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EXHIBIT 2.1
MELITA EUROPE LIMITED
SHARE EXCHANGE AGREEMENT
BY AND BETWEEN
MELITA INTERNATIONAL CORPORATION (AS "BUYER")
AND
SZLAM PARTNERS, L.P. (AS "SELLER")
DATED AS OF MARCH 31, 1997
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MELITA EUROPE LIMITED
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement ("Agreement") is made as of March 31,
1997, by MELITA INTERNATIONAL CORPORATION, a Georgia corporation ("Buyer") and
SZLAM PARTNERS, L.P., a Georgia limited partnership (the "Partnership" or
"Seller") whose sole general partner is Szlam Management Company, L.L.C.
RECITALS
Seller owns 100% of Melita Europe Limited, a United Kingdom
corporation (the "Company"), Common Stock.
The parties hereto anticipate that the Buyer will sell shares of its
stock to the public and the Buyer wishes to have, for the benefit of its public
shareholders, representations and warranties made by the Seller with respect to
the Company.
The parties are also desirous of arranging this transfer of Company
stock to the Buyer in such a manner that no gain will be recognized by Seller
in the exchange of Company stock for Buyer's Stock. For this reason, they have
structured the transaction to qualify as a tax free transaction under Section
351 of the Internal Revenue Code.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"APPLICABLE CONTRACT." Any Contract (a) under which the Company has or
may acquire any rights, (b) under which the Company has or may become subject
to any obligation or liability, or (c) by which the Company or any of the
assets owned or used by it is or may become bound.
"BALANCE SHEET." As defined in Section 3.4.
"BEST EFFORTS." The efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such
result is achieved as expeditiously as possible.
"BREACH." A "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or
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inconsistent with such representation, warranty, covenant, obligation, or other
provision, and the term "Breach" means any such inaccuracy, breach, failure,
claim, occurrence, or circumstance.
"BUYER." As defined in the first paragraph of this Agreement.
"BUYER'S STOCK." The no par value common stock of the Buyer.
"CLOSING." As defined in Section 2.3.
"CLOSING DATE." The date and time as of which the Closing actually
takes place.
"COMPANY." As defined in the Recitals of this Agreement.
"CONSENT." Any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS." All of the transactions contemplated by
this Agreement, including:
(a) the contribution of the Shares by Seller to Buyer;
(b) the delivery of the Buyer's Stock;
(c) the performance by Buyer and Seller of their respective
covenants and obligations under this Agreement; and
(d) Buyer's acquisition and ownership of the Shares and
exercise of control over the Company.
"CONTRACT." Any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"DAMAGES." As defined in Section 10.2.
"DISCLOSURE LETTER." The disclosure letter to be delivered by Seller
to Buyer prior to Closing concurrently with the execution and delivery of this
Agreement and any supplement thereto.
"ENCUMBRANCE." Any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right
of first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
"FACILITIES." Any real property, leaseholds, or other interests
currently or formerly owned or operated by the Company and any buildings,
plants, structures, or equipment (including motor vehicles, tank cars, and
rolling stock) currently or formerly owned or operated by the Company.
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"GAAP." Generally accepted United States accounting principles,
applied on a consistent basis.
"GOVERNMENTAL AUTHORIZATION." Any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"GOVERNMENTAL BODY." Any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"INTELLECTUAL PROPERTY ASSETS." As defined in Section 3.22.
" BALANCE SHEET." As defined in Section 3.4.
"KNOWLEDGE." An individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of conducting
a reasonably comprehensive investigation concerning the existence of such fact
or other matter.
A Person (other than an individual) will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving, or who
has at any time served, as a director, officer, partner, executor, or trustee
of such Person (or in any similar capacity) has, or at any time had, Knowledge
of such fact or other matter.
"LEGAL REQUIREMENT." Any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"ORDER." Any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
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"ORDINARY COURSE OF BUSINESS." An action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person;
(b) such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons exercising
similar authority) [and is not required to be specifically authorized by the
parent company (if any) of such Person]; and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or by
any Person or group of Persons exercising similar authority), in the ordinary
course of the normal day-to-day operations of other Persons that are in the
same line of business as such Person.
"ORGANIZATIONAL DOCUMENTS." (a) The articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement
and any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any
amendment to any of the foregoing.
"PERSON." Any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"PROCEEDING." Any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"RELATED PERSON." With respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material
Interest; and
(d) any Person with respect to which such individual or one
or more members of such individual's Family serves as a director, officer,
partner, executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly under common
control with such specified Person;
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(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a
Material Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause
(b) or (c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of voting securities or other voting interests representing at
least 10% of the outstanding voting power of a Person or equity securities or
other equity interests representing at least 10% of the outstanding equity
securities or equity interests in a Person.
"REPRESENTATIVE." With respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"SECURITIES ACT." The Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"SELLER." Szlam Partners, L.P..
"SHARES." All of the Company's outstanding stock.
"THREATENED." A claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in
writing), or if any other event has occurred or any other circumstances exist,
that would lead a prudent Person to conclude that such a claim, Proceeding,
dispute, action, or other matter is likely to be asserted, commenced, taken, or
otherwise pursued in the future.
