EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
MAREX, INC.
SOFTWARE SUPPORT TEAM, INC.
and
each of the stockholders of the Corporation
DATED AS OF SEPTEMBER 21, 2001
Table of Contents
Page
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Section 1.1 Sale of Stock....................................................1
Section 1.2 Purchase Price and Payment.......................................1
Section 1.3 Purchase Price Adjustments.......................................2
Section 1.4 Dispute Resolution...............................................2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS.................................4
Section 2.1 Corporate Organization, Etc......................................4
Section 2.2 Subsidiaries.....................................................4
Section 2.3 Capitalization...................................................4
Section 2.4 Books and Records................................................4
Section 2.5 Title to Stock...................................................4
Section 2.6 Authorization, Etc...............................................5
Section 2.7 Financial Statements.............................................5
Section 2.8 Employees........................................................6
Section 2.9 Warranty.........................................................7
Section 2.10 Absence of Certain Developments.................................7
Section 2.11 Assets..........................................................8
Section 2.12 Tax Matters.....................................................9
Section 2.13 Contracts and Commitments......................................10
Section 2.14 Intellectual Property..........................................11
Section 2.15 Litigation.....................................................13
Section 2.16 Brokerage......................................................13
Section 2.17 Insurance......................................................13
Section 2.18 No Employee Benefit Plans......................................13
Section 2.19 Compliance with Law and Certifications.........................14
Section 2.20 Affiliated Transactions........................................14
Section 2.21 Environmental Matters..........................................14
Section 2.22 Accounts Receivable............................................14
Section 2.23 Disclosure.....................................................14
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER..............................15
Section 3.1 Corporate Organization, Etc.....................................15
Section 3.2 Authorization, Etc..............................................15
Section 3.3 No Violation....................................................15
Section 3.4 Investment Intent...............................................16
ARTICLE IV
COVENANTS OF THE CORPORATION AND THE SELLERS.................................16
Section 4.1 Conduct of Business of the Corporation..........................16
Section 4.2 Review of the Corporation.......................................16
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Table of Contents
(continued)
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Section 4.3 Notices and Consents............................................16
Section 4.4 Insurance.......................................................17
Section 4.5 Intellectual Property Rights....................................17
Section 4.6 Notice of Material Change.......................................17
Section 4.7 S Corporation Status............................................17
Section 4.8 Simplified Employee Pension Program.............................17
ARTICLE V
COVENANTS OF THE PURCHASER...................................................17
Section 5.1 Notices and Consents............................................17
Section 5.2 DockMaster 6.0 Software Development.............................18
Section 5.3 Release from Certain Obligations................................18
ARTICLE VI
OTHER AGREEMENTS.............................................................18
Section 6.1 Non-Competition and Non-Solicitation............................18
Section 6.2 Confidentiality.................................................19
Section 6.3 Tax Matters.....................................................19
ARTICLE VII
CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT THE CLOSING.....................20
Section 7.1 Representations and Warranties, Covenants.......................20
Section 7.2 Consents and Approvals..........................................20
Section 7.3 Opinion of the Corporation's and the Sellers' Counsel...........20
Section 7.4 No Material Adverse Change......................................20
Section 7.5 Litigation......................................................20
Section 7.6 Accounting Matters..............................................21
Section 7.7 Condition of Assets.............................................21
Section 7.8 Secretary's Certificate.........................................21
Section 7.9 Certificates of Good Standing...................................21
Section 7.10 Termination of Affiliate Contracts.............................21
Section 7.11 Joinder of All Sellers.........................................21
Section 7.12 Employment Agreements..........................................21
Section 7.13 Creditor Consents..............................................21
Section 7.14 Resignations...................................................22
Section 7.15 Leases.........................................................22
Section 7.16 Estimated Closing Date Working Capital.........................22
Section 7.17 Termination of Simplified Employee Pension Program.............22
ARTICLE VIII
CONDITIONS TO THE CORPORATION'S AND THE SELLERS' OBLIGATIONS TO CLOSE........22
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Table of Contents
(continued)
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Section 8.1 Truth of Representations and Warranties.........................22
Section 8.2 Litigation......................................................22
Section 8.3 Consents and Approvals..........................................22
Section 8.4 Employment Agreements...........................................22
Section 8.5 Security Agreement..............................................22
ARTICLE IX
CLOSING......................................................................23
Section 9.1 Closing.........................................................23
Section 9.2 Intervening Litigation..........................................23
ARTICLE X
TERMINATION AND ABANDONMENT..................................................23
Section 10.1 Methods of Termination.........................................23
Section 10.2 Procedure Upon Termination.....................................23
ARTICLE XI
INDEMNIFICATION..............................................................24
Section 11.1 Survival.......................................................24
Section 11.2 Limitation.....................................................24
Section 11.3 Indemnification by Sellers.....................................25
Section 11.4 Indemnification by the Purchaser...............................26
Section 11.5 Notice of Indemnity Claims.....................................26
Section 11.6 Indemnification Obligation.....................................28
ARTICLE XII
MISCELLANEOUS................................................................28
Section 12.1 Certain Definitions............................................28
Section 12.2 Expenses.......................................................34
Section 12.3 Governing Law..................................................34
Section 12.4 Captions.......................................................34
Section 12.5 Notices........................................................34
Section 12.6 Counterparts...................................................35
Section 12.7 Entire Agreement...............................................35
Section 12.8 Amendments.....................................................36
Section 12.9 Severability...................................................36
Section 12.10 Third Party Beneficiaries.....................................36
Section 12.11 Assignment....................................................36
Section 12.12 CONSENT TO JURISDICTION; SERVICE OF PROCESS...................36
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") dated as of
the 21st day of September, 2001, among Marex, Inc., a Florida corporation, (the
"Purchaser"), Software Support Team, Inc., a Florida corporation (the
"Corporation"), and the stockholders of the Corporation set forth on the
signature pages hereto (each a "Seller" and collectively the "Sellers"). Except
as otherwise indicated herein, capitalized terms used herein are defined in
Article XII hereof.
WHEREAS, the Corporation is in the business of developing,
customizing, installing and servicing computer software and related applications
for the marine industry (the "Business");
WHEREAS, the Sellers own all of the shares of capital stock of
the Corporation (the "Stock"), consisting solely of common stock, $1.00 par
value per share, being all of the issued and outstanding shares of all classes
of capital stock and Options of the Corporation;
WHEREAS, the Purchaser desires to acquire all of the
outstanding Stock of the Corporation; and
WHEREAS, the Sellers desire to sell, and the Purchaser desires
to purchase, the Stock pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein set forth, the parties agree as follows:
ARTICLE I
AUTHORIZATION AND CLOSINGS
Section 1.1 Sale of Stock. Subject to the terms and
conditions to closing set forth in this Agreement, the Sellers do hereby sell,
assign, convey, transfer and deliver to the Purchaser, and the Purchaser does
hereby purchase from the Sellers on the Closing Date, all of the shares of Stock
owned by the Sellers as reflected on the signature pages hereto. The
certificates representing the Stock shall be delivered to the Purchaser, duly
endorsed in blank, or accompanied by stock powers duly executed in blank, with
all necessary transfer tax and other revenue stamps, acquired at the Sellers'
expense, affixed and canceled. The Sellers agree to cure any deficiencies with
respect to the endorsement of the certificates representing the Stock owned by
the Sellers or with respect to the stock powers accompanying any such
certificates.
Section 1.2 Purchase Price and Payment
(a) In full consideration for the sale of the Stock, and
subject to the terms and conditions contained herein, the Purchaser shall pay to
the Sellers (the "Purchase Price"):
(i) An aggregate amount equal to $800,000, (A)
minus the Indebtedness of the Corporation outstanding on the
Closing Date and (B) minus
any applicable Working Capital Shortfall as set forth in
Section 1.3(b)(i) (such net amount being referred to as the
"Cash Amount");
(ii) Promissory notes made by the Purchaser in
favor of the Sellers in the aggregate principal amount of
$1,600,000, substantially in the form of Exhibit 1.2 hereto
(the "Note");
(b) The Cash Amount shall be paid to the Sellers by means
of a wire transfer of immediately available funds on the Closing Date.
(c) The Note shall be delivered to the applicable Sellers
at Closing.
Section 1.3 Purchase Price Adjustments
(a) Estimated Closing Date Balance Sheet. On the Closing
Date, the chief financial officer of the Corporation or other officer
functioning in such capacity (the "Chief Financial Officer") shall prepare and
deliver to the Purchaser (i) an estimated balance sheet for the Corporation as
of the Closing Date in accordance with the procedures set forth on Schedule 1.3
hereto (the "Estimated Closing Date Balance Sheet") and (ii) an estimated
calculation of the Closing Date Working Capital (the "Estimated Closing Date
Working Capital"), each prepared in accordance with GAAP. The Chief Financial
Officer of the Corporation shall also provide the Purchaser with copies of all
work papers and other documents and data used to prepare the Estimated Closing
Date Balance Sheet.
(b) Post Closing Adjustments. Within fifteen (15) days
after delivery to the Purchaser of all materials related to the close of the end
of the first month following the Closing Date, the Purchaser shall prepare and
deliver to the Sellers a balance sheet for the Corporation as of the Closing
Date (the "Closing Date Balance Sheet"), which shall be prepared in accordance
with GAAP. The Purchaser shall also make available to the Sellers copies of all
work papers and other documents and data used to prepare the Closing Date
Balance Sheet. The Sellers and the Purchaser shall have the right to dispute the
Closing Date Balance Sheet (and any items therein) and make any proposed
adjustments thereto as provided in Section 1.4 hereto.
(i) If it is determined that there was an
Adjusted Working Capital Shortfall at Closing, the Working
Capital Shortfall shall be paid by the Sellers to the
Purchaser on the Settlement Date; or
(ii) In the event a Working Capital Shortfall is
not paid to the Purchaser on the Settlement Date (unless due
to the fault of the Purchaser), the Sellers shall also pay to
the Purchaser interest on the amount of the Working Capital
Shortfall at a rate of six percent (6%) per annum, which shall
accrue from the Closing Date to the date of actual payment.
Section 1.4 Dispute Resolution
(a) Dispute Mechanism. The Sellers shall have until
thirty (30) days after the delivery of the Closing Date Balance Sheet to review
the Closing Date Working Capital calculations and propose any adjustments
thereto. All adjustments proposed by the Sellers shall
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be set out in detail in a written statement delivered to the Purchaser (the
"Adjustment Statement") and shall be incorporated into the calculation of the
Closing Date Working Capital, unless the Purchaser shall object in writing to
such proposed adjustments (the proposed adjustment or adjustments to which the
Purchaser objects are referred to herein as the "Contested Adjustments" and the
Purchaser's objection notice is referred to herein as the "Contested Adjustment
Notice") within thirty (30) days of delivery by the Sellers to the Purchaser of
the Adjustment Statement. If the Purchaser delivers a Contested Adjustment
Notice to the Sellers, the Purchaser and the Sellers shall attempt in good faith
to resolve their dispute regarding the Contested Adjustments, but if a final
resolution thereof is not obtained within ten (10) days after the Purchaser
delivers to the Sellers said Contested Adjustment Notice, either the Purchaser
or the Sellers may retain for the benefit of all the parties hereto an
accounting firm acceptable to both the Sellers and the Purchaser (the
"Independent Accountant") to resolve any remaining disputes concerning the
Contested Adjustments. If the Independent Accountant is retained, then (i) the
Sellers and the Purchaser shall each submit to the Independent Accountant in
writing not later than thirty (30) days after the Independent Accountant is
retained their respective positions with respect to the Contested Adjustments,
together with such supporting documentation as they deem necessary or as the
Independent Accountant requests, and (ii) the Independent Accountant shall,
within thirty (30) days after receiving the positions of both the Sellers and
the Purchaser and all supplementary supporting documentation requested by the
Independent Accountant, render its decision as to the Contested Adjustments,
which decision shall be final and binding on, and nonappealable by, the Sellers
and the Purchaser. The fees and expenses of the Independent Accountant shall be
paid by the party whose estimate of the calculation in question is furthest from
the Independent Accountant's estimate of the calculation in question. The
decision of the Independent Accountant shall also include a certificate of the
Independent Accountant setting forth the final calculation in question (the
"Settlement Amount Certificate"). The calculation of the Closing Date Working
Capital shall be deemed to include those adjustments accepted or made by the
decision of the Independent Accountant in resolving the Contested Adjustments.
