EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
RETURN ON INVESTMENT CORPORATION,
TECTONIC SOLUTIONS, INC.
BBN ACQUISITION, INC.
AND
CERTAIN SHAREHOLDERS OF BBN ACQUISITION, INC.
DATED AS OF OCTOBER 29, 2003
TABLE OF CONTENTS
ARTICLE I THE MERGER.......................................................1
1.1 The Merger............................................................1
1.2 Closing...............................................................1
1.3 Effective Time........................................................1
1.4 Effects of the Merger.................................................2
1.5 Articles of Incorporation; Bylaws.....................................2
1.6 Directors; Officers...................................................2
1.7 Consideration.........................................................2
1.8 Effect on Capital Stock...............................................2
1.9 Exchange of Certificates..............................................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PRINCIPAL
SHAREHOLDERS.................................................................3
2.1 Organization and Standing.............................................3
2.2 Authority; Noncontravention; and Corporate Power......................4
2.3 Consents and Approvals................................................4
2.4 Capital Structure.....................................................4
2.5 Financial Statements..................................................5
2.6 Real Property; Other Assets...........................................5
2.7 Software..............................................................6
2.8 Intellectual Property.................................................7
2.9 No Infringement.......................................................8
2.10 Material Contracts....................................................9
2.11 Litigation...........................................................10
2.12 Compliance with Applicable Laws......................................10
2.13 Environmental Laws...................................................10
2.14 Taxes................................................................10
2.15 Benefit Plans........................................................11
2.16 Labor Matters........................................................14
2.17 Brokers..............................................................14
2.18 Insurance............................................................14
2.19 Business Relationships...............................................14
2.20 Related Party Transactions...........................................15
2.21 Disclosure...........................................................15
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE MERGER
SUB ........................................................................15
3.1 Organization and Standing............................................16
3.2 Authority; Noncontravention; and Corporate Power.....................16
3.3 Consents and Approvals...............................................16
3.4 Purchaser Shares.....................................................16
3.5 SEC Filings; Purchaser Financial Statements..........................17
3.6 Purchaser Capitalization.............................................17
3.7 Merger Sub Capitalization............................................17
3.8 Litigation...........................................................17
3.9 No Material Adverse Change...........................................17
3.10 Brokers' and Finders' Fees...........................................18
3.11 Disclosure...........................................................18
ARTICLE IV CONDUCT OF BUSINESS OF COMPANY................................18
4.1 Conduct of Business of the Company...................................18
4.2 No Solicitation......................................................19
i
ARTICLE V ADDITIONAL COVENANTS............................................20
5.1 Access to Information, Confidentiality...............................20
5.2 Reasonable Best Efforts..............................................20
5.3 Public Announcements.................................................21
5.4 Non-Competition Agreements...........................................21
5.5 Shareholder Approval; Provision of Information.......................21
5.6 Conversion of Warrants...............................................21
5.7 Conversion of Options...............................................21
ARTICLE VI CONDITIONS PRECEDENT..........................................21
6.1 Conditions to Each Party's Obligation to Effect the Merger...........21
6.2 Conditions to Obligations of the Purchaser...........................22
6.3 Conditions to Obligation of the Company..............................22
ARTICLE VII INDEMNIFICATION...............................................23
7.1 By the Principal Shareholders for Breaches by the Company............23
7.2 By a Principal Shareholder for Breaches by such Principal
Shareholder .......................................................24
7.3 By Purchaser.........................................................24
7.4 Defense of Third Party Claims........................................24
7.5 Payment; Arbitration.................................................25
7.6 Survival of Representations and Warranties...........................25
7.7 Limitation of Principal Shareholder Liability........................25
7.8 Satisfaction of Indemnification Claims Against Principal
Shareholders ......................................................25
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER.............................26
8.1 Termination..........................................................26
8.2 Effect of Termination................................................27
8.3 Amendment............................................................27
8.4 Extension; Waiver....................................................27
8.5 Procedure for Termination, Amendment, Extension or Waiver............27
ARTICLE IX GENERAL PROVISIONS............................................27
9.1 [Reserved]...........................................................27
9.2 Fees and Expenses....................................................27
9.3 Definitions..........................................................27
9.4 Notices..............................................................29
9.5 Interpretation.......................................................30
9.6 Entire Agreement; Third-Party Beneficiaries..........................30
9.7 Governing Law........................................................30
9.8 Assignment...........................................................30
9.9 Severability.........................................................30
9.10 Counterparts.........................................................31
EXHIBIT A Equity Holders
EXHIBIT B Principals
EXHIBIT C Opinion Letter from Company Counsel
EXHIBIT D Shareholder Letter of Transmittal and Investor
Representation Letter
EXHIBIT E Form of Non-Competition Agreement
ii
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of October 29, 2003 (this
"AGREEMENT"), is made and entered into by and among Return On Investment
Corporation, a Delaware corporation ("PURCHASER"), Tectonic Solutions, Inc., a
Georgia corporation and a wholly owned subsidiary of Purchaser (the "MERGER
SUB"), BBN Acquisition, Inc., a North Carolina corporation (the "COMPANY")
▇▇▇▇▇▇▇ ▇▇▇▇, an individual resident of the State of North Carolina ("▇▇▇▇"),
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual resident of the State of North Carolina
("▇▇▇▇▇▇"), and ▇▇▇▇ ▇▇▇▇▇▇▇, an individual resident of the State of Georgia
("▇▇▇▇▇▇▇" and collectively with ▇▇▇▇ and ▇▇▇▇▇▇, the "PRINCIPAL Shareholders").
Capitalized terms as used herein shall have the meaning set forth in Section 9.3
below.
RECITALS:
WHEREAS, the respective Boards of Directors of Purchaser, Merger Sub and
the Company have determined that it would be advisable and in the best interests
of their respective corporations and their respective stockholders for Purchaser
to acquire Company, by means of a merger of the Company with and into Merger Sub
(the "MERGER"), on the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, the parties desire to make certain representations, warranties and
covenants in connection with the Merger and to prescribe various conditions to
the consummation of the Merger; and
WHEREAS, the parties intend for the transaction contemplated by this
Agreement to constitute a tax-free reorganization under Section 368 of the
Internal Revenue Code (the "CODE").
NOW, THEREFORE, in consideration of the representations, warranties and
covenants contained in this Agreement, the parties hereto hereby agree as
follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. On the terms and subject to the conditions set forth in
this Agreement, and in accordance with the North Carolina Business Corporation
Act (the "NCBCA") and the Georgia Business Corporation Code (the "GBCC"), the
Merger shall be effected and the Company shall be merged with and into the
Merger Sub at the Effective Time (as defined in Section 1.3). At the Effective
Time, the separate existence of the Company shall cease and Merger Sub shall
continue as the surviving corporation (sometimes hereinafter referred to as the
"SURVIVING CORPORATION").
1.2 CLOSING. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Article
VII, and subject to the satisfaction or waiver of all of the conditions set
forth in Article VI, the closing of the Merger (the "CLOSING") will take place
at 10:00 a.m. on the second business day (the "CLOSING DATE") following
satisfaction or waiver of all of the conditions set forth in Article VI, other
than those conditions that by their nature are to be satisfied at the Closing,
but subject to the fulfillment or waiver of those conditions, at the offices of
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, unless another date, time or place is agreed to in writing by
the parties.
1.3 EFFECTIVE TIME. The Parties shall file with the Secretary of State of
the State of North Carolina (the "NORTH CAROLINA SECRETARY OF STATE") and the
Secretary of State of the State of Georgia
on the Closing Date (or on such other date as Purchaser and Company may agree)
articles of merger (the "ARTICLES OF MERGER") and any other appropriate
documents, and make all other filings or recordings required under the NCBCA or
the GBCC in connection with the Merger. The Merger shall become effective upon
the filing of the Articles of Merger with the North Carolina Secretary of State,
or at such later time as is specified in the Articles of Merger (the "EFFECTIVE
TIME").
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set forth in
the applicable provisions of the NCBCA and the GBCC. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
property of Merger Sub and Company shall vest in the Surviving Corporation, and
all liabilities of Merger Sub and Company shall become the liabilities of the
Surviving Corporation.
1.5 ARTICLES OF INCORPORATION; BYLAWS. At the Effective Time, (a) the
articles of incorporation of the Merger Sub as in effect at the Effective Time
shall, from and after the Effective Time, be the articles of incorporation of
the Surviving Corporation until thereafter changed or amended in accordance with
the provisions thereof and applicable law, and (b) the bylaws of the Merger Sub
as in effect at the Effective Time shall, from and after the Effective Time, be
the bylaws of the Surviving Corporation until thereafter changed or amended in
accordance with the provisions thereof and applicable law.
1.6 DIRECTORS; OFFICERS. From and after the Effective Time, the directors
and officers of Merger Sub shall be the directors and officers of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
1.7 CONSIDERATION. In consideration of all the issued and outstanding
shares of common stock, $0.001 par value per share, of the Company (the "COMPANY
COMMON STOCK") at the Effective Time (the "SHARES"), the Purchaser shall issue
750,000 shares (such shares, plus the Fractional Payments payable pursuant to
Section 1.9, the "MERGER CONSIDERATION") of Purchaser common stock, $0.01 par
value per share (the "PURCHASER COMMON STOCK"). The Purchaser Common Stock
portion of the Merger Consideration shall be valued an a per share basis at the
average closing price of the Purchaser's common stock on the Over-the-Counter
Bulletin Board for the sixty trading days ending on the trading day prior to the
Closing Date.
1.8 EFFECT ON CAPITAL STOCK. Subject to the terms and conditions of this
Agreement, as of the Effective Time, by virtue of the Merger and without any
action on the part of Merger Sub, the Company or the holder of any Shares, the
following shall occur:
(a) Each share of Company Common Stock which are held as of the Effective
Time, shall be converted into the right to receive that fraction of a share of
Purchaser Common Stock equal to the Applicable Fraction (as defined below).
(b) Each share of capital stock of the Company that is held in the treasury
of the Company, if any, shall be cancelled and retired and cease to exist and no
consideration shall be issued in exchange therefor.
(c) To the extent any options to purchase the common stock of Company
remain exercisable immediately prior to the Effective Time, such options shall,
in connection with the Merger, be terminated and shall not be assumed by
Purchaser.
(d) For purposes of this Agreement, the "APPLICABLE FRACTION" shall be the
number equal to the fraction: (A) having a numerator equal to 750,000 and (B)
having a denominator equal to the
aggregate number of shares of Company Common Stock outstanding immediately prior
to the Effective Time.
1.9 EXCHANGE OF CERTIFICATES.
(a) At the Effective Time, upon surrender of a stock certificate
representing Company Stock (a "COMPANY STOCK CERTIFICATE") to Purchaser for
exchange, Purchaser shall deliver to the holder of such Company Stock
Certificate a certificate representing the number of shares of Purchaser Common
Stock that such holder has the right to receive pursuant to Section 1.8;
PROVIDED, HOWEVER, that all certificates representing Purchaser Common Stock to
be delivered to the holder of a Company Stock Certificate shall, in each case,
represent only whole shares of Purchaser Common Stock, and in lieu of any
fractional shares to which such holder would otherwise be entitled, the holder
of such Company Stock Certificate shall be paid in cash an amount equal to the
product of (i) the closing price of the Purchaser Common Stock on the
over-the-counter bulletin board on the last business day immediately preceding
the Closing Date, multiplied by (ii) the fraction of a share of Purchaser Common
Stock that would otherwise be deliverable to such holder (such product, the
"FRACTIONAL PAYMENT").
