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ASSET PURCHASE AGREEMENT
DATED AS OF APRIL 23, 1999
BY AND AMONG
OMNITECH CONSULTING GROUP, INC.
AND
THE PERSONS IDENTIFIED HEREIN AS ITS STOCKHOLDERS
AND
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II SALE AND PURCHASE OF PURCHASED ASSETS . . . . . . . . . . . . 7
2.1 Sale and Purchase of Purchased Assets . . . . . . . . . . . . 7
2.2 Payment of the Purchase Price . . . . . . . . . . . . . . . . 7
2.3 Earn-Out Adjustment . . . . . . . . . . . . . . . . . . . . . 8
2.4 Earn-Out Payments . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Net Worth Adjustment. . . . . . . . . . . . . . . . . . . . . 9
2.6 Net Worth Payment . . . . . . . . . . . . . . . . . . . . . . 9
2.7 Assumption of Liabilities . . . . . . . . . . . . . . . . . . 10
2.8 Sales and Transfer Taxes. . . . . . . . . . . . . . . . . . . 10
2.9 Allocation. . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS.... 11
3.1 Corporate Status; Authority of Sellers; Enforceability. . . . 11
3.2 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . 12
3.3 Intellectual Property . . . . . . . . . . . . . . . . . . . . 12
3.4 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . 13
3.6 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 Personnel Identification and Compensation . . . . . . . . . . 13
3.8 [INTENTIONALLY DELETED] . . . . . . . . . . . . . . . . . . . 13
3.9 Stockholders. . . . . . . . . . . . . . . . . . . . . . . . . 13
3.10 [INTENTIONALLY DELETED] . . . . . . . . . . . . . . . . . . . 13
3.11 Certain Transactions. . . . . . . . . . . . . . . . . . . . . 13
3.12 Employee Benefit Matters. . . . . . . . . . . . . . . . . . . 14
3.13 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.14 Title to Assets; Condition. . . . . . . . . . . . . . . . . . 15
3.15 Real Property . . . . . . . . . . . . . . . . . . . . . . . . 16
3.16 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.17 Licenses and Permits. . . . . . . . . . . . . . . . . . . . . 16
3.18 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.19 Financial Statements. . . . . . . . . . . . . . . . . . . . . 16
3.20 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . 16
3.21 Conduct of Business Since Reference Balance Sheet Date. . . . 16
3.22 Broker's or Consultant's Fees . . . . . . . . . . . . . . . . 17
3.23 Banking Arrangements. . . . . . . . . . . . . . . . . . . . . 17
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3.24 Independent Investigation. . . . . . . . . . . . . . . . . . . 17
3.25 Restrictions on Transfer . . . . . . . . . . . . . . . . . . . 18
3.26 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . . . . . . . . 18
4.1 Corporate Status; Due Authorization. . . . . . . . . . . . . . 18
4.2 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.3 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . 19
4.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.5 Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.6 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 19
4.7 Broker's or Consultant's Fees. . . . . . . . . . . . . . . . . 19
4.8 Reports and Financial Statements . . . . . . . . . . . . . . . 19
4.9 Absence of Certain Changes or Events . . . . . . . . . . . . . 20
4.10 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.1 Non-Transferrable Contracts. . . . . . . . . . . . . . . . . . 20
5.2 General Restrictions on Transfer . . . . . . . . . . . . . . . 20
5.3 Name Change; D/B/A Names . . . . . . . . . . . . . . . . . . . 21
5.4 Change of Control. . . . . . . . . . . . . . . . . . . . . . . 21
5.5 Internal Revenue Forms . . . . . . . . . . . . . . . . . . . . 22
5.6 Miscellaneous Actions. . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VI CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.1 Time and Place . . . . . . . . . . . . . . . . . . . . . . . . 23
6.2 Closing Transactions . . . . . . . . . . . . . . . . . . . . . 23
6.3 Deliveries by Sellers to Purchaser . . . . . . . . . . . . . . 23
6.4 Deliveries by Purchaser to Seller. . . . . . . . . . . . . . . 24
ARTICLE VII OTHER AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . 25
7.1 Further Assurance. . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . 25
7.3 Employment Matters . . . . . . . . . . . . . . . . . . . . . . 26
7.4 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . 26
7.5 Non-Competition Agreement. . . . . . . . . . . . . . . . . . . 26
ARTICLE VIII INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 27
8.1 Indemnification by Seller. . . . . . . . . . . . . . . . . . . 27
8.2 Indemnification by Purchaser . . . . . . . . . . . . . . . . . 28
8.3 Procedure for Indemnification. . . . . . . . . . . . . . . . . 28
8.4 Limitations on Indemnity . . . . . . . . . . . . . . . . . . . 28
8.5 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.6 Set-Off. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IX SELLER'S REPRESENTATIVE. . . . . . . . . . . . . . . . . . . . 30
9.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 30
9.3 Irrevocable Appointment. . . . . . . . . . . . . . . . . . . . 31
9.4 Resignation. . . . . . . . . . . . . . . . . . . . . . . . . . 31
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9.5 Purchaser's Reliance. . . . . . . . . . . . . . . . . . . . . 31
9.6 Exculpation and Indemnification . . . . . . . . . . . . . . . 31
ARTICLE IX MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . 31
10.1 Post-Closing Deliveries . . . . . . . . . . . . . . . . . . . 31
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.3 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.4 Benefit of the Agreement. . . . . . . . . . . . . . . . . . . 33
10.5 Exhibits and Schedules. . . . . . . . . . . . . . . . . . . . 33
10.6 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.7 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 33
10.8 Modifications and Waivers . . . . . . . . . . . . . . . . . . 33
10.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 33
10.10 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 33
10.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 33
10.12 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.13 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . 34
EXHIBITS
Exhibit A Form of Assumption Agreement
Exhibit B Form of ▇▇▇▇ of Sale and Assignment
Exhibit C Form of Promissory Note
Exhibit D Earn-Out Formula
Exhibit E Allocation of Purchase Price
Exhibit F Form of Withholding Certificate
Exhibit G Form of Employment Agreement
SCHEDULES
Schedule 1.2 Retained Assets
Schedule 2.7 Plan Liabilities
Schedule 3.1 Corporate Status
Schedule 3.3 Intellectual Property
Schedule 3.4 Contracts
Schedule 3.6 Litigation
Schedule 3.7 Personnel Identification and Compensation
Schedule 3.11 Certain Transactions
Schedule 3.12 Employee Benefit Matters
Schedule 3.14 Title to Assets
Schedule 3.15 Leased Real Property
Schedule 3.16 Consents
Schedule 3.17 Licenses and Permits
Schedule 3.18 Insurance
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Schedule 3.19 Financial Statements
Schedule 3.20 Undisclosed Liabilities
Schedule 3.21 Conduct of Business
Schedule 3.22 Broker's or Consultant's Fees
Schedule 3.23 Banking Arrangements
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of this 23rd day of April,
1999 by and among DIAMOND TECHNOLOGY PARTNERS INCORPORATED, a Delaware
corporation (together with its successors and permitted assigns, "Purchaser"),
the individuals identified on the signature page hereto as "Stockholders"
(each, a "Stockholder", and collectively, the "Stockholders"), and Omnitech
Consulting Group, Inc., an Illinois corporation ("Seller").
RECITALS
WHEREAS, Seller wishes to sell and transfer substantially all of its assets
and substantially all of its liabilities to Purchaser, and Purchaser wishes to
purchase such assets from and assume such liabilities of Seller, all as more
fully described below;
WHEREAS, Stockholders, collectively, own all of the issued and outstanding
shares of capital stock of Seller and, as a result of the transactions
contemplated under this Agreement, will receive direct and indirect benefits;
and
WHEREAS, Seller is engaged in the business of providing and building custom
management, sales and marketing training programs (the "Business");
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
agreements and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Purchaser, Stockholders and Seller hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 GENERAL. Each term defined in the first paragraph of this Agreement
and in the Recitals shall have the meaning set forth above whenever used herein,
unless otherwise expressly provided or unless the context clearly requires
otherwise.
1.2 DEFINITIONS. As used herein, the following terms shall have the
meanings ascribed to them in this Section 1.2:
ACCOUNTS RECEIVABLE. All rights to payment for goods sold or services
rendered whether or not earned by performance, including, without limitation,
all accounts or notes receivable owned or held by Seller and accrued on the
books of Seller in accordance with GAAP (as hereafter defined).
ADVERSE CONSEQUENCES. All allegations, charges, complaints, actions,
suits, proceedings, hearings, investigations, claims, demands, judgments,
orders, decrees, stipulations, injunctions,
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damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities,
Taxes, interest, Liens, losses, expenses and fees, including all reasonable
accounting, consultant and attorneys' fees and court costs, costs of expert
witnesses and other expenses of litigation.
AFFILIATE. As set forth in Rule 12b-2 of the regulations promulgated under
the Securities Exchange Act of 1934.
AGREEMENT. This Asset Purchase Agreement, together with all Exhibits and
Schedules referred to herein, as amended, modified or supplemented from time to
time in accordance with the terms hereof.
ASSUMPTION AGREEMENT. The Assumption Agreement between Purchaser and
Seller substantially in the form of Exhibit A hereto.
AUTHORITY. Any governmental, regulatory or administrative body, agency or
authority, any court of judicial authority, any arbitrator or any public,
private or industry regulatory authority, whether foreign, federal, state or
local.
▇▇▇▇ OF SALE AND ASSIGNMENT. The ▇▇▇▇ of Sale and Assignment between
Purchaser and Seller substantially in the form of Exhibit B hereto.
BOARD. As defined in Section 5.4.
BUSINESS. As defined in the Recitals hereto.
CHANGE OF CONTROL. As defined in Section 5.4.
CLOSING. The conveyance, transfer, assignment and delivery of the
Purchased Assets to Purchaser, and the assumption of the Liabilities of Seller
(excluding the Retained Liabilities) by Purchaser, in exchange for the
consideration payable to Seller pursuant to this Agreement.
CLOSING BALANCE SHEET. As defined in Section 2.5(a).
CODE. Internal Revenue Code of 1986.
CONFIDENTIAL INFORMATION. As defined in Section 7.2(a).
CONTRACTS. All contracts, leases, subleases, arrangements, commitments and
other agreements of Seller, including all customer agreements, vendor
agreements, purchase orders, installation and maintenance agreements, computer
software licenses, hardware lease or rental agreements, contract claims and all
other arrangements and understandings related to the Business.
EMPLOYMENT AGREEMENTS. As defined in Section 6.3(m).
ERISA. Employee Retirement Income Security Act of 1974.
EXCHANGE ACT. Securities Exchange Act of 1934.
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EARN-OUT ADJUSTMENT REPORT. As defined in SECTION 2.3(b).
EARN-OUT CALCULATION. As defined in SECTION 2.3(a).
EARN-OUT SETTLEMENT DATE. As defined in SECTION 2.3(d).
FINANCIAL STATEMENTS. The Reference Balance Sheet and the audited balance
sheets, statements of cash flows and income statements of Seller for the two
(2) years ended December 31, 1996 and 1997 and the unaudited balance sheet and
income statement of Seller for the year ended December 31, 1998, copies of which
are attached hereto as Schedule 3.19.
GAAP. Generally accepted accounting principles consistently applied.
INCUMBENT BOARD. As defined in Section 5.4.
INDEMNIFIED PARTY. As defined in Section 8.3.
