Exhibit 10.17
ASSET PURCHASE AGREEMENT
AGREEMENT made as of May 14, 2001 among DF ACQUISITION CORP.
("Purchaser"), a New York corporation with a principal place of business at ▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, DELTAFORCE PERSONNEL SERVICES, INC.
("Seller"), a New York corporation with a principal place of business at ▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and 5B TECHNOLOGIES CORPORATION
("Shareholder"), a Delaware corporation with a principal place of business at ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
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WHEREAS, Seller has been and is engaged in business as an employment
agency providing permanent and temporary job placements and the business
activities relevant and related thereto (the "Business"); and
WHEREAS, Shareholder is the sole shareholder of Seller; and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires
to purchase from Seller, substantially all of the assets, real and personal,
tangible and intangible, of Seller for the consideration and on the other terms
and conditions set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. CERTAIN DEFINED TERMS IN THIS AGREEMENT. As used in this Agreement,
the following terms shall have the following meanings:
1.1 BEST EFFORTS -- shall mean the efforts that a prudent
business person desirous of achieving a result would use under similar
circumstances to achieve that result.
1.2 CLOSING -- shall mean the consummation of the Contemplated
Transactions in accordance with the terms and upon the conditions set forth in
this Agreement.
1.3 CLOSING DATE -- shall mean the effective date of this
Agreement as set forth in the initial paragraph of this Agreement.
1.4 CONTRACT -- shall mean any oral or written contract,
agreement understanding, commitment or arrangement.
1.5 CONTEMPLATED TRANSACTIONS -- shall mean all of the
transactions contemplated by this Agreement, including, but not limited to the
sale of the Purchased Assets (as defined in section 2.1) by Seller to Purchaser,
the execution, delivery and performance of the Consulting Agreement (as defined
in section 6.1.4), and the performance by Seller, Purchaser and Shareholder of
their respective agreements, covenants and obligations pursuant to this
Agreement.
1.6 EMPLOYEE -- shall mean, when used in the context of
Seller, an employee or consultant of Seller, whether full- or part-time,
temporary or permanent and whether working directly for Seller or as an
assignment employee or consultant for clients of Seller. The term employee shall
also include recruitment candidates whom Seller has assisted or is assisting in
seeking direct employment with its clients.
1.7 FINANCIAL STATEMENTS -- shall mean the audited balance
sheet, statements of income, cash flow and changes in financial position,
supporting schedules and all related footnotes of Seller for its two calendar
years ending immediately prior to the date of this Agreement, as well as all
interim statements since the end of its most recent calendar year.
1.8 PERSON -- shall mean any individual, corporation
(including any non-profit corporation), general partnership, limited
partnership, limited liability company, limited liability partnership, joint
venture, estate, trust, cooperative, foundation, union, syndicate, league,
consortium, coalition, committee, society, firm, company or other enterprise,
association, organization or other entity or governmental body.
2. PURCHASED ASSETS.
2.1 IN GENERAL. Subject to the terms and conditions of this
Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase
from Seller, at the Closing all of Seller's assets (except the Excluded Assets,
as defined in section 2.3) whether real or personal, tangible or intangible,
fixed or contingent, including, but not limited to, all of Seller's right, title
and interest in (1) equipment; (2) furniture and fixtures; (3) supply inventory;
(4) assumed names, trade names and trademarks, proprietary information and other
intangible assets (including, but not limited to, the names "DeltaForce
Personnel Services" and "Wordsmiths" (and derivatives of either thereof) (the
"Intellectual Property"); (5) executory Contracts to which Seller is a party
(including, but not limited to, agreements with employees or clients); (6)
files, client records and other information necessary to the operation of the
Business (including, but not limited to, lists of active and inactive clients);
(7) except as specifically provided in section 2.3.2, book and records (8) all
telephone and telecopier numbers, e-mail accounts and web sites associated with
the Business; and (9) goodwill (collectively, the "Purchased Assets").
2.2 CORPORATE NAME. Seller shall promptly after the Closing
cause to be filed with the applicable government offices, at Seller's expense,
certificates of amendment to its Certificate of Incorporation and any filed
out-of-state qualification changing its corporate name so as not to contain the
words "DeltaForce," "Wordsmiths" or "Personnel" or words similar thereto or any
word containing any recognizable component thereof. Seller shall cooperate in
any actions by Purchaser to adopt the words "DeltaForce Personnel" or
"Wordsmiths" in its corporate name or as a fictitious name under which Purchaser
would be authorized to conduct business. Each of Seller and Shareholder
covenants and agrees not to, at any time after the Closing, conduct any
business, directly or indirectly, under any name which includes the words
"DeltaForce," "Wordsmiths" or "Personnel" or words similar thereto or any word
containing any recognizable component thereof.
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2.3 EXCLUDED ASSETS. Notwithstanding the generality of this
section 2, Seller is not selling, and Purchaser is not purchasing, the following
assets (the "Excluded Assets"):
2.3.1 Seller's corporate minute book, seal, stock ledger
and similar type items.
2.3.2 Seller's original financial records and books of
account; provided, however, that Seller shall supply, at its expense, copies of
all such to Purchaser to the extent necessary to carry out the intent of this
Agreement.
2.3.3 Seller's cash, cash equivalents and similar
assets.
2.3.4 Seller's accounts receivable. To the extent any of
Seller's clients make payment with respect to Seller's accounts receivable to
Purchaser, the proceeds of such payment shall be treated in accordance with
section 2.4.
2.3.5 Such other assets as are reflected on Exhibit 2.3.
2.4 ACCOUNTS RECEIVABLE.
2.4.1 COLLECTION AND REMITTANCE OF RETAINED RECEIVABLES.
Within three (3) business days following the Closing, Seller shall deliver to
Purchaser a schedule of accounts receivable outstanding for services rendered up
to and including midnight (12:00 a.m. E.S.T.) on the day immediately preceding
the Closing Date (the "Retained Receivables"), which shall include the client's
name, invoice number, invoice date and amount. Such schedule shall be
accompanied by copies of the invoices described therein. Following the Closing,
Purchaser shall, on the fifth business day following the 15th of each month and
the fifth business day following the last day of each month, pay over to Seller
any and all payments with respect to the Retained Receivables received (in good
funds) by Purchaser. Purchaser shall cooperate with Seller in seeking to collect
the Retained Receivables as reasonably requested from time to time by Seller,
provided that Seller shall pay Purchaser's out-of-pocket expenses related
thereto.