(b) All Company Stock Certificates so surrendered shall be cancelled. Until
surrendered as contemplated by this Section 1.9, each Company Stock Certificate
shall be deemed, from and after the Effective Time, to represent only the right
to receive the Merger Consideration in accordance with this Agreement. If any
Company Stock Certificate shall have been lost, stolen or destroyed, the owner
thereof shall, in lieu of surrendering such Company Stock Certificate, provide
an appropriate affidavit to Purchaser as indemnity against any claim that may be
made against Purchaser or the Surviving Corporation with respect to such Company
Stock Certificate.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PRINCIPAL SHAREHOLDERS
The Company and the Principal Shareholders, jointly and severally,
represent and warrant to the Purchaser and the Merger Sub that the statements
contained in this Article II are true, correct and complete as of the date
hereof, and will be true, correct and complete as of the Closing Date (unless
specifically made as of another date), except as specified to the contrary in
the corresponding paragraph of the disclosure schedule prepared by the Company
accompanying this Agreement (the "COMPANY DISCLOSURE SCHEDULE") which is made a
part hereof. The Company Disclosure Schedule will be arranged in paragraphs
corresponding to the letter and numbered paragraphs contained in this Article
II.
2.1 ORGANIZATION AND STANDING. Each of Company and each Subsidiary of
Company is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated and has the
requisite corporate power and authority to carry on its business as now being
conducted. Each of the Company and each Subsidiary of the Company is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect (as defined in Section 9.3(h)) on the Company. The Company has
delivered to the Purchaser or its representatives true, complete and correct
copies of the articles of incorporation and bylaws or comparable governing
documents of the Company and each Subsidiary of the Company, in each case as
amended to the date of this Agreement. A true,
correct and complete list of all Subsidiaries of Company, together with the
jurisdiction of incorporation of each such Subsidiary and the percentage of each
such Subsidiary's capital stock owned by the Company or another Subsidiary, is
set forth in the Company Disclosure Schedule.
2.2 AUTHORITY; NONCONTRAVENTION; AND CORPORATE POWER. The Company has the
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and the Principal Shareholders and,
assuming that this Agreement constitutes a valid and binding obligation of
Purchaser and Merger Sub, constitutes a valid and binding obligation of Company
and the Principal Shareholders, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and to general principles of equity. None of the
Company or its Subsidiaries is in violation of its respective articles of
incorporation (or the comparable governing documents) or bylaws. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the provisions hereof will
not, (i) conflict with any of the provisions of the articles of incorporation or
bylaws of the Company or the comparable governing documents of any Subsidiary of
the Company, in each case as amended to the date of this Agreement, (ii) subject
to the governmental filings and other matters referred to in the next section,
conflict with, result in a breach of or default (with or without notice or lapse
of time, or both) under, or give rise to a material obligation, a right of
termination, cancellation or acceleration of any obligation or a loss of a
material benefit under, or require the consent of any person under, any
indenture or other agreement, permit, concession, franchise, license or similar
instrument or undertaking to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any of their
respective assets is bound or affected, or (iii) subject to the governmental
filings and other matters referred to in Section 2.3, contravene any domestic or
foreign law, rule or regulation or any order, writ, judgment, injunction,
decree, determination or award currently in effect and applicable to the
Company, which in the case of clauses (ii) and (iii) above, could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
2.3 CONSENTS AND APPROVALS. No consent, approval or authorization of, or
declaration or filing with, or notice to, any domestic or foreign court,
governmental agency or regulatory authority (each a "GOVERNMENTAL ENTITY") or
any other third party which has not been received or made (or has been received
or made but is not otherwise in full force and effect) is required by or with
respect to the Company or any of its Subsidiaries (as the case may be) in
connection with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby, except
for (i) the approval of the Merger by the Company Shareholders, (ii) the filing
of the Articles of Merger with the North Carolina Secretary of State and with
the Georgia Secretary of State and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business,
and (iii) such consents, approvals, authorizations, filings or notices as are
specified in the Company Disclosure Schedule. The Company Shareholders and the
directors of the Company are the only Persons entitled to approve the Merger
under the NCBCA and the Company's articles of incorporation or bylaws.
2.4 CAPITAL STRUCTURE. The capitalization of the Company as of the date
hereof, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities exercisable or exchangeable for, or convertible
into, any shares of capital stock is set forth on SCHEDULE 2.4 of the Company
Disclosure Schedule. All of such outstanding shares of capital stock have been,
or upon issuance, will be, validly issued, fully paid and
non-assessable. Except as set forth on SCHEDULE 2.4, no shares of capital stock
of the Company are subject to preemptive rights or any other similar rights or
any liens or encumbrances created by any agreement to which the Company is a
party. Except as set forth on SCHEDULE 2.4, there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exercisable
or exchangeable for, any shares of capital stock of the Company or any of its
Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is
or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, nor are any such issuances or arrangements
contemplated. The Company has furnished to the Purchaser or its representatives
true and correct copies of all instruments and agreements governing securities
convertible into or exercisable or exchangeable for capital stock of the
Company. EXHIBIT A sets forth a true, correct and complete list of all Persons
that hold equity in the Company, or any instrument convertible into equity as of
the Closing Date, and sets forth the state of residence for each such Person.
Company shall deliver an updated EXHIBIT A at or prior to the Closing Date.
2.5 FINANCIAL STATEMENTS. Included in SCHEDULE 2.5 of the Company
Disclosure Schedule are true and complete copies of the financial statements of
the Company consisting of an unaudited balance sheet of the Company as of
September 30, 2003 (the "COMPANY INTERIM BALANCE SHEET"), and the related
unaudited statements of income, changes in stockholders' equity and cash flows
for the period then ended (together with the Company Interim Balance Sheet, the
"COMPANY FINANCIAL STATEMENTS"). Each of the Company Financial Statements have
been prepared in accordance with generally accepted United States accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved and (ii) fairly present the consolidated financial position of the
Company as of the respective dates thereof and the consolidated results of
operations and cash flows for the periods indicated, except that the Company
Financial Statements do not contain footnotes and lack other presentation items
and are subject to audit adjustments. The books and records of the Company have
been and are being maintained in accordance with GAAP and reflect only actual
transactions.
2.6 REAL PROPERTY; OTHER ASSETS.
(a) The Company does not own, and has never owned, any real property.
(b) The Company or one of its Subsidiaries has good and marketable fee
simple title to or a valid leasehold interest in each tangible asset reflected
in the latest balance sheet of the Company (other than any such other asset
disposed of or consumed in the ordinary course of business) free and clear of
all Liens except (A) those reflected or reserved against in the latest balance
sheet of the Company, (B) taxes and general and special assessments not in
default and payable without penalty and interest, (C) those Liens set forth in
the Company Disclosure Schedule, and (D) such other Liens and other
imperfections of title, if any, as do not detract from the value or materially
interfere with the present use of the property affected thereby.
(c) The Company Disclosure Schedule sets forth a true and complete list,
and the Company has heretofore delivered to the Purchaser or its representatives
true, correct and complete copies of all leases, subleases and other agreements
(the "REAL PROPERTY LEASES") under which the Company or any of its Subsidiaries
uses or occupies or has the right to use or occupy, now or in the future, real
property or facilities (the "LEASED REAL Property"), including all
modifications, amendments and supplements thereto. Except where the failure
could not reasonably be expected to have, individually, a Material Adverse
Effect on the Company: (A) the Company or one of its Subsidiaries has a valid
and subsisting leasehold interest in each parcel of Leased Real Property free
and clear of all Liens and each Real Property Lease is in full force and effect
in all material respects; (B) all rent and other sums and charges payable by the
Company or its Subsidiaries as tenants thereunder are current in all respects;
(C) no
termination event or condition or uncured default on the part of the Company or
any such Subsidiary or, to the Company's Knowledge, the landlord, exists under
any Real Property Lease; (D) to the Company's Knowledge, the Company or one of
its Subsidiaries is the sole undisputed lessee of each Leased Real Property, is
in actual possession thereof and is entitled to quiet enjoyment thereof in
accordance with the terms of the applicable Real Property Lease; and (E) no
consent or approval from the lessor under the Real Property Leases is required
for the consummation by the Company of the transactions contemplated hereby.
(d) The Company's, or any of its Subsidiaries', current use of the Leased
Real Property and the improvements and buildings located thereon in connection
with the operation of the Company's, or any of its Subsidiaries', business is in
compliance in all material respects and substantially conforms with all
applicable zoning and building regulation requirements.
2.7 SOFTWARE.
(a) SCHEDULE 2.7(A)(1) of the Company Disclosure Schedule sets forth under
the caption "OWNED SOFTWARE" a true, correct and complete list (other than
"off-the-shelf" computer programs that are validly and properly licensed under a
shrink-wrap or click-wrap license) of all material computer programs (source
code or object code) which were developed for or on behalf of, or have been
purchased by, the Company or any Subsidiary of the Company and which are
currently used internally by the Company or which are being distributed by the
Company or any of its Subsidiaries to its customers and all material computer
programs under development by the Company or its Subsidiaries but not currently
distributed (collectively, the "OWNED Software"), and SCHEDULE 2.7(A)(2) of the
Company Disclosure Schedule sets forth under the caption "LICENSED SOFTWARE" a
true, correct and complete list (other than "off-the-shelf" computer programs
that are validly and properly licensed under a shrink-wrap or click-wrap
license) of all material computer programs (source code or object code) licensed
to the Company or any Subsidiary of the Company by another person which are
currently used internally by the Company or which are being distributed by the
Company or any of its Subsidiaries to its customers, whether as integrated or
bundled with any of the Company's or its Subsidiaries' computer programs or as a
separate stand-alone product (specifically excluding any off-the-shelf computer
program that is validly and properly licensed under a shrink-wrap or click-wrap
license) (collectively, the "LICENSED SOFTWARE" and, together with the Owned
Software, the "SOFTWARE"). Software that is being distributed by the Company or
any of its subsidiaries to it customers is referred to herein as the "MARKETED
SOFTWARE."
(b) The Company, directly or through its Subsidiaries, has good, marketable
and exclusive title to, and the valid and enforceable power and unqualified
right to sell, license, lease, transfer, use, create derivative works of, or
otherwise exploit, all versions and releases of the Owned Software and all
copyrights thereof, free and clear of all Liens. The Company, directly or
through its Subsidiaries, is in actual possession of the source code and object
code for each computer program included in the Owned Software, and the Company,
directly or through its Subsidiaries, is in possession of all other
documentation, including without limitation all related engineering
specifications, program flow charts, installation and user manuals and know-how
necessary for the effective use of the Owned Software as currently used in the
Company's business or as offered or represented to the Company's customers or
potential customers. The Company, directly or through its Subsidiaries, is in
actual possession of the object code and user manuals for each computer program
included in the Licensed Software. The Software constitutes all of the material
computer programs necessary to conduct the Company's business as now conducted,
and includes all of the material computer programs licensed or offered for
license to the Company's customers and potential customers or otherwise used in
the development, marketing, licensing, sale or support of the products and the
services presently offered by the Company (other than "off-the-shelf" computer
programs). No person other than the Company and its Subsidiaries has any right
or interest of any kind or nature in or with respect to the Owned Software or
any portion thereof or any rights to sell, license, lease, transfer, use or
otherwise exploit the Owned Software or any portion thereof.
