Exhibit 10.19
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ASSET PURCHASE AGREEMENT
by and among
ICONIXX CORPORATION
("Iconixx")
ICONIXX - HOUSTON, INC.
("Buyer")
ENTERPRISEWORKS, LLC
(the "Company")
and
CERTAIN MEMBERS OF ENTERPRISEWORKS, LLC
(the "Majority Members")
Dated March 23, 2000
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TABLE OF CONTENTS
Page
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RECITALS .....................................................................1
ARTICLE I DEFINITIONS ........................................................1
1.1. Definitions ........................................................1
ARTICLE II ASSET PURCHASE ....................................................7
2.1. Asset Purchase .....................................................7
(a) Cash, Cash Equivalents and Investments ........................7
(b) Customer Deposits and Accounts Receivable .....................7
(c) Real Property .................................................7
(d) Business, Equipment and Supplies ..............................7
(e) Contracts and Other Agreements Relating to the Business .......7
(f) Books, Records, Lists and Other Data ..........................8
(g) Employment Agreements and Employee Relationships ..............8
(h) Licenses, Permits .............................................8
(i) Prepayments ...................................................8
(j) Intellectual Property .........................................8
(k) General Intangibles ...........................................8
(l) Other Assets ..................................................8
2.2 Excluded Assets ....................................................8
2.3 Assumed Liabilities ................................................9
2.4 Excluded Liabilities ...............................................9
2.5 Title to the Purchased Assets: Documents of Conveyance ............10
2.6 Purchase Price; Allocation of Purchase Price ......................11
2.7 Payment of Purchase Price .........................................11
2.8 Funded Indebtedness Adjustment ....................................11
2.9 Financial Condition ...............................................11
2.10 Closing ...........................................................12
2.11 Escrow Arrangements ...............................................12
2.12 Closing Audit .....................................................12
2.13 Post-Closing Net Working Capital Adjustment .......................13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND THE MAJORITY MEMBERS .......................................13
3.1. Capitalization ....................................................13
3.2. No Liens on Purchased Assets ......................................14
3.3. Subsidiaries ......................................................14
3.4. Brokers ...........................................................14
3.5. Due Organization ..................................................14
3.6. Due Authorization .................................................14
3.7. Financial Statements ..............................................15
3.8. Certain Actions ...................................................15
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3.9 Properties ........................................................16
3.10 Licenses and Permits ..............................................17
3.11 Intellectual Property .............................................17
3.12 Compliance with Laws ..............................................18
3.13 Insurance .........................................................19
3.14 Employee Benefit Plans ............................................19
3.15 Contracts and Agreements ..........................................20
3.16 Claims and Proceedings ............................................21
3.17 Taxes .............................................................21
3.18 Personnel .........................................................22
3.19 Business Relations ................................................23
3.20 Accounts Receivable; Accounts Payable; Customer Deposits;
Customer Revenues and Deferred Revenues ...........................23
3.21 Bank Accounts; Investments ........................................24
3.22 Customer Claims ...................................................24
3.23 Affiliated Transactions ...........................................24
3.24 Funded Indebtedness; Letters of Credit; Undisclosed Liabilities ...24
3.25 Year 2000 .........................................................25
3.26 Information Furnished .............................................25
ARTICLE IV BUYER'S AND ICONIXX'S REPRESENTATIONS AND
WARRANTIES .............................................................25
4.1 Due Organization of Iconixx and Buyer .............................25
4.2 Due Authorization .................................................26
4.3 No Brokers ........................................................26
4.4 Information Furnished .............................................26
4.5 Capital Stock and Related Matters .................................26
4.6 Authorization of the Stock ........................................26
4.7 Compliance with Laws ..............................................27
4.8 Taxes .............................................................27
4.9 Claims and Proceedings ............................................27
4.10 Intellectual Property .............................................27
4.11 Registration Rights ...............................................28
4.12 Financial Statements ..............................................28
ARTICLE V PRE-CLOSING COVENANTS OF THE COMPANY, ICONIXX,
BUYER AND THE MAJORITY MEMBERS .........................................28
5.1 Consents of Others ................................................28
5.2 Reasonable Efforts ................................................29
5.3 Powers of Attorney ................................................29
5.4 Conduct of Business Pending Closing ...............................31
5.5 Access Before Closing .............................................31
ARTICLE VI POST-CLOSING COVENANTS ...........................................32
6.1 General ...........................................................32
6.2 Transition ........................................................32
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6.3. Covenants Not to Compete; Confidentiality; Non-Solicitation .......32
6.4. Access to Records After Closing ...................................32
6.5. Assignment of Contracts ...........................................33
6.6. Change of Name ....................................................33
6.7. Litigation Support ................................................33
6.8. Audits ............................................................34
6.9. 401(k) Plan .......................................................32
6.10. Iconixx's Stock Options ...........................................34
ARTICLE VII CONDITIONS TO OBLIGATIONS OF PARTIES TO
CONSUMMATE CLOSING .......................................................34
7.1. Conditions to Iconixx's and Buyer's Obligations ...................34
7.2. Conditions to the Majority Members' and the Company's Obligations .36
ARTICLE VIII INDEMNIFICATION...................................................38
8.1. Indemnification by the Majority Members ...........................38
8.2. Indemnification of the Majority Members and the Company ...........39
8.3. Defense of Claims .................................................39
8.4. Escrow Claim ......................................................40
8.5. Tax Audits, Etc ...................................................40
8.6. Limits on Indemnification .........................................40
ARTICLE IX TERMINATION ........................................................41
9.1. Termination .......................................................41
9.2. Effect of Termination .............................................42
ARTICLE X MISCELLANEOUS .......................................................42
10.1. Modifications .....................................................42
10.2. Notices ...........................................................42
10.3. Counterparts; Facsimile Transmission ..............................44
10.4. Expenses ..........................................................44
10.5 Binding Effect; Assignment ........................................44
10.6. Entire and Sole Agreement .........................................45
10.7. Governing Law .....................................................45
10.8. Survival of Representations, Warranties and Covenants .............45
10.9. Invalid Provisions ................................................45
10.10. Public Announcements ..............................................45
10.11. Remedies Cumulative ...............................................45
10.12. Third Parties .....................................................46
10.13. No Strict Construction ............................................46
10.14. Disclosure Schedules ..............................................46
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LIST OF EXHIBITS
Exhibit A Form of Escrow Agreement
Exhibit B Form of ▇▇▇▇ of Sale, Assignment and Assumption Agreement
Exhibit C Majority Members Accounts and Wire Transfer
Instructions ((S) 2.4)
Exhibit D-1 Articles of Organization of the Company
Exhibit D-2 Regulations of the Company
Exhibit E Certificate of Incorporation of Iconixx
Exhibit F-1 Form of ▇▇▇▇▇▇▇ Employment Agreement
Exhibit F-2 Form of Key Employee Employment Agreement
Exhibit F-3 Form of A.B. Holdings/▇▇▇▇▇▇▇▇ Non-solicitation Agreement
Exhibit G Opinion of Company's Counsel
Exhibit G-1 Opinion of Iconixx's and Buyer's Counsel
Exhibit H Form of Employee Transition Services Agreement
Exhibit I Form of Assignment of Trademark Agreement
DISCLOSURE SCHEDULES
LEASES SCHEDULE
ICONIXX CAPITALIZATION SCHEDULE
EMPLOYEE SCHEDULE
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
March 23, 2000, by and among ICONIXX CORPORATION, a Delaware corporation
("Iconixx"), ICONIXX - HOUSTON, INC., a Delaware corporation ("Buyer"),
ENTERPRISEWORKS, LLC, a Texas limited liability company (the "Company" or
"Seller"); and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and AB
HOLDINGS, LLC, a Nevada limited liability company (collectively, the "Majority
Members").
Recitals
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A. Pursuant to this Agreement, the Company, which is engaged in the
business of providing information technology, enterprise resource and systems
integration consulting in the United States (the "Business"), will be acquired
by Buyer pursuant to an acquisition of substantially all of the assets of the
Company (the "Acquisition").
B. On the date of this Agreement, the Company's capitalization
consists of 9,975,000 units (the "Company Shares"), of which 9,325,000 are owned
by the Majority Members.
C. Buyer, a wholly-owned subsidiary of Iconixx, desires to purchase
from the Company and the Company desires to sell to Buyer, substantially all of
the Company's assets used in the operation of the Business on the terms and
subject to the conditions set forth in this Agreement.
D. In connection with its purchase of such assets from the Company,
Buyer desires to assume certain of the liabilities and obligations of the
Company relating to the Business (and no others), all as more specifically set
forth herein.
Agreement
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NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto covenant and agree
as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. In this Agreement, the following terms have the
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meanings specified or referred to in this Section 1.1 and shall be equally
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applicable to both the singular and plural forms. Any agreement referred to
below shall mean such agreement as amended,
supplemented and modified from time to time to the extent permitted by the
applicable provisions thereof and by this Agreement.
"Acquisition" has the meaning specified in Recital A of this
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Agreement.
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.
"Assumed Liabilities" has the meaning specified in Section 2.3.
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"Audited Closing Financial Statements" has the meaning specified in
Section 2.12.
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"Business" has the meaning specified in Recital A of the Agreement.
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"Buyer" has the meaning specified in the first paragraph of this
Agreement.
"Cash Purchase Price" shall have the meaning assigned to such term in
Section 2.2(a).
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"Closing" means the closing of the Acquisition.
"Closing Date" has the meaning specified in Section 2.10.
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"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, Section 4980B of the Code, Title I, Part 6 of ERISA, and any
regulations and proposed regulations thereunder.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock, par value $.01 per share, of
Iconixx.
"Company" has the meaning specified in the first paragraph of this
Agreement.
"Company Shares" has the meaning specified in Recital B of the
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Agreement.
"Contracts" has the meaning specified in Section 3.15.
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"Court Order" means any judgment, order, award or decree of any
foreign, federal, state, local or other court or tribunal and any award in any
arbitration proceeding.
"Disclosure Schedules" shall mean the Disclosure Schedules attached to
this Agreement pursuant to which exceptions to the Majority Members' and the
Company's specific representations and warranties set forth in Article III (and
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listed on a Section-by-Section basis) are disclosed to Buyer and Iconixx
pursuant to said Article III, and pursuant to which exceptions to Buyer's and
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Iconixx's specific representations and warranties set forth in Article IV
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(and listed on a
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Section-by-Section basis) are disclosed to the Majority Members and the Company
pursuant to Article IV.
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"Employee" has the meaning specified in Section 5.3.
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"Encumbrance" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
defect in title or restrictive covenant.
"Environmental and OSHA Obligations" has the meaning specified in
Section 3.12.
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"Equipment" has the meaning specified in Section 2.1(d).
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"Equitable Exceptions" shall have the meaning specified in Section
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3.6.
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"Equity Agreements" means (i) the Stockholders Agreement dated August
12, 1999 between Iconixx and its Stockholders and (ii) the Registration Rights
Agreement dated August 12, 1999 between Iconixx and its Stockholders.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means First Union National Bank, N.A.
"Escrow Agreement" means the Escrow Agreement to be executed by and
among the Majority Members, Buyer, Iconixx and the Escrow Agent in the form of
Exhibit A.
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"Escrow Period" has the meaning specified in Section 2.11.
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"Escrow Sum" has the meaning specified in Section 2.11.
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"Excluded Assets" has the meaning specified in Section 2.2.
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"Excluded Liabilities" has the meaning specified in Section 2.4.
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"Financial Statements" has the meaning specified in Section 3.7.
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"Force Majeure" shall mean any failure or delay caused by acts of god,
flood, fire, war or terrorism or any failure or delay caused by a governmental
blockage of all currency transactions between a foreign Governmental Body and
the United States of America.
"Funded Indebtedness" means all (i) indebtedness of the Company for
borrowed money or other interest-bearing indebtedness; (ii) obligations of the
Company to pay the deferred purchase or acquisition price for goods or services,
other than trade accounts payable in the ordinary course of business and the
deferred purchase or acquisition price specifically referenced in Item (i/m) of
Schedule 3.8; (iii) indebtedness of others guaranteed by the Company or secured
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by an Encumbrance on the Company's property; (iv) letters of credit or similar
obligations;
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and (v) indebtedness of the Company under extended credit terms of more than 60
days from vendors provided to the Company.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"Governmental Body" means any foreign, federal, state, local or other
governmental authority or regulatory body having jurisdiction over the Company
and/or the Majority Members.
"Governmental Permits" has the meaning specified in Section 3.10.
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"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended and the rules and regulations promulgated thereunder.
"Iconixx" has the meaning specified in the first paragraph of this
Agreement.
"IRS" means the Internal Revenue Service.
"Indemnifiable Costs" has the meaning specified in Section 8.1.
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"Indemnified Parties" has the meaning specified in Section 8.1.
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"Intellectual Property" shall mean all of the following owned by or
licensed or sublicensed to the Company as they are related primarily to the
Business: (i) patents, patent applications, patent disclosures and inventions
(whether or not patentable and whether or not reduced to practice); (ii)
trademarks, service marks, trade dress, trade names, corporate or company names,
logos, slogans and Internet domain names, together with all goodwill associated
with each of the foregoing; (iii) copyrights and copyrightable works; (iv)
registrations, applications and renewals for any of the foregoing; (v) trade
secrets, confidential information and know-how (including but not limited to
ideas, formulae, compositions, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, business and marketing plans, and customer and supplier lists and
related information); and (vi) computer software (including but not limited to
data, data bases and documentation).
"Investments" means short-term investments in any funds, accounts,
securities, certificates of deposit or instruments of any Person which are (i)
included as short-term investments on a balance sheet in accordance with GAAP,
and (ii) marked to market as of any date of determination.
"Knowledge of the Company" (whether or not capitalized) shall mean
actual knowledge, after reasonable inquiry within the Company to senior
administrative managers with responsibility for the subject matter in question,
of the Majority Members and the officers of the Company. "Knowledge of the
Majority Members" (whether or not capitalized) shall mean actual knowledge of
the Majority Members. "Knowledge of Iconixx" (whether or not capitalized) shall
mean actual knowledge, after reasonable inquiry within Iconixx and its
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Affiliates to senior administrative managers with responsibility for the subject
matter in question, of the officers of Iconixx.
"Leases" shall mean the leases set forth on the Schedule 3.9.
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"Material" (whether or not capitalized) shall, where appropriate in
context of its use in making the representations and warranties set forth in
Article III, be deemed to mean an amount of money greater than $50,000
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individually or $75,000 in the aggregate.
"Material Adverse Change" or "Material Adverse Effect" means a
material adverse change or effect on the assets, properties, Business,
operations, liabilities or financial condition of the Company and its
subsidiaries, taken as a whole. In determining whether a "Material Adverse
Change" or "Material Adverse Effect" has occurred in the context of the use of
such terms in the Company's and the Majority Members' representations and
warranties set forth in Article III, such terms shall refer to the occurrence of
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any single event, or any series of related events, or set of related
circumstances, which results or likely will result in a loss to the Company or
Buyer, in excess of $50,000 per occurrence or $75,000 in the aggregate.
"Majority Members" has the meaning set forth in the first paragraph of
this Agreement.
"Minimum Cash" has the meaning specified in Section 2.9.