INDEMNIFYING PARTY. As defined in Section 8.3.
INDEPENDENT AUDITORS. As defined in Section 2.3(c).
INTELLECTUAL PROPERTY. (i) All discoveries and inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications (either filed or in
preparation for filing), and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions and reexaminations,
(ii) all trademarks, service marks, trade dress, brand names, logos, domain
names, trade names and corporate names, together with all translations,
adaptations, derivations and combinations thereof and including, without
limitation, all goodwill associated therewith, and all applications (either
filed or in preparation for filing), registrations and renewals in connection
therewith, (iii) all copyrightable works (including, without limitation,
computer software), all copyrights and all applications (either filed or in
preparation for filing), registrations and renewals in connection therewith,
(iv) all trade secrets and confidential business information (including, without
limitation, ideas, research and development, know-how, formulas, compositions,
recipes, manufacturing and production processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing and cost
information and business and marketing plans and proposals), (v) all other
proprietary rights currently owned by Seller, (vi) all copies and tangible
embodiments of the foregoing (in whatever form or medium), (vii) all licenses or
agreements in connection with the foregoing, and (viii) the right to ▇▇▇ for
infringement of any of the foregoing rights and to collect damages in such suits
in each case to the extent relating to, or used, useable, or held for use in
connection with the Business.
IRS. Internal Revenue Service.
LAW. Any applicable law, statute, regulation, rule, ordinance,
requirement, announcement or other binding action or requirement of an
Authority.
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LEASED REAL PROPERTY. Those certain parcels of real property subject to
the leases more fully described on Schedule 3.15 to this Agreement.
LIABILITIES. Any obligation or liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated and whether due or to become
due), including, without limitation, any liability for Taxes.
LIEN. Any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, capitalized lease or other title retention agreement) other
than (a) liens for Taxes not yet due and payable, (b) purchase money security
interests, (c) liens securing rent obligations, and (d) other liens arising in
the Ordinary Course of Business and not incurred in connection with the
borrowing of money.
MATERIAL CONTRACTS. As defined in Section 3.4.
NET WORTH. The aggregate amount of stockholder's equity of Seller as of
the Closing determined in accordance with GAAP.
NET WORTH ADJUSTMENT REPORT. As defined in Section 2.5(b).
NET WORTH CALCULATION. As defined in Section 2.5(a).
NET WORTH SETTLEMENT DATE. As defined in Section 2.5(d).
ORDER. Any applicable decree, order, judgment, writ, award, injunction,
stipulation or consent of or by an Authority.
ORDINARY COURSE OF BUSINESS. The ordinary course of business of Seller in
accordance with past custom and practice (including with respect to quantity and
frequency).
OUTSTANDING COMPANY COMMON STOCK. As defined in Section 5.4.
OUTSTANDING COMPANY VOTING SECURITIES. As defined in Section 5.4.
PERMITS. As defined in Section 3.17.
PERSON. Any natural person, corporation, limited liability company,
partnership, firm, joint venture, joint-stock company, trust, association,
Authority, unincorporated entity or organization of any kind.
PLAN. As defined in Section 3.12(a).
PURCHASE PRICE. As defined in Section 2.2.
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PURCHASED ASSETS. All the assets, rights, properties and business of
Seller used or held in the conduct of or in connection with the Business,
whether tangible or intangible, real, personal or mixed, and whenever located
(but, in any event, excluding the Retained Assets), including without
limitation, the following:
(a) the Seller's leasehold interest in the Leased Real Property;
(b) Accounts Receivable, together with all other receivables and loans
owing to Seller;
(c) Seller's Intellectual Property;
(d) all installations, fixtures, improvements, betterments and additions
located on or within the Leased Real Property, machinery, equipment,
appliances, furniture, office furniture, fixtures, office supplies and office
equipment, computers, computer terminals and printers, computer software,
telephone systems, telecopiers and photocopiers, and other tangible personal
property of every kind and description that are located upon or within the
Leased Real Property, which are owned or leased by Seller;
(e) all assignable Permits (including, without limitation, any assignable
permanent certificates of occupancy);
(f) all books of account, ledgers, forms, records, documents, files,
invoices, vendor or supplier lists, business records (excluding corporate minute
books and stock ownership records), plans and other data which are necessary to
or desirable for the ownership, use, maintenance or enjoyment of the Purchased
Assets or the operation of the Business and which are owned or used by Seller,
including, without limitation, all personnel, payroll, payroll tax and labor
relations records, all handbooks, technical manuals and data, engineering
specifications and work papers, all pricing and cost information, all sales
records, all accounting and financial records, all sales and use tax returns,
reports, files and records, asset history records and files, all data entry and
accounting systems used to conduct the day-to-day operations of the Business,
all maintenance and repair records, all correspondence, notices, citations and
all other documents received from, sent to or in Seller's possession in
connection with any Authorities (collectively, the ""Records''); provided,
however, that Seller may retain copies of such Records as are reasonably
necessary to enable Seller to fulfill its regulatory or statutory obligations
after the date hereof;
(g) all sales and marketing plans, projections, studies, reports and other
documents and data (including, without limitation, creative materials,
advertising and promotional matters and current and past lists of customers),
and all training materials and marketing brochures related to the Business;
(h) all cash and cash equivalents, if any (whether on hand or deposit or
in transit), prepaid expenses, deposits and advance payments, other prepaid
items, and all rights of Seller to receive discounts, refunds, rebates, awards
and the like;
(i) Seller's goodwill related to the Business;
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(j) all of Seller's rights and remedies on and after the date hereof,
under warranty or otherwise, against a manufacturer, vendor or other Person for
any defects in any Purchased Asset;
(k) all deposits held by Seller with respect to services to be performed
or products to be delivered after the date hereof;
(l) all other properties, assets and rights of every kind, character or
description which are owned or used by Seller and which are not Retained Assets;
(m) all Contracts and rights under Contracts related to the Business,
including, without limitation, sales orders, customer contracts, equipment
leases, insurance contracts, agreements for the provision of services by Seller
to customers, and other matters used in or related to the Business.
PURCHASER SEC REPORTS. As defined in Section 4.8.
PURCHASER SHARES. As defined in Section 2.2(a)(iii).
PURCHASER WARRANTY CLAIM. As defined in Section 8.1(a).
REFERENCE BALANCE SHEET. The unaudited balance sheet and statement of
income for Seller dated the Reference Balance Sheet Date.
REFERENCE BALANCE SHEET DATE. March 31, 1999.
RELATED ENTITIES. Purchaser, Seller and their respective Affiliates.
REPRESENTATIVE. As defined in Section 9.1.
RETAINED ASSETS. All of the following assets of Seller: (i) any benefit,
right or claim relating to any contract or liability not assumed by Purchaser;
(ii) tax records, corporate books and records of Seller to the extent such
records and books do not relate to the Business; (iii) income or franchise tax
refunds, assessments or charges due to Seller; (iv) any employee benefit or
incentive plan, agreement or arrangement, including without limitation, any
pension, life insurance, profit sharing, bonus, incentive, deferred
compensation, stock purchase, stock option, group insurance, cafeteria, vacation
pay, severance pay or retirement plan, agreement or arrangement (other than
those plans or agreements related to the Liabilities set forth on Schedule 2.7
hereto); (v) rights under this Agreement; and (vi) any other assets identified
under the heading ""Retained Assets'' on Schedule 1.2.
RETAINED LIABILITIES. As defined in Section 2.7(b).
SEC. The Securities and Exchange Commission.
SECURITIES ACT. Securities Act of 1933.
SELLER WARRANTY CLAIM. As defined in Section 8.2.
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SELLER'S KNOWLEDGE. The actual knowledge of ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ after reasonable investigation.
TAXES. As defined in Section 3.13(a).
TRANSFERRED EMPLOYEES. As defined in Section 7.3(b).
1.3 INTERPRETATION. Unless otherwise expressly provided or unless the
context requires otherwise, (a) all references in this Agreement to Articles,
Sections, Schedules and Exhibits shall mean and refer to Articles, Sections,
Schedules and Exhibits of this Agreement; (b) all references to statutes and
related regulations shall include all amendments of the same and any successor
or replacement statutes and regulations; (c) words using the singular or plural
number also shall include the plural and singular number, respectively;
(d) references to "hereof", "herein", "hereby" and similar terms shall refer
to this entire Agreement (including the Schedules and Exhibits hereto); and
(e) references to any Person shall be deemed to mean and include the successors
and permitted assigns of such Person (or, in the case of an Authority, Persons
succeeding to the relevant functions of such Person).
ARTICLE II
SALE AND PURCHASE OF PURCHASED ASSETS
2.1 SALE AND PURCHASE OF PURCHASED ASSETS.
(a) Subject to the terms and conditions of this Agreement, and in reliance
upon the representations, warranties, covenants and agreements made in this
Agreement by Purchaser, Seller and Stockholders, Purchaser shall purchase and
accept from Seller, and Seller shall sell, transfer, convey, assign and deliver
to Purchaser, on the date hereof, all of the Purchased Assets and Purchaser
shall assume all Liabilities (except for Retained Liabilities) of Seller.
(b) Notwithstanding anything in this Agreement to the contrary, Seller is
retaining ownership and possession of, and Seller is not selling, transferring,
conveying, assigning or delivering to Purchaser any right, title or interest of
Seller in, to or under any of the Retained Assets.
2.2 PAYMENT OF THE PURCHASE PRICE.
(a) The purchase price (as adjusted pursuant to Sections 2.4 and 2.6, the
"Purchase Price") payable by Purchaser to Seller in consideration for the
Purchased Assets shall be the assumption of the Liabilities (other than the
Retained Liabilities) of Seller and SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000.00) payable at the Closing in the following manner:
(i) an aggregate amount of $4,000,000 in cash to Seller;
(ii) an aggregate amount of $1,000,000 to Seller pursuant to the
Promissory Note substantially in the form attached hereto as Exhibit C; and
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(iii) an aggregate amount of 115,641 shares of Class A Common Stock,
par value $.001 per share of Purchaser (collectively, the "Purchaser
Shares") to Seller.
(b) The cash amounts paid pursuant to Section 2.2(a)(i) above and Section
2.4 below (if any) shall be by wire transfer of immediately available federal
funds to an account designated in writing to Purchaser by Seller. Seller shall
receive certificates representing the number of Purchaser Shares to which Seller
is entitled in accordance with Section 2.2(a)(iii) above.
2.3 EARN-OUT ADJUSTMENT.
(a) Within forty-five (45) days after the end of (i) the period commencing
on May 1, 1999 and ending March 31, 2000, and (ii) the twelve-month period
commencing April 1, 2000 and ending March 31, 2001 (each, a "Period"),
Purchaser shall prepare and deliver to the Representative an "earn-out"
calculation in accordance with Exhibit D for such prior Period (the "Earn-Out
Calculation"), together with all relevant work papers and supporting
calculations. The Earn-Out Calculation shall be prepared in accordance with GAAP
and pursuant to the principles and terms described on Exhibit D hereto.