(c) SCHEDULE 2.7(C) of the Company Disclosure Schedule sets forth a true,
correct and complete list of (A) all persons other than the Company and its
Subsidiaries that have been provided with the source code or have a right to be
provided with the source code (including any such right that may arise after the
occurrence of any specified event or circumstance, either with or without the
giving of notice or passage of time or both) for any of the Owned Software, and
(B) all source code escrow agreements relating to any of the Owned Software
(setting forth as to any such escrow agreement the source code subject thereto
and the names of the escrow agent and all other persons who are actual or
potential beneficiaries of such escrow agreement), and identifies with
specificity all agreements and arrangements pursuant to which the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby would entitle any third party or parties to
receive possession of the source code for any of the Owned Software or any
related technical documentation. No person (other than the Company, its
Subsidiaries or their employees and consultants and any person that is a party
to a contract referred to in clause (F) of Section 2.10 that restricts such
person from disclosing any information concerning such source code) is in
possession of, or has or has had, since the Company acquired it, access to, any
source code for any computer program included in the Owned Software.
(d) There are no known defects in any computer program included in the
Owned Software that would materially and adversely affect the functioning
thereof in accordance with any published specifications therefor or in
accordance with any warranties given with respect thereto. Each computer program
included in the Owned Software is in machine readable form and contains all
current revisions. SCHEDULE 2.7(D) of the Company Disclosure Schedule sets forth
a true, correct and complete list of current claims of defects by customers of
the Company or any of its Subsidiaries under warranties or support and
maintenance agreements with respect to any Marketed Software.
(e) None of the sale, license, lease, transfer, use, reproduction,
distribution, modification or other exploitation by the Company or any
Subsidiary of the Company of any version or release of any computer program
included in the Marketed Software obligates or will obligate the Company or any
Subsidiary of the Company to pay any royalty, fee or other compensation to any
other person.
(f) Neither the Company nor any of its Subsidiaries markets, or has
marketed, and none of them have supported or is obligated to support, any
Licensed Software separate from the Owned Software.
(g) No material agreement, license or other arrangement pertaining to any
of the Software (including, without limitation, any development, distribution,
marketing, user or maintenance agreement, license or arrangement) to which the
Company or any Subsidiary of the Company is a party will terminate or become
terminable by any party thereto as a result of the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby. All licenses covering Licensed Software are of perpetual
duration (subject to provisions allowing the Company to terminate and provisions
allowing the respective licensors to terminate in the event of a breach by the
Company).
2.8 INTELLECTUAL PROPERTY.
(a) SCHEDULE 2.8 of the Company Disclosure Schedule sets forth a true,
correct and complete list (including, to the extent applicable, registration,
application or file numbers) of all patents, and all material copyrights, trade
dress, trademarks, trade names, service marks and domain names currently used by
the Company or any Subsidiary of the Company in connection with the conduct of
the Company's business, and all registrations of or applications for
registration of any of the foregoing, including any
additions thereto or extensions, continuations, renewals or divisions thereof
(setting forth the registration, issue or serial number and a description of the
same). The Purchaser or its representatives has heretofore been furnished with
true, correct and complete copies of each registration or application for
registration covering any of the Intellectual Property (as defined below) or
Software which is registered with, or in respect of which any application for
registration has been filed with, any Governmental Entity.
(b) The Intellectual Property includes all of the material intellectual
property rights owned by or licensed by or to the Company and its Subsidiaries
that are necessary to conduct the Company's business as it is now conducted, and
includes all of the material intellectual property rights owned by or licensed
by or to the Company and its Subsidiaries that are used in the development,
marketing, licensing or support of the Software or are licensed by the Company
to, or offered for license to, the Company's customers or potential customers.
The Company, directly or through its Subsidiaries, has good, marketable and
exclusive title to, and the valid and enforceable power and unqualified right to
use, the Intellectual Property free and clear of all Liens. No person or entity
other than the Company and its Subsidiaries has any right or interest of any
kind or nature in or with respect to the Intellectual Property or any portion
thereof or any rights to use, market or exploit the Intellectual Property or any
portion thereof.
(c) Except as set forth in SCHEDULE 2.8 of the Company Disclosure Schedule,
in each case in which the Company has acquired from any Person ownership of any
Intellectual Property, the Company has obtained a valid and enforceable
assignment sufficient to transfer all rights in such Intellectual Property
(including the right to seek past and future damages with respect to such
Intellectual Property) to the Company.
(d) "INTELLECTUAL PROPERTY" means all patents and all material copyrights,
trade dress, trademarks, trade names, service marks, domain names and other
material intellectual property rights, including without limitation, trade
secrets, processes, formulae, designs and know-how currently used by the Company
or a Subsidiary of the Company in connection with the conduct of the Company's
business.
2.9 NO INFRINGEMENT. Neither the existence nor the sale, license, lease,
transfer, use, reproduction, distribution, modification or other exploitation by
the Company, any Subsidiary of the Company or any of their respective successors
or assigns of any Owned Software or Intellectual Property (and, to the Company's
knowledge, the Licensed Software), as such Software or Intellectual Property, as
the case may be, is or was to be sold, licensed, leased, transferred, used or
otherwise exploited by such persons, does, did or will (A) infringe on any
United States patent, trademark, copyright or other intellectual property right
of any other person, (B) to the Company's Knowledge, constitute a misuse or
misappropriation of any trade secret, know-how, process, proprietary information
or other intellectual property right of any other person or a violation of any
relevant agreement governing the license of the Licensed Software to the Company
or its Subsidiaries, or (C) entitle any other person to any interest therein, or
right to compensation from the Company, any Subsidiary of the Company or any of
their respective successors or assigns, by reason thereof, in each case, except
as could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company. Neither the Company nor any of its
Subsidiaries has received any written complaint, assertion, threat or allegation
or otherwise has notice of any lawsuit, claim, demand, proceeding or
investigation involving matters of the type contemplated by the immediately
preceding sentence or has Knowledge of any facts or circumstances that could
reasonably be expected to give rise to any such lawsuit, claim, demand,
proceeding or investigation. Except as provided in the relevant agreements
governing the license of the Licensed Software to the Company or its
Subsidiaries, there are no restrictions on the ability of the Company, any
Subsidiary of the Company or any of their respective successors or assigns to
sell, license, lease, transfer, use, reproduce, distribute, modify or otherwise
exploit any Software or Intellectual Property.
2.10 MATERIAL CONTRACTS. SCHEDULE 2.10(A) of the Company Disclosure
Schedule sets forth the following contracts to which the Company or any of its
Subsidiaries is a party or by which any of them is bound, true, correct and
complete copies of which have been provided to the Purchaser or its
representatives (collectively, the "MATERIAL CONTRACTS"): (A) contracts with any
current officer, director or employee of the Company or any of its Subsidiaries;
(B) contracts pursuant to which the Company or any of its Subsidiaries licenses
other persons to use any of the Software or has agreed to support, maintain,
upgrade, enhance, modify, port, or consult with respect to any of the Software,
or pursuant to which other persons license the Company or any of its
Subsidiaries to use the Licensed Software; (C) contracts (1) for the sale of any
of the assets of the Company or any of its Subsidiaries, other than contracts
entered into in the ordinary course of business, (2) for the grant to any person
of any preferential rights to purchase any of its assets or (3) for the sale or
transfer of any equity of the Company; (D) contracts by which the Company has
agreed to design, develop, author or create any new custom, or customized
software for any third party; (E) contracts which restrict the Company or any of
its Subsidiaries from competing in any line of business or with any person in
any geographical area or which restrict any other person from competing with the
Company or any of its Subsidiaries in any line of business or in any
geographical area; (F) contracts which restrict the Company or any of its
Subsidiaries from disclosing any information concerning or obtained from any
other person or which restrict any other person from disclosing any information
concerning or obtained from the Company or any of its Subsidiaries; (G)
indentures, credit agreements, security agreements, mortgages, guarantees,
promissory notes and other contracts relating to the borrowing of money; and (H)
all other agreements, contracts or instruments entered into outside of the
ordinary course of business or which are material to the Company. Except as
could not reasonably be expected to have a Material Adverse Effect on the
Company, all of the Material Contracts are in full force and effect as to the
Company and are the legal, valid and binding obligation of the Company and/or
its Subsidiaries, enforceable against them in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally and subject,
as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Neither the Company
nor any of its Subsidiaries is in breach or default (with or without notice or
lapse of time, or both) in any material respect under any Material Contract nor,
to the Knowledge of the Company, is any other party to any Material Contract in
breach or default (with or without notice or lapse of time, or both) thereunder
in any material respect. Neither the Company nor any of its Subsidiaries is a
party to any existing contract, obligation or commitment of any type in any of
the following categories: (1) any sales contract, including any open bid or
quotation, which is of an open-end or blanket nature; (2) contracts for the
purchase of materials, supplies or equipment which have not been entered into in
the ordinary course of business and consistent with past practice or for capital
expenditures in excess of $10,000; (3) contracts with distributors,
manufacturers' representatives or sales agents, except those which are
terminable at the option of the Company or any of its Subsidiaries on 60 days'
notice or less without incurring any liability in excess of $10,000; (4)
contracts under which the Company or any of its Subsidiaries has, except by way
of endorsement of negotiable instruments for collection in the ordinary course
of business and consistent with past practice, become absolutely or contingently
or otherwise liable for (aa) the performance of any other person, firm or
corporation under a contract, or (bb) the whole or any part of the indebtedness
or liabilities of any other person, firm or corporation; (5) powers of attorney
outstanding from the Company or any of it Subsidiaries other than as issued in
the ordinary course of business and consistent with past practice with respect
to customs, insurance, patent, trademark or tax matters, or to agents for
service of process; (6) contracts under which any amount payable by the Company
or any of its Subsidiaries is dependent upon the revenues or profits of the
Company or any of its Subsidiaries (other than employment contracts containing
bonus payment provisions dependent on the Company's or any of its Subsidiaries'
financial performance which are contained in the Company Disclosure Schedule);
(7) contracts with any party for the loan of money or availability of credit to
or from the Company or any of its Subsidiaries (except trade credit extended by
the Company or any of its Subsidiaries to its or their
customers or travel advances to its or their employees in the ordinary course of
business and consistent with past practice); or (8) any hedging, option,
derivative or other similar transaction.
2.11 LITIGATION. There is no legal action, suit, or proceeding of any
nature pending or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries, their properties or any of their officers,
directors or employees, nor, to the Knowledge of the Company, is their any
reasonable basis therefor.
2.12 COMPLIANCE WITH APPLICABLE LAWS. All federal, state, local and foreign
governmental approvals, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights (collectively, "PERMITS") necessary for
each of the Company and its Subsidiaries to own, lease or operate its properties
and assets and to carry on its business as now conducted have been obtained or
made, and there has occurred no material default (with or without notice or
lapse of time or both) under any such Permit. The Company and its Subsidiaries
are in compliance with all applicable statutes, laws, ordinances, rules, orders
and regulations of any Governmental Entity.