(b) Settlement Date. There shall be a "Settlement Date"
after the calculation of the Closing Date Working Capital which shall mean the
following, as applicable:
(i) If the Sellers have not timely delivered an
Adjustment Statement to the Purchaser, thirty-five (35) days after the
date the Sellers receive the calculation in question;
(ii) If the Sellers have timely delivered an Adjustment
Statement and the Purchaser has not timely delivered a Contested
Adjustment Notice, thirty-five (35) days after the date the Purchaser
receives the Adjustment Statement;
(iii) If the Sellers and the Purchaser have any disputes
regarding the Contested Adjustments and they resolve those disputes,
five (5) business days after such resolution;
(iv) Five (5) business days after the Independent
Accountant delivers the Settlement Amount Certificate, if applicable;
or
(v) Such other date as shall be agreed between the
Sellers and the Purchaser.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
As a material inducement to the Purchaser to enter into this
Agreement and to purchase the Stock hereunder, the Sellers hereby jointly and
severally represent and warrant to the Purchaser that:
Section 2.1 Corporate Organization, Etc. The Corporation
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation with full corporate power and
authority to carry on its Business as it is now being conducted and to own,
operate and lease its properties and assets. The Corporation is duly qualified
or licensed to do business and is in good standing in every jurisdiction in
which the conduct of its Business, and the ownership or lease of its properties
and assets, require it to be so qualified or licensed. Such jurisdictions are
set forth in Schedule 2.1 hereto.
Section 2.2 Subsidiaries. The Corporation has no
Subsidiaries or Investments in any Person and has no interest, direct or
indirect, and no commitment to make any Investment, directly or indirectly, in
any other Person. The Business carried on by the Corporation has not been
conducted through any other direct or indirect Subsidiary or Affiliate of any
Seller.
Section 2.3 Capitalization. The Corporation has
authorized and issued the outstanding capital stock as set forth in Schedule 2.3
hereto. All outstanding shares of capital stock of the Corporation have been,
and will on the Closing Date be, duly authorized, validly issued, fully paid and
nonassessable. Except as set forth on Schedule 2.3 hereto, there are no
outstanding subscriptions, Options, rights, calls, commitments, conversion
rights, rights of exchange, preemptive rights, rights of first refusal, rights
of first offer, plans or other Contracts of any character providing for the
purchase, issuance or sale of any shares of the capital stock of the
Corporation, other than as contemplated by this Agreement.
Section 2.4 Books and Records. The corporate minute
books of the Corporation that have been made available to the Purchaser for
inspection are complete and correct in all material respects and contain all of
the material proceedings of the stockholders and directors of the Corporation.
The Corporation does not have any of its records, systems, controls, data or
information recorded, stored, maintained, operated or otherwise wholly or partly
dependent upon or held by any means (including any electronic, mechanical or
photographic process, whether computerized or not) which (including all means of
access thereto and therefrom) are not under the exclusive ownership and direct
control of the Corporation.
Section 2.5 Title to Stock. The Sellers own the shares
of Stock of the Corporation as set forth on the signature pages hereto, free and
clear of all Liens, Claims and Orders, which constitute all of the issued and
outstanding shares of capital stock and Options of the Corporation. The delivery
to the Purchaser of the Stock pursuant to the provisions of this Agreement will
transfer to the Purchaser good and marketable title to all of the capital stock
and Options of the Corporation, free and clear of all Liens, Claims and Orders.
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Section 2.6 Authorization, Etc.
(a) The Corporation has full power and authority to enter
into this Agreement, and the Transaction Documents to which the Corporation is a
party, and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement, the Transaction Documents
and the transactions contemplated hereby and thereby have been duly authorized
by the board of directors and the stockholders of the Corporation and no other
corporate proceedings on their part are necessary to authorize this Agreement,
the Transaction Documents and the transactions contemplated hereby and thereby.
This Agreement and the Transaction Documents to be entered into by the
Corporation each constitutes a legal, valid and binding obligation of the
Corporation, enforceable against the Corporation in accordance with its terms.
(b) Each Seller is the sole owner of and has full right,
power and authority to sell and vote the Stock set forth opposite the signature
line for such Seller's name below. Each Seller has the requisite power and
authority to execute and deliver this Agreement and the Transaction Documents,
and to perform his or her obligations hereunder and thereunder, and to sell,
assign, transfer and convey the shares of Stock, and the certificates evidencing
such Stock, so owned by such Seller to the Purchaser pursuant to this Agreement,
free and clear of all Liens, Claims and Orders. This Agreement and the
Transaction Documents to be entered into by the Sellers each constitute a legal,
valid and binding obligation of each Seller who is a party thereto, enforceable
against each Seller in accordance with its terms.
(c) The execution, delivery and performance by the
Corporation and the Sellers of this Agreement and the Transaction Documents, and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Corporation and the Sellers, do not and will not (a) conflict with or
result in a breach of the terms, conditions or provisions of, (b) constitute a
default or event of default under (whether with or without due notice, the
passage of time or both), (c) result in the creation of any Lien upon the
Corporation's capital stock or assets pursuant to, (d) give any third party the
right to modify, terminate or accelerate any obligation under, (e) result in a
violation of, or (f) require any authorization, consent, approval, exemption or
other action by, notice to, or filing with any third party or Authority pursuant
to, the charter or bylaws of the Corporation or any applicable Regulation, Order
or Contract to which the Corporation, the Sellers or their respective properties
or the Stock are subject. Each of the Sellers and the Corporation has complied
with all applicable Regulations and Orders in connection with the execution,
delivery and performance of this Agreement, the Transaction Documents and the
transactions contemplated hereby and thereby.
Section 2.7 Financial Statements
(a) Attached as Schedule 2.7 hereto are (i) unaudited
balance sheets of the Corporation as of December 31, 1998, 1999 and 2000 and
unaudited statements of operations of the Corporation for the years then ended
and (ii) an unaudited balance sheet of the Corporation as of June 30, 2001 and
an unaudited statement of operations for the six (6)-month period then ended.
Such balance sheets fairly present the financial position of the Corporation at
the respective dates thereof in accordance with GAAP, and such statements of
operations fairly present the results of operations for the periods referred to
therein in accordance with GAAP,
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except that (x) the unaudited financial statements do not include statements of
shareholders' equity and changes in cash flow and have no notes attached thereto
(none of such notes would be material) and (y) the Corporation has historically
expensed research and development costs as incurred (except for the Dockmaster
VB Software Project and for software acquired by the Corporation). All of the
foregoing financial statements were prepared from the books and records of the
Corporation. The Corporation does not utilize any percentage of completion or
similar method of accounting for revenue, income or cost recognition purposes.
The Corporation has not in the past five (5) fiscal years written off any
research and development costs, incurred any reorganization, restructuring or
similar costs or changed the book value of any assets, liabilities or goodwill
of any business acquired by the Corporation. All properties used in the
Corporation's business operations during the period covered by the foregoing
financial statements are reflected in the financial statements in accordance
with and to the extent required by GAAP. The foregoing balance sheets and
statements of operations are herein collectively referred to as the "Financial
Statements" and June 30, 2001 is herein referred to as the "Financial Statement
Date."
(b) The Corporation does not have any Indebtedness,
obligation or liability (whether accrued, absolute, contingent, unliquidated or
otherwise, known or unknown to the Corporation, whether due or to become due)
arising out of transactions entered into at or prior to the Closing Date, or any
state of facts existing at or prior to the Closing Date, other than: (i)
liabilities set forth in the Latest Balance Sheet of the Corporation, or (ii)
liabilities and obligations that have arisen after the Financial Statement Date
in the ordinary course of business (none of which is a liability resulting from
breach of a Contract, Regulation, Order or warranty, tort, infringement or
Claim).
(c) There is no Person that has Guaranteed, or provided
any financial accommodation of, any Indebtedness, obligation or liability of the
Corporation or for the benefit of the Corporation for the periods covered by the
Financial Statements other than as set forth in the Financial Statements. The
management of the Corporation has disclosed to the Purchaser all facts and
circumstances known to them that are material and bear upon the accuracy of the
financial statements. The Corporation's accounting systems and controls are
sufficient to detect material fraud and inaccuracies in the financial reporting
processes and reports.
Section 2.8 Employees. Schedule 2.8 hereto sets forth a
complete and accurate list of (a) all officers, directors and key employees
(meaning those earning more than $50,000 annually) of the Corporation, and their
total compensation and (b) all accrued and unpaid bonuses and all paid bonuses
that have arisen since December 31, 2000. The Corporation has conducted its
business in compliance with all Regulations and Orders affecting employment and
employment practices applicable to the Corporation, including the payment of
wages and hours. Neither the Corporation nor any of its Subsidiaries are a party
to a collective bargaining agreement and, since December 31, 1995, there have
been no strikes, work stoppages nor any demands for collective bargaining by any
union, labor organization or other Person. There is no dispute or controversy
with any union or other organization of the Corporation's employees and no
arbitration proceedings are pending or, to the knowledge of the Sellers,
threatened involving an employment or labor related dispute or controversy
affecting the Corporation. At the Closing the Corporation will not have any
liability or obligation to any of its current or former employees, officers or
directors (including unaccrued year end bonuses) other than for the
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payment of salaries and reimbursement of business expenses in the ordinary
course of business. The Corporation has not taken any action, or failed to take
any action, that has or would reasonably be likely to result in any Claim by an
employee that he/she has been constructively terminated or due severance
payments. Except as set forth on Schedule 2.8 hereto, upon the consummation of
the transactions contemplated hereby and pursuant to the agreements referred to
herein (either alone or upon the occurrence of any additional or subsequent
event), the Corporation will not have any "change in control," bonus or other
obligations to any Seller, or any of the Corporation's employees, consultants or
other Persons performing services for the Corporation.
Section 2.9 Warranty. Except as set forth on Schedule
2.9 hereto, all products produced and services rendered by the Corporation have
been in conformity in all material respects with all applicable contractual
commitments and all express and implied warranties, and the Corporation does not
have any liability (and there is no reasonable basis for any present or future
Claim or demand against it giving rise to any such liability) for replacement or
repair thereof or other damages in connection therewith (including, but not
limited to requirements to perform additional services in connection therewith)
in excess of an aggregate of ten thousand dollars ($10,000). No services
rendered nor products produced by the Corporation are subject to any Guarantee,
warranty or other indemnity beyond the applicable standard terms and conditions
of products produced or services rendered by the Corporation, except as set
forth on Schedule 2.9 hereto. Schedule 2.9 hereto includes copies of such
standard terms and conditions of products produced and services rendered by the
Corporation (containing applicable Guarantee, warranty and indemnity
provisions).