2. SALE AND TRANSFER OF SHARES; CLOSING
2.1. SHARES. Subject to the terms and conditions of this Agreement, at
the Closing, Seller will transfer the Shares to Buyer, and Buyer will accept
the Shares from Seller.
2.2. EXCHANGE PRICE. The exchange price (the "Exchange Price") for the
Shares will be the shares of the Buyer's Stock set out on the signature page of
this Agreement.
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2.3. CLOSING. The share exchange (the "Closing") provided for in this
Agreement will occur no later than the effectiveness of the Buyer's
registration statement in connection with a registered public offering of the
Buyer's Stock at such time and place as the parties may agree.
Failure to consummate the purchase and sale provided for in
this Agreement on the date and time and at the place determined pursuant to
this Section 2.3 will result in the termination of this Agreement and will
relieve any party of any obligation under this Agreement except Buyer's
obligation under Section 11.1.
2.4. CLOSING OBLIGATIONS. At the Closing:
(a) Seller will deliver to Buyer:
(i) certificates representing the Shares, duly
endorsed (or accompanied by duly executed stock powers) for transfer to Buyer;
and
(ii) a certificate executed by Seller representing
and warranting to Buyer that each of Seller's representations and warranties in
this Agreement is accurate in all respects as of the Closing Date as if made on
the Closing Date (giving full effect to the Disclosure Letter and any
supplements to the Disclosure Letter that was delivered by Seller to Buyer
prior to the Closing Date in order that the information contained in the
Disclosure Letter be true and correct on the Closing Date).
(b) Buyer will deliver to Seller:
(i) certificates representing the shares of Buyer's
Stock issued to Seller; and
(ii) a certificate executed by Buyer to the effect
that, except as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in all respects
as of the date of this Agreement and is accurate in all respects as of the
Closing Date as if made on the Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1. ORGANIZATION AND GOOD STANDING.
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to conduct its business
as it is now being conducted, to own or use the properties and assets that it
purports to own or use, and to perform all its obligations under Applicable
Contracts.
The Company is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each state or other
jurisdiction in which either the ownership or
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use of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification.
(b) Seller has delivered to Buyer copies of the
Organizational Documents of the Company, as currently in effect.
3.2. AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its terms.
Upon the execution and delivery by Seller of the documents required to be
delivered by Seller at Closing (collectively, the "Seller's Closing
Documents"), the Seller's Closing Documents will constitute the legal, valid,
and binding obligations of Seller, enforceable against Seller in accordance
with their respective terms.
Seller has the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and the Seller's
Closing Documents and to perform their obligations under this Agreement and the
Seller's Closing Documents.
(b) Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents of the Company,
or (B) any resolution adopted by the board of directors or the stockholders of
the Company;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which the
Company or Seller, or any of the assets owned or used by the Company, may be
subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by the Company or that otherwise
relates to the business of, or any of the assets owned or used by, the Company;
(iv) cause Buyer or the Company to become subject
to, or to become liable for the payment of, any tax;
(v) cause any of the assets owned by the Company to
be reassessed or revalued by any taxing authority or other Governmental Body;
(vi) contravene, conflict with, or result in a
violation or breach of any provision of, or give any Person the right to
declare a default or exercise any remedy under, or to
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accelerate the maturity or performance of, or to cancel, terminate, or modify,
any Applicable Contract; or
(vii) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or used by the
Company.
Neither the Company nor Seller is or will be required to give
any notice to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or performance of
any of the Contemplated Transactions.
(c) Seller is acquiring the Buyer's Stock for their own
account and not with a view to their distribution within the meaning of Section
2(11) of the Securities Act. Seller is an "accredited investor" as such term is
defined in Rule 501(a) under the Securities Act.
3.3. CAPITALIZATION. The authorized equity securities of the Company
consist of shares of common stock, of which 31,328 shares are issued and
outstanding and constitute the Shares. Seller is and will be on the Closing
Date the record and beneficial owners and holders of the Shares, free and clear
of all Encumbrances.
No legend or other reference to any purported Encumbrance
appears upon any certificate representing equity securities of the Company. All
of the outstanding equity securities of the Company have been duly authorized
and validly issued and are fully paid and nonassessable.
There are no Contracts relating to the issuance, sale, or
transfer of any equity securities or other securities of the Company. None of
the outstanding equity securities or other securities of the Company was issued
in violation of the Securities Act or any other Legal Requirement. The Company
does not own, nor has any Contract to acquire, any equity securities or other
securities of any Person or any direct or indirect equity or ownership interest
in any other business.
3.4. FINANCIAL STATEMENTS.
Seller has delivered to Buyer: an audited balance sheet of the Company
as at December 31, 1996 (the "Balance Sheet") and the related audited
statements of income, for the 12 months then ended.
Such financial statements and notes fairly present the financial
condition and the results of operations, changes in stockholders' equity, and
cash flow as at the respective dates of and for the periods referred to in such
financial statements, all in accordance with GAAP; the financial statements
referred to in this Section 3.4 reflect the consistent application of such
accounting principles throughout the periods involved.