2.4.2 REPORTING. Purchaser shall, simultaneously with
each payment pursuant to section 2.4.1, deliver to Seller a report indicating
the Retained Receivables it has received and turned over to Seller. Each such
report shall also be accompanied by copies of any written communications
received providing status updates with respect to any of the Retained
Receivables. In the event there is any discrepancy between the report provided
by Purchaser and Seller's records, Purchaser and Seller shall attempt in good
faith to reconcile such discrepancy, together with the relevant client if
necessary.
3. PURCHASE PRICE/PAYMENT.
3.1 PURCHASE PRICE. In consideration of the Purchased
Assets, Purchaser shall pay to Seller the sum of $710,000 (the "Purchase
Price"), and shall assume the Assumed Liabilities (as defined in section 3.3).
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3.2 PAYMENT. The Purchase Price shall be paid as follows:
3.2.1 CLOSING PAYMENT. At the Closing, Purchaser shall
pay to Seller $568,000 (the "Closing Payment") towards the Purchase Price in
cash or by certified or bank check payable to Seller.
3.2.2 DEFERRED PAYMENT. Nine months from the Closing
Date, Purchaser shall pay to Seller $142,000 (the "Deferred Payment")
representing the remaining Purchase Price owed in excess of the Closing Payment.
3.3 ASSUMED LIABILITIES.
3.3.1 ASSUMPTION AGREEMENT. In further consideration of
the Purchased Assets, Purchaser and Seller have simultaneously with the
execution of this Agreement, executed and delivered a certain assignment and
assumption agreement (the "Assumption Agreement") pursuant to which Purchaser is
assuming those liabilities of Seller set forth on Schedule I of the Assumption
Agreement (such scheduled liabilities being the "Assumed Liabilities"),
including those liabilities of Seller relating to the period after the Closing
Date with respect to those executory Contracts to which Seller is a party and
which are reflected on such Schedule I (the "Assigned Contracts").
3.3.2 OFFICE SPACE. Purchaser shall be granted full
access to Seller's office space at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (the
"Office Space") from and after the Closing, and Seller and Purchaser shall
cooperate with one another to move the tangible Purchased Assets (such move to
be at Purchaser's expense; the "Move") to a location selected by Purchaser. The
Move shall be completed by Purchaser by May 31, 2001, provided that Purchaser
may elect to leave certain items of office furniture at the Office Space (such
items to thereby be deemed excluded from the Purchased Assets and remain the
property of Seller). Purchaser shall reimburse Seller for the pro rata share of
monthly rent with respect to the Office Space attributable to the period from
the Closing Date through the later of May 31, 2001 or the date the Move is
actually completed.
3.3.3 NO OTHER LIABILITIES. No liabilities other than
those set forth in this section 3.3, including, but not limited to, liabilities
with respect to executory Contracts to which Seller is a party but which are not
identified as Assigned Contracts, are to be assumed except as the parties may
agree.
3.4 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated among the Purchased Assets as provided in Exhibit 3.4. Pursuant to
Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code"), the
parties shall complete and file Internal Revenue Service Form 8594 (Asset
Acquisition Statement) and any other documents necessary in connection therewith
in accordance with the allocation of the Purchase Price provided for in this
section 3.4.
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3.5 EXPENSES. Each party shall bear its own costs, including,
without limitation, legal and accounting fees, incurred by it in connection with
negotiating and consummating this Agreement and the Contemplated Transactions.
4. SELLER'S AND SHAREHOLDER'S REPRESENTATIONS AND WARRANTIES. Seller
and Shareholder, jointly and severally, represent and warrant to
Purchaser the matters set forth below. These are continuing
representations and warranties, and shall survive the Closing as
provided in section 8.5, notwithstanding any investigation by
Purchaser:
4.1 CORPORATE STRUCTURE.
4.1.1 SELLER. Seller (1) is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
New York; (2) is in good standing and qualified in all states and other
jurisdictions where Seller is doing business as required by law, which states
and jurisdictions are identified on Exhibit 4.1.1A; (3) is not qualified and has
not done business as a foreign corporation in any other state or other
jurisdiction and has not, at any time prior to the date of this Agreement,
received any communications from any state or other jurisdiction asserting that
its activities require that it be qualified to do business in that state or
other jurisdiction; and (4) has received all approvals of Federal, state and
local authorities necessary for it to conduct its business as currently being
conducted. True, complete and current copies of Seller's Certificate of
Incorporation and By-Laws are attached as Exhibit 4.1.1B.
4.1.2 SHAREHOLDER. Shareholder (1) is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware; (2) is in good standing and qualified to do business in the State of
New York; and (3) has received all approvals of Federal, state and local
authorities necessary for it to conduct its business as currently being
conducted. True, complete and current copies of Shareholder's Articles of
Incorporation and By-Laws are attached as Exhibit 4.1.2.
4.2 CONDUCT OF BUSINESS. Seller has all requisite power and
authority to own its property and operate its business as and where such is now
being conducted. Seller is not a party to nor subject to any Contract, judgment,
order or decree which will or may restrict the conduct of its business in any
jurisdiction or location.
4.3 AUTHORIZED CAPITAL STOCK. The total authorized capital
stock of Seller consists of 200 shares of common stock, no par value, and there
are no shares of preferred stock. All issued and outstanding shares are validly
issued in accordance with all applicable laws and are fully paid and
non-assessable. There are no outstanding subscriptions, offers, options, rights,
warrants, convertible securities, or other Contracts, commitments or
contingencies obligating or requiring the issuance of any additional shares or
other securities of Seller.
4.4 NO SUBSIDIARIES OR AFFILIATES. Seller has no wholly or
partly owned subsidiaries, has never had any wholly or partly owned
subsidiaries, nor is it a party to any joint venture or partnership, nor does it
have any direct or indirect interest either by way of stock
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ownership or otherwise, in any other person, nor are there any outstanding
offers by Seller with respect to any such matter.
4.5 SHAREHOLDER. Shareholder (1) is the sole record and
beneficial owner of all of Seller's issued and outstanding capital stock, free
and clear of all liens, pledges, encumbrances, charges, agreements or claims of
any kind whatsoever; and (2) has full capacity and authority under law to
contract with Purchaser to do and perform all of its obligations under this
Agreement and as contemplated by the Contemplated Transactions.