Section 2.10 Absence of Certain Developments
(a) Except as expressly contemplated by this Agreement,
since the Financial Statement Date the Corporation has not:
(i) issued any notes, bonds or other debt
securities or any capital stock or other equity securities or any
securities convertible, exchangeable or exercisable into any capital
stock or other equity securities;
(ii) borrowed any amount or incurred or become
subject to any liabilities, except current liabilities incurred in the
ordinary course of business and liabilities under Contracts entered
into in the ordinary course of business;
(iii) discharged or satisfied any Lien or paid any
obligation or liability, other than current liabilities paid in the
ordinary course of business;
(iv) declared or made any payment or distribution
of cash or other property to its stockholders with respect to its
capital stock or other equity securities or purchased or redeemed any
shares of its capital stock or other equity securities (including,
without limitation, any Options or other rights to acquire its capital
stock);
(v) mortgaged or pledged any of its properties
or assets or subjected them to any Lien, except Liens for current
property taxes not yet due and payable;
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(vi) sold, assigned or transferred any of its
tangible assets, except in the ordinary course of business, or canceled
any debts or Claims;
(vii) sold, assigned or transferred any
Intellectual Property rights or other intangible assets, or disclosed
any proprietary confidential information to any Person;
(viii) suffered any extraordinary losses or waived
any rights of value, whether or not in the ordinary course of business
or consistent with past practice;
(ix) made capital expenditures or commitments
therefor that aggregate in excess of $10,000;
(x) made any loans or advances to, guarantees
for the benefit of, or any Investments in, any Person in excess of
$10,000 in the aggregate;
(xi) made any charitable contributions or
pledges;
(xii) suffered any damage, destruction or casualty
loss exceeding in the aggregate $10,000, whether or not covered by
insurance;
(xiii) made any investment in or taken steps to
incorporate any Subsidiary;
(xiv) become a party to any Contract for the
performance of services and/or the sale of products in which losses to
the Corporation are in the excess of $10,000 in the aggregate;
(xv) entered into, amended, modified or
supplemented any Contract, transaction, commitment or arrangement with
any of its officers, directors, employees, stockholders or Affiliates
or with any entity in which any such Person or individual owns a
beneficial interest, except for customary employment arrangements and
benefit programs on reasonable terms and except as otherwise expressly
contemplated by this Agreement;
(xvi) increased any compensation or paid any bonus
or other forms of current and deferred compensation payable to any
officer, director or employee of the Corporation; or
(xvii) entered into any other transaction other
than in the ordinary course of business or entered into any other
material transaction, whether or not in the ordinary course of
business.
(b) The Corporation has not at any time made any payments
for political contributions or made any bribes, kickback payments or other
illegal payments.
Section 2.11 Assets. The Corporation has good and
marketable title to, or a valid leasehold interest in, the properties and assets
used by it, located on its premises or shown
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on the Latest Balance Sheet or acquired thereafter, free and clear of all Liens,
except for properties and assets disposed of in the ordinary course of business
since the date of the Latest Balance Sheet and except for Liens disclosed on the
Latest Balance Sheet (including any notes thereto) and Liens for current
property taxes not yet due and payable. The Corporation's buildings, equipment
and other tangible assets are in good operating condition and are fit for use in
the ordinary course of business.
Section 2.12 Tax Matters.
(a) The Corporation has filed all Tax Returns that it was
required to file. All such Tax Returns were correct and complete in all
respects. All Taxes owed by the Corporation (whether or not shown on any Tax
Return) have been paid. The Corporation currently is not the beneficiary of any
extension of time within which to file any Tax Return. No Claim has ever been
made by an authority in a jurisdiction where the Corporation does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction. There are
no security interests on any of the assets of the Corporation that arose in
connection with any failure (or alleged failure) to pay any Tax.
(b) The Corporation has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or other third
party.
(c) No Seller, director or officer (or employee
responsible for Tax matters) of the Corporation expects any Authority to assess
any additional Taxes for any period for which Tax Returns have been filed. There
is no dispute or Claim concerning any Tax liability of the Corporation either
(i) claimed or raised by any Authority in writing or (ii) as to which any of the
Sellers and the directors and officers (and employees responsible for Tax
matters) of the Corporation has knowledge based upon personal contact with any
agent of such authority. Schedule 2.12 hereto lists all federal, state, local,
and foreign income Tax Returns filed with respect to the Corporation for taxable
periods ended on or after April 15, 1998, indicates those Tax Returns that have
been audited, and indicates those Tax Returns that currently are the subject of
audit. The Sellers have delivered to the Purchaser correct and complete copies
of all federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by the Corporation since April 15,
1995.
(d) The Corporation has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(e) The Corporation has not filed a consent under Code
ss.341(f) concerning collapsible corporations. The Corporation has not made any
payments, is not obligated to make any payments and is not a party to any
agreement that under any circumstances could obligate it to make any payments
that will not be deductible under Code ss.280G. The Corporation has not been a
United States real property holding corporation within the meaning of Code
ss.897(c)(2) during the applicable period specified in Code ss.897(c)(1)(A)(ii).
The Corporation has disclosed on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Code ss.6662. The Corporation is not a party to
any Tax allocation or sharing agreement. The Corporation (i) has not been a
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member of an affiliated group filing a consolidated federal income Tax Return
and (ii) has no liability for the Taxes of any Person under Reg. ss.1.1502-6 (or
any similar provision of state, local, or foreign law), as a transferee or
successor, by Contract, or otherwise.
(f) Schedule 2.12 sets forth with respect to the
Corporation as of the most recent practicable date the basis of the Corporation
in its assets.
(g) The unpaid Taxes of the Corporation (i) do not exceed
the reserve for Tax liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth
on the Estimated Closing Date Balance Sheet (rather than in any notes thereto)
and (ii) do not exceed that reserve as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of the
Corporation in filing their Tax Returns.
(h) The Corporation will not be required to include any
item of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of
any (i) change in method of accounting for a taxable period ending on or prior
to the Closing Date under Code ss. 481(c) (or any corresponding or similar
provision of state, local or foreign income Tax law); (ii) "closing agreement"
as described in Code ss.7121 (or any corresponding or similar provision of
state, local or foreign income Tax law) executed on or prior to the Closing
Date; (iii) deferred intercompany gain or any excess loss account described in
Treasury Regulations under Code ss. 1502 (or any corresponding or similar
provision of state, local or foreign income Tax law); (iv) installment sale or
open transaction disposition made on or prior to the Closing Date; or (v)
prepaid amount received on or prior to the Closing Date.
(i) The Corporation has been a validly existing S
corporation within the meaning of Code ss. ss. 1361 and 1362 at all times during
its existence since the date of its incorporation and the Corporation will be an
S corporation up to and including the day before the Closing Date.
(j) The Corporation does not own a "qualified subchapter
S subsidiary" within the meaning of Code ss. 1361(b)(3)(B).
(k) The Corporation would not be liable for any Tax under
Code ss. 1374 if its assets were sold for their fair market value as of the
Closing Date. The Corporation has not in the past 10 years, (i) acquired assets
from another corporation in a transaction in which the Corporation's Tax basis
for the acquired assets was determined, in whole or in part, by reference to the
Tax basis of the acquired assets (or any other property) in the hands of the
transferor or (ii) acquired the stock of any corporation which is a qualified
subchapter S subsidiary.
Section 2.13 Contracts and Commitments. Attached as
Schedule 2.13 hereto is a complete list of every material Contract, job order
and work plan to which the Corporation is a party or to which its assets are
bound. Except as set forth on Schedule 2.13 hereto, the Corporation is neither a
party to nor is bound by (i) any Contract or commitment that involves the
performance by the Corporation, the purchase of its goods or services, the
provision of the Corporation's employees, a capital expenditure by the
Corporation, in each of the foregoing
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cases in excess of $10,000 annually, (ii) any Contract, indenture or other
instrument which contains restrictions with respect to payment of dividends or
any other distribution in respect of its capital stock, (iii) any Contract
relating to the deferred purchase price of property (excluding trade payables in
the ordinary course of business), (iv) any loan or advance to, Investment in, or
commitment to make any loan, advance or Investment in any Person, (v) any
Contract or commitment involving a sharing of the Corporation's profits, (vi)
any Guarantee or other contingent liability in respect of any Indebtedness or
obligation of any Person, (vii) any Contract or commitment limiting the ability
of the Corporation to engage in any line of business or to compete with any
Person or to otherwise acquire property or conduct business in any area, (viii)
any warranty, Guarantee or other similar undertaking with respect to a
contractual performance extended by the Corporation, other than in the ordinary
course of business, (ix) any employment, consulting, sales, commissions,
advertising or marketing Contracts which provide for annual payments in excess
of $50,000, or (x) any material Contract that requires the consent of any party
in connection with the execution, delivery or performance of this Agreement.
Except as otherwise set forth on Schedule 2.13 hereto each Contract set forth on
Schedule 2.13 hereto (or required to be set forth on Schedule 2.13 hereto) is
valid, binding and enforceable in accordance with its terms, is in full force
and effect and there exists no material default by the Corporation or, to the
knowledge of the Sellers, event, occurrence, condition or act (including the
consummation of the sale contemplated hereby) which, with the giving of notice,
the lapse of time or the happening of any other event or condition, could become
a default by the Corporation. To the knowledge of the Sellers, there does not
exist any material default by any other party to any Contract set forth on
Schedule 2.13 hereto.
Section 2.14 Intellectual Property
(a) Schedule 2.14 hereto is a complete and accurate list
of all Intellectual Property used, held for use, or is required in the Business
of the Corporation. To the extent indicated on such schedule, the Intellectual
Property listed on Schedule 2.14 hereto has been duly registered in, filed in or
issued by the United States Patent and Trademark Office, United States Copyright
Office, a duly accredited and appropriate domain name registrar, the appropriate
offices in the various states of the United States and the appropriate offices
of other jurisdictions (foreign and domestic), and each such registration,
filing and issuance remains in full force and effect as of the Closing Date.
Copies of all items of Corporation Intellectual Property which have been reduced
to writing or other tangible form have been delivered by the Corporation to the
Purchaser (including, without limitation true and complete copies of all related
licenses, and amendments and modifications thereto).
(b) Except as set forth in Schedule 2.14 and for purchase
orders or license Contracts arising in the ordinary course of business, the
Corporation is not a party to any license or Contract, whether as licensor,
licensee, or otherwise with respect to any Intellectual Property. To the extent
any Intellectual Property is used under license in the Business of the
Corporation, no notice of a material default has been sent or received by the
Corporation under any such license which remains uncured and the execution,
delivery or performance of the Corporation's obligations hereunder will not
result in such a default. Each such license agreement is a legal, valid and
binding obligation of the Corporation and each of the other parties thereto,
enforceable in accordance with the terms thereof.
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(c) Except as set forth in Schedule 2.14 hereto, the
Corporation owns or is licensed to use, all of the Corporation Intellectual
Property, free and clear of any Liens, Orders and other adverse Claims, without
obligation to pay any royalty or any other fees with respect thereto. The
Corporation's use of the Intellectual Property (including, without limitation,
the manufacturing, marketing, licensing, sale or distribution of products and
the general conduct and operations of the business of the Corporation) does not
violate, infringe, misappropriate or misuse any Intellectual Property rights of
any third party. No Corporation Intellectual Property has been cancelled,
abandoned or otherwise terminated and all renewal and maintenance fees in
respect thereof have been duly paid. There are no actions that must be taken or
payments that must be made by the Corporation within 180 days following the
Closing Date that, if not taken, will adversely affect the Corporation
Intellectual Property.
(d) Except as set forth in Schedule 2.14 hereto, the
Corporation has not received any written notice or Claim from any third party
challenging the right of the Corporation to use any of the Corporation
Intellectual Property.
(e) Except as set forth in Schedule 2.14 hereto, the
Corporation has not made, and has not been subject to, any Claim in writing of a
violation, infringement, misuse or misappropriation by any third party
(including, without limitation, any employee or former employee of the
Corporation) of its rights to, or in connection with any Intellectual Property.
Except as set forth in Schedule 2.14 hereto, the Corporation has not entered
into any Contract to indemnify any other Person against any charge of
infringement of any Intellectual Property, other than indemnification provisions
contained in purchase orders or license Contracts arising in the ordinary course
of business.
(f) Except as set forth in Schedule 2.14 hereto, to the
best knowledge of the Corporation, there are no pending or threatened Claims by
any Person or Authority of a violation, infringement, misuse or misappropriation
by the Corporation of any Intellectual Property owned by any third party, or of
the invalidity of any Intellectual Property included in the Corporation
Intellectual Property. To the best knowledge of the Sellers, there is no valid
basis for any such Claims.