3.5. BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other records of the Company, all of which have been made
available to Buyer, are complete and correct and have been maintained in
accordance with sound business practices.
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3.6. TITLE TO PROPERTIES; ENCUMBRANCES. The Company owns all the
properties and assets (whether real, personal, or mixed and whether tangible or
intangible) that it purports to own, including all of the properties and assets
reflected in the Balance Sheet.
All material properties and assets reflected in the Balance
Sheet are free and clear of all Encumbrances except for liens for current taxes
not yet due.
3.7. CONDITION AND SUFFICIENCY OF ASSETS. The Company's assets
reflected on its Balance Sheet are adequate for the uses to which they are
being put and are sufficient for the continued conduct of the business of the
Company after the Closing in substantially the same manner as conducted prior
to the Closing.
3.8. ACCOUNTS RECEIVABLE. [RESERVED.]
3.9. INVENTORY. [RESERVED.]
3.10. NO UNDISCLOSED LIABILITIES. The Company has no liabilities or
obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent, or otherwise) except for liabilities or obligations
reflected or reserved against in the Balance Sheet and current liabilities
incurred by the payment of a dividend on its Shares and current liabilities
incurred in the Ordinary Course of Business since the respective dates thereof.
3.11. TAXES. The Company's liabilities for income, excise, ad valorem,
employment, value added (sales), withholding, and other taxes ("Taxes") are as
shown on the Balance Sheet at the Balance Sheet date. The Company has not
incurred any other Taxes after that date except in the ordinary course of
business.
3.12. NO MATERIAL ADVERSE CHANGE. Since the date of the Balance Sheet,
there has not been any material adverse change in the business, operations,
properties, prospects, assets, or condition of the Company, and no event has
occurred or circumstance exists that may result in such a material adverse
change.
3.13. EMPLOYEE BENEFITS.
The Company currently provides to its employees all benefits required
by law. There are no unfunded employee benefits at the Balance Sheet date that
are not reflected on the Balance Sheet. Any other unfunded employee benefits
which have arisen after that date are only those which arise in the ordinary
course of business.
3.14. COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.
(a) Unless otherwise set forth in the notes to the Balance
Sheet:
(i) the Company is in full compliance with each
Legal Requirement that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its assets;
(ii) no event has occurred or circumstance exists
that (with or without notice or lapse of time) (A) may constitute or result in
a violation by the Company of, or a failure on the part of the Company to
comply with, any Legal Requirement, or (B) may give rise
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to any obligation on the part of the Company to undertake, or to bear all or
any portion of the cost of, any remedial action of any nature; and
(iii) the Company has not received, at any time
since January 1, 1994, any notice or other communication (whether oral or
written) from any Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of, or failure to comply
with, any Legal Requirement, or (B) any actual, alleged, possible, or potential
obligation on the part of the Company to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature.
(b) [RESERVED.]
3.15. LEGAL PROCEEDINGS; ORDERS.
(a) There is no pending Proceeding:
(i) that has been commenced by or against the
Company or that otherwise relates to or may affect the business of, or any of
the assets owned or used by, the Company; or
(ii) that challenges, or that may have the effect
of preventing, delaying, making illegal, or otherwise interfering with, any of
the Contemplated Transactions.
To the Knowledge of Seller and the Company, (1) no such Proceeding has
been Threatened, and (2) no event has occurred or circumstance exists that may
give rise to or serve as a basis for the commencement of any such Proceeding.
(b) Except as set forth in notes to the Balance Sheet:
(i) there is no Order to which any of the Company,
or any of the assets owned or used by the Company, is subject;
(ii) Seller is subject to any Order that relates to
the business of, or any of the assets owned or used by, the Company; and
(iii) to the Knowledge of Seller and the Company,
no officer, director, agent, or employee of the Company is subject to any Order
that prohibits such officer, director, agent, or employee from engaging in or
continuing any conduct, activity, or practice relating to the business of the
Company.
(c) [RESERVED.]
3.16. ABSENCE OF CERTAIN CHANGES AND EVENTS. Since the date of the
Balance Sheet, the Company have conducted their businesses only in the Ordinary
Course of Business and there has not been any:
(a) change in the Company's authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital stock
of the Company; issuance of any security
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convertible into such capital stock; grant of any registration rights;
purchase, redemption, retirement, or other acquisition by the Company of any
shares of any such capital stock; or declaration or payment of any dividend or
other distribution or payment in respect of shares of capital stock;
(b) any amendment to the Organizational Documents of the
Company;
(c) payment or increase by the Company of any bonuses,
salaries, or other compensation to any stockholder, director, officer, or
(except in the Ordinary Course of Business) employee or entry into any
employment, severance, or similar Contract with any director, officer, or
employee;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any employees
of the Company;
(e) damage to or destruction or loss of any asset or property
of the Company, whether or not covered by insurance, materially and adversely
affecting the properties, assets, business, financial condition, or prospects
of the Company, taken as a whole;
(f) entry into, termination of, or receipt of notice of
termination of (i) any license, distributorship, dealer, sales representative,
joint venture, credit, or similar agreement, or (ii) any Contract or
transaction involving a total remaining commitment by or to the Company of at
least $250,000;
(g) sale (other than sales of inventory in the Ordinary
Course of Business), lease, or other disposition of any asset or property of
the Company or mortgage, pledge, or imposition of any lien or other encumbrance
on any material asset or property of the Company, including the sale, lease, or
other disposition of any of the Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a
value to the Company in excess of $250,000;
(i) material change in the accounting methods used by the
Company; or
(j) agreement, whether oral or written, by the Company to do
any of the foregoing.