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"Most Recent Financial Statements" has the meaning specified in
Section 3.7.
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"Net Working Capital" shall equal the Company's total current assets
(including cash and cash equivalents but excluding Permitted Distributions)
minus its total current liabilities including, without limitation, any: (i) cash
to accrual liability borne by the Company or Buyer; and (ii) change in control
payments due to employees, subcontractors, vendors or customers as a result of
the Acquisition contemplated hereby, each as calculated in accordance with GAAP.
"Net Working Capital Adjustment" has the meaning specified in Section
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2.13.
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"OSHA" means the Occupational Safety and Health Act, 29 U.S.C. (S)(S)
651 et seq., any amendment thereto, and any regulations promulgated thereunder.
-- ---
"Other Arrangement" means a benefit program or practice providing for
bonuses, incentive compensation, vacation pay, severance pay, insurance,
restricted stock, stock options, employee discounts, company cars, tuition
reimbursement or any other perquisite or benefit (including, without limitation,
any fringe benefit under Section 132 of the Code) to employees, officers or
independent contractors that is not an Employee Benefit Plan within the meaning
of Section 3(3) of ERISA.
"Permitted Distributions" has the meaning specified in Section 3.8.
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"Permitted Exception" means (a) liens for Taxes and other governmental
charges and assessments which are not yet due and payable, (b) nondelinquent
liens of landlords and liens of carriers, warehousemen, mechanics and
materialmen and other like liens arising in the ordinary course of business for
sums not yet past due, (c) purchase money security interest or equipment liens
on any Assumed Liabilities solely on the property acquired pursuant to such
credit purchase, or (d) other liens or imperfections on property which are not
material in amount or do not materially detract from the value or the existing
use of the property affected by such lien or imperfection.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or Governmental Body.
"Preferred Stock" means the Convertible Class A Preferred Stock, par
value $.01 per share of Iconixx.
"Preliminary Closing Balance Sheet" has the meaning specified in
Section 2.9.
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"Projected Net Working Capital" means the amount of Net Working
Capital of the Company reflected on the Preliminary Closing Balance Sheet.
"Purchase Price" has the meaning specified in Section 2.6.
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"Purchased Assets" means the assets of the Business specified in
Section 2.1.
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"Real Property" has the meaning specified in Section 2.1(c).
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"Requirements of Laws" means any foreign, federal, state and local
laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued
or promulgated by any Governmental Body (including, without limitation, those
pertaining to electrical, building, zoning, environmental and occupational
safety and health requirements).
"Seller" has the meaning specified in the first paragraph of this
Agreement.
"Tax" or "Taxes" means any federal, state, local or foreign income,
alternative or add-on minimum, gross income, gross receipts, windfall profits,
severance, property, production, sales, use, transfer, gains, license, excise,
employment, payroll, withholding or minimum tax, transfer, goods and services,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amounts imposed thereon by any Governmental Body.
"Tax Return" means any return, report or similar statement required to
be filed with respect to any Taxes (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return and declaration of estimated Tax.
"Transferred Employees" has the meaning specified in Section 5.3.
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ARTICLE II
ASSET PURCHASE
2.1. Asset Purchase. On the Closing Date (as hereinafter defined) and
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subject to the terms and conditions set forth in this Agreement, the Company
shall sell and deliver to Buyer and Buyer agrees to purchase from the Company at
the Closing (as hereinafter defined), free and clear of all liens, claims and
Encumbrances except for the Permitted Exceptions, all of the Company's right,
title and interest in and to all assets of the Business included in the
Company's December 31, 1999 balance sheet for the Business, subject to changes:
(i) in the ordinary course of business (and consistent with the Company's
covenants in Section 5.4) from such date through the Closing Date that are not
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in the aggregate Material; or (ii) set forth on Schedule 2.1, together with all
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other assets owned and used by the Company in the Business, other than the
Excluded Assets (collectively, the "Purchased Assets"). The Purchased Assets
include, without limitation, the following as they exist on the Closing Date:
(a) Cash, Cash Equivalents and Investments. Cash (other than the Cash
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Purchase Price), cash equivalents and Investments.
(b) Customer Deposits and Accounts Receivable. All accounts receivable,
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customer deposits and other deposits (other than the Escrow Sum), advances and
suppliers' or vendors' rebates and all other receivables of the Business
existing on the Closing Date, in the ordinary course of the operation of the
Business.
(c) Real Property. All leases of real property and interests, options or
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rights relating to real property with respect to the Business (collectively, the
"Real Property"). All Real Property is identified as leased and described on the
Leases Schedule attached hereto.
(d) Business, Equipment and Supplies. All tangible personal property,
--------------------------------
equipment, supplies, furniture, leasehold improvements, including but not
limited to, leases and subleases of personal property or equipment, all
automobiles and other vehicles, computers, software and peripherals and all
maintenance and other operating supplies and other miscellaneous tangible
personal property owned by Seller and used in the Business, whether or not
located at or on the Real Property at the Closing Date and whether or not
reflected on the Most Recent Financial Statements (collectively, the
"Equipment").
(e) Contracts and Other Agreements Relating to the Business. All rights of
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Seller (or of Seller's Affiliates to the extent such rights pertain exclusively
to the Business) as of the Closing Date under all (written or oral) customer
contracts or vendor contracts with software or other companies, marketing
agreements, consortia agreements, web-design or other agreements relating to the
Business, interface or similar agreements pertaining to licenses, leases,
purchase orders and all other contracts, agreements or arrangements relating to
the Business.
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(f) Books, Records, Lists and Other Data. All files, books, records,
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invoices, accounts, surveys, customer lists and records, vendor and supplier
lists, catalogs, price lists, marketing and advertising information, purchasing
histories, profiles and materials, technical bulletins, books and records of
account and other financial, vendor, customer and credit data, and all computer
programs, software, hardware, firmware, tapes and other materials used to store,
record or produce such data, owned or leased by the Company and used in the
Business (exclusive of the Company's company or unit records).
(g) Employment Agreements and Employee Relationships. All rights of Seller
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as of the Closing Date under all employment and non-compete agreements plus all
relationships of the Company with any of its employees to the extent any of the
foregoing are used in the Business.
(h) Licenses, Permits. To the extent assignable, all rights of Seller in
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and to all federal, state, local and other governmental licenses, permits,
approvals and authorizations that relate to the operation of the Business.
(i) Prepayments. All security, utility, lease or similar deposits or
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prepaid expenses of the Company used in the Business but excluding any prepaid
insurance policies.
(j) Intellectual Property. All Intellectual Property of the Company.
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(k) General Intangibles. All general intangibles used by the Business
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including, without limitation, all goodwill as a going concern and any and all
causes of action or claims of Seller against any third party that arose or will
arise in connection with the Business prior to the Closing Date.
(l) Other Assets. All other assets of Seller used in the conduct of the
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Business, whether or not reflected on the books or records of Seller or the
Business, other than the Excluded Assets.
2.2. Excluded Assets. Notwithstanding anything to the contrary in this
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Agreement, the Purchased Assets do not include, and Buyer is not purchasing or
assuming any liability therefor, the following: (i) company charter and unit
records of the Company; (ii) tax records of the Company; (iii) 401(k) plan in
which the Company's employees participate and other employee benefit plans; (iv)
the rights and obligations of the Company under that certain Management
Agreement dated December 31, 1997 between the Company and Valid Management,
L.L.C.; (v) the rights and obligations of ▇.▇. ▇▇▇▇▇ & Associates, L.P. under
that certain Professional Services Agreement dated January 1, 1998, between the
Company and ▇.▇. ▇▇▇▇▇ & Associates, L.P.; and (vi) this Agreement and the other
contracts entered into by the Company in connection herewith (the "Excluded
Assets"), ownership of which is retained by Seller.
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2.3. Assumed Liabilities. On the terms and subject to the conditions and
-------------------
exceptions contained herein, at Closing, Seller shall assign and delegate to
Buyer, and Buyer shall assume and undertake to pay, defend, discharge and
perform in full when due the liabilities and obligations of Seller (insofar as
such liabilities and obligations relate to the Business and the Purchased
Assets) included in Seller's December 31, 1999 balance sheet for the Business,
subject to changes and additional liabilities and obligations specifically
identified below in this Section 2.3 (the "Assumed Liabilities"), and no others,
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pursuant to this Agreement and the General Assignment, ▇▇▇▇ of Sale and
Assumption Agreement referred to in Section 2.5.
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(a) the rights, liabilities and obligations of Seller to perform under
the agreements and contracts listed on Schedule 2.3(a) attached hereto together
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with such other agreements and contracts entered into by Seller in the ordinary
course of business individually involving amounts less than $50,000
(collectively, the "Assumed Contracts"); provided, however, that Buyer shall not
assume any liabilities or obligations arising out of or in connection with
Seller's breach of such Assumed Contracts in excess of the amounts reserved
therefor in the balance sheet included as part of the Most Recent Financial
Statements;
(b) the rights, liabilities and obligations of Seller to perform under
the Leases from and after the Closing Date;
(c) the liabilities and obligations of Seller for accrued expenses for
utilities, professional fees (other than fees related to the Acquisition),
wages, commissions and bonuses, and accrued vacation benefits in each case to
the extent such accrued expenses are (i) reflected in Seller's December 31, 1999
balance sheet for the Business, or (ii) incurred in the ordinary course of
business between December 31, 1999 and the Closing Date; and
(d) all other liabilities and obligations of Seller (other than the
Excluded Liabilities defined in Section 2.4 below) which relate to the Business
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and/or the Purchased Assets and are (i) reflected in Seller's December 31, 1999
balance sheet for the Business; (ii) incurred in the ordinary course of business
between December 31, 1999 and the Closing Date; or (iii) reflected in item (i/m)
of Schedule 3.8.
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2.4 Excluded Liabilities. Notwithstanding anything to the contrary
--------------------
contained in this Agreement, Buyer will not assume or be liable for and Seller
will retain and remain responsible for all of Seller's debts, liabilities and
obligations of any nature whatsoever, other than the Assumed Liabilities,
whether accrued, absolute or contingent, whether known or unknown, whether due
or to become due and whether related to the Business and the Purchased Assets or
otherwise, and regardless of when asserted (the "Excluded Liabilities"),
including, without limitation, the following liabilities or obligations of
Seller (none of which will constitute Assumed Liabilities):
(a) All of Seller's liabilities or obligations under this Agreement or
under any other agreement between Seller on the one hand and Buyer on the other
hand entered into on or after the date of this Agreement;
-9-
(b) All liabilities and obligations of Seller for Taxes which are
imposed on or measured by income, for any period, and all of Seller's
liabilities or obligations with respect to any non-income Taxes except to the
extent specifically accrued on the balance sheet for the Business included in
the Most Recent Financial Statements or incurred in the ordinary course of
business between December 31, 1999 and the Closing Date.
(c) All of Seller's liabilities or obligations arising out of or in
connection with the breach of any contract or agreement included in the
Purchased Assets, other than for such amounts as are adequately and properly
reserved for in the balance sheet included as part of the Most Recent Financial
Statements;
(d) All of Seller's liabilities or obligations for expenses, Taxes or
fees incident to or arising out of the negotiation, preparation, approval, or
authorization of this Agreement or the consummation (or preparation for the
consummation) of the transactions contemplated hereby, including all attorneys'
and accountants' fees, brokerage fees, consultants' fees and finders' fees, and
sales, bulk sales and transfer taxes which are Seller's responsibility
hereunder;
(e) Seller's obligations and liabilities for the period up to and
including the Closing Date which relate to any employee plans (as described in
Section 3.14) (including unfunded pension plan liabilities and retiree health
------------
benefits);
(f) Any liability or obligation under COBRA to any person covered by
Seller's health plans or any Employee who ceases to be employed by Seller on or
before the Closing Date, or who is not employed by Buyer on the Closing Date,
and any liability or obligation under COBRA to any family member of such person
or Employee.
(g) Any liability or obligation for Funded Indebtedness or any other
liability or obligation of Seller that does not relate to, or arise from, the
Business and the Purchased Assets.
(h) Any liability or obligation pertaining to any discontinued
operation owned or operated by Seller and related to the Business as it was
operated by Seller prior to the Business.
(i) Any liability or obligation that relates to, or arises from, the
Excluded Assets.
2.5 Title to the Purchased Assets: Documents of Conveyance. At Closing,
-----------------------------
Seller shall convey all of its right, title and interest in and to the Business
and the Purchased Assets to Buyer free and clear of all liabilities,
obligations, liens and Encumbrances, excepting only the Assumed Liabilities and
the Permitted Exceptions. Title to the Purchased Assets shall be conveyed
pursuant to a General Assignment, ▇▇▇▇ of Sale and Assumption Agreement
substantially in the form attached hereto as Exhibit B, and by such other
---------
documents as are reasonably acceptable to counsel for Seller and counsel for
Buyer in accordance with the terms
-10-
hereof. Each of the parties hereto agrees to use its reasonable commercial
efforts to take or cause to be taken all action, and to do, or cause to be done,
all things reasonably necessary, proper or advisable, whether before or after
Closing, to ensure transfer of title to the Purchased Assets to Buyer occurs as
contemplated hereunder.
2.6 Purchase Price; Allocation of Purchase Price. The total purchase price
--------------------------------------------
for the Purchased Assets (the "Purchase Price") shall be equal to
$22,028,676.90, subject to any adjustment required to be made pursuant to
Sections 2.8, 2.9 and 2.13 below. The Purchase Price shall be allocated among
----------------- ----
the Purchased Assets as proposed by Buyer and approved by Seller, which approval
shall not be unreasonably withheld, which proposed allocation shall be delivered
to Seller within ten (10) days following the determination of the Audited
Closing Financial Statements.
2.7 Payment of Purchase Price. On the Closing Date and subject to the
-------------------------
terms and conditions set forth in this Agreement, Buyer shall pay the Purchase
Price for the Purchased Assets to the Company. The Purchase Price shall be
payable as follows:
(a) an aggregate of $16,000,000 shall be paid at Closing by wire
transfer of immediately available funds to the Company's account as specified in
Exhibit C hereto (the "Cash Purchase Price");
---------
(b) $1,000,000 shall be paid in cash to the Escrow Agent at Closing
pursuant to Section 2.7 below to serve as the Escrow Sum (as defined below); and
-----------
(c) $5,028,676.90 shall be paid to the Company in the form of
3,868,213 shares of Common Stock (valued at $1.30 per share) to be distributed
by the Company among the members of the Company who are either accredited
investors or senior executives of the Company in the amounts specified in
Exhibit C hereto.
---------
2.8 Funded Indebtedness Adjustment. The Cash Purchase Price will be
------------------------------
adjusted downward by the amount, if any, by which the Company's Funded
Indebtedness exceeds $0 as of the Closing Date.
2.9. Financial Condition. The Cash Purchase Price will be adjusted upward
--------------------
or downward at Closing, by the amount, if any, that the Company's Net Working
Capital at the Closing exceeds or is less than $1,600,000 (as determined based
on the Company's preliminary closing balance sheet prepared not more than five
days prior to the Closing Date (the "Preliminary Closing Balance Sheet"). The
Company shall have at least $100,000 in cash and cash equivalents on hand at the
Closing (the "Minimum Cash") or the Cash Purchase Price payable at Closing will
be reduced by the amount of such deficit(s).