(g) Except as set forth in Schedule 2.14 hereto, there
are no interferences or other contested proceedings, either pending or, to the
best knowledge of the Corporation, threatened, in the United States Copyright
Office, the United States Patent And Trademark Office, or any governmental
Authority (foreign or domestic) relating to any pending application with respect
to the Corporation Intellectual Property.
(h) The Corporation has secured valid written assignments
from all Persons (including, without limitation, consultants and employees) who
contributed to the creation or development of Corporation Intellectual Property
of the rights to such contributions that the Corporation does not already own by
operation of law.
(i) The Corporation has taken all reasonable steps to
protect and preserve the confidentiality of all trade secrets, know-how, source
codes, databases, customer lists, schematics, ideas, algorithms and processes
and all use, disclosure or appropriation thereof by or to any third party has
been pursuant to the terms of a written agreement between such third party
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and the Corporation. The Corporation has not breached any Contracts of
non-disclosure or confidentiality.
Section 2.15 Litigation. There have been no Claims or
Orders involving the Corporation since December 31, 1995. To the knowledge of
the Sellers, there is no Claim or Order threatened against the Corporation nor
is there any basis therefor.
Section 2.16 Brokerage. Other than for fees due to
Southeast Business Partners, Inc., which shall be paid by the Sellers, there are
no Claims for brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement binding upon the Corporation or the Sellers.
Section 2.17 Insurance. Schedule 2.17 hereto contains an
accurate description of each insurance Policy maintained by the Corporation, and
each such Policy is in full force and effect as of the Closing. The Corporation
is not in default with respect to its obligations under any insurance Policy
maintained by it, and the Corporation has not been denied insurance coverage.
The insurance coverage of the Corporation is adequate to cover all anticipated
liabilities.
Section 2.18 No Employee Benefit Plans. Set forth on
Schedule 2.18 hereto is an accurate and complete list of all bonus, stock
option, stock purchase, restricted stock, incentive, fringe benefit, "voluntary
employees' beneficiary associations" under Section 501(c)(9) of the Code,
deferred compensation, medical life insurance, disability, accident, salary
continuation, severance, accrued leave, vacation, sick pay, sick leave,
supplemental retirement and unemployment benefit plans, programs, arrangements,
commitments and/or practices (whether or not insured) and employment,
consulting, termination, and severance Contracts; in each case for active,
retired or former employees or directors, whether or not any such plans,
programs, arrangements, commitments, Contracts and or practices referred to
above are in writing or are otherwise exempt from the provisions of ERISA, that
have been established, maintained or contributed to (or with respect to which an
obligation to contribute has been undertaken) or with respect to which any
potential liability is borne by the Corporation (including, for this purpose and
for the purpose of all of the representations in this Section 2.18, any
predecessors to the Corporation and all employers (whether or not incorporated)
that would be treated together with the Corporation and/or any of the
stockholders as a single employer (i) within the meaning of Section 414 of the
Code or (ii) as a result of the Corporation and/or a stockholder being or having
been a general partner of any such employer) since January 1, 1993
(collectively, the "Employee Benefit Plans"). Except for the Corporation's
Simplified Employee Pension Program,neither the Corporation nor any employers
which would be treated together with the Corporation as a single employer within
the meaning of Section 414 of the Code has ever maintained or contributed to, or
had any obligation to contribute to (or borne any liability with respect to) any
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA.
Except as set forth on Schedule 2.18 hereto: (a) each Employee Benefit Plan is
in compliance with applicable law and has been administered and operated in all
respects in accordance with its terms; (b) no Employee Benefit Plan provides for
post-employment or retiree welfare benefits, except to the extent required by
Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code; (c) no
liability, claim, action or litigation, has been made, commenced or, to the
Corporation's knowledge, threatened with respect to any Employee
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Benefit Plan (other than routine claims for benefits payable in the ordinary
course, and appeals of denied claims); (d) full payment has been timely made of
all amounts which the Corporation is required, under applicable law or under any
Employee Benefit Plan or any agreement relating to any Employee Benefit Plan to
which the Corporation is a party, to have paid as contributions or premiums
thereto as of the last day of the most recent fiscal year of such Employee
Benefit Plan ended prior to the date hereof; and (e) no condition or
circumstance exists that would prevent the amendment or termination of any
Employee Benefit Plan. The Corporation has delivered or caused to be delivered
to the Purchaser or its counsel true and complete copies of each Employee
Benefit Plan, together with all amendments thereto.
Section 2.19 Compliance with Law and Certifications
(a) The Corporation has operated in compliance with all
applicable Regulations and Orders, including, without limitation, all
Regulations relating to the safe conduct of business, environmental protection,
quality and labeling, antitrust, consumer protection, equal opportunity,
discrimination, health, sanitation, fire, zoning, building and occupational
safety. There are no Claims pending, or to the Sellers' knowledge threatened,
nor has the Corporation received any written notice, regarding any violations of
any Regulations or Orders enforced by any Authority claiming jurisdiction over
the Corporation.
(b) The Corporation holds all material registrations,
accreditations and other certifications required for the conduct of its Business
by any Authority or trade group and the Corporation has operated in compliance
with the terms and conditions of all such registrations, accreditations and
certifications. The Corporation has not received any notice alleging that it has
failed to hold any such material registration, accreditation or other
certification.
Section 2.20 Affiliated Transactions. No officer,
director, employee, stockholder or Affiliate of the Corporation, or any entity
in which any such Person or individual owns any beneficial interest, is a party
to any Contract, commitment or transaction with the Corporation or has any
material interest in any material property used by the Corporation.
Section 2.21 Environmental Matters. Neither the
Corporation's Business nor the operation thereof has violated any applicable
Environmental Law and there has been no condition or Occurrence which, with
notice or the passage of time or both, would constitute a violation of any
Environmental Law.
Section 2.22 Accounts Receivable. The accounts receivable
of the Corporation reflected in the Financial Statements and such additional
accounts receivable as are reflected on the books of the Corporation on the date
hereof are current, good and collectible except to the extent reserved against
thereon (which reserves have been determined based upon actual prior experience
and GAAP and are consistent with prior practices). All such accounts receivable
are valid, genuine and subsisting, arise out of bona fide sales and deliveries
of goods, performance of services or other business transactions and are not
subject to defenses, deductions, set-offs or counterclaims.
Section 2.23 Disclosure. Neither (i) the representations
and warranties of the Sellers in this Agreement, (ii) the Transaction Documents
nor (iii) any of the exhibits, schedules,
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attachments, written statements, documents, certificates or other items prepared
or supplied to the Purchaser by or on behalf of the Corporation with respect to
the transactions contemplated hereby contain any untrue statement of a material
fact or omit a material fact necessary to make each statement contained herein
or therein not misleading. There is no fact which the Corporation has not
disclosed to the Purchaser in writing and of which any of its officers,
directors or executive employees is aware and which has had or would reasonably
be expected to have a Material Adverse Effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers as
follows as of the date hereof and as of the Closing Date:
Section 3.1 Corporate Organization, Etc. The Purchaser
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation with full corporate power and
authority to carry on its business as it is now being conducted and to own,
operate and lease its properties and assets. The Purchaser is duly qualified or
licensed to do business and is in good standing in every jurisdiction in which
the conduct of its business, the ownership or lease of its properties, currently
require it to be so qualified or licensed.
Section 3.2 Authorization, Etc. The Purchaser has full
power and authority to enter into this Agreement and the Transaction Documents
to which the Purchaser is a party and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and the Transaction Documents and the transactions contemplated hereby
and thereby have been duly authorized by the board of directors of the Purchaser
and no other corporate proceedings on their part are necessary to authorize this
Agreement, the Transaction Documents and the transactions contemplated hereby
and thereby. This Agreement and the Transaction Documents to be entered into by
the Purchaser each constitutes a legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms.
Section 3.3 No Violation. The execution, delivery and
performance by the Purchaser of this Agreement and the Transaction Documents,
and the fulfillment of and compliance with the respective terms hereof and
thereof by the Purchaser, do not and will not (a) conflict with or result in a
breach of the terms, conditions or provisions of, (b) constitute a default or
event of default under (whether with or without due notice, the passage of time
or both), (c) result in a violation of, or (d) require any authorization,
consent, approval, exemption or other action by, or notice to, or filing with
any third party or Authority pursuant to, the charter or bylaws of the Purchaser
or any applicable Regulation, Order or Contract to which the Purchaser or its
properties are subject. The Purchaser has complied with all applicable
Regulations and Orders in connection with its execution, delivery and
performance of this Agreement, the agreements contemplated hereby and the
transactions contemplated hereby and thereby.
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Section 3.4 Investment Intent. The Purchaser is
purchasing the Stock for investment purposes and not with a view to distribution
(as such term is used in Section 2(11) of the Securities Act) thereof and agrees
that it will not make any sale, transfer or other disposition of the Stock in
violation of any applicable securities law.
ARTICLE IV
COVENANTS OF THE CORPORATION AND THE SELLERS
Until the Closing Date, except as otherwise consented to or
approved by Purchaser in writing, the Corporation and the Sellers agree that
they shall act, or refrain from acting where required hereinafter, to comply
with the following (and to cause the Corporation to do the same).
Section 4.1 Conduct of Business of the Corporation.
Since the Financial Statement Date, the Sellers shall have caused the
Corporation to conduct its operations only according to its ordinary and usual
course of business and used their best efforts to preserve intact the
Corporation's Business, kept available the services of its officers and
employees and maintained satisfactory relationships with licensors, suppliers,
distributors, clients and others having business relationships with it. Since
the Financial Statement Date, the Corporation has (a) not amended its articles
of incorporation or bylaws, (b) maintained at their current levels the
compensation payable or to become payable by the Corporation to any officer,
employee or agent being paid $50,000 per year or more, other than adjustments to
compensation which may have been made in the ordinary course of business
consistent with the Corporation's past practices, (c) refrained from making any
bonus, pension, retirement or insurance payment or arrangement to or with any
such persons, (d) refrained from entering into any material Contract or
commitment except Contracts in the ordinary course of business, (e) refrained
from making any capital expenditures or commitments not necessary for the
continued operations of the Corporation other than expenditures which may have
been made in the ordinary course of business consistent with the Corporation's
past practices, (f) refrained from declaring or paying any dividends or other
distributions, (g) refrained from issuing, redeeming, transferring, selling or
encumbering any shares of Stock or any securities exchangeable or convertible
into shares of Stock and (h) refrained from taking any action, or omitting to
take any action, which with the passage of time, would cause the representations
and warranties contained in Article II hereof to be untrue or incorrect in any
material respect.
Section 4.2 Review of the Corporation. The Sellers,
prior to the Closing Date, directly or through its representatives, shall
provide access to all information about the Corporation including, but not
limited to, review of the assets, liabilities, Business, business plans,
Contracts, corporate and business books and records of the Corporation and its
financial and legal condition to the extent it deems necessary or advisable.
Such review shall not, however, affect the representations and warranties made
by the Sellers.
Section 4.3 Notices and Consents. As of the Closing
Date, the Sellers shall have caused the Corporation to give any notices to third
parties and shall have caused the Corporation to use its best efforts to obtain
any third party consents that the Purchaser may have requested in connection
with the transactions contemplated by this Agreement .The Sellers shall have
caused the Corporation to give all notices to, make all filings with, and shall
have used its
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best efforts to obtain any authorizations, consents, and approvals of
Authorities in connection with the transactions contemplated by this Agreement.
Section 4.4 Insurance. The Corporation shall, up to and
including the Closing Date, maintain with insurers believed by the Corporation
to be responsible, insurance coverage in such amounts and of such types as are
customarily carried under similar circumstances by companies of similar size and
engaged in the same or a similar business or having similar properties similarly
situated. All such insurance coverage will be effective under valid and
enforceable Policies issued by insurers of recognized financial status and
responsibility.