4.6 NO CONFLICT. The execution and delivery of this
Agreement and the documents to be executed and delivered pursuant to this
Agreement to accomplish the Closing of the Contemplated Transactions do not and
will not on the Closing Date (1) conflict, contravene or violate any provision
of Seller's or Shareholder's Certificate or Articles of Incorporation or By-Laws
or any resolution adopted by the board of directors of Seller or Shareholder;
(2) result in a breach by Seller or Shareholder, or constitute a default under,
or permit the termination of, or cause the acceleration of the maturity of, any
of the terms, conditions, or provisions of any Contract to which Seller or
Shareholder is a party or by which Seller or Shareholder or any of their assets
may be bound or affected; (3) violate any statute, law, regulation, judgment,
order, writ, injunction, decree or demand of any court or Federal, state,
municipal, or other governmental department, commission, board, bureau, agency
or instrumentality, to which Seller or Shareholder is named as a party; (4)
result in the creation or imposition of any lien, charge, or encumbrance of any
nature whatsoever; or (5) cause Purchaser, Seller or Shareholder to become
subject to, or to become liable for the payment of, any Tax (as defined in
section 4.22).
4.7 AUTHORIZATION.
4.7.1 SELLER. Seller has full corporate power and
authority to enter into this Agreement and any Contract provided for herein and
to carry out the Contemplated Transactions. The board of directors and sole
shareholder of Seller have duly authorized and approved the execution, delivery
and performance of this Agreement, each Contract and document provided for
herein and the Contemplated Transactions, and no other corporate proceedings on
the part of Seller are necessary to authorize and approve such execution,
delivery and performance. This Agreement and each Contract provided for herein
to which Seller is a party has been duly executed and delivered by Seller and
constitutes the valid and binding agreement of Seller enforceable against it in
accordance with its terms (except as may be limited by applicable bankruptcy
laws or similar laws affecting creditors' rights generally).
4.7.2 SHAREHOLDER. Shareholder has full corporate power
and authority to enter into this Agreement and any Contract provided for herein
and to carry out the Contemplated Transactions. The board of directors of
Shareholder has duly authorized and approved the execution, delivery and
performance of this Agreement, each Contract and document provided for herein
and the Contemplated Transactions, and no other corporate proceedings on the
part of Shareholder are necessary to authorize and approve such execution,
delivery and performance. This Agreement and each Contract provided for herein
to which
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Shareholder is a party has been duly executed and delivered by Shareholder and
constitutes the valid and binding agreement of Shareholder enforceable against
it in accordance with its terms (except as may be limited by applicable
bankruptcy laws or similar laws affecting creditors' rights generally).
4.8 MINUTE BOOKS AND STOCK BOOKS. The minute books for
Seller provided to Purchaser contain true originals or copies of all minutes of
meetings of and corporate actions taken by, the shareholders, the board of
directors and all committees of the board of directors of Seller and are
reflective of actions taken on those occasions in all material respects. The
stock books of Seller provided to Purchaser provide a complete and accurate
record of the issuance, transfer and holders of all stock of Seller ever
declared, paid, authorized or issued.
4.9 GOVERNMENTAL AUTHORITIES. Seller is not required to
submit any notice, report or other filing to any governmental or regulatory
authority in connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby. No
consent, approval or authorization of any governmental or regulatory authority
is required to be obtained by Seller in connection with the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby.
4.10 PURCHASED ASSETS.
4.10.1 TITLE. Other than leased assets and licensed
software, Seller has, and hereby conveys to Purchaser, effective as of the
Closing Date, good and marketable title to all of the Purchased Assets, free and
clear of all mortgages, liens, pledges, charges, claims, leases, restrictions or
encumbrances of any nature whatsoever, and subject to no restrictions with
respect to transferability. Simultaneously with the execution of this Agreement,
Seller has delivered to Purchaser evidence satisfactory to Purchaser of the
release of any liens which appear of record against any of the Purchased Assets.
4.10.2 IDENTIFICATION OF TANGIBLE ASSETS. Exhibit 4.10.2
lists all of the tangible assets included within the Purchased Assets, setting
forth for each item its date of acquisition, location and cost.
4.10.3 CONDITION. All of the tangible assets included
within the Purchased Assets are in operating condition and repair, normal wear
and tear excepted. Each item of tangible equipment can operate substantially in
accordance with its specifications.
4.10.4 CONDUCT OF BUSINESS. The Purchased Assets
comprise substantially all of the assets of Seller used by it and are sufficient
to carry on the Business as presently conducted by Seller.
4.11 REGULATORY COMPLIANCE. Seller has not violated, nor is
Seller currently in violation of, any zoning or building statutes, ordinances or
regulations or other laws, statutes, ordinances or regulations relating to the
Purchased Assets or their use. To the extent that Seller holds a properly issued
waiver for any condition presently existing which would otherwise constitute
such a violation, such waivers are described on Exhibit 4.11.
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4.12 EXHIBITS. Each of the following Exhibits which have been
furnished by Seller to Purchaser and which are incorporated herein by reference,
is complete and the information contained therein is correct in all material
respects:
4.12.1 Exhibit 4.12.1 -- REAL PROPERTY LEASES -- lists
the parties, date and subject property of all Contracts to which Seller is a
party, as lessor, lessee, sublessor, sublessee or otherwise, concerning the
lease or rental of real property or any interest in real property.
4.12.2 Exhibit 4.12.2 -- PERSONAL PROPERTY LEASES --
lists the parties, date and subject property of all Contracts to which Seller is
a party, as lessor, lessee or otherwise, concerning the lease or rental of
personal property or any interest in personal property.
4.12.3 Exhibit 4.12.3 -- INTANGIBLE PROPERTY -- lists
all intangible personal property used by Seller, including, without limitation,
trademarks, trade names, service names, service marks, patents, patent licenses
and registrations or applications for any and all of the foregoing.
4.12.4 Exhibit 4.12.4 -- MISCELLANEOUS CONTRACTS --
lists each Contract of the following types to which Seller is a party (to the
extent not set forth in any other Exhibit):
4.12.4.1 For delivery of its services over a
period of more than 30 days from the date of this Agreement.
4.12.4.2 Involving an expenditure of more than
$2,500 for the purchase of any services, materials, supplies or equipment.
4.12.4.3 For capital expenditures.
4.12.4.4 Continuing over a period of more than
one year from its date, which is not terminable by Seller upon not more than 30
days' notice.
4.12.4.5 For the sale of any capital asset.
4.12.4.6 Not made in the ordinary course of
business.
4.12.4.7 Which has, or may have, a material
effect on the business of Seller or its future business prospects.
4.12.5 Exhibit 4.12.5 -- PERMITS -- lists all permits,
licenses and other approvals, authorizations and waivers which are necessary to,
or held by Seller in connection with, Seller's conduct of the Business, together
with the title, issuing agency and expiration date thereof.