2.10. Closing. The Closing of the Acquisition shall take place at 10:00
-------
a.m., Eastern Time, at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇.▇. in Washington, D.C. on March 23, 2000, or on a date mutually agreed to by
the parties (which date shall be as soon as practicable following the date on
which all of the conditions to Closing set forth in
-11-
Sections 7.1 and 7.2 have been satisfied) (the "Closing Date"), with an
------------ ---
effective date as of March 31, 2000.
2.11. Escrow Arrangements. Pursuant to the Escrow Agreement to be entered
-------------------
into among the Company, Majority Members, Buyer, Iconixx and the Escrow Agent,
$1,000,000 of the Purchase Price shall be delivered to the Escrow Agent at
Closing (such monies paid, together with all interest accrued thereon, is
hereinafter referred to as the "Escrow Sum"). The Escrow Sum shall be held
pursuant to the terms of the Escrow Agreement for payment from such Escrow Sum
of the amounts, if any, owing by Majority Members or the Company to Iconixx or
Buyer pursuant to the provisions of the Net Working Capital Adjustment or for
indemnification claims pursuant to Article VIII hereof. To the extent claims
------------
against the Escrow Sum are determined in favor of the Company and/or Majority
Members, all amounts reserved against the Escrow Sum in connection with such
claims shall be remitted to the Company as soon as practicable following any
such determination. On the six month anniversary of the Closing Date, the
Escrow Sum shall be reduced to an amount equal to the sum of $500,000 plus the
amount of claims then pending against the Escrow Sum, with such reduction amount
to be remitted to the Company. On December 31, 2000 (such nine-month period
being referred to herein as the "Escrow Period"), such remaining portion of the
Escrow Sum not theretofore claimed by or paid to Iconixx or Buyer in accordance
with the terms of the Escrow Agreement and this Agreement (together with any
interest on such remaining portion of the Escrow Sum) shall be disbursed to the
Company. All disbursements at the expiration of the Escrow Period shall be paid
in cash to the Company at its account set forth in Exhibit C as updated from
---------
time to time. The Company, the Majority Members and Iconixx and Buyer agree
that each will execute and deliver such reasonable instruments and documents as
are furnished by any other party to enable such furnishing party to receive
those portions of the Escrow Sum to which the furnishing party is entitled under
the provisions of the Escrow Agreement and this Agreement.
2.12. Closing Audit. Within 180 days following the Closing Date, there
-------------
shall be delivered to Iconixx, Buyer, the Company and to Majority Members an
audit of the Company's balance sheet as of the Closing Date (the "Audited
Closing Financial Statements"). The Audited Closing Financial Statements shall
be audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P. in accordance with GAAP. The cost of
preparing the Audited Closing Financial Statements shall be paid by Iconixx. The
Company and the Majority Members shall be afforded a reasonable opportunity to
review the audit results (including any work papers prepared in connection
therewith). In the event that the Company provides written notice within 20 days
after receipt of the Audited Closing Financial Statements that it disputes any
item(s) contained in the Audited Closing Financial Statements, then the Company
and Iconixx shall jointly select and retain an independent "Big Five" accounting
firm (the "Independent Accountants") to review the disputed item(s) in the
Audited Closing Financial Statements. In conducting such review, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, L.L.P. shall provide the Independent Accountants with customary access
to the work papers of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P. utilized in preparing the Audited
Closing Financial Statements. The final determination of such disputed item(s)
by the Independent Accountants shall be utilized to determine all adjustments
described in Section 2.13 below and shall be final
------------
-12-
and binding on the parties solely for such purposes. The cost of retaining the
Independent Accountants shall be paid by the Company and/or the Majority Members
as they may agree.
2.13. Post-Closing Net Working Capital Adjustment. The Purchase Price will
-------------------------------------------
be adjusted upward or downward, on a dollar-for-dollar basis, to reflect the
increase or decrease, if any, in Net Working Capital as reflected on the Audited
Closing Financial Statements from the Projected Net Working Capital (the "Net
Working Capital Adjustment"). The Net Working Capital Adjustment shall be
determined by referring to the Audited Closing Financial Statements. In the
event that the Net Working Capital Adjustment results in an increase in the
Purchase Price, then Buyer shall pay such amount to the Company in immediately
available funds within 15 days of delivery of the Audited Closing Financial
Statements as finally determined in accordance with Section 2.12 above. In the
------------
event that the Net Working Capital Adjustment results in a decrease in the
Purchase Price, then the amount of any such decrease shall be payable to Buyer
(i) first, from the Escrow Sum in immediately available funds within 15 days of
the final determination of the Net Working Capital Adjustment up to a maximum of
$500,000 and (ii) second, the balance, if any, by the Majority Members or the
Company in immediately available funds within 15 days of the final determination
of the Net Working Capital Adjustment. All payments required to be paid by
Iconixx, Buyer, the Company, the Majority Members or the Escrow Agent pursuant
to this Section 2.13 shall be deemed to be an adjustment to the Purchase Price
------------
and shall not be controlled or limited by any provision contained in Article
-------
VIII hereof.
----
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE MAJORITY MEMBERS
Except as set forth on the Disclosure Schedules attached hereto (which
Disclosure Schedules identify the exception and reference the applicable
representation so qualified), the Company and the Majority Members jointly and
severally represent and warrant to Buyer and Iconixx that:
3.1. Capitalization. The authorized membership units of the
--------------
Company consists of only the Company Shares, 9,975,000 of which are issued and
outstanding and are owned in the amounts set forth on Schedule 3.1. All of the
------------
Company Shares are duly authorized, validly issued, fully paid, and
nonassessable. All of the Company Shares are owned of record and, to the
Knowledge of the Majority Members, beneficially by the members identified on
Schedule 3.1. None of the Company Shares was issued in violation of any
------------
preemptive, right of first offer or refusal or preferential rights of any
Person.
3.2. No Liens on Purchased Assets. The Company owns or has valid
----------------------------
leasehold interest in or valid licenses to use all of the Purchased Assets, free
and clear of any Encumbrances other than the rights and obligations arising
under this Agreement, the Permitted Exceptions and those Encumbrances that will
be released on or prior to the Closing Date. Except as set forth on Schedule
--------
3.2, none of the Purchased Assets is subject to (i) any outstanding
---
-13-
option, warrant, call, or similar right of any other Person to acquire the same
or (ii) any restriction on transfer thereof except for restrictions imposed by
applicable federal and state securities laws. At Closing pursuant to the
Acquisition, the Company will have full power and authority to convey good and
marketable title to the Purchased Assets owned by the Company to Buyer, free and
clear of any Encumbrances other than the restrictions imposed by federal and
state securities laws and Permitted Exceptions.
3.3. Subsidiaries. The Company does not own, directly or
------------
indirectly, any capital stock or ownership interests in any Person. Except as
set forth on Schedule 3.3, the Majority Members do not own any capital stock or
------------
ownership interests in any other Person engaged in the Business other than the
Company Shares (other than ownership of a publicly-held corporation of which the
Majority Members, or any of them, own, or have real or contingent rights to own
less than five percent of any class of outstanding securities).
3.4. Brokers. Except for Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.,
-------
neither the Company nor the Majority Members have engaged, or caused to be
incurred any liability to any finder, broker, or sales agent in connection with
the origin, negotiation, execution, delivery, or performance of this Agreement
or the Acquisition.
3.5. Due Organization. The Company is a limited liability company
----------------
duly organized, validly existing, and in good standing under the laws of the
State of Texas and has full company power and authority to own and lease its
properties and assets and to carry on the Business as now conducted. Complete
and correct copies of the Articles of Organization and Regulations of the
Company, and all amendments thereto, have been delivered to Iconixx and are
attached hereto as Exhibits D-1 and D-2, respectively. The Company is not
------------ ---
qualified as a foreign company to do business in any other jurisdiction.
Neither the nature of the Business or the ownership of the Company's properties
requires such qualification except where the failure to be so qualified does not
and could not reasonably be expected to have a Material Adverse Effect.
3.6. Due Authorization. The Company and the Majority Members each
-----------------
have full power and authority to execute, deliver and perform this Agreement and
to carry out the Acquisition. The execution, delivery, and performance of this
Agreement and the Acquisition have been duly and validly authorized by all
necessary company action of the Company. This Agreement has been duly and
validly executed and delivered by the Company and the Majority Members and
constitutes the valid and binding obligations of the Company and the Majority
Members, enforceable in accordance with its terms, except to the extent that
enforceability may be limited by laws affecting creditors' rights and debtors'
obligations generally, and legal limitations relating to remedies of specific
performance and injunctive and other forms of equitable relief (the "Equitable
Exceptions"). The execution, delivery, and performance of this Agreement and
the Acquisition (as well as all other instruments, agreements, certificates, or
other documents contemplated hereby) by the Company and the Majority Members, do
not (a) violate any Requirements of Laws or any Court Order of any Governmental
Body applicable to the Company or the Majority Members, or the Company's
property, (b) violate or conflict with, or permit the cancellation of, or
constitute a default under, any Material agreement to which the Company is a
party, or by which the Company or any of its property is bound, (c) permit the
-14-
acceleration of the maturity of any Material indebtedness of, or indebtedness
secured by the property of, the Company, (d) violate or conflict with any
provision of the Articles of Organization or Regulations of the Company, or (e)
except for filings or approvals under the HSR Act and such consents, approvals,
or registrations as may be required under applicable state securities laws,
require any material consent, approval or authorization of, or notice to, or
declaration, filing or registration with, any Governmental Body or other third
party; except (i) as set forth in Schedule 3.6, or (ii) for any such conflicts,
------------
breaches, violations or defaults that would not have a Material Adverse Effect.
3.7. Financial Statements. The following financial statements of
--------------------
the Company have been delivered to Iconixx by the Company: audited balance
sheets for the period ended December 31, 1997 and the years ended December 31,
1998 and December 31, 1999; audited statements of operation and cash flows for
the period ended December 31, 1997 and the years ended December 31, 1998 and
December 31, 1999 (collectively, the "Financial Statements"). Copies of the
Financial Statements are included in Schedule 3.7. Other than the Financial
------------
Statements as of and for the year ended December 31, 1999 (the "Most Recent
Financial Statements"), the Financial Statements have been prepared in
accordance with GAAP, except as set forth in Schedule 3.7. The Financial
------------
Statements (including the notes thereto) have been prepared on a consistent
basis throughout the periods indicated and fairly present, in all material
respects, the financial position, results of operations and changes in financial
position of the Company as of the indicated dates and for the indicated periods
and are consistent with the books and records of the Company (which books and
records are correct and complete in all material respects). Since December 31,
1999, the Company has not experienced any Material Adverse Change.
3.8. Certain Actions. Since December 31, 1999, the Company has
---------------
not, except as disclosed on any of the Financial Statements or notes thereto or
on Schedule 3.8: (a) paid or declared any dividends or distributions, or
------------
purchased, redeemed, acquired, or retired any stock or indebtedness of any
Member (other than (i) distributions of certain assets mutually agreed upon by
the Company and Iconixx that have been delivered to the Company by its customers
in lieu of a cash payment for services as listed on Schedule 3.8, (ii)
------------
distributions for income taxes and expenses incurred in connection with the
transactions contemplated hereby so long as no Net Working Capital Adjustment
will occur and so long as the Company retains at least the Minimum Cash as of
the Closing Date and (iii) the issuances and exchange of the unit appreciation
rights as described on Schedule 3.8 (collectively the "Permitted
------------
Distributions")); (b) made or agreed to make any loans or advances or guaranteed
or agreed to guarantee any loans or advances to any party whatsoever; (c)
suffered or permitted any Encumbrance (other than the Permitted Exceptions) to
arise or be granted or created against or upon any of its assets, real or
personal, tangible or intangible; (d) canceled, waived, or released or agreed to
cancel, waive, or release any of its debts, rights, or claims against third
parties in excess of $10,000 individually or $50,000 in the aggregate; (e) sold,
assigned, pledged, mortgaged, or otherwise transferred, or suffered any Material
damage, destruction, or loss (whether or not covered by insurance) to, any
assets (except in the ordinary course of the Business); (f) amended its Articles
of Organization or Regulations; (g) outside the ordinary course of business,
paid or made a commitment to pay any
-15-
severance or termination payment to any employee or consultant; (h) made any
Material change in its method of management operation, accounting or reporting
of income or deductions for tax purposes or any change outside the ordinary
course of the Business in the Company's working capital other than Permitted
Distributions; (i) made any Material acquisitions, made any Material capital
expenditures, including, without limitation, replacements of equipment in the
ordinary course of the Business, or entered into commitments therefor, except
for capital expenditures or commitments therefor which do not, in the aggregate,
exceed $50,000; (j) made any investment or commitment therefor in any Person;
(k) made any payment or contracted for the payment of any bonus or other
compensation or personal expenses, other than (i) wages and salaries and
business expenses paid in the ordinary course of the Business, and (ii) wage and
salary adjustments made in the ordinary course of the Business for employees who
are not officers, managers, or members of the Company; (l) made, amended or
entered into any written employment contract with any officers or key employees
of the Company listed on Schedule 3.15 hereto or created or made any Material
-------------
change in any bonus, stock option, pension, retirement, profit sharing or other
employee benefit plan or arrangement; (m) made or entered into any Contract
greater than the smallest of the non-employee Contracts scheduled in accordance
with Schedule 3.15; (n) made or entered into any agreement granting any Person
-------------
any registration or offer rights in respect of the Company's units; (o) entered
into any non-competition agreement restricting the Company from engaging in the
Business; (p) made or entered into any employment agreement or other agreement
or other arrangement with any officer, manager, member or Affiliate of the
Company; or (q) amended, experienced a termination or received notice of actual
or threatened termination or non- renewal of any Material contract, agreement,
lease, franchise or license to which the Company is a party that would or could
reasonably be expected to have a Material Adverse Effect.
3.9. Properties. The Leases Schedule attached hereto as Schedule
---------- --------------- --------
3.9 lists and briefly describes each interest in real property (including,
---
without limitation, leasehold interests) and each item of personal property
owned or leased by the Company and utilized in the conduct of the Business
having a book or fair market value in excess of $10,000 as of February 29, 2000.
Except for Permitted Exceptions and the Encumbrances to be released on or before
the Closing Date, such real and personal properties owned by the Company are
free and clear of Encumbrances. The Company has delivered to Iconixx copies of
all real property leases and a lien search obtained from ▇▇▇▇▇▇ County, Texas
and the Texas Secretary of State office of all UCC liens of record against the
Company's personal property in the State of Texas. Except as set forth in
Schedule 3.9, all of the material properties and assets necessary for continued
------------
operation of the Business as currently conducted (including, without limitation,
all books, records, computers and computer software and data processing systems)
are owned, leased or licensed by the Company and are reasonably suitable for the
purposes for which they are currently being used. With the exception of used
equipment and inventory valued at no more than $10,000 in the aggregate on the
Company's Financial Statements, the physical properties of the Company,
including the real properties leased by the Company, are in good operating
condition, reasonable wear and tear excepted. Except for Permitted Exceptions,
the Company has title to all such properties and assets owned by the Company.