Section 4.5 Intellectual Property Rights. The
Corporation shall possess, prosecute and maintain all Intellectual Property
necessary to the conduct of their respective businesses prior to, as of and
after the Closing Date and own all right, title and interest in and to, or have
a valid license for, all such Intellectual Property. The Corporation shall not
take any action, or fail to take any action, which would result in the
invalidity, abandonment, misuse or unenforceability of such Intellectual
Property or which would infringe upon or misappropriate any rights of other
Persons. The Corporation has and will duly pay all renewal fees related to the
Corporation Intellectual Property.
Section 4.6 Notice of Material Change. Prior to the
Closing, the Corporation will immediately notify the Purchaser of any
occurrence, event or lack thereof that has, or is reasonably likely to have, a
material effect on the completeness or accuracy of the representations and
warranties of the Corporation set forth in Article II hereof.
Section 4.7 S Corporation Status
The Corporation and the Sellers will not revoke the
Corporation's election to be taxed as an S corporation within the meaning of
Code ss. ss. 1361 and 1362. The Corporation will not take or allow any action
other than the sale of the Stock pursuant to this Agreement that would result in
the termination of the Corporation's status as a validly electing S corporation
within the meaning of Code ss. ss. 1361 and 1362.
Section 4.8 Simplified Employee Pension Program. Prior
to the Closing Date, the Sellers shall take whatever action is necessary to
terminate its Simplified Employee Pension program.
ARTICLE V
COVENANTS OF THE PURCHASER
The Purchaser hereby covenants and agrees with the Corporation
and the Sellers that:
Section 5.1 Notices and Consents. As of the Closing
Date, the Purchaser shall give any notices to third parties and shall use its
best efforts to obtain any third party consents required by it under this
Agreement, the Transaction Documents and the transactions contemplated hereby
and thereby. The Purchaser shall give all notices to, make all filings with, and
shall have used its best efforts to obtain any authorizations, consents, and
approvals of
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Authorities required of the Purchaser in connection with the transactions
contemplated hereby and thereby.
Section 5.2 DockMaster 6.0 Software Development. After
the Closing Date, the Purchaser shall provide up to $960,000 to facilitate the
development of the DockMaster 6.0 Windows application software; provided,
however, that upon mutual agreement of the Purchaser and the Sellers, the
Purchaser may elect to develop such software using its own internal resources.
Section 5.3 Release from Certain Obligations. The
Purchaser will assume or otherwise discharge all personal Guarantees relating to
the obligations of the Corporation granted by the Sellers, as identified on
Schedule 5.3 hereto, within sixty (60) days after the Closing. The Purchaser
hereby agrees to use reasonable efforts to assume or otherwise discharge all
personal Guarantees relating to the obligations of the Corporation granted by
the Sellers which are identified after the Closing Date within 60 days after
receipt of written notice. The Purchaser also hereby agrees to indemnify and
hold harmless the Sellers for any and all liability arising after the Closing
Date under (i) the Guarantees set forth in Schedule 5.3 hereto, and (ii) any
Guarantees assumed by the Purchaser after the Closing Date.
ARTICLE VI
OTHER AGREEMENTS
The parties further agree as follows:
Section 6.1 Non-Competition and Non-Solicitation. During
the Restricted Period, each Seller agrees not to, directly or indirectly, alone
or as a partner, officer, director, employee, consultant, agent, independent
contractor, member or Seller of any Person, engage in any business activity in
the Restricted Area which is directly or indirectly in competition with the
products or services being developed, manufactured, marketed, sold or otherwise
provided by the Corporation, the Purchaser or their Affiliates or which is
directly or indirectly detrimental to the Business or business plans of the
Corporation, the Purchaser or their Affiliates; provided, however, that the
record or beneficial ownership by a Seller of five percent (5%) or less of the
outstanding publicly traded capital stock of any such company for investment
purposes shall not be deemed to be in violation of this Section 6.1 so long as
such Seller is not an officer, director, employee or consultant of such Person.
Each Seller further agrees that, during the Restricted Period, such Seller shall
not in any capacity, either separately, jointly or in association with others,
directly or indirectly do any of the following: (a) employ or seek to employ any
Person or agent who is then employed or retained by the Corporation, the
Purchaser or their Affiliates (or who was so employed or retained at any time
within the two (2) years prior to the date the Seller employs or seeks to employ
such Person); (b) solicit, induce, or influence any proprietor, partner, Seller,
lender, director, officer, employee, joint venturer, investor, consultant,
agent, lessor, supplier, customer or any other Person which has a business
relationship with the Corporation, the Purchaser or their Affiliates, at any
time during the Restricted Period, to discontinue or reduce or modify the extent
of such relationship with the Corporation, the Purchaser or their Affiliates;
and (c) submit, solicit, encourage or discuss any proposal, plan or offer to
acquire an interest in any of the Corporation's, the Purchaser's or their
Affiliates' identified potential acquisition candidates.
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Section 6.2 Confidentiality. Except as may be required
by lawful order of an Authority of competent jurisdiction, each Seller agrees to
keep secret and confidential after the Closing, all non-public information
concerning the Corporation, the Purchaser and their Affiliates that was acquired
by, or disclosed to, such Seller prior to the Closing Date, except any of the
same which (a) was, is now, or becomes generally available to the public (but
not as a result of a breach of any duty of confidentiality by which such Seller
and its Affiliates are bound); (b) was disclosed to such Seller by a third party
not subject to any duty of confidentiality to the Corporation prior to its
disclosure to the Seller by the Corporation; and (c) is disclosed by such Seller
in the ordinary course of the Corporation's business as a proper part of his
employment in connection with communications with customers, vendors and other
proper parties, provided that it is for a proper purpose solely for the benefit
of the Corporation.
Section 6.3 Tax Matters. (a)The Corporation shall
prepare or cause to be prepared and file or cause to be filed all Tax Returns
for the Corporation for all periods ending on or prior to the Closing Date which
are filed after the Closing Date. The Corporation shall permit the Sellers to
review and comment on each such Tax Return described in the preceding sentence
prior to filing such Tax Return and, with respect to the federal income tax
return of the Corporation, shall make such revisions to such Tax Returns as are
reasonably requested by the Sellers. To the extent permitted by applicable law,
the Sellers shall include any income, gain, loss, deduction or other tax items
for such periods on their Tax Returns in a manner consistent with the Schedule
K-1s furnished by the Corporation to the Sellers for such periods. The Sellers
shall reimburse the Purchaser for any Taxes of the Corporation with respect to
such periods within fifteen (15) days after payment by the Purchaser or the
Corporation of such Taxes to the extent such Taxes are not reflected in the
reserve for Tax liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) shown on
the face of the Closing Date Balance Sheet.
(b) The Purchaser, the Corporation and the Sellers shall
cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of Tax Returns pursuant to this Section and any
audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The Corporation and the Sellers agree (i) to retain
all books and records with respect to Tax matters pertinent to the Corporation
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified by the
Purchaser or the Sellers, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
taxing authority, and (ii) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the other party so requests, the Corporation or the Sellers, as the case may
be, shall allow the other party to take possession of such books and records.
The Purchaser, the Corporation and the Sellers further agree, upon request, to
use their best efforts to obtain any certificate or other document from any
governmental Authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby).
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(c) All transfer, documentary, sales, use, stamp,
registration and other similar Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement shall be paid by the
Sellers when due, and the Sellers will, at their own expense, file all necessary
Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and, if
required by applicable law, the Purchaser will, and will cause its affiliates
to, join in the execution of any of such Tax Returns and other documentation.
ARTICLE VII
CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT THE CLOSING
The obligations of the Purchaser to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, on
or before the Closing, of each of the following conditions, unless otherwise
waived:
Section 7.1 Representations and Warranties, Covenants.
The representations and warranties contained in Article II of this Agreement
shall be true and correct at and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of such date,
and the Corporation and the Sellers shall have performed and complied with all
of the covenants, agreements, obligations and conditions required to be
performed or complied with by it or them hereunder on or before the Closing. The
president of the Corporation shall have delivered to the Purchaser a
certificate, (which shall be addressed to the Purchaser), dated the Closing
Date, in the form of Exhibit 7.1 hereto, certifying to the foregoing.
Section 7.2 Consents and Approvals. The Sellers and the
Corporation shall have obtained any and all consents, approvals, Orders, Permits
or other authorizations required by all applicable Regulations, Orders and
Contracts involving the Corporation or binding on its properties and assets,
with respect to the execution, delivery and performance of the Agreement and the
Transaction Documents, the financing and consummation of the transactions
contemplated herein and therein and the conduct of the Business of the
Corporation in the same manner after the Closing Date as before the Closing
Date.
Section 7.3 Opinion of the Corporation's and the
Sellers' Counsel. The Purchaser shall have received an opinion of the
Corporation's and the Sellers' counsel, dated the Closing Date, in the form of
Exhibit 7.3 hereto.
Section 7.4 No Material Adverse Change. From the date of
this Agreement to the Closing Date there shall have been no (i) material adverse
change in the Business, operations, assets, nature of assets, accounting
treatment, liabilities, condition (financial or otherwise), results of
operations, or prospects of the Corporation, taken as a whole and (ii) material
damage, destruction, or loss to any asset or property, tangible or intangible,
of the Corporation which materially affects the ability of the Corporation to
conduct its Business, or material adverse occurrences which affect the Stock or
the ability of any Seller to transfer, sell and convey his or her Stock as
contemplated by this Agreement.
Section 7.5 Litigation. No preliminary or permanent
injunction or other Order issued by a court of competent jurisdiction or by any
Authority, or any Regulation or Order
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promulgated or enacted by any Authority shall be in effect which would prevent
the consummation of the transactions contemplated hereby.
Section 7.6 Accounting Matters. The Purchaser shall have
received a certificate, dated the Closing Date, of the Corporation's Chief
Financial Officer as to the accuracy of all of the Financial Statements in the
form of Exhibit 7.6 hereto. The Purchaser shall also have received adequate
supporting information regarding the Estimated Closing Date Balance Sheet.
Section 7.7 Condition of Assets. The Corporation's
assets and properties shall not have been damaged or destroyed, prior to the
Closing Date, by fire or other casualty, whether or not fully covered by
insurance, in an aggregate amount exceeding $25,000.
Section 7.8 Secretary's Certificate. The Purchaser shall
have received a certificate, by the secretary of the Corporation, as to the
articles of incorporation and bylaws of the Corporation, the resolutions adopted
by the directors and stockholders of the Corporation in connection with this
Agreement, the incumbency of certain officers of the Corporation and the
jurisdictions in which the Corporation is qualified to conduct business in the
form of Exhibit 7.8 hereto.
Section 7.9 Certificates of Good Standing. At the
Closing, the Corporation shall have delivered to the Purchaser certificates
issued by the appropriate governmental Authorities evidencing the good standing,
with respect to both the conduct of business and the payment of all Taxes, of
the Corporation as of a date not more than fifteen (15) days prior to the
Closing Date as a corporation organized under the laws of the state of its
incorporation and as a foreign corporation authorized to do business under the
laws of the jurisdictions listed in Schedule 2.1 hereto.
Section 7.10 Termination of Affiliate Contracts. The
Sellers shall have caused all Contracts between the Corporation, on the one
hand, and the Sellers and Affiliates of the Sellers, on the other hand, to
terminate at Closing without any further liability or obligation to the
Corporation.
Section 7.11 Joinder of All Sellers. All of the existing
holders of the Stock and Options shall have executed this Agreement, or a
counterpart hereof, and shall have delivered at the Closing certificates
representing all of their Stock and Options, duly endorsed to the Purchaser,
together with stock powers executed in blank.
Section 7.12 Employment Agreements. Each of ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have executed and
delivered an employment agreement substantially in the form of Exhibit 7.12
hereto providing for the continued employment of such Person with the
Corporation and containing certain noncompetition provisions.
Section 7.13 Creditor Consents. The secured creditors of
the Corporation shall have agreed in writing with the Corporation as to the
amounts owed in order for such creditors to have been paid in full and, in the
event those amounts are paid in full at or before the Closing Date, to release
all Liens in favor of such creditors. The Corporation and its counsel shall have
caused the secured creditors to provide at Closing such UCC termination
statements, releases of
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mortgages and other releases of Liens as shall be required by the Purchaser and
its lenders to remove any outstanding Liens.