2.13 ENVIRONMENTAL LAWS. To the Company's Knowledge: (i) neither the
Company nor any of its Subsidiaries has violated or is in violation of any
Environmental Law (as defined in Section 9.3(d)); (ii) none of the Leased Real
Property (including without limitation soils and surface and ground waters) has
been or are contaminated with any Hazardous Substance (as defined in Section
9.3(e)); (iii) neither the Company nor any of its Subsidiaries is potentially
liable or liable for any off-site contamination; (iv) neither the Company nor
any of its Subsidiaries has any notice of an actual liability, remediation
obligation or reporting duty under any Environmental Law; (v) no assets of the
Company or any of its Subsidiaries are subject to pending or threatened Liens
under any Environmental Law; (vi) the Company and its Subsidiaries have all
Permits required under any Environmental Law ("ENVIRONMENTAL PERMITS"), other
than Environmental Permits where the failure to have such permits could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company; and (vii) the Company and its Subsidiaries are in
compliance with their respective Environmental Permits.
2.14 TAXES.
(a) Each of the Company and each Subsidiary of the Company (and any
affiliated or unitary group of which any such person was a member) has (A)
timely filed all federal, state, local and foreign returns, declarations,
reports, estimates, information returns and other statements of any kind
("RETURNS") required to be filed by or for it in respect of any Taxes (as
defined in the last paragraph of this Section 2.14), the Company has not filed
for an extension to file any Returns that will not have expired prior to the
Closing Date, and has caused such Returns as so filed to be true, correct and
complete in all material respects, (B) established reserves that are reflected
in the Company Financial Statements and that as so reflected are adequate for
the payment of all Taxes with respect to the results of operations of the
Company and its Subsidiaries through the date of such Company Financial
Statements, and (C) timely withheld and paid over to the proper taxing
authorities all Taxes required to be so withheld and paid over through the date
hereof. Each of the Company and each Subsidiary of the Company (and any
affiliated or unitary group of which any such person was a member) has timely
paid all Taxes with respect to any Returns referred to in the immediately
preceding sentence and that became due and payable on or before the date hereof.
(b) There has been no taxable period for which a Return of the Company or
any of its Subsidiaries has been examined on audit by the Internal Revenue
Service (the "IRS") or an applicable state, local or foreign taxing authority
that remains open as of the date hereof, and except for alleged deficiencies
which have been finally and irrevocably resolved, the Company has not received
formal or informal written notification that any deficiency for any Taxes, the
amount of which could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company, has been or will be proposed, asserted or assessed against the
Company or any of its Subsidiaries by any federal, state, local or foreign
taxing authority or court with respect to any period.
(c) Neither the Company nor any of its Subsidiaries has (A) executed or
entered into with the IRS or any other taxing authority any agreement or other
document that continues in force and effect beyond the Effective Time and that
extends or has the effect of extending the period for assessments or collection
of any Taxes, (B) executed or entered into with the IRS or any other taxing
authority any closing agreement or other similar agreement (nor has the Company
or any of its Subsidiaries received any ruling, technical advice memorandum or
similar determination) affecting the determination of Taxes required to be shown
on any Return not yet filed, or (C) requested any extension of time to be
granted to file after the Effective Date any Return required by applicable law
to be filed by it.
(d) Neither the Company nor any of its Subsidiaries has made an election
under Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code
apply to any disposition of a subsection (f) asset (as such term is defined in
Section 341(f)(4) of the Code) owned by the Company or any of its Subsidiaries.
None of the assets of the Company or any of its Subsidiaries is required to be
treated as being owned by any other person pursuant to the "safe harbor" leasing
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954 as formerly
in effect.
(e) Neither the Company nor any of its Subsidiaries is a party to, is bound
by or has any obligation under any tax sharing agreement or similar agreement or
arrangement.
(f) The Company has no pending application with the IRS under Section
481(a) of the Code requesting a change in accounting method or otherwise.
(g) Neither the Company nor any of its Subsidiaries is, or has been, a
United States Real Property Holding Corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(h) Except for the group of which the Company is presently the common
parent, the Company has never been a member of an affiliated group of
corporations, within the meaning of Section 1504 of the Code, and each of the
Company's Subsidiaries has never been a member of an affiliated group of
corporations, within the meaning of Section 1504 of the Code, except where the
Company was the common parent of such affiliated group.
For purposes of this Agreement, "TAXES" shall mean all federal, state,
local, foreign or other jurisdiction taxes including, but without limitation,
income, property, sales, excise, employment, payroll, franchise, withholding and
other taxes, tariffs, charges, fees, levies, imposts, duties, licenses or other
assessments of every kind and description, together with any interest and any
penalties, additions to tax or additional amounts imposed by any taxing
authority.
2.15 BENEFIT PLANS. The Company Disclosure Schedule sets forth a true,
correct and complete list of all the employee benefit plans (as that phrase is
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to for the benefit of any
current or former employee, officer or director of the Company or any of its
Subsidiaries ("COMPANY ERISA PLANS") and any other benefit or compensation plan,
program or arrangement maintained or contributed to for the benefit of any
current or former employee, officer or director of the Company or any of its
Subsidiaries (Company ERISA Plans and such other plans being referred to as
"COMPANY PLANS"). The Company has delivered or made available to the Purchaser
or its representatives a true, correct and complete copy of every document
pursuant to which each Company Plan is established or
operated (including any summary plan descriptions), a written description of any
Company Plan for which there is no written document, and the most recent annual
report, financial statement and actuarial valuation with respect to each Company
Plan, if required to be filed or prepared. Except as specified in the Company
Disclosure Schedule:
(a) No member of the Company Group (as defined below) maintains, or has at
any time established or maintained, or has at any time obligated to make, or
made, contributions to or under any multiemployer plan (as defined in Section
3(37) and Section 4001(a)(3) of ERISA).
(b) None of the Company Plans promises or provides retiree health or life
insurance benefits to any person (other than continuation health coverage
benefits under the Consolidated Omnibus Budget Reconciliation Act).
(c) None of the Company Plans provides for payment of a benefit, the
increase of a benefit amount, the payment of a contingent benefit, the
acceleration of the payment, or the vesting of a benefit by reason of the
execution of this Agreement or the consummation of the transactions contemplated
by this Agreement.
(d) Neither the Company nor any of its Subsidiaries has an obligation to
adopt, or is considering the adoption of, any new Company Plan or the amendment
of an existing Company Plan, except such amendments that are required by law.
(e) The IRS has issued favorable determination letters to the effect that
each Company ERISA Plan intended to be qualified under Code Section 401(a)
qualifies under Code Section 401(a) and that any related trust is exempt from
taxation under Code Section 501(a), and such determination letters remain in
effect and have not been revoked. Copies of the most recent determination
letters and any outstanding requests for a determination letter with respect to
each Company ERISA Plan have been delivered to the Purchaser. No Company ERISA
Plan has been amended since the issuance of its respective determination letter.
The Company ERISA Plans that are tax-qualified retirement plans currently comply
in all material respects with the requirements under Code Section 401(a), other
than changes required by statutes, regulations and rulings for which amendments
are not yet required.
No issue concerning the tax-qualification of any Company ERISA Plan that is
a tax-qualified retirement plan is pending before or, to the Knowledge of the
Company, is threatened by the IRS. Neither the Company nor any of its
Subsidiaries or any other entities which now or in the past constitute a single
employer within the meaning of Code Section 414 (the "COMPANY GROUP") or any
fiduciary of any Company ERISA Plan has done anything that would adversely
affect the qualified status of the Company ERISA Plans or the related trusts.
Any Company ERISA Plan which is required to satisfy Code Section 401(k)(3)
and 401(m)(2) has been tested for compliance with, and has satisfied the
requirements of, Code Section 401(k)(3) and 401(m)(2) for each plan year ending
prior to the Closing Date.
(f) Each Company Plan has been operated in accordance with its terms
(except for those terms which are inconsistent with the changes required by
statutes, regulations, and rulings for which changes are not yet required to be
made, in which case the Company ERISA Plans have been administered in accordance
with the provisions of those statutes, regulations and rulings) and the
requirements of all applicable law, in each case, except as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(g) To the Company's Knowledge, no member of the Company Group (other than
the Company or any of its Subsidiaries) nor any other "disqualified person" or
"party in interest" (as defined in Code Section 4975 and ERISA Section 3(14),
respectively) with respect to the Company Plans, has engaged in any "prohibited
transaction" (as defined in Code Section 4975 or ERISA Section 406). All members
of the Company Group and all "fiduciaries" (as defined in ERISA Section 3(21))
with respect to the Company Plans, including any members of Company Group which
are fiduciaries as to a Company ERISA Plan, have complied in all material
respects with the requirements of ERISA Section 404. To the Company's knowledge,
no member of the Company Group (other than the Company or any of its
Subsidiaries) and no party in interest or disqualified person with respect to
the Company Plans has taken or omitted any action which could lead to the
imposition of an excise tax under the Code or a fine under ERISA. To the
Company's knowledge, no member of the Company Group (other than the Company or
any of its Subsidiaries) is subject to any material liability, tax or penalty
whatsoever to any person whomsoever as a result of any member of the Company
Group engaging in a prohibited transaction under ERISA or the Code, and the
Company Group has no knowledge of any circumstances which reasonably might
result in any such material liability, tax or penalty as a result of a breach of
fiduciary duty under ERISA.
(h) To the Company's Knowledge, no member of the Company Group (other than
the Company or any of its Subsidiaries) maintains or has maintained an "employee
benefit pension plan" within the meaning of ERISA Section 3(2) that is or was
subject to Title IV of ERISA or has incurred any direct or indirect liability
under, arising out of or by operation of Title IV of ERISA in connection with
the termination of, or withdrawal from, any the Company ERISA Plan or other
retirement plan or arrangement, and no fact or event exists that could
reasonably be expected to give rise to any such liability.
(i) To the Company's Knowledge, each member of the Company Group (other
than the Company or any of its Subsidiaries) has made full and timely payment
of, or has accrued pending full and timely payment, all amounts which are
required under the terms of each of the Company Plans and in accordance with
applicable laws to be paid as a contribution to each Company Plan and no excise
taxes are assessable as a result of any nondeductible or other contributions
made or not made to a Company Plan. The assets of all Company Plans which are
required under applicable laws to be held in trust are in fact held in trust,
and the assets of each such Company Plan equal or exceed the liabilities of each
such plan. The liabilities of each other Company Plan are properly and
accurately reported on the financial statements and records of the Company. The
assets of each Company Plan are reported at their fair market value on the books
and records of each plan.
(j) There are no claims relating to the Company Plans, other than routine
claims for benefits.
(k) Each member of the Company Group has complied with the continuation
coverage requirements of Section 1001 of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and ERISA Sections 601 through 608. Each
member of the Company Group has also complied with the privacy, portability,
access, and renewability provisions of the Health Insurance Portability and
Accountability Act of 1996 and regulatory guidance issued thereunder.
(l) No member of the Company Group is obligated, contingently or otherwise,
under any agreement to pay any amount which would be treated as a "parachute
payment," as defined in Code Section 280G(b) (determined without regard to Code
Section 280G(b)(2)(A)(ii)).
(m) None of the Company Plans provide for benefits or other participation
therein, and the Company has received no claims or demands for participation in
or benefits under any Company Plan, by any individual classified or treated by
the Company as an independent contractor.