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4.12.6 Exhibit 4.12.6 -- EMPLOYEES -- lists each
employee and consultant (part or full time) of Seller, and the position, title,
remuneration and date of employment of each such employee or consultant. This
Exhibit also lists the date and amount of the next salary increase, if any,
which Seller would expect to grant to such person pursuant to its normal and
standard policies. This Exhibit separately identifies employees and consultants
providing services directly to Seller and employees and consultants who provide
temporary services to Seller's clients.
4.12.7 Exhibit 4.12.7 -- EMPLOYMENT AGREEMENTS -- lists
each Contract of the following types to which Seller is a party:
4.12.7.1 Each employment Contract, other than
union contracts, between Seller and any of its employees, including, without
limitation, any bonus, incentive or deferred compensation plan and any
confidentiality or non-competition agreements.
4.12.7.2 Each retention Contract between Seller
and any of its consultants, including, without limitation, any bonus, incentive
or deferred compensation plan and any confidentiality or non-competition
agreements.
4.12.7.3 Each plan providing for pension,
retirement, profit sharing, bonus, stock option, stock purchase, life insurance,
medical insurance, disability insurance, vacations and other employee benefits
or compensation (including, but notlimited to, plans constituting "employee
benefit plans" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA")). As used in this Agreement, the term "Benefit
Plans" refers to any plan disclosed on Exhibit 4.12.7 or which should have been
so disclosed.
4.12.7.4 Each Contract with any union covering
employees in the bargaining unit represented by such union.
4.12.8 Exhibit 4.12.8 -- CLIENT CONTRACTS -- Each
Contract between Seller and any client of Seller concerning Seller's services to
be provided to such client.
4.12.9 Exhibit 4.12.9 -- INSURANCE -- lists each policy
of fire, liability and other forms of insurance insuring the assets or
operations of Seller and a brief description thereof containing the name of the
insurer, types and limits of coverage, and property and locations covered.
Exhibit 4.12.9 also lists all certificates of insurance provided to clients,
including the name of the client and the nature and amount of insurance
specified.
4.12.10 Exhibit 4.12.10 -- LICENSE AGREEMENTS -- lists
each license granted to or by Seller with respect to the use of any intangible
rights, including, without limitation, computer software (other than
"off-the-shelf" software), patents, trade secrets, trademarks or copyrights.
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4.12.11 Exhibit 4.12.11 -- DEBT -- lists all Contracts,
including, but not limited to, loan agreements, promissory notes, debt
instruments, guarantees and security agreements, concerning any loan, debt or
borrowing by Seller or any lien, security interest or encumbrance on Seller's
property.
4.12.12 Exhibit 4.12.12 -- INTERESTED TRANSACTIONS --
lists any Contract or other arrangements, whether or not reflected on any other
Exhibit, between Seller and Shareholder or any affiliate of Shareholder or any
person in which Shareholder or any affiliate of Shareholder has a direct or
indirect interest.
4.12.13 Exhibit 4.12.13 -- VEHICLES -- lists all motor
vehicles owned or leased by Seller, whether or not reflected on any other
Exhibit.
4.12.14 Exhibit 4.12.14 -- BANKING MATTERS -- lists all
of Seller's bank, mutual fund and similar accounts and safe deposit boxes,
together with the authorized signatures for each such account or box.
4.12.15 Exhibit 4.12.15 -- CONSENTS -- lists all notices
to or consents or approvals from third parties which are or may be required in
connection with the Closing of the Contemplated Transactions (the "Consents").
4.13 COPIES OF CONTRACTS AND OTHER DOCUMENTS. Seller has
delivered to Purchaser true, correct and complete copies of each Contract
reflected on any Exhibit listed in section 4.12 and, to the extent requested by
Purchaser, of each other document reflected on any such Exhibit.
4.14 NO DEFAULTS. Each of the Contracts reflected on any
Exhibit listed in section 4.12 is in full force and effect. Seller is not in
default or breach under any of such Contracts, nor has any event occurred which,
through the passage of time or the giving of notice, or both, would constitute a
breach or default thereunder, or cause the acceleration of any obligation of
Seller or result in the creation of any lien, charge or encumbrance upon any
asset of Seller. To Seller's or Shareholder's best knowledge, no other party to
any of such Contracts is in default or breach under any of such Contracts, nor
has any event occurred which, through the passage of time or the giving of
notice, or both, would constitute a breach or default thereunder, or cause the
acceleration of any obligation of such other party, nor has any such other party
given any notice of an intention to terminate or modify any of such Contracts.
4.15 NO MATERIAL ADVERSE CHANGES IN BUSINESS OR FINANCIAL
CONDITION. Except as identified on Exhibit 4.15, since December 31, 2000 there
have been no changes in the financial condition, results of operations,
business, assets or prospects of Seller, which changes have been, individually
or in the aggregate, materially adverse.
4.16 CERTAIN BUSINESS OR FINANCIAL TRANSACTIONS. Since
December 31, 2000, Seller has not, except as set forth in Exhibit 4.16:
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4.16.1 Mortgaged, pledged or caused to be created a
security interest or other encumbrance in or against any of its property or
assets.
4.16.2 Declared or authorized any dividends or other
distributions which have not been fully paid.
4.16.3 Declared, paid or authorized any stock options;
profit sharing, pension or retirement contributions; health, disability,
accident or life insurance contributions; or created any arrangement or plan for
any such option or contribution.
4.16.4 Authorized or paid any bonus to any employee.
4.16.5 Increased the compensation payable to or to
become payable to any employee.
4.16.6 Made any change in the basis of computation of
any bonus, commission or other compensation or benefit of any employee.
4.16.7 Suffered any damage, destruction or loss
materially adversely affecting the properties, assets or business of Seller.
4.16.8 Sold, assigned or transferred any patents,
trademarks, trade names, copyrights, licenses, franchises or other intangible
assets or intangible properties of Seller.
4.16.9 Disposed of any of its assets except for the sale
or disposition of used assets in the ordinary course of business.
4.16.10 Engaged in any other transaction other than in
the ordinary course of business.
4.17 INTERESTED TRANSACTIONS. Except as set forth in Exhibit
4.17, Seller has not sold, distributed, given or otherwise transferred to
Shareholder or any person affiliated with or controlled by Shareholder any asset
within the two (2) year period preceding the Closing Date.
4.18 INTELLECTUAL PROPERTY. Seller owns all of the
Intellectual Property. No claim is pending or, to Seller's or Shareholder's best
knowledge, threatened to the effect that the operations of Seller infringe upon
or conflict with the asserted rights of any other person with respect to any
Intellectual Property, and there is no basis for any such claim (whether or not
pending or threatened). Each person who has produced any material Intellectual
Property for use by Seller, including, but not limited to, employees and
independent contractors, has relinquished, in writing, any claim or right which
such person may have to any such Intellectual Property and confirmed Seller's
ownership thereof.