(b) Within twenty (20) days after the Earn-Out Calculation is delivered to
the Representative pursuant to Section 2.3(a), the Representative shall deliver
to Purchaser either (i) a written acknowledgment accepting the Earn-Out
Calculation or (ii) a written report setting forth in reasonable detail any
proposed adjustments to the Earn-Out Calculation (the "Earn-Out Adjustment
Report"). If the Representative fails to respond to Purchaser within such
20-day period, Seller shall be deemed to have accepted and agreed to the
Earn-Out Calculation as delivered pursuant to Section 2.3(a). Purchaser shall
provide the Representative with reasonable access to the books and records of
Seller in order to verify the accuracy of any Earn-Out Calculation.
(c) In the event that the Representative and Purchaser fail to agree on
any of the Representative's proposed adjustments set forth in the Earn-Out
Adjustment Report within thirty (30) days after Seller provides the Purchaser
with its proposed adjustments to the Earn-Out Adjustment Report, Seller and
Purchaser agree that a mutually acceptable independent accounting firm of
nationally recognized standing (the "Independent Auditors") within the 30-day
period immediately following such 30-day period, shall make the final
determination with respect to any disputed portion of the Earn-Out Calculation.
Purchaser and the Representative shall each provide the Independent Auditors
with their respective determinations of the Earn-Out Calculation. The decision
of the Independent Auditors shall be rendered in writing and shall be final and
binding on Seller and Purchaser and the reasonable fees, costs and expenses of
the Independent Auditors shall be paid by the non-prevailing party.
(d) The date on which the Earn-Out Calculation is finally determined
pursuant to this Section 2.3 shall hereinafter be referred to as the "Earn-Out
Settlement Date".
2.4 EARN-OUT PAYMENTS. No later than fifteen (15) days after the Earn-Out
Settlement Date, Purchaser shall pay to Seller an amount specified in the
Earn-Out Calculation; provided, however, notwithstanding the actual Earn-Out
Calculation, the aggregate amounts payable (i) in the
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initial Period shall not in any event exceed $1,000,000 and (ii) for both
Periods on a combined basis shall not in any event exceed $2,000,000.
2.5 NET WORTH ADJUSTMENT. Purchaser shall prepare and deliver to the
Representative within forty-five (45) days after the date hereof, (i) an audited
balance sheet of the Business immediately prior to the Closing (the "Closing
Balance Sheet") and (ii) a calculation setting forth the result of (A) Net
Worth as of the date hereof minus (B) $857,064 plus (C) the aggregate amount of
the Retained Liabilities reflected on the Closing Balance Sheet (the "Net Worth
Calculation"), together with all relevant work papers and supporting
calculations. The Closing Balance Sheet and the Net Worth Calculation shall be
prepared in accordance with GAAP consistent with the preparation of the
Reference Balance Sheet.
(b) Within twenty (20) days after the Closing Balance Sheet and the Net
Worth Calculation are delivered to the Representative pursuant to Section
2.5(a), the Representative shall deliver to Purchaser either (i) a written
acknowledgment accepting the Closing Balance Sheet and the Net Worth Calculation
or (ii) a written report setting forth in reasonable detail any proposed
adjustments to the Closing Balance Sheet and the Net Worth Calculation (the
"Net Worth Adjustment Report"). If the Representative fails to respond to
Purchaser within such 20-day period, Seller shall be deemed to have accepted and
agreed to the Closing Balance Sheet and the Net Worth Calculation as delivered
pursuant to Section 2.5(a).
(c) In the event that Purchaser and the Representative fail to agree on
any of the Representative's proposed adjustments set forth in the Net Worth
Adjustment Report within twenty (20) days after Purchaser receives the Net Worth
Adjustment Report, Seller and Purchaser agree that the Independent Auditors
shall, within the 20-day period immediately following such 20-day period, make
the final determination with respect to any disputed portion of the Net Worth
Calculation. Purchaser and the Representative shall each provide the Independent
Auditors with their respective determinations of the Net Worth Calculation. The
Independent Auditors shall select either Purchaser's or the Representative's
determination in establishing the final Net Worth Calculation. The decision of
the Independent Auditors shall be rendered in writing and shall be final and
binding on Seller and Purchaser. The fees, costs and expenses of the Independent
Auditors shall be paid by the non-prevailing party.
(d) The date on which the Closing Balance Sheet and the Net Worth
Calculation are finally determined pursuant to this Section 2.5 shall
hereinafter be referred to as the "Net Worth Settlement Date". Purchaser shall
pay the aggregate fees and costs of auditing the Closing Balance Sheet and Net
Worth Calculation to the extent such fees and costs exceed $2,750.
2.6 NET WORTH PAYMENT.
(a) In the event that the Net Worth Calculation is less than zero, no
later than ten (10) days after the Net Worth Settlement Date, Seller shall pay
to Purchaser an amount equal to the absolute value of the Net Worth Calculation.
In the event the Net Worth Calculation is greater than zero, no later than ten
(10) days after the Net Worth Settlement Date, Purchaser shall pay to Seller an
amount equal to the Net Worth Calculation.
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(b) Any payment required to be made pursuant to Section 2.6(a) shall be by
certified or cashier's check, or at the option of the recipient, by the
transfer of immediately available federal funds for credit to recipient at a
bank account designated by the recipient.
2.7 ASSUMPTION OF LIABILITIES.
(a) As additional consideration for the Purchased Assets, Purchaser shall,
on the date hereof, by its execution and delivery of the Assumption Agreement,
assume and agree to pay and perform all Liabilities of Seller (other than the
"Retained Liabilities," as defined below) relating to the Business.
(b) Purchaser shall not assume, pay or perform and Seller shall remain
obligated for the following Liabilities of Seller, whether or not relating to
the Business (collectively, the "Retained Liabilities"):
(i) any Liability relating to the violation or failure to comply with
any Law relating to the operation of the Business prior to date hereof;
(ii) any Liability arising out of or relating to the Retained Assets;
(iii)any Liability of Seller for any Taxes for any periods (or
portions thereof) prior to the date hereof, whether or not relating to the
Business and, with respect to periods subsequent to the date hereof, other
than with respect to the operation of the Business or the ownership or use
of the Purchased Assets; or
(iv) any Liability of Seller with respect to any employee benefit or
incentive plan, agreement or arrangement, including without limitation, any
pension, life insurance, profit sharing, bonus, incentive, deferred
compensation, stock purchase, stock option, group insurance, cafeteria,
vacation pay, severance pay or retirement plan, agreement or arrangement
except as specifically set forth herein (excluding, however, those
Liabilities set forth on Schedule 2.7 hereto);
(v) the fees, costs and expenses of any person, firm, corporation or
other entity acting on behalf of, or representing the Seller or the
Stockholders as broker, finder, investment banker, financial advisor,
accountant, attorney or in any similar capacity, whether in connection with
this Agreement and the transactions contemplated hereby or otherwise;
(vi) any Liability of Seller arising after Closing to its officers,
employees or affiliates including, without limitation, the Stockholders.
2.8 SALES AND TRANSFER TAXES. Seller and Purchaser shall each pay
one-half of any and all transfer, sales, purchase, use, value added, excise or
similar tax imposed under the laws of the United States, or any state or
political subdivision thereof, which arises out of the transfer by Seller to
Purchaser of the Purchased Assets and Liabilities (other than Retained
Liabilities) of Seller.
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2.9 ALLOCATION. Seller and Purchaser (a) mutually agree on the allocation
of the Purchase Price among the Purchased Assets as set forth on Exhibit E, and
(b) acknowledge that the allocation set forth on Exhibit E was the result of
arms-length negotiations. Each of Seller and Purchaser agrees that for income
tax purposes, it (i) shall report the transactions contemplated by this
Agreement in accordance with the allocation set forth on Exhibit E and (ii) will
not take any contrary position in any related administrative or legal
proceeding.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS
As an inducement to Purchaser to enter into and perform its obligations
under this Agreement, and in consideration of the covenants of Purchaser
contained herein, Seller and each Stockholder, jointly and severally, represent
and warrant to Purchaser (which representations and warranties shall survive the
Closing (subject to Section 8.4) regardless of what examinations, inspections,
audits and other investigations Purchaser has heretofore made with respect to
such representations and warranties) as follows:
3.1 CORPORATE STATUS; AUTHORITY OF SELLER; ENFORCEABILITY.
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Illinois and, except as set forth on
Schedule 3.1, is qualified to do business as a foreign corporation in each other
jurisdiction where the failure to so qualify could reasonably be expected to
have a material adverse effect on the business, operations or condition
(financial or otherwise) of Seller or the Purchased Assets. Seller has the
corporate power and authority necessary to (i) own, lease, operate or otherwise
hold its properties and assets and to carry on its business as presently
conducted and (ii) execute and deliver this Agreement and perform its
obligations hereunder.
(b) Each Stockholder has the capacity to execute and deliver this
Agreement and to perform his obligations hereunder. The execution and delivery
by Seller of this Agreement, and the performance by Seller of its obligations
hereunder, have been duly and validly authorized and approved by all necessary
corporate action on the part of Seller. This Agreement, the ▇▇▇▇ of Sale and
Assignment and the Assumption Agreement are each binding upon, and enforceable
against, Seller and each Stockholder in accordance with their terms, subject
to bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally and by general principles of equity (whether in a proceeding
at law or in equity).
(c) Except as set forth on Schedule 3.1, neither the execution or delivery
of this Agreement by Seller or any Stockholder nor the performance by Seller or
any Stockholder of its or his obligations under this Agreement will (assuming
the receipt of all consents referred to in SECTION 3.16), conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any material contract, lease, license, franchise, permit, indenture,
mortgage, deed of trust, note agreement or other agreement or instrument to
which any Stockholder or Seller is a party or is bound, the articles of
incorporation or by-laws of Seller or any applicable Law or Order to which
Seller or any Stockholder is a party or by which Seller or Stockholder is bound.
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3.2 ACCOUNTS RECEIVABLE. Except as reserved against on the Reference
Balance Sheet, the Accounts Receivable reflected on such balance sheet: (a) were
acquired by Seller in the Ordinary Course of Business and represent bona fide
transactions; (b) to the Seller's Knowledge, are not subject to any material
claim, counterclaim, set-off or deduction; (c) represent valid obligations owing
to Seller by account debtors that are not Affiliates of Seller, which are
enforceable in accordance with their respective terms, subject to bankruptcy
insolvency, reorganization and other laws affecting creditors' rights generally,
and by general principals of equity (whether in a proceeding at law or in
equity); and (d) are owned by Seller free and clear of all Liens.
INTELLECTUAL PROPERTY. Schedule 3.3 sets forth all of the Intellectual
Property owned or licensed for use by Seller (or material to the Business)
including any United States or foreign registrations or applications therefor.
All of the registrations and applications set forth in Schedule 3.3 are in full
force and effect and all necessary registration, maintenance and renewal fees
in connection therewith have been made and all necessary documents and
certificates in connection therewith have been filed with the relevant patent,
copyright, trademark or other Authority for the purpose of maintaining the
registrations or applications for registration of such Intellectual Property.
Seller owns all right, title, and interest in and to each item of such
Intellectual Property disclosed in Schedule 3.3, except for those items of
Intellectual Property which have been licensed to or by Seller, which are
identified therein (the "Intellectual Property License Agreements"). All
Intellectual Property disclosed in Schedule 3.3 (i) is free and clear of any
and all Liens and (ii) there are no restrictions on the direct or indirect
transfer of any such Intellectual Property. Seller has taken commercially
reasonable measures to protect the secrecy, confidentiality and value of their
trade secrets and proprietary information. Seller has not granted any license,
agreement or other permission to use such Intellectual Property except as
disclosed on Schedule 3.3. To Seller's Knowledge, (i) no Intellectual Property
is being infringed by any other Person, and (ii) Seller is not infringing on
any intellectual property of any other Person, and no claim is pending, or, to
the Seller's Knowledge, has been threatened to such effect or with respect to
the ownership, validity, license or use of, or any infringement resulting from,
the Intellectual Property or the sale of any products or services by Seller.
