Exhibit 2.1
ASSET PURCHASE AGREEMENT
DATED AS OF
FEBRUARY 8, 2005
BY AND AMONG
DATATEC SYSTEMS, INC.,
DATATEC INDUSTRIES, INC.
AND
EAGLE ACQUISITION PARTNERS, INC.
(AND/OR ITS DESIGNEES)
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of February 8, 2005 is made by and
among Eagle Acquisition Partners, Inc., a Delaware corporation, and/or its
designees (collectively, "PURCHASER"), and Datatec Systems, Inc., a Delaware
corporation, and Datatec Industries, Inc., a New Jersey corporation (each
individually a "SELLER" and collectively, "SELLERS"), as debtors and
debtors-in-possession in jointly administered Chapter 11 cases (the "BANKRUPTCY
CASES") pending in the United States Bankruptcy Court for the District of
Delaware (the "BANKRUPTCY COURT").
WHEREAS, Sellers are in the business of providing rapid and accurate
technology services to accelerate the delivery and management of complex
information technology (IT) solutions for technology providers and enterprises
(the "BUSINESS"); and
WHEREAS, on December 14, 2004 (the "FILING DATE"), Sellers each filed
voluntary petitions with the Bankruptcy Court under Chapter 11 of Title 11 of
the United States Code, Section 101, ET SEQ. (the "BANKRUPTCY CODE"); and
WHEREAS, Sellers desire to sell substantially all of their assets to
Purchaser, and Purchaser desires to purchase and acquire substantially all of
the assets of Sellers upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the foregoing, of the
representations, warranties, covenants and mutual agreements hereinafter
contained, and of other good and valuable consideration, receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
The terms defined in this ARTICLE I, whenever used herein (including
without limitation the Exhibits and Schedules hereto), shall have the following
meanings for all purposes of this Agreement:
"AFFILIATE" of a Person means any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by, or is
under common control with such Person.
"AGREEMENT" means this agreement among the parties set forth on the
first page hereof, including, without limitation, all Exhibits and Schedules
hereto, as the same may be amended from time to time.
"ALPINE" means Alpine Associates, A Limited Partnership.
"ALPINE NOTE" means that certain Senior Secured Note dated December
13, 2004 in the principal amount of $585,000 issued by Sellers to Alpine.
"APPORTIONED OBLIGATIONS" has the meaning set forth in SECTION 5.6
hereof.
"ASSETS" has the meaning set forth in SECTION 2.1 hereof.
"ASSUMED CONTRACTS" has the meaning set forth in SECTION 2.1(f)
hereof.
"ASSUMED LIABILITIES" has the meaning set forth in SECTION 2.3 hereof.
"AUCTION" has the meaning set forth in SECTION 5.5(c) hereof.
"BANKRUPTCY CASES" has the meaning given to it in the recitals hereto.
"BANKRUPTCY CODE" has the meaning given to it in the recitals hereto.
"BANKRUPTCY COURT" has the meaning given to it in the recitals hereto.
"BIDDING PROCEDURES ORDER" has the meaning set forth in SECTION 5.5(c)
hereof.
"BUSINESS" has the meaning given to it in the recitals hereto.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City are required or authorized by law
to be closed.
"CLOSING" means the closing of the transactions contemplated by this
Agreement.
"CLOSING DATE" means the date on which the conditions set forth in
ARTICLE VI are satisfied or waived, or such other date as the parties may
mutually agree, upon which the Closing takes place.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
"CONSENT" means any consent, approval, authorization, license or order
of, registration, declaration or filing with, or notice to, or waiver from, any
federal, state, local, foreign or other Governmental Entity or any other Person,
including, without limitation, any security holder or creditor which is
necessary to be obtained, made or given in connection with the execution and
delivery of this Agreement and/or any Operative Document, the performance by a
Person of its obligations hereunder and/or thereunder and the consummation of
the transactions contemplated hereby and/or thereby.
"DEBT INSTRUMENTS" means the secured notes and documents related
thereto assigned to the Purchaser by IBM Credit LLC and funds managed by the
Palladin Group L.P.
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"DEBTOR IN POSSESSION CREDIT AGREEMENT" has the meaning set forth in
SECTION 2.6 hereof.
"DIP ORDER" means the final financing order of the Bankruptcy Court
approving the Debtor in Possession Credit Agreement.
"DIRECTLY OR INDIRECTLY" means as an individual, partner, shareholder,
member, creditor, director, officer, principal, agent, employee, trustee,
consultant, advisor or in any other relationship or capacity.
"DISCLOSURE SCHEDULE" means all of the disclosure Schedules attached
to this Agreement as EXHIBIT 1, and includes but is not limited to each of the
Schedules expressly referred to in ARTICLE III.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" (as defined
under Section 3(3) of ERISA) or any other bonus, deferred compensation, pension,
profit-sharing, retirement, stock purchase, stock option, stock appreciation,
other forms of incentive compensation, excess benefit, supplemental pension
insurance, disability, medical, supplemental unemployment, vacation benefits,
payroll practice, fringe benefit, scholarship, sickness, accident, severance, or
post-retirement compensation or benefit, welfare or any other employee benefit
plan, policy, arrangement or practice, whether written or oral.
"ENCUMBRANCES" means collectively, any and all security interests,
liens, pledges, claims, levies, charges, deeds of trust, escrows, encumbrances,
options, rights of first refusal, transfer restrictions, conditional sale
contracts, title retention contracts, mortgages, leases, easements,
hypothecations, indentures, security agreements or other agreements,
arrangements, contracts, commitments, understandings or obligations of any kind
whatsoever, whether written or oral.
"ENVIRONMENT" means any surface or subsurface physical medium or
natural resource, including, air, land, soil, surface waters, ground waters,
stream and river sediments.
"ENVIRONMENTAL LAWS" means any federal, state, local or common law,
rule, regulation, ordinance, code, order or judgment (including the common law
and any judicial or administrative interpretations, guidances, directives,
policy statements or opinions) relating to the injury to, or the pollution or
protection of, human health and safety or the Environment.
"ENVIRONMENTAL LIABILITIES" means any claims, judgments, damages
(including punitive damages), losses, penalties, fines, liabilities,
encumbrances, liens, violations, costs and expenses (including attorneys' and
consultants' fees) of investigation, assessment, remediation or defense of any
matter relating to human health, safety or the Environment of whatever kind or
nature by any Person or Governmental Entity, (A) that are incurred as a result
of (i) the existence of Hazardous Substances in, on, under, at or emanating from
any Real Property, (ii) the off-site transportation, treatment, storage or
disposal of Hazardous Substances generated by Sellers, or (iii) the violation of
any Environmental Laws, or (B) that arise under the Environmental Laws.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means any entity that would be deemed a "single
employer" with Sellers under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA.
"EXCLUDED ASSETS" has the meaning set forth in SECTION 2.2 hereof.
"EXCLUDED LIABILITIES" has the meaning set forth in SECTION 2.4
hereof.
"FILING DATE" has the meaning given to it in the recitals hereto.
"FINAL ORDER" has the meaning set forth in SECTION 6.1(f) hereof.
"GAAP" means United States generally accepted accounting principles,
applied on a consistent basis.
"GOVERNMENTAL ENTITY" means any federal, state, local or foreign
government, political subdivision, legislature, court, agency, department,
bureau, commission or other governmental regulatory authority, body or
instrumentality, including any industry or other non-governmental
self-regulatory organizations.
"HAZARDOUS SUBSTANCE" means petroleum, petroleum products,
petroleum-derived substances, radioactive materials, hazardous wastes,
polychlorinated biphenyls, lead based paint, radon, urea formaldehyde, asbestos
or any materials containing asbestos, and any materials or substances regulated
or defined as or included in the definition of "hazardous substances,"
"hazardous materials," "hazardous constituents," "toxic substances,"
"pollutants," "contaminants" or any similar denomination intended to classify or
regulate substances by reason of toxicity, carcinogenicity, ignitability,
corrosivity or reactivity under any Environmental Law.
"INSTRUMENTS OF ASSIGNMENT" has the meaning given to it in SECTION
2.7(a) hereof.
"INSTRUMENTS OF ASSUMPTION" has the meaning set forth in SECTION
2.7(b) hereof.
"IRS" means the Internal Revenue Service.
"LAWS" has the meaning as set forth in SECTION 2.10(a) hereof.
"MARKS" has the meaning as set forth in SECTION 3.7(a)(iv) hereof.
"MATERIAL ADVERSE EFFECT" means any set of events, occurrences or
circumstances since November 1, 2004 that are material and adverse to the
Business or the Assets and which impairs materially the value of the Business or
the Assets.
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"OPERATIVE DOCUMENT" means any agreement, instrument or other document
to be executed and delivered in connection with the consummation of the
transactions contemplated by this Agreement.
"PERMITS" means all licenses, permits, orders, consents, approvals,
registrations, local siting approvals, authorizations, qualifications and
filings under any federal, state or local laws or with any Governmental Entities
or other private Persons.
"PERSON" means an individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint stock company, trust,
unincorporated organization or other entity, or any Governmental Entity or
quasi-governmental body or regulatory authority.
"PLAN" means any Employee Benefit Plan established, maintained,
sponsored, or contributed to by Sellers or an ERISA Affiliate on behalf of any
employee, director or shareholder (whether current, former or retired) or their
beneficiaries, or with respect to which Sellers or any ERISA Affiliate has or
has had any obligation on behalf of such person.
"POST-CLOSING TAX PERIOD" shall mean (i) any Tax period beginning the
day after the Closing Date and (ii) with respect to a Tax period that commences
before but ends after the Closing Date, the portion of such period beginning the
day after the Closing Date.
"PRE-CLOSING TAX PERIOD" shall mean (i) any Tax period ending on or
before the Closing Date and (ii) with respect to a Tax period that commences
before but ends after the Closing Date, the portion of such period up to and
including the Closing Date.
"PROPERTY" (or "PROPERTIES" when the context requires) means any Real
Property and any personal or mixed property, whether tangible or intangible.
"PURCHASE PRICE" has the meaning set forth in SECTION 2.6 hereof.
"REAL PROPERTY" means any real property presently owned, used, leased,
occupied, managed or operated by Sellers.
"SALE APPROVAL ORDER" has the meaning set forth in SECTION 5.5(d)
hereof.