The Company's operation of the properties and Business in the manner in which
they are now and have been operated does
-16-
not violate any zoning ordinances, municipal regulations, or other Requirements
of Laws, except for any such violations which would not, individually or in the
aggregate, have a Material Adverse Effect. The real property leased by the
Company has free and uninterrupted access to and from a dedicated public
right-of-way by reason of the fact that such parcel either adjoins such
dedicated public right-of-way or connects to such right-of-way through a valid
and subsisting easement and, to the Knowledge of the Company, such access is
adequate for the use being made by the parcel being accessed. All leases of real
or personal property by the Company are in full force and effect and constitute
the legal, valid and binding obligations of the Company, subject to the
Equitable Exceptions, and except as set forth on Schedule 3.9, will not be
------------
terminated on or after the Closing Date as a result of the failure to obtain any
consents to the Acquisition contemplated hereby. All facilities leased by the
Company have received all material approvals from any Governmental Body
(including Governmental Permits) required to be obtained by the Company in
connection with the operation of the Business and have been operated and
maintained in accordance with all material Requirements of Laws applicable to
the Company as a lessee thereof. The Company owns no real property. The
Purchased Assets and all real and personal property leased by the Company, the
leases of which are included in the Purchased Assets, constitute all of the
Material assets reasonably necessary to operate the Business as currently
conducted.
3.10. Licenses and Permits. Schedule 3.10 lists all material
-------------------- -------------
licenses, certificates, privileges, immunities, approvals, franchises,
authorizations and permits held or applied for by the Company from any
Governmental Body (herein collectively called "Governmental Permits"). The
Company has complied in all material respects with the terms and conditions of
all such Governmental Permits, and the Company has not received notification
from any Governmental Body of violation of any such Governmental Permit or the
Requirements of Laws governing the issuance or continued validity thereof. All
of such Governmental Permits are valid and in full force and effect. No
additional Governmental Permits are required from any Governmental Body thereof
in connection with the conduct of the Business which Governmental Permits, if
not obtained, would individually or in the aggregate have a Material Adverse
Effect.
3.11. Intellectual Property. Schedule 3.11 lists and briefly
--------------------- -------------
describes all material Intellectual Property owned or licensed by the Company.
The Company has furnished Iconixx with copies of all material license agreements
(including software licensing agreements but excluding all shrinkwrap, clickwrap
or other similar end user license agreements) to which the Company is a party,
either as licensor or licensee, with respect to any Intellectual Property. The
Company has legal title to or the right to use all the Intellectual Property and
all inventions, processes, designs, formulae, trade secrets and know-how
utilized in the conduct of the Business as presently conducted and, the Company
has sufficient rights in the Intellectual Property to permit diversification of
the Company's customer base as currently planned by the Company immediately
prior to the Closing without material impediment, without the payment of any
royalty or similar payment other than those set forth on Schedule 3.11, and the
-------------
Company is not infringing on any intellectual property right of others in any
Material respect and neither the Company nor the Majority Members have Knowledge
of any infringement by others of any such rights owned by the Company; provided,
however, that the Company's representation that it is
-17-
not infringing on the intellectual property rights of others is expressly
limited to the Company's Knowledge with respect to the infringement of any "off
the shelf" software licensed by the Company; provided, further, that the Company
has complied in all material respects with the terms of any software licenses
and has not unlawfully copied or pirated any "off the shelf" software licensed
by the Company. The Company has not received notice of any charge, claim,
demand, complaint, action, suit, hearing, proceeding or investigation which
challenges the Company's ownership or licensing of any Intellectual Property,
the Company's current uses or the Company's compliance with the terms and
conditions of any contracts, licenses, agreements or Court Orders involving the
Intellectual Property. Schedule 3.11 contains a complete list of filings made
-------------
with any Governmental Bodies with regard to the Intellectual Property owned by
the Company. All licenses set forth on Schedule 3.11 are valid and binding
-------------
obligations of the Company, and to the Knowledge of the Company the other
parties thereto, enforceable against the Company, and to the Knowledge of the
Company the other parties thereto in accordance with their respective terms,
except for the Equitable Exceptions. The Company owns and possesses all right,
title and interest in and to, or has the right to use pursuant to a valid
license, all Material Intellectual Property necessary for the operation of the
Business of the Company as presently conducted. Except as provided on Schedule
--------
3.11, the Company's use of each item of the Material Intellectual Property owned
----
or licensed by Company (i) will not be terminated as a result of the Acquisition
contemplated hereby; (ii) to the Company's knowledge, does not interfere with
the rights of any other Person based on the Company's current use of such items
or the Company's currently proposed use of such items; (iii) are in compliance
with the material terms and conditions of all license or other agreements
relating to such items; and (iv) does not violate any material Requirements of
Laws or Courts Orders applicable to the Company or, to the Company's Knowledge,
any other party to any material license or other agreement relating to such
Intellectual Property to which the Company is a party. The Company is not in
default (whether or not after the giving of notice or the lapse of time or both)
under any material license, contract or other agreement relating to any
Intellectual Property, except for any such default which does not and could not
reasonably be expected to have a Material Adverse Effect.
3.12. Compliance with Laws. The Company has (i) complied in all
--------------------
material respects with all Requirements of Laws, Governmental Permits and Court
Orders applicable to the Business and has filed with the proper Governmental
Bodies all material statements and reports required by all Requirements of Laws,
Governmental Permits and Court Orders to which the Company or any of its
employees (because of their activities on behalf of the Company) are subject and
(ii) conducted the Business and is in compliance in all material respects with
all federal, state and local energy, public utility, health, safety and
environmental Requirements of Laws, Governmental Permits and Court Orders
including the Clean Air Act, the Clean Water Act, the Solid Waste Act, the
Comprehensive Environmental Response Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Safe Drinking Water Act, OSHA, the
Toxic Substances Control Act and any similar state, local or foreign laws
(collectively "Environmental and OSHA Obligations") and all other Governmental
Body requirements, except where any such failure to comply or file would not, in
the aggregate, have a Material Adverse Effect. No claim has been made by any
Governmental Body (and, to the Knowledge of the Company and the Majority
Members, no such claim is reasonably anticipated)
-18-
to the effect that the Business fails to comply, in any material respect, with
any Requirements of Laws, Governmental Permit or Environmental and OSHA
Obligation or that a Governmental Permit or Court Order is necessary in respect
thereto.
3.13. Insurance. Schedule 3.13 lists all coverages for fire,
--------- -------------
liability, or other forms of insurance and all fidelity bonds held by or
applicable to the Company. Copies of the binder for all such insurance policies
have been delivered to Iconixx. The insurance maintained by the Company is
customary and reasonably adequate for companies engaged in the Business. To the
Company's Knowledge, no event relating to the Company has occurred which will
result in cancellation of any such insurance coverages.
3.14. Employee Benefit Plans.
----------------------
(a) Employee Welfare Benefit Plans and Other Arrangements. Except as
-----------------------------------------------------
disclosed on Schedule 3.14(a), the Company does not maintain or contribute to
----------------
any "employee welfare benefit plan" as such term is defined in Section 3(1) of
ERISA or Other Arrangement (each a "plan"). With respect to each such plan: (i)
the plan is, in all material respects, in compliance with, and, except as set
forth on Schedule 3.14(a), the Company does not have any liability with respect
----------------
to any such plan under ERISA, the Code or any Requirements of Law; (ii) the plan
has been administered, in all material respects, in accordance with its
governing documents; (iii) neither the plan, nor any fiduciary with respect to
the plan, has engaged in any "prohibited transaction" as defined in Section 406
of ERISA other than any transaction subject to a statutory or administrative
exemption; (iv) except for the processing of routine claims in the ordinary
course of administration, there is no litigation, arbitration or disputed claim
outstanding which relates to any such plan; and (v) all premiums due on any
insurance contract through which the plan is funded have been paid. All
employee welfare benefit plans and the related trusts that are subject to
Section 4980B(f) of the Code and Sections 601 through 607 of ERISA comply with
and have been administered, in all material respects, in compliance with the
health care continuation-coverage requirements for tax-favored status under
Section 4980B(f) of the Code and Sections 601 through 607 of ERISA. All
employee welfare benefit plans currently comply with and have been administered,
in all material respects, in compliance with the requirements of the (i) Health
Insurance Portability and Accountability Act of 1996, to the extent applicable,
and applicable proposed or final regulations, and (ii) Mental Health Parity Act
of 1996, to the extent applicable.
(b) Employee Pension Benefit Plans. Except as set forth in Schedule
------------------------------ --------
3.14(b), the Company does not maintain or contribute to any arrangement that is
-------
or may be an "employee pension benefit plan" relating to employees, as such term
is defined in Section 3(2) of ERISA. With respect to each such plan: (i) the
plan is qualified under Section 401(a) of the Code, and any trust through which
the plan is funded meets the requirements to be exempt from federal income tax
under Section 501(a) of the Code; (ii) the plan is, in all material respects, in
compliance with ERISA and all other applicable Requirements of Laws; (iii) the
plan has been administered, in all Material respects, in accordance with its
governing documents as modified by applicable law; (iv) the plan has not
suffered an "accumulated funding deficiency" as defined in Section 412(a) of the
Code; (v) the plan has not
-19-
engaged in, nor has any fiduciary with respect to the plan engaged in, any
"prohibited transaction" as defined in Section 406 of ERISA or Section 4975 of
the Code other than a transaction subject to statutory or administrative
exemption; (vi) the plan has not been subject to a "reportable event" (as
defined in Section 4043(b) of ERISA), the reporting of which has not been waived
by regulation of the Pension Benefit Guaranty Corporation; (vii) no termination
or partial termination of the plan has occurred within the meaning of Section
411(d)(3) of the Code; (viii) all contributions required to be made to the plan
have been made to or on behalf of the plan or accrued in accordance with GAAP;
(ix) there is no litigation, arbitration or disputed claim outstanding; (x) all
applicable premiums due to the Pension Benefit Guaranty Corporation for plan
termination insurance have been paid in full on a timely basis; and (xi) a
favorable determination letter from the IRS has been received by the Company
with respect to such plan stating that such plan is so qualified; and, to the
Company's Knowledge, there are no circumstances which would cause such plan to
lose such qualified status.
(c) Employment and Non-Tax Qualified Deferred Compensation
------------------------------------------------------
Arrangements. Except as set forth on Schedule 3.14(c), the Company does not
------------ ----------------
maintain or contribute to any retirement or deferred or incentive compensation
or stock purchase, stock grant or stock option arrangement entered into between
the Company and any current or former officer, consultant, manager or employee
of the Company that is not intended to be and that is not a tax qualified
arrangement under Section 401(a) of the Code.
3.15. Contracts and Agreements. Schedule 3.15 hereto contains a
------------------------ -------------
list of all customer contracts that obligate the Company to sell or supply
products or perform services following the Closing Date that involve an amount
greater than $50,000, all employment contracts involving annual salaries greater
than $60,000 and all employment contracts with general managers or officers of
the Company. Schedule 3.15 also contains a list of the 30 largest contracts (in
-------------
terms of annual payments made or received with respect thereto) to which the
Company is a party or by which the Company or its properties are bound, a list
of any real estate or office building leases involving the Company and a list of
any contract or agreements, if any, prohibiting the Company from freely engaging
in the Business anywhere in the world (collectively, the "Contracts"). Except
as set forth in Schedule 3.15, the Company is not and, to the Knowledge of the
--------------
Majority Members and the Company, no other party thereto is in default in any
material respect (and no event has occurred which, with the passage of time or
the giving of notice, or both, would constitute such a default by the Company)
under any of the Contracts, and the Company has not waived any right under any
of the Contracts. All of the Contracts to which the Company is a party are in
full force and effect and constitute valid and binding obligations of the
Company, subject to the Equitable Exceptions. Except as set forth on Schedule
--------
3.15, all of the Contracts to which the Company is a party will not be
----
terminated on or after the Closing Date as a result of the failure to obtain any
consents to the Acquisition contemplated hereby, and will be assignable to
Buyer. Except as set forth on Schedule 3.15, the Company has not guaranteed any
-------------
obligations of any other Person. The Company has no present expectation or
intention of not fully performing all of its obligations under any Contract;
provided, however, that following the Closing and the assignment of the
Contracts to the Buyer, the Company has no intention of performing any further
obligations under the Contracts, except as provided in Section 6.5 hereof.
-----------
-20-
A.B. Holdings has no Knowledge of any intention or desire of ▇.▇. ▇▇▇▇▇ &
Associates, L.P. to terminate the Company's contract with ▇.▇. ▇▇▇▇▇ &
Associates, L.P. after its assignment to the Buyer. Except as set forth on
Schedule 3.15, the Company has no Knowledge of any breach or anticipated breach
-------------
by the other parties to any Contract and the Company has not received notice of
actual or threatened termination or non renewal of any Contract.
3.16. Claims and Proceedings. Except as set forth on Schedule
---------------------- --------
3.16, there are no claims, actions, suits, proceedings, or investigations
pending or, to the Knowledge of the Majority Members or the Company, threatened
against or affecting the Company or any of its properties or assets, at law or
in equity, before or by any court, municipality or other Governmental Body. To
the extent any are disclosed on Schedule 3.16, none of such claims, actions,
-------------
suits, proceedings, or investigations, if adversely determined, will
individually or in the aggregate result in any Material Adverse Effect to the
Company except as otherwise disclosed therein. The Company has not been and the
Company is not now, subject to any Court Order, stipulation, or consent of or
with any court or Governmental Body. No inquiry, action or proceeding has been
instituted or, to the Knowledge of the Majority Members or the Company,
threatened or asserted against the Majority Members or the Company to restrain
or prohibit the carrying out of the Acquisition or to challenge the validity of
the Acquisition or any part thereof or seeking damages on account thereof, and
to the Knowledge of the Company and the Majority Members, there is no basis for
any such valid claim or action.
3.17. Taxes.
-----
(a) All Federal, foreign, state, county and local and other Taxes due
from the Company on or before the Closing have been paid, or adequate provisions
for the payment thereof have been made, and except as set forth on Schedule
--------
3.17, all Tax Returns which are required to be filed by the Company on or before
the date hereof have been filed within the time and in the manner provided by
all Requirements of Laws or extensions were timely filed, and all such Tax
Returns are true and correct and accurately reflect the Tax liabilities of the
Company in all respects. No Tax Returns of the Company are presently subject to
an extension of the time to file. All Taxes, assessments, penalties, and
interest of the Company which have become due pursuant to such Tax Returns or
any assessments received have been paid or adequately accrued on the Financial
Statements. The provisions for Taxes reflected on the balance sheets contained
in the Financial Statements are adequate to cover all of the Company's Tax
liabilities for the respective periods then ended and all prior periods. The
Company has not executed any presently effective waiver or extension of any
statute of limitations against Material assessments and collection of Taxes, and
there are no pending or, to the Knowledge of the Company, threatened claims,
assessments, notices, proposals to assess, deficiencies, or audits with respect
to any such Taxes of which any of the Majority Members or the Company are aware.
For Governmental Bodies with respect to which the Company files Tax Returns, no
such Governmental Body has given the Company written notification within the
last two years that the Company is or may be subject to additional taxation by
that Governmental Body. Except as set forth on Schedule 3.17, the Company has
-------------
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, member, creditor,
independent contractor or other party. The Company has properly
-21-
reflected for tax purposes in accordance with all Requirements of Laws the
status of all independent contractors, consultants and subcontractors. There are
no Tax liens on any of the property or assets of the Company except for the
Permitted Exceptions. The Company (and any predecessor of the Company) has been
validly electing to be taxed as a partnership within the meanings of applicable
sections of the Code at all times since the date of its formation.