There is no dispute between Seller and any licensor under any applicable
Intellectual Property License Agreement.
3.4 CONTRACTS. Copies of all Contracts to which Seller is party or by
which Seller is currently bound which provide for annual payments to or from
Seller in excess of $25,000 (the "Material Contracts") have been provided to
Purchaser (A) in those certain binders labeled "Omnitech(R)
Consulting Group, Response To: Diamond Technology Partners, Inc., REQUEST FOR
INFORMATION, March 22, 1999, Book 1 and 2" and (B) those certain Contracts
referenced in the letter dated April 14, 1999 from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to ▇▇▇▇
▇▇▇▇▇▇▇. Identified with an asterisk on Schedule 3.4 are those Material
Contracts which are not, by their terms, assignable to Purchaser. Seller is not
a party to, nor are the Purchased Assets bound by, any Material Contract, not
entered into in the Ordinary Course of Business. Each Material Contract is in
full force and effect and constitutes a legal, valid and binding obligation of
Seller and, to the Seller's Knowledge, each other party thereto, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, reorganization and
other laws affecting creditors' rights generally and by general principals
equity (whether in a proceeding at law or in equity). Neither Seller nor, to
Seller's Knowledge, any other party to such Material Contract is, or has
received notice that it is in violation or breach of or default
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under any such Material Contract (or with notice or lapse of time or both, would
be in violation or breach of or default under any such Material Contract).
3.5 COMPLIANCE WITH LAWS. Seller has complied with all, and is not in
violation of any, applicable Laws or Orders affecting the Purchased Assets or
the operation of the Business, the failure with which to comply could reasonably
be expected to have a material adverse effect on the Business or the Purchased
Assets. Seller has not received any notice, citation, claim, assessment or
proposed assessment as to or alleging any violation of any Law nor, to Seller's
Knowledge, has Seller been subject to any investigation by any Authority within
the prior three (3) years.
3.6 LITIGATION. Schedule 3.6 sets forth a brief description of all suits,
actions, arbitrations, and legal, administrative and other proceedings and
governmental investigations pending or, to the Seller's Knowledge, threatened
against or affecting Seller or the Purchased Assets. None of the matters set
forth in Schedule 3.6, if decided adversely to Seller, could reasonably be
expected to have a material adverse effect on the Business or the Purchased
Assets. Seller is not presently engaged in any legal action to recover moneys
due to it for damages sustained by it.
3.7 PERSONNEL IDENTIFICATION AND COMPENSATION. Schedule 3.7 contains a
true and complete list of the names and titles of all current officers,
directors and employees of Seller. Seller has previously delivered to Purchaser
a true and correct schedule stating the rates of compensation payable (or paid,
as the case may be) to each such person.
3.8 [INTENTIONALLY DELETED]
3.9 STOCKHOLDERS. The persons listed as "Stockholders" on the signature
pages of this Agreement are all of the record and beneficial owners of all of
the issued and outstanding capital stock of Seller.
3.10 [INTENTIONALLY DELETED].
3.11 CERTAIN TRANSACTIONS. All purchases and sales or other transactions,
if any, between Seller, on the one hand, and any officer, director, shareholder
or key employee or Affiliate thereof, on the other hand, within the three (3)
years immediately preceding the date hereof have been made on the basis of
prevailing market rates and terms such that from the perspective of Seller, all
such transactions have been made on terms no less favorable than those which
would have been available from unrelated third parties. Schedule 3.11 sets forth
a summary of each officer, director, shareholder, key employee or Affiliate of
Seller to which Seller is indebted to, the outstanding principal amount of such
indebtedness together with accrued and unpaid interest thereon and the interest
rates and maturity dates related to such indebtedness. Except as set forth on
Schedule 3.11, neither any officer, nor any director or employee of Seller, nor
any spouse, child or other relative of any of such persons, owns, or has any
interest, directly or indirectly, in any of the real or personal property owned
by or leased to Seller or any copyrights, patents, trademarks, trade names or
trade secrets owned or licensed by Seller.
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3.12 EMPLOYEE BENEFIT MATTERS.
(a) Schedule 3.12 contains a true, complete and correct list of each
pension, retirement, profit sharing, savings, stock option, restricted stock,
severance, termination, bonus, fringe benefit, insurance, supplemental benefit,
medical, education reimbursement or other employee benefit plan, program,
agreement or arrangement, including each "employee benefit plan" as defined in
Section 3(3) of ERISA, sponsored, maintained or contributed to or required to be
contributed to by Seller for the benefit of current or former employees of the
Business (each a "Plan").
(b) True, complete and correct copies of the following items relating to
each Plan, where applicable, have been delivered to Purchaser:
(i) the most recent determination letter, if any, received from the
IRS with respect to each such Plan that is intended to be qualified under
Section 401 of the Code; and
(ii) the most recent Form 5500, summary plan description, summary of
material modifications and all material communications to participants.
(c) Each of the Plans has been operated and administered in accordance
with the applicable provisions of Laws, and there are no actions, suits or
claims pending or threatened against any Plan or any administrator or fiduciary
thereof, nor do any facts exist which could give rise to any such action, suit
or claim.
3.13 TAX MATTERS. Other than as disclosed on Schedule 3.13:
(a) The term "Taxes" means all net income, capital gains, gross income,
gross receipts, sales, use, transfer, ad valorem, franchise, profits, license,
capital, withholding, payroll, employment, excise, goods and services,
severance, stamp, occupation, premium, property, assessments or other
governmental charges of any kind whatsoever, together with any interest, fines
and any penalties, additions to tax or additional amounts incurred or accrued
under applicable federal, state, local or foreign tax law or assessed, charged
or imposed by any Authority, domestic or foreign, provided that any interest,
penalties, additions to tax or additional amounts that relate to Taxes for any
taxable period (including any portion of any taxable period ending on or before
the date hereof) shall be deemed to be Taxes for such period, regardless of when
such items are incurred, accrued, assessed or charged. For the purposes of this
Section 3.13, Seller shall be deemed to include any predecessor to Seller and
any Person from which Seller incurs a liability for Taxes as a result of
transferee liability, joint and several liability or otherwise.
(b) Seller has duly and timely filed (and prior to the date hereof will
duly and timely file) true, correct and complete Tax returns, reports or
estimates, all prepared in material accordance with applicable Laws, for all
years and periods (and portions thereof), for all jurisdictions (whether
federal, state, local or foreign) in which any such returns, reports or
estimates were due on or prior to the date hereof. All Taxes shown as due and
payable on such returns, reports and estimates have been paid (or will be paid
prior to the Closing), and there is no current liability for any Taxes due and
payable in connection with any such returns. Any charges, accruals and reserves
for Taxes
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provided for on the Financial Statements are adequate. There are no existing
Liens for Taxes upon any of the Purchased Assets. Seller has provided to
Purchaser copies of all federal, state and foreign tax returns filed by Seller
for the past five (5) years.
(c) Seller has withheld all required amounts from its employees, agents
and contractors and remitted such amounts to the proper Authorities; paid all
employer contributions and premiums; and filed all federal, state, local and
foreign returns and reports with respect to employee income Tax withholding,
and social security and unemployment Taxes and premiums, all in compliance with
the withholding provisions of the Code, or any prior provision of the Code and
other applicable Laws.
(d) None of Seller's assets is tax exempt use property under Code Section
168(h). None of Seller's assets is property that Seller is required to treat as
being owned by any other Person pursuant to the safe harbor lease provision of
former Code Section 168(f)(8).
(e) No portion of the cost of any of Seller's assets was financed directly
or indirectly from the proceeds of any tax exempt state or local government
obligation described in Code Section 103(a).
(f) Seller has no (and has not previously had any) permanent establishment
in any foreign country and Seller does not engage (and has not previously
engaged) in a trade or business within the meaning of the Code relating to the
creation of a permanent establishment in any foreign country.
(g) Seller is not a foreign person within the meaning of Code
Section 1445.
(h) Seller is not a party to any joint venture, partnership or other
arrangement that could be treated as a partnership for federal income
Tax purposes.
(i) To Seller's Knowledge, no federal, state, local or foreign Tax audits
or other administrative proceedings, discussions or court proceedings are
presently pending with regard to any Taxes or Tax returns of Seller and no
additional issues are being asserted against Seller in connection with any
existing audits of Seller.
(j) Seller made a valid election on January 1, 1989 under subchapter S
of the Code to be treated as an "S corporation." Such election will be in
effect until the Closing Date.
3.14 TITLE TO ASSETS; CONDITION. Other than as set forth on Schedule 3.14,
Seller has (i) good and marketable title to, or with respect to the Leased Real
Property, a valid and binding leasehold interest in, the Purchased Assets, free
and clear of all Liens and (ii) owns or otherwise has an enforceable right to
use all of the Purchased Assets. All of Seller's assets are adequate and fit
to be used for the purposes for which they are currently used and are in good
operating condition subject to normal wear and tear and obsolescence.
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3.15 REAL PROPERTY. Other than as lessee under the leases identified on
Schedule 3.15, Seller has no title to or interests in any real property. All
amounts due and payable with respect to such leases have been paid.
3.16 CONSENTS. Except as otherwise disclosed on Schedule 3.16, no material
consent, approval, order or authorization of, or registration, declaration
or filing with, any Authority or any other Person is required to be obtained
or made by the Stockholders or Seller in connection with the execution and
delivery of this Agreement or the performance by the Stockholders or Seller
of their obligations hereunder.
3.17 LICENSES AND PERMITS. Schedule 3.17 lists and describes all material
qualifications, registrations, filings, privileges, franchises, immunities,
licenses, permits, authorizations and approvals of Authorities which are used
or required in order for Seller to own and operate the Business (collectively,
the "Permits"); and each Permit is valid and subsisting, and in full force and
effect in accordance with its terms..
3.18 INSURANCE.
(a) Schedule 3.18 sets forth a list and brief description of all insurance
policies maintained by Seller. Seller is not in default with respect to any
provision contained in any insurance policy maintained by Seller, nor has it
failed to give any notice or present any claim thereunder with respect to any
pending matter in a due and timely fashion.
3.19 FINANCIAL STATEMENTS. The Financial Statements attached hereto as
Schedule 3.19 were prepared by Seller from the books and records of the Business
and, except as described therein, in accordance with generally accepted
accounting principles consistently applied and present fairly the financial
position and results of operations of Seller at the dates and for the periods
indicated therein.
3.20 UNDISCLOSED LIABILITIES. Except as disclosed on Schedule 3.20. on the
Reference Balance Sheet Date, Seller had no Liability with respect to the
Business of any nature (whether accrued, absolute, contingent or otherwise)
of the type which are required to be reflected in balance sheets (including the
notes thereto) prepared in accordance with GAAP which was not fully disclosed,
reflected or reserved against in the Reference Balance Sheet (subject to normal
year-end adjustments); and, except for Liabilities which have been incurred
since the Reference Balance Sheet Date in the Ordinary Course of Business, since
the Reference Balance Sheet Date Seller has not incurred any Liability of any
nature.