2.16 LABOR MATTERS.
(a) Neither the Company nor any of its Subsidiaries is a party to any
employment, labor or collective bargaining agreement, and there are no
employment, labor or collective bargaining agreements which pertain to employees
of the Company or any of its Subsidiaries. The Company has heretofore delivered
to the Purchaser or its representatives true, complete and correct copies of the
agreements referred to in the previous sentence, together with all amendments,
modifications, supplements or side letters affecting the duties, rights and
obligations of any party thereunder.
(b) No employees of the Company or any of its Subsidiaries are represented
by any labor organization and, to the Knowledge of the Company, no labor
organization or group of employees of the Company or any of its Subsidiaries has
made a pending demand for recognition or certification. There are no
representation or certification proceedings or petitions seeking a
representation proceeding presently pending or threatened in writing to be
brought or filed with the National Labor Relations Board or any other labor
relations tribunal or authority and, to the Knowledge of the Company, there are
no organizing activities involving the Company or any of its Subsidiaries
pending with any labor organization or group of employees of the Company or any
of its Subsidiaries.
(c) There are no (A) unfair labor practice charges, grievances or
complaints pending or threatened in writing to the Company by or on behalf of
any employee or group of employees of the Company or any of its Subsidiaries, or
(B) complaints, charges or claims against the Company or any of its Subsidiaries
pending, or threatened in writing to the Company to be brought or filed, with
any Governmental Entity or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment of
any individual by the Company or any of its Subsidiaries.
(d) SCHEDULE 2.16(D) of the Company Disclosure Schedule sets forth, for the
Company, a true and complete list of employees, consultants and independent
contractors who currently perform services for the Company, and for each such
Person includes a complete and accurate summary description of the material
compensation paid to such Person (including the date of the most recent increase
thereof), any employment contract between such Person and the Company and any
severance pay, lump sum or other payment, compensation or other remuneration
that such Person is or would be eligible to receive, or has received, upon
termination of employment or service or as a result of the Merger.
2.17 BROKERS. No broker, investment banker, financial advisor or other
person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of the Company.
2.18 INSURANCE. The Company has insurance policies and fidelity bonds
covering its and its Subsidiaries' assets, business, equipment, properties,
operations, employees, officers and directors of the type and in amounts
customarily carried by persons conducting business similar to that of the
Company. All premiums due and payable under all such policies and bonds have
been paid, and the Company is otherwise in full compliance with the terms and
conditions of all such policies and bonds in all material respects. The reserves
established by the Company in respect of all matters as to which the Company
self-insures, including for workers' compensation and workers' medical coverage,
are adequate and appropriate. The Company Disclosure Schedule sets forth a true
and complete list of all insurance policies, fidelity bonds and self-insurance
provisions of the Company.
2.19 BUSINESS RELATIONSHIPS. The relationships of the Company and its
Subsidiaries with their significant customers, distributors, licensors,
designers and suppliers are satisfactory in all material respects to the Company
and, to the Company's Knowledge, the execution of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby will
not materially adversely affect the relationships of the Company and its
Subsidiaries with such customers, distributors, licensors, designers and
suppliers.
2.20 RELATED PARTY TRANSACTIONS. Except as set forth in the Company
Disclosure Schedule no shareholder, director nor any officer of the Company owns
or holds, directly or indirectly, any interest in (excepting holdings solely for
passive investment purposes of securities of publicly held and traded entities
constituting less than 5% of the equity of any such entity), or is an officer,
director, employee or consultant of any person that is, a competitor, lessor,
lessee, customer or supplier of the Company or which conducts a business similar
to any business conducted by the Company. Except as set forth in the Company
Disclosure Schedule, no shareholder, director or officer of the Company (a) owns
or holds, directly or indirectly, in whole or in part, any Company Intellectual
Property (other than by virtue of ownership of equity securities of the
Company), (b) has any claim, charge, action or cause of action against the
Company or any of its subsidiaries, except for claims for reasonable
unreimbursed travel or entertainment expenses, accrued vacation pay or accrued
benefits under any employee benefit plan existing on the date hereof, (c) has
made, on behalf of the Company, any payment or commitment to pay any commission,
fee or other amount to, or to purchase or obtain or otherwise contract to
purchase or obtain any goods or services from, any other Person of which any
stockholder, director or officer of the Company is a partner, member or
stockholder (excepting holdings solely for passive investment purposes of
securities of publicly held and traded entities constituting less than 5% of the
equity of any such entity), (d) owes any money to the Company or (e) has any
interest in any property, real or personal, tangible or intangible, used in or
pertaining to the business of the Company.
2.21 DISCLOSURE.
(a) No representation or warranty of the Company or the Principal
Shareholders in this Agreement and no statement in any Company Disclosure
Schedule omits to state a material fact necessary to make the statements herein
or therein, in light of the circumstances in which they were made, not
misleading.
(b) To the Knowledge of the Company or the Principal Shareholders, no fact
exists that has specific application to either the business of the Company
(other than general economic or industry conditions) and that materially and
adversely affects the assets, business, prospects, financial condition, or
results of operations of the Company taken as a whole that has not been set
forth in this Agreement or the Company Disclosure Schedule.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE MERGER SUB
The Purchaser and the Merger Sub represent and warrant to the Company and
the Principal Shareholders that the statements contained in this Article III are
true, correct and complete as of the date hereof, and will be true, correct and
complete as of the Closing Date (unless specifically made as of another date),
except as specified to the contrary in the corresponding paragraph of the
Disclosure Schedule prepared by the Purchaser accompanying this Agreement (the
"PURCHASER DISCLOSURE SCHEDULE") which is made a part hereof. The Purchaser
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Article III.
3.1 ORGANIZATION AND STANDING. The Purchaser and the Merger Sub are
corporations duly organized, validly existing and in good standing under the
laws of their state of incorporation and each has the requisite corporate power
and authority to carry on its business as now being conducted. The Purchaser is
duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Purchaser.
3.2 AUTHORITY; NONCONTRAVENTION; AND CORPORATE POWER. The Purchaser and the
Merger Sub each has the requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement by the Purchaser and the
Merger Sub, and the consummation by the Purchaser and the Merger Sub of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Purchaser and the Merger Sub. The Agreement
has been duly executed and delivered by the Purchaser and the Merger Sub, and,
assuming that this Agreement constitute a valid and binding obligation of the
other parties, constitutes a valid and binding obligation of the Purchaser and
the Merger Sub, as applicable, enforceable against the Purchaser and the Merger
Sub in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general principles of
equity. The Purchaser and the Merger Sub are not in violation of their
respective certificates of incorporation or bylaws. The execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not, (i)
conflict with any of the provisions of the certificate of incorporation or
bylaws of the Purchaser or the Merger Sub, in each case as amended to the date
of this Agreement and the Closing Date (ii) subject to the governmental filings
and other matters referred to in the next section, conflict with, result in a
breach of or default (with or without notice or lapse of time, or both) under,
or give rise to a material obligation, a right of termination, cancellation or
acceleration of any obligation or a loss of a material benefit under, or require
the consent of any person under, any indenture or other agreement, permit,
concession, franchise, license or similar instrument or undertaking to which the
Purchaser or the Merger Sub is a party or by which the Purchaser or the Merger
Sub or any of their assets is bound or affected, or (iii) subject to the
governmental filings and other matters referred to in Section 3.3, contravene
any domestic or foreign law, rule or regulation or any order, writ, judgment,
injunction, decree, determination or award currently in effect and applicable to
the Purchaser and the Merger Sub, which, in the case of clauses (ii) and (iii)
above could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Purchaser or the Merger Sub.
3.3 CONSENTS AND APPROVALS. No consent, approval or authorization of, or
declaration or filing with, or notice to, any Governmental Entity or any other
third party which has not been received or made (or has been received or made
but is not otherwise in full force and effect) is required by or with respect to
the Purchaser or the Merger Sub in connection with the execution and delivery of
this Agreement by the Purchaser or the Merger Sub or the consummation by the
Purchaser or the Merger Sub of the transactions contemplated thereby, except for
(i) the filing of the Articles of Merger with the North Carolina Secretary of
State and the Georgia Secretary of State and (ii) appropriate documents with the
relevant authorities of other states in which the Company is qualified to do
business, and (iii) such consents, approvals, authorizations, filings or notices
as are specified in the Purchaser Disclosure Schedule.
3.4 PURCHASER SHARES. The shares of Common Stock of the Purchaser to be
issued in payment of the Purchase Price will, when issued and delivered in
accordance with this Agreement, (a) will not be subject to any preemptive right,
right of first refusal or other preferential rights, and (b) will be duly
authorized, validly issued, fully paid and non-assessable and will be issued in
compliance with all applicable federal and state securities laws; provided,
however, the Purchaser Shares to be issued hereunder may be subject to
restrictions on transfer under applicable federal and state securities laws.
3.5 SEC FILINGS; PURCHASER FINANCIAL STATEMENTS.
(a) Purchaser has filed all required forms, reports, registration
statements and documents with the SEC since January 1, 2000. All such required
forms, reports and documents (including those that the Purchaser may file
subsequent to the date hereof until the Closing) are referred to herein as the
"PURCHASER SEC REPORTS"; provided, that any Purchaser SEC Report shall be deemed
to include all amendments to such report through the date hereof. As of their
respective filing dates (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing), the Purchaser SEC
Reports (A) complied in all material respects with the requirements of the
Securities Act, or the Securities Exchange Act of 1934, as amended, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
Purchaser SEC Reports and (B) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) The consolidated financial statements of the Purchaser (including, in
each case, the notes thereto), included in the Purchaser SEC Reports (the
"PURCHASER FINANCIAL STATEMENTS"), including each Purchaser SEC Report filed
after the date hereof until the Closing, (A) complied as to form in all material
respects with the applicable rules and regulations of the SEC with respect
thereto; (B) was prepared in accordance with GAAP applied on a consistent basis
throughout the periods indicated (other than the provision of notes to the
financial statements for quarterly periods); and (C) fairly presented the
consolidated financial position of the Purchaser and its subsidiaries at the
respective dates thereof and the consolidated results of Purchaser's operations
and cash flows for the periods indicated (subject, in the case of unaudited
financial statements, to audit adjustments). There has been no change in the
Purchaser's accounting policies except as described in the notes to the
Purchaser Financial Statements.
3.6 PURCHASER CAPITALIZATION. The authorized capital stock of the Purchaser
as of the date of this Agreement consists of 25,000,000 shares of Common Stock,
$0.01 par value per share, of which 11,323,494 shares are issued and outstanding
(subject to the changes prior to the Closing Date contemplated by the Purchaser
Disclosure Schedules), and 500,000 shares of Preferred Stock, $0.01 par value
per share, of which no shares are issued and outstanding.
3.7 MERGER SUB CAPITALIZATION. The authorized capital stock of the Merger
Sub as of the date of this Agreement consists of 1,000 shares of Common Stock,
$0.01 par value per share, of which 1,000 shares are issued and outstanding and
held by the Purchaser.
3.8 LITIGATION. There is no legal action, suit or proceeding of any nature
pending or to the Purchaser's Knowledge threatened against the Purchaser, its
properties or any of its officers, directors or employees, nor, to the Knowledge
of the Purchaser, is there any reasonable basis therefor.