Section 7.14 Resignations. The Sellers shall have caused
the directors previously identified by the Purchaser to have resigned from their
positions.
Section 7.15 Leases. The Sellers shall have obtained and
delivered Estoppel Certificates executed by each of the Corporation's landlords
in the form of Exhibit 7.15 hereto.
Section 7.16 Estimated Closing Date Working Capital. The
Estimated Closing Date Working Capital shall be satisfactory to the Purchaser in
its sole discretion.
Section 7.17 Termination of Simplified Employee Pension
Program. The Corporation shall have terminated its Simplified Employee Pension
Program.
ARTICLE VIII
CONDITIONS TO THE CORPORATION'S AND THE SELLERS'
OBLIGATIONS TO CLOSE
The obligations of the Corporation and the Sellers to
consummate the transactions contemplated by this Agreement on the Closing Date
are conditioned upon satisfaction on or prior to the Closing Date, of each of
the following conditions:
Section 8.1 Truth of Representations and Warranties. The
representations and warranties in Article III of this Agreement shall be true
and correct at and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, and the
Purchaser shall have performed and complied with all of the covenants,
agreements, obligations and conditions required to be performed or complied with
by it hereunder on or before Closing.
Section 8.2 Litigation. No preliminary or permanent
injunction or other Order issued by a court of competent jurisdiction or by any
Authority, or any Regulation or Order promulgated or enacted by any Authority
shall be in effect which would prevent the consummation of the transactions
contemplated hereby.
Section 8.3 Consents and Approvals. The Purchaser shall
have obtained any and all consents, approvals, Orders, Permits or other
authorizations required by all applicable Regulations or Orders involving the
Purchaser, with respect to the execution, delivery and performance of the
Agreement and the consummation of the transactions contemplated hereby.
Section 8.4 Employment Agreements. The Corporation shall
have executed and delivered employment agreements in favor of ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ substantially in the form of
Exhibit 7.12 hereto.
Section 8.5 Security Agreement. The Corporation shall
have executed and delivered a Security Agreement substantially in the form of
Exhibit 8.5 hereto and the related Form UCC-1.
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ARTICLE IX
CLOSING
Section 9.1 Closing. Unless this Agreement shall have
been terminated or abandoned pursuant to the provisions of Article X hereof, a
closing of the transactions contemplated by this Agreement (the "Closing") shall
be held on September 28, 2001, or on such other date (the "Closing Date")
designated by the Purchaser upon five (5) days notice to the Corporation in the
offices of the Purchaser's counsel, provided that the Closing shall not occur,
in any event, after October 31, 2001.
Section 9.2 Intervening Litigation. If prior to the
Closing Date any preliminary or permanent injunction or other Order issued by a
court of competent jurisdiction or by any other Authority shall restrain or
prohibit this Agreement or the consummation of the transactions contemplated
hereby for a period of fifteen (15) days or longer, the Closing shall be
adjourned at the option of either party for a period of not more than thirty
(30) days. If at the end of such thirty (30) day period such injunction or Order
shall not have been favorably resolved, either party may, by written notice
thereof to the other, terminate this Agreement, without liability or further
obligation hereunder.
ARTICLE X
TERMINATION AND ABANDONMENT
Section 10.1 Methods of Termination. This Agreement may
be terminated and the transactions herein contemplated may be abandoned at any
time:
(a) by mutual consent of the Purchaser and the Sellers;
(b) by the Purchaser or the Sellers if this Agreement is
not consummated on or before October 31, 2001; provided that if any party has
breached or defaulted with respect to its respective obligations under this
Agreement on or before such date, such party may not terminate this Agreement
pursuant to this Section 10.1(b), and each other party to this Agreement shall
at its option enforce its rights against such breaching or defaulting party and
seek any remedies against such party, in either case as provided hereunder and
by applicable law;
(c) by the Purchaser if as of the Closing Date any of the
conditions specified in Article VII hereof have not been satisfied;
(d) by the Purchaser if the Estimated Closing Date
Working Capital calculation provided by the Sellers pursuant to Section 1.3
hereof is unacceptable to the Purchaser; or
(e) by the Sellers if as of the Closing Date any of the
conditions specified in Article VIII hereof have not been satisfied.
Section 10.2 Procedure Upon Termination. In the event of
termination and abandonment pursuant to Section 10.1 hereof and subject to the
provisions contained in Section 10.1(b), this Agreement shall terminate and
shall be abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
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(a) each party shall deliver all documents and other
material of any other party relating to the transactions contemplated hereby,
whether obtained before or after the execution hereof, to the party furnishing
the same; and
(b) all information received by any party hereto with
respect to the business of any other party hereto (other than information which
is a matter of public knowledge or which has heretofore been or is hereafter
published in any publication for public distribution or filed as public
information with any governmental Authority) shall not at any time be used for
the advantage of, or disclosed to third parties by, such party to the detriment
of the party furnishing such information.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Survival. All of the terms and conditions of
this Agreement, together with the representations, warranties and covenants
contained herein or in any instrument or document delivered or to be delivered
pursuant to this Agreement, shall survive the execution of this Agreement and
the Closing Date until all obligations set forth therein shall have been
performed and satisfied notwithstanding any investigation heretofore or
hereafter made by or on behalf of any party hereto as follows: (a) the
representations and warranties in Section 2.12 (Tax Matters) and Section 2.18
(ERISA) and their related schedules and the covenants contained in this
Agreement shall survive until sixty (60) days after the date as of which the
applicable statutes of limitations with respect to such matters expire (after
giving effect to any extensions or waivers thereof); (b) the representations and
warranties in Section 2.21 (Environmental) and Section 2.19 (Compliance with Law
and Certifications) and their related schedules shall terminate on the sixth
anniversary of the Closing Date; (c) the representations and warranties in
Section 2.3 (Capitalization), Section 2.5 (Title to Stock), Section 2.6
(Authorization) and Section 2.16 (Brokerage) and their related schedules shall
survive indefinitely and not terminate; and (d) all other representations and
warranties in this Agreement and their related schedules or in any of the
written statements, certificates or other items prepared and delivered hereunder
or to induce the consummation of any of the transactions contemplated hereby,
shall terminate upon the end of the twenty-four (24) month period commencing on
the Closing Date; provided that the representations, warranties and indemnities
for which an indemnification Claim shall be pending as of the end of the
applicable period referred to herein shall survive with respect to such Claim
until the final disposition thereof. The representations and warranties in this
Agreement and the schedules attached hereto or in any writing delivered in
connection herewith shall in no event be affected by any investigation, inquiry
or examination made for or on behalf of any party or be affected by the
knowledge of any officer, director, stockholder, employee, partner or agent of
any party seeking indemnification hereunder or by the acceptance of any
certificate or opinion from any third party. In addition, in no event will any
disclosure of any event or circumstance made after the date hereof and prior to
the Closing serve to amend any representation or warranty for any purpose of
this Agreement.
Section 11.2 Limitation. Neither party shall be required
to indemnify the other party under Sections 11.3(a) and 11.4(a) until the
indemnifiable damages, individually or in the aggregate, exceed $60,000 (the
"Hurdle Rate"), at which point such indemnifying party shall be responsible for
all indemnifiable damages that may arise, irrespective of the Hurdle Rate; and
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provided that indemnifiable damages shall accumulate until such time as they
exceed the Hurdle Rate, whereupon the party to be indemnified shall be entitled
to seek indemnification for the full amount of such damages.
Section 11.3 Indemnification by Sellers. Subject to
Section 11.1 and 11.2, the Sellers agree to, and shall, jointly and severally,
indemnify the Purchaser and its Subsidiaries and the Corporation and their
respective officers, directors, employees, stockholders, representatives and
agents and hold each of them harmless against and in respect of any and all
damage, loss, deficiency, liability, obligation, commitment, cost or expense
(including the reasonable fees and expenses of counsel) resulting from, or in
respect of, any of the following:
(a) Any misrepresentation, breach of warranty, or
non-fulfillment of any obligation on the part of the Corporation or the Sellers
under this Agreement, any document relating hereto or thereto or contained in
any schedule to this Agreement or from any misrepresentation in or omission from
any certificate, schedule, other Contract or instrument delivered by the Sellers
or the Corporation hereunder.
(b) All liability of the Corporation for Taxes that
accrue on or prior to the Closing Date and any Tax liability of the Corporation
arising in connection with the transactions contemplated hereby (including
without limitation, Tax liability arising from the conversion from a cash to
accrual basis of accounting and any Tax liability as a result of an Authority
taking the position that any former or current subcontractor of the Corporation
should have been, at any time prior to the Closing Date, treated as an employee
of the Corporation), but excluding any Taxes for which there is an adequate
accrual and reserve on the Closing Date Balance Sheet. Any Taxes, penalties or
interest attributable to the operations of the Corporation payable as a result
of an audit of any Tax Return shall be deemed to have accrued in the period to
which such Taxes, penalties or interest are attributable.
(c) All products or service liability Claims arising
against or involving the Corporation or concerning any product manufactured,
shipped, sold, delivered by or on behalf of the Corporation, or services
performed by the Corporation, on or prior to the Closing Date related to or
resulting from an alleged defect in design, manufacture, materials or
workmanship of any product manufactured, shipped, sold or delivered by or on
behalf of the Corporation, or services performed by the Corporation, or any
alleged failure to warn, or any alleged breach of express or implied warranties
or representations.
(d) All environmental liability of the Corporation,
including federal, state and local environmental liability, together with any
interest or penalties thereon or related thereto, that arises or accrues on or
prior to the Closing Date, but excluding any amount for which there is an
adequate accrual and reserve on the Closing Date Balance Sheet.
(e) Any failure (i) of any Seller to have good, valid and
marketable title to the issued and outstanding Stock held by such Seller, free
and clear of all Liens, Claims, Contracts and Orders or (ii) to obtain the
signature of any holder of any Stock to this Agreement, and the Sellers shall be
responsible for all liability, fees and expenses that may arise because such
Person fails or refuses to agree to the terms hereof.
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(f) Any Claim by a stockholder or former stockholder of
the Corporation or any other Person seeking to assert: (i) ownership or rights
to ownership of the Stock of the Corporation; (ii) any rights of a stockholder
(other than the right to receive the Purchase Price in accordance with the terms
of this Agreement) including any Option, preemptive rights or rights to receive
notice or to vote; (iii) any rights under the Corporation's charter, bylaws or
other constituent documents; or (iv) any Claim that his or her shares of capital
stock or securities that were convertible or exchangeable into capital stock or
Options were improperly repurchased by the Corporation.
(g) Any Claim for transaction costs or expenses.
(h) All demands, assessments, judgments, costs and
reasonable legal and other reasonable expenses arising from, or in connection
with, any action, suit, proceeding or Claim incident to any of the foregoing.
Section 11.4 Indemnification by the Purchaser. Subject to
Section 11.1 and 11.2, the Purchaser agrees to, and shall, indemnify the Sellers
and hold each of them harmless, against and in respect of any and all damage,
loss, deficiency, liability, obligation, commitment, cost or expense (including
the fees and expenses of counsel) resulting from, or in respect of, any of the
following:
(a) Any misrepresentation, breach of warranty or
non-fulfillment of any obligation on the part of the Purchaser under this
Agreement, any document relating hereto or thereto or contained in any schedule
to this Agreement or from any misrepresentation in or omission from any
certificate, schedule, other Contract or instrument by the Purchaser hereunder.
(b) All demands, assessments, judgments, costs and
reasonable legal and other expenses arising from, or in connection with, any
action, suit, proceeding or Claim incident to any of the foregoing.
Section 11.5 Notice of Indemnity Claims.