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4.19 GOOD WORKING RELATIONSHIPS. Seller enjoys good working
relationships with its employees, consultants, suppliers and clients.
4.20 FINANCIAL STATEMENTS. The Financial Statements fairly
present in accordance with GAAP the financial position of Seller as of the date
of each such statement and its results of operations for the period then ended.
Seller has no liabilities, matured or unmatured, absolute or contingent, except
as reflected in the Financial Statements or incurred in the ordinary course of
business since December 31, 2000.
4.21 ACCOUNTS RECEIVABLES. Subject to any allowance for
doubtful accounts established in accordance with Seller's usual business
practices and reflected in the Financial Statements, each of Seller's accounts
receivable relates to services rendered by Seller to the debtor client, is valid
and is collectible in full in the ordinary course of business.
4.22 TAX COMPLIANCE. Seller has duly, accurately and properly
filed all necessary tax returns and tax reports (whether with respect to income,
sales, withholding or otherwise) which it is required to file with the United
States Government, the state of its incorporation, and all other relevant state
and local and foreign governmental agencies for all periods to and including the
fiscal year ending December 31, 2000, and when and where required, for all
periods since that date to the Closing Date. Seller has paid or accrued the
taxes shown to be due by all such returns and reports and up to and through the
Closing Date. As of the Closing Date, there are no pending claims for unpaid
taxes or fines, penalties or interest in respect thereof being asserted against
Seller by the Federal Government or any state, local or foreign governmental
agency and there is no basis for any such claim. Except as listed in Exhibit
4.22, Seller has never been audited by Federal, state, local or foreign taxing
authorities for sales, income, franchise or any other taxes. For purposes of
this section 4.22, "tax" means any tax, levy, assessment, tariff, impost,
imposition, toll, duty, deficiency or fee imposed, assessed or collected by or
under the authority of any governmental body, including, but not limited to,
income taxes, franchise taxes, sales taxes, unemployment insurance and payroll
related taxes ("Tax").
4.23 NO LITIGATION OR GOVERNMENTAL INVESTIGATIONS. Except as
on Exhibit 4.23, (1) there are no suits at law or in equity, nor any government
investigations or proceedings, pending, or, to Seller's or Shareholder's best
knowledge, threatened against Seller and (2) there are no suits at law or in
equity being investigated by Seller or pending or threatened in favor of Seller.
4.24 CLIENTS. Exhibit 4.24 contains a list of Seller's
clients, showing annual revenue from each client for the last two full fiscal
years and through March 31, 2001 for the present fiscal year.
4.25 EMPLOYMENT MATTERS. Except as on Exhibit 4.23 referenced
above, there are no claims pending, or, to Seller's or Shareholder's best
knowledge, threatened against Seller with respect to any applicant for
employment or present or former employee of Seller, nor, to Seller's or
Shareholder's best knowledge, does there exist any state of facts which is
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reasonably likely to give rise to any such claim. With respect to Seller's
employees and employee benefit plans and programs:
4.25.1 HUMAN RESOURCES COMPLIANCE. Seller is in strict
compliance with all applicable laws and regulations respecting employment and
employment practices, terms and conditions of employment and wages and hours
(collectively, "Employment Laws"). Seller has paid all workers' compensation
premiums to a private insurer or, if appropriate, has applied to, and has paid
and secured coverage from a workers' compensation State Fund.
4.25.2 NO UNFAIR LABOR PRACTICE, NO LABOR DISPUTES, ETC.
Seller: (1) is not engaged in any unfair labor practice; (2) is not the subject
of any investigation, complaint or proceeding based on any Employment Laws; (3)
does not have any unfair labor practice complaints against it pending, or
threatened, before the National Labor Relations Board or any other agency; (4)
does not have any strikes, labor disputes, slowdowns or stoppages actually
pending, or threatened, against or directly affecting it; and (5) does not have
any union representation question respecting its employees and no union
organizing activities are taking place.
4.25.3 NO COLLECTIVE BARGAINING. Seller is not a party
to any collective bargaining or other labor agreement(s) with any party on
behalf of any of its employees and no petition has been filed for recognition by
any collective bargaining agent on behalf of Seller's employees.
4.25.4 MULTIEMPLOYER PENSION PLAN. Seller has never and
does not presently contribute to any "multiemployer pension plan" (as defined in
section 3(37) of ERISA).
4.25.5 BENEFITS PLANS. Except as provided in Exhibit
4.25.5:
4.25.5.1 Seller has delivered to Purchaser a true
and complete copy of each Benefit Plan and any related funding agreements,
including all amendments, supplements, and modifications thereto (and Exhibit
4.25.5 includes a description of any such item that is not in writing), all of
which are legally valid and binding and in full force and effect, and there are
no defaults thereunder, notwithstanding the termination of the Benefit Plans
prior to the Closing Date;
4.25.5.2 Seller has delivered to Purchaser a true
and complete copy of the most recent annual report and actuarial report for each
Benefit Plan, and the Internal Revenue Service determination letter, if any, for
each Benefit Plan and each amendment thereto;
4.25.5.3 all contributions required to be made to
each Benefit Plan under the terms of that Benefit Plan, ERISA, or other
applicable law have been timely made. In the case of each Benefit Plan that is
subject to Title 1, Subtitle B, Part 3 of ERISA, the net fair market value of
the assets held to fund that Benefit Plan as of the Closing
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Date exceeds the actuarial present value of all accrued benefits, both vested
and non-vested (based upon projected earnings increases of five percent (5%) per
annum, in the case of a final pay plan), under that Benefit Plan as of the
Closing Date;
4.25.5.4 each Benefit Plan complies currently,
and has complied in the past, in form and operation, with the applicable
provisions of ERISA, the Code, and other applicable law (including foreign law);
4.25.5.5 no excise tax is due or owing from
Seller with respect to any "prohibited transaction" (as defined in section
4975(c)(1) of the Code) relating to any Benefit Plan. No amount is due or owing
from Seller to the Pension Benefit Guaranty Corporation under title IV of ERISA
for any reason, or to any "multiemployer pension plan" (as defined in section
3(37) of ERISA) on account of any withdrawal therefrom; and
4.25.5.6 since September 2, 1974, Seller has not
terminated any employee benefit plan subject to title IV of ERISA for which a
Notice of Sufficiency has not been issued by the Pension Benefit Guaranty
Corporation.
4.25.6 COBRA COMPLIANCE. Seller is, and at all pertinent
times has been, in compliance with COBRA and any and all other applicable state
and Federal laws, rules and regulations requiring Seller to offer the option of
continuing health insurance coverage to employees of Seller and their family
members.