3.9 NO MATERIAL ADVERSE CHANGE. Since the date of the balance sheet
included in the Purchaser's most recently filed Purchaser SEC Report, there has
not occurred any material adverse change in the financial condition,
liabilities, assets, business or results of operations of Purchaser. For
purposes of this section, changes in economic conditions or changes in the
industry and markets in which the Purchaser competes shall not constitute a
material adverse change, whether occurring at any time or from time to time.
3.10 BROKERS' AND FINDERS' FEES. Except as otherwise provided herein, the
Purchaser has not incurred, nor will they incur, directly or indirectly, any
liability for brokerage or finders' fees or agent's commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
3.11 DISCLOSURE.
(a) No representation or warranty of the Purchaser or the Merger Sub in
this Agreement and no statement in any Purchaser Disclosure Schedule, when read
together with the Purchaser SEC Reports, omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
(b) To the Knowledge of the Purchaser and the Merger Sub, no fact exists
that has specific application to either the business of the Purchaser (other
than general economic or industry conditions) and that materially and adversely
affects the assets, business, prospects, financial condition, or results of
operations of the Purchaser taken as a whole that has not been set forth in this
Agreement, the Company Disclosure Schedule or the Purchaser SEC Reports.
ARTICLE IV
CONDUCT OF BUSINESS OF COMPANY
4.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as expressly provided for
herein, during the period from the date of this Agreement to the Closing Date,
the Company shall, and shall cause each of its Subsidiaries to, (a) act and
carry on its business only in the ordinary course of business and, to the extent
consistent therewith, (b) use reasonable best efforts to preserve intact its
current business organizations, keep available the services of its current key
officers and employees and preserve the goodwill of those engaged in material
business relationships with the Company, and to that end, without limiting the
generality of the foregoing, the Company shall not, and shall not permit any of
its Subsidiaries to, without the prior written consent of the Purchaser, which
consent shall not be unreasonably withheld:
(a) (i) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, securities or other property) in respect of, any
of its outstanding capital stock (other than, with respect to a Subsidiary of
the Company, to its corporate parent), (ii) split, combine or reclassify any of
its outstanding capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
outstanding capital stock, or (iii) purchase, redeem or otherwise acquire any
shares of its outstanding capital stock or any rights, warrants or options to
acquire any such shares;
(b) issue, sell, grant, pledge or otherwise encumber any shares of its
capital stock, any other voting securities (other than the issuance of shares of
capital stock upon the exercise of outstanding warrants or in connection with
the exercise and termination of outstanding options) or any securities
convertible into or exchangeable for, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible or exchangeable
securities;
(c) amend its articles of incorporation, bylaws or other comparable charter
or organizational documents;
(d) directly or indirectly acquire, make any investment in, or make any
capital contributions to, any person other than in the ordinary course of
business;
(e) directly or indirectly sell, pledge or otherwise dispose of or encumber
any of its properties or assets that are material to its business, except for
sales, pledges or other dispositions or encumbrances in the ordinary course of
business;
(f) (i) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, other than indebtedness owing to or guarantees
of indebtedness owing to the Company or any direct or indirect wholly owned
Subsidiary of the Company, or (ii) make any loans or advances to any other
person, other than to the Company or to any direct or indirect wholly owned
Subsidiary of the Company and other than routine travel advances to employees or
customer trade credit, except, in the case of clause (i), for borrowings under
existing credit facilities described in the Company Disclosure Schedule in the
ordinary course of business;
(g) grant or agree to grant to any officer, employee or consultant any
increase in wages or bonus, severance, profit sharing, retirement, deferred
compensation, insurance or other compensation or benefits, or establish any new
compensation or benefit plans or arrangements, except normal, regularly
scheduled increases in respect of non-officer employees;
(h) enter into or amend any employment, consulting, severance or similar
agreement with any individual, except with respect to new hires of nonofficer
employees in the ordinary course of business;
(i) adopt or enter into a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization, share
exchange or other material reorganization or any agreement involving any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of all or any
significant portions of the assets of the Company or any of its Subsidiaries, in
a single transaction or series of related transactions which could reasonably be
expected to interfere with the completion of the Merger;
(j) make any tax election or settle or compromise any income tax liability
of the Company or of any of its Subsidiaries involving on an individual basis
more than $10,000;
(k) make any change in any method of accounting or accounting practice or
policy, except as required by any changes in GAAP;
(l) enter into any agreement, understanding or commitment that restrains,
limits or impedes the Company's ability to compete with or conduct any business
or line of business, except for any such agreement, understanding or commitment
entered into in the ordinary course of business;
(m) plan, announce, implement or effect any reduction in force, lay-off,
early retirement program, severance program or other program or effort
concerning the termination of employment of employees of the Company or its
Subsidiaries;
(n) except as previously approved by the Board of Directors of the Company
prior to the date hereof and as identified to the Purchaser prior to the date
hereof, authorize or commit to make capital expenditures in excess of $10,000;
or
(o) authorize any of, or commit or agree to take any of, the foregoing
actions in respect of which it is restricted by the provisions of this Section
4.1.
4.2 NO SOLICITATION. Until the earlier of the Closing Date and the date of
termination of this Agreement pursuant to the provisions of Section 8.1, the
Company shall, and shall cause its subsidiaries
and all of its or their affiliates, officers, directors, employees, agents and
representatives (including without limitation any investment banker, financial
advisor, attorney or accountant retained by the Company or any of its
subsidiaries or affiliates) to discontinue any solicitation efforts, discussions
or negotiations with respect to any Acquisition Proposal (as hereinafter
defined) with any person or entity other than the Purchaser. The Company shall
not, and shall not authorize or permit any of its subsidiaries or any of its or
their affiliates, officers, directors, employees, agents or representatives
(including without limitations any investment banker, financial advisor,
attorney or accountant retained by the Company or any of its subsidiaries or
affiliates) to, directly or indirectly, initiate, solicit or encourage
(including by way of furnishing information or assistance), or take any action
to facilitate, any inquiries, any expression of interest or the making of any
proposal that constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal, or enter into or maintain or continue discussions or
negotiate with any person in furtherance of such inquiries or to obtain an
Acquisition Proposal or agree to or endorse any Acquisition Proposal. For
Purposes of this Agreement, "ACQUISITION PROPOSAL" means an inquiry, offer,
proposal or other indication of interest (other than the potential acquisition)
regarding any of the following matters involving the Company: (a) any merger,
consolidation, share exchange, tender or exchange offer, recapitalization,
business combination or other similar transaction; (b) any acquisitions of
voting stock or other securities issued by the Company or any of its
subsidiaries; (c) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of all or any substantial portion of the assets of the Company and
its subsidiaries, taken as a whole, in a single transaction or series of related
transactions; or (d) any proposal, plan or intention to do any of the foregoing
or any agreement in principle or other agreement to engage in any of the
foregoing.
ARTICLE V
ADDITIONAL COVENANTS
5.1 ACCESS TO INFORMATION, CONFIDENTIALITY. Upon reasonable notice, the
Company shall, and shall cause each of its Subsidiaries to, afford to the
Purchaser and to the Purchaser's officers, employees, counsel, financial
advisors and other representatives reasonable access during normal business
hours during the period prior to the Effective Time to all its properties,
books, contracts, commitments, Returns, personnel (with the prior consent of the
Company) and records and, during such period, the Company shall, and shall cause
each of its Subsidiaries to, furnish as promptly as practicable to the Purchaser
such information concerning its business, properties, financial condition,
operations and personnel as the Purchaser may from time to time reasonably
request, provided, however, that the Company shall not be required to disrupt
its business operations with respect to the provision of such information. Any
such investigation by the Purchaser shall not affect the representations or
warranties contained in this Agreement. Except as required by law, the Purchaser
will hold, and will cause its directors, officers, employees, accountants,
counsel, financial advisors and other representatives and affiliates to hold,
any non-public information obtained from the Company in confidence to the extent
required by, and in accordance with the provisions of, the letter agreement
between the Purchaser and the Company with respect to confidentiality and other
matters, and the Purchaser agrees that, prior to the Effective Time, it will not
use any such non-public information to, directly or indirectly, divert or
attempt to divert any business, customer or employee of the Company or any of
its Subsidiaries.
5.2 REASONABLE BEST EFFORTS. On the terms and subject to the conditions set
forth in this Agreement, each of the Parties shall use its reasonable best
efforts to take, or cause to be taken, all actions, and do, or cause to be done,
and assist and cooperate with the other parties in doing, all things necessary,
proper or advisable (a) to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated hereby, including the satisfaction of the
respective conditions set forth in Article VI, and (b) to maintain the Company's
current customer relationships.
5.3 PUBLIC ANNOUNCEMENTS. The Company shall consult with the Purchaser
before issuing, and provide the Purchaser the opportunity to review and comment
upon, any press release, SEC filing or other public statements with respect to
the transactions contemplated hereby, including the Merger, and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, regulation or by
court process.
5.4 NON-COMPETITION AGREEMENTS. The Company shall use its reasonable best
efforts to cause the persons identified by the Purchaser on EXHIBIT B hereto
(each a "PRINCIPAL") to execute and deliver, prior to the Effective Time,
non-competition Agreements on terms reasonably satisfactory to the Purchaser and
such persons.
5.5 SHAREHOLDER APPROVAL; PROVISION OF INFORMATION. In connection with the
solicitation of the approval of the Merger by the Company Shareholders, the
Company shall provide each Company Shareholder with information about the
Company's business, a copy of the Purchaser's most recent annual report on Form
10-KSB, a copy of this Merger Agreement and any and all other necessary
documentation required under the NCBCA. Prior to soliciting the approval of the
Company Shareholders, the Company will give the Purchaser an opportunity to
review such solicitation materials.
5.6 CONVERSION OF WARRANTS. The Company shall deliver a notice to each
holder of warrants to purchase Company stock in compliance with Section 6 of
such warrants of their right to exercise such warrant or have such warrant
terminated pursuant to its terms.
5.7 CONVERSION OF OPTIONS. The Company shall deliver a notice to each
holder of options to purchase Company stock of their right to exercise such
option or have such option terminated pursuant to its terms.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or written waiver on or prior to the Closing Date of the following
conditions:
(a) No action or proceeding. No claim, action, suit or other proceeding
shall be pending or threatened by any public authority or person before any
court, agency or administrative body which would have the effect of making
illegal, materially delaying or otherwise restraining or prohibiting the
transactions contemplated hereby or allowing any material damages to be
recovered or other material relief to be obtained as a result of the
transactions contemplated hereby or as a result of any agreement entered into in
connection with, or as a condition precedent to, the consummation of the
transactions contemplated hereby.
(b) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect, provided, however, that the party
invoking this condition shall have complied with its obligations under this
Agreement.
6.2 CONDITIONS TO OBLIGATIONS OF THE PURCHASER. The obligation of the
Purchaser to effect the Merger is further subject to satisfaction or written
waiver on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. Representations and warranties of the
Company and the Principal Shareholders contained in this Agreement (other than
representations and warranties expressly made only as of a specific date, which
shall be accurate as of such date) shall have been accurate in all respects as
of the date of this Agreement and shall be accurate in all respects as of the
Closing Date as if made on and as of the Closing Date, except for any such
failure which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Company, and the Purchaser
shall have received a certificate signed on behalf of the Company by an
authorized officer of the Company to such effect with respect to the Company.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and the Purchaser shall
have received a certificate signed on behalf of the Company by an authorized
officer of the Company to such effect.