(a) The following procedures shall be applicable with
respect to indemnification for third-party Claims. Promptly after receipt by the
party seeking indemnification hereunder (hereinafter referred to as the
"Indemnitee") of notice of the commencement of any (i) Tax audit or proceeding
for the assessment of Tax by any Authority or any other proceeding likely to
result in the imposition of a Tax liability or obligation or (ii) any action or
the assertion of any Claim, liability or obligation by a third party (whether by
legal process or otherwise), against which Claim, liability or obligation the
other party to this Agreement (hereinafter the "Indemnitor") is, or may be,
required under this Agreement to indemnify such Indemnitee, the Indemnitee
shall, if a Claim thereon is to be, or may be, made against the Indemnitor,
notify the Indemnitor in writing of the commencement or assertion thereof and
give the Indemnitor a copy of such Claim, process and all legal pleadings. The
Indemnitor shall have the right to (i) participate in the defense of such action
with counsel of reputable standing and (ii) assume the defense of such action by
agreeing to assume such defense within ten (10) business days of transmittal of
the notice of the Claim by the Indemnitee, in
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writing unless such Claim (A) may result in criminal proceedings, injunctions or
other equitable remedies in respect of the Indemnitee or its business; (B) may
result in liabilities which, taken with other then existing Claims under this
Article XI, would not be fully indemnified hereunder; (C) may have a Material
Adverse Effect on the business or financial condition of the Indemnitee after
the Closing Date (including an effect on the Tax liabilities, earnings or
ongoing business relationships of the Indemnitee); (D) is for an alleged amount
of less than $25,000; or (E) upon petition by the Indemnitee, if an appropriate
court rules that the Indemnitor failed or is failing to vigorously prosecute or
defend such Claim, in which events the Indemnitee shall assume the defense.
(b) The Indemnitor and the Indemnitee shall cooperate in
the defense of any third party Claims. In the event that the Indemnitor assumes
or participates in the defense of such third party Claim as provided herein, the
Indemnitee shall make available to the Indemnitor all relevant records and take
such other action and sign such documents as are reasonable necessary to defend
such third party Claim in a timely manner. If the Indemnitee shall be required
by judgment or a settlement agreement to pay any amount in respect of any
obligation or liability against which the Indemnitor has agreed to indemnify the
Indemnitee under this Agreement, the Indemnitor shall promptly reimburse the
Indemnitee in an amount equal to the amount of such payment plus all expenses
(including legal fees and expenses) incurred by such Indemnitee in connection
with such obligation or liability subject to this Article XI. No Indemnitor, in
the defense of any such Claim, shall, except with the consent of the Indemnitee,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnitee of a release from all liability with respect to such Claim.
In the event that the Indemnitor does not accept the defense of any matter for
which it is entitled to assume as provided above, the Indemnitee shall have the
full right to defend such Claim.
(c) Prior to paying or settling any Claim against which
an Indemnitor is, or may be, obligated under this Agreement to indemnify an
Indemnitee, the Indemnitee must first supply the Indemnitor with a copy of a
final court judgment or decree holding the Indemnitee liable on such Claim or
failing such judgment or decree, must first receive the written approval of the
terms and conditions of such settlement from the Indemnitor, which shall not be
unreasonably withheld; provided however, that no written approval is required
from the Indemnitor as to any third party Claim (i) that results solely in
injunctions or other equitable remedies in respect of the Indemnitee or its
business; (ii) that settles liabilities, or portions thereof, that are not
subject to indemnification hereunder; or (iii) is for an amount of less than
$25,000.
(d) An Indemnitee shall have the right to employ its own
counsel in any case and the fees and expenses of such counsel shall be at the
expense of the Indemnitee unless (i) the employment of such counsel shall have
been authorized in writing by the Indemnitor in connection with the defense of
such Claim; (ii) the Indemnitor shall not have employed counsel in the defense
of such Claim after ten days notice; or (iii) such Indemnitee shall have
reasonably concluded that there may be defenses available to it which are
contrary to, or inconsistent with, those available to the Indemnitor; in any of
the foregoing events such fees and expenses shall be borne by the Indemnitor.
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Section 11.6 Indemnification Obligation
(a) Each Seller hereby agrees that, subject to the
following provisions of this Section 11.6, any Claims by the Purchaser for
indemnification by the Purchaser against the Sellers (or any of them) hereunder
may be satisfied by the Purchaser by its right of offset pursuant to the terms
of the Note. All payments for indemnifiable damages made pursuant to this
Article XI shall be treated as adjustments to the Purchase Price. If the
principal amount of the Note is insufficient to set off any Claim by the
Purchaser for indemnifiable damages made hereunder (or have been delivered to
the holders prior to the making or resolution of such Claim), then the Purchaser
may take any action or exercise any remedy available to it against the Sellers
by appropriate legal proceedings to collect such indemnifiable damages. To the
extent the principal amount of the Note is sufficient in value to cover the
claimed amount of all of the Purchaser's indemnification Claims, then the
Purchaser agrees to first offset against the principal amount of the Note prior
to seeking redress against any of the Sellers' other assets.
(b) Each Indemnitor shall pay the indemnification amount
in excess of the principal amount of the Note claimed by the Indemnitee in
immediately available funds promptly within ten (10) days after the Indemnitee
provides the Indemnitor with written notice of such a Claim hereunder unless the
Indemnitor in good faith disputes such Claim. If the Indemnitor disputes such
Claim in good faith, then promptly after the resolution of such dispute, the
amount finally determined to be due shall be paid by the Indemnitor to the
Indemnitee in immediately available funds within ten (10) days of such dispute
resolution. In the event the Indemnitor fails to pay the Indemnitee the amount
of such indemnification Claim within such ten (10) day period the Indemnitor
shall pay the Indemnitee interest on the amount of such indemnification Claim at
a rate of ten percent (10%) per annum, compounded monthly from the date of the
original written notice of such indemnification Claim until the indemnification
Claim is paid in full.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Certain Definitions.
"Adjusted Working Capital Shortfall" shall exist when the
Corporation's Closing Date Working Capital is less than eighty percent (80%) of
the Estimated Closing Date Working Capital.
"Adjustment Statement" shall have the meaning set forth in
Section 1.4.
"Agreement" shall have the meaning set forth in the Preamble.
"Authority" means any governmental, regulatory or
administrative body, agency, department, commission, board, bureau, arbitrator
or authority, any court or judicial authority, any public, private or industry
regulatory authority, consumer protection agency or other instrumentality,
whether international, national, federal, state, provincial, local, county, or
municipality.
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"Affiliate" means, with regard to any Person, (a) any Person,
directly or indirectly, controlled by, under common control of, or controlling
such Person; (b) any Person, directly or indirectly, in which such Person holds,
of record or beneficially, five percent (5%) or more of the equity or voting
securities; (c) any Person that holds, of record or beneficially, five percent
(5%) or more of the equity or voting securities of such Person; (d) any Person
that, through Contract, relationship or otherwise, exerts a substantial
influence on the management of such Person's affairs; (e) any Person that,
through Contract, relationship or otherwise, is influenced substantially in the
management of its affairs by such Person; (f) any director, officer, partner or
individual holding a similar position in respect of such Person; or (g) as to
any natural Person, any Person related by blood, marriage or adoption and any
Person owned by such Persons, including without limitation, any spouse, parent,
grandparent, aunt, uncle, child, grandchild, sibling, cousin or in-law of such
Person.
"Business" means the actual and contemplated business of the
Corporation on the Closing Date.
"Cash Amount" shall have the meaning set forth in Section 1.2.
"CERCLA" means Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, and the Regulations
thereunder.
"Chief Financial Officer" shall have the meaning set forth in
Section 1.3.
"Claim" means any action, suit, claim, lawsuit, warning
letter, fine, penalty, demand, inquiry, hearing, investigation, notice of a
violation or noncompliance, litigation, proceeding, arbitration, appeals or
other dispute, whether civil, criminal, administrative or otherwise.
"Closing" shall have the meaning set forth in Section 9.1.
"Closing Date" shall have the meaning set forth in Section
9.1.
"Closing Date Balance Sheet" shall have the meaning set forth
in Section 1.3.
"Closing Date Working Capital" of the Corporation shall mean
the following from the Closing Date Balance Sheet or Estimated Closing Date
Balance Sheet, respectively: (a) the sum of (i) cash, (ii) accounts receivable
that satisfy the representation in Section 2.22, (iii) inventory that satisfies
the representation in Section 2.22, and (iv) prepaid expenses, less (b) the sum
of the Corporation's (i) accounts payable, (ii) accrued expenses and (iii) other
current liabilities, contingencies or reserves set forth on the Closing Date
Balance Sheet or Estimated Closing Balance Sheet, respectively.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Regulations thereunder.
"Contested Adjustments" shall have the meaning set forth in
Section 1.4.
"Contested Adjustment Notice" shall have the meaning set forth
in Section 1.4.
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"Contract" means any agreement, contract, commitment,
instrument, document, certificate or other binding arrangement or understanding,
whether written or oral.
"Corporation" shall mean Software Support Team, Inc., a
Florida corporation and any Subsidiaries taken as a whole, notwithstanding any
definition in the preamble.
"Corporation Intellectual Property" shall mean all
Intellectual Property owned by the Corporation or used or useful in connection
with the Business of the Corporation.
"Employee Benefit Plans" shall have the meaning set forth in
Section 2.18.
"Environmental Law" shall mean any Regulation, Order,
settlement agreement or Authority requirement, which relates to or otherwise
imposes liability or standards of conduct concerning the environment, health,
safety or Hazardous Substances, including without limitation, discharges,
emissions, releases or threatened releases of noises, odors or any Hazardous
Substances, whether as matter or energy, into ambient air, water, or land, or
otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of Hazardous
Substances, including but not limited to CERCLA, the Superfund Amendments and
Reauthorization Act of 1986, the Hazardous Material Transportation Act, the
Resource Conservation and Recovery Act of 1976, the Toxic Substances Control
Act, the Federal Water Pollution Control Act, the Clean Water Act, the Clean Air
Act, the Occupational Safety and Health Act, any so-called "SuperLien" law, all
as now or hereafter amended or supplemented, and the Regulations promulgated
thereunder, and any other similar Federal, state or local Regulations.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Estimated Closing Date Balance Sheet" shall have the meaning
set forth in Section 1.3.
"Estimated Closing Date Working Capital" shall have the
meaning set forth in Section 1.3.
"Financial Statements" shall have the meaning set forth in
Section 2.7.
"Financial Statement Date" shall have the meaning as set forth
in Section 2.7.
"GAAP" means U.S. generally accepted accounting principles,
consistently applied, as in existence at the date hereof.
"Guarantee" means any guarantee or other contingent liability
(other than any endorsement for collection or deposit in the ordinary course of
business), direct or indirect with respect to any obligations of another Person,
through a Contract or otherwise, including, without limitation, (a) any
endorsement or discount with recourse or undertaking substantially equivalent to
or having economic effect similar to a guarantee in respect of any such
obligations and (b) any Contract (i) to purchase, or to advance or supply funds
for the payment or purchase of, any such obligations, (ii) to purchase, sell or
lease property, products, materials or supplies, or
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transportation or services, in respect of enabling such other Person to pay any
such obligation or to assure the owner thereof against loss regardless of the
delivery or nondelivery of the property, products, materials or supplies or
transportation or services or (iii) to make any loan, advance or capital
contribution to or other Investment in, or to otherwise provide funds to or for,
such other Person in respect of enabling such Person to satisfy an obligation
(including any liability for a dividend, stock liquidation payment or expense)
or to assure a minimum equity, working capital or other balance sheet condition
in respect of any such obligation.
"Hazardous Substances" shall be construed broadly to include
any toxic or hazardous substance, material, or waste, any petroleum or petroleum
products, radioactive materials, asbestos in any form that has become friable,
ura formaldehyde foam insulation, dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas, any chemicals, materials or substances
defined or included in the definition of "hazardous substances," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," or words of similar
import, under any applicable Environmental Law, any other chemical, material or
substance, exposure to which is prohibited, limited, or regulated by any
governmental Authority and any other contaminant, pollutant or constituent
thereof, whether liquid, solid, semi-solid, sludge and/or gaseous, including
without limitation, chemicals, compounds, by-products, pesticides, asbestos
containing materials, petroleum or petroleum products or by-products, and
polychlorinated biphenyls, the presence of which requires investigation or
remediation under any Environmental Law or which are or could reasonably be
expected to become regulated, listed or controlled by, under or pursuant to any
Environmental Law, or which has been or shall be determined or interpreted at
any time by any Authority to be a hazardous or toxic substance regulated under
any other Regulation or Order.