"SALE HEARING" has the meaning set forth in SECTION 5.5(c) hereof.
"SALE HEARING DATE" means the date on which the Bankruptcy Court
conducts a hearing to approve the sale of the Assets to Purchaser pursuant to
this Agreement.
"SELLERS" has the meaning given to it in the recitals hereto.
"SELLERS INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in
SECTION 3.7(a) hereof.
"SELLERS LICENSE RIGHTS" has the meaning set forth in SECTION 3.7(b)
hereof.
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"SELLERS' REPRESENTATIVE" has the meaning set forth in SECTION 8.15
hereof.
"SELLERS RIGHTS" has the meaning set forth in SECTION 3.7(b) hereof.
"SELLERS SOFTWARE PRODUCTS" has the meaning set forth in SECTION
3.7(a)(i) hereof.
"SUBSIDIARY," or "SUBSIDIARIES" where the context requires, means any
corporation, partnership, limited liability company or other entity in which
Sellers, directly or indirectly, own or control 50% or more of the voting stock
or other ownership interests.
"TAXES" (or "TAX" where the context requires) shall mean all federal,
state, county, provincial, local, foreign and other taxes (including, without
limitation, income, profits, premium, estimated, excise, sales, use, occupancy,
gross receipts, franchise, ad valorem, severance, capital levy, production,
transfer, withholding, employment and payroll related and property taxes and
other governmental charges and assessments), whether attributable to statutory
or nonstatutory rules and whether or not measured in whole or in part by net
income, and including, without limitation, interest, additions to tax or
interest, charges and penalties with respect thereto, and expenses associated
with contesting any proposed adjustment related to any of the foregoing.
"TRADE SECRETS" means any information which (i) is used in a business,
(ii) is not generally known to the public or to Persons who can obtain economic
value from its disclosure, and (iii) is subject to reasonable efforts to
maintain its secrecy or confidentiality; the term may include but is not limited
to inventions, processes, know-how, formulas, computer software, and mask works
which are not patented and are not protected by registration (e.g., under
copyright or mask work laws); lists of customers, suppliers, and employees, and
data related thereto; business plans and analyses; and financial data.
"WARN ACT" has the meaning set forth in SECTION 5.9 hereof.
ARTICLE II
SALE AND PURCHASE OF ASSETS; CLOSING
2.1. ASSET PURCHASE. Upon the terms and subject to the conditions hereof,
and upon the basis of the agreements, representations and warranties contained
in this Agreement, on the Closing Date, Sellers shall sell, transfer, assign,
convey and deliver to Purchaser, and Purchaser shall purchase, acquire and
accept from Sellers, all of Sellers' right, title and interest in and to all of
the assets, properties and rights of Sellers owned or used by Sellers in the
conduct of the Business, as and to the extent existing on the Closing Date, but
excluding the Excluded Assets (such assets, properties and rights are
hereinafter collectively referred to as the "ASSETS"), free and clear of all
Encumbrances pursuant to Sections 363(b) and (f) of the Bankruptcy Code. Subject
to, but without limitation of the foregoing, the Assets include the following as
and to the extent existing on the Closing Date:
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(a) TANGIBLE PERSONAL PROPERTY. All tangible personal property owned
by Sellers used in the conduct of the Business including, but not limited to,
all machinery, equipment, furniture, office equipment, supplies, vehicles,
automobiles, trucks, trailers, tools, computers, printers, hardware, stored
materials, works in progress, consumables and other items of tangible personal
property of every kind owned by Sellers;
(b) REAL PROPERTY. All Real Property owned by Sellers and all rights
and interests of Sellers under real property leases that are included within the
Assumed Contracts;
(c) CASH. All cash and cash equivalents of Sellers;
(d) INTELLECTUAL PROPERTY. All right, title and interest to the
Sellers Rights, other than those Sellers Rights identified on SCHEDULES 3.7(a)
and (b) as being Excluded Assets;
(e) ACCOUNTS RECEIVABLE. All of Sellers' trade accounts, notes and
other receivables to the maximum extent permitted by law. To the extent that any
account receivable is unable to be assigned because of any applicable law or
regulation, Sellers acknowledge and agree that the proceeds of any account
receivable collected by them shall be held in trust for Purchaser and promptly
be endorsed over and remitted to Purchaser;
(f) CONTRACTS. The contracts, leases and other agreements set forth on
SCHEDULE 2.1(f) to which certain Sellers are a party (the "ASSUMED CONTRACTS"),
provided however, that SCHEDULE 2.1(f) may be amended and supplemented by
Purchaser, in its sole and absolute discretion, up to the Sale Hearing Date. In
the event that Purchaser acquires any particular contract of Sellers with a
customer of Sellers, it is understood that any payments theretofor made under
such contract by such customer to Sellers will be deducted from the ultimate
amount payable by such customer to Purchaser under such contract (but not with
respect to amounts payable by a customer under other contracts with such
customer);
(g) INVENTORY. All raw materials, work-in-process, finished goods and
merchandise, packaging materials and other supplies related thereto that are
owned or used by Sellers in the conduct of the Business;
(h) INSURANCE. All claims of Sellers under insurance policies covering
the Assets or the Business;
(i) BANK ACCOUNTS. All rights with respect to Sellers' bank accounts;
(j) DEPOSITS AND PREPAID EXPENSES. All deposits (including customer
deposits and security deposits for rent, electricity, telephone or otherwise)
and prepaid charges and expenses of Sellers relating to the Assets or the
Assumed Liabilities;
(k) BOOKS AND RECORDS. All general, financial and personnel records of
Sellers relating to the Business including, but not limited to, technical data,
asset ledgers, books of account, inventory records, budgets, customer lists,
sales records, supplier records, computer programs, correspondence and any other
files of Sellers created or maintained in connection with the Business;
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(l) GOODWILL. All of Sellers' goodwill and other intangible assets
associated with the Business, including the goodwill associated with the Sellers
Rights;
(m) CAUSES OF ACTION. All causes of action, rights of recovery and
rights of set-off arising out of the conduct of the Business;
(n) PERMITS. All of Sellers' right, title and interest in and to any
and all Permits, licenses, approvals and authorizations by a federal, state,
local or foreign governmental or non-governmental board, bureau, agency or
regulatory body pertaining to the conduct of the Business, to the extent
transferable or assignable, other than those Permits set forth on SCHEDULE
2.1(n);
(o) SUPPLIES. All supplies owned by Sellers and used in the conduct of
the Business;
(p) WARRANTIES; REPRESENTATIONS, ETC. All of Sellers' rights under or
pursuant to all warranties, representations and guarantees made by suppliers,
manufacturers and contractors to the extent relating to products sold, or
services provided, to the Business or to the extent affecting any Assets, in
each case to the extent assignable and except to the extent related to any
Excluded Assets;
(q) CONFIDENTIALITY RIGHTS. All rights of Sellers under non-disclosure
or confidentiality, non-compete or non-solicitation agreements with employees,
consultants or agents of Sellers or with third parties to the extent they relate
to the Business or the Assets (or any portion thereof); and
(r) CUSTOMER AND SUPPLIER LISTS. All customer and supplier lists and
related information of Sellers, as well as all existing advertising plans of any
kind, sales literature and related items, in accordance with federal and state
laws and regulations.
(s) STOCK OF ▇▇▇▇▇▇▇.▇▇▇, INC. All of the capital stock of
▇▇▇▇▇▇▇.▇▇▇, Inc. held by Sellers.
2.2. EXCLUDED ASSETS. Any provision of this Agreement to the contrary
notwithstanding, Purchaser shall not acquire, and nothing herein shall be deemed
to sell, transfer, assign or convey to Purchaser, and Sellers shall retain all
of Sellers' right, title and interest in and to the assets listed in this
SECTION 2.2 (the "EXCLUDED ASSETS"):
(a) all contracts, leases or other agreements other than the Assumed
Contracts;
(b) all claims against Purchaser arising under or in connection with
this Agreement;
(c) claims related solely to Excluded Liabilities;
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(d) all items set forth on SCHEDULE 2.2(d) attached hereto; provided
however, that SCHEDULE 2.2(d) may be amended and supplemented by Purchaser, in
its sole and absolute discretion, up to 10 calendar days prior to the Sale
Hearing Date;
(e) all prepaid insurance premiums for Sellers' directors and officers
insurance policy;
(f) all intercompany obligations, liabilities and indebtedness,
including any note indebtedness, owed to or by a Seller to or by any Affiliates
of a Seller; and
(g) all preference, fraudulent transfer and/or other avoidance claims
and actions of any kind of Sellers, including, without limitation, any such
claims and actions arising under Sections 544, 545, 547, 548 549, 550 and 551 of
the Bankruptcy Code.
(h) all claims and actions (i) of any kind against directors and
officers of Sellers, and (ii) against Purchaser that are permitted to be made
under the DIP Order.
2.3. ASSUMED LIABILITIES. On the terms and subject to the conditions set
forth in this Agreement, at the Closing Purchaser shall assume, effective as of
the Closing Date, and shall timely perform and discharge in accordance with
their respective terms, the following liabilities of Sellers (collectively, the
"ASSUMED LIABILITIES"):
(a) all liabilities of Sellers under the Assumed Contracts that accrue
after the Closing Date; and
(b) all post-petition trade payables of Sellers incurred in the
ordinary course of Business.
2.4. EXCLUDED LIABILITIES. Other than the Assumed Liabilities, Purchaser
shall not assume or be liable for any of the debts, liabilities or obligations
of Sellers or the Business (the "EXCLUDED LIABILITIES").
2.5. CURE AMOUNTS. At Closing and pursuant to Section 365 of the Bankruptcy
Code, Sellers shall assign to Purchaser and Purchaser shall assume from Sellers,
the Assumed Contracts. The cure amounts, as determined by the Bankruptcy Court,
if any, necessary to cure all defaults, if any, and to pay all actual or
pecuniary losses that have resulted from such defaults under the Assumed
Contracts, shall be paid by Purchaser on or before Closing and Sellers shall
have no liability therefor.
