrators' award
and waives any objection it may have with respect to the jurisdiction of such
arbitrations or such courts or the inconvenience of such forums or venues.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS
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In order to induce Buyer to enter into this Agreement, each of the Seller and
the Stockholders, jointly and severally, represent and warrant to the Buyer
that, except as set forth in the Disclosure Schedule attached hereto as Schedule
2, the statements contained in this Article II 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 Article II).
3.1 Authority Relative to this Agreement. The Seller and Stockholders have
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the full power and authority to execute, deliver and perform this Agreement and
any agreement or document contemplated hereby, and to consummate the
transactions contemplated hereby or thereby. The obligations imposed on Seller
and Stockholders by this Agreement, or by any agreement or document contemplated
hereby, constitute the valid and binding obligations and agreements of Seller
and Stockholders, enforceable against each of them in accordance with their
respective terms except that (i) such enforcement may be subject to bankruptcy,
insolvency,
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reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights; and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
3.2 Compliance of Transaction With Laws and Other Instruments. The
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execution, delivery and performance by Seller and the Stockholders of this
Agreement and any agreement or document contemplated hereby, and the performance
and consummation of the transactions contemplated hereby or thereby by Seller
and Stockholders (i) do not require on behalf of Seller and Stockholders any
approval, consent or waiver of, or filing with, any governmental agency, court
or other authority which has not been obtained and which is not in full force
and effect as of the date hereof; (ii) will not conflict with or constitute a
breach or violation of the charter or bylaws of Seller; (iii) will not result in
a violation of any law, regulation, judgment, writ, injunction, order or decree
of any court or governmental or regulatory authority (federal, local or
otherwise) to which Seller or Stockholders are subject; and (iv) will not
require the approval, consent or waiver of, or filing with any party to, violate
or conflict with or result in a breach of, or constitute a default or
acceleration of or give rise to a right of termination (or an event which with
notice or lapse of time or both would become a default) under, any provision of
any contract, indenture, mortgage, lease, agreement or other instrument to which
Seller or Stockholders is a party or to which any of his or its assets are
subject.
3.3 Organization and Qualification. Seller is a corporation duly organized,
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validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to own, lease
and operate its assets and properties and to conduct the Business in the manner
and in the places where such assets and properties are owned, leased or operated
or the Business is conducted by it. Seller has no subsidiaries and does not
own, directly or indirectly, any equity investment in any corporation,
partnership, joint venture or other business entity.
3.4 Financial and Other Statements. The Disclosure Schedule contains true
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and complete copies of (i) Seller's financial statements and the notes thereto
reviewed by a certified public accountant for the years ended December 31, 1996
and December 31, 1995, and (ii) Seller's financial statements and the notes
thereto for the period ended December 31, 1997 (collectively the "Financial
Statements"). Except as set forth in the Disclosure Schedule, the Financial
Statements (i) have been prepared in accordance with generally accepted
accounting principles on a consistent basis and (ii) fairly present in all
material respects the financial position and results of operation of Seller as
of the indicated dates and for the periods indicated therein.
2.5 Title to Properties; Liens; Condition of Properties. Seller has good and
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marketable title to or a valid leasehold in, the properties and assets used by
it, located on its premises, or shown in the Financial Statements or acquired
after the date thereof (the "Acquired Assets", which shall exclude the "Excluded
Assets" as defined in Section 8.3). None of such
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assets are subject to any mortgage, pledge, lien, conditional sale agreement,
security interest, encumbrance, title defect or other charge, except for liens
for taxes not yet due and payable. The Disclosure Schedule sets forth the
addresses or locations of all facilities (whether leased or owned) of Seller and
the addresses or locations of all places where Seller operates the Business.
2.6 No Undisclosed Liabilities. There are no contractual or non-contractual
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obligations, debts or liabilities of any nature of Seller whether accrued or
unaccrued, contingent or absolute, direct or indirect, recorded or unrecorded,
potential or realized (the "Liabilities") as of December 31, 1997, which are not
otherwise disclosed in the Financial Statements. Seller has not incurred any
Liabilities since December 31, 1997, except for those Liabilities incurred in
the ordinary course of Seller's business and consistent with past practice and
which, in any event, would not, in the aggregate, have a Material Adverse
Effect.
2.7 Taxes. Except as set forth on the Disclosure Schedule, Seller has filed
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(i) all federal, state, municipal and local tax returns (whether relating to
income, sales, franchise, withholding, real or personal property, employment or
otherwise) ("tax returns") required to be filed; (ii) all federal, state,
municipal and local tax returns (whether relating to income, sales, franchise,
withholding, real or personal property, employment of otherwise) ("taxes") which
are due, pursuant to such returns, or claimed to be due by any taxing authority,
or otherwise due and owing, and any penalties or other charges due with respect
to the late filing of any such return have been fully paid, and shall be fully
paid at the time of closing; (iii) each such tax return heretofore filed by
Seller correctly and accurately reflects the amount of its tax liability
thereunder; (iv) Seller currently is not the beneficiary of any extension of
time within which to file any tax return; (v) no claim has ever been made by an
authority in a jurisdiction where Seller does not file tax returns that it is or
may be subject to taxation by that jurisdiction; (vi) there are no security
interests on any of the assets of Seller that arose in connection with any
failure (or alleged failure) to pay any tax; (vii) Seller has withheld and paid
all taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, creditor, independent contractor, or other third
party and all such taxes shall be withheld or paid by Closing and all such taxes
accrued but not due as of Closing shall be escrowed with Buyer; (viii) Seller
does not expect any authority to assess any additional taxes for any period for
which tax returns have been filed; (ix) There is no dispute or claim concerning
any tax liability of Seller claimed or raised by any authority or as to which
Seller has knowledge based upon personal contact with any agent of such
authority.
2.8 Absence of Certain Changes. Since December 31, 1997, there has not been:
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(a) any material adverse change in the financial condition, properties,
assets, liabilities, personnel or operations of Seller;
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(b) any obligation or liability incurred by Seller, including the
obligation to perform services normally conducted by the Business, other than
obligations and liabilities incurred in the ordinary course of business;
(c) any purchase, sale or other disposition, or any agreement or other
arrangement for the purchase, sale or other disposition, of any of the services,
properties or assets of the Business, except in the ordinary course of business;
(d) any damage, destruction or loss, whether or not covered by
insurance, affecting the Business;
(e) any loss or threatened loss of any permit, license, qualification or
certificate of authority held or enjoyed by Seller which loss has had, or could
in the future have, a material adverse effect ("Material Adverse Effect") on the
business, properties, financial condition or results of operation of the
Business or Buyer's free and unencumbered ownership and use of any of the assets
or properties of the Business, whether owned or leased, and whether or not
carried or reflected on the books and records of Seller (the "Assets");
(f) any pending or threatened labor disputes or strikes, labor union
organizational activity, claim or threatened claim of unfair labor practices, or
any material adverse change in relations with Seller's employees generally;
(g) any action taken by Seller outside of the ordinary course of
business;
(h) any written notice of termination of, or default under, any
contract;
(i) any loan or advance to or any investment in any person, firm or
corporation, except for normal business advances to employees consistent with
past practice;
(j) any increase in the compensation payable or to become payable to any
of its officers or employees (other than non-material increases in the ordinary
course of business) and there has been no establishment, adoption, entering
into, or making or any new grants or awards under, acceleration of payment or
vesting, any obligation to grant any awards under, or any amendment to any
collective bargaining, bonus, profit sharing, thrift, compensation, stock option
or other equity, pension, retirement, incentive or deferred compensation,
employment, retention, termination, severance, health, life or other welfare,
fringe, Employee Benefit Plan, or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any current or former directors, officers or
employees, or any granting or paying of any benefit not required by any existing
Seller Benefit Plan or other plan or arrangement.