3.17. CONTRACTS; NO DEFAULTS.
(a) The Disclosure Letter contains a complete and accurate
list of:
(i) each Applicable Contract that involves
performance of services or delivery of goods or materials by one or more
Company of an amount or value in excess of $250,000;
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(ii) each Applicable Contract that involves
performance of services or delivery of goods or materials to one or more
Company of an amount or value in excess of $250,000;
(iii) each Applicable Contract that was not entered
into in the Ordinary Course of Business and that involves expenditures or
receipts of one or more Company in excess of $250,000;
(iv) each lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and other Applicable
Contract affecting the ownership of, leasing of, title to, use of, or any
leasehold or other interest in, any real or personal property (except personal
property leases and installment and conditional sales agreements having a value
per item or aggregate payments of less than $250,000 and with terms of less
than one year);
(v) each licensing agreement or other Applicable
Contract with respect to patents, trademarks, copyrights, or other intellectual
property, including agreements with current or former employees, consultants,
or contractors regarding the appropriation or the non-disclosure of any of the
Intellectual Property Assets;
(vi) each joint venture, partnership, and other
Applicable Contract (however named) involving a sharing of profits, losses,
costs, or liabilities by the Company with any other Person;
(vii) each Applicable Contract containing covenants
that in any way purport to restrict the business activity of the Company or any
Affiliate of the Company or limit the freedom of the Company or any Affiliate
of the Company to engage in any line of business or to compete with any Person;
(viii) each Applicable Contract providing for
payments to or by any Person based on sales, purchases, or profits, other
than direct payments for goods;
(ix) each power of attorney that is currently
effective and outstanding;
(x) each Applicable Contract entered into other
than in the Ordinary Course of Business that contains or provides for an
express undertaking by the Company to be responsible for consequential damages;
(xi) each Applicable Contract for capital
expenditures in excess of $250,000;
(xii) each written warranty, guaranty, and or other
similar undertaking with respect to contractual performance extended by the
Company other than in the Ordinary Course of Business; and
(xiii) each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.
(b) Except as set forth in the Disclosure Letter:
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(i) Seller (and no Related Person of Seller) has
or may acquire any rights under, and Seller has or may become subject to any
obligation or liability under, any Contract that relates to the business of, or
any of the assets owned or used by, the Company; and
(ii) to the Knowledge of Seller and the Company, no
officer, director, agent, employee, consultant, or contractor of the Company is
bound by any Contract that purports to limit the ability of such officer,
director, agent, employee, consultant, or contractor to (A) engage in or
continue any conduct, activity, or practice relating to the business of the
Company, or (B) assign to the Company or to any other Person any rights to any
invention, improvement, or discovery.
(c) Except as set forth in the Disclosure Letter, each
Contract identified or required to be identified in the Disclosure Letter is in
full force and effect and is valid and enforceable in accordance with its
terms.
(d) Except as set forth in the Disclosure Letter:
(i) the Company is, and at all times since January
1, 1994 has been, in full compliance with all applicable terms and requirements
of each Contract under which the Company has or had any obligation or liability
or by which the Company or any of the assets owned or used by the Company is or
was bound;
(ii) each other Person that has or had any
obligation or liability under any Contract under which the Company has or had
any rights is, and at all times since January 1, 1994 has been, in full
compliance with all applicable terms and requirements of such Contract;
(iii) no event has occurred or circumstance exists
that (with or without notice or lapse of time) may contravene, conflict with,
or result in a violation or breach of, or give the Company or other Person the
right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any Applicable
Contract; and
(iv) the Company has not given to or received from
any other Person, at any time since January 1, 1994, any notice or other
communication (whether oral or written) regarding any actual, alleged,
possible, or potential violation or breach of, or default under, any Contract.
(e) There are no renegotiations of, attempts to renegotiate,
or outstanding rights to renegotiate any material amounts paid or payable to
the Company under current or completed Contracts with any Person and, to the
Knowledge of Seller and the Company, no such Person has made written demand for
such renegotiation.
(f) The Contracts relating to the sale, design, manufacture,
or provision of products or services by the Company have been entered into in
the Ordinary Course of Business and have been entered into without the
commission of any act alone or in concert with any other Person, or any
consideration having been paid or promised, that is or would be in violation of
any Legal Requirement.
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3.18. INSURANCE. [RESERVED.]
3.19. ENVIRONMENTAL MATTERS. [RESERVED.]
3.20. EMPLOYEES. There are no retired employees entitled to benefits
from the Company; no union represents any Company employees; there are no
grievances by or disputes with any employee or former employee.