4.25.7 NO COMPLAINTS. With respect to clauses 1 through
6 of this section 4.25, there are no complaints, charges, claims, litigations,
investigations or administrative proceedings filed, pending or, to Seller's or
Shareholder's best knowledge, threatened.
4.26 NO BROKERS, FINDERS, ETC. Except Summit Resources, Ltd.
("Summit"), neither Seller nor Shareholder has not dealt with any broker, finder
or other person who performed brokerage, finder or other similar services in
connection with this Agreement, nor does either Seller or Shareholder know of
any person that has any basis for claiming any brokerage, finders or similar
fees against Seller or Shareholder in connection with this Agreement. Seller and
Shareholder are responsible for the payment of all fees of Summit.
4.27 NO MATERIAL OMISSION. No representation or warranty by
Seller or Shareholder in this Agreement, nor any statement, certificate or
Exhibit furnished or to be furnished by Seller or Shareholder pursuant to this
Agreement or any document or certificate delivered to Purchaser pursuant to this
Agreement or in connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit a material fact necessary to make the statements contained therein not
misleading.
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5. PURCHASER'S REPRESENTATIONS AND WARRANTIES: Purchaser represents and
warrants to Seller the matters set forth below. These are continuing
representations and warranties, and shall survive the Closing as
provided in section 8.5, notwithstanding any investigation by
Seller:
5.1 CORPORATE STRUCTURE. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
New York and has all requisite power and authority to own its property and
operate its business as and where such is now being conducted.
5.2 NO CONFLICT. The execution and delivery of this
Agreement and the documents to be executed and delivered pursuant to this
Agreement to accomplish the Closing of the Contemplated Transactions do not and
will not on the Closing Date (1) conflict, contravene or violate any provision
of Purchaser's Certificate of Incorporation or By-Laws or any resolution adopted
by the board of directors of Purchaser; (2) result in a breach by Purchaser, or
constitute a default under, or permit the termination of, or cause the
acceleration of the maturity of, any of the terms, conditions, or provisions of
any Contract to which Purchaser is a party or by which Purchaser or its assets
may be bound or affected; (3) violate any statute, law, regulation, judgment,
order, writ, injunction, decree or demand of any court or Federal, state,
municipal, or other governmental department, commission, board, bureau, agency
or instrumentality, to which Purchaser is named as a party; (4) result in the
creation or imposition of any lien, charge, or encumbrance of any nature
whatsoever; or (5) cause Seller to become subject to, or to become liable for
the payment of, any Tax.
5.3 AUTHORIZATION. Purchaser has full corporate power and
authority to enter into this Agreement and any Contract provided for herein and
to carry out the Contemplated Transactions. The board of directors of Purchaser
has duly authorized and approved the execution, delivery and performance of this
Agreement, each Contract and document provided for herein and the Contemplated
Transactions, and no other corporate proceedings on the part of Purchaser are
necessary to authorize and approve such execution, delivery and performance.
This Agreement and each Contract provided for herein to which Purchaser is a
party has been duly executed and delivered by Purchaser and constitutes the
valid and binding agreement of Purchaser enforceable against it in accordance
with its terms (except as may be limited by applicable bankruptcy laws or
similar laws affecting creditors' rights generally).
5.4 NO BROKERS, FINDERS, ETC. Purchaser has not dealt with
any broker, finder or other person who performed brokerage, finder or other
similar services in connection with this Agreement, and does not know of any
person that has any basis for claiming any brokerage, finders or similar fees
against Purchaser in connection with this Agreement.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
6.1 BY OR ON BEHALF OF SELLER. At the Closing, Seller will
cause the following items to be delivered to Purchaser:
6.1.1 A ▇▇▇▇ of Sale with respect to the Purchased
Assets.
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6.1.2 The Assumption Agreement (which assigns the
Assigned Contracts to Purchaser).
6.1.3 The Consents.
6.1.4 A Consulting and Non-Competition Agreement among
the parties requiring (1) Seller to provide ceratin consulting services to
Purchaser and (2) Seller and Shareholder to refrain from competing with
Purchaser in connection with the Business, all as more fully set forth in such
Agreement (the "Consulting Agreement").
6.1.5 An opinion of counsel from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
dated as of the Closing Date with respect to certain matters concerning Seller
and Shareholder.
6.1.6 Evidence that all liens, if any, on the Purchased
Assets have been released.
6.1.7 A certificate executed by the Secretary of Seller
(1) identifying those persons who are the officers and directors of Seller as of
the Closing Date and (2) certifying resolutions of the board of directors and
shareholders of Seller approving this Agreement and authorizing the consummation
of the Contemplated Transactions.
6.1.8 Any other documents signed by the appropriate
officers and directors of Seller requested by Purchaser and necessary or
desirable in order to accomplish the Closing of the Contemplated Transactions.
6.2 BY OR ON BEHALF OF SHAREHOLDER. At the Closing,
Shareholder will cause the following items to be delivered to Purchaser:
6.2.1 The Consulting Agreement.
6.2.2 A certificate executed by the Secretary of
Shareholder (1) identifying those persons who are the officers and directors of
Shareholder as of the Closing Date and (2) certifying resolutions of the board
of directors of Shareholder approving this Agreement and authorizing the
consummation of the Contemplated Transactions.
6.2.3 Any other documents signed by the appropriate
officers and directors of Shareholder requested by Purchaser and necessary or
desirable in order to accomplish the Closing of the Contemplated Transactions.
6.3 BY OR ON BEHALF OF PURCHASER. At the Closing, Purchaser
will cause the following items to be delivered to Seller:
6.3.1 The Closing Payment.
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6.3.2 The Assumption Agreement (with respect to the
Assumed Liabilities).
6.3.3 The Consulting Agreement, together with the Up
Front Payment provided for therein.
6.3.4 An opinion of counsel from the law firm of Wolf
Haldenstein ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP dated as of the Closing Date with respect
to certain matters concerning Purchaser and Guarantor (as defined at the
conclusion to this Agreement.
6.3.5 A certificate executed by the Secretary of
Purchaser (1) identifying those persons who are the officers and directors of
Purchaser as of the Closing Date and (2) certifying resolutions of the board of
directors of Purchaser approving this Agreement and authorizing the consummation
of the Contemplated Transactions.
6.3.6 Any other documents signed by the appropriate
officers and directors of Purchaser requested by Seller and necessary or
desirable in order to accomplish the Closing of the Contemplated Transactions.