(k) any commitment for any addition to property, plant or equipment not
in the ordinary course of business;
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(l) any payment, loan or advance of any amount to, or sale, transfer or
lease of Assets to, or any agreements or arrangements with, any of Seller's
officers, directors or "affiliates," as such term is defined in the rules and
regulations of the Securities and Exchange Commission ("Affiliate"), except for
(i) normal business advances to employees consistent with past practice and (ii)
compensation to officers permitted by subparagraph (j) above;
(m) any charitable or other capital contribution;
(n) any declaration, set aside or payment of any dividend, any
distribution with respect to its capital stock, or any redemption, repurchase,
or other acquisition of any of its capital stock;
(o) any failure to pay current liabilities, including accounts payable
and accrued expenses in the ordinary course of business and otherwise in
accordance with their terms; or
(p) any agreement or understanding by Seller to do any of the foregoing.
2.9 Patents, Trademarks, Trade Names and Similar Rights. Seller owns all
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trademarks, logos, service marks, trade names, copyrights or other similar
proprietary rights (the "Intangibles") used in the Business, has no obligation
to any third party with respect thereto, and has not sold, licensed, sublicensed
or otherwise granted to any third party the right to use such Intangibles. All
Intangibles of Seller are based on statutory and common law usage rights (not
registration) and are listed in the Disclosure Schedule. Except as set forth in
the Disclosure Schedule, to Seller's knowledge, none of the Intangibles, and
none of the products or services sold or processes used by Seller, conflict with
the patents, trademarks, logos, service marks, trade names, copyrights or other
similar proprietary rights of any person or entity, and Seller has not received
notice of the possibility of any such conflict.
2.10 Trade Secrets and Customer Lists. Seller has the right to use, without
--------------------------------
liability to others, all trade secrets and customer lists, if any, required and
used in the Business within the last five years and has not disclosed, sold,
licensed, sublicensed or otherwise granted to any third party the right to use
such trade secrets and information. Seller is not using or in any way making
use of any confidential information or trade secrets of any third party,
including, without limitation, a former employer of any present or past employee
of Seller.
2.11 Client and Other Agreements. With respect to the Client Agreements set
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forth in Section 2 of the Disclosure Schedule, and all other agreements relating
to the Business: (i) all such agreements are legal, valid, binding, enforceable,
in full force and effect, and subject to customer consent, are fully
transferable to Buyer subject to no governmental or regulatory requirement or
impediment; (ii) all such agreements will be legal, valid, binding and
enforceable
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and in full force and effect on the same terms and conditions on the Closing;
(iii) 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 said agreements; (iv) no party
has repudiated any provision of said agreements; (v) the list of Client
Agreements set forth in Section 2 of the Disclosure Schedule is a complete and
accurate list of all agreements between Seller and its customers; (vi) Seller
and Stockholders have no reason to know of and have not received any notice or
information from any of the listed customers indicating an intention to decrease
the number of employees placed with Seller's customers ("Field Personnel"), or
to decrease the quantity of services Seller provides to any such customer, or to
reduce the rates at which Seller is being compensated for the placement of any
Field Personnel with said customers; (vii) Seller and Stockholders have not
received any notice of claims from any of the listed customers relating to
Seller's performance of services for such customer, and (viii) none of such
agreements were awarded or are in any way based upon or related to the status of
Seller or its principals as a minority business, small business, woman-owned
business or disadvantaged business enterprise or individual. Seller and
Stockholders represent and acknowledge that with respect to the representations
set forth in this Section 2.11, they have reviewed the aforesaid representations
with their client service managers, associate client service managers, and
project managers (the "Executive Employees") and such Executive Employees have
no reason to know that such representations are not true and correct.
2.12 Employee Agreements and Plans.
-----------------------------
(a) Except as set forth in the Disclosure Schedule, Seller nor any ERISA
Affiliate presently maintains, contributes to, or has (or may have) any material
liability under any Employee Benefit Plan with respect to all employees and
former employees (including both Field Personnel and all other employees other
than Field Personnel, hereinafter referred to as "Administrative Employees"),
directors and independent contractors of Seller and their dependents and
beneficiaries. For purposes of this Section 2.12 and the Agreement:
(i) "Seller Benefit Plans" mean the plans, programs and arrangements
set forth in the Disclosure Schedule;
(ii) "Employee Benefit Plan" means (a) any bonus, incentive
compensation, profit sharing, retirement, pension, group
insurance, death benefit, group health, medical expense
reimbursement, dependent care, legal services, flexible benefits
or cafeteria, stock option, stock purchase, stock appreciation
rights, phantom stock, savings, deferred compensation, consulting,
severance pay or termination pay, vacation pay, leave of absence,
layoff, life insurance, accident, disability, workers'
compensation, welfare or other employee benefit or fringe benefit
plan, program, arrangement practice or policy which is an
"employee pension benefit plan" as such term is defined in Section
3(2) of the Employee
13
Retirement Income Security Act of 1974, as amended ("ERISA") or an
"employee welfare benefit plan" as defined in Section 3(1) of
ERISA, whether written or unwritten; and
(iii) "ERISA Affiliate" means each person (as defined in Section 3(9) of
ERISA) that, together with Seller (or any person whose liabilities
Seller has assumed or is otherwise subject to, whether directly or
indirectly, including as a result of indemnification) would be or
has been treated as a single employer under Section 4001(b) of
ERISA or Section 414 of the Internal Revenue Code of 1986, as
amended ("Code").
Except with respect to Seller Benefit Plans, Seller does not have (nor may have)
any material liability under any Employee Benefit Plan which an ERISA Affiliate
presently maintains, contributes to or has (or may have) liability under.
(b) With respect to all employees and former employees of Seller,
Seller nor any ERISA Affiliate presently maintains, contributes to or has or may
have any liability under any funded or unfunded medical or health plan or
arrangement or other employee welfare benefit plan as defined in Section 3(1) of
ERISA for present or future retirees or present or future terminated employees,
except as required by the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA") or state continuation coverage laws.
(c) Seller does not maintain a plan intended to be a tax-qualified plan
under sections 401(a) and 501(a) of the Code.
(d) Seller, the ERISA Affiliates and all of their respective directors,
officers, employees and any other "fiduciary" (as such term is defined in
Section 3(21) of ERISA) have complied with and performed all of their material
contractual obligations and all material obligations under the Code, ERISA and
all applicable federal, state and local laws, rules and regulations (domestic
and foreign) required to be performed by them under or with respect to all of
the Seller Benefit Plans and any related agreements.
(e) As of the Closing, no Seller Benefit Plan has any unfunded
liability and all accruals with respect to the Seller Benefit Plans have been
made. No Seller Benefit Plan is subject to Section 412 of the Code, Section 302
of ERISA or Title IV of ERISA. All applicable due and owing contributions and
premium payments for all periods ending prior to the Closing Date (including
periods from the first day of the then current plan year to the Closing Date)
shall be made prior to the Closing Date in accordance with past practice. No
event has occurred or circumstance exists that could result in a material
increase in premium costs of the Seller Benefit Plans that are insured or a
material increase in the benefit costs of such Seller Benefit Plans that are
self-insured.