3.21 CONDUCT OF BUSINESS SINCE REFERENCE BALANCE SHEET DATE. Except as
set forth on Schedule 3.21, since the Reference Balance Sheet Date:
(a) the Business has been conducted only in the Ordinary Course of
Business;
(b) except for equipment and supplies purchased, leased, sold or otherwise
disposed of in the Ordinary Course of Business, Seller has not purchased, sold,
leased, mortgaged, pledged or otherwise acquired or disposed of any properties
or assets;
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(c) Seller has not sustained or incurred any loss or damage with respect
to the Purchased Assets (whether or not insured against) on account of fire,
flood, accident or other calamity which has interfered with or affected, or may
interfere with or affect, the operation of the Purchased Assets;
(d) Seller has not increased the rate of compensation of any officer or
other employee of the Business, except in the Ordinary Course of Business, and
has not declared any dividends or made any distributions to its stockholders;
(e) there has been no material adverse change in or with respect to the
condition (financial or otherwise), operations, business, prospects, rights,
properties, assets or liabilities of the Business or Seller's relations with
Authorities or its employees, creditors, advertisers, suppliers, distributors,
customers or others having business relationships with Seller;
(f) Seller has not canceled any of its debts or claims owed to it and has
paid and satisfied its account payables in the Ordinary Course of Business;
(g) Seller has not changed any accounting methods or practices (including,
without limitation, any change in depreciation or amortization policies
or rates); or
(h) Seller has not agreed to take any of the actions described in
paragraphs (b), (d), (f) or (g) above.
3.22 BROKER'S OR CONSULTANT'S FEES. Except as set forth on Schedule 3.22,
each Seller represents and warrants that it has dealt with no broker, finder or
consultant in connection with any of the transactions contemplated by this
Agreement, and, to the Seller's Knowledge, no Person is entitled to any
commission, broker's or finder's fee in connection with the sale of the
Purchased Assets to Purchaser.
3.23 BANKING ARRANGEMENTS. Except as set forth in Schedule 3.23, Seller
has no banking, borrowing or depository relationship, or accounts or deposits of
funds, and all persons authorized as signatories on each such account are
listed in Schedule 3.23. No Person holds any power of attorney from Seller.
3.24 INDEPENDENT INVESTIGATION. Each Stockholder and Seller has such
knowledge and experience in financial and business matters that he or it is
capable of evaluating the merits and risks of Seller owning the Purchaser
Shares. In making the decision to receive the Purchaser Shares that are
delivered as part of the Purchase Price, each Stockholder and Seller has relied
solely upon independent investigations made by him or it. No representations or
warranties have been made by Purchaser or any director, manager, officer,
employee, agent or affiliate of Purchaser to any Stockholder or Seller other
than as set forth in this Agreement. Each Stockholder and Seller represents and
warrants that such Stockholder and Seller has been offered the opportunity to
obtain additional information, to evaluate the merits and risks of Seller owning
the Purchaser Shares and to ask questions of and receive satisfactory answers
from the Purchaser concerning the terms and conditions of owning the Purchaser
Shares. In making the decision whether to own the Purchaser Shares, each
Stockholder and Seller has relied solely on the information contained in this
Agreement
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and the Purchaser SEC Reports (as hereafter defined). To the extent
any Stockholder or Seller has deemed it appropriate, such Stockholder or Seller
has consulted with attorneys with respect to all matters concerning this
investment.
3.25 RESTRICTIONS ON TRANSFER. Each Stockholder and Seller understands and
agrees that because the Purchaser Shares delivered in connection with this
Agreement have not been registered under federal or state securities laws, none
of the Purchaser Shares acquired may at any time be sold or otherwise disposed
of by Seller unless they are registered under the Securities Act or there is
applicable to such sale or other disposition one of the exemptions from
registration set forth in the Securities Act, the rules and regulations of the
SEC thereunder and applicable state law. Each Stockholder and Seller further
understands that Purchaser has no obligation or present intention to register
the Purchaser Shares or to permit their sale other than in strict compliance
with the Securities Act, SEC rules and regulations thereunder and applicable
state law. Each Stockholder and Seller recognizes that, as a result of the
aforementioned restrictions, there is and may be no public market for the
Purchased Shares.
3.26 DISCLOSURE. None of the representations and warranties made by Seller
or any Stockholder in this Agreement or in the Schedules hereto, contains or
will contain any untrue statement of a material fact, or omits any material fact
the omission of which would make the statements made therein misleading.
Any matter set forth on any disclosure schedule to Seller's representations
and warranties in this Article III shall be deemed to be disclosed with regard
to, and constitute an exception to, each of Seller's representations and
warranties in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller and each Stockholder to enter into and perform
their obligations under this Agreement, and in consideration of the covenants of
Seller and each Stockholder contained herein, Purchaser represents and warrants
to Seller and each Stockholder (which representations and warranties shall
survive the Closing (subject to Section 8.4) regardless of what examinations,
inspections, audits and other investigations Seller and each Stockholder have
heretofore made with respect to such representations and warranties) as
follows:
4.1 CORPORATE STATUS; DUE AUTHORIZATION. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Purchaser has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution
and delivery by Purchaser of this Agreement, and the performance by Purchaser
of its obligations hereunder (including the execution and delivery of the
Promissory Note and the issuance of the Purchaser Shares), have been duly and
validly authorized and approved by all necessary corporate action on the part
of Purchaser.
4.2 NO CONFLICT. Neither the execution or delivery of this Agreement by
Purchaser nor the performance by Purchaser of its obligations under this
Agreement will conflict with or result in
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a breach of any of the terms or provisions of, or constitute a default under,
any contract, lease, license, franchise, permit, indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which Purchaser is a
party or is bound, its certificate of incorporation, by-laws or any applicable
Law or Order to which Purchaser is a party or by which Purchaser is bound.
4.3 ENFORCEABILITY. This Agreement, the ▇▇▇▇ of Sale and Assignment,
Assumption Agreement and the Promissory Note are binding upon, and enforceable
against, Purchaser in accordance with their terms, subject, in each case, to
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally and by principles of equity (whether in a proceeding at law or
in equity).
4.4 CONSENTS. Except for filings required by the Commission or NASDAQ or
as otherwise contemplated by this Agreement, no consent, approval, Order or
authorization of, or registration, declaration or filing with, any Authority or
any other Person is required to be obtained or made by Purchaser in connection
with its execution and delivery of this Agreement or the performance by it of
its obligations hereunder.
4.5 SECURITIES. The offer and issuance of the Purchaser Shares and the
Promissory Note pursuant to this Agreement are exempt from the registration
requirements of the Securities Act. The Purchaser Shares, when issued in
consideration of the transactions contemplated by this Agreement, will be
validly issued, fully paid and non-assessable.
4.6 CAPITALIZATION. The authorized capital stock of the Purchaser is as
follows:
(a) 2,000,000 shares of preferred stock, $1.00 par value per share, none
of which is outstanding;
(b) 40,000,000 shares of Class A Common Stock, $.001 par value per share,
of which 9,700,598 shares were outstanding as of April 1, 1999; and
(c) 20,000,000 share of Class B Common Stock, $.001 par value per share,
of which 3,649,180 shares were outstanding as of April 1, 1999.
4.7 BROKER'S OR CONSULTANT'S FEES. Purchaser represents and warrants that
it has dealt with no broker, finder or consultant in connection with any of the
transactions contemplated by this Agreement, and no Person claiming through
Purchaser is entitled to any commission, broker's or finder's fee in connection
with the sale of the Purchased Assets to Purchaser.
4.8 REPORTS AND FINANCIAL STATEMENTS. Purchaser has filed all reports
required to be filed with the SEC pursuant to the Exchange Act (such reports
together with all registration statements, prospectuses and information
statements filed by Purchaser being hereinafter collectively referred to as the
"Purchaser SEC Reports"), and has previously furnished the Representative with
true and complete copies of all such Purchaser SEC Reports filed during the last
three (3) fiscal years. As of their respective dates, all such Purchaser SEC
Reports complied as to form in all material respects with the applicable
requirements of the Securities Act. Each of the balance sheets (including the
related notes) included in the Purchaser SEC Reports fairly presents the
financial position of
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Purchaser as of the respective dates thereof, and the other related statements
(including the related notes) included therein fairly present the results of
operations and the changes in financial position of Purchaser for the respective
periods or as of the respective dates set forth therein (subject, where
appropriate to normal year-end adjustments), all in conformity with GAAP during
the periods involved except as otherwise noted therein.
4.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
Purchaser SEC Reports, since March 31, 1999, Purchaser has not: (a) suffered any
change which had or would have a material adverse effect on the financial
condition of Purchaser or (b) conducted its business and operations other than
in the ordinary course of business and consistent with past practices.
4.10 DISCLOSURE. None of the representations and warranties made by
Purchaser in this Agreement contains or will contain any untrue statement of a
material fact, or omits any material fact the omission of which would make the
statements made herein misleading.
ARTICLE V
COVENANTS
Each Stockholder, Seller and Purchaser covenant and agree that:
5.1 NON-TRANSFERRABLE CONTRACTS.
(a) Seller shall use all commercially reasonable efforts to obtain and
deliver to Purchaser such consents as are required to allow the assignment by
Seller to Purchaser of Seller's right, title and interest in, to and under any
Contract included in the Purchased Assets. To the extent any such Contract is
not assigned or if such assignment or attempted assignment would constitute a
breach thereof or a violation of any Law or Order, this Agreement shall not
constitute an assignment or an attempted assignment of such Contract.
(b) To the extent that such consents and waivers are not obtained by
Seller, this Agreement, to the extent permitted by law, shall constitute an
equitable assignment by the Seller to Purchaser of all of Seller's rights,
benefits, title and interest in and to such Material Contracts, and Purchaser
shall be deemed to be the Seller's agent for the purpose of completing,
fulfilling and discharging all of the Seller's rights and liabilities arising
after the date hereof under such Material Contracts.
5.2 GENERAL RESTRICTIONS ON TRANSFER. (a) In no event will Seller or any
Stockholder sell, transfer, assign, pledge, hypothecate or otherwise dispose of
("Transfer") all or any portion of the Purchaser Shares prior to April 23, 2000.
During the twelve month period beginning on April 24, 2000, Seller or any
Stockholder shall be permitted to Transfer not more than one-half of the
Purchaser Shares received by Seller or any Stockholder. Thereafter, Seller and
each Stockholder shall be permitted to Transfer the remaining Purchaser Shares
at any time after (but not before) the second anniversary of the date hereof.
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(b) Purchaser shall not be required to reflect on its books any purported
Transfer in violation of any of the provisions set forth in this Section 5.2, to
treat any purported transferee of such Purchaser Shares as a record owner of
such Purchaser Shares, or (iii) to afford such purported transferee any right to
vote, or to receive dividends in respect of, such Purchaser Shares.
(c) Notwithstanding the foregoing provisions, each Stockholder may
Transfer the Purchaser Shares to a spouse, a lineal ancestor or descendant, or
adopted child, of such Stockholder, or a trust for the primary benefit of any of
such Stockholder or the foregoing, provided, that the transferee of such
Purchaser Shares shall agree to be bound by the limitations set forth in this
Section 5.2.