6.4 FORM OF CLOSING DOCUMENTS. Each of the closing documents
required to be delivered pursuant to this section 6 shall be in form and
substance satisfactory to the recipient of such document.
7. POST CLOSING COVENANTS. From and after the Closing Date:
7.1 FURTHER ASSURANCES BY SELLER AND SHAREHOLDER. Each of
Seller and Shareholder will, upon request of Purchaser from time to time,
execute and deliver, and use its Best Efforts to cause other persons to execute
and deliver, to Purchaser all such further documents and instruments, and will
do such other acts, as Purchaser may reasonably request more completely to
consummate and make effective the Closing of the Contemplated Transactions.
7.2 FURTHER ASSURANCES BY PURCHASER. Purchaser will, upon
request of Seller or Shareholder from time to time, execute and deliver, and use
its Best Efforts to cause other persons to execute and deliver, to Seller all
such further documents and instruments, and will do such other acts, as Seller
may reasonably request more completely to consummate and make effective the
Closing of the Contemplated Transactions.
7.3 COMMUNICATION WITH CLIENTS. If Purchaser requests,
Seller shall deliver to Purchaser, or directly to Seller's clients, a letter
executed by Seller in form and substance acceptable to Purchaser pursuant to
which Seller shall advise each addressee that the Seller's Business has been
transferred to Purchaser.
8. INDEMNIFICATION.
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8.1 BY SELLER AND SHAREHOLDER. Seller and Shareholder,
jointly and severally, agree to indemnify, defend, release and hold Purchaser,
its affiliates, subsidiaries or related companies, and their officers,
directors, employees, representatives and agents, harmless from and against any
and all damages, losses (including loss of goodwill and damage to reputation),
penalties, interest obligations, Tax liabilities and other liabilities, claims,
judgments, causes of action, deficiencies, costs and expenses (including
reasonable attorneys' fees and other costs) (collectively, "Claims"), asserted
against or incurred or required to be paid by Purchaser or any other indemnified
person on account of or incident or pursuant to: (1) breach of any
representation, warranty, covenant or agreement made by Seller or Shareholder in
this Agreement or in any Contract or document delivered pursuant to or in
connection with this Agreement; (2) the operation of Seller's business or the
ownership, maintenance, use or operation of Seller's assets prior to the
Closing; (3) the failure of Seller or Purchaser to comply with applicable bulk
transfer laws, to the extent such failure causes Purchaser to be liable for
liabilities of Seller other than the liabilities which Purchaser specifically
assumes pursuant to this Agreement; and (4) any and all lawsuits against Seller
or involving any of the assets of Seller which are based on a cause of action
arising before the Closing Date.
8.2 BY PURCHASER. Purchaser agrees to indemnify, defend,
release and hold Shareholder, Seller and Seller's officers, directors,
employees, representatives and agents harmless from and against any and all
Claims asserted against, incurred or required to be paid by Seller or any other
indemnified person on account of or incident to: (1) breach of any
representation, warranty, covenant or agreement made by Purchaser in this
Agreement or in any Contract or document delivered pursuant to or in connection
with this Agreement; (2) the business or operations of Purchaser before, at or
after the date of this Agreement; and (3) the ownership, maintenance, use or
operation of the Purchased Assets after the Closing.
8.3 INDEMNIFICATION PROCEDURE.
8.3.1 NOTICE. With respect to any matter for which
indemnification is claimed pursuant to section 8.1, the indemnified person(s)
will notify Seller and Shareholder in writing promptly after becoming aware of
such matter. With respect to any matter for which indemnification is claimed
pursuant to section 8.2, the indemnified person(s) will notify Purchaser in
writing promptly after becoming aware of such matter. A failure or delay to
promptly notify an indemnifying person of a Claim will only relieve such person
of its obligation pursuant to this section 8 to the extent, if at all, that such
person is prejudiced by reason of such failure or delay.
8.3.2 DEFENSE OF CLAIM. Promptly after receipt of any
notice pursuant to section 8.3.1, the indemnifying person(s) shall defend,
contest, settle, compromise or otherwise protect the indemnified person(s)
against any such Claim at its (their) own cost and expense. Each indemnified
person will have the right, but not the obligation, to participate, at its own
expense, in the defense by counsel of its own choosing; provided, however, that
the indemnifying person will be entitled to control the defense unless the
indemnified person has relieved the indemnifying person in writing from
liability with respect to the particular matter. The indemnified person shall
reasonably cooperate with the indemnifying person's requests, and at the
indemnifying person's expense (including, but not limited to, indemnifying
person's
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paying or reimbursing the indemnified person's reasonable attorneys' fees and
investigation expenses), concerning the defense of the Claim.
8.3.3 FAILURE TO DEFEND. If the indemnifying person does
not timely defend, contest or otherwise protect against a Claim after receipt of
the required notice, the indemnified person will have the right, but not the
obligation, to defend, contest or otherwise protect against the same, make any
compromise or settlement thereof, and recover the entire cost thereof from the
indemnifying person, including, without limitation, reasonable attorneys' fees,
disbursements and all amounts paid as a result of such suit, action,
investigation and Claim.
8.4 RIGHT OF SET-OFF. Purchaser may, in addition to any
other remedy available to Purchaser at law or in equity, withhold and set-off
against any and all amounts payable to Seller and/or Shareholder with respect to
the Deferred Payment and/or the Consulting Agreement any amounts for which
Purchaser is due indemnification pursuant to this Agreement. Any claim by
Purchaser for such a set off shall be made in good faith, and Purchaser shall
not set off more than the amount reasonably claimed. Purchaser shall not assert
a right of set off pursuant to this section 8.4 unless Purchaser shall have
previously (1) given the notice required pursuant to section 8.3 with respect to
the indemnification claim at issue and (2) afforded the indemnifying person(s)
an opportunity to satisfy or compromise such indemnification claim or otherwise
cure the breach associated therewith.
8.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Notwithstanding anything in this Agreement to the contrary, the representations
and warranties of the parties contained in this Agreement shall survive the
Closing for a period of two (2) years only.
9. ATTORNEYS' FEES. If any party resorts to legal action to enforce any
of its rights pursuant to this Agreement, the prevailing party will
be entitled to recover its costs and expenses associated with such
legal action including, but not limited to, court costs and
reasonable attorneys' fees at trial or appeal.
10. MISCELLANEOUS.
10.1 NOTICES. Any notice or other communication given or made
pursuant to this Agreement must be in writing and shall be delivered to the
party to whom intended at the address set forth above (or at such other address
as such party may designate by proper notice) by personal delivery, by
telecopier, by nationally recognized courier (Federal Express, Express Mail,
DHL, etc.) or by certified or registered mail, postage prepaid, and shall be
deemed given when personally delivered or sent by telecopier or two (2) business
days after deposit with a courier or five (5) business days after mailing.