2.6. CONSIDERATION. The aggregate consideration for the Assets (the
"PURCHASE PRICE") shall be EIGHT MILLION DOLLARS ($8,000,000) payable in the
form of a credit bid pursuant to Section 363(k) of the Bankruptcy Code based
upon Purchaser's claim arising pursuant to the Debt Instruments, plus (i) the
assumption of the Assumed Liabilities, (ii) the cure amounts associated with the
Assumed Contracts, (iii) the full repayment and satisfaction of the Alpine Note,
and (iv) the full repayment and satisfaction of any outstanding borrowings under
that certain Debtor in Possession Revolving Credit Agreement with Alpine
providing for borrowings up to $2,500,000 (the "DEBTOR IN POSSESSION CREDIT
AGREEMENT").
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2.7. TRANSFER OF ASSETS AND ASSUMED LIABILITIES.
(a) At the Closing, Sellers shall effect the sale, conveyance,
assignment, transfer and delivery of the Assets to Purchaser by delivering to
Purchaser or its designees documents of assignment and transfer as are
reasonably necessary to vest in Purchaser good and valid title to the Assets,
free and clear of all Encumbrances, except the Assumed Liabilities, in form and
substance reasonably acceptable to the parties, collectively, the "INSTRUMENTS
OF ASSIGNMENT".
(b) At the Closing, Purchaser shall deliver to Sellers instruments,
documents or agreements in form and substance reasonably acceptable to the
parties (collectively, the "INSTRUMENTS OF ASSUMPTION") as are reasonably
necessary to evidence Purchaser's assumption of and agreement to pay and
discharge the Assumed Liabilities.
2.8. POSSESSION. Right to possession of the Assets shall transfer to
Purchaser on the Closing Date. Sellers shall transfer and deliver to Purchaser
on the Closing Date such keys, lock and safe combinations and other similar
items as Purchaser shall require to obtain immediate and full occupation and
control of the Assets, and shall also make available to Purchaser at Sellers'
then existing locations all documents in Sellers' possession that are required
to be transferred to Purchaser by this Agreement.
2.9. TRANSFER TAXES. Provided that the Sale Approval Order (as defined in
SECTION 5.5(d) hereof) includes the finding set forth in clause (xiii) of
SECTION 5.5(d) in accordance with Section 1146(c) of the Bankruptcy Code, the
making or delivery of any instrument of transfer, including the filing of any
deed or other document of transfer to evidence, effectuate or perfect the
rights, transfers and interest contemplated by this Agreement, shall be in
contemplation of a plan or plans or reorganization to be confirmed in the
Bankruptcy Cases, and such shall be free and clear of any and all transfer tax,
stamp tax or similar taxes. If such transfer, stamp or similar taxes are
ultimately payable, notwithstanding Section 1146(c) of the Bankruptcy Code or
for any other reason, Purchaser shall pay any and all such transfer, stamp or
similar taxes that may be payable by reason of the transaction contemplated in
this Agreement and any and all claims, charges, interest or penalties assessed,
imposed or asserted in relation to any such taxes.
2.10. NON-ASSIGNABLE PERMITS.
(a) To the extent that any Permit included among the Assets is not
capable of being assigned to Purchaser at the Closing without the Consent of the
issuer thereof, or if such assignment or attempted assignment would constitute a
breach thereof, or a violation of any applicable federal, state, local or
foreign law, statute, ordinance, rule, regulation, order, judgment or decree,
administrative order or decree, administrative or judicial decision, and any
other executive or legislative proclamation ("LAWS"), neither this Agreement nor
any Instrument of Assignment shall constitute an assignment thereof, or an
attempted assignment, unless such Consent has been obtained.
(b) In the event that any Consent referred to in SECTION 2.10(a) has
not been obtained prior to the Closing and Purchaser nevertheless determines to
effect the Closing, if Purchaser so desires, Purchaser shall use its
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commercially reasonable efforts, and Sellers shall cooperate with Purchaser, to
obtain each and every such Consent and to resolve the impracticalities of
assignment referred to in SECTION 2.10(a) after the Closing; PROVIDED, HOWEVER,
that any related costs and expenses shall be borne by Purchaser.
2.11. THE CLOSING. The Closing of the purchase and sale of the Assets and
the consummation of the other transactions contemplated by this Agreement shall
take place as soon as reasonably practicable after the date hereof and no later
than March 15, 2005, at a date and time mutually agreeable to the parties
hereto, but only after the satisfaction or waiver of the conditions set forth in
ARTICLE VI hereof, at a location mutually agreeable to the parties hereto.
Purchaser may, in its sole discretion, waive the requirement that the Closing
occur no later than March 15, 2005, in which case the Closing shall occur no
later than three days following such waiver, but only after the satisfaction or
waiver of the conditions set forth in ARTICLE VI hereof. At the Closing,
Purchaser and Sellers shall deliver or cause to be delivered the items necessary
to convey, assign, transfer and deliver the Assets to Purchaser.
2.12. DELIVERIES BY SELLERS.
At the Closing, Sellers shall deliver, or cause to be delivered, to
Purchaser each of the following, duly executed by or on behalf of Sellers:
(a) the Instruments of Assignment referred to in SECTION 2.7(a)
hereof;
(b) executed copies of the Consents referred to in SECTION 6.1(b)
hereof;
(c) the officer's certificate of Sellers referred to in SECTION 6.1(d)
hereof;
(d) a copy of the Sale Approval Order referred to in SECTION 5.5(d)
hereof; and
(e) a copy of the Bankruptcy Court's docket sheet for the Bankruptcy
Cases evidencing that there has been no appeal or stay of the Sale Approval
Order.
2.13. DELIVERIES BY PURCHASER.
At the Closing, Purchaser shall deliver or cause to be delivered to Sellers
each of the following, duly executed by or on behalf of Purchaser:
(a) the cancellation and termination of any and all Debt Instruments;
(b) the Instruments of Assumption referred to in SECTION 2.7(b)
hereof;
(c) executed copies of the Consents referred to in SECTION 6.2(c)
hereof;
(d) the officer's certificate of Purchaser referred to in SECTION
6.2(e) hereof;
(e) copies of the certificate of incorporation and by-laws of
Purchaser; and
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(f) resolutions of the board of directors of Purchaser approving and
authorizing the execution, delivery and performance of this Agreement and the
transactions contemplated in connection herewith, certified by the Secretary of
Purchaser as of the Closing Date, together with a certificate of the Secretary
of Purchaser as to the incumbency and signature of the officers of Purchaser
executing this Agreement and any certificate or other documents to be delivered
by them pursuant hereto, together with evidence of the incumbency of such
Secretary.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each of Sellers hereby jointly and severally represents and warrants
to Purchaser as follows (all such representations and warranties are qualified
by the Disclosure Schedule attached to this Agreement as EXHIBIT 1):
3.1. ORGANIZATION AND QUALIFICATION. Each Seller is duly organized, validly
existing and in good standing in the state of its organization (which state is
set forth on SCHEDULE 3.1), with all necessary corporate power and authority to
own, lease and operate its Assets and Properties and carry on its business as
presently owned or conducted.
3.2. AUTHORITY; NO BREACH.
(a) Each of Sellers has all requisite power and authority to execute
and deliver this Agreement and the Operative Documents to which it is or shall,
pursuant to this Agreement, be a party, and to perform, carry out and consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Operative Documents to which it is or
shall, pursuant to this Agreement, be a party have been duly authorized by all
necessary action on the part of each of Sellers, subject to approval by the
Bankruptcy Court. This Agreement has been duly executed and delivered by Sellers
and constitutes the legal, valid and binding obligation of Sellers, enforceable
against Sellers in accordance with its terms.
(b) Except with regard to the contemplated approval and authorization
of the Bankruptcy Court, and except as set forth on SCHEDULE 3.2(b), neither the
execution and delivery of this Agreement or any Operative Document by Sellers
nor the consummation of any of the transactions contemplated herein or therein,
nor the full performance by each of Sellers of its obligations hereunder or
thereunder do or will (i) violate any provision of the certificate of
incorporation or by-laws of any of Sellers or (ii) conflict with, violate,
result in a breach of or constitute a default under any writ, injunction,
statute, law, ordinance, rule, regulation, judgment, award, Permit, decree,
order, or process of any Governmental Entity to which any Seller or any Assets
or Properties of any Seller are subject, except where such conflict, violation,
breach or default would not, individually or in the aggregate, have a Material
Adverse Effect.
3.3. TITLE TO ASSETS. Sellers have good and valid title to all of the
Assets free and clear of any and all Encumbrances pursuant to Section 363 of the
Bankruptcy Code and any other applicable sections of the Bankruptcy Code and as
set forth in the Sale Approval Order. Upon the Closing and transfer to Purchaser
12
of the Assets, Purchaser shall receive good and marketable title to all of the
Assets free and clear of any and all Encumbrances, pursuant to Section 363 of
the Bankruptcy Code and any other applicable sections of the Bankruptcy Code and
as set forth in the Sale Approval Order.
3.4. ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth on SCHEDULE
3.4 and other than liabilities arising in the ordinary course of business under
the agreements set forth on SCHEDULE 3.9 (but excluding any liabilities arising
as a result of a breach by any Seller of any such agreement), no Seller has any
liabilities, losses or obligations of any nature (whether absolute, accrued,
fixed, contingent, liquidated, unliquidated, due or to become due, or
otherwise), except for liabilities as of November 30, 2004 and adequately
reserved against therein in accordance with GAAP, except to the extent any such
liability, loss or obligation would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
3.5. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth on SCHEDULE
3.5, since the Filing Date, Sellers have owned and operated the Assets and the
Business in the ordinary course and consistent with past practice. Without
limiting the generality of the foregoing, since the Filing Date, except as set
forth on SCHEDULE 3.5:
(a) the Business has not experienced any change which has had a
Material Adverse Effect or experienced any event or failed to take any action
which reasonably could be expected to result in a Material Adverse Effect;
(b) the Business has not suffered any material loss, damage, or
destruction of property or Assets or other casualty to property or Assets
(whether or not covered by insurance);
(c) no Seller has suffered any loss of officers, employees or
suppliers which had or may reasonably be expected to result in a Material
Adverse Effect;
(d) Sellers have not subjected any portion of the Assets to any
Encumbrance except as disclosed on SCHEDULE 3.5;
(e) no Seller has changed any accounting policy or method; and
(f) no Seller has entered into or otherwise committed to any of the
foregoing.
3.6. REAL PROPERTY ASSETS.
(a) SCHEDULE 3.6(a) contains a complete and correct list of all Real
Property owned by Sellers. Sellers have good and marketable title to all such
owned Real Property, free and clear of all Encumbrances, except for (i) liens
for current Taxes not yet due and payable and (ii) Encumbrances set forth on
SCHEDULE 3.6(a).