5.3 NAME CHANGE; D/B/A NAMES. Seller shall take or cause to be taken all
necessary action in order to change its corporate name to a name reasonably
approved by Purchaser shall have effected such name change by filing an
amendment to its Articles of Incorporation with the Illinois Secretary of State
within fourteen (14) days hereafter. Seller shall execute and deliver such
consents, waivers and other documents as are necessary or, in Purchaser's
determination, advisable in order for Purchaser to use the corporate name
"Omnitech", any derivation of any such name or any other name associated with
or relating to the Business.
5.4 CHANGE OF CONTROL. Effective immediately upon a Change of Control,
(i) Purchaser's obligations under the Promissory Note and the Earn-Out
Calculation shall become due and payable without any further action on the part
of Seller and Purchaser shall pay to Seller (A) the then outstanding principal
amount (together with accrued interest thereon) of the Promissory Note and (B)
the maximum amount Seller could have received pursuant to the Earn-Out
Calculation after the date of the Change of Control; and (ii) the limitations on
Transfer set forth in Section 5.2 hereof shall be null and void and of no
further force or effect.
For purposes of this Agreement, a "Change of Control" shall mean:
(a) individuals who, as of the date hereof, constitute the Board of
Directors of Purchaser (the "Board") (as of the date hereof, the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Purchaser's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14A-11 of Regulation 14A promulgated under the Exchange Act or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board); or
(b) approval by the stockholders of Purchaser of a "Business
Combination," which shall mean a reorganization, merger or consolidation, in
each case, unless, following such reorganization, merger of consolidation,
(i) more than 50% of respectively, the then outstanding common shares of the
corporation resulting from such reorganization, merger of consolidation and the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the
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election of directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the then outstanding shares of common stock of
Purchaser ("Outstanding Company Common Stock") and the combined voting power
of the then outstanding voting securities of the Purchaser entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities") immediately prior to such reorganization, merger or consolidation
of the Outstanding Company Common Shares and Outstanding Company Voting
Securities, as the case may be, and (ii) at least a majority of the members of
the board of directors of the corporation resulting from such reorganization,
merger or consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such reorganization, merger or
consolidation; or
(c) approval by the stockholders of Purchaser of (i) a complete
liquidation or dissolution of Purchaser or (ii) the sale of other disposition of
all or substantially all of the assets of Purchaser, other than to a
corporation, with respect to which following such sale or other disposition, (A)
more than 50% of, respectively, the then outstanding common shares of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Shares and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Shares and
Outstanding Company Voting Securities, as the case may be, and (B) at least a
majority of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition of
assets of the Company.
For purposes of the foregoing definition of "Change of Control," a
"subsidiary" of Purchaser shall mean any corporation in which Purchaser,
directly or indirectly, holds a majority of the voting power of such
corporation's outstanding shares of capital stock.
5.5 INTERNAL REVENUE FORMS. Each of Seller and Purchaser agree that, in
accordance with the "Alternative Procedure" provided in Section 5 of Revenue
Procedure 96-60, 1990-2 Internal Revenue Bulletin 399, with respect to filing
and furnishing Internal Revenue Service Forms W-2, W-3 and 941, (i) each of
Seller and Purchaser shall report on a 'predecessor successor' basis as set
forth herein, (ii) Seller shall be relieved from furnishing Forms W-2 to the
employees of Seller to whom Seller would have been obligated to furnish such
Forms to for the full 1999 calendar year, and (iii) Purchaser will assume the
obligation of Seller to furnish such Forms to such employees for the full 1999
calendar year.
5.6 MISCELLANEOUS ACTIONS.
(a) Immediately following the Closing, Purchaser shall pay to Seller in
cash the full aggregate amount set forth on Schedule 2.7 and Seller shall use
such payments to promptly satisfy the obligations described thereon;
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(b) Concurrent with the Closing, Purchaser shall pay to Seller an
aggregate amount equal to Seller's payroll obligations for the period beginning
on April 1, 1999 and ending April 30, 1999 and Seller shall use such payments to
satisfy such payroll obligations in full;
(c) No later than ten (10) days after the Closing, Seller shall cause
Purchaser to be named as an "additional insured" on each of its existing
policies of insurance; and
(d) No later than fifteen (15) days after Closing, Seller shall cause to
be delivered to Purchaser a cash flow statement for the year ended December 31,
1998 and for the period beginning January 1, 1999 and ending March 31, 1999.
ARTICLE VI
CLOSING
6.1 TIME AND PLACE. The Closing shall take place at 10:00 a.m. (Chicago
time) on the date hereof at the offices of Winston & ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
6.2 CLOSING TRANSACTIONS. All documents and other instruments required to
be delivered at the Closing shall be regarded as having been delivered
simultaneously, and no document or other instrument shall be regarded as having
been delivered until all have been delivered.
6.3 DELIVERIES BY SELLER TO PURCHASER. At the Closing, Seller shall
deliver or cause to be delivered to Purchaser:
(a) the ▇▇▇▇ of Sale and Assignment, the Assumption Agreement and warranty
bills of sale, lease assignments, contract assignments, vehicle titles and other
documents and instruments of sale, assignment, conveyance and transfer as
Purchaser may deem necessary or desirable, each as duly executed by Seller;
(b) articles of incorporation of Seller certified by the Secretary of
State of the State of Illinois as of a date not earlier than five (5) days prior
to the date hereof;
(c) a certificate of the Secretary or Assistant Secretary of Seller, dated
as of the date hereof, certifying to (i) the by-laws of Seller, and
(ii) resolutions of the Board of Directors of Seller approving the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby;
(d) certificates of good standing for Seller from the State of Illinois
and any state where Seller's failure to be qualified to transact business as a
foreign corporation would have a material adverse effect on Seller or its
business or financial condition;
(e) an executed original of each consent required to be obtained pursuant
to Section 3.16;
(f) an affidavit of the President or a Vice President of Seller stating,
under penalty of perjury, Seller's United States taxpayer identification number
and that Seller is not a foreign person, pursuant to Section 1442(b)(2) of the
Code;
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(g) all releases necessary to terminate and discharge any Liens on the
Purchased Assets;
(h) a withholding certificate, in the form of Exhibit G executed by
Seller;
(i) evidence of the repayment in full of the aggregate amount of all
loans, if any, due and owing to Seller from any Stockholder or any of Seller's
Affiliates, employees, officers or directors;
(j) a legal opinion from ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special
counsel to Seller and the Stockholders, in form and substance satisfactory to
Purchaser;
(k) evidence of name change by Seller;
(l) the Allocation Agreement executed by Seller;
(m) Employment Agreements substantially in the form of Exhibit H executed
by each Stockholder (collectively, the "Employment Agreements"); and
(n) such other instruments and documents as are: required by any other
provisions of this Agreement to be delivered on the date hereof by Seller to
Purchaser; or reasonably necessary, in the opinion of Purchaser, to effect the
performance of this Agreement by Seller and the Stockholders.
6.4 DELIVERIES BY PURCHASER TO SELLER. At the Closing, Purchaser shall
deliver or cause to be delivered to Seller:
(a) (i) the Purchase Price in accordance with Section 2.2, the Promissory
Note and (iii) certificates representing the Purchaser Shares issued in the name
of Seller;
(b) each of the ▇▇▇▇ of Sale and Assignment and the Assumption Agreement
duly executed by Purchaser;
(c) a certificate of the Vice President and General Counsel of Purchaser,
dated as of the date hereof, certifying to (i) the by-laws of Purchaser; and
(ii) resolutions of the Board of Directors of Purchaser approving the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby;
(d) certification of incorporation of Purchaser certified by the Secretary
of State of the State of Delaware as of a date not earlier than five (5) days
prior to the date hereof;
(e) the Allocation Agreement executed by Purchaser;
(f) each of the Employment Agreements executed by Purchaser;
(g) a legal opinion from Winston & ▇▇▇▇▇▇, special counsel to Purchaser,
in form and substance satisfactory to Seller; and
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(h) such other instruments and documents as are: (i)required by any other
provisions of this Agreement to be delivered on the date hereof by Purchaser to
Seller; or (ii)reasonably necessary, in the opinion of Seller, to effect the
performance of this Agreement by Purchaser.
ARTICLE VII
OTHER AGREEMENTS
7.1 FURTHER ASSURANCE. At any time and from time to time from and after
the date hereof, Seller, Stockholders and Purchaser will, at the request and
expense of the other parties hereto, execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered, such instruments and other documents
and perform or cause to be performed such acts and provide such information, as
may reasonably be required to evidence or effectuate the sale, conveyance,
transfer, assignment and delivery to Purchaser of the Purchased Assets or for
the performance by Seller, Stockholders or Purchaser of any of their other
respective obligations under this Agreement.
7.2 CONFIDENTIALITY.
(a) The parties hereto agree with respect to the terms and conditions of
this Agreement, including, without limitation, the Purchase Price, and all
information that is furnished or disclosed by the other party (collectively,
"Confidential Information"), that (i)such Confidential Information is
confidential and/or proprietary to the furnishing/disclosing party and entitled
to and shall receive treatment as such by the receiving party; (ii)the receiving
party will hold in confidence and not disclose nor use (except in respect of the
transactions contemplated by this Agreement) any such Confidential Information,
treating such Confidential Information with the same degree of care, but not
less than a reasonable degree of care, and confidentiality as it accords its own
confidential and proprietary information; provided, however, that the receiving
party shall not have any restrictive obligation with respect to any Confidential
Information which (A)is contained in a printed publication available to the
general public, (B)is or becomes publicly known through no wrongful act or
omission of the receiving party, (C) is known by the receiving party without any
proprietary restrictions by the furnishing/disclosing party at the time of
receipt of such Confidential Information, or (D)is legally required to be
disclosed, in which case the receiving party shall notify the disclosing party a
reasonable time prior to disclosure and allow the disclosing party a reasonable
opportunity to seek appropriate protective measures; and (iii)all such
Confidential Information furnished to either party by the other, unless
otherwise specified in writing, shall remain the property of the
furnishing/disclosing party, and in the event this Agreement is terminated,
shall be returned to it, together with any and all copies made thereof, upon
request for such return by it (except for documents submitted to an Authority
with the consent of the furnishing/disclosing party or upon subpoena and which
cannot be retrieved with reasonable effort).
(b) Each party hereto acknowledges that the remedy at law for any breach
by either party of its obligations under Section 7.2(a) is inadequate and that
the other party shall be entitled to equitable remedies, including an
injunction, in the event of breach of any other party.
31
7.3 EMPLOYMENT MATTERS.
(a) Purchaser shall offer employment to all of the employees of Seller
engaged full-time or part-time in the conduct of the Business at not less than
their current salary from Seller (and on other terms and conditions
substantially similar to the terms and conditions to which similarly situated
non-probationary employees of Purchaser are subject) and Seller shall facilitate
the employment of such persons by Purchaser, including termination of the
employment of such persons by Seller on the date hereof. Seller shall be
responsible for the payment of all compensation and other benefits payable to,
or accrued in respect of, all such employees for all times prior to the
termination of their employment with Seller. Seller shall retain all Liabilities
(including, without limitation, any severance claims or other causes of action)
that relate to or arise out of employment with Seller) that are asserted by any
employee or former employee of Seller (including any and all beneficiaries
thereof) who do not become employees of Purchaser.
(b) All hourly and salaried employees of Seller who accept employment with
Purchaser and commence such employment after the Closing (the "Transferred
Employees") will be included in Purchaser's existing employee welfare benefit
plans and will be subject to Purchaser's existing employment policies, as
applicable to Purchaser's employees who are similarly situated.