(c) No Material Adverse Change. Since the date of this Agreement, the
Company and its Subsidiaries, taken as a whole, shall not have experienced any
change, event or occurrence that has had or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company.
(d) Consents. All consents, authorizations, orders and approvals of (or
filings or registrations with) any Governmental Entity or any other person
required to be obtained or made by the Company prior to the Effective Time in
connection with the execution, delivery and performance of this Agreement shall
have been obtained or made.
(e) Company Shareholder Approval. The Merger shall have been approved
unanimously by all the Company Shareholders.
(f) Legal Opinion. The Purchaser shall have received a legal opinion from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, legal counsel to the Company, substantially
in the form attached hereto as EXHIBIT C.
(g) Delivery of Stock Certificates, Shareholder Letter of Transmittal and
Investor Representation Letter. The Purchaser shall have received from all the
Company Shareholders duly endorsed stock certificates representing the Shares
and an executed Shareholder Letter of Transmittal and Investor Representation
Letter in form attached hereto as EXHIBIT D.
(h) Non-Competition Agreements. The Principals shall have entered into
non-competition agreements with the Purchaser in the form attached hereto as
EXHIBIT E.
(i) Additional Closing Documents. The Company shall have furnished to the
Purchaser such additional certificates, opinions and other documents as the
Purchaser may have reasonably requested as to any of the conditions set forth in
this Section 6.2.
6.3 CONDITIONS TO OBLIGATION OF THE COMPANY . The obligation of the Company
to effect the Merger is further subject to satisfaction or written waiver on or
prior to the Closing Date of the following conditions:
(a) Representations and Warranties. Representations and warranties of the
Purchaser and the Merger Sub contained in this Agreement (other than
representations and warranties expressly made as of a certain date, which shall
be accurate as of such date) shall have been accurate in all respects as of the
date of this Agreement and shall be accurate in all respects as of the Closing
Date as if made on and as of the Closing Date, except for any such failure
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect on the Purchaser or the Merger Sub, and the
Company shall have received a certificate signed on behalf of the Purchaser by
an authorized officer of the Purchaser to such effect.
(b) Performance of Obligations of the Purchaser. The Purchaser shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and the Company shall
have received a certificate signed on behalf of the Purchaser by an authorized
officer of the Purchaser to such effect.
(c) No Material Adverse Change. Since the date of this Agreement, the
Purchaser and its Subsidiaries, taken as a whole, shall not have experienced any
change, event or occurrence that has had or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Purchaser.
(d) Additional Closing Documents. The Purchaser shall have furnished to the
Company such additional certificates and other documents as the Company may have
reasonably requested as to any of the conditions set forth in this Section 6.3.
(e) Consents. All consents, authorizations, orders and approvals of (or
filings or registrations with) any Governmental Entity or any other person
required to be obtained or made by the Purchaser or the Merger Sub the Effective
Time in connection with the execution, delivery and performance of this
Agreement shall have been obtained or made.
(f) Shareholder Approval. The Merger shall have been approved unanimously
by all of the Company Shareholders.
ARTICLE VII
INDEMNIFICATION
7.1 BY THE PRINCIPAL SHAREHOLDERS FOR BREACHES BY THE COMPANY. Subject to
the terms and conditions of this Article VII, the Principal Shareholders hereby
agree, jointly and severally, to indemnify, defend and hold harmless Purchaser
and its direct and indirect subsidiaries (including the Surviving Corporation
after the Effective Time) and their respective directors, officers, employees
and controlled and controlling Persons (collectively, "PURCHASER AFFILIATES"),
from and against all Damages (as defined below) and Claims (as defined below)
asserted against, imposed upon, or incurred by Purchaser or any Purchaser
Affiliate, directly or indirectly, by reason of, arising out of, or resulting
from (a) the inaccuracy or breach as of the date hereof or as of the Closing
Date of any representation or warranty of the Company contained in or made
pursuant to this Agreement or (b) the breach of any covenant or agreement of the
Company contained in or made pursuant to this Agreement. As used in this Article
VII, the term (i) "CLAIM" means any and all claims, causes of action, demands,
lawsuits, suits, proceedings, governmental investigations or audits and
administrative orders and (II) "DAMAGES" means all debts, liabilities,
obligations, losses, including diminution of value, damages, costs and expenses,
whether actual, consequential or punitive, interest (including, without
limitation, prejudgment interest), penalties, reasonable legal fees,
disbursements and costs of investigations, deficiencies, levies, duties and
imposts.
7.2 BY A PRINCIPAL SHAREHOLDER FOR BREACHES BY SUCH PRINCIPAL SHAREHOLDER.
Subject to the terms and conditions of this Article VII, each Principal
Shareholder, jointly and severally, hereby agrees to indemnify, defend and hold
harmless Purchaser and the Purchaser Affiliates, from and against all Damages
and Claims asserted against, imposed upon or incurred by any such Person,
directly or indirectly, by reason of, arising out of or resulting from (a) the
inaccuracy or breach as of the date hereof or as of the Closing Date of any
representation or warranty of a Principal Shareholder contained in or made
pursuant to this Agreement, or (b) the breach of any covenant or agreement of
such Principal Shareholder contained in or made pursuant to this Agreement.
7.3 BY PURCHASER. Subject to the terms and conditions of this Article VII,
Purchaser hereby agrees to indemnify, defend and hold harmless each Principal
Shareholder, its successors and assigns, from and against all Damages and Claims
asserted against, imposed upon or incurred by each such Person, directly or
indirectly, by reason of, arising out of or resulting from (a) the inaccuracy or
breach as of the date hereof or as of the Closing Date of any representation or
warranty of Purchaser contained in or made pursuant to this Agreement or (b) the
breach of any covenant or agreement of Purchaser contained in or made pursuant
to this Agreement.
7.4 DEFENSE OF THIRD PARTY CLAIMS. The obligations and liabilities of any
party to indemnify any other party under this Article VII with respect to Claims
or Damages relating to or arising from third parties (a "THIRD PARTY CLAIM"),
shall be subject to the following terms and conditions:
(a) The party or parties to be indemnified hereunder (whether one or more,
the "INDEMNIFIED PARTY") will give the other party or parties (whether one or
more, the "INDEMNIFYING PARTY") prompt written notice of any such Third Party
Claim, and the Indemnifying Party may undertake the defense thereof by
representatives chosen by it upon written notice to the Indemnified Party
provided within 20 days of receiving notice of such Third Party Claim (or sooner
if the nature of the Third Party Claim so requires). Failure of the Indemnified
Party to give such notice shall not affect the Indemnifying Party's duty or
obligations under this Article VII, except to the extent the Indemnifying Party
is prejudiced thereby. The Indemnified Party shall make available to the
Indemnifying Party or its representatives all records and other materials
required by them and in the possession or under the control of the Indemnified
Party, for the use of the Indemnifying Party and its representatives in
defending any such Claim, and shall in other respects give reasonable
cooperation in such defense.
(b) If the Indemnifying Party, within 20 days after notice of any such
Third Party Claim (or sooner if the nature of the Third Party Claim so
requires), fails to defend such Third Party Claim actively and in good faith,
then the Indemnified Party will (upon further notice) have the right to
undertake the defense, compromise or settlement of such Third Party Claim, or
consent to the entry of a judgment with respect thereto, and the Indemnifying
Party shall thereafter have no right to challenge the Indemnified Party's
defense, compromise or settlement thereof.
(c) Notwithstanding anything in this Article VII to the contrary (i) if
there is a reasonable possibility, in the Indemnified Party's opinion, that a
Third Party Claim may adversely affect the Indemnified Party other than as a
result of money damages or other money payments, the Indemnified Party shall
have the right to defend, compromise or settle such Third Party Claim (provided
that the Indemnified Party shall not settle or consent to any judgment without
first obtaining the consent of the Indemnifying Party, which shall not be
unreasonably withheld), and (ii) the Indemnifying Party shall not, without the
written consent of the Indemnified Party, settle or compromise any Third Party
Claim or consent to the entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of an unconditional release from all liability in respect of
such Third Party Claim.
7.5 PAYMENT; ARBITRATION. Upon the occurrence of a Claim or Damages, other
than a Third Party Claim, for which indemnification is believed to be due under
this Article VII, the Indemnified Party shall provide notice of such Claim or
Damages to the Indemnifying Party, stating the circumstances giving rise to the
Claim or Damages, specifying the amount of the Claim or Damages and making a
request for any payment then believed due. Any such claim for indemnification
shall be conclusive against the Indemnifying Party in all respects 20 days after
receipt by the Indemnifying Party of such notice, unless within such period the
Indemnifying Party sends the Indemnified Party a notice disputing the propriety
of such claim. Such notice of dispute shall describe the basis for such
objection and the amount of the claim as to which the Indemnifying Party does
not believe should be subject to indemnification. Upon receipt of any such
notice of objection, both the Indemnified Party and the Indemnifying Party shall
use their reasonable best efforts to cooperate and arrive at a mutually
acceptable resolution of such dispute within the next 30 days. If a mutually
acceptable resolution cannot be reached between the Indemnified Party and the
Indemnifying Party with such 30-day period, either party may submit the dispute
for resolution by a panel of three arbitrators selected from the panels of
arbitrators of the American Arbitration Association in a city mutually selected
by the Indemnifying Party and Indemnified Party (or, if no city can be mutually
agreed upon within 15 days, then in Atlanta, Georgia); provided, however, that
(i) one arbitrator shall be selected by the Indemnified Party, the second
arbitrator shall be selected by the Indemnifying Party, and the third arbitrator
shall be selected by the two previously selected arbitrators and (ii) in all
respects, such panel shall be governed by the American Arbitration Association's
then existing Commercial Arbitration Rules. If it is finally determined that all
or a portion of such claim amount is owed to the Indemnified Party, the
Indemnifying Party shall, within 10 days of such determination and subject to
the limitations set forth herein, pay the Indemnified Party such amount owed,
together with interest from the date that the Indemnified Party initially
requested such payment until the date of actual payment, at an annual rate equal
to the prime interest rate then generally in effect on the date of payment as
set forth in The Wall Street Journal.
7.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, covenants and agreements in this Agreement or made pursuant hereto
shall survive the Closing and any investigation thereof; provided, however, that
in no event shall any Indemnified Party be permitted to make any claim under
Article VII unless such claim is first asserted on or before the first
anniversary of the Closing Date, except with respect to Claims or Damages
arising from or with respect to (i) actual fraud or (ii) breach of any covenants
or agreements to be performed after the Effective Time.
7.7 LIMITATION OF PRINCIPAL SHAREHOLDER LIABILITY. Notwithstanding anything
to the contrary herein and except for actual fraud or gross negligence by a
Principal Shareholder, each Principal Shareholder shall only be obligated to
indemnify the Purchaser and the Purchaser Affiliates under Sections 7.1 and 7.2
up to the 30% of the aggregate number of shares of Purchaser Common Stock that
were received by such Principal Shareholder (the "LIABILITY CAP"). For purposes
of valuing the Purchaser Common Stock for purposes of satisfying Claims and
Damages under this Section 7.7, the Purchaser Common Stock delivered to such
Principal Shareholder shall be valued based on the closing price of the
Purchaser's common stock on the over-the-counter bulletin board (or any
subsequent market) on either (i) the Closing Date or (ii) the date such
Purchaser Common Stock is delivered to the Purchaser in satisfaction of the
Claim or Damage, whichever is lower.