(b) SCHEDULE 3.6(b) contains a complete and correct list of all Real
Property leased by Sellers. Sellers have previously delivered to Purchaser true,
complete and correct copies of all lease documents to which any Seller is a
party relating to such Real Property.
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3.7. INTELLECTUAL PROPERTY.
(a) Except as disclosed on SCHEDULE 3.7(a), one or more Sellers is the
exclusive owner of all right, title and interest in and to each of the following
that are being used in the Business as currently conducted:
(i) all computer programs and databases and their associated
system and user documentation (collectively, the "SELLERS SOFTWARE PRODUCTS")
set forth on SCHEDULE 3.7(a)(i);
(ii) all copyrights and copyright registrations set forth on
SCHEDULE 3.7(a)(ii);
(iii) all patents and patent applications set forth on SCHEDULE
3.7(a)(iii);
(iv) All trademarks, service marks and tradenames (collectively
the "MARKS"), and the registrations of, and/or applications to register, any one
or more of the Marks in federal, state or foreign jurisdictions set forth on
SCHEDULE 3.7(a)(iv); and
(v) all Trade Secrets and other proprietary rights.
The items referred to in subparagraphs (i) through (v) of this SECTION
3.7(a) are herein referred to collectively as the "SELLERS INTELLECTUAL PROPERTY
RIGHTS."
(b) SCHEDULE 3.7(b) sets forth a list of all license and similar
agreements between Sellers and third parties, under which Sellers are granted
rights to the use, reproduction, distribution, manufacture, sale or licensing of
items embodying the patent, copyright, Trade Secret, trademark or other
proprietary rights of such third parties (collectively, the "SELLERS LICENSE
RIGHTS"). The Sellers License Rights and the Sellers Intellectual Property
Rights are sometimes collectively referred to as the "SELLERS RIGHTS."
(c) SCHEDULE 3.7(c) sets forth a list of all agreements under which
Sellers have granted any rights of whatever nature to third parties of, to or
under the Sellers Rights. True, correct and complete copies of all such
agreements have been delivered to Purchaser.
(d) No claims with respect to the Sellers Rights have been asserted
or, to the knowledge of any Seller, are threatened by any Person. To the
knowledge of Sellers, there has not been any infringement, misappropriation or
any other unauthorized use of any of the Sellers Rights by any third party,
employee, consultant or former employee or consultant of Sellers, the result of
which would reasonably be expected to be a Material Adverse Effect.
(e) To the knowledge of Sellers, none of Sellers has, by reason of its
use, license, sale or other distribution of the Sellers Rights or otherwise, nor
has any Seller been alleged to have, infringed upon, violated, misappropriated
or misused any intellectual property right or other proprietary right
(including, without limitation, any patent right, copyright, trade name or Trade
Secret) of any third party.
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3.8. ACCOUNTS RECEIVABLE. Except as set forth on SCHEDULE 3.8, all of the
accounts, notes and other receivables of Sellers (i) as of November 30, 2004 and
(ii) as of the date hereof, represent sales actually made in the ordinary course
of business consistent with past practice for goods or services delivered or
rendered in bona fide arm's-length transactions.
3.9. CONTRACTS AND COMMITMENTS. Since November 1, 2004, except as set forth
on SCHEDULE 3.9:
(a) There are no agreements, contracts, or commitments under which
Sellers are currently providing materials or services related to the Business or
Assets, written or oral, which either individually or in conjunction with other
agreements, contracts or commitments with the same party, and in connection with
the same matter, relate to commitments in excess of $50,000 per annum or are
otherwise material to its business, operations or prospects;
(b) None of Sellers has entered into any (i) employment agreements,
(ii) employee non-competition agreements, or (iii) agreements or policies that
contain any bonus, severance or termination pay liabilities or obligations;
(c) None of Sellers has entered into any collective bargaining or
union contracts or agreements; and
(d) None of Sellers has become a party to any partnership or joint
venture agreement whether or not a separate legal entity is created thereby.
3.10. INSURANCE. SCHEDULE 3.10 contains a true and complete list of all
insurance policies covering any of Sellers or otherwise held by or on behalf of
it, indicating the type of coverage, name of insured, the insurer, the amount of
coverage, the deductibles, the premium, and the expiration date. Except as set
forth on SCHEDULE 3.10, there are no pending claims under any insurance policy
listed on SCHEDULE 3.10.
3.11. LITIGATION, ETC. Except as set forth on SCHEDULE 3.11, there has not
been in the twenty-four (24) months prior to the date hereof, nor is there
currently, any claim, action, suit, inquiry, proceeding or investigation of any
kind or nature whatsoever, by or before any court or Governmental Entity or
other regulatory or administrative agency or commission or tribunal pending or,
to the knowledge of any Seller, threatened against or involving or that
reasonably would be expected to involve any Seller or its business, Assets,
Properties, officers or directors or that questions or challenges the validity
of this Agreement or any action taken or to be taken by such Seller pursuant to
this Agreement or in connection with the transactions contemplated hereby.
3.12. COMPLIANCE WITH LAW; NECESSARY AUTHORIZATIONS.
(a) Each of Sellers is duly complying and has duly complied in respect
of its business, operations, Properties and Assets, with all applicable laws,
rules, regulations, orders, building and other codes, zoning and other
ordinances, Permits, authorizations, judgments and decrees of all Governmental
Entities, except to the extent that any such failure to comply would not,
individually or in the aggregate, have a Material Adverse Effect.
15
(b) Each of Sellers has duly obtained all Permits, concessions,
grants, franchises, licenses and other governmental authorizations, Consents,
and approvals necessary for the conduct of its business and each of Sellers is
in compliance with all material terms of all the foregoing, except to the extent
that failure to comply would not, individually or in the aggregate, have a
Material Adverse Effect; except as set forth on SCHEDULE 3.12(b), there are no
proceedings pending or, to the knowledge of any Seller, threatened which may
result in the revocation, cancellation, suspension or modification thereof; and
except as set forth on SCHEDULE 3.12(b), the consummation of the transactions
contemplated hereby will not result in any such revocation, cancellation,
suspension or modification nor require Sellers or Purchaser to make any filing
or take any action in order to maintain the validity of any item listed on
SCHEDULE 3.12(b).
3.13. ENVIRONMENTAL MATTERS. All of the operations of Sellers comply with
all applicable Environmental Laws, except to the extent that any such failure to
comply would not, individually or in the aggregate, have a Material Adverse
Effect, and none of Sellers are subject to any Environmental Liabilities that
would, individually or in the aggregate, have a Material Adverse Effect.
3.14. LABOR MATTERS. Except to the extent set forth on SCHEDULE 3.14:
(a) there is no labor strike, or, to the knowledge of Sellers,
dispute, grievance, arbitration proceeding, slowdown or stoppage, or charge of
unfair labor practice actually pending or threatened against the Business;
(b) None of Sellers has, during the three years prior to the date
hereof, experienced any work stoppage or other labor dispute; and
(c) there are no charges or complaints of discrimination pending or to
the knowledge of any Seller, threatened, before the Equal Employment Opportunity
Commission or any state or local agency with respect to Sellers.
3.15. EMPLOYEE BENEFIT PLANS.
(a) Except as set forth on SCHEDULE 3.15(a), there are no Plans. With
respect to each Plan, as applicable, accurate and complete (i) copies of each
written Plan (including all amendments thereto), (ii) written descriptions of
each oral Plan, (iii) copies of related trust or funding agreements, (iv)
summary plan descriptions, (v) copies of the most recent annual reports and
actuarial valuations and (vi) copies of the most recent determination letter
from the IRS for each Plan intended to qualify under Code Section 401(a) have
been heretofore delivered to Purchaser.
(b) Sellers, each ERISA Affiliate, each Plan, and each "plan sponsor"
(within the meaning of Section 3(16) of ERISA) of each "welfare benefit plan"
(within the meaning of Section 3(1) of ERISA) has complied in all respects with
the requirements of Section 4980B of the Code and Title I, Subtitle B, Part 6 of
ERISA.
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(c) No "reportable event" within the meaning of Section 4043(b) of
ERISA has occurred, and the consummation of the transaction contemplated by this
Agreement will not result in a reportable event.
(d) With respect to each of the Plans on SCHEDULE 3.15(a):
(i) each Plan intended to qualify under Section 401(a) of the
Code has received a determination letter from the IRS to the effect that the
Plan is qualified under Section 401 of the Code and any trust maintained
pursuant thereto is exempt from federal income taxation under Section 501 of the
Code;
(ii) all payments required by any Plan, any agreement, or by law
with respect to all periods through the date of the Closing shall have been made
prior to the Closing (on a pro rata basis where such payments are otherwise
discretionary at year end) or appropriate accruals therefor have been provided
for by Sellers;
(iii) no "accumulated funding deficiency" (within the meaning of
Section 302 of ERISA and Section 412 of the Code) has been incurred, whether or
not waived, and no excise or other taxes have been or could be expected to be
incurred or are due and owing with respect to the Plan because of any failure to
comply with the minimum funding standards of ERISA and the Code;
(iv) no claim, lawsuit, arbitration or other action has been
threatened, asserted, instituted, or anticipated against the Plans (other than
non-material routine claims for benefits, and appeals of such claims), any
trustee or fiduciaries thereof, Sellers, any ERISA Affiliate, any director,
officer, or employee thereof, or any of the assets of any trust of the Plans;
and
(v) no "prohibited transaction," within the meaning of Section
4975 of the Code and Section 406 of ERISA, has occurred or is expected to occur
with respect to the Plan (and the consummation of the transactions contemplated
by this Agreement will not constitute or directly or indirectly result in such a
"prohibited transaction").
3.16. FINDERS. Except as set forth on SCHEDULE 3.16, none of Sellers has
taken any action that, Directly or Indirectly, would obligate Purchaser or
Sellers, to anyone acting as broker, finder, financial advisor or in any similar
capacity in connection with this Agreement or any of the transactions
contemplated hereby.
3.17. ASSETS OF BUSINESS. The Assets represent substantially all of the
assets of the Business required to operate the Business as currently conducted.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants as follows:
4.1. ORGANIZATION AND QUALIFICATION. It is duly organized, validly existing
and in good standing in its jurisdiction of organization.