7.4 EMPLOYEE BENEFITS. (a) Seller shall remain solely responsible for
Liabilities arising from workers' compensation claims, both medical and
disability, or other government-mandated programs which are based on injuries
occurring prior to the date hereof regardless of when such claims are filed.
Purchaser shall be solely responsible for such claims of Transferred Employees
based on injuries occurring after the date hereof.
(b) Seller shall remain solely responsible for the satisfaction of all
claims for medical, dental, life insurance, health, accident, disability or
other benefits brought by or in respect of Transferred Employees and former
employees of Seller under any of Seller's welfare benefit plans where the claims
were incurred prior to the date hereof regardless of when such claims are filed.
(c) Seller shall remain solely responsible for all Liabilities in
connection with claims for benefits brought by or in respect of all employees
and former employees of Seller (other than Transferred Employees) under any of
Seller's welfare benefit plans with respect to medical, dental, life insurance,
health, accident or disability or other benefits, including without limitation
continuation coverage pursuant to Section 4980B of the Code and Part 6 of
Title I of ERISA.
7.5 NON-COMPETITION AGREEMENT.
7.5.1 In partial consideration for the Purchase Price paid to Seller for
the Purchased Assets, for a period of three (3) years from and after the date
hereof, Seller shall not, directly or indirectly, or as the agent of another
Person or through other Persons as an agent:
(a) participate or engage in, directly or indirectly (as an owner,
partner, employee, officer, director, independent contractor, consultant,
advisor or in any other capacity calling for the rendition of services, advice,
or acts of management, operation or control), any business that is
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competitive with the Business within any geographic area in which any of the
Related Entities does business; provided, however, that Seller may own up to
five percent (5%) of any class of securities of a corporation engaged in such a
competitive business if such securities are listed on a national securities
exchange or registered under the Exchange Act;
(b) solicit any current employee of the Related Entities or any
individual who becomes an employee during such period to leave such employment;
or
(c) seek to divert or dissuade from continuing to do business with or
entering into business with any of the Related Entities, any supplier, customer
or other Person that had a business relationship with or with which any Related
Entity was actively planning or pursuing a business relationship during such
three-year period.
7.5.2 The necessity of protection against the competition of Seller
against Purchaser and the nature and scope of such protection has been carefully
considered by the parties hereto. The parties hereto agree and acknowledge that
the duration, scope and geographic areas applicable to the covenant
not-to-compete described in this Section 7.5 are fair, reasonable and necessary
and that adequate compensation has been received by Sellers for such
obligations. If, however, for any reason any court determines that the
restrictions in this Section 7.5 are not reasonable or that consideration is
inadequate, such restrictions shall be interpreted, modified or rewritten to
include as much of the duration, scope and geographic area identified in this
Section 7.5 as will render such restrictions valid and enforceable.
7.5.3 In the event of a breach or threatened breach of this Section 7.5,
Purchaser shall be entitled, without the posting of a bond, to an injunction
restraining such breach. Nothing herein contained shall be construed as
prohibiting any party from pursuing any other remedy available to it for such
breach or threatened breach.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY SELLER. Seller and Stockholders, jointly and
severally, agree to indemnify, defend and hold harmless Purchaser and all of its
officers, directors, shareholders, Affiliates, employees and agents (the
"Purchaser Indemnified Persons") after the Closing from and against any
Adverse Consequence arising out of or resulting from:
(a) the untruth, inaccuracy or incompleteness as of the date hereof of any
representation or warranty of Seller or any Stockholder contained in this
Agreement or Schedules hereto (or in any document, writing, certificate, data or
financial statements delivered or required to be delivered by Seller or any
Stockholder pursuant to this Agreement) (each a "Purchaser Warranty Claim") or
the failure by any Stockholder or Seller to perform any of his or its covenants
or obligations hereunder;
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(b) any brokers' commissions, finders' fees or other like payments
incurred or alleged to have been incurred by Seller or any Stockholder in
connection with the sale of the Shares or the consummation of the transactions
contemplated by this Agreement; and
(c) any and all Retained Liabilities of Seller.
8.2 INDEMNIFICATION BY PURCHASER. Purchaser agrees to indemnify, defend
and hold harmless Seller, each Stockholder and their respective employees,
agents and Affiliates after the Closing from and against any Adverse
Consequences arising out of or resulting from (a) the untruth, inaccuracy or
incompleteness as of the date hereof of any representation or warranty of
Purchaser contained in this Agreement (or in any document, writing or
certificate delivered by Purchaser under this Agreement) (each a "Seller
Warranty Claim"), (b) the failure by Purchaser to perform any of its covenants
or obligations hereunder, (c) any brokers' commissions, finders' fees or other
like payments incurred or alleged to have been incurred by Purchaser in
connection with the sale of the Purchased Assets or the consummation of the
transactions contemplated by this Agreement and (d) any and all Purchased Assets
and Liabilities (other than Retained Liabilities) of Seller.
8.3 PROCEDURE FOR INDEMNIFICATION. If any Person shall claim
indemnification (the "Indemnified Party") hereunder for any claim other than a
third-party claim, the Indemnified Party shall promptly give written notice to
the other party from whom indemnification is sought (the "Indemnifying Party")
of the nature and amount of the claim. If an Indemnified Party shall claim
indemnification hereunder arising from any claim or demand of a third party, the
Indemnified Party shall promptly give written notice (a "Third-Party Notice")
to the Indemnifying Party of the basis for such claim or demand, setting forth
the nature of the claim or demand in detail. The Indemnifying Party shall have
the right to compromise or, if appropriate, defend at its own cost and through
counsel of its own choosing, any claim or demand set forth in a Third-Party
Notice giving rise to such claim for indemnification. In the event the
Indemnifying Party undertakes to compromise or defend any such claim or demand,
it shall promptly (and in any event, no later than fifteen (15) days after
receipt of the Third-Party Notice) notify the Indemnified Party in writing of
its intention to do so. The Indemnified Party shall fully cooperate with the
Indemnifying Party and its counsel in the defense or compromise of such claim or
demand. After the assumption of the defense by the Indemnifying Party, the
Indemnified Party shall not be liable for any legal or other expenses
subsequently incurred by the Indemnifying Party, in connection with such
defense, but the Indemnified Party may participate in such defense at its own
expense. No settlement of a third party claim or demand defended by the
Indemnifying Party shall be made without the written consent of the Indemnified
Party, such consent not to be unreasonably withheld. The Indemnifying Party
shall not, except with the written consent of the Indemnified Party, consent to
the entry of a judgment or settlement which does not include as an unconditional
term thereof, the giving by the claimant or plaintiff to the Indemnified Party
of an unconditional release from all liability in respect of such third party
claim or demand.
8.4 LIMITATIONS ON INDEMNITY. (a) The indemnities contained in this
Article VIII with respect to Purchaser Warranty Claims and Seller Warranty
Claims shall expire eighteen (18) months following the date hereof, except with
respect to claims under Section 3.13 as to which the indemnification obligation
shall survive until thirty (30) days after the expiration of any applicable
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statute of limitations; provided, that if at the stated expiration of any
indemnification obligation there shall then be pending any indemnification claim
by a Person, such Person shall continue to have the right to such
indemnification with respect to such claim notwithstanding such expiration.
(b) Seller's and Stockholder's maximum aggregate liability to the
Purchaser Indemnified Persons for indemnification of Purchaser Warranty Claims
pursuant to Section 8.1(a) shall not exceed $7,500,000.
(c) Purchaser's maximum aggregate liability to Seller and Stockholders for
indemnification of Seller Warranty Claims pursuant to Section 8.2(a) shall not
exceed $2,500,000.
(d) No Purchaser Indemnified Person shall be entitled to indemnification
pursuant to Section 8.1 for any Purchaser Warranty Claims unless and until the
aggregate Adverse Consequences suffered by all Purchaser Indemnified Persons
collectively exceeds $300,000 whereupon the Purchaser Indemnified Persons
shall be entitled to indemnification hereunder from Seller and Stockholders for
all Adverse Consequences suffered by Purchaser Indemnified Persons regardless
of such threshold amount.
(e) Seller and Stockholders shall not be entitled to indemnification
pursuant to Section 8.2 for any Seller Warranty Claims unless and until the
aggregate Adverse Consequences suffered by Seller and Stockholders exceeds
$50,000, whereupon Seller and Stockholders shall be entitled to indemnification
hereunder from Purchaser for all Adverse Consequences suffered by Seller and
Stockholders regardless of such threshold amount.
8.5 PAYMENT. Except for third-party claims and disputes subject
to arbitration under Section 10.13 being defended in good faith by the
Indemnifying Party in accordance with Section 8.3, the Indemnifying Party shall
satisfy its obligations hereunder within fifteen (15) days after receipt of
notice of a claim.
8.6 SET-OFF. If Seller or any Stockholder fails to make any payment with
respect to any indemnification claim in accordance with this Article VIII when
due, Purchaser may, in addition to any other rights hereunder, upon seven (7)
days notice to Seller, set-off the amount of such claim against any amounts
payable by Purchaser to Seller under this Agreement, (including, without
limitation, payments to be made pursuant to the Promissory Note and Section 2.4
hereof). Notwithstanding anything in this Article VIII to the contrary,
Purchaser and Seller each agrees that (i) any claim for indemnification by
Purchaser shall be charged first against any amounts owing to Seller under the
Promissory Note, in the inverse order of the installments owing thereunder, (ii)
any additional amounts shall then be charged against any payments which may
become owing to Seller pursuant to Section 2.3, and (iii) in no event shall
Purchaser have any right of set-off or deduction against any compensation in
whatever form paid to any of the Stockholders in their capacities as employees
or officers of, or consultants, to, Purchaser or any Affiliate thereof on
account of any indemnification obligation owing to Purchaser by the Seller or
any Stockholder hereunder.
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ARTICLE IX
SELLER'S REPRESENTATIVE
9.1 APPOINTMENT. Seller hereby irrevocably makes, constitutes and
appoints ▇▇▇▇ ▇. ▇▇▇▇▇▇ as representative on behalf of Seller and Stockholders
(the "Representative") for all purposes under this Agreement. In the event of
the death, resignation or incapacity of the Representative, Seller shall
promptly designate another individual to act as their representative under this
Agreement so that at all times there will be a Representative with the
authority provided in this Article IX. Such successor Representative shall be
designated by Seller by an instrument in writing signed by Seller (or its
successors in interest), and such appointment shall become effective as to the
successor Representative when such instrument shall have been delivered to him
or her and a copy thereof delivered to Purchaser.
