Exhibit 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
AXIUM INTERNATIONAL, INC.,
DIVERSITY MSP, INC., AS BUYER,
CHIMES INC., AS SELLER
AND
COMPUTER HORIZONS CORP.
Dated as of October 18, 2006
TABLE OF CONTENTS
ARTICLE I
ASSETS TO BE PURCHASED AND ASSUMPTION OF
OBLIGATIONS...........................1
Section 1.1(a)
Description of Assets.......................................1
Section 1.2
Assumption of Certain Liabilities..............................4
Section 1.3
Non-Assignment of Certain Property.............................4
Section 1.4
Liabilities Not Assumed........................................4
ARTICLE II
PURCHASE
PRICE.................................................................5
Section 2.1
Consideration..................................................5
Section 2.2
Prorations.....................................................5
ARTICLE III
CLOSING........................................................................5
Section 3.1
Closing........................................................5
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES.................................................6
Section 4.1
Representations and Warranties of Axium and Buyer..............6
Section 4.2
Representations and Warranties of Seller and CHC...............8
ARTICLE V
COVENANTS.....................................................................17
Section 5.1
Conduct of Business...........................................17
Section 5.2
Notice of Default.............................................18
Section 5.3
Confidentiality...............................................19
Section 5.4
Preservation of Books and Records.............................19
Section 5.5
CHC Shareholders Meeting......................................19
Section 5.6
Additional Covenants..........................................20
Section 5.7
Sales and Transfer Taxes......................................20
Section 5.8
Transferred Employees.........................................20
Section 5.9
Noncompete....................................................21
Section 5.10
Superior Offer...............................................21
Section 5.11
Name Change..................................................22
Section 5.12
Conversion to LLC............................................22
Section 5.13
Transition Services Agreement................................22
Section 5.14
No Amendment of Financing....................................22
ARTICLE VI
CONDITIONS TO
CLOSING.........................................................23
Section 6.1
Conditions to Obligations of Seller and CHC...................23
Section 6.2
Conditions to the Obligations of Buyer and Axium..............24
ARTICLE VII
INDEMNIFICATION...............................................................26
Section 7.1
Indemnification of Axium and Buyer............................26
Section 7.2
Indemnification of CHC and Seller.............................26
Section 7.3
Method of Asserting Claims....................................26
Section 7.4
Exclusive Remedy..............................................28
ARTICLE VIII
TERMINATION OF
AGREEMENT......................................................28
Section 8.1
Termination...................................................28
Section 8.2
Effect of Termination.........................................29
Section 8.3
Termination Payment...........................................29
Section 8.4
Expenses......................................................29
Section 8.5
Payment.......................................................30
Section 8.6
Waiver........................................................30
ARTICLE IX
MISCELLANEOUS.................................................................30
Section 9.1
Notices.......................................................30
Section 9.2
Entire Agreement..............................................31
Section 9.3
Binding Effect, Benefits, Assignments.........................31
Section 9.4
Applicable Law................................................31
Section 9.5
Jurisdiction..................................................31
Section 9.6
Further Assurances............................................32
Section 9.7
Counterparts..................................................32
Section 9.8
Headings......................................................32
Section 9.9
Severability..................................................32
Section 9.10
Publicity and Disclosures....................................32
Section 9.11
Amendment....................................................32
Section 9.12
Knowledge of Seller or CHC...................................33
Exhibit A - Bill of Sale
Exhibit B - [Intentionally Omitted]
Exhibit C - Buyer's Solvency
Certificate
Exhibit D - IP Assignment
Exhibit E - Seller's
Solvency Certificate
Exhibit F - Transition Services Agreement
ii
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE
AGREEMENT (this
"AGREEMENT") is made and entered into
as of
October
18,
2006 by and among
AXIUM
INTERNATIONAL,
INC.,
a Delaware
corporation ("AXIUM"),
DIVERSITY MSP, INC., a California corporation ("BUYER"),
CHIMES, INC., a Delaware
corporation
("SELLER") and Computer Horizons Corp., a
New York corporation ("CHC").