14
(f) Seller nor any ERISA Affiliate maintains, contributes to or has or
may have any liability (including current or potential withdrawal liability)
with respect to any "multiemployer plan" as such term is defined in Section
3(37) or 4001(a)(3) of ERISA.
(g) Seller nor any ERISA Affiliate has ever maintained an "employee
pension benefit plan", as such term is defined in Section 3(2) of ERISA.
(h) There is no pending, threatened or anticipated legal action,
proceeding, investigation, dispute, grievance, charge, complaint, restraining or
injunctive order or claim against or involving any Seller Benefit Plan which has
a material adverse effect maintained by Seller or any ERISA Affiliate (other
than routine claims for benefits) or the assets of any such Seller Benefit Plan
and there is no basis for or any facts which could give rise to any such legal
action, proceeding, investigation, dispute, grievance, charge, complaint,
restraining or injunctive order or claim. No Seller Benefit Plan is presently
under audit or examination (nor has notice been received of a potential audit)
by the Internal Revenue Service, Department of Labor or the PBGC, nor are there
any matters pending with respect to any Seller Benefit Plan with the Internal
Revenue Service under its Voluntary Compliance Resolution program, its Closing
Agreement Program or similar programs.
(i) There has been no act or acts which would result in a disallowance
of a deduction or the imposition of a tax pursuant to Code Section 4980B or any
predecessor provision of the Code, or any related regulations. No event has
occurred with respect to which Seller or any of its affiliates could be liable
for a tax imposed by any of Code Sections 4972, 4976, 4977, 4979 or 4980, or for
a civil penalty under Section 502(c) of ERISA.
(j) With respect to each of the Seller Benefit Plans, to the extent
applicable, Seller has made available to Buyer true and complete copies of: (i)
the plan documents (or, if there is none, a written summary of the plan's terms
and conditions), including any amendments, related trust agreements, insurance
contracts and other funding arrangements; (ii) the most recent determination
letter received from the Internal Revenue Service; (iii) the three most recent
IRS Form 5500 annual reports, including all schedules and attachments thereto as
applicable; (iv) the most recent financial statement; (v) all correspondence
with the Internal Revenue Service, the Department of Labor and the PBGC with
respect to the past three plan years, other than IRS Form 5500 filings and PBGC
premium payments; and (vi) the most recent summary plan description and any
summaries of material modifications not reflected therein (or other material
summaries and descriptions furnished to participants and beneficiaries, if a
summary plan description is not required). Each Seller Benefit Plan can be
unilaterally amended, terminated or otherwise discontinued, in whole or part, by
Seller at any time without liability to Seller (except to the extent prohibited
by law). Neither Seller nor any ERISA Affiliate has any formal plan or
commitment, or has communicated to any current or former employee any intention,
whether legally binding or not, to increase any benefits or create new benefits
under any Seller Benefit Plan or to create any additional Employee Benefit Plan.
Neither Seller nor any ERISA Affiliate
15
maintains or contributes to a trust, organization or association described in
any of Sections 501(c)(9), 501 (c)(17) or 501 (c)(20) of the Code.
(k) Neither Seller nor any of its affiliates is a party to any
employment agreement, whether written or oral, or agreement with change in
control or similar provisions, or collective bargaining agreement or contract
with any labor union relating to any employees or former employees of Seller.
Except as set forth in the Disclosure Schedule, the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated by this Agreement will not entitle any individual to severance pay
or accelerate the time of payment or vesting, or increase the amount of any
compensation or benefits due to any individual nor result in the imposition of
any federal excise tax with respect to any Seller Benefit Plan. All
contributions and payments made or accrued with respect to all Seller Benefit
Plans are deductible currently under Code Section 162 or 404 and no amount
payable to an employee or former employee of Seller will be an "excess parachute
payment" which is non-deductible or subject to tax under Section 280G or 4999 of
the Code. Neither Seller nor any of its affiliates has currently outstanding any
loan or loans to any current or former employees of Seller, nor have Seller or
any of its affiliates guaranteed such loans.
(l) The Disclosure Schedule sets forth, as of the date of this
Agreement, with respect to each employee employed by Seller, his or her name,
position, salary or hourly wage, his or her date of employment and any
applicable significant employee benefits or entitlement not available generally
to Seller's employees.
(m) Without limiting the application of any other representation set
forth herein, Seller has substantially complied, in all material respects, with
all applicable laws relating to the employment of labor or consultants or
independent contractors in connection with the operation of the Business,
including, without limitation, those relating to wages, hours, collective
bargaining, unemployment insurance, workers' compensation, immigration and
naturalization, equal employment opportunity and the payment and withholding of
taxes.
(n) Seller is not a party to any contract with any labor organization,
nor has it agreed to recognize any union or other collective bargaining unit,
nor has any union or other collective bargaining unit been certified as
representing any Employees. Seller has not experienced any strikes, work
stoppages, significant grievance proceedings or claims of unfair labor practices
filed or, to Seller's or Stockholder's knowledge, threatened to be filed with
respect to the operation of the Business.
2.13 Litigation, Proceedings, Etc. Except for matters described in the
----------------------------
Disclosure Schedule, (i) there is no pending claim, action, litigation, suit or
proceeding against, or investigation of, Seller; (ii) Seller has not received
any notice of any claim, action, litigation, suit or proceeding against it or
investigation of it, and no such claim, action, suit, proceeding or
investigation is pending or, to Seller's or Stockholders'(in their capacity as
officers of the Seller)
16
knowledge, threatened against Seller; and (iii) there are no outstanding court,
arbitration or agency orders, decrees or stipulations to which Seller is a party
or which are directed to Seller.
2.14 Compliance with Law and Other Instruments; Permits. Seller is not (and
--------------------------------------------------
has not been for the past twelve months) in violation of, or default under: (i)
any term or provision of its charter or by-laws; (ii) any material term or
provision of any financial covenant or any indenture, mortgage, contract,
commitment or other agreement or instrument to which it is a party, or by which
it or any of its properties or business is or may be bound or affected, or (iii)
any applicable law (including, without limitation, the Fair Labor Standards Act
and all other federal and state wage and hour laws and any and all Federal
immigration laws, regulations and promulgations), rule, regulation, judgment,
order or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over it or any of its properties or business, or Seller's employees
or Seller's consultants or independent contractors. Seller owns, possesses, or
has obtained all governmental and other licenses, permits, certifications,
registrations, approvals or consents and other authorizations necessary to own
or lease, as the case may be, its business or operations as presently conducted
and all such governmental and other licenses, permits, certifications,
registrations, approvals, consents and other authorizations are in good
standing, and there are no proceedings pending or, to the best knowledge of
Seller's officers and directors, threatened, or any basis therefor existing,
seeking to cancel, terminate or limit such licenses, permits, certifications,
registrations, approvals, or consents or authorizations, or related to the
breach or failure to comply with any law, rule, regulation, judgment or decree.
2.15 Transactions with Affiliates. Except as set forth in the Disclosure
----------------------------
Schedule, there is no material lease, sublease, indebtedness, contract,
agreement, commitment, understanding or other material arrangement of any kind
whatsoever entered into by Seller with Seller or any of its other stockholders,
officers or directors or any Affiliate of any of them.
2.16 Books and Records. All books and records pertaining to the Business
-----------------
have been, or prior to the Closing shall have been, made available for review by
Buyer and its representatives and are correct and complete in all material
respects, have been maintained in accordance with good business practice and
fairly reflect the basis for the financial condition and results of operations
of Seller set forth in the Financial Statements.