4.2. AUTHORITY. It has all requisite power and authority to execute and
deliver this Agreement and to perform, carry out and consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on its part. This
Agreement has been duly executed and delivered by it and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms.
4.3. NO BREACH. Neither the execution and delivery of this Agreement by it
nor the consummation of the transactions contemplated herein and the full
performance by it of its obligations hereunder do or will: (i) violate any
provision of its organizational documents; (ii) conflict with, violate, result
in a breach of or constitute a default under any writ, injunction, statute, law,
ordinance, rule, regulation, judgment, award, decree, order, or process of any
Governmental Entity; or (iii) require it to obtain any Consent, other than the
Consent of the Bankruptcy Court.
4.4. POWERS; CONSENTS; ABSENCE OF CONFLICTS. The execution, delivery, and
performance of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby by Purchaser: (a) are within its corporate
powers, are not in contravention of the terms of the certificate of
incorporation or bylaws of Purchaser, and have been duly authorized by all
appropriate corporate action; (b) do not and will not require any approval or
consent of, or filing with, any governmental agency or authority; (c) do not and
will not violate any statute, law, rule, or regulation to which Purchaser may be
subject; (d) do not and will not conflict with, or result in a breach of or a
default under (with or without notice or lapse of time, or both), any contract,
agreement, indenture, mortgage, deed of trust, lease, or other instrument to
which Purchaser is a party or by which Purchaser is bound or subject; and (e) do
not and will not violate any judgment, order, or decree of any court or other
governmental agency or authority to which Purchaser may be subject. This
Agreement has been duly executed and delivered by Purchaser and constitutes a
valid and binding obligation of Purchaser, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, and similar laws affecting creditors'
rights and remedies generally and general principles of equity.
4.5. LITIGATION OR PROCEEDINGS. There is no litigation or other proceeding
pending or, to the knowledge of Purchaser or any of its Affiliates, directors,
managers, officers, employees, agents, or representatives, threatened against
18
Purchaser that could reasonably be expected to affect adversely Purchaser's
ability to consummate the transactions contemplated by this Agreement.
4.6. FINANCIAL CAPABILITY. Purchaser has the ability, including the
financial capability, to perform all of its obligations hereunder, including,
without limitation, payment of the Purchase Price.
4.7. BROKERS. Purchaser has incurred no liability to any broker, finder or
agent with respect to the payment of any commission regarding the consummation
of the transactions contemplated hereby. Purchaser agrees that any claims for
commissions, fees or other compensation, including, without limitation,
brokerage fees, finder's fees, or commissions are ever asserted against
Purchaser or Sellers in connection with this transaction, all such claims shall
be handled and paid by the party whose actions form the basis of such claim and
such party shall indemnify (with counsel reasonably satisfactory to the
party(ies) entitled to indemnification) and hold harmless from and against any
and all such claims or demands asserted by any person, firm or corporation in
connection with the transaction contemplated hereby.
4.8. "AS IS" "WHERE IS" PURCHASE. Except for Sellers' representations and
warranties contained in Article III above, (i) Sellers have not made , and
Purchaser has not relied and will not rely, on any representations or warranties
whatsoever, express or implied, with respect to any matter relating to the
Assets and (ii) Purchaser shall accept the Assets on an "AS IS" and "WHERE IS"
basis.
ARTICLE V
COVENANTS
5.1. Conduct of the Business.
(a) Prior to the Closing, except (1) as set forth on SCHEDULE 5.1(a),
(2) as required by applicable Laws, (3) as otherwise contemplated by this
Agreement or (4) with the prior written consent of Purchaser, Sellers shall:
(i) conduct the Business only in the ordinary course;
(ii) use its commercially reasonable efforts to (A) preserve the
Assets and the present business operations, organization and goodwill of the
Business, and (B) preserve the present relationships with customers and
suppliers of the Business; and
(iii) act in accordance with the Bankruptcy Court's interim or
subsequent final financing order.
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(b) Except (1) as set forth on SCHEDULE 5.1(b), (2) as required by
applicable Laws, (3) as otherwise contemplated by this Agreement or (4) with the
prior written consent of Purchaser (which consent shall not be unreasonably
withheld or delayed), Sellers shall not, solely as it relates to the Business:
(i) make or rescind any material election relating to Taxes,
except as may be required by applicable Laws or GAAP, make any material change
to any of their methods of accounting or methods of reporting income or
deductions for Taxes or accounting practice or policy from those employed in the
preparation of its most recent Tax returns;
(ii) subject any of the Assets to any Encumbrances other than in
connection with the Alpine Note and the Debtor in Possession Credit Facility;
(iii) acquire any material properties or assets that would be
Assets or sell, assign, license, transfer, convey, lease or otherwise dispose of
any of the Assets in excess of $5,000 for any individual acquisition or
disposition and $50,000 for all acquisitions and dispositions in the aggregate,
provided, however, that any disposition of any Asset shall be for cash in an
amount equal to such Asset's fair market value, as determined by Sellers in
their reasonable discretion; ;
(iv) enter into or agree to enter into any merger or
consolidation with, any corporation or other entity other than pursuant to this
Agreement;
(v) cancel or compromise any debt or claim or waive or release
any material right of Sellers that constitutes an Asset except in the ordinary
course of the Business, other than as permitted by any order of the Bankruptcy
Court;
(vi) except for the Great Plains Financial Systems and supporting
technology related thereto as reflected in Sellers' business plan for fiscal
year 2005, enter into any commitment for capital expenditures in excess of
$5,000 for any individual commitment and $50,000 for all commitments in the
aggregate;
(vii) enter into, modify or terminate (except for labor or
collective bargaining agreements that expire in accordance with their own terms)
any labor or collective bargaining agreement or, through negotiation or
otherwise, make any commitment or incur any liability to any labor organization;
or
(viii) terminate the employment, other than for cause, of ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇.
5.2. ACCESS. Sellers agree that, prior to the Closing Date, Purchaser shall
be entitled, through its officers, employees and representatives (including,
without limitation, its legal advisors and accountants), to make such
investigation of the properties, businesses and operations of the Business and
such examination of the books and records of the Business, the Assets and the
Assumed Liabilities as it reasonably requests and to make extracts and copies of
such books and records at Purchaser's sole expense. Any such investigation and
20
examination shall be conducted during regular business hours upon reasonable
advance notice and under reasonable circumstances and shall be subject to
restrictions under applicable Laws. Sellers shall cause the officers, employees,
consultants, agents, accountants, attorneys and other representatives of Sellers
to cooperate with Purchaser and Purchaser's representatives in connection with
such investigation and examination, and Purchaser and its representatives shall
cooperate with Sellers and its representatives and shall use their reasonable
efforts to minimize any disruption to the Business.
5.3. FILINGS AND AUTHORIZATIONS. Each of Sellers and Purchaser, as promptly
as practicable, (i) shall make, or cause to be made, all such filings and
submissions under laws, rules and regulations applicable to it or its
Affiliates, as may be required to consummate the transactions contemplated
herein, in accordance with the terms of this Agreement, (ii) shall use all
commercially reasonable best efforts to obtain, or cause to be obtained, all
authorizations, approvals, consents and waivers from all governmental and
non-governmental Persons necessary to be obtained by it or its Affiliates, in
order to consummate the transactions contemplated herein; PROVIDED, HOWEVER,
that, any provision hereof to the contrary notwithstanding, Sellers shall have
no obligation to: (A) pay any fee to any third party for the purpose of
obtaining any Consent or any costs and expenses of any third party resulting
from the process of obtaining such Consent or (B) sell any material portion of
the Business; PROVIDED FURTHER, HOWEVER, that neither Purchaser nor Sellers
shall be obligated to consummate the transactions contemplated by this Agreement
absent the prior approval of the Bankruptcy Court and neither Purchaser nor
Sellers shall be obligated to modify the Agreement in any material respect to
satisfy the Bankruptcy Court, and (iii) shall use all commercially reasonable
efforts to take, or cause to be taken, all other actions necessary, proper or
advisable in order for it to fulfill its obligations hereunder. Sellers and
Purchaser shall coordinate and cooperate with one another in exchanging such
information and supplying such reasonable assistance as may be reasonably
requested by each in connection with the foregoing.
5.4. FURTHER ASSURANCES. Simultaneous with the Closing, Sellers shall take
such steps as may be necessary to put Purchaser in actual possession and
operating control of the Assets and the Business. At or after the Closing,
Sellers shall, at the reasonable request of Purchaser, without further
consideration, promptly execute and deliver, or cause to be executed and
delivered, to Purchaser such assignments, bills of sale, consents and other
instruments in addition to those required by this Agreement, in form and
substance reasonably satisfactory to Purchaser, and take all such other actions
as Purchaser may reasonably deem necessary to implement any provision of this
Agreement and to transfer to and vest in Purchaser title to, and to put
Purchaser in possession of, all of the Assets, free and clear of any and all
Encumbrances.
5.5. BANKRUPTCY COVENANTS.
(a) CURE OF DEFAULTS. Purchaser shall promptly, on or prior to the
Closing Date, cure any and all defaults and breaches and satisfy any liability
or obligation arising from or relating to pre-Closing periods under the Assumed
Contracts, so that such Assumed Contracts may be assigned by Sellers to
Purchaser in accordance with the provisions of Section 365 of the Bankruptcy
21
Code, the Sale Approval Order, any other orders of the Bankruptcy Court
effectuating such assignments, and this Agreement. Upon the assumption and
assignment of the Assumed Contracts by Sellers to Purchaser, Sellers shall be
relieved of all future obligations under the Assumed Contracts pursuant to
Section 365(k) of the Bankruptcy Code.
(b) MOTIONS, ORDERS, ETC. Sellers shall promptly provide Purchaser
with the proposed final drafts of all documents, motions, orders, or pleadings
that Sellers propose to file with the Bankruptcy Court that relate to the
approval of this Agreement or the consummation of the transactions contemplated
hereby, or any provision therein or herein, and shall provide Purchaser and its
counsel with a reasonable opportunity to review and comment on such documents,
motions, orders, or pleadings.