(b) The Company has not made any payments, is not obligated to make
any payments, and is not a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be deductible
under Code Sec. 280G. The Company has not been a United States real property
holding corporation within the meaning of Code Sec. 897(c)(2) during the
applicable period specified in Code Sec. 897(c)(1)(A)(ii). The Company is not a
party to any Tax allocation or sharing agreement.
(c) No transaction contemplated by this Agreement is subject to
withholding under Section 1445 of the Code and no transfer taxes, real estate
transfer taxes or similar taxes will be imposed upon the sale of the Purchased
Assets pursuant to this Agreement.
3.18. Personnel. Schedule 3.15 sets forth a list of the names and
--------- -------------
annual rates of compensation of the managers and executive officers of the
Company, and of the employees of the Company whose annual rates of compensation
during the calendar year ended December 31, 1999 (including base salary, bonus
and incentive pay) exceeded (or by December 31, 2000 are expected to exceed)
$60,000 and the employment agreements, if any, pertaining to such employees.
Schedule 3.18 summarizes the bonus, profit sharing, percentage compensation,
-------------
company automobile, club membership, and other like benefits, if any, paid or
payable to such managers, officers, and employees during the Company's calendar
year ended December 31, 1999 and to the date hereof. Except as set forth on
Schedule 3.18, the employee relations of the Company are generally good, there
-------------
has been no unusual level of employee departures and there is no pending or, to
the Knowledge of Majority Members or the Company, threatened labor dispute or
union organization campaign. None of the employees of the Company is covered by
a collective bargaining agreement. The Company is in compliance in all material
respects with all Requirements of Laws respecting employment and employment
practices, including, without limitation, the Fair Labor Standards Act of 1938,
immigration hiring, terms and conditions of employment, and wages and hours, and
is not engaged in any unfair labor practices. Neither the Company nor the
Majority Members have Knowledge that any Person listed on Schedule 3.15 hereto
-------------
will not agree to remain employed by Buyer after the consummation of the
Acquisition. There is no unfair labor practice claim against the Company before
the National Labor Relations Board, or any strike, dispute, slowdown, or
stoppage pending or, to the Knowledge of the Company and the Majority Members,
threatened against or involving the Company, and none has previously occurred.
3.19. Business Relations. Except as set forth on Schedule 3.19,
------------------ -------------
since December 31, 1999, neither the Company nor the Majority Members have
Knowledge that any customer, supplier or licensor engaged in doing business with
the Company will cease to do business with the Company as a result of the
consummation of the Acquisition except for any terminations which will not, in
the aggregate, result in a Material Adverse Change. Except as set
-22-
forth on Schedule 3.19, neither the Majority Members nor the Company has
-------------
received any notice of cancellation of any Material business arrangement between
any Person and the Company, and neither the Company nor the Majority Members
have Knowledge that the Business will be subject to cancellation of any such
business arrangement.
3.20. Accounts Receivable; Accounts Payable; Customer Deposits;
---------------------------------------------------------
Customer Revenues and Deferred Revenues.
---------------------------------------
(a) Accounts Receivable. All of the accounts, notes, and loans
-------------------
receivable that have been recorded on the books of the Company in the Financial
Statements are bona fide and represent amounts validly due for goods sold or
services rendered, except for amounts reserved for as doubtful accounts
consistent with the reserves in the Financial Statements and, to the Company's
Knowledge, all such amounts as of the Closing Date will be collected in full
prior to August 31, 2000. Except as set forth on Schedule 3.20(a), such
----------------
accounts, notes, and loans receivable: (i) all are free and clear of any
Encumbrances; (ii) no claims of offset have been asserted in writing against any
of such accounts, notes, or loans receivable; and (iii) none of the obligors
thereto has given written notice that it will or may refuse to pay the full
amount or any portion thereof. Lists of the Company's accounts receivable as of
December 31, 1999 (including any reconciliation to the accounts receivable entry
on the balance sheet included in the Most Recent Financial Statements) have been
attached to Schedule 3.20(a).
----------------
(b) Accounts Payable. The aggregate amount of accounts payable
-----------------
reflected on the Most Recent Financial Statements are prepared in accordance
with GAAP, and reflect the accounts payable of the Company as of December 31,
1999.
(c) Customer Deposits; Customer Revenues and Deferred Revenues.
----------------------------------------------------------
Schedule 3.20(c) sets forth, as of the date specified therein all deferred
----------------
revenues as of such date on an aggregate basis. For the year ending December
31, 1999, the Company's actual deposits and revenues from customer contracts are
not less than the Company's deposits and revenues from customer contracts for
the year ending December 31, 1998.
3.21. Bank Accounts; Investments. Schedule 3.21 lists all banks or
-------------------------- -------------
other financial institutions with which the Company has an account or maintains
a safe deposit box, showing the type and account number of each such account and
safe deposit box and the names of the persons authorized as signatories thereon
or to act or deal in connection therewith. Schedule 3.21 also lists all
-------------
Material investments by the Company in any funds, accounts, securities,
certificates of deposit or instruments of any Person. None of such investments
involve any type of derivative, option, hedging or other speculative instrument.
3.22. Customer Claims. Except as set forth in Schedule 3.22, no
--------------- -------------
written or oral claims for breach of contract or otherwise by any customers (a
"Customer Claim") has been made against the Company since January 1, 1999 which
could, individually or in the aggregate, result in any Material Adverse Effect.
The level of Customer Claims for the period
-23-
since December 31, 1998 through the date hereof is consistent (plus or minus 5%)
with past practices of the Company for the comparable period in 1998.
3.23. Affiliated Transactions. Except as set forth in Schedule
----------------------- --------
3.23, no officer, manager, member or Affiliate of the Company or any individual
----
related by blood or marriage to any such Person, or any entity in which any such
Person owns any beneficial interest, is a party to any agreement, contract,
arrangement or commitment with the Company or engaged in any transaction with
the Company or has any interest in any property used by the Company. Except as
set forth in Schedule 3.23, no officer, manager or member of the Company has any
-------------
ownership interest in any competitor, supplier, or customer of the Company
(other than ownership of securities of a publicly-held corporation or mutual
fund of which such Person owns, or has real or contingent rights to own, less
than five percent of any class of outstanding securities) or any property used
in the operation of the Business.
3.24. Funded Indebtedness; Letters of Credit; Undisclosed
---------------------------------------------------
Liabilities.
-----------
(a) Funded Indebtedness. Other than any Funded Indebtedness which is
-------------------
to be repaid and discharged by the Company prior to Closing in accordance with
Section 7.1(d), the Company does not have any Funded Indebtedness.
--------------
(b) Letters of Credit. Other than those listed on Schedule 3.24, the
----------------- -------------
Company has no letters of credit, performance bonds or similar instruments
issued on or for its account for the benefit of any of its vendors or otherwise.
(c) Undisclosed Liabilities. The Company does not have any Material
-----------------------
liabilities in the aggregate (whether absolute, accrued, contingent or
otherwise) of a nature required by GAAP to be reflected on a company balance
sheet or in the notes thereto, except for (i) such liabilities which are accrued
or reserved against in the Financial Statements or disclosed in the notes
thereto, (ii) liabilities and obligations incurred since December 31, 1999 in
the ordinary course of business (including, without limitation, any accounts
payable or service liabilities of the Company incurred prior to the Closing
Date), and (iii) those disclosed on Schedule 3.24(c).
----------------
3.25. Year 2000. Except as set forth on Schedule 3.25, the Company
--------- -------------
has not been engaged in any year 2000 correction consulting work for customers
pertaining to its work product and has received no claim or notice from any
customer regarding the failure of the Company to install computer software that
is year 2000 compliant.
3.26. Information Furnished. The Company and the Majority Members
---------------------
have made available to Iconixx true and correct copies of all material company
or unit records of the Company and all material agreements, documents, and other
items listed on the Disclosure Schedules to this Agreement or referred to in
Article III of this Agreement, and neither this Agreement, the Disclosure
-----------
Schedules hereto, nor any written information, instrument, or document delivered
to Buyer or Iconixx pursuant to this Agreement contains any untrue
-24-
statement of a Material fact or omits any Material fact necessary to make the
statements herein or therein, as the case may be, not misleading.
ARTICLE IV
BUYER'S AND ICONIXX'S REPRESENTATIONS AND WARRANTIES
Except as set forth on the Disclosure Schedules attached hereto (which
Disclosure Schedules identify the exception and references the applicable
representation so qualified), Buyer and Iconixx jointly and severally represent
and warrant to the Majority Members and the Company as follows:
4.1. Due Organization of Iconixx and Buyer. Iconixx and Buyer are
-------------------------------------
each a corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware and each has full corporate power and
authority to own and lease its properties and assets and to carry on its
business as now conducted or as contemplated. Each of Iconixx and Buyer are
qualified to do business in each jurisdiction in which the nature of their
business or the ownership of their properties require such qualification except
where the failure to be so qualified does not and could not reasonably be
expected to have a material adverse effect upon the business, condition,
operations, assets, liabilities or prospects of Buyer, Iconixx and its
subsidiaries, taken as a whole (hereinafter, an "Iconixx Material Adverse
Effect").
4.2. Due Authorization. Iconixx and Buyer each have full corporate
-----------------
power and authority to execute, deliver and perform this Agreement and to carry
out the Acquisition. The execution, delivery and performance of this Agreement
has been duly authorized by all necessary corporate action by Iconixx and Buyer
and the Agreement has been duly and validly executed and delivered by Iconixx
and Buyer and constitutes the valid and binding obligation of each of Iconixx
and Buyer, enforceable in accordance with its terms, except for the Equitable
Exceptions. The execution, delivery, and performance of this Agreement and the
Escrow Agreement (as well as all other instruments, agreements, certificates or
other documents contemplated hereby) by Iconixx and Buyer shall not (a) violate
any Requirements of Laws or Court Order of any Governmental Body applicable to
Iconixx or Buyer their property, (b) violate or conflict with, or permit the
cancellation of, or constitute a default under any agreement to which Iconixx or
Buyer is a party or by which Iconixx or Buyer or their property is bound, (c)
permit the acceleration of the maturity of any indebtedness of, or any
indebtedness secured by the property of, Iconixx or Buyer, (d) violate or
conflict with any provision of the Certificate of Incorporation or Bylaws of
Iconixx or Buyer, or (e) except for filings or approvals under the HSR Act and
such consents, approvals, or registrations as may be required under applicable
state securities laws, require any consent, approval or authorization of, or
notice to, or declaration, filing or registration with, any Governmental Body or
other third party.
4.3. No Brokers. Except as set forth on Schedule 4.3 hereto,
---------- ------------
Iconixx has not engaged, or caused to be incurred any liability for which the
Majority Members may be liable to any finder, broker or sales agent in
connection with the origin, negotiation, execution, delivery, or performance of
this Agreement or the Acquisition.
-25-
4.4. Information Furnished. No written information, instrument or
---------------------
document delivered to the Majority Members or the Company pursuant to this
Agreement contains any untrue statement of a material fact or omits any material
fact necessary to make the statements appearing in the aforementioned items, not
misleading.
4.5. Capital Stock and Related Matters. As of the Closing and
---------------------------------
immediately thereafter, the authorized capital stock of Iconixx shall consist of
100,000,000 shares of stock, of which (i) 150,000 shares shall be designated as
Preferred Stock and (ii) 99,850,000 shares shall be designated as Common Stock.
The ownership of the issued and outstanding Preferred Stock and Common Stock are
as set forth on the Iconixx Capitalization Schedule. As of the Closing, all of
-------------------------------
the outstanding shares of Iconixx's capital stock shall be validly issued, fully
paid and nonassessable and all such shares were offered, issued and sold in
compliance with all applicable state and federal securities laws. None of such
shares were issued in violation of any preemptive rights.
4.6. Authorization of the Stock. Iconixx has authorized the
--------------------------
issuance and sale to the Company of up to an aggregate of 3,867,728 shares of
Common Stock, each having the rights and preferences set forth in the Iconixx's
Certificate of Incorporation attached hereto as Exhibit E. Each share of Common
---------
Stock to be issued to the Company pursuant to this Agreement will be, when
issued in accordance with the terms hereof, duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
4.7 Compliance with Laws. Each of Buyer, Iconixx and its
--------------------
subsidiaries has (i) complied in all material respects with all Requirements of
Laws, Governmental Permits and Court Orders applicable to the conduct of their
business and has filed with the proper Governmental Bodies all material
statements and reports required by all Requirements of Laws, Governmental
Permits and Court Orders to which they, or any of their employees (because of
their activities on behalf of Buyer, Iconixx or its subsidiaries) are subject
and (ii) conducted their respective business and is in compliance in all
material respects with all Environmental and OSHA Obligations and all other
Governmental Body requirements, except where any such failure to comply or file
would not, in the aggregate, have an Iconixx Material Adverse Effect. No claim
has been made by any Governmental Body (and, to the Knowledge of Iconixx, no
such claim is reasonably anticipated) to the effect that the business of Buyer,
Iconixx or its subsidiaries fails to comply, in any material respect, with any
Requirements of Laws, Governmental Permit or Environmental and OSHA Obligation
that would, in the aggregate, have an Iconixx Material Adverse Effect.
4.8 Taxes. All Federal, foreign, state, county and local and other
-----
Taxes due from Buyer, or Iconixx on or before the Closing have been paid, or
adequate provisions for the payment thereof have been made, and all Tax Returns
which are required to be filed by the such entities on or before the date hereof
have been filed within the time and in the manner provided by all Requirements
of Laws or extensions were timely filed, and all such Tax Returns are true and
correct and accurately reflect the Tax liabilities of such entities in all
respects. All Taxes, assessments, penalties, and interest of Buyer, Iconixx or
its subsidiaries which have become due pursuant to such Tax Returns or any
assessments received have been paid or adequately accrued
-26-
on the Iconixx Financial Statements except for those which would not result in
an Iconixx Material Adverse Effect. There are no pending or, to the Knowledge of
Iconixx, threatened claims, assessments, notices, proposals to assess,
deficiencies, or audits with respect to any such Taxes which could result in an
Iconixx Material Adverse Effect.
4.9 Claims and Proceedings. There are no claims, actions, suits,
----------------------
proceedings or investigations pending, or to the Knowledge of Iconixx,
threatened against or affecting Buyer, Iconixx or any of its subsidiaries or
their properties or assets, at law or in equity, before any court, municipality,
or other Governmental Body, which, if adversely determined, would result in an
Iconixx Material Adverse Effect.
4.10 Intellectual Property. Iconixx and each of its subsidiaries
---------------------
has legal title to or the right to use all intellectual property and all
inventions, processes, designs, formulae, trade secrets and know-how which are
utilized in and material to, the conduct of their respective business as
presently conducted. To the Knowledge of Iconixx, neither Iconixx nor any of
its subsidiaries is infringing upon any intellectual property right of others
and Iconixx has no knowledge of any infringement by others of any such rights
owned by Iconixx or its subsidiaries. Neither Iconixx nor any subsidiary is in
default (whether or not after the giving of notice or the lapse of time or both)
under any material license, contract or other agreement relating to any material
intellectual property, except for any such default which does not and could not
reasonably be expected to result in an Iconixx Material Adverse Effect.