"Hurdle Rate" shall have the meaning set forth in Section
11.2.
"Indebtedness" with respect to any Person means (a) any
obligation of such Person for borrowed money, but in any event shall include:
(i) any obligation or liabilities incurred for all or any part of the purchase
price of property or other assets or for the cost of property or other assets
constructed or of improvements thereto, other than accounts payable included in
current liabilities and incurred in respect of property purchased in the
ordinary course of business, (whether or not such Person has assumed or become
liable for the payment of such obligation) (whether accrued, absolute,
contingent, unliquidated or otherwise, known or unknown, whether due or to
become due); (ii) the face amount of all letters of credit issued for the
account of such Person and all drafts drawn thereunder; (iii) obligations
incurred for all or any part of the purchase price of property or other assets
or for the cost of property or other assets constructed or of improvements
thereto, other than accounts payable included in current liabilities and
incurred in respect of property purchased in the ordinary course of business
(whether or not such Person has assumed or become liable for the payment of such
obligation) secured by Liens; (iv) capitalized lease obligations (excluding all
lease obligations set forth on Schedule 12.1 hereto); and (v) all Guarantees of
such Person; (b) accounts payable of such Person that have not been paid within
sixty (60) days of their due date and are not being contested; (c) annual
employee bonus obligations that are not accrued on the Financial Statements; and
(d) retroactive insurance premium obligations.
"Indemnitee" shall have the meaning set forth in Section 11.5.
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"Indemnitor" shall have the meaning set forth in Section 11.5.
"Independent Accountant" shall have the meaning set forth in
Section 1.4.
"Intellectual Property" means all domestic and foreign
patents, patent applications, trademarks, service marks and other indicia of
origin, trademark and service ▇▇▇▇ registrations and applications for
registrations thereof, copyrights, copyright registrations and applications for
registration thereof, Internet domain names and universal resource locators
("URLs"), trade secrets, inventions (whether or not patentable), invention
disclosures, moral and economic rights of authors and inventors (however
denominated), technical data, customer lists, corporate and business names,
trade names, trade dress, brand names, know-how, show-how, maskworks, formulae,
methods (whether or not patentable), designs, processes, procedures, technology,
source codes, object codes, computer software programs, databases, data
collectors and other proprietary information or material of any type, whether
written or unwritten (and all good will associated with, and all derivatives,
improvements and refinements of, any of the foregoing).
"Investment" shall mean (a) any direct or indirect ownership,
purchase or other acquisition by a Person of any notes, obligations,
instruments, capital stock, Options, securities or ownership interests
(including partnership interests and joint venture interests) of any other
Person; and (b) any capital contribution or similar obligation by a Person to
any other Person.
"Latest Balance Sheet" means the balance sheet dated as of the
Financial Statement Date.
"Lien" means any (a) security interest, lien, mortgage,
pledge, hypothecation, encumbrance, Claim, easement, charge, restriction on
transfer or otherwise, or interest of another Person of any kind or nature,
including any conditional sale or other title retention Contract or lease in the
nature thereof; (b) any filing or agreement to file a financing statement as
debtor under the UCC or any similar statute; and (c) any subordination
arrangement in favor of another Person.
"Material Adverse Effect" means any circumstances, state of
facts or matters which might reasonably be expected to have a material adverse
effect in respect of the Corporation's business, operations, properties, assets,
condition (financial or otherwise), results, plans, strategies or prospects.
"Note" shall have the meaning set forth in Section 1.2.
"Occurrence" means any accident, happening or event which
occurs or has occurred at any time prior to the Closing Date which results or is
alleged to have resulted in injury or death to any Person or damage to or
destruction of property (including damage to or destruction of the product
itself) or other consequential damages, at any time.
"Option" means any subscription, option, warrant, right,
security, Contract, commitment, understanding, stock appreciation right, phantom
stock option, profit participation or arrangement by which (a) with respect to
the Corporation, the Corporation is bound to issue any additional shares of its
capital stock or an interest in the equity or equity appreciation of the
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Corporation or rights pursuant to which any Person has a right to purchase
shares of the Corporation's capital stock or an interest in the equity or equity
appreciation of the Corporation or (b) with respect to a Seller, the Seller is
bound to sell or allow another Person to vote, encumber or control the
disposition of any shares of the Corporation's capital stock or rights pursuant
to which any Person has a right to purchase, vote, encumber or control the
disposition of shares of the Corporation's capital stock from the Seller.
"Order" means any writ, decree, order, judgment, injunction,
rule, ruling, Lien, citation, summons, directive, communication or informational
request, voting right, consent of or by an Authority.
"Permits" means all permits, licenses, registrations,
certificates, Orders, qualifications or approvals required by any Authority or
other Person.
"Person" means any corporation, partnership, joint venture,
limited liability company, organization, entity, Authority or natural person.
"Policies" means all Contracts that insure (a) the
Corporation's properties, plant and equipment for loss or damage; and (b) the
Corporation or its officers, directors, employees or agents against any
liabilities, losses or damages (or lost profits) for any reason or purpose.
"Purchase Price" shall have the meaning set forth in Section
1.2.
"Purchaser" shall have the meaning set forth in the Preamble.
"Restricted Area" shall mean those states in which the
Purchaser, the Corporation or their Affiliates is conducting or has written
proposals to conduct business as of the date of determination.
"Restricted Period" shall mean five (5) years after the date
of this Agreement.
"Regulation" means any rule, law, code, statute, regulation,
ordinance, requirement, announcement, policy, guideline, rule of common law or
other binding action of or by an Authority and any judicial interpretation
thereof.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and Regulations promulgated thereunder, or any similar federal law
then in force.
"Seller" shall have the meaning set forth in the Preamble.
"Settlement Amount" shall have the meaning set forth in
Section 1.4.
"Settlement Amount Certificate" shall have the meaning set
forth in Section 1.4.
"Settlement Date" shall have the meaning set forth in Section
1.4.
"Stock" shall have the meaning set forth in the second whereas
clause.
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"Subsidiary" any Person in which the Corporation has (a) an
Investment; (b) advanced funds or provided financial accommodations to which, in
each case, is secured by an Investment in; or (c) has an Option to acquire an
Investment in such Person.
"Tax" or "Taxes" means any federal, state, local or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, property, windfall, profits, environmental, customs,
capital stock, franchise, employees' income withholding, foreign or domestic
withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, value added, alternative or add-on minimum or
other similar tax, governmental fee, governmental assessment or governmental
charge of any kind whatsoever, including any interest, penalties or additions to
Tax or additional amounts with respect to the foregoing.
"Tax Returns" means returns, declarations, reports, Claims for
refund, information returns or other documents (including any related or
supporting schedules, statements or information) filed or required to be filed
in connection with the determination, assessment or collection of Taxes of any
party or the administration of any laws, Regulations or administrative
requirements relating to any Taxes.
"Transaction Documents" means this Agreement and the exhibits
attached hereto, the articles of incorporation and bylaws of the Corporation,
the employment agreements and all other documents referenced in or contemplated
by this Agreement.
"UCC" means the Uniform Commercial Code.
"Working Capital Shortfall" shall mean the amount by which the
Corporation's Closing Date Working Capital is less than the Estimated Closing
Date Working Capital.
Section 12.2 Expenses. The Sellers and the Purchaser
shall pay their own expenses, and the Sellers shall pay any expenses incurred by
the Corporation, incident to the negotiation, preparation and carrying out of
this Agreement, including, without limitation, the fees and expenses of their
respective counsel.
Section 12.3 Governing Law. The interpretation and
construction of this Agreement, and all matters relating hereto, shall be
governed by the internal laws of the State of Florida.
Section 12.4 Captions. The Article and Section captions
used herein are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
Section 12.5 Notices. Any notice, demand or other
communication required or permitted under this Agreement shall be sufficiently
given if and when (a) delivered in person, (b) sent by telecopy, (c) one
business day after being couriered by overnight receipted courier service, and
(d) three business days after mailing by registered or certified mail, postage
prepaid, addressed as follows:
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If to the Purchaser, to:
Marex, Inc.
ATTN: Chief Financial Officer
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
White & Case LLP
First Union Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
tel: (▇▇▇) ▇▇▇-▇▇▇▇
fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
and if to the Corporation, to:
Software Support Team, Inc.
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
tel: (▇▇▇) ▇▇▇-▇▇▇▇
fax: (▇▇▇) ▇▇▇-▇▇▇▇
and if to the Sellers, to the address set forth on the signature pages hereto or
such other address or number as shall be furnished in writing by any such party,
and such notice or communication shall be deemed to have been given as of the
date so delivered, sent by telecopier or mailed.
Section 12.6 Counterparts. This Agreement may be executed
by facsimile or original signature in two or more counterparts, all of which
taken together shall constitute one instrument.
Section 12.7 Entire Agreement. This Agreement, including
the exhibits, schedules, and other documents referred to herein and therein
which form a part hereof and thereof, contain the entire understanding of the
parties hereto with respect to the subject matter contained herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
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Section 12.8 Amendments. This Agreement may not be
changed orally, but only by an agreement in writing signed by the Purchaser and
the Sellers.
Section 12.9 Severability. In case any provision in this
Agreement shall be held invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof will not in any
way be affected or impaired thereby.
Section 12.10 Third Party Beneficiaries. Each party hereto
intends that this Agreement shall not benefit or create any right or cause of
action in or on behalf of any Person other than the parties hereto.
Section 12.11 Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties, except that the Purchaser may, without the prior approval of the
Sellers or the Corporation, assign its rights, interests and obligations
hereunder to any Affiliate, and may grant Liens in respect of its rights and
interests hereunder to its lenders (and any agent for the lenders), and the
parties hereto consent to any exercise by such lenders (and such agent) of their
rights and remedies with respect to such collateral.
Section 12.12 CONSENT TO JURISDICTION; SERVICE OF PROCESS.
THE CORPORATION, EACH SUBSIDIARY AND EACH OF THE SELLERS HEREBY IRREVOCABLY
SUBMIT TO THE JURISDICTION OF THE STATE OR FEDERAL COURTS LOCATED IN MIAMI-DADE
COUNTY, FLORIDA IN CONNECTION WITH ANY SUIT, ACTION OR OTHER PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY,
AND HEREBY AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE IN
ANY SUCH SUIT, ACTION OR PROCEEDING THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY
NOT BE ENFORCED BY SUCH COURTS.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
MAREX, INC.
By:
-----------------------------------
Name:
Title:
SOFTWARE SUPPORT TEAM, INC.
By:
-----------------------------------
Name:
Title:
No. Shares SELLERS
59,100
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
No. Shares
59,100
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Exhibits
--------
1.2 Note
7.1 Officer's Certificate
7.6 Chief Financial Officer's Certificate
7.8 Secretary's Certificate
7.12 Employment Agreements
7.15 Landlord Estoppel Agreement
8.5 Security Agreement
Schedules
---------
1.3 Estimated Closing Date Balance Sheet Procedures
2.1 Jurisdictions
2.3 Capitalization
2.6 Conflicts
2.7(a) Financial Statements
2.7(b) Indebtedness
2.7(c) Guaranteed Obligations
2.8 Employees
2.9 Warranty
2.10 Certain Developments
2.11 Title to Properties
2.12 Taxes
2.13 Contracts and Commitments
2.14 Intellectual Property
2.15 Litigation
2.17 Insurance
2.18 Employee Benefit Plans
2.20 Affiliated Transactions
2.21 Environmental Matters
5.3 Assumed Obligations
12.1 Exceptions to Definitions of Indebtedness