(c) BIDDING PROCEDURES ORDER. Sellers and Purchaser hereby find
acceptable and approve of the bidding procedures order, including the bidding
procedures attached thereto as Exhibit A, entered by the Bankruptcy Court on
January 13, 2005 and annexed hereto as EXHIBIT 2 (the "BIDDING PROCEDURES
ORDER"). The Bidding Procedures Order sets forth, among other things, the
earliest available date for a hearing to approve the sale of the Assets (the
"SALE HEARING") and authorizes Sellers to conduct an auction (the "AUCTION") of
the Assets in the event that qualified bids are received for the sale of the
Assets in accordance with the Bidding Procedures Order and setting a date for
such Auction.
(d) SALE APPROVAL ORDER. Without limiting the generality of the
foregoing SECTION 5.5(b), the sale approval order, substantially in the form
annexed hereto as EXHIBIT 3 (the "SALE APPROVAL ORDER"), shall be reasonably
acceptable in form and substance to Purchaser and shall include provisions,
among other things (i) providing that Purchaser shall not incur any liability as
a successor to the Business unless expressly assumed, (ii) approving the sale of
the Assets to Purchaser on the terms and conditions set forth in this Agreement,
or such higher and better terms and conditions offered at the Auction, and
authorizing Sellers to proceed with this transaction, (iii) stating that any
objections timely filed with respect to the sale of the Assets, which have not
been withdrawn, are overruled or the interests of such objections have been
otherwise satisfied or adequately provided for by the Bankruptcy Court, (iv)
finding that the Purchase Price represents fair value for the Assets, (v)
finding that the sale is in the best interests of Sellers' estates and
creditors, (vi) finding that Purchaser is a good faith purchaser of the Assets
under Section 363(m) of the Bankruptcy Code and that the provisions of Section
363(n) of the Bankruptcy Code have not been violated, (vii) providing that the
sale of the Assets to Purchaser shall be free and clear of all liens, claims,
interests, obligations and encumbrances whatsoever under Section 363 of the
Bankruptcy Code and any other applicable sections of the Bankruptcy Code, (viii)
providing that the Bankruptcy Court shall retain jurisdiction for the purpose of
enforcing the provisions of the Sale Approval Order including, without
limitation, compelling delivery of the Assets to Purchaser and protecting
Purchaser against any liens, claims, interests, obligations and encumbrances
against Sellers or the Assets, (ix) finding that there are no brokers involved
in consummating the sale and no brokers' commissions are due, (x) providing that
the parties hereto shall be authorized to close this transaction immediately
upon execution of the Sale Approval Order pursuant to Rules 6004(g) and 6006(d)
of the Federal Rules of Bankruptcy Procedure, (xi) authorizing and directing
Sellers to execute, deliver, perform under, consummate and implement this
Agreement, together with all additional instruments and documents that may be
reasonably necessary or desirable to implement the foregoing, (xii) determining
that Purchaser is not a successor to Sellers or otherwise liable for any of the
22
Excluded Liabilities or Excluded Assets and permanently enjoining each and every
holder of any of the Excluded Liabilities or Excluded Assets from commencing,
continuing or otherwise pursuing or enforcing any remedy, claim, cause of action
or encumbrance against Purchaser or the Assets related thereto, and (xiii)
finding that, pursuant to Section 1146(c) of the Bankruptcy Code, the within
transaction is "in contemplation of a plan or plans of reorganization to be
confirmed in the Bankruptcy Cases," and as such shall be free and clear of any
and all transfer tax, stamp tax or similar taxes; PROVIDED, HOWEVER, that
Purchaser's obligations hereunder shall not be conditioned on the findings set
forth in clause (xiii). Sellers shall use their best efforts to obtain entry of
the Sale Approval Order. Purchaser's obligations to consummate the transactions
contemplated herein shall be conditioned upon the Bankruptcy Court's entry of
the Sale Approval Order in form and substance satisfactory to Purchaser. To the
extent that there is any inconsistency between this paragraph and the Sale
Approval Order, the Sale Approval Order shall govern.
(e) ASSUMED CONTRACTS. Sellers shall not reject under Section 365 of
the Bankruptcy Code, waive or release any of their rights under, amend or
otherwise modify any of the Assumed Contracts without the prior written consent
of Purchaser, which consent shall not be unreasonably withheld. Sellers shall
obtain an order or orders (which may include the Sale Approval Order) in a form
reasonably satisfactory to Purchaser, among other things (i) approving the
assumption and assignment of the Assumed Contracts to Purchaser pursuant to, and
subject to the provisions of, Section 365 of the Bankruptcy Code, (ii) providing
that all defaults of Purchaser under the Assumed Contracts arising or accruing
prior to the date of the Closing (without giving effect to any acceleration
clauses or any default provisions in such contracts of a kind specified in
Section 365(b)(2) of the Bankruptcy Code) have been cured or will be promptly
cured by Purchaser so that Sellers shall have no liability or obligation with
respect to any default or obligation arising or accruing prior to the date of
the Closing or in respect of any cure obligations, except as may otherwise be
specifically agreed as set forth in this Agreement, such Assumed Contracts and
cure amounts are set forth on SCHEDULE 5.5(e), and (iii) providing that the
Assumed Contracts shall be transferred to, and remain in full force and effect
for the benefit of, Purchaser, notwithstanding any provision in any such Assumed
Contract or in applicable Law (including those described in Sections 365(b)(2)
and (f) of the Bankruptcy Code) that prohibits, restricts, or limits in any way
such assignment or transfer.
(f) OTHER BANKRUPTCY COVENANTS. Sellers shall promptly make any
filings, take all actions, and use their best efforts to obtain any and all
other approvals and orders necessary or appropriate for consummation of the sale
of the Assets, subject to their obligations to comply with any order of the
Bankruptcy Court. In the event an appeal is taken, or a stay pending appeal is
requested, from any of the foregoing orders of the Bankruptcy Court, Sellers
shall promptly notify Purchaser of such appeal or stay request and, upon
Purchaser's request, shall provide to Purchaser within two days after Sellers'
receipt thereof a copy of the related notice of appeal or order of stay. Sellers
shall also provide Purchaser with written notice of any motion, application,
brief or other pleading filed in connection with any appeal from any of such
orders.
5.6. APPORTIONED OBLIGATIONS. All real property Taxes, personal property
Taxes and similar ad valorem obligations levied with respect to the Assets for a
taxable period that includes (but does not end on) the Closing Date
23
(collectively, the "APPORTIONED OBLIGATIONS") shall be apportioned between
Sellers and Purchaser based on the number of days of such taxable period
included in the Pre-Closing Tax Period and the number of days of such taxable
period included in the Post-Closing Tax Period. Sellers shall be liable for the
proportionate amount of such Taxes that is attributable to the Pre-Closing Tax
Period, and Purchaser shall be liable for the proportionate amount of such Taxes
that is attributable to the Post-Closing Tax Period. Upon receipt of any ▇▇▇▇
for real or personal property Taxes relating to the Assets, each of Sellers and
Purchaser shall present a statement to the other, setting forth the amount of
reimbursement to which each is entitled under this SECTION 5.6 together with
such supporting evidence as is reasonably necessary to calculate the proration
amount. The proration amount shall be paid by the party owing it to the other
within ten (10) Business Days after delivery of such statement. In the event
that either Sellers or Purchaser shall make any payment for which it is entitled
to reimbursement under this SECTION 5.6, the other party shall make such
reimbursement promptly but in no event later than ten (10) Business Days after
the presentation of a statement setting forth the amount of reimbursement to
which presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement. Purchaser shall
notify the Sellers' Representative of any audit or examination of the
Apportioned Obligations. The Sellers' Representative shall have the right to
participate in any such audit or examination and Purchaser shall not settle any
such audit or examination without the consent of the Sellers' Representative,
which consent shall not be unreasonably withheld.
5.7. TAXES. Except as otherwise specifically provided in this Agreement,
(i) Sellers shall pay all Taxes payable with respect to the Assets and the
operations of the Business for the Pre-Closing Tax Period and (ii) Purchaser
shall pay all Taxes payable with respect to the Assets for the Post-Closing Tax
Period.
5.8. CONSENTS. Prior to Closing, Sellers shall use their commercially
reasonable best efforts to obtain, or cause to be obtained, all Consents,
including but not limited to the Consents set forth on SCHEDULE 6.1(b). Sellers
shall be responsible for all costs and expenses resulting from securing each
such Consent (including without limitation, any fee to any third party for the
purpose of obtaining each such Consent or any costs and expenses of any third
party resulting from securing each such Consent).
5.9. WARN ACT. Purchaser intends to provide job offers to a sufficient
number of current full-time employees of Sellers, at terms and conditions
substantially similar in the aggregate to those presently enjoyed by such
employees, so as not to give rise to any liability of Sellers under the Worker
Adjustment and Retraining Notification Act of 1988, as amended, and any similar
foreign, state or local law, regulation or ordinance (collectively, the "WARN
ACT"). To the extent that Purchaser elects not to provide job offers to a
sufficient number of current full-time employees of Sellers so as to give rise
to any WARN Act liability for Sellers, Purchaser shall give notice to Sellers
within 10 days after the execution of this Agreement of its intent not to
provide job offers to a sufficient number of current full-time employees of
Sellers.
5.10. INVENTORY NOT OWNED BY SELLERS. Sellers shall use their best efforts
to cause all inventory, equipment or component parts related to Assumed
24
Contracts not owned by Sellers but within Sellers' control or possession to be
transferred to Purchaser on the Closing Date provided that all costs and
expenses related to such transfer shall be paid by Purchaser.
ARTICLE VI
CONDITIONS TO CLOSING
6.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. The obligation of
Purchaser under this Agreement to consummate the transactions contemplated by
this Agreement on the Closing Date shall be subject to the satisfaction, at or
prior to the Closing Date, of all of the following conditions, any one or more
of which may be waived by Purchaser:
(a) PERFORMANCE BY SELLERS. Each of Sellers shall have performed and
complied in all material respects with all covenants and agreements required to
be performed or complied with by such Person hereunder on or prior to the
Closing Date.
(b) CONSENTS. All Consents required in connection with the
consummation of the transactions contemplated by this Agreement and the Closing
(including those set forth on SCHEDULE 6.1(b) hereto) shall have been duly
obtained, made or given and shall be in full force and effect, without the
imposition upon Purchaser or Sellers of any condition, restriction or required
undertaking.