2.17 Powers of Attorney. There are no outstanding powers of attorney
------------------
executed on behalf of Seller. Set forth in the Disclosure Schedule is an
accurate and complete list of the name and address of each bank or other
institution where Seller has an account or safe deposit box, the number of such
account, and the names of all persons authorized to draw thereon or have access
thereto.
2.18 Minority-Owned Enterprise, Etc. Seller is not doing business as a
------------------------------
minority-owned business enterprise nor as a small or economically disadvantaged
business nor as a women-owned business.
17
2.19 Broker's Fees. Neither Seller nor Stockholder has any obligation or
-------------
liability to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
2.20 Miscellaneous. Seller is not a guarantor or otherwise liable for any
-------------
liability or obligation (including indebtedness of any other person). Seller
has no subsidiary, parent of affiliate organizations. All compensation payments
including vacation, per diem, holiday and sickness payments, required to be paid
to Seller's personnel for any period prior to the Closing, will be paid in full
at the time of Closing. Seller has not entered into any employment agreement
and or arrangement with nonexempt personnel guaranteeing a minimum number or
work hours during any predetermined time period. Except as is necessary to
close the Business, collect accounts receivable, and pay off obligations, Seller
and the Stockholders agree not to use the name Argos Adriatic Corporation or any
similar name for any purpose.
2.21 Disclosure. The statements contained in this Agreement, and in any
----------
written documents or Schedules attached hereto prepared and delivered by or on
behalf of Seller pursuant to the terms hereof are true and correct in all
material respects, and such statements, documents or Schedules do not omit any
material fact required by the terms hereof or thereof to be stated herein or
therein or necessary to make the statements contained herein or therein not
misleading.
2.22 Further Disclosure. No representation or warranty made by Seller in
------------------
this Agreement, nor any document, written information, statement, financial
statement, certificate, schedule or exhibit prepared and furnished or to be
prepared and furnished by Seller or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading in light of the circumstances under which they were
furnished. There is no event, fact or condition that materially and adversely
affects the business of Seller taken as a whole, or that reasonably could be
expected to do so, that has not been disclosed to Buyer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
In order to induce Seller to enter into this Agreement, the Buyer represents
and warrants to each of the Seller and Stockholders that the statements
contained in this Article III 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 through this Article III).
18
3.5 Authority Relative to this Agreement. The Buyer has the full corporate
------------------------------------
power and authority, and has taken all necessary and proper action, corporate
and otherwise, to execute, deliver and perform this Agreement and any other
agreement or document contemplated hereby, and to consummate the transactions
contemplated hereby or thereby. All action on the part of Buyer necessary for
the authorization, execution, delivery and performance of this Agreement and any
other agreement or document contemplated hereby, and the consummation of the
transactions contemplated hereby or thereby, has been taken. The obligations
imposed on Buyer by this Agreement, or by any agreement or document contemplated
hereby, constitute the valid and binding obligations and agreements of Buyer,
enforceable against it in accordance with their respective terms, except that
(i) such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights; and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
3.6 Compliance of Transaction with Laws and Other Instruments. The
---------------------------------------------------------
execution, delivery and performance by Buyer of this Agreement and any agreement
or document contemplated hereby, and the performance and consummation of the
transactions contemplated hereby or thereby by Buyer (i) do not require on
behalf of Buyer any approval, consent or waiver of, or filing with, any
governmental agency, court or other authority which has not been obtained and
which is not in full force and effect as of the date hereof; (ii) will not
result in a violation of any law, regulation, judgment, writ, injunction, order
or decree of any court or governmental or regulatory authority (federal, local
or otherwise) to which Buyer is subject; (iii) will not conflict with or
constitute a breach or violation of the charter or bylaws of Buyer; and (iv)
will not require the approval, consent or waiver of, or filing with any party
to, violate or conflict with or result in a breach of, or constitute a default
or acceleration of or give rise to a right of termination (or an event which
with notice or lapse of time or both would become a default) under, any
provision of any contract, indenture, mortgage, lease, agreement or other
instrument to which Buyer is a party or to which any of its assets are subject.
3.7 Organization and Qualification. Buyer is a corporation duly organized,
------------------------------
validly existing and in good standing under the laws of its state of
incorporation.
3.4 SEC Documents. Buyer has made available to Seller true and complete
-------------
copies of each statement, report, registration statement (without exhibits) and
definitive proxy statement filed by Buyer with the Securities and Exchange
Commission (the "SEC") since December 31, 1996 (the "SEC Documents"), which are
all the documents (other than preliminary material) that Buyer was required to
file with the SEC since such date and which include the Annual Report on Form
10-K for Buyer's fiscal year ended December 31, 1996 (the "10-K Report") and the
Quarterly Report on Form 10-Q for Buyer's fiscal quarter ended September 30,
1997 (the "10-Q Report"). As of their respective filing dates, the SEC
Documents complied or will comply in all material respects with the applicable
requirements of the Exchange Act and/or the Securities Act,
19
and none of the SEC Documents contained or will contain any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading except to the extent
corrected by a subsequently filed SEC Document. The financial statements of
Buyer included in the SEC Documents, including the 10-K Report and the 10-Q
Report (the "Financial Statements"), comply as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles consistently applied (except as
may be indicated in the notes thereto or, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC), are in accordance with the books and
records of the Buyer, are accurate in all material respects, and fairly present
the consolidated financial position of Buyer and its consolidated subsidiaries
at the dates thereof and the consolidated results of their operations and
changes in financial position for the periods then ended (subject, in the case
of unaudited statements, to normal, recurring audit adjustments).
3.5 Future SEC Filings. All documents that Buyer is required to file with
------------------
the SEC prior to each Earnout Payment date and during each Measurement Period
(the "SEC Filings") will be timely filed by Buyer prior to the applicable
Measurement Period. As of their respective filing dates, the SEC Filings will
comply in all material aspects with the applicable requirements of the Exchange
Act and/or the Securities Act, and none of the SEC Filings will contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances in which they are made, not misleading except to the extent
corrected by a subsequently filed SEC Filing filed prior to the Measurement
Period. Any material adverse information reasonably likely to affect the market
price of BI Common Stock will have been disclosed in the SEC filings or
otherwise disclosed to the public markets prior to the applicable Measurement
Periods. The financial statements of Buyer included in the SEC Filings will
comply as to form in all material aspects with applicable accounting
requirements and with published rules and regulations of the SEC with respect
thereto. Such financial statements will be prepared in accordance with
generally accepted accounting principles consistently applied (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC), will be in accordance with the books and
records of the Buyer, will be accurate in all material respects, will fairly
present the consolidated financial position of Buyer and its consolidated
subsidiaries at the dates thereof and the consolidated results of their
operations and changes in financial position for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring audit
adjustments).
3.6 Disclosure. No representative or warranty made by Buyer in this
----------
Agreement, nor any document, written information, statement, financial
statement, certificate, schedule or exhibit prepared and furnished or to be
prepared and furnished by Buyer or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to
20
make the statements or facts contained herein or therein not misleading in light
of the circumstances under which they were furnished. There is no event, fact or
condition that materially and adversely affects the business of Buyer and its
subsidiaries taken as a whole, or that reasonably could be expected to do so,
that has not been disclosed to Seller. Buyer meets the current public
information requirements set forth in SEC Rule 144(c).
3.7 Consents. Except for the consent or waiver of GE Capital Corp. ("GE
--------
Capital") under the Credit Agreement by and between GE Capital as lender and BI
and various BI affiliates as Borrowers, Buyer is not subject to any law,
ordinance, regulation, rule, order, judgment, injunction, decree, contract,
commitment, lease, agreement, instrument or other restriction of any kind, which
by its provisions would prevent the consummation of this Agreement or any of the
transactions contemplated hereby, without the consent, filing with or
notification of any third party which has not already been obtained or made or
will not be obtained prior to the Closing.