9.2 AUTHORIZATION. Seller and each Stockholder hereby authorizes the
Representative, on their behalf and in its or his name, to:
(a) receive all notices or documents given or to be given to Seller or
Stockholders by the Purchaser pursuant hereto or in connection herewith and
to receive and accept service of legal process in connection with any suit or
proceeding arising under this Agreement. The Representative shall make a good
faith reasonable effort to forward a copy of such notice of process to Seller
and each Stockholder;
(b) deliver at the Closing the Purchased Assets in exchange for the
consideration payable with respect to such Purchased Assets;
(c) upon confirmation of the receipt of wire transfers or certified or
official bank check, sign and deliver to Purchaser at the Closing a receipt for
Seller's consideration;
(d) deliver to Purchaser at the Closing all certificates and documents
to be delivered to Purchaser by Seller pursuant to this Agreement, together with
any other certificates and documents executed by Seller and deposited with the
Representative for such purpose;
(e) engage counsel, and such accountants and other advisors for Seller and
incur such other expenses on behalf of Seller in connection with this Agreement
and the transactions contemplated hereby as the Representative may deem
appropriate; and
(f) take such action on behalf of Seller as the Representative may deem
appropriate in respect of:
(i) waiving any inaccuracies in the representations or warranties
of Purchaser contained in this Agreement or in any document delivered by
Purchaser pursuant hereto;
(ii) taking such other action as the Representative is authorized to
take under this Agreement including, without limitation, Section 2.3;
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(iii) receiving all documents or certificates and making all
determinations, on behalf of Seller, required under this Agreement;
(iv) all such other matters as the Representative may deem necessary
or appropriate to consummate this Agreement and the transactions
contemplated hereby; and
(v) taking all such action as may be necessary after the date hereof
to carry out any of the transactions contemplated by this Agreement.
9.3 IRREVOCABLE APPOINTMENT. The appointment of the Representative
hereunder is irrevocable and any action taken by the Representative pursuant to
the authority granted in this Article IX shall be effective and absolutely
binding on Seller and each Stockholder notwithstanding any contrary action of,
or direction from, Seller or a Stockholder, except for actions taken by the
Representative which are in bad faith or grossly negligent. The death or
incapacity of a Stockholder shall not terminate the prior authority and agency
of the Representative.
9.4 RESIGNATION. The Representative may resign at any time by giving
notice to Seller, and such resignation shall be effective upon the appointment
and qualification of a successor. The Representative may be discharged, and
replaced by another person to act as his or her successor, by an instrument in
writing signed by Seller (or its successors in interest) or Stockholders
holding a majority of the Purchaser Shares at the time of determination.
9.5 PURCHASER'S RELIANCE. Purchaser shall not be obliged to inquire into
the authority of the Representative, and Purchaser shall be fully protected in
dealing with the Representative in good faith.
9.6 EXCULPATION AND INDEMNIFICATION. In performing any of his or her
duties as Representative under this Agreement, the Representative shall not
incur any Liability to any Person, except for Liability caused by the
Representative's willful misconduct or gross negligence. Accordingly, the
Representative shall not incur any such Liability for (i) any action that is
taken or omitted in good faith regarding any questions relating to the duties
and responsibilities of the Representative under this Agreement, or (ii) any
action taken or omitted to be taken in reliance upon any instrument that the
Representative shall in good faith believe to be genuine, to have been signed or
delivered by a proper person or persons and to conform with the provisions of
this Agreement.
(b) Stockholders, jointly and severally, shall indemnify, defend and hold
harmless the Representative against, from and in respect of any Adverse
Consequence arising out of or resulting from the performance of his or her
duties hereunder or in connection with this Agreement (except for Liabilities
arising from the gross negligence or willful misconduct of the Representative).
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 POST-CLOSING DELIVERIES. After the Closing, any monies, checks,
instruments, invoices, bills, receipts, notices, mail and other communications
received by one party but directed
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toward or due to another shall be promptly delivered to the other party. Seller
shall cooperate with Purchaser after the Closing to ensure the orderly
transition of the operation of the Purchased Assets from Seller to Purchaser.
10.2 NOTICES. All notices or other communications required or permitted
by this Agreement shall be in writing and shall be deemed to have been duly
received (a) if given by telecopier, when transmitted and the appropriate
telephonic confirmation received if transmitted on a business day and during
normal business hours of the recipient, and otherwise on the next business day
following transmission, (b) if given by certified or registered mail, return
receipt requested, postage prepaid, three business days after being deposited in
the U.S. mails and (c) if given by courier or other means, when received or
personally delivered, and, in any such case, addressed as follows:
(i) if to Purchaser:
Diamond Technology Partners Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President and General Counsel
Facsimile: (▇▇▇)-▇▇▇-▇▇▇▇
with a copy to:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Seller or Representative:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇. ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ & Associates, Ltd.
▇▇▇▇-▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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or to such other addresses as may be specified by any such Person to the other
Person pursuant to notice given by such Person in accordance with the provisions
of this Section 10.2.
10.3 ASSIGNMENT. No party may assign or transfer any or all of its
rights or obligations under this Agreement without the prior written approval of
all the other parties; provided, however, that Purchaser may assign or transfer
all (but not less than all) of its rights and obligations under this Agreement
to any Person that is wholly-owned, directly or indirectly, by Purchaser;
provided, further, Seller may transfer all or any portion of its interest in the
Purchaser Shares or the Promissory Note to any Stockholder.
10.4 BENEFIT OF THE AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall not be construed so as to confer any
right or benefit upon any Person, other than the parties hereto and their
respective successors and permitted assigns.
10.5 EXHIBITS AND SCHEDULES. The Exhibits and Schedules hereto shall be
construed with and as an integral part of this Agreement to the same effect as
if the contents thereof had been set forth verbatim herein.
10.6 HEADINGS. The headings used in this Agreement are for convenience
of reference only and shall not be deemed to limit, characterize or in any way
affect the interpretation of any provision of this Agreement.
10.7 ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding of the parties with respect to the subject matter hereof, and no
other representations, promises, agreements or understandings regarding the
subject matter hereof shall be of any force or effect unless in writing,
executed by the party to be bound thereby and dated on or after the date hereof.
10.8 MODIFICATIONS AND WAIVERS. No change, modification or waiver of
any provision of this Agreement shall be valid or binding unless it is in
writing, dated subsequent to the date hereof and signed by Purchaser and Seller.
No waiver of any breach, term or condition of this Agreement by any party shall
constitute a subsequent waiver of the same or any other breach, term or
condition.
10.9 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
10.10 SEVERABILITY. In case any one or more of the provisions contained
herein for any reason shall be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions had never been
contained herein.
10.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.
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10.12 EXPENSES. Except as otherwise expressly provided herein, each
party hereto shall pay all of its own costs and expenses incurred or to be
incurred in negotiating and preparing this Agreement and in closing and carrying
out the transactions contemplated by this Agreement.
10.13 ARBITRATION. Any dispute among the parties in connection with or
arising with respect to any provision of this Agreement shall be subject to
binding arbitration in Chicago, Illinois. To commence arbitration, one of the
Purchaser, Seller or the Representative, as the case may be, shall deliver
written notice of dispute and written demand for arbitration to the other
parties. Purchaser, Seller and the Representative shall, within thirty (30) days
of delivery of such notice, mutually agree in writing to an independent
arbitrator. If the parties are unable to agree by the thirtieth day after
delivery of notice, the party demanding arbitration shall request the American
Arbitration Association to appoint an arbitrator located in Chicago, Illinois.
The arbitration shall be conducted according to the rules of the American
Arbitration Association within the following guidelines:
(a) each party shall present its case in writing to the arbitrator
within sixty (60) days of the appointment of the arbitrator. There shall be one
reply brief submitted by each party;
(b) each party shall be allowed a maximum of two days to make its
presentations to the arbitrator;
(c) the decision of the arbitrator shall be in writing and final and
binding on the parties, and may be entered and enforced by any court of
competent jurisdiction; and
(d) each party shall bear its own expenses in connection with the
arbitration.
40
IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement as of the date first written above.
PURCHASER: DIAMOND TECHNOLOGY
PARTNERS INCORPORATED
By:___________________________
Name:_________________________
Title:________________________
SELLER: OMNITECH CONSULTING GROUP, INC.
By:___________________________
Name:_________________________
Title:________________________
STOCKHOLDERS:
___________________________ ______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________ ______________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
___________________________ ______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________ ______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
41
EXHIBIT A
FORM OF ASSUMPTION AGREEMENT
42
EXHIBIT B
FORM OF ▇▇▇▇ OF SALE AND ASSIGNMENT
43
EXHIBIT C
FORM OF PROMISSORY NOTE
44
EXHIBIT D
EARN-OUT FORMULA
45
EXHIBIT E
ALLOCATION OF PURCHASE PRICE
Seller and Purchaser hereby agree to allocate the tax basis of the
Purchased Assets and assumed Liabilities as follows:
(1) equipment and other fixed assets will be reflected at their net book
value as set forth on the audited Closing Balance Sheet; and
(2) all other Purchased Assets and assumed Liabilities will be reflected
at their respective balance as set forth on the audited Closing
Balance Sheet; and
(3) any excess will be allocated to goodwill.
PURCHASER: DIAMOND TECHNOLOGY
PARTNERS INCORPORATED
By:____________________________
Name:__________________________
Title:_________________________
SELLER: OMNITECH CONSULTING GROUP, INC.
By:____________________________
Name:__________________________
Title:_________________________
46
EXHIBIT F
FORM OF WITHHOLDING CERTIFICATE
I, ________________ , on behalf of Omnitech Consulting Group, Inc. (the
"Company") hereby certify as to the following:
1. This Company is not a nonresident alien for purposes of U.S. income
taxation;
2. The Company's U.S. taxpayer identification number is ________________;
and
3. The Company's address is
_________________________
_________________________
I understand that this certification may be disclosed to the Internal
Revenue Service.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete.
OMNITECH CONSULTING GROUP, INC.
By:___________________________
Name:_________________________
Title:________________________
Date April 23, 1999
47
EXHIBIT G
FORM OF EMPLOYMENT AGREEMENT
48
SCHEDULE 2.7
LIABILITIES ASSUMED
1998 Bonus Pool B as of 4/23/99..................... $ 247,350
1998 Bonus Pool C as of 4/23/99..................... 350,000
1998 Profit Sharing Pool (Pool D) as of 4/23/99..... 440,011
1998 Bonus Pool E as of 4/23/99..................... 759,788
1999 Profit Sharing and Bonus Pool as of 3/31/99.... 325,500
1999 Net Income Bonus Pool as of 3/31/99............ 104,584
---------
2,227,233
=========
49
LIST OF EXHIBITS AND SCHEDULES
The following is a list identifying all omitted exhibits and schedules to
the Agreement. Registrant agrees to furnish supplementally to the Commission
upon request a copy of any omitted exhibits or schedules.
EXHIBITS DESCRIPTION
-------- -----------
Exhibit A Form of Assumption Agreement
Exhibit B Form of ▇▇▇▇ of Sale and Assignment
Exhibit C Form of Promissory Note
Exhibit D Earn-out Calculation
Exhibit E Allocation of Purchase Price
Exhibit F Form of Withholding Certificate
Exhibit G Form of Employment Agreement
SCHEDULES
---------
Schedule 1.2 Retained Assets
Schedule 2.7 Liabilities Assumed
Schedule 3.1 Corporate Status; Authority of Seller
Schedule 3.3 Intellectual Property
Schedule 3.7 Personnel Identification and Compensation
Schedule 3.11 Certain Transactions
Schedule 3.12 Employee Benefit Matters
Schedule 3.13(i) Taxes
Schedule 3.14 Title to Assets
Schedule 3.16 Consents
Schedule 3.17 Licenses and Permits
Schedule 3.18 Insurance
Schedule 3.19 Financial Statements
Schedule 3.20 Undisclosed Liabilities
Schedule 3.21 Conduct of Business Since Reference Balance Sheet
Schedule 3.22 Brokers or Consultants Fees
Schedule 3.23 Banking Arrangements