(c) NO LEGAL PROHIBITION. No suit, action, investigation, inquiry or
other proceeding by any Governmental Entity or other Person shall have been
instituted or threatened which arises out of or relates to this Agreement, or
the transactions contemplated hereby and no injunction, order, decree or
judgment shall have been issued and be in effect or threatened to be issued by
any Governmental Entity of competent jurisdiction, and no statute, rule or
regulation shall have been enacted or promulgated by any Governmental Entity and
be in effect, which in each case restrains or prohibits the consummation of the
transactions contemplated hereby.
(d) CERTIFICATE. Purchaser shall have received a certificate, dated
the Closing Date, signed on behalf of Sellers by an officer of each of Sellers,
to the effect that the conditions set forth in SECTIONS 6.1(a) and 6.1(b) have
been satisfied.
(e) NO MATERIAL ADVERSE CHANGE. No material adverse change shall have
occurred in the business of Sellers and no other event, loss, damage, condition
or state of facts of any kind shall exist which has a Material Adverse Effect or
can reasonably be expected to have a Material Adverse Effect. The provisions of
this SECTION 6.1(e) shall not apply to items that appear on SCHEDULE 3.5.
(f) ENTRY OF ORDER; APPEAL. The Bankruptcy Court shall have entered
the Bidding Procedures Order in accordance with SECTION 5.5(c) in the form
attached hereto as SCHEDULE 6.1(f), the Sale Approval Order in accordance with
SECTION 5.5(d), and any other order in accordance with SECTION 5.5(e) relating
to the assignment of the Assumed Contracts, all in form and substance reasonably
acceptable to Purchaser, and the Sale Approval Order and any other order in
accordance with SECTION 5.5(e) relating to the assignment of the Assumed
25
Contracts, shall not have been stayed, and shall have become a Final Order,
unless the finality of the Sale Approval Order is waived by Purchaser in
Purchaser's sole discretion. The term "FINAL ORDER" as used in this Agreement
shall mean an order, judgment or other decree, the operation or effect of which
has not been reversed, stayed, modified or amended and any and all appeal
periods with respect to such order, judgment or other decree have expired.
(g) INSTRUMENTS OF ASSIGNMENT. Purchaser shall have received the
Instruments of Assignment reasonably necessary to vest in Purchaser good and
valid title to the Assets, free and clear of all Encumbrances, except the
Assumed Liabilities.
6.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS. The obligations of
each of Sellers under this Agreement to consummate the transactions contemplated
by this Agreement on the Closing Date shall be subject to the satisfaction, at
or prior to the Closing Date, of all of the following conditions, any one or
more of which may be waived by Sellers:
(a) PERFORMANCE BY PURCHASER. Purchaser shall have performed and
complied in all material respects with all covenants and agreements required to
be performed or complied with by them hereunder on or prior to the Closing Date.
(b) CONSENTS. All Consents required in connection with the purchase
and sale of the Assets and the Closing shall have been duly obtained, made or
given and shall be in full force and effect.
(c) NO LEGAL PROHIBITION. No suit, action, investigation, inquiry or
other proceeding by any Governmental Entity or other Person shall have been
instituted or threatened which arises out of or relates to this Agreement or the
transactions contemplated hereby and no injunction, order, decree or judgment
shall have been issued and be in effect or threatened to be issued by any
Governmental Entity of competent jurisdiction, and no statute, rule or
regulation shall have been enacted or promulgated by any Governmental Entity and
be in effect, which in each case restrains or prohibits the consummation of the
transactions contemplated hereby.
(d) CERTIFICATE. Sellers' Representative shall have received a
certificate, dated the Closing Date, signed on behalf of Purchaser by an officer
of Purchaser, to the effect that the conditions set forth in SECTIONS 6.2(a) and
6.2(b) have been satisfied.
(e) ENTRY OF ORDER; APPEAL. The Sale Approval Order shall have been
entered by the Bankruptcy Court and shall not have been stayed.
(f) INSTRUMENTS OF ASSUMPTION. Sellers shall have received the
Instruments of Assumption reasonably necessary to evidence Purchaser's
assumption of and agreement to pay and discharge the Assumed Liabilities.
26
ARTICLE VII
NON-SURVIVAL
7.1. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained in ARTICLES III and IV shall expire concurrently with
the effectiveness of the transactions at Closing.
ARTICLE VIII
MISCELLANEOUS
8.1. TERMINATION. This Agreement may be terminated, and the transactions
contemplated herein may be abandoned:
(a) any time before the Closing, by mutual written agreement of
Sellers and Purchaser;
(b) any time before the Closing, by Sellers, on the one hand, or
Purchaser, on the other hand, (i) in the event of a material breach hereof by
any non-terminating party if such non-terminating party fails to cure such
breach within five (5) Business Days following notification thereof by the
terminating party or (ii) upon notification to the non-terminating party by the
terminating party that the satisfaction of any condition to the terminating
party's obligations under this Agreement becomes impossible or impracticable
with the use of commercially reasonable efforts if the failure of such condition
to be satisfied is not caused by a breach hereof by the terminating party;
(c) by Purchaser, upon five (5) Business Days' prior written notice to
the Sellers' Representative, if (i) Purchaser is not determined to be the
Winning Bidder (as defined in, and in accordance with, the Bidding Procedures
Order) upon the conclusion of the Auction, (ii) the Sale Approval Order and any
other order in accordance with SECTION 5.5(e) relating to the assignment of the
Assumed Contracts shall not have been entered within three (3) Business Days
following the date of the Sale Hearing or (iii) the Closing has not taken place
within the time period set forth in SECTION 2.11 of this Agreement, other than
by reason of a material breach of this Agreement by Purchaser; or
(d) by Sellers, upon five (5) Business Days' prior written notice to
Purchaser, if the Closing has not taken place within the time period set forth
in SECTION 2.11 of this Agreement, other than by reason of a material breach of
this Agreement by Sellers.
The time periods for termination of this Agreement set forth in SECTIONS
8.1(c)(iii) and 8.1(d) may be extended by mutual written agreement of Sellers
and Purchaser without further order of the Bankruptcy Court.
27
8.2. EFFECT OF TERMINATION.
If this Agreement is validly terminated pursuant to SECTION 8.1, this
Agreement will forthwith become null and void, and there will be no liability or
obligation on the part of any party (or any of their respective officers,
directors, employees, partners, agents or other representatives or Affiliates),
except as provided in the next succeeding sentence and except that the
provisions in SECTIONS 8.3, 8.16 and 8.21 will continue to apply following any
such termination. Upon termination of this Agreement pursuant to SECTIONS 8.1,
Sellers will remain liable to Purchaser for any breach of this Agreement by
Sellers existing at the time of such termination, and Purchaser will remain
liable to Sellers for any breach of this Agreement by Purchaser existing at the
time of such termination. Failure of any party to satisfy any of the conditions
set forth in SECTIONS 6.1 or 6.2 of this Agreement shall not be deemed a breach
of this Agreement by such party except to the extent that such failure also
constitutes a breach of a representation, warranty or covenant.
8.3. EXPENSES. Except as otherwise set forth herein, each party hereto
shall pay its own expenses (including legal, accounting and other professional
fees) incurred in connection with this Agreement and the transactions
contemplated hereby.
8.4. AMENDMENT. This Agreement may not be modified, amended, altered or
supplemented except by a written agreement executed by Purchaser and Sellers.
Notwithstanding the foregoing, from time to time up to the time of the Sale
Hearing Date, Purchaser shall have the right to supplement or amend the
following schedules attached to this Agreement, in its sole and absolute
discretion: SCHEDULE 2.1(f) and SCHEDULE 2.1(n). In addition, SCHEDULE 2.2(d)
may be amended and supplemented by Purchaser, in its sole and absolute
discretion, up to 10 calendar days prior to the Sale Hearing Date.
8.5. ENTIRE AGREEMENT. This Agreement, together with the Exhibits and
Schedules hereto and the instruments and other documents delivered pursuant to
this Agreement, contain the entire agreement of the parties relating to the
subject matter hereof, and supersede all prior agreements, understandings,
representations, warranties and covenants of any kind between the parties. All
others are specifically waived.
8.6. WAIVERS. Waiver by any party of any breach of or failure to comply
with any provision of this Agreement by the other party shall not be construed
as, or constitute, a continuing waiver of such provision, or a waiver of any
other breach of, or failure to comply with, any other provision of this
Agreement. No waiver of any such breach or failure or of any term or condition
of this Agreement shall be effective unless in a written notice signed by the
waiving party and delivered, in the manner required for notices generally, to
each affected party.
8.7. NOTICES. All notices and other communications hereunder shall be
validly given or made if in writing, (i) when delivered personally (by courier
service or otherwise), or (ii) when actually received if mailed by first-class
certified or registered United States mail or recognized overnight courier
service, postage-prepaid and return receipt requested, and all legal process
with regard hereto shall be validly served when served in accordance with
applicable law, in each case to the address of the party to receive such notice
28
or other communication set forth below, or at such other address as any party
hereto may from time to time advise the other parties pursuant to this
Subsection:
If to Sellers:
Datatec Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Interim Chief Executive Officer
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Park Avenue Tower
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
and
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ P.C.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to Purchaser:
Eagle Acquisition Partners, Inc.
c/o ▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
8.8. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
29
8.9. GOVERNING LAW. All disputes arising out of or related to this
Agreement, including, without limitation, any dispute relating to the
interpretation, meaning or effect of any provision hereof, will be resolved in
the Bankruptcy Court and the parties hereto will each submit to the exclusive
jurisdiction of the Bankruptcy Court for the purposes of adjudicating any such
dispute, to the extent the jurisdiction of the Bankruptcy Court is applicable.
If the jurisdiction of the Bankruptcy Court is not applicable, any legal action,
suit or proceeding arising out of or relating to this Agreement, each and every
agreement and instrument contemplated hereby or the transactions contemplated
hereby and thereby shall be instituted in any Federal court of the Southern
District of New York. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York (i.e., without regard
to its conflicts of law rules).
8.10. BINDING EFFECT; THIRD PARTY BENEFICIARIES; ASSIGNMENT. This Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties hereto and their respective legal representatives, successors and
permitted assigns. Except as expressly set forth herein, nothing expressed or
referred to in this Agreement is intended or shall by construed to give any
Person other than the parties to this Agreement, or their respective legal
representatives, successors and permitted assigns, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein. Neither party may assign this Agreement nor any of its rights hereunder,
other than any right to payment of a liquidated sum, nor delegate any of its
obligations hereunder, without the prior written consent of the other, except
that Purchaser may assign its rights under this Agreement to any Affiliate or to
any Person providing financing for the transaction. Purchaser may assign the
Assets to any of its Subsidiaries or Affiliates.