3.8 Broker's Fees. Buyer has no liability or obligation except to Elite
-------------
Investment Group, LLC to pay any fees or commissions to any broker, investment
bankers, finder or agent with respect to the transactions contemplated by this
Agreement.
ARTICLE IV
BUYER'S CONDITIONS TO CLOSING
-----------------------------
The obligations of Buyer to purchase the Acquired Assets and to consummate the
transactions contemplated hereby, are subject to the fulfillment in all material
respects on or prior to the Closing Date of each of the following conditions:
3.8 Representations and Warranties. The representations and warranties made
------------------------------
by Seller and Stockholders in Article II hereof shall be true and correct when
----------
made, and shall be true and correct in all material respects on the Closing Date
with the same force and effect as if they had been made on and as of the Closing
Date, except for changes permitted or contemplated by this Agreement and except
that representations which are specifically made as of a specified date shall be
true and correct as of such earlier date.
3.9 Performance. All covenants, agreements and conditions contained in this
-----------
Agreement to be performed or complied with by Seller on or prior to the Closing
Date shall have been performed or complied with in all material respects.
3.10 Closing Deliveries. Buyer shall have received all documents and
------------------
instruments required pursuant to Section 7.2 hereof.
-----------
21
3.11 Absence of Litigation. No action, suit or proceeding before any court
---------------------
or any governmental body or authority shall be pending against either Seller or
Buyer which seeks to impose substantial damages in connection with, or to
restrain or invalidate the transactions contemplated by, this Agreement, and no
preliminary or permanent injunction or order that would prohibit or restrain
such transactions shall be in effect.
3.12 Absence of Certain Changes. There shall not have occurred prior to the
--------------------------
Closing Date (a) any material adverse change in the Business of Seller, or any
event or condition which, with the passage of time or the filing of notice, may
cause or create any such material adverse change, or (b) the legal inability of
Seller to convey, assign and transfer to Buyer the Business, or to convey,
assign and transfer to Buyer the Acquired Assets.
4.6 Consent. The Consent of GE Capital.
-------
4.7 Further Assurances. All actions to be taken by the Seller in connection
------------------
with consummation of the transactions contemplated hereby and all certificates,
opinion, instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this Article IV if it executes a
writing so stating at or prior to the Closing Date.
ARTICLE V
SELLER'S CONDITIONS TO CLOSING
------------------------------
The obligations of Seller to sell the Acquired Assets at the Closing, and the
obligation of Seller to consummate the transactions contemplated hereby are
subject to the fulfillment in all material respects on or prior to the Closing
of each of the following conditions:
3.13 Representations and Warranties. The representations and warranties made
------------------------------
by Buyer in Article III hereof shall be true and correct when made, and shall be
-----------
true and correct in all material respects on the Closing with the same force and
effect as if they had been made on and as of the Closing, except for changes
permitted or contemplated by this Agreement and except that representations
which are specifically made as of a specified date shall be true and correct as
of such earlier date.
3.14 Performance. All covenants, agreements and conditions contained in this
-----------
Agreement to be performed or complied with by Buyer on or prior to the Closing
shall have been performed or complied with in all material respects.
3.15 Closing Deliveries. Seller and Stockholders shall have received all
------------------
documents and instruments required pursuant to Section 7.2 hereof.
-----------
22
5.4 Consent. The Consent of GE Capital.
-------
5.5 Absence of Litigation. No action, suit or proceeding before any court or
---------------------
any governmental body or authority shall be pending against either Seller,
Stockholders or Buyer which seeks to impose substantial damages in connection
with, or to restrain or invalidate the transactions contemplated by this
Agreement and no preliminary or permanent injunction or order that would
prohibit or restrain such transactions shall be in effect.
23
ARTICLE VI
FURTHER AGREEMENTS
------------------
3.16 Expenses. Seller and Stockholders shall pay their costs incurred in
--------
connection with the preparation, negotiation, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
including, without limitation, the fees of the attorneys and accountants of
Seller. Buyer shall pay its costs incurred in connection with the preparation,
negotiation, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby including, without limitation, the fees of
its attorneys and accountants.
3.17 News Releases. Upon Closing, Buyer may prepare and issue, subject to
-------------
Seller's reasonable approval, press release(s) regarding the transaction
contemplated hereby and upon doing same will provide advance notice to Seller
and will review and consider Seller's comments on same.
3.18 Survival of Representations. The representations and warranties
---------------------------
contained herein are and will be deemed and construed to be continuing
representations and warranties and will survive the Closing and (other than the
representations and warranties set forth in Section 2.7 and other than
fraudulent misrepresentations made by Seller or Stockholders) continue in full
force and effect thereafter, provided that a notice is given as to a breach of
such representations or warranties within one year of the Closing Date. The
representations and warranties set forth in Section 2.7 above and all fraudulent
misrepresentations made by Seller and Stockholders shall continue in full force
and effect at all times thereafter. If a notice of breach is given within any
applicable time period, the other party shall be responsible for all Adverse
Consequences (as defined below) resulting from, arising out of, or related to
such breach, including Adverse Consequences suffered after the date notice has
been given.
3.19 Indemnification.
---------------
(a) Indemnification of Buyer. Each of Seller and Stockholders jointly
------------------------
and hereby severally agrees to indemnify, defend and hold harmless Buyer from
and against all demands, claims, actions, or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including without limitation,
interest, penalties and reasonable attorney's fees and expenses (a "Claim"),
that arise out of:
(i) any inaccuracy or breach of any representation, warranty or
covenant by Seller or Stockholders contained in or made pursuant to this
Agreement;
(ii) all matters arising out of or in connection with the
operation of the Business on or before the Closing; and
24
(iii) all Unassumed Liabilities and Excluded Assets.
(b) Indemnification of Seller. Buyer hereby agrees to indemnify,
-------------------------
defend and hold Seller and Stockholders from and against all demands, claims,
actions, or causes of action, assessments, losses, damages, liabilities, costs
and expenses, including without limitation, interest, penalties and reasonable
attorney's fees and expenses (a "Claim"), that arise out of:
(i) any inaccuracy or breach of any representation, warranty or
covenant by Buyer contained in or made pursuant to this Agreement;
(ii) all matters arising out of or in connection with the
operation of the Business after Closing; and
(iii) all Assumed Liabilities and Acquired Assets.
(c) Limitations.
-----------
(i) Any Claim shall be offset or reduced by the amount of any
insurance proceeds or net tax benefits , hereinafter "Tax Benefits") received by
any party to such Claim.
(ii) Notwithstanding the foregoing, in no event shall the amount
of liability of Seller and Stockholders to Buyer for breach of any
representation, warranty, indemnity or covenant or otherwise under, or arising
in connection with, this Agreement (including, without limitation the
indemnification set forth above and the obligations under all exhibits hereto)
exceed an amount equal to (x) $1,500,000 (after deducting any insurance proceeds
and Tax Benefits received therefrom), in aggregate, or (y) $1,000,000 (after
deducting any insurance proceeds and Tax Benefits received therefrom), for all
matters other than claims arising out of project work (excluding, in clauses (x)
and (y), matters set forth in the last sentence of this paragraph). The
liability, if any, of the Stockholders to the Buyer pursuant to this Section 6.4
shall be joint and several. However, nothing in this Section 6.4 shall limit, in
any manner (whether by time, amount, procedure or otherwise), any remedy at law
or in equity to which a party may be entitled as a result of, (x) actual fraud
by the other party, including any wilful failure to disclose matters that should
have been disclosed pursuant to Article 2 hereof; or (y) any Claim resulting or
arising out of the Seller's Datablade project with Informix Corporation.