7.8 SATISFACTION OF INDEMNIFICATION CLAIMS AGAINST PRINCIPAL SHAREHOLDERS.
The obligations of the Principal Shareholders to indemnify the Purchaser or any
Purchaser Affiliate shall be limited to the right of the Purchaser to recover
shares of Purchaser Common Stock received by the Principal Shareholders up to
the Liability Cap. In the event it is finally determined in accordance with
Section 7.5 that the Purchaser or any Purchaser Affiliate is entitled to receive
payment from the Principal Shareholders in respect of a Claim or Damages, the
amount recovered by such Indemnified Party shall be paid pro rata (based on the
number of shares of Purchaser Common Stock received by the Principal
Shareholders pursuant to this Agreement) by the Principal Shareholders. In such
event, the Principal Shareholders shall send one or more certificates
representing Purchaser Common Stock to the Purchaser for cancellation, and the
Purchaser shall promptly issue, or cause to be issued, to each Principal
Shareholder a new certificate representing the number of shares of Purchaser
Common Stock, if any, that the Purchaser is not entitled to cancel pursuant to
the provisions of this Article VII. If a Principal Shareholder refuses to
deliver to the Purchaser his or her stock certificate representing shares of
Purchaser Common Stock after it is finally determined that such Principal
Shareholder owes such shares in satisfaction of a Claim hereunder, the Purchaser
may enter a stop transfer order with its transfer agent to effect the
cancellation of the shares that such Principal Shareholder is obligated to
deliver to the Purchaser hereunder.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date, in
any one of the following circumstances:
(a) By mutual written consent duly authorized by the Boards of Directors of
the Purchaser and the Company;
(b) By the Purchaser or the Company, if the Closing Date shall not have
occurred on or before December 1, 2003, otherwise than as a result of any
material breach of any provision of this Agreement by the party seeking to
effect such termination;
(c) By the Purchaser or the Company, if any federal or state court of
competent jurisdiction or other Governmental Entity shall have issued an order,
decree or ruling, or taken any other action permanently restraining, enjoining
or otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and non-appealable, provided that neither party
may terminate this Agreement pursuant to this Section 8.1(c) unless such party
has used its reasonable best efforts to remove such order, decree, ruling or
injunction;
(e) By the Purchaser if any of the Company's representations and warranties
contained in this Agreement shall have been materially inaccurate as of the date
of this Agreement or shall have become materially inaccurate as of the Closing
Date as if made on such date, or if any of the Company's covenants and
agreements contained in this Agreement shall have been breached in any material
respect, provided, however, that the Purchaser may not terminate this Agreement
under this Section 8.1(e) on account of an inaccuracy in the Company's
representations and warranties that is curable by the Company or on account of a
breach of a covenant or agreement by the Company that is curable by the Company
unless the Company fails to cure such inaccuracy or breach within ten (10) days
after receiving written notice from the Purchaser of such inaccuracy or breach;
(f) By the Company if any of the Purchaser's representations and warranties
contained in this Agreement shall have been materially inaccurate as of the date
of this Agreement or shall have become materially inaccurate as of the Closing
Date as if made on such date, or if any of the Purchaser's covenants and
agreements contained in this Agreement shall have been breached in any material
respect, provided, however, that the Company may not terminate this Agreement
under this Section 8.1(f) on account of an inaccuracy in the Purchaser's
representations and warranties that is
curable by the Purchaser or on account of a breach of covenant or agreement by
the Purchaser that is curable by the Purchaser unless the Purchaser fails to
cure such inaccuracy or breach within ten (10) days after receiving written
notice from the Company of such inaccuracy or breach.
8.2 EFFECT OF TERMINATION. In the event of the termination and abandonment
of this Agreement pursuant to Section 8.1(a) hereof, this Agreement shall
(except for the provisions of Section 2.17, the last sentence of Section 5.1,
Section 5.3, this Section 8.2 and Article IX, which shall survive the
termination of this Agreement) forthwith become void and cease to have any force
or effect, without any liability on the part of any party hereto or any of its
affiliates; provided, however, that nothing in this Section 8.2 shall relieve
any party to this Agreement of liability for any willful or intentional breach
of this Agreement.
8.3 AMENDMENT. At any time prior to the Closing Date, the parties hereto
may modify or amend this Agreement by written agreement executed and delivered
by duly authorized officers of the respective parties and each of the Principal
Shareholders.
8.4 EXTENSION; WAIVER. At any time prior to the Closing Date, the parties
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties, (b) waive any inaccuracies in the representations and
warranties of the other parties contained in this Agreement or in any document
delivered pursuant to this Agreement, or (c) subject to Section 8.3, waive
compliance with any of the agreements or conditions of the other parties
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in a written instrument
executed and delivered by a duly authorized officer on behalf of such party. The
failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights.
8.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER. A
termination of this Agreement pursuant to Section 8.1, an amendment of this
Agreement pursuant to Section 8.3 or an extension or waiver pursuant to Section
8.4 shall, in order to be effective, require in the case of the Purchaser or the
Company, action by its Board of Directors or the duly authorized designee of its
Board of Directors.
ARTICLE IX
GENERAL PROVISIONS
9.1 [Reserved]
9.2 FEES AND EXPENSES. Each party hereto shall pay its own fees and
expenses incident to preparing for, entering into and carrying out this
Agreement and the consummation of the transactions contemplated hereby.
9.3 DEFINITIONS. For purposes of this Agreement:
(a) "Affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
(b) "Business day" means any day other than Saturday, Sunday or any other
day on which banks in the City of New York are required or permitted to close;
(c) "Disclosure Schedule" means the disclosure schedule delivered by each
party to the other simultaneously with the execution of this Agreement;
(d) "Environmental Laws" means any federal, state or local law, rule,
regulation or decision relating to: (i) releases or threatened releases of
Hazardous Substances or materials containing Hazardous Substances; (ii) the
manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Substances or materials containing Hazardous Substances; or (iii)
otherwise relating to pollution of the environment or the protection of human
health;
(e) "Hazardous Substances" means: (i) those substances defined as
"hazardous substances," "pollutants" or "contaminants," "hazardous waste,"
"hazardous chemicals" and the like in or regulated under the following federal
statutes and their state counterparts, as each may be amended from time to time,
and all regulations thereunder: the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking
Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide and
Rodenticide Act and the Clean Air Act; (ii) petroleum and petroleum products
including crude oil and any fractions thereof; (iii) natural gas, synthetic gas
and any mixtures thereof usable for fuel, (iv) radon; (v) asbestos; and (vi) any
other substance, regardless of physical form, that is subject to any
Environmental Laws;
(f) "Knowledge" means the actual knowledge of any executive officer of
Company or Purchaser, as the case may be;
(g) "Liens" means, collectively, all pledges, claims, liens, charges,
mortgages, conditional sale or title retention agreements, hypothecations,
collateral assignments, security interests, easements and other encumbrances of
any kind or nature whatsoever;
(h) "Material Adverse Effect" or "Material Adverse Change" means any event,
occurrence, failure of event or occurrence, change, effect, state of affairs,
breach, default, violation, fine, penalty or failure to comply (each, a
"circumstance"), individually or taken together with all other circumstances
contemplated by or in connection with the applicable representations and
warranties made in this Agreement which could reasonably be expected to: (i)
materially adversely effect the business, properties, assets, condition
(financial or otherwise), or results of operations of the Purchaser or Company,
in each case, including its respective Subsidiaries together with it taken as a
whole, or (ii) impair the Purchaser or Company, as the case may be, of its
ability to perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. In no event shall any of the following
constitute a Material Adverse Effect or a Material Adverse Change: (i) a change
in the trading prices of the Purchaser's equity securities between the date of
this Agreement and the Effective Time, in and of itself; (ii) effects, changes,
events, circumstances or conditions generally affecting the business application
integration industry in which the Purchaser and the Company operate or arising
from changes in general business or economic conditions, and not specifically
relating to the Purchaser or Company, as the case may be; (iii) effects,
changes, events, circumstances or conditions directly attributable to (A)
out-of-pocket fees and expenses (including, without limitation, legal,
accounting, investigatory, investment banking, and other fees and expenses)
incurred in connection with the transactions contemplated by the Agreement or
(B) the payment by the Purchaser or Company of all amounts due to any officers
or employees of Company under employment contracts, non-competition agreements,
employee benefit plans or severance arrangements as specified in the Disclosure
Schedule; (iv) any effects, changes, events, circumstances or conditions
resulting from any change in law or GAAP, which affect generally entities such
as the Purchaser and Company; (v) any effects, changes, events, circumstances or
conditions resulting from compliance by the Purchaser or Company with the
express terms of this Agreement or
action taken with the prior informed written consent of the other party; and
(vi) the default by Company of any payment obligations in favor of the Purchaser
under any promissory notes issued by Company to the Purchaser.
(i) "Person" means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity;
(j) a "Subsidiary" of any person means any other person of which (i) the
first mentioned person or any Subsidiary thereof is a general partner, (ii)
voting power to elect a majority of the board of directors or others performing
similar functions with respect to such other person is held by the first
mentioned person and/or by any one or more of its Subsidiaries, or (iii) at
least 50% of the equity interests of such other person is, directly or
indirectly, owned or controlled by such first mentioned person and/or by any one
or more of its Subsidiaries.
9.4 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) or by telecopy (and confirmed by telecopy answerback) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to the Purchaser, to
Return on Investment Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Company, to
BBN Acquisition, Inc.
BBN Acquisition, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to ▇▇▇▇, to
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(iv) if to ▇▇▇▇▇▇, to
Laurrane ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(v) if to ▇▇▇▇▇▇▇, to
▇▇▇▇ ▇▇▇▇▇▇▇
c/o Return On Investment Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
9.5 INTERPRETATION. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for convenience of reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
9.6 ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES. This Agreement constitutes
the entire agreement, and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter of
this Agreement. This Agreement is not intended to confer upon any person
(including without limitation any employees or former employees of Company),
other than the parties hereto, any rights or remedies.
9.7 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Georgia.
9.8 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned or delegated, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, and any such assignment without such prior
written consent shall be null and void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
9.9 SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and
this Agreement shall be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision or portion of any provision
had never been contained herein.
9.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
[Signature Pages Follow]
IN WITNESS WHEREOF, the Purchaser, the Merger Sub, the Company and the
Principal Shareholders have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first written
above.
PURCHASER COMPANY
RETURN ON INVESTMENT CORPORATION BBN ACQUISITION, INC.
By: ___________________________ By: ___________________________
Name: ___________________________ Name: ___________________________
Title: ___________________________ Title: ___________________________
MERGER SUB PRINCIPAL SHAREHOLDERS
TECTONIC SOLUTIONS, INC. ______________________________(Seal)
▇▇▇▇▇▇▇ ▇▇▇▇
By: ___________________________
Name: ___________________________ ______________________________(Seal)
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: ___________________________
______________________________(Seal)
▇▇▇▇ ▇▇▇▇▇▇▇
Merger Agreement Signature Page