8.11. SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall not invalidate 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,
and any such provision, to the extent invalid or unenforceable, shall be
replaced by a valid and enforceable provision which comes closest to the
intention of the parties underlying such invalid or unenforceable provision.
8.12. SPECIFIC PERFORMANCE. Notwithstanding anything to the contrary
contained herein, each party hereto acknowledges that money damages would be
incalculable and an insufficient remedy for any breach of this Agreement by such
party and that any such breach would cause the other party hereto irreparable
harm. Accordingly, each party hereto also agrees that, in the event of any
breach or threatened breach of the provisions of this Agreement by such party,
the other party hereto shall be entitled to equitable relief without the
requirement of posting a bond or other security, including in the form of
injunctions and orders for specific performance.
8.13. HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not modify define, limit, expand or otherwise affect in
any way the meaning or interpretation of this Agreement.
30
8.14. NO AGENCY. Except as provided in SECTION 8.15 hereof, no party hereto
shall be deemed hereunder to be an agent of, or partner or joint venturer with,
any other party hereto.
8.15. SELLERS' REPRESENTATIVE. Each Seller hereby irrevocably appoints
Datatec Systems, Inc. (the "SELLERS' REPRESENTATIVE") as its true and lawful
attorney-in-fact and agent, with full power of substitution or resubstitution,
to act solely and exclusively on behalf of such Seller with respect to any
matters relating to this Agreement and any document, certificate or other
agreement to be executed and delivered by or on behalf of any Seller pursuant
hereto, with the full power, without the consent of Sellers or any of them, to
exercise as it in its sole discretion deems appropriate, all of the powers that
any Seller could exercise under the provisions of this Agreement or any
document, certificate or other agreement to be executed and delivered by or on
behalf of any Seller pursuant hereto, including, without limitation, to (i)
accept and give notices hereunder or thereunder on behalf of any or all of
Sellers, (ii) consent to any modification or amendment hereof or thereof or
(iii) give any waiver or consent hereunder or thereunder. Sellers'
Representative does hereby accept such appointment. Purchaser shall be entitled
to rely exclusively upon such notices, waivers, consents, amendments,
modifications and other acts of the Sellers' Representative as being the binding
acts of Sellers or any of them, and Purchaser shall be entitled to deliver any
notices, payments or other items required to be delivered by it to any Seller
hereunder or thereunder only to the Sellers' Representative, and any such
delivery shall be fully effective as if it were made directly to any relevant
Seller. Sellers' Representative shall not effect any substitution for itself as
the Sellers' Representative without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld. In the event that Sellers'
Representative is dissolved or merged out of existence, Sellers shall promptly
designate a new Sellers' Representative.
8.16. PUBLIC AND PRIVATE ANNOUNCEMENTS. Prior to Closing, neither Purchaser
nor any Seller will issue or cause the publication of any press release or
otherwise make any public and/or private statement with respect to the
transactions contemplated hereby without the prior written consent of the
parties hereto, except with regard to certain negotiations or communications by
Sellers with any or all competing bidders as contemplated under the Bidding
Procedures Order, provided, that any party hereto may make a public and/or
private announcement to the extent required by law, judicial process or the
rules, regulations or interpretations of the Securities and Exchange Commission
or any national securities exchange.
8.17. PRESERVATION AND ACCESS TO RECORDS AFTER CLOSING. Purchaser
acknowledges that following the Closing Date, Sellers or a statutory committee
or trustee appointed under either Chapter 11 or 7 of the Bankruptcy Code may
need access to information or documents in the control or possession of
Purchaser for the purposes of concluding the transactions contemplated hereby,
audits, compliance with governmental requirements and regulations, and the
prosecution or defense of claims. Accordingly, Purchaser agrees that until
Debtors' Bankruptcy Cases are closed, it shall make reasonably available to
Sellers, their representatives, agents or independent auditors, and/or any
governmental agencies or authorities designated by Sellers, upon written
request, consistent with applicable law, or a statutory committee or trustee
appointed under either Chapter 11 or 7 of the Bankruptcy Code and at the expense
of the requesting party, such documents and information as may be available
relating to the Business for periods prior and subsequent to the Closing Date to
31
the extent necessary to facilitate concluding the transaction herein
contemplated, audits, compliance with governmental requirements and regulations,
and the prosecution or defense of claims or other causes of action retained by
Sellers or a statutory committee or trustee appointed under either Chapter 11 or
7 of the Bankruptcy Code. Subsequent to the Closing Date, Purchaser shall make
available to Sellers' Representative and its counsel Sellers' books and records,
for the purposes of, inter alia, (i) complying with the terms of this Agreement
or applicable law and (ii) resolving all claims against Sellers scheduled or
filed in the Bankruptcy Cases and any claims to which Sellers have retained
liabilities. Notwithstanding the foregoing, Purchaser may destroy or discard all
information or documents in its control or possession following the one year
anniversary of the Closing Date provided, however, that until such time that
Debtors' Bankruptcy Cases are closed, Purchaser shall provide counsel to
Sellers, the creditors' committee or any trustee subsequently appointed, 45 days
written notice of the proposed destruction and grant them the opportunity and
access to take possession of all or a portion of Seller's books and records.
8.18. SELLERS' KNOWLEDGE QUALIFICATIONS. Whenever Sellers make any
representation, warranty or other statement to Sellers' knowledge, Sellers'
knowledge means the knowledge, after due inquiry, of each of the persons set
forth on SCHEDULE 8.18 hereto.
8.19. ACCOUNTING TERMS. Any accounting terms used in this Agreement shall,
unless otherwise defined in this Agreement, have the meaning ascribed thereto by
GAAP.
8.20. INTERPRETATION. In this Agreement, unless a contrary intention
appears, (i) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision, and to any certificates delivered
pursuant hereto; and (ii) reference to any Article or Section means such Article
or Section hereof.
8.21. CONFIDENTIALITY. Prior to Closing, any information obtained or
derived by Purchaser as a result of its due diligence review shall be maintained
strictly confidential, shall be used solely for the purposes contemplated by
this Agreement, and shall not be disclosed to any third party except to the
extent that such disclosure is specifically required by law. Purchaser further
agrees that, not less than five (5) Business Days prior to disclosing any
confidential information pursuant to the first sentence of this SECTION 8.21, it
will inform Sellers of the circumstances requiring disclosure, unless providing
such disclosure is itself prohibited by law.
32
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
DATATEC SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Interim CEO
DATATEC INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Interim CEO
EAGLE ACQUISITION PARTNERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary and Treasurer
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS .......................................................1
ARTICLE II SALE AND PURCHASE OF ASSETS; CLOSING..............................6
2.1. Asset Purchase..................................................... 6
2.2. Excluded Assets.....................................................8
2.3. Assumed Liabilities.................................................9
2.4. Excluded Liabilities................................................9
2.5. Cure Amounts........................................................9
2.6. Consideration.......................................................9
2.7. Transfer of Assets and Assumed Liabilities.........................10
2.8. Possession.........................................................10
2.9. Transfer Taxes.....................................................10
2.10. Non-Assignable Permits.............................................10
2.11. The Closing........................................................11
2.12. Deliveries by Sellers..............................................11
2.13. Deliveries by Purchaser............................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS.......................12
3.1. Organization and Qualification.....................................12
3.2. Authority; No Breach...............................................12
3.3. Title to Assets....................................................12
3.4. Absence of Undisclosed Liabilities.................................13
3.5. Absence of Certain Changes or Events...............................13
3.6. Real Property Assets...............................................13
3.7. Intellectual Property..............................................14
3.8. Accounts Receivable................................................15
3.9. Contracts and Commitments..........................................15
3.10. Insurance..........................................................15
3.11. Litigation, etc....................................................15
3.12. Compliance with Law; Necessary Authorizations......................15
3.13. Environmental Matters..............................................16
3.14. Labor Matters......................................................16
3.15. Employee Benefit Plans.............................................16
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3.16. Finders............................................................17
3.17. Assets of Business.................................................17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER......................18
4.1. Organization and Qualification.....................................18
4.2. Authority..........................................................18
4.3. No Breach..........................................................18
4.4. Powers; Consents; Absence of Conflicts.............................18
4.5. Litigation or Proceedings..........................................18
4.6. Financial Capability...............................................19
4.7. Brokers............................................................19
4.8. "AS IS" "WHERE IS" Purchase........................................19
ARTICLE V COVENANTS 19
5.1. Conduct of the Business............................................19
5.2. Access.............................................................20
5.3. Filings and Authorizations.........................................21
5.4. Further Assurances.................................................21
5.5. Bankruptcy Covenants...............................................21
5.6. Apportioned Obligations............................................23
5.7. Taxes..............................................................24
5.8. Consents...........................................................24
5.9. WARN Act...........................................................24
ARTICLE VI CONDITIONS TO CLOSING............................................25
6.1. Conditions Precedent to Obligations of Purchaser...................25
6.2. Conditions Precedent to Obligations of Sellers.....................26
ARTICLE VII NON-SURVIVAL 27
7.1. Non-Survival of Representations and Warranties.....................27
ARTICLE VIII MISCELLANEOUS..................................................27
8.1. Termination........................................................27
8.2. Effect of Termination..............................................28
8.3. Expenses...........................................................28
8.4. Amendment..........................................................28
8.5. Entire Agreement...................................................28
8.6. Waivers............................................................28
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8.7. Notices............................................................28
8.8. Counterparts.......................................................29
8.9. Governing Law......................................................30
8.10. Binding Effect; Third Party Beneficiaries; Assignment..............30
8.11. Severability.......................................................30
8.12. Specific Performance...............................................30
8.13. Headings...........................................................30
8.14. No Agency..........................................................31
8.15. Sellers' Representative............................................31
8.16. Public and Private Announcements...................................31
8.17. Preservation and Access to Records After Closing...................31
8.18. Sellers' Knowledge Qualifications..................................32
8.19. Accounting Terms...................................................32
8.20. Interpretation.....................................................32
8.21. Confidentiality....................................................32
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