(iii) Except as provided in subsection (ii) above, this section 6.4
shall set forth the sole and exclusive remedy and recourse (and corresponding
liability for any party) of the parties arising from a Claim, cause of action,
any other claim, or right of nature against a party or any or its officers,
directors, employees, agents and representatives.
25
(iv) Buyer and Seller shall act in good faith and in a
commercially reasonable manner to mitigate any Claims and damages they may
suffer.
(d) Notice of Claim. Each month, each Indemnified Party shall notify
---------------
the other party of any potential indemnity claims that have come to the
attention of the Indemnified Party (provided that a good faith failure to notify
the other party of such claims will not affect the rights and obligations of
either party under this Article). In addition, if an Indemnified Party becomes
aware of a Claim in respect of which indemnification is provided for pursuant to
this Agreement, the Indemnified Party shall promptly give written notice of the
Claim to the Indemnifying Party. Such notice shall specify whether the Claim
arises as a result of a Claim by a person other than a party against the
Indemnified Party (a "Third Party Claim") or whether the Claim does not so arise
(a "Direct Claim"), and shall also specify with reasonable particularity (to the
extent information is available): (i) the factual basis of the Claim; and (ii)
the amount of the Claim, if known. If, through the fault of the Indemnified
Party, the Indemnifying Party does not receive notice of a Claim in time
effectively to contest the determination of any liability susceptible to being
contested, then the liability of the Indemnifying Party to the Indemnified Party
under this Section 6.4 shall be reduced by the amount of any losses incurred by
the Indemnifying Party resulting from the Indemnified Party's failure to give
such notice on a timely basis.
(e) Direct Claims. In the case of a Direct Claim, the Indemnifying
-------------
Party shall have 15 days from receipt of notice of the Claim within which to
make such investigation of the Claim as the Indemnifying Party considers
necessary or desirable. For the purpose of such investigation, the Indemnified
Party shall make available to the Indemnifying Party the information relied upon
by the Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or before the expiration of such 15 day period (or any mutually agreed
upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall pay to the Indemnified Party (or the Indemnified Party
may set-off such amounts from amounts due to the Indemnifying Party pursuant to
Section 1.3 hereof) the full amount of such Claim, including court costs and
attorney's fees and expenses arising as a result of such claim ("Adverse
Consequences"), failing which the disputed amount (by way of set-off or
otherwise) may be placed in a Third Party escrow acceptable to both parties and
the matter shall be referred to binding arbitration in such manner as the
parties may agree or shall be determined by a court of competent jurisdiction.
(f) Third Party Claims. In the case of a Third Party Claim, the
------------------
Indemnifying Party shall have the right, at its expense, to participate in or
assume control of the negotiation, settlement or defense of the Claim and, in
such event, the Indemnifying Party shall reimburse the Indemnified Party for all
of the Indemnified Party's out-of-pocket expenses as a result of such
participation or assumption. If the Indemnifying Party elects to assume such
control, the Indemnified Party shall have the right to participate in the
negotiation, settlement or defense of such Third Party claim and to retain
counsel to act on its behalf, provided that the fees and
26
disbursements of such counsel shall be paid by the Indemnified Party unless the
Indemnifying Party consents to the retention of such counsel at its expense or
unless the named parties to any action or proceeding include both the
Indemnifying Party and the Indemnified Party and a representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between them
(such as the availability of different defenses). If the Indemnifying Party,
having elected to assume such control, thereafter fails to defend the Third
Party Claim within a reasonable time, the Indemnified Party shall be entitled to
assume such control and the Indemnifying Party shall be bound by the results
obtained by the Indemnified Party with respect to such Third Party Claim.
(g) Settlement of Third Party Claims. If the Indemnifying Party fails
--------------------------------
to assume control of the defense of any Third Party Claim, the Indemnified Party
shall have the right to contest, settle or pay the amount claimed. If the
Indemnifying Party assumes control of the negotiation, settlement and defense of
any Third Party Claim, the Indemnifying Party may settle any Third Party Claim
in a manner that does not adversely affect the Indemnified Party with prior
notice to the Indemnified Party. The Indemnified Party shall not agree to any
settlement of any such action or claim without the consent of the Indemnifying
Party, which shall not be unreasonably withheld.
(h) Set-Off. In the event the Indemnifying Party is required to make
-------
any payments under paragraphs (f) or (g) hereof, or in the event Indemnifying
Party is required to reimburse the Indemnified Party pursuant to paragraphs (f)
and (g) hereof, the Indemnified Party, may, in lieu of seeking such payments
from the Indemnifying Party or in lieu of seeking reimbursement from the
Indemnifying Party, set-off such amounts from amounts due to the Indemnifying
Party pursuant to Section 1.3 hereof, and place the amount of the payment or the
amount of the reimbursement in a Third Party escrow acceptable to both parties,
whereupon the matter shall be referred to binding arbitration in such manner as
the parties may agree or shall be determined by a court of competent
jurisdiction.
6.5 Seller's Employees. Buyer will employ all of Seller's current employees
------------------
and will offer such employees compensation, in the aggregate, at least equal to
such employees' current aggregate compensation. Buyer will employ all such
current employees of Seller effective on the Closing Date.
ARTICLE VII
CLOSING DELIVERIES
------------------
3.20 Closing. Subject to the conditions contained in this Agreement, the
-------
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place on February 24, 1998. The effective time for purposes of
apportionments and other matters involving allocations for the Closing shall be
at 11:59 p.m. on February 21, 1998.
27
3.21 Deliveries.
----------
(a) At the Closing, Buyer shall deliver to Seller:
(i) The Purchase Price pursuant to Section 1.2 hereof;
-----------
(ii) Certified copies of the resolutions of the Board of
Directors of Buyer authorizing Buyer to execute and deliver this Agreement, any
agreement or document contemplated hereby, and to consummate the transactions
contemplated hereby and thereby;
(iii) A certificate of an executive officer of Buyer, dated the
Closing Date, certifying that: (i) all representations and warranties made by
Buyer in Article III hereof were true and correct when made, and are true and
-----------
correct on the Closing Date, except for changes permitted or contemplated by
this Agreement and except that representations which are specifically made as of
a specified date shall be true and correct as of such earlier date; and (ii) all
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by Buyer on or prior to the Closing Date have been performed or
complied with;
(iv) Executed Employment Agreements, in substantially the forms
attached as Exhibits A-1 and A-2 hereto; and
(v) Evidence of employment of or reasonable actions to employ
all of Seller's current employees in accordance with the provisions of Section
6.5.