3.21. LABOR RELATIONS; COMPLIANCE. [RESERVED.]
3.22. INTELLECTUAL PROPERTY.
The Company owns the Company's name, all fictional business names,
trading names, registered and unregistered trademarks, service marks, and
applications used by it (collectively, "Marks"). The Company does not own any
patents, patent applications, and inventions and discoveries that may be
patentable (collectively, "Patents") or any copyrights in published or
unpublished works (collectively, "Copyrights"). The Company owns all know-how,
trade secrets, confidential information, customer lists, software, technical
information, data, process technology, plans, drawings, and blue prints
(collectively, "Trade Secrets") owned, used, or licensed by the Company as
licensee or licensor.
The Company does not pay or receive any royalties and is not
a party to any licenses except for any license implied by the sale of a product
and perpetual, paid-up licenses for commonly available software programs with a
value of less than $250,000 under which the Company is the licensee. There are
no outstanding and, to Seller's Knowledge, no Threatened disputes or
disagreements with respect to any such agreement.
The Disclosure Letter contains a complete and accurate list
and summary description of all Marks. The Marks are free and clear of all
liens, security interests, charges, encumbrances, equities, and other adverse
claims.
3.23. CERTAIN PAYMENTS. Since January 1, 1994, neither the Company nor
any director, officer, agent, or employee of the Company, or to Seller's
Knowledge any other Person associated with or acting for or on behalf of the
Company, has directly or indirectly (a) made any contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other payment to any Person,
private or public, regardless of form, whether in money, property, or services
(i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain special concessions
or for special concessions already obtained, for or in respect of the Company
or any Affiliate of the Company, or (iv) in violation of any Legal Requirement,
(b) established or maintained any fund or asset that has not been recorded in
the books and records of the Company.
3.24. DISCLOSURE.
(a) No representation or warranty of Seller in this Agreement
and no statement in the Disclosure Letter omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
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(b) There is no fact known to Seller that has specific
application to Seller or the Company (other than general economic or industry
conditions) and that materially adversely affects the assets, business,
prospects, financial condition, or results of operations of the Company that
has not been set forth in this Agreement or the Disclosure Letter.
3.25. RELATIONSHIPS WITH RELATED PERSONS. No Seller or any Related
Person of Seller or of the Company has, or since January 1, 1994 has had, any
interest in any property (whether real, personal, or mixed and whether tangible
or intangible), used in or pertaining to the Company' businesses.
No Seller or any Related Person of Seller or of the Company is, or
since January 1, 1994 has owned (of record or as a beneficial owner) an equity
interest or any other financial or profit interest in, a Person that has (i)
had business dealings or a material financial interest in any transaction with
the Company other than business dealings or transactions conducted in the
Ordinary Course of Business with Melita International Corporation, or (ii)
engaged in competition with the Company with respect to any line of the
products or services of the Company (a "Competing Business") in any market
presently served by the Company. Except as set forth in the Disclosure Letter,
no Seller or any Related Person of Seller or of the Company is a party to any
Contract with, or has any claim or right against, the Company.
3.26. BROKERS OR FINDERS. [RESERVED.]
3.27. CONSENTS. At the Closing Date, the Seller will have obtained
such consents as may be necessary to permit the Closing to occur without
causing the Company to incur any lien or liability.
4. REPRESENTATIONS AND WARRANTIES OF BUYER [RESERVED.]
5. COVENANTS OF SELLER PRIOR TO CLOSING DATE
5.1. ACCESS AND INVESTIGATION. [RESERVED.]
5.2. OPERATION OF THE BUSINESSES OF THE COMPANY. Between the date of
this Agreement and the Closing Date, Seller will, and will cause the Company
to:
(a) conduct the business of the Company only in the Ordinary
Course of Business;
(b) use their Best Efforts to preserve intact the current
business organization of the Company, keep available the services of the
current officers, employees, and agents of the Company, and maintain the
relations and good will with suppliers, customers, landlords, creditors,
employees, agents, and others having business relationships with the Company;
(c) confer with Buyer concerning operational matters of a
material nature; and
(d) otherwise report periodically to Buyer concerning the
status of the business, operations, and finances of the Company.
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5.3. NEGATIVE COVENANT. Except as otherwise expressly permitted by
this Agreement, between the date of this Agreement and the Closing Date, Seller
will not, and will cause the Company not to, without the prior consent of
Buyer, take any affirmative action, or fail to take any reasonable action
within their or its control, as a result of which any of the changes or events
listed in Section 3.16 is likely to occur.
5.4. REQUIRED APPROVALS. [RESERVED.]
5.5. NOTIFICATION. [RESERVED.]
5.6. PAYMENT OF INDEBTEDNESS BY RELATED PERSONS. [RESERVED.]
5.7. NO NEGOTIATION. [RESERVED.]
5.8. BEST EFFORTS. Between the date of this Agreement and the Closing
Date, Seller will use their Best Efforts to cause the conditions in Sections 7
and 8 to be satisfied.