4.11 Registration Rights. Except for the registration rights set
-------------------
forth in the Registration Rights Agreement dated August 12, 1999 between Iconixx
and its stockholders, Iconixx has not granted registration rights to any other
Person.
4.12 Financial Statements. The following financial statements of
--------------------
Iconixx and its subsidiaries have been delivered to the Company: an unaudited
consolidating balance sheet of Iconixx as of December 31, 1999 and unaudited
consolidating statement of operations of Iconixx for the three months ended
December 31, 1999(collectively, "Iconixx Financial Statements"). Except as set
forth on Schedule 4.12 or otherwise noted on the Iconixx Financial Statements,
-------------
to the knowledge of Iconixx, such Iconixx Financial Statements have been
prepared in accordance with GAAP. The Iconixx Financial Statements (including
the notes thereto) have been prepared on a consistent basis throughout the
periods indicated and fairly present, in all material respects, the financial
position, results of operations and changes in financial condition of each
entity as of the indicated dates and for the indicated periods.
ARTICLE V
PRE-CLOSING COVENANTS OF THE COMPANY, ICONIXX, BUYER AND THE
MAJORITY MEMBERS
5.1. Consents of Others. Prior to the Closing, the Company and the
------------------
Majority Members shall use commercially reasonable efforts to obtain and to
cause the Company to obtain all material authorizations, consents and permits
required of the Company and the Majority
-27-
Members to permit them to consummate the Acquisition. To the extent required to
consummate the Acquisition or to ensure that the Contracts shall not be
terminated as a result of the Closing, the Company shall have obtained the
written consent or waiver of any "assignment" type termination rights of any
third party to any Contract. As promptly as practicable after the date hereof,
Iconixx, Buyer, the Company and the Majority Members shall make, or shall cause
to be made, such filings as may be required pursuant to the HSR Act with respect
to the consummation of the Acquisition. Prior to Closing, the Company shall have
obtained the consent to the assignment, without substantial change, to Buyer of
each of its vendor contracts with Versata, pcOrder, Asera, Peregrine, Onyx and
Sensormatic.
5.2. Reasonable Efforts. The Company, the Majority Members,
------------------
Iconixx and Buyer shall use commercially reasonable efforts to cause all
conditions for the Closing to be met.
5.3. Employees.
---------
(a) Except as provided in Section 5.3(b) with respect to the
--------------
Retained Employees, the Company and the Majority Members shall cause the
Company to terminate at or prior to Closing all employees of the Company
(the "Employees") and Buyer (or an Affiliate thereof) shall offer
employment to all the Employees, which Employees shall be identified on an
"Employee Schedule" (the "Transferred Employees") to be delivered by the
Company to Buyer immediately upon execution of this Agreement, on terms and
conditions substantially similar to their employment by the Company and
assume all accrued obligations to such employees to the extent disclosed to
Iconixx and either reserved for on the Preliminary Closing Balance Sheet or
set forth on Schedule 5.3; provided that the terms of this Section 5.3
------------ -----------
shall not entitle any Employee to remain in the employment of the Company
or Buyer or affect the right of Buyer to terminate any Employee at any
time, or to establish, modify or terminate any employee benefit plan as
defined in Section (3)(3) of ERISA or any benefit under any such plan at
any time. The Company shall assume all obligations and liability under
Section 4980B of the Code with respect to the Company's current and former
employees and their qualified beneficiaries where such employees' or
qualified beneficiaries' initial qualifying event occurs on or prior to the
Closing Date. The Company shall be responsible for any notices or other
obligations required under Section 4980 of the Code in connection with the
Company's termination of any employees' employment hereunder.
(b) Notwithstanding anything in this Section 5.3 to the contrary,
-----------
the Company shall retain on its payroll the employees listed on Schedule
--------
5.3(b) (the "Retained Employees") pursuant to the terms of an Employee
------
Transition Services Agreement substantially in the form attached hereto as
Exhibit H until the earlier of (i) any required or recommended filings with
---------
respect to the Retained Employees' immigration status or petition for
permanent residence have been received to the reasonable satisfaction of
Buyer or (ii) December 31, 2000. The Company and Buyer shall cooperate in
the completion of any such filings and approvals. On or prior to the date
hereof, the Company shall have furnished to Buyer copies of all original I-
9 files, personnel files and immigration files for all Transferred
Employees.
-28-
(c) Buyer shall take all action necessary and appropriate to
extend coverage, effective as of the Closing Date, under a 401(k) plan
and/or other qualified pension plan (the "Buyer's Retirement Plan") to the
Transferred Employees having account balances under the 401(k) plan of
which the Company is an adopting employer (the "Company 401(k) Plan") as of
the Closing Date. Such Transferred Employees shall be credited under the
Buyer's Retirement Plan, for eligibility and vesting purposes, with the
service credited under the terms of Company 401(k) Plan. The Company shall
provide Buyer with all such information as is necessary for Buyer to carry
out its obligations under the foregoing sentence. The Company shall cause
to be made any contributions that are required under the Company 401(k)
Plan for the period prior to the Closing Date, and Buyer shall have no
responsibility therefor. Buyer agrees to establish an arrangement under
which a Transferred Employee may provide for payroll withholding for the
purpose of repaying any loan that is outstanding under the Company 401(k)
Plan as of the Closing Date to such Transferred Employee.
(d) Buyer shall provide the Company with an opinion letter of
counsel acceptable to the Company that the Buyer's Retirement Plan
satisfies the requirements for qualification and exemption under Sections
401(a) and 501(a) of the Code, or deliver to the Company a favorable
determination letter issued by the IRS and acceptable to Seller that the
Buyer's Retirement Plan satisfies the requirements for qualification under
such Code sections. As soon as practicable after the expiration of 60 days
following the filing of Forms 5310 with the IRS, if required, the Company
shall cause the trustee of the Company 401(k) Plan to transfer to the trust
forming a part of the Buyer's Retirement Plan such assets (including cash
and participant notes) equal to the aggregate account balances (including
vested and unvested balances and loan balances) of the Transferred
Employees as of such transfer date. Buyer shall establish accounts in the
Buyer's Retirement Plan for the Transferred Employees equal to the
aggregate account balances transferred.
(e) Buyer agrees to assume the Company's group medical, dental
benefit, life, and disability plans listed on Schedule 5.3(e) (the
---------------
"Transferred Benefit Plans") as of the Closing Date and to provide coverage
to the Transferred Employees (effective as of the day following the Closing
Date) under the Transferred Benefit Plans on the same terms and conditions
as such coverage is generally maintained by Buyer or Iconixx for its
employees and their dependents under Buyer or Iconixx's medical and/or
dental benefit plans. Buyer shall honor any deductible and out of pocket
expenses incurred by Transferred Employees and their beneficiaries under
the Transferred Benefit Plans during the portion of the year 2000 prior to
the Closing Date. Notwithstanding the foregoing, nothing in this Section
-------
5.3(e) shall prevent Buyer from providing coverage to the Transferred
------
Employees under new or different benefit plans provided that such new or
different benefit plans provide coverage to the Transferred Employees that
is substantially similar to the coverage contemplated by this Section
-------
5.3(e).
------
(f) Buyer agrees that all accrued service credit of a Transferred
Employee with the Company (and any entity affiliated with Company under
Sections 414(b), (c), (m) or (o) of the Code) shall be recognized by Buyer
for all employee benefit purposes.
-29-
(g) Buyer will permit Transferred Employees to schedule and take
unused vacation days with pay to the extent that such vacation days are
reflected on the Most Recent Financial Statements or have been accrued and
earned through the Closing Date, in accordance with the vacation policies
of the Company as of the Closing Date.
(h) The Company and Buyer shall cooperate with each other in all
respects relating to any actions to be taken pursuant to this Section 5.3.
-----------
5.4. Conduct of Business Pending Closing. From the date of this
-----------------------------------
Agreement to the Closing Date:
(a) Except as otherwise contemplated by this Agreement, or as
Iconixx may otherwise consent to in writing, the Company shall conduct the
Business only in the ordinary course and shall not engage in any Material
transactions or enter into any Material transaction which would cause a breach
of the representations and warranties contained in Article III.
-----------
(b) The Company shall use commercially reasonable efforts to, and
the Majority Members shall use commercially reasonable efforts to cause the
Company to, cause the Business to preserve substantially intact its current
business organization and present relationships with its customers, vendors,
suppliers and employees and to maintain all of its insurance currently in
effect.
(c) The Majority Members and the Company shall give prompt notice
to Iconixx of any notice of any Material default received by the Company or the
Business subsequent to the date of this Agreement under any Contract or any
Material Adverse Change occurring prior to the Closing Date in the operation of
the Company or the Business.
(d) Neither the Company nor the Majority Members, nor any of
their representatives, shall solicit, encourage or discuss any Acquisition
Proposal (as hereinafter defined) or supply any non-public information
concerning the Company or the Business or the Company's assets to any party
other than Iconixx or its representatives. As used herein, "Acquisition
Proposal" means any proposal other than the Acquisition, for (i) any merger or
other business combination involving the Company or the Business, (ii) the
acquisition of the Company, a material equity interest in the Company or a
material portion of its assets, or (iii) the dissolution or liquidation of the
Company.
5.5. Access Before Closing. Prior to the Closing Date, the Company
---------------------
agrees that it will give, or cause to be given, to Iconixx and its
representatives, during normal business hours and at Iconixx's expense,
reasonable access to the Company's personnel, independent accountants, officers,
agents, employees, assets, properties, titles, contracts, company or unit minute
and other books, records, files and documents of the Company with respect to the
Business (including financial, tax basis, budget projections, accountants' work
papers and other information as Iconixx may reasonably request) upon 24 hours
prior notice. The Majority Members and Iconixx shall mutually agree on the
timing and manner of contact with all third parties, including, but not limited
-30-
to, customers, vendors or suppliers, which contact shall not be unreasonably
withheld. Iconixx shall not be given access to any information where the
provision of such information would violate a law or regulation applicable to
the Company or adversely affect the Company's attorney-client privilege relating
to any pending or threatened claim, proceeding or other action.
ARTICLE VI
POST-CLOSING COVENANTS
6.1. General. In case at any time after the Closing any further
-------
action is legally necessary or reasonably desirable (as determined by Iconixx
and the Company) to carry out the purposes of this Agreement, each of the
parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other party reasonably may
request, all at the sole cost and expense of the requesting party (unless the
requesting party is entitled to indemnification therefor under Article VIII
------------
below). The Company acknowledges and agrees that from and after the Closing,
Buyer will be entitled to possession of all documents, books, records,
agreements, and financial data of any sort relating to the Company (other than
tax or general company or unit records or other Excluded Assets), which shall be
maintained at the chief executive office of Buyer; provided, however, that the
Company and/or the Majority Members shall be entitled to reasonable access to
and to make copies of such books and records at their sole cost and expense and
Buyer will maintain all of the same for a period of at least three (3) years
after Closing. Thereafter, Buyer will offer such documentation to the Company
and/or the Majority Members before disposal thereof. Seller further agrees to
convey all rights to any Intellectual Property reasonably related to the
Business to Buyer (including, without limitation, assigning all right and title
to the trademark "EnterpriseWorks" to Buyer pursuant to an Assignment of
Trademark Agreement in substantially the form attached hereto as Exhibit I).
---------
6.2. Transition. [Intentionally Left Blank]
----------
6.3. Covenants Not to Compete; Confidentiality; Non-Solicitation.
-----------------------------------------------------------
For and in consideration of the allocation of $50,000 of the Purchase Price paid
to Seller and the Majority Members by Buyer, each of Seller and the Majority
Members and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ have agreed to be bound, as applicable, by
certain covenants not to compete, confidentiality and non-solicitation
provisions contained in their respective employment or confidentiality and non-
solicitation agreements executed by each of those parties in connection with,
and as a condition to, this Agreement in substantially the forms attached hereto
as Exhibits F-1, F-2 and F-3.
------------ --- ---
6.4 Access to Records After Closing. After the Closing Date, Buyer
-------------------------------
on the one hand and Seller on the other agree that they will give, or cause to
be given, to the other party, its successors and its representatives, during
normal business hours and at the requesting party's expense, such reasonable
access to the properties, titles, contracts, books, records, files and documents
(but excluding attorney work product or other privileged communications) of
Buyer (to the extent Buyer's records are the records, materials and data
transferred to Buyer from Seller pursuant to this Agreement) or Seller, as the
case may be, as is reasonably necessary to allow the
-31-
requesting party to obtain information in the other party's possession with
respect to any claims, demands, audits, suits or matters of a similar nature
made by or against the requesting party as the previous or new owner and
operator of the Business, as the case may be, and to make copies of such
information to the extent reasonably necessary. Buyer agrees that it will not
dispose of or destroy any of such records for seven (7) years after the Closing
Date without first offering to turn over possession thereof to Seller and the
Majority Members by written notice to Seller and the Majority Members at least
30 days prior to the proposed date of any such disposition or destruction.
6.5 Assignment of Contracts. Anything in this Agreement to the
-----------------------
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign or otherwise transfer any Contract or any rights thereunder, if an
attempted assignment or transfer thereof would constitute a breach thereof,
would be ineffective or would violate any applicable law without the consent of
a third party to such assignment or transfer. Until such consent or waiver has
been obtained or waived by Buyer, Buyer shall make all reasonable efforts to
perform in Seller's name all of Seller's obligations under any such Contract for
which any such consent has not been obtained, including without limitation, any
failure of the Company to obtain the consent to the assignment, if required, of
the Company's lease of its office space. Seller shall cooperate with Buyer in
any reasonable arrangement designed to provide for Buyer all of the benefits,
and to have Buyer assume the burdens, liabilities, obligations and expenses
under all such Contracts. At Buyer's request, Seller shall, at Buyer's sole
cost and expense, take all reasonable efforts requested by Buyer to enforce, for
the benefit of Buyer, any and all rights of Seller under any such Contract not
otherwise transferred pursuant to the provisions of this Agreement including the
assignment of all vendor and customer contracts (including Trilogy and Sage) not
assigned prior to Closing (other than those vendor contracts specified in
Section 5.1 hereof for which Seller has specifically agreed that it will obtain
-----------
such assignments prior to the Closing). Seller hereby authorizes Buyer to
perform and Buyer hereby agrees to perform all of Seller's obligations after the
Closing under all such Contracts. Seller agrees to remit promptly to Buyer all
collections or payments received by Seller in respect of all such Contracts, and
shall hold all such collections or payments for the benefit of, and promptly pay
the same over to, Buyer; provided, however, that nothing herein shall create or
provide any rights or benefits in or to third parties.
6.6 Change of Name. Seller agrees to promptly change its name
--------------
following the Closing to a name which does not contain the words
"EnterpriseWorks" or any variations thereof.
6.7. Litigation Support. In the event and for so long as any party
------------------
is actively contesting or defending against any claim, suit, action or charge,
complaint, or demand in connection with (i) any transaction contemplated under
this Agreement or (ii) any fact, circumstance, status, condition, activity,
practice, occurrence, event, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, Buyer or the Business, each of the
other parties will cooperate and make reasonably available themselves or their
personnel, as applicable, and provide such reasonable testimony and access to
their books and records as shall be necessary in connection with the contest or
defense.