W I T N E S S E T H:
WHEREAS,
Seller is engaged in the business of providing
business
process
outsourcing
services and work-force
procurement
and management
services (the
"BUSINESS");
WHEREAS, Buyer desires to purchase and Seller desires to sell
substantially
all of the Seller's
assets,
upon the terms and subject to the
conditions
set
forth in this Agreement; and
WHEREAS,
the
respective
Boards of
Directors
of Axium and Buyer and the
respective
Boards of Directors
of Seller and CHC deem it advisable
and in the
best interest of their respective shareholders that Buyer acquire
the assets and
assume the
liabilities
of Seller
described in and on the terms and subject to
the conditions set forth in this Agreement;
NOW,
THEREFORE,
in
consideration of the premises and the mutual promises
herein contained and for other good and valuable consideration,
the receipt and
sufficiency
of which
hereby are
acknowledged,
the
parties
hereto
agree as
follows:
ARTICLE I
ASSETS TO BE PURCHASED AND ASSUMPTION OF OBLIGATIONS
Section 1.1
(a) DESCRIPTION OF ASSETS. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing (as
hereinafter defined),
Seller
shall sell,
convey,
transfer,
assign and deliver to Buyer,
and Buyer
shall
purchase,
acquire and take
assignment and delivery from Seller,
all of
Seller's
right
and
title
to and
interest
in and
to its
business
assets,
properties,
rights
(contractual
or
otherwise)
and
claims
(other
than the
Excluded
Assets
specified
in
SECTION
1.1(B))
free and
clear of liens
and
encumbrances
(the
"PROPERTY").
Nothing
contained
herein
shall
require the
physical
delivery
of
the
Property.
The
Property
shall
include,
without
limitation, all of Seller's right, title and interest in and to the
following:
(i)
All of Seller's inventory,
raw materials,
packaging
materials,
machinery, obsolete inventory, equipment, tooling, parts,
furniture,
supplies,
vehicles,
office equipment and other tangible personal property (the
"PERSONAL
PROPERTY"),
including,
without
limitation,
the Personal
Property
listed on SCHEDULE 1.1(A)(I) hereto;
(ii)
All of Seller's industrial and intellectual
property
rights,
including,
without
limitation,
patents,
patent
rights,
patent
applications,
inventions,
trade secrets, processes,
formulas, customer lists,
proprietary rights,
proprietary knowledge,
computer software,
websites, URLs,
domain names, trademarks,
names, service marks, brand marks, brand names, trade
names, source or object code,
copyrights,
trade secrets relating to or arising
from any proprietary process,
symbols and logos related to the Business and all
applications
therefor,
registrations
thereof and licenses and
sublicenses or
agreements in respect
thereof,
which Seller owns or has the right to use or to
which
Seller is a party and all filings,
registrations
or issuances of any of
the
foregoing
with or by any
federal,
state,
local or
foreign
regulatory,
administrative
or governmental
office
including,
without
limitation,
those
listed
on
SCHEDULE
1.1(A)(II)
and
the
goodwill
appurtenant
thereto
(collectively, the "PROPRIETARY RIGHTS");
(iii)
All leases of equipment,
machinery or other tangible
personal property to which Seller is a party, as listed on SCHEDULE
1.1(A)(III)
hereto (the "PERSONAL PROPERTY LEASES");
(iv)
All contracts,
agreements,
contract rights, license
agreements,
customer contracts,
distribution agreements,
franchise rights and
agreements,
purchase and sales orders,
quotations
and executory
commitments,
instruments,
royalty
agreements,
third
party
guaranties,
indemnifications,
arrangements and
understandings,
whether oral or written, to which Seller is a
party (whether or not legally bound thereby), including without
limitation those
listed on SCHEDULE 1.1(A)(IV) hereto (the "CONTRACTS");
(v)
All
franchises,
licenses,
permits,
consents,
authorizations,
approvals and certificates of any regulatory, administrative or
other
Governmental
Authority
(as defined
herein) (to the extent the same are
transferable by Seller to Buyer),
as listed on SCHEDULE
1.1(A)(V)
hereto (the
"PERMITS");
(vi)
All of
Seller's
rights
under all of its leases for
its facilities together with all buildings, structures,
installations, fixtures
and all other
improvements,
appurtenant
thereto or
situated
thereon and all
other rights,
interests and
appurtenances
of Seller
pertaining
thereto (the
"OFFICE LEASES");