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE
6.1. APPROVALS OF GOVERNMENTAL BODIES. [RESERVED.]
6.2. BEST EFFORTS. [RESERVED.]
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
7.1. ACCURACY OF REPRESENTATIONS.
(a) All of Seller's representations and warranties in this
Agreement (considered collectively), and each of these representations and
warranties (considered individually), must have been accurate in all material
respects as of the date of this Agreement, and must be accurate in all material
respects as of the Closing Date as if made on the Closing Date, without giving
effect to any supplement to the Disclosure Letter.
(b) Each of Seller's representations and warranties in
Sections 3.3, 3.4, 3.12, and 3.24 must have been accurate in all respects as of
the date of this Agreement, and must be accurate in all respects as of the
Closing Date as if made on the Closing Date, without giving effect to any
supplement to the Disclosure Letter.
7.2. SELLER'S PERFORMANCE. All of the covenants and obligations that
Seller is required to perform or to comply with pursuant to this Agreement at
or prior to the Closing (considered collectively), and each of these covenants
and obligations (considered individually), must have been duly performed and
complied with in all material respects.
7.3. CONSENTS. [RESERVED.]
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7.4. ADDITIONAL DOCUMENTS. [RESERVED.]
7.5. NO PROCEEDINGS. [RESERVED.]
7.6. NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. There must
not have been made or Threatened by any Person any claim asserting that such
Person (a) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any stock of, or any other
voting, equity, or ownership interest in, any of the Company, or (b) is
entitled to all or any portion of the Buyer's Stock exchanged for the Shares.
7.7. NO PROHIBITION. [RESERVED.]
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Seller, in whole or in part):
8.1. ACCURACY OF REPRESENTATIONS. [RESERVED.]
8.2. BUYER'S PERFORMANCE. All of the covenants and obligations that
Buyer is required to perform or to comply with pursuant to this Agreement at or
prior to the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and complied
with in all material respects.
8.3. CONSENTS. [RESERVED.]
8.4. ADDITIONAL DOCUMENTS. [RESERVED.]
8.5. NO INJUNCTION. There must not be in effect any Legal Requirement
or any injunction or other Order that (a) prohibits the sale of the Shares by
Seller to Buyer, and (b) has been adopted or issued, or has otherwise become
effective, since the date of this Agreement.
9. TERMINATION
9.1. TERMINATION EVENTS. This Agreement may, by notice given prior to
or at the Closing, be terminated by either Buyer or by ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as
attorney-in-fact for the Seller.
9.2. EFFECT OF TERMINATION. If this Agreement is terminated pursuant
to Section 9.1, all further obligations of the parties under this Agreement
will terminate, except that the obligations in Section 11.1 will survive.
10. INDEMNIFICATION; REMEDIES
10.1. SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE.
All representations, warranties, covenants, and obligations in this Agreement,
the Disclosure Letter, the supplements to the Disclosure Letter, the
certificate delivered pursuant to Section 2.4(a)(ii),
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and any other certificate or document delivered pursuant to this Agreement will
survive the Closing.
The right to indemnification, payment of Damages or other remedy based
on such representations, warranties, covenants, and obligations will not be
affected by any investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time, whether before or after
the execution and delivery of this Agreement or the Closing Date, with respect
to the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation.
The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment
of Damages, or other remedy based on such representations, warranties,
covenants, and obligations.
10.2. INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER. Seller will
indemnify and hold harmless Buyer, the Company, and their respective
Representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability, claim, damage (including incidental
and consequential damages), expense (including costs of investigation and
defense and reasonable attorneys' fees) or diminution of value, whether or not
involving a third- party claim (collectively, "Damages"), arising, directly or
indirectly, from or in connection with any Breach of any representation or
warranty made by Seller in this Agreement as if such representation or warranty
were made on and as of the Closing Date without giving effect to any supplement
to the Disclosure Letter, other than any such Breach that is disclosed in a
supplement to the Disclosure Letter and is expressly identified in the
certificate delivered pursuant to Section 2.4(a)(ii) as having caused the
condition specified in Section 7.1 not to be satisfied;
The remedies provided in this Section 10.2 will not be exclusive of or
limit any other remedies that may be available to Buyer or the other
Indemnified Persons.
10.3. INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER--ENVIRONMENTAL
MATTERS.
[RESERVED.]
10.4. INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. [RESERVED.]
10.5. TIME LIMITATIONS. If the Closing occurs, Seller will have no
liability (for indemnification or otherwise) with respect to any representation
or warranty, or covenant or obligation to be performed and complied with prior
to the Closing Date, other than those in Section 3.3, unless on or before
December 31, 1999, Buyer notifies Seller of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known by Buyer; a
claim with respect to Section 3.3, or a claim for indemnification or
reimbursement not based upon any representation or warranty or any covenant or
obligation to be performed and complied with prior to the Closing Date, may be
made at any time.
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If the Closing occurs, Buyer will have no liability (for
indemnification or otherwise) with respect to any representation or warranty,
or covenant or obligation to be performed and complied with prior to the
Closing Date.