-32-
6.8. Audits. Following the Closing, the Company shall use its
------
commercially reasonable efforts to cause the Company, at Buyer's expense, to
deliver, or cause to be delivered, to Iconixx an unqualified and unmodified
audit report of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P. or other reputable independent
accounting firm on the balance sheet of the Company as of the Closing Date in
connection with the preparation of the Audited Closing Financial Statements and
audited statements of operations and cash flows of the Company with respect to
the periods January 1, 2000 through the Closing Date and for any prior fiscal
years in 1999, 1998 and 1997, which reports shall be without limitation as to
the scope of the audit. The Majority Members, in their capacities as officers
and managers of the Company during such periods, shall provide all management
letters, reports or representations reasonably requested by such auditors in
connection with such audits.
6.9. Iconixx's Stock Options. At or shortly following the
-----------------------
Closing, Iconixx will grant stock options for the purchase of Common Stock under
its stock option plan in the aggregate amount of 541,790 shares to the
Transferred Employees (consisting of both former UAR holders of the Company and
other current employees of the Company) who accept employment with Buyer and to
future employees of the Buyer employed in the Business. Such stock options
shall generally be for ten years from the date of grant, shall be exercisable at
the fair market value per share of the Common Stock on the date of grant, as
determined by Iconixx, and shall otherwise be on the same terms and conditions
applicable to all stock options granted to key executives and employees of
Iconixx and its subsidiaries. Stock options for the purchase of 241,790 shares
of Common Stock to be issued to former UAR holders of the Company, as set forth
on Schedule 6.9, shall vest on the first anniversary following the Closing Date.
------------
Stock options for the purchase of the remaining 300,000 shares of Common Stock
to the extent issuable to Transferred Employees shall generally be subject to
customary four year annual vesting requirements (i.e., 25% vesting per annum).
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF PARTIES TO CONSUMMATE CLOSING
7.1. Conditions to Iconixx's and Buyer's Obligations. The
-----------------------------------------------
obligation of Iconixx and Buyer under this Agreement to consummate the Closing
is subject to the conditions that:
(a) Covenants, Representations and Warranties. The Company and
-----------------------------------------
the Majority Members shall have performed in all material respects all
obligations and agreements and complied in all material respects with all
covenants contained in this Agreement to be performed and complied with by each
of them prior to or at the Closing Date. The representations and warranties of
the Company and the Majority Members set forth in this Agreement shall be
accurate in all material respects at and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date.
(b) Consents. All statutory requirements for the valid
--------
consummation by the Company and the Majority Members of the Acquisition shall
have been fulfilled and all
-33-
authorizations, consents and approvals, including expiration or early
termination of all waiting periods under the HSR Act and those of all federal,
state, local and foreign governmental agencies and regulatory authorities
required to be obtained in order to permit the consummation of the Acquisition
shall have been obtained in form and substance reasonably satisfactory to
Iconixx unless such failure could not reasonably be expected to have a Material
Adverse Effect. All approvals of the Board of Managers, the members of the
Company, and the lenders of Iconixx necessary for the consummation of this
Agreement and the Acquisition shall have been obtained.
(c) Leases. Each of the Leases shall provide that the Company is the
------
lessee and if required under the terms of a given lease, any consent required in
connection with the Acquisition contemplated by this Agreement shall have been
obtained, and copies of such Leases (and any assignments pursuant to which any
of such Leases have been assigned to Buyer prior to the Closing Date) shall have
been provided to Iconixx.
(d) Discharge of Indebtedness and Liens. The Company shall have
-----------------------------------
provided for the payment in full of all Funded Indebtedness of the Company at
the Closing or the Purchase Price will be reduced proportionately by the amount
that such Funded Indebtedness exceeds $0 as of the Closing Date. Such Funded
Indebtedness, if any, as of December 31, 1999, is listed on Schedule 7.1(d)
---------------
hereto. The Company shall have also provided for the termination of all
Encumbrances of record on the properties of the Company or the Business, except
for Permitted Exceptions. All liens or UCC filings against the Company shall
have been terminated as of the Closing, except for those relating to Permitted
Exceptions.
(e) Transfer Taxes. The Company and Majority Members shall be
--------------
responsible for all transfer or gains taxes imposed on the Majority Members
incurred in connection with this Agreement.
(f) Documents to be Delivered by the Majority Members and the
---------------------------------------------------------
Company. The following documents shall be delivered at the Closing by the
-------
Majority Members and the Company:
(i) Escrow Agreement. The Majority Members and the Company
----------------
shall have delivered to Iconixx and Buyer at the Closing the duly
executed Escrow Agreement in substantially the form attached hereto as
Exhibit A.
---------
(ii) Opinion of the Company's Counsel. Iconixx and Buyer
--------------------------------
shall have received an opinion of counsel to the Company, dated the
Closing Date, in substantially the same form as the form of opinion
that is Exhibit G-1 hereto or in a form reasonably acceptable to
-----------
Iconixx.
(iii) Certificates. Iconixx and Buyer shall have received
------------
an officer's certificate and a secretary's certificate of the Company
executed by
-34-
officers of the Company, dated the Closing Date, in a form mutually
agreed upon by Iconixx and the Company.
(iv) Conveyance Documents. Such instruments of sale,
--------------------
transfer, assignment, conveyance and delivery (including all vehicle
titles), in form and substance reasonably satisfactory to counsel for
Buyer (including, without limitation, the General Assignment, ▇▇▇▇ of
Sale and Assumption Agreement in substantially the form attached
hereto as Exhibit B (the "▇▇▇▇ of Sale, Assignment and Assumption
---------
Agreement"), as are required in order to transfer to Buyer good and
marketable title to the Purchased Assets, free and clear of all liens,
charges, security interests and other encumbrances except as provided
herein.
(v) Resolutions. A certified copy of resolutions of
-----------
Seller's Board of Managers authorizing the execution, delivery and
consummation of this Agreement and the transactions contemplated
hereby.
(vi) UCC Matters. UCC termination statements and other
-----------
applicable documentation necessary to release any interest of any
third party in the Purchased Assets except as provided herein.
(vii) Employment Agreements; Confidentiality and Non-
----------------------------------------------
Solicitation Agreement. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have duly executed and
----------------------
delivered an Employment Agreement in substantially the same form
attached as Exhibit F-1 hereto, pursuant to which he will be employed
-----------
by Buyer following the Closing. Each of the Messrs. ▇▇▇▇▇, ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ shall have duly executed and delivered an Employment Agreement
in substantially the same form attached as Exhibit F-2 hereto,
-----------
pursuant to which each will be employed by Buyer following the
Closing. A.B. Holdings, LLC and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall each have
duly executed and delivered a Confidentiality and Nonsolicitation
Agreement in substantially the form attached as Exhibit F-3 hereto.
-----------
(g) Iconixx Equity Arrangements. Joinders to the Equity Agreements
---------------------------
shall have been executed and delivered by the Majority Members and other Persons
receiving shares of Iconixx's Common Stock.
7.2. Conditions to the Majority Members' and the Company's
-----------------------------------------------------
Obligations. The obligation of the Majority Members and the Company under
-----------
this Agreement to consummate the Closing is subject to the conditions that:
(a) Covenants, Representations and Warranties. Iconixx and Buyer
-----------------------------------------
shall have performed in all material respects all obligations and agreements and
complied in all material respects with all covenants contained in this Agreement
to be performed and complied with by Iconixx and/or Buyer prior to or at the
Closing and the representations and warranties of Iconixx and Buyer set forth in
Article IV hereof shall be accurate in all material
----------
-35-
respects, at and as of the Closing Date, with the same force and effect as
though made on and as of the Closing Date.
(b) Consents. All statutory requirements for the valid consummation
--------
by Iconixx and Buyer of the Acquisition shall have been fulfilled and all
authorizations, consents and approvals, including expiration or early
termination of all waiting periods under the HSR Act and those of all federal,
state, local and foreign governmental agencies and regulatory authorities
required to be obtained in order to permit the consummation by Iconixx or Buyer
of the Acquisition shall have been obtained unless such failure shall not have a
Material Adverse Effect on the Business. Iconixx shall have consented and shall
have obtained all necessary consents and waivers from its stockholders under the
Stockholders Agreement dated August 12, 1999 for the Company's distribution of
the shares of Iconixx Common Stock to its members.
(c) Documents to be Delivered by Iconixx and Buyer. The following
----------------------------------------------
documents shall be delivered at the Closing by Iconixx and Buyer:
(i) Escrow Agreement. Iconixx and Buyer shall have
----------------
delivered to the Majority Members at the Closing the duly executed
Escrow Agreement.
(ii) Employment Agreements; Confidentiality and Non-
----------------------------------------------
Solicitation Agreement. Iconixx shall have caused Buyer to duly
----------------------
execute and deliver an Employment Agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in
substantially the same form attached as Exhibit F-1 hereto, pursuant
-----------
to which he will be employed by Buyer following the Closing. Iconixx
shall have caused Buyer to duly execute and deliver Employment
Agreements with Messrs. ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ in substantially the
same form attached as Exhibit F-2 hereto, pursuant to which each of
-----------
such Persons will be employed by Buyer following the Closing. Iconixx
shall have caused Buyer to duly execute and deliver a Confidentiality
and Non-Solicitation Agreement with each of A.B. Holdings, LLC and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ in substantially the same form attached as Exhibit
-------
F-3 hereto.
---
(iii) Certificates. Iconixx and Buyer shall have delivered
------------
an officer's certificate and a secretary's certificate of Iconixx and
Buyer executed by officers of Iconixx and Buyer, dated the Closing
Date, in a form mutually agreed upon by Iconixx and the Majority
Members.
(iv) Assumption Documents. Such instruments of assignment
--------------------
and assumption, in form and substance reasonably satisfactory to
counsel for the Company (including, without limitation, the ▇▇▇▇ of
Sale, Assignment and Assumption Agreement) as are required for Buyer's
assumption of all Assumed Liabilities pursuant to the terms of this
Agreement.
(v) Opinion of Counsel. The Company and the Majority
------------------
Members shall have received an opinion of counsel to Iconixx and
Buyer, dated the
-36-
the Closing Date, in substantially the same form as the form of
opinion that is Exhibit G-2 hereto.
-----------
(vi) Resolutions. Certified copies of the resolutions of
-----------
Buyer's and Iconixx's respective boards of directors authorizing the
execution, delivery and consummation of this Agreement and the
transactions contemplated hereby.
(d) Company Equity Arrangements. The Equity Agreements shall
---------------------------
have been executed and delivered by the respective parties thereto.
(e) Payments to Seller. Seller shall have received the Purchase
------------------
Price payable at Closing for the Purchased Assets.
(f) Iconixx Material Adverse Effect. From and including the
-------------------------------
date hereof, there shall not have occurred any event and no circumstance shall
exist which, alone or together with any one or more other events or
circumstances has had, is having or would reasonably be expected to have a
Iconixx Material Effect.
ARTICLE VIII
INDEMNIFICATION
8.1. Indemnification by the Majority Members. Except as provided
---------------------------------------
in Section 8.6, the Company and the Majority Members agree to jointly and
-----------
severally indemnify and hold harmless Iconixx and Buyer and each officer,
director, and Affiliate of Iconixx and Buyer, including without limitation any
successor of Buyer or Iconixx (collectively, the "Buyer Indemnified Parties")
from and against any and all damages, losses, claims, liabilities, demands,
charges, suits, penalties, costs and expenses (including court costs and
reasonable attorneys' fees and expenses incurred in investigating and preparing
for any litigation or proceeding) (collectively, the "Indemnifiable Costs"),
which any of the Buyer Indemnified Parties may sustain, or to which any of the
Buyer Indemnified Parties may be subjected, arising out of (A) any
misrepresentation, breach or default by the Majority Members or the Company of
or under any of the representations, covenants, agreements or other provisions
of this Agreement or any agreement or document executed in connection herewith;
(B) any downward Net Working Capital Adjustment not paid to Buyer pursuant to a
reduction of the Escrow Sum; (C) the cost of any brokerage or other transaction
fees liability, if any, borne by Buyer and not by the Majority Members or the
Company except as provided in Section 10.4 hereof; (D) any customer claims
------------
involving pre-Closing services or products of the Company for breach of
warranty, product liability or customer service remediation, including claims
for consequential damages, to the extent not reserved for in the Company's
Financial Statements; (E) any Excluded Liabilities; and (F) any failure of the
Company to obtain, within 30 days after the Closing, any Material landlord,
customer or supplier consents to the Acquisition contemplated hereby required
under the terms of any leases of the Company's real property or any Contracts to
the extent the Company's failure to obtain such consent is not permanently
waived by Buyer and to the extent that the
-37-
Company is unable to perform the material benefits of such leases or Contracts
for the Buyer pursuant to Section 6.5.
-----------
8.2 Indemnification of Majority Members and the Company. Iconixx
---------------------------------------------------
and Buyer agree to jointly and severally indemnify and hold harmless the
Majority Members and the Company and each officer, manager, member or Affiliate
of the Company, their successors and assigns (collectively, the "Seller
Indemnified Parties"), from and against any Indemnifiable Costs arising out of
(A) any misrepresentation, breach or default by Iconixx or Buyer of or under any
of the representations, covenants, agreements or other provisions of this
Agreement or any agreement or document executed in connection herewith;
provided, however, that claims for breaches of representations and warranties of
Iconixx with respect to the operations, financial performance or otherwise of
its subsidiaries shall be expressly limited to periods arising after the
acquisition of such subsidiaries by Iconixx, (B) Buyer's operation and ownership
of the Business and Purchased Assets from and after the Closing Date, including,
without limitation, the Buyer's liabilities and obligations to the Seller and
with respect to Retained Employees of the Seller pursuant to that certain
Employee Transition Services Agreement to be effective as of March 31, 1999 and
(C) any Assumed Liability.
8.3. Defense of Claims. For purposes hereof, the Person claiming
-----------------
indemnification hereunder, whether a Buyer Indemnified Party or a Seller
Indemnified Party, is sometimes referred to as the "Indemnified Party" and the
party against whom such claims are asserted hereunder is sometimes referred to
as the "Indemnifying Party." If any legal proceeding shall be instituted, or
any claim or demand made by a third Person, against any Indemnified Party in
respect of which the Indemnifying Parties may be liable hereunder, such
Indemnified Party shall give prompt written notice thereof to the Indemnifying
Parties and, except as otherwise provided in Section 8.5 below, the Indemnifying
-----------
Parties shall have the right to defend any litigation, action, suit, demand, or
claim for which an Indemnified Party may seek indemnifications, and such
Indemnified Party shall extend reasonable cooperation in connection with such
defense, which shall be at the Indemnifying Parties' expense. In the event the
Indemnifying Parties fail or refuse to defend the same within a reasonable
length of time, the Indemnified Parties shall be entitled to assume the defense
thereof, and the Indemnifying Parties shall be jointly and severally liable to
repay the Indemnified Parties for all reasonably incurred Indemnifiable Costs.