Copies of all notices shall be given to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Wolf Haldenstein ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may be designated by Purchaser from time to time and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may be designated by Seller (on behalf or Seller and
Shareholder) from time to time.
10.2 ENTIRE AGREEMENT. This Agreement represents the entire
agreement among the parties regarding the subject matter hereof and supersedes
in all respects any and all prior oral or written agreements or understandings
among them pertaining to the subject matter of this Agreement (including, but
not limited to, that certain letter of understanding dated March 26, 2001 and
that certain Confidentiality Agreement between Purchaser and Summit (on behalf
of Seller) executed on or about January 12, 2001). There are no representations,
warranties or covenants among the parties with respect to the subject matter of
this Agreement, except as set forth in this Agreement. This Agreement cannot be
modified or terminated, nor may any of its provisions be waived, except by a
written instrument signed by the party(ies) against which enforcement is sought.
Any waiver by any party of the strict performance of any of the terms,
conditions and provisions of this Agreement shall not be construed as a waiver
thereof for the future, but shall be considered a waiver only in the particular
instance, for the particular purpose, and at the time when and for which it is
given.
10.3 GOVERNING LAW. This Agreement has been made and entered
into in the State of New York and shall be governed by and construed and
enforced in accordance with the internal substantive laws of the State of New
York.
10.4 SUCCESSORS; BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of the respective parties, their
successors, assigns, heirs, legatees, executors, administrators and legal
representatives ("Successors") and any Successor shall be deemed a party to this
Agreement upon such Successor's receipt of any interest in this Agreement.
Whenever a party is referred to in this Agreement, such reference shall include
reference to such party's Successors.
10.5 CAPTIONS. Headings contained in this Agreement have been
inserted for reference purposes only and shall not be considered part of this
Agreement in construing this Agreement.
10.6 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all of
which together shall be
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deemed to be one and the same instrument. This Agreement shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to each of the other parties.
10.7 SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement.
10.8 TERMINOLOGY. Unless the context clearly indicates
otherwise, terms used in this Agreement in the masculine include the feminine
and the neuter, terms used in the singular include the plural and terms used in
the plural include the singular.
IN WITNESS WHEREOF, this Agreement has been executed by each of the
parties as of the date stated at the beginning of this Agreement.
DF ACQUISITION CORP. DELTAFORCE PERSONNEL SERVICES, INC.
By:_________________________________ By:________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III, President Name:
Title:
5B TECHNOLOGIES CORPORATION
By:_________________________________
Name:
Title:
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GUARANTY BY THE SUPPORTING CAST, INC.
The undersigned, THE SUPPORTING CAST, INC. ("Guarantor"), a New York corporation
and the sole shareholder of Purchaser, hereby guarantees to Seller the full and
prompt payment and performance of Purchaser's obligations with respect to (1)
the Deferred Payment provided in section 3.2.2, (2) the indemnification
obligations of Purchaser provided in section 8.2, and (3) the obligation of
Purchaser to turn over Seller's accounts receivable as provided in sections
2.3.4 and 2.4 (the "Accounts Receivable Obligation"). Except as provided in the
following paragraph, the obligations of Guarantor under this guaranty shall be
absolute and unconditional and shall remain in full force and effect until every
payment, obligation or liability guaranteed hereunder shall have been fully and
finally paid and performed. Guarantor further guarantees that all payments made
by Purchaser with respect to any liabilities hereby guaranteed by Guarantor
will, when made, be final and agrees that if any such payment is recovered from
or repaid by Seller in whole or in part in any bankruptcy, insolvency or similar
proceeding instituted by or against Purchaser (a "Bankruptcy Proceeding"), this
guaranty shall continue to be fully applicable to such liabilities to the same
extent as though the payment so recovered or repaid had never been originally
made on such liabilities. The obligations of Guarantor under this guaranty shall
not be affected, modified or impaired upon the happening from time to time of
any amendment or modification of this Agreement, whether or not with notice to,
or consent of, Guarantor.
In the event that Purchaser (1) is the subject of a Bankruptcy Proceeding or (2)
ceases to operate the Business, and, in any event with respect to the Accounts
Receivable Obligation, then Seller shall have the right to proceed first and
directly against Guarantor under this guaranty without proceeding against or
exhausting any other remedies which Seller may have and without resorting to any
other security held by Seller. In all other events of an alleged default by
Purchaser with respect to a guaranteed obligation, Seller shall be obligated to
obtain a judgment against Purchaser which remains unsatisfied after ten (10)
business days before proceeding against Guarantor. Guarantor hereby expressly
waives, to the extent permitted by law, demand, presentment, protest, and notice
of the acceptance of this guaranty and of any extensions granted or other action
taken in reliance hereon and all other demands and notices of any description in
connection with this guaranty, the liabilities hereunder or otherwise. No delay
or omission in exercising any right hereunder shall operate as a waiver of such
right or any other right.
This guaranty is entered into by Guarantor for the benefit of Seller and
Shareholder, and their respective successors and assigns, all of whom shall be
entitled to enforce performance and observance of this guaranty. Section 9 of
this Agreement shall apply with equal force and effect as between Guarantor and
Seller with respect to this guaranty.
THE SUPPORTING CAST, INC.
By:_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III, President
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EXHIBIT LIST
2.3 Additional Excluded Assets.
3.3.2 Office Space.
3.4 Allocation of Purchase Price.
4.1.1A Seller's Qualifications.
4.1.1B Seller's Certificate of Incorporation and By-Laws.
4.1.2 Shareholder's Articles of Incorporation and By-Laws.
4.10 Tangible Assets.
4.11 Regulatory Compliance.
4.12.1 Real Property Leases.
4.12.2 Personal Property Leases.
4.12.3 Intangible Property.
4.12.4 Miscellaneous Contracts.
4.12.5 Permits.
4.12.6 Employees.
4.12.7 Employment Agreements.
4.12.8 Client Contracts.
4.12.9 Insurance.
4.12.10 License Agreements.
4.12.11 Debt.
4.12.12 Interested Transactions.
4.12.13 Vehicles.
4.12.14 Banking Matters.
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4.12.15 Consents.
4.15 No Material Adverse Changes in Business or Financial
Condition.
4.16 Certain Business or Financial Transactions.
4.17 Interested Transactions
4.22 Tax Compliance/Audits.
4.23 Pending or Threatened Litigations or Investigations.
4.24 Clients.
4.25.5 Benefit Plans.
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