(b) At the Closing, Seller and Stockholders, as the case may be, shall
deliver to Buyer:
(i) General Assignment and Xxxx of Sale conveying title, free
and clear of any encumbrances, to the Acquired Assets, from Seller to Buyer;
(ii) Possession of all Acquired Assets used in the Business,
except for Excluded Assets;
(iii) All contracts, leases, agreements or other documents, books,
financial and accounting records of Seller not previously delivered or not
located on the premises of Seller, to the extent such items are used in the
Business, and are not Excluded Assets or items related to Excluded Assets;
(iv) Executed Employment Agreements, in substantially the forms
attached as Exhibits A-1 and A-2 hereto;
28
(v) Certificate of good standing in California along with
California Tax Clearance Certificates and a Certificate of Release (Form DE-
2220);
(vi) The Federal Predecessor/Successor Election, in the form
attached hereto as Exhibit B;
(vii) Consent by the Lessor of the Lease referred to in Article I
hereof, (x) consenting to the assignment and assumption of such lease to Buyer,
(y) acknowledging that all obligations, duties and liabilities of whatever
nature, kind or description arising or occurring prior to closing are the sole
and exclusive responsibility of Seller to the exclusion of Buyer, and (z)
waiving and releasing all claims against Buyer;
(viii) Certified copies of the resolutions of the Board of
Directors of Seller authorizing Seller to execute and deliver this Agreement,
any agreement or document contemplated hereby, and to consummate the
transactions contemplated hereby and thereby;
(ix) An opinion of Wilson, Sonsini, Xxxxxxxx and Xxxxxx, counsel
for Seller and the stockholders, dated the Closing Date, in the form attached
hereto as Exhibit C;
(x) The Certificate of Incorporation and By-Laws of Seller, as
amended to the date hereof, and a certification by an officer of Seller that
same are true and complete copies of such documents in effect at the time of
certification;
(xi) A certificate of the Seller, dated the Closing Date,
certifying that: (i) all representations and warranties made by Seller in
Article II hereof were true and correct when made, and are true and correct
----------
on the Closing Date except for changes permitted or contemplated by this
Agreement and except that representations which are specifically made as of a
specified date shall be true and correct as of such earlier date; and (ii) all
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by Seller on or prior to the Closing Date have been performed
or complied with; and
(xii) Evidence of payment of all liens, or satisfactory consents
to terminate such liens.
ARTICLE VIII
POST-CLOSING COVENANTS AND AGREEMENTS
-------------------------------------
3.22 Further Assurances. If at any time and from time to time after the
------------------
Closing, Buyer determines that any further conveyance, assignment, consent to
assignment or other document or any other further action is necessary or
desirable to carry out the purposes of and to make
29
effective the transactions contemplated by this Agreement, Seller agrees to
execute and deliver all such instruments and to take such actions as may be
reasonably necessary or advisable for such purpose.
8.2 Covenant Not to Compete.
-----------------------
(a) Until the last to occur of: (i) 5 years from the date of this
Agreement, or (ii) 1 year from the last termination or end of employment of
either Stockholder pursuant to the Employment Agreement (provided, however, that
if the employment of the Stockholders is terminated or ended on different dates,
the period of this covenant not to compete shall, with respect to the
Stockholder whose employment is first terminated or ended, terminate on the last
to occur of: (i) 5 years from the date of this Agreement, or (ii) 1 year from
the date of termination or end of employment of such Stockholder), Seller and
Stockholders shall not directly or indirectly through representatives, agents or
otherwise, (i) engage in competition with the Business sold hereunder, its
successors or assigns in the Territory or with respect to "Seller's Customers"
as defined in this Agreement; or (ii) provide information, solicit or sell for,
own, or organize any interest in, either directly or through any affiliate or
subsidiary corporation, partnership or other entity, or become engaged by, act
as agent for, or in any manner assist, any person, corporation or other entity
that competes with the Business, or their successors or assigns in the Territory
or with respect to Seller's Customers. Seller and Stockholders further agree
that within the restrictive period, Seller and Stockholders will not in any way
divert or attempt to divert from Buyer or Seller any business whatsoever and
Seller and Stockholders further agree that during said restrictive period they
will not influence or attempt to influence any customers of Buyer or Seller's
Customers not to do business with Buyer. Seller and Stockholders further agree
that they will not make or permit the making of any public announcement or
statement of any kind that Stockholder was formerly employed or connected with
Buyer or Seller, which announcement has as its purpose the intent to violate the
provisions of this paragraph. The term "Seller's Customer", as used in this
Section 8.2, shall mean, (i) each individual or entity listed on the Disclosure
Schedule, and (ii) each otherindividual or entity which either Stockholder does
business with on behalf of Buyer, and that purchases services directly related
to Seller's Business at, or within 12 months prior to the last termination or
end of employment of either Stockholder pursuant to the Employment Agreement
(provided, however, that if the employment of the Stockholders is terminated or
ended on different dates, then the definition of "Seller's Customer", as used in
this Section 8.2, with respect to the Stockholder whose employment is first
terminated or ended, shall mean, (i) each individual or entity listed on the
Disclosure Schedule, and (ii) each other individual or entity which either
Stockholder does business with on behalf of Buyer and that purchases services
directly related to Seller's Business, at, or within 12 months prior the
termination or end of employment of the Stockholder whose employment is first
terminated or ended). The term "Territory" as used herein shall mean: (i) any
location within 150 miles of Fremont, California, and (ii) any location within
150 miles of any other office, either now existing or hereinafter opened, where
Seller or Stockholders exert any material management control with respect to the
Business.
30
(b) During the term set forth in paragraph (a) and thereafter, Seller
shall not divulge any of Buyer's or Seller's business contacts, customers,
suppliers, technology, know-how, trade secrets, marketing techniques, books and
records, computer programs or any other confidential or proprietary information
or make available to any other persons any documents, files or other papers
concerning the foregoing or the Business or financial affairs of Seller or
Buyer. During the term set forth in paragraph (a) and thereafter, Seller shall
not solicit the employment of, any employee or consultant currently or
provisionally employed or retained by Buyer or Seller.
(c) Seller has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon Buyer under
this Agreement and hereby acknowledges and agrees that the same are reasonable
in time and Territory.
(d) It is stipulated that a breach by Seller and/or either Stockholder of
the restrictive covenants set forth herein will cause irreparable damage to
Buyer and that in the event of any breach of the provisions under this Section,
Buyer, in addition to any other remedies it has, shall be entitled to an
injunction restraining Seller and the Stockholders from violating or continuing
a violation of the restrictive covenants herein contained. It is further
stipulated that the existence of any claim or cause of action on the part of
Seller and/or any Stockholder against Buyer, whether arising from this Agreement
or otherwise shall in no way constitute a defense to the enforcement of the
restrictive covenants contained herein, and the restrictive periods which Buyer
is entitled to an injunction shall be extended in an amount which equals the
time period which the Seller or Stockholders are or have been in violation of
the restrictive covenant contained herein. The provisions of this Section 8.2
shall survive the Closing Date. If any of the provisions of this Section shall
be held invalid, illegal, or unenforceable by the final determination of a court
of competent jurisdiction and all appeals therefrom shall have failed or the
time for such appeals shall have expired the provision or provisions shall be
deemed eliminated from this Agreement to such jurisdiction but the remaining
provisions shall nevertheless be given full effect. In the event this Agreement
or any portion hereof is more restrictive than permitted by the law of the
jurisdiction in which enforcement is sought, this Agreement or such portion
shall be limited in that jurisdiction only to the extent required by the law of
that jurisdiction. If a court of competent jurisdiction shall determine that the
terms of this Section 8.2 are partially or wholly inoperative, unenforceable or
invalid in a particular case because of their time or geographic scope or for
any other reason such court shall have the power to limit such time or
geographic scope or otherwise to recast the terms of this Agreement in such case
so as to permit its enforcement to the greatest extent permitted by applicable
law.
8.3 Additional Post Closing Agreements.
----------------------------------
(a) Buyer agrees it shall fund the necessary working capital to
achieve the approved financial plan of the operations relating to Seller's
Business for each Earnout Payment,
31
and will not take any action which will materially impair the Seller's ability
to achieve the Earnout Payments.