(vii)
All of
Seller's
accounts
receivable
as
listed on
SCHEDULE 1.1(A)(VII) (the "RECEIVABLES");
(viii) All causes of action, judgments, claims or demands of
whatever
kind or
description
which
Seller has or may have
against any other
person or entity as listed on
SCHEDULE
1.1(A)(VIII)
hereto
(the
"CAUSES
OF
ACTION");
(ix)
Seller's marketing and sales materials;
(x)
Seller's
backlog
(sales
orders
which have not yet
been processed);
(xi)
All of
Seller's
customer
or client
lists,
files,
documentation, records and related documentation, including,
without limitation,
those listed on SCHEDULE 1.1(A)(XI) hereto;
(xii)
All of Seller's security deposits,
prepaid expenses,
and other miscellaneous assets, including,
without limitation,
those listed on
SCHEDULE 1.1(A)(XII) hereto;
(xiii) All of Seller's goodwill;
2
(xiv)
All of Seller's other tangible and intangible assets,
other than the Excluded Assets;
(xv)
All of the cash held by Seller (i) as restricted cash
received by Seller and held in client-specific bank accounts,
listed on SCHEDULE
1.1(A)(XV)
hereto,
to be used to make
payments
to vendors of the
applicable
client ("VENDOR
RESTRICTED FUNDS") and (ii) to be disbursed to Seller's vendors
in accordance with the client payment terms ("VENDOR CASH"); and
(xvi)
All right,
title and
interest
in and to all of the
securities of Seller's subsidiaries,
including,
without limitation, (A) Chimes
(Canada),
Inc., a corporation organized under the laws of Nova Scotia,
Canada,
(B) Chimes Servicing Corp., a corporation
organized under the laws of the State
of Delaware,
(C) Chimes
Netherlands
B.V., a private limited liability company
organized under the laws of the Netherlands,
(D) Chimes (UK) Limited, a private
company
organized
under the laws of England and Wales,
and (E) Chimes (Puerto
Rico) Inc., a corporation organized under the laws of Puerto Rico.
(b)
Notwithstanding
the
foregoing,
the
following
assets are
being
retained by Seller and/or CHC, are
expressly
excluded from the purchase
and sale
contemplated
hereby,
and, as such,
are not included in the Property
(the "EXCLUDED ASSETS"):
(i)
Seller's
stock
record
books and
corporate
record
books
containing
minutes of meetings of directors
and
stockholders,
and any
other
records
that
relate
exclusively
to
Seller's
organization
or
stock
capitalization (collectively, the "CORPORATE RECORDS")
(ii)
Except as related to warranty
obligations assumed by
Buyer as set forth in Section 1.2(d), all insurance policies,
including, without
limitation,
all rights to receive proceeds of insurance policies and all rights
of offset, counterclaims and insurance coverage thereunder;
(iii)
all cash,
bank
accounts,
certificates
of deposit,
commercial
paper,
annuities,
treasury
notes and
bills and other
marketable
securities other than Vendor Restricted Funds and Vendor Cash;
(iv)
any and all income tax
credits
and
refunds for the
period ending on the Closing Date;
(v)
all severance, pension, retirement and other employee
benefit plans;
(vi)
all
rights of Seller
with
respect
to the
claims,
refunds,
causes of action, rights of recovery,
rights of set-off and all other
rights and assets of every kind and nature
related to the Excluded
Liabilities
(as defined below);
(vii)
all monies to be
received
by, and all other
rights
of, Seller and/or CHC under this Agreement,
including,
without
limitation the
Purchase
Price (as defined
herein) and the other
agreements,
documents,
and
instruments executed or delivered in connection with this
Agreement; and
3
(viii) the right to
receive
mail and other
communications
addressed to Seller
and/or CHC
relating to any of the assets
described in the
foregoing clauses (i) through (vi) or the Excluded Liabilities.
Section
1.2 ASSUMPTION
OF CERTAIN
LIABILITIES.
On the Closing Date (as
hereinafter
defined),
Buyer shall,
subject to SECTION 1.4 hereof,
assume and
hereby
agrees to pay,
perform
and
discharge
when due,
all
accrued
debts,
liabilities,
obligations
and
commitments
of Seller
except for the
Excluded
Liabilities (as defined herein) including, without limitation, the
following:
(a)
all accounts payable (the "ACCOUNTS PAYABLE");
(b)
all accrued liabilities relating to the Property as shown on
the balance
sheet dated June 30,
2006 to the extent not
satisfied,
and those
accruing since that date in the ordinary course of business