10.6. LIMITATIONS ON AMOUNT--SELLER. [RESERVED.]
10.7. LIMITATIONS ON AMOUNT--BUYER. [RESERVED.]
10.8. ESCROW [RESERVED]; RIGHT OF SET-OFF. Upon notice to Seller
specifying in reasonable detail the basis for such set-off, Buyer may set off
any amount to which it may be entitled under this Section 10 against amounts
otherwise payable to Seller. Neither the exercise of nor the failure to
exercise such right of set- off will constitute an election of remedies or
limit Buyer in any manner in the enforcement of any other remedies that may be
available to it.
10.9. PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.
(a) Promptly after receipt by an indemnified party under
Section 10.2 of notice of the commencement of any Proceeding against it, such
indemnified party will, if a claim is to be made against an indemnifying party
under such Section, give notice to the indemnifying party of the commencement
of such claim, but the failure to notify the indemnifying party will not
relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party
demonstrates that the defense of such action is prejudiced by the indemnifying
party's failure to give such notice.
(b) If any Proceeding referred to in Section 10.9(a) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party will be
entitled to participate in such Proceeding and, to the extent that it wishes
(unless (i) the indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint representation would be
inappropriate, or (ii) the indemnifying party fails to provide reasonable
assurance to the indemnified party of its financial capacity to defend such
Proceeding and provide indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel satisfactory to the
indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this Section 10 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding,
in each case subsequently incurred by the indemnified party in connection with
the defense of such Proceeding, other than reasonable costs of investigation.
If the indemnifying party assumes the defense of a
Proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that Proceeding are within the scope of and
subject to indemnification; (ii) no compromise or settlement of such claims may
be effected by the indemnifying party without the indemnified party's consent
unless (A) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and no effect on any
other claims that may be made against the indemnified party, and (B) the sole
relief provided is monetary damages that are paid in full by
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the indemnifying party; and (iii) the indemnified party will have no liability
with respect to any compromise or settlement of such claims effected without
its consent.
If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding
or any compromise or settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such Proceeding,
but the indemnifying party will not be bound by any determination of a
Proceeding so defended or any compromise or settlement effected without its
consent (which may not be unreasonably withheld).
(d) Seller hereby consents to the non-exclusive jurisdiction
of any court in which a Proceeding is brought against any Indemnified Person
for purposes of any claim that an Indemnified Person may have under this
Agreement with respect to such Proceeding or the matters alleged therein, and
agree that process may be served on Seller with respect to such a claim
anywhere in the world.
10.10. PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.
11. GENERAL PROVISIONS
11.1. EXPENSES. The Buyer will bear expenses incurred in connection
with the preparation, execution, and performance of this Agreement and the
Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants.
11.2. PUBLIC ANNOUNCEMENTS. [RESERVED.]
11.3. CONFIDENTIALITY. [RESERVED.]
11.4. NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other addresses
and telecopier numbers as a party may designate by notice to the other
parties):
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Seller: Szlam Partners, L.P.
c/o Szlam Management Company, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: _______________
Buyer: Melita International Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
11.5. JURISDICTION; SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Georgia, County of Gwinnett, or, if it has or can acquire jurisdiction, in
the United States District Court for the Northern District of Georgia, and each
of the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred
to in the preceding sentence may be served on any party anywhere in the world.
11.6. FURTHER ASSURANCES. [RESERVED.]
11.7. WAIVER. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege.
To the maximum extent permitted by applicable law, (a) no
claim or right arising out of this Agreement or the documents referred to in
this Agreement can be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be a waiver of any obligation of such party or of
the right of the party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the documents
referred to in this Agreement.
11.8. ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
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11.9. DISCLOSURE LETTER.
(a) The disclosures in the Disclosure Letter must relate only
to the representations and warranties in the Section of the Agreement to which
they expressly relate and not to any other representation or warranty in this
Agreement.
(b) In the event of any inconsistency between the statements
in the body of this Agreement and those in the Disclosure Letter (other than an
exception expressly set forth as such in the Disclosure Letter with respect to
a specifically identified representation or warranty), the statements in the
body of this Agreement will control.
11.10. ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
11.11. SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or
unenforceable.
11.12. SECTION HEADINGS, CONSTRUCTION. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
11.13. TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
11.14. GOVERNING LAW. [RESERVED.]
11.15. COUNTERPARTS. [RESERVED.]
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
BUYER: SELLER:
MELITA INTERNATIONAL SZLAM PARTNERS, L.P.
CORPORATION
By:
-------------------------------------
By: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as Manager, for
--------------------------------- Szlam Management Company, LLC
President
The Exchange price is shares of Buyer's Stock.