(b) Seller acknowledges and agrees that the Earnout Shares are being
acquired solely for the account of Seller for investment and not with a view to
or for resale in connection with any distribution;
(c) Seller hereby authorizes Buyer to receive and open mail addressed
to Seller and to deal with the contents thereof in a responsible matter provided
that such mail relates to the Acquired Assets or to the Business of Seller; and
(d) Buyer agrees to pay for all expenses associated with the transfer
of Seller's current employees to Buyer, including but not limited to costs
associated with visa processing and transfers.
ARTICLE IX
TERMINATION; WAIVER
-------------------
3.23 Termination. This Agreement may be terminated at any time prior to the
-----------
Closing:
(a) the Buyer and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving written notice to
the Seller at any time prior to the Closing (i) in the event the Seller has
breached any material representation, warranty, or covenant contained in this
Agreement in any material respect, the Buyer has notified the Seller of breach,
and the breach has continued without cure for a period of 10 days after the
notice of breach or (ii) if the Closing shall not have occurred on or before
February 28, 1998, by reason of Seller being unable or unwilling to effect a
Closing on or before , February 28, 1998, or by reason of the failure of any
condition precedent under Article IV hereof (unless the failure results
----------
primarily from the Buyer itself breaching any representation, warranty, or
covenant contained in this Agreement); and
(c) the Seller may terminate this Agreement by giving written notice to
the Buyer at any time prior to the Closing (i) in the event the Buyer has
breached any material representation, warranty, or covenant contained in this
Agreement in any material respect, any of the Seller has notified the Buyer of
the breach, and the breach has continued without cure for a period of 10 days
after the notice of breach, or (ii) if the Closing shall not have occurred on or
before February 28, 1998, by reason of Buyer being unable or unwilling to effect
a Closing on or before February 28, 1998, or by reason of the failure of any
condition precedent under Article V
---------
32
hereof (unless the failure results primarily from the Seller itself breaching
any representation, warranty, or covenant contained in this Agreement).
3.24 Effect of Termination; Specific Performance. In the event of the
-------------------------------------------
termination of this Agreement pursuant to Section 9.1 hereof, notice thereof
-----------
shall be promptly given by the terminating party to the other party and
thereafter this Agreement shall forthwith become void and have no effect,
without any liability on the part of any party or its directors, officers or
stockholders, except that (i) the provisions of Section 6.1 hereof shall remain
-----------
in effect and (ii) nothing in this Section 9.2 shall relieve any party to this
-----------
Agreement from liability for breach of this Agreement or any misrepresentation
hereof.
3.25 Extension; Waiver. At any time prior to the Closing, the parties hereto
-----------------
may (i) extend the time for the performance of any of the obligations or other
acts of the other party hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein by the other party or in any
document, certificate or writing delivered pursuant hereto by the other party or
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of either party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. No waiver of any breach of a provision of this Agreement
shall constitute or be deemed a waiver of any other breach of the same or any
other provision of this Agreement, and no delay or failure to take action with
respect to any breach or provision of this Agreement shall constitute or be
deemed a waiver of the right to enforce this Agreement and to take action
against such breach or any subsequent breach of the same or any other provision.
ARTICLE X
MISCELLANEOUS PROVISIONS
------------------------
3.26 Entire Agreement; Amendment. Except with respect to those documents
---------------------------
signed in connection with the Closing of the transactions contemplated by this
Agreement and those documents that, by their terms, modify or supersede this
Agreement, this Agreement, (including the Disclosure Schedule), contains the
entire agreement between the parties hereto and supersedes all prior oral or
written agreements, promises, representations, commitments or understandings
with respect to the matters provided for herein. This Agreement may be modified
or amended only by a writing duly executed by the Buyer, the Stockholders and
the Seller, which modification or amendment shall be binding upon all of the
parties hereto.
3.27 Assignment and Binding Effect. This Agreement and the rights and
-----------------------------
obligations of any party hereunder may not be assigned by any party without the
prior written consent of the other party hereto. All covenants, agreements,
statements, representations, warranties and
33
indemnities in this Agreement by and on behalf of either of the parties hereto
shall bind and inure to the benefit of their respective heirs, successors and
permitted assigns of the parties hereto.
3.28 Waivers. No waiver of any of the provisions of this Agreement shall be
-------
deemed or shall constitute a continuing waiver, and no waiver shall be binding
unless executed in writing by the party making the waiver.
3.29 Notices. All notices, demands or other communications which may be or
-------
are required to be given by any party to any other party pursuant to this
Agreement, shall be in writing and shall be mailed by certified mail, return
receipt requested, postage prepaid, or transmitted by hand delivery, national
overnight express, telegram or facsimile transmission, addressed as follows:
34
(a) If to Buyer:
Xxxxxx International, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Xx. Vice President-Finance
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
XxXxxxx, XxXxxxx & Xxxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
(b) If to Seller:
Argos Adriatic Corporation
00000 Xxxxxxxx Xxx #000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
(c) If to Stockholders:
Xxxxxx Xxxxxxxx
Argos Adriatic Corporation
00000 Xxxxxxxx Xxx, #000
Xxxxxxx, XX 00000
Xxxxx Xxxxxxxx
Argos Adriatic Corporation
00000 Xxxxxxxx Xxx, #000
Xxxxxxx, XX 00000
until such time as either party notifies the other of a change of address. Each
notice or other communication which shall be mailed, delivered or transmitted in
the manner described above shall be deemed sufficiently given and received for
all purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, or the affidavit of messenger or
35
telefax transmission log being deemed conclusive evidence of such delivery) or
at such time as delivery is refused by the addressee upon presentation.
3.30 Governing Law; Jurisdiction and Venue. This Agreement shall be governed
-------------------------------------
by and construed in accordance with the laws of the State of California, without
giving effect to the principles of conflicts of laws thereof. Each party hereby
submits to the personal jurisdiction of the United States District Court for the
Northern District of California or any court of the State of California, and
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such court. In
addition, each party hereby irrevocably and unconditionally waives, to the
fullest extent permitted by law, (i) any objection which it may now have or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any related matter in such court, (ii)
the defense of an inconvenient forum to the maintenance of any suit, action or
proceeding in any such court and (iii) trial by jury in any such suit, action or
proceeding.
3.31 Counterparts; Execution. To facilitate execution, this Agreement may be
-----------------------
executed in as many counterparts as may be required, and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but a single agreement.
3.32 Effective Time of Closing. Notwithstanding the time at which Closing
-------------------------
takes place, the Closing shall be deemed to be effective as of 11:59 p.m. on
February 21, 1998.
3.33 Severability. Any provision of this Agreement which is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
3.34 No Third Parties Benefitted. This Agreement is made and entered into
---------------------------
for the sole protection and benefit of the parties hereto, their successors and
assigns, and no other person or persons shall have any right or action under
this Agreement.
3.35 Recitals, Schedules and Exhibits. The recitals, schedules, and exhibits
--------------------------------
to this Agreement are incorporated herein and, by this reference, made a part
hereof as if fully set forth at length herein.
3.36 Section Headings. The section headings used herein are inserted for
----------------
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
36
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or
caused this Agreement to be executed on its behalf, as of the date first above
written.
BUYER:
XXXXXX TELECOM, INC.
By: ______________________________
Its: ______________________________
SELLER:
ARGOS ADRIATIC CORPORATION
BY:___________________________
Its:__________________________
STOCKHOLDERS:
_____________________________
XXXXX XXXXXXXX
__________________________
XXXXX XXXXXXXX
37