If the Indemnifying Parties shall not have the right to assume the defense of
any litigation, action, suit, demand, or claim in accordance with the preceding
sentence, the Indemnified Parties shall, at the Indemnifying Parties' expense,
have the absolute right to control the defense of such litigation, action, suit,
demand, or claim, but the Indemnifying Parties shall be entitled, at their own
expense, to participate in such litigation, action, suit, demand, or claim. The
party controlling any defense pursuant to this Section 8.3 shall deliver, or
-----------
cause to be delivered to the other party, copies of all correspondence,
pleadings, motions, briefs, appeals or other written statements relating to or
submitted in connection with the defense of any such litigation, action, suit,
demand or claim, and timely notice of any hearing or other court proceeding
relating to such litigation, action, suit, demand or claim. Notwithstanding the
forgoing, in no event will the party controlling any defense pursuant to this
Section 8.3 settle any litigation, action, suit, demand or claim without the
-----------
prior written consent of the non-controlling
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party, unless such settlement provides for the unqualified, absolute and
complete release of all claims against the non-controlling party and results in
no monetary or equitable liability to the non-controlling party.
8.4. Escrow Claim. If any claim for indemnification is made by a
------------
Buyer Indemnified Party pursuant to this Article VIII prior to the expiration
------------
of the Escrow Period, such Buyer Indemnified Party shall first apply to the
Escrow Agent provided in Section 2.7 of this Agreement for reimbursement of such
-----------
claim in accordance with the provisions of the Escrow Agreement provided,
however, the Escrow Sum is not intended to be an exclusive remedy in the event
Iconixx or Buyer has indemnification claims hereunder which exceed such amount.
In the event that Iconixx offsets more than the amount of any Indemnifiable
Costs (as finally determined), Iconixx shall be responsible to the Company for
such sums which should not have been subject to an offset, together with
interest at the rate of 10% per annum.
8.5. Tax Audits, Etc. In the event of an audit of a Tax Return of
---------------
the Company with respect to which a Buyer Indemnified Party might be entitled to
indemnification pursuant to this Article VIII, the Company shall control any and
------------
all such audits which may result in the assessment of additional Taxes against
the Company or Buyer and any and all subsequent proceedings in connection
therewith, including appeals. The Company, Buyer and Iconixx shall cooperate
fully in all matters relating to any such audit or other Tax proceeding
(including according access to all records pertaining thereto), and will execute
and file any and all consents, powers of attorney, and other documents as shall
be reasonably necessary in connection therewith. If additional Taxes are
payable by Buyer as a result of any such audit or other proceeding, the Company
and the Majority Members shall be jointly and severally responsible for and
shall promptly pay all Taxes, interest, and penalties for which any of the Buyer
Indemnified Parties shall be entitled to indemnification.
8.6. Limits on Indemnification. All Indemnifiable Costs sought by
-------------------------
any Indemnifying Party hereunder shall be net of any insurance proceeds received
by such Person with respect to such claim (less the present value of any premium
increases occurring as a result of such claim). Notwithstanding the provisions
of Section 8.1, the indemnity obligations hereunder relating to any breach of or
-----------
default under any covenants hereunder or in any agreement or document executed
in connection herewith relating to confidentiality, noncompetition, non-
solicitation or employment shall not be the joint indemnification obligations of
the Company and the Majority Members but shall be the sole and several
obligation of the respective party to such covenant or agreement. The right of
the Buyer Indemnified Parties to make claims for indemnification provided under
this Article VIII (other than claims for Excluded Liabilities or for claims for
------------
breaches of covenants to be performed by the Company following the Closing)
shall expire on September 30, 2001 (except for any claims for Indemnifiable
Costs made prior to such date which claims shall continue after such date until
finally resolved). The right of the Seller Indemnified Parties to make claims
for Indemnification provided under this Article VIII (other than claims arising
------------
under Section 8.2(B) or (C) or claims for breaches of covenants to be performed
---------------------
by Buyer or Iconixx following the Closing) shall expire on September 30, 2001
(except for any claims for which Indemnifiable Costs made prior to such date
which claims shall continue after such date until finally resolved). Neither
the Company nor the Majority Members
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shall be obligated to pay any amounts for indemnification under this Article
-------
VIII until the aggregate indemnification obligation sought by Iconixx or Buyer
----
hereunder exceeds $50,000, whereupon the Company and the Majority Members shall
be liable for all amounts for which indemnification may be sought, provided,
--------
however, that such $50,000 threshold shall not apply to claims for payment of
-------
Excluded Liabilities. The Company and the Majority Members shall, except as
otherwise provided hereby, be jointly and severally liable for all
indemnification claims of Iconixx or Buyer, provided, however, that the
Company's and the Majority Members' aggregate indemnification of Iconixx or
Buyer for all claims shall be limited to the Purchase Price and a Majority
Member's individual aggregate indemnification of Iconixx or Buyer shall be
limited to his, her or its proportionate share of the Purchase Price; provided,
further, that in the event of fraud by the Company or any Majority Member, the
aggregate indemnification obligation of such party shall not be so limited.
Neither Iconixx or Buyer shall be obligated to pay any amounts for
indemnification under this Article VIII until the aggregate indemnification
------------
obligation sought by the Majority Members and the Company hereunder exceeds
$50,000, whereupon Iconixx and Buyer shall be liable for all amounts for which
indemnification may be sought, provided, however, that such $50,000 threshold
-------- -------
shall not apply to claims for payment of Assumed Liabilities and to
indemnification claims under Section 8.2(B) with respect to Retained Employees.
--------------
Notwithstanding the foregoing, in no event shall the aggregate liability of (A)
Iconixx or Buyer to the Majority Members and the Company for breach of the
representations and warranties under Article IV exceed $5,000,000 and (B) the
----------
Majority Members and the Company to Iconixx for breach of representations and
warranties exceed $5,000,000; provided, however, that such limitation shall not
include and shall not limit any claims for (i) the breaching of the
representations and warranties of the Company and Majority Members under
Sections 3.2 (as to title and ownership of the Purchased Assets), 3.12 (to the
------------ ----
extent such claims relate to Environmental and OSHA Obligations) and 3.17 or any
----
breach of Sections 8.1(B) or (E), all of which claims together shall not exceed
--------------- ---
the Purchase Price, or (ii) any breach by Iconixx or Buyer of Sections 8.2(B) or
---------------
(C). However nothing in this Article VIII shall limit Iconixx, Buyer, the
--- ------------
Company or the Majority Members in exercising or securing any remedies provided
by applicable statutory or common law with respect to the fraudulent conduct of
the Company, Majority Members, Buyer or Iconixx in connection with this
Agreement or in the amount of damages that it can recover from the defrauding
party in the event that Iconixx or the Majority Members successfully prove
intentional fraud or intentional fraudulent conduct in connection with this
Agreement. Other than as set forth in the preceding sentence, the
indemnification provided for in this Article VIII is intended to be the
------------
exclusive monetary remedy of Iconixx, Buyer, the Company or the Majority Members
with regard to the Acquisition contemplated by this Agreement.
ARTICLE IX
TERMINATION
9.1. Termination. This Agreement may be terminated at any time
-----------
prior to the Closing:
(a) by the mutual written consent of all parties hereto;
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(b) in writing by Iconixx and Buyer, if the Company or any of
the Majority Members has breached in any material respect any representation,
warranty or covenant contained in this Agreement, and in each case such breach
has not been remedied within ten (10) business days after receipt of written
notice specifying such breach and demanding such breach to be remedied; or
(c) in writing by the Majority Members and the Company, if
Iconixx or Buyer has breached in any material respect any representation,
warranty or covenant contained in this Agreement, and in each case such breach
has not been remedied within ten (10) business days after receipt of written
notice specifying such breach and demanding such breach to be remedied; or
(d) in writing by the Majority Members and the Company, on the
one hand, or Iconixx and Buyer, on the other hand, in the event the Closing has
not occurred on or before March 31, 2000, or such later date as the parties may
agree upon, unless the failure of such consummation or the failure to satisfy
such condition, as applicable, shall be due to a breach of any representation or
warranty made by the party or parties seeking to terminate this Agreement or the
failure of such party or parties to comply in all material respects with the
agreements and covenants contained herein to be performed by such party or
parties.
9.2. Effect of Termination. If the Acquisition is terminated
---------------------
pursuant to Section 9.1 by notice in writing to the non-terminating party or
-----------
parties, this Agreement shall become void and of no further force and effect,
except that (a) such termination shall not relieve (i) any party from its
covenants in respect of confidentiality set forth in any other agreement
executed by the parties hereto and (ii) any party then in breach of any
representation, warranty, covenant or agreement contained in this Agreement from
liability in respect of such breach and (b) Sections 10.4 and 10.7 shall survive
------------- ----
termination of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1. Modifications. Any amendment, change or modification of this
-------------
Agreement shall be void unless in writing and signed by all parties hereto. No
failure or delay by any party hereto in exercising any right, power or privilege
hereunder (and no course of dealing between or among any of the parties) shall
operate as a waiver of any such right, power or privilege. No waiver of any
default on any one occasion shall constitute a waiver of any subsequent or other
default. No single or partial exercise of any such right, power or privilege
shall preclude the further or full exercise thereof.
10.2. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given when personally
delivered, or 48 hours after deposited in the United States mail, first-class,
postage prepaid, or by facsimile addressed to the respective parties hereto as
follows:
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Iconixx or Buyer:
----------------
Iconixx Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Tel No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
--------------
▇▇▇▇▇▇ Equity Investors IV, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Tel No.: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
------
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
Columbia Square
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Tel No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Majority Members:
-----------------------------------
c/o EnterpriseWorks, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Tel No.: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to (which shall not constitute notice):
--------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Tel No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as to any party hereto as such party shall designate by
like notice to the other parties hereto.
10.3. Counterparts; Facsimile Transmission. This Agreement may be
------------------------------------
executed in several counterparts, each of which shall be deemed an original but
all of which counterparts collectively shall constitute one instrument, and in
making proof of this Agreement, it shall never be necessary to produce or
account for more than one such counterpart. Signatures of a party to this
Agreement or other documents executed in connection herewith which are sent to
the other parties by facsimile transmission shall be binding as evidence of
acceptance of the terms hereof or thereof by such signatory party, with
originals to be circulated to the other parties in due course.
10.4. Expenses. Each of the parties hereto will bear all costs,
--------
charges and expenses incurred by such party in connection with this Agreement
and the consummation of the Acquisition, provided, however, that the Majority
Members shall bear all costs and expenses of (i) any broker involved in this
transaction on behalf of the Majority Members or the Company and (ii) all legal
and other expenses of the Majority Members or the Company with respect to this
Agreement and the Acquisition; provided, however, that the Company may bear such
costs so long as no Net Working Capital Adjustment or Minimum Cash deficit would
occur.
10.5. Binding Effect; Assignment. This Agreement shall be binding
--------------------------
upon and inure to the benefit of the Company, Iconixx, Buyer and the Majority
Members, their heirs, representatives, successors, and permitted assigns, in
accordance with the terms hereof. This Agreement shall not be assignable by the
Company or the Majority Members without the prior written consent of Iconixx.
This Agreement shall be assignable by Iconixx and/or Buyer to either (a) any
lender providing financing to Iconixx or Buyer (but only with respect to
Iconixx's or Buyer's rights under Article II and Article VIII hereof) or (b) any
---------- ------------
Affiliate of Iconixx, provided Iconixx remains liable, in each case without the
prior written consent of the Majority Members. In addition, following the
Closing, Iconixx or Buyer may assign any or all of its rights hereunder, without
the consent of the Majority Members, in connection with any sale of all or
substantially all of the assets, capital stock, partnership interests or
business of Buyer or Iconixx (whether effected by sale, exchange, merger,
consolidation or other transaction) and provided the acquiring party shall
assume all of Iconixx's or Buyer's obligations hereunder.
10.6. Entire and Sole Agreement. This Agreement and the other
-------------------------
schedules and agreements referred to herein, constitute the entire agreement
between the parties hereto and
-43-
supersede all prior agreements, representations, warranties, statements,
promises, information, arrangements and understandings, whether oral or written,
express or implied, with respect to the subject matter hereof.
10.7. Governing Law. This Agreement and its validity, construction,
-------------
enforcement, and interpretation shall be governed by the substantive laws of the
State of Delaware, without giving effect to the principles of conflicts of laws
thereof.
10.8. Survival of Representations, Warranties and Covenants.
-----------------------------------------------------
Regardless of any investigation at any time made by or on behalf of any party
hereto or of any information any party may have in respect thereof, all
covenants, agreements, representations, and warranties and the related
indemnities made hereunder or pursuant hereto or in connection with the
Acquisition shall survive the Closing for a period ending on September 30, 2001,
provided that any covenant relating to Indemnifiable Costs under Section 8.1(E)
--------------
and Sections 8.2(B) and (C) shall survive the Closing until the expiration of
--------------- ---
the applicable statutes of limitations, (c) all covenants in this Agreement
which have an expiration date contained therein shall expire as of such date and
(d) all other covenants in this Agreement requiring performance of a party
following the Closing Date which do not have an expiration date shall expire
upon the expiration of the applicable statutes of limitation.
10.9. Invalid Provisions. If any provision of this Agreement is
------------------
deemed or held to be illegal, invalid or unenforceable, this Agreement shall be
considered divisible and inoperative as to such provision to the extent it is
deemed to be illegal, invalid or unenforceable, and in all other respects this
Agreement shall remain in full force and effect; provided, however, that if any
provision of this Agreement is deemed or held to be illegal, invalid or
unenforceable there shall be added hereto automatically a provision as similar
as possible to such illegal, invalid or unenforceable provision and be legal,
valid and enforceable. Further, should any provision contained in this
Agreement ever be reformed or rewritten by any judicial body of competent
jurisdiction, such provision as so reformed or rewritten shall be binding upon
all parties hereto.
10.10. Public Announcements. Neither the Majority Members nor the
--------------------
Company (pre-Closing) shall make any public announcement of the Acquisition
without the prior written consent of Iconixx, which consent shall not be
unreasonably withheld.
10.11. Remedies Cumulative. Except for the indemnification
-------------------
provided in Article VIII which shall be the sole and exclusive monetary remedy
------------
of the parties thereto (other than for fraud), the remedies of the parties under
this Agreement are cumulative and shall not exclude any other equitable remedies
to which any party may be lawfully entitled.
10.12. Third Parties. Except as specifically set forth or referred
-------------
to herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any Person, other than the parties hereto and their
permitted successors or assigns, any rights or remedies under or by reason of
this Agreement.
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10.13. No Strict Construction. The parties hereto have
----------------------
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
10.14. Disclosure Schedules. An item disclosed in any part of the
--------------------
Disclosure Schedules attached hereto shall be deemed disclosed in response to
other applicable Disclosure Schedules sections to the extent expressly cross-
referenced therein.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-45-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the date and year first above written.
THE COMPANY:
-----------
ENTERPRISEWORKS LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President and Chief Executive Officer
MAJORITY MEMBERS:
----------------
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
AB HOLDINGS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
-46-
BUYER:
-----
ICONIXX - HOUSTON, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Secretary
ICONIXX:
-------
ICONIXX CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
The Exhibits and Schedules to this Asset Purchase Agreement are not included
with this Registration Statement on Form S-1. The Registrant will provide these
Exhibits and Schedules upon the request of the Securities and Exchange
Commission.
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