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25
TABLE OF CONTENTS
Page
----
1. DEFINITIONS....................................................................................................1
2. SALE AND TRANSFER OF SHARES; CLOSING...........................................................................5
2.1. SHARES.......................................................................................................5
2.2. EXCHANGE PRICE...............................................................................................5
2.3. CLOSING......................................................................................................6
2.4. CLOSING OBLIGATIONS..........................................................................................6
3. REPRESENTATIONS AND WARRANTIES OF SELLER.......................................................................6
3.1. ORGANIZATION AND GOOD STANDING...............................................................................6
3.2. AUTHORITY; NO CONFLICT.......................................................................................7
3.3. CAPITALIZATION...............................................................................................8
3.4. FINANCIAL STATEMENTS.........................................................................................8
3.5. BOOKS AND RECORDS............................................................................................8
3.6. TITLE TO PROPERTIES; ENCUMBRANCES............................................................................9
3.7. CONDITION AND SUFFICIENCY OF ASSETS..........................................................................9
3.8. ACCOUNTS RECEIVABLE..........................................................................................9
3.9. INVENTORY....................................................................................................9
3.10. NO UNDISCLOSED LIABILITIES..................................................................................9
3.11. TAXES.......................................................................................................9
3.12. NO MATERIAL ADVERSE CHANGE..................................................................................9
3.13. EMPLOYEE BENEFITS...........................................................................................9
3.14. COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.............................................9
3.15. LEGAL PROCEEDINGS; ORDERS..................................................................................10
3.16. ABSENCE OF CERTAIN CHANGES AND EVENTS......................................................................10
3.17. CONTRACTS; NO DEFAULTS.....................................................................................11
3.18. INSURANCE..................................................................................................14
3.19. ENVIRONMENTAL MATTERS......................................................................................14
3.20. EMPLOYEES..................................................................................................14
3.21. LABOR RELATIONS; COMPLIANCE................................................................................14
3.22. INTELLECTUAL PROPERTY......................................................................................14
3.23. CERTAIN PAYMENTS...........................................................................................14
3.24. DISCLOSURE.................................................................................................14
3.25. RELATIONSHIPS WITH RELATED PERSONS.........................................................................15
3.26. BROKERS OR FINDERS.........................................................................................15
3.27. CONSENTS...................................................................................................15
4. REPRESENTATIONS AND WARRANTIES OF BUYER.......................................................................15
5. COVENANTS OF SELLER PRIOR TO CLOSING DATE.....................................................................15
5.1. ACCESS AND INVESTIGATION....................................................................................15
5.2. OPERATION OF THE BUSINESSES OF THE COMPANY..................................................................15
5.3. NEGATIVE COVENANT...........................................................................................16
5.4. REQUIRED APPROVALS..........................................................................................16
5.5. NOTIFICATION................................................................................................16
5.6. PAYMENT OF INDEBTEDNESS BY RELATED PERSONS..................................................................16
5.7. NO NEGOTIATION..............................................................................................16
5.8. BEST EFFORTS................................................................................................16
(i)
26
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE......................................................................16
6.1. APPROVALS OF GOVERNMENTAL BODIES............................................................................16
6.2. BEST EFFORTS................................................................................................16
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE...........................................................16
7.1. ACCURACY OF REPRESENTATIONS.................................................................................16
7.2. SELLER'S PERFORMANCE........................................................................................16
7.3. CONSENTS....................................................................................................16
7.4. ADDITIONAL DOCUMENTS........................................................................................17
7.5. NO PROCEEDINGS..............................................................................................17
7.6. NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS.........................................................17
7.7. NO PROHIBITION..............................................................................................17
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE..........................................................17
8.1. ACCURACY OF REPRESENTATIONS.................................................................................17
8.2. BUYER'S PERFORMANCE.........................................................................................17
8.3. CONSENTS....................................................................................................17
8.4. ADDITIONAL DOCUMENTS........................................................................................17
8.5. NO INJUNCTION...............................................................................................17
9. TERMINATION...................................................................................................17
9.1. TERMINATION EVENTS..........................................................................................17
9.2. EFFECT OF TERMINATION.......................................................................................17
10. INDEMNIFICATION; REMEDIES....................................................................................17
10.1. SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE...............................................17
10.2. INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER...........................................................18
10.3. INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER--ENVIRONMENTAL MATTERS....................................18
10.4. INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER............................................................18
10.5. TIME LIMITATIONS...........................................................................................18
10.6. LIMITATIONS ON AMOUNT--SELLER..............................................................................19
10.7. LIMITATIONS ON AMOUNT--BUYER...............................................................................19
10.8. ESCROW [RESERVED]; RIGHT OF SET-OFF........................................................................19
10.9. PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS..........................................................19
10.10. PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS...............................................................20
11. GENERAL PROVISIONS...........................................................................................20
11.1. EXPENSES...................................................................................................20
11.2. PUBLIC ANNOUNCEMENTS.......................................................................................20
11.3. CONFIDENTIALITY............................................................................................20
11.4. NOTICES....................................................................................................20
11.5. JURISDICTION; SERVICE OF PROCESS...........................................................................21
11.6. FURTHER ASSURANCES.........................................................................................21
11.7. WAIVER.....................................................................................................21
11.8. ENTIRE AGREEMENT AND MODIFICATION..........................................................................21
11.9. DISCLOSURE LETTER..........................................................................................22
11.10. ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS........................................................22
11.11. SEVERABILITY..............................................................................................22
11.12. SECTION HEADINGS, CONSTRUCTION............................................................................22
11.13. TIME OF ESSENCE...........................................................................................22
11.14. GOVERNING LAW.............................................................................................22
11.15. COUNTERPARTS..............................................................................................22
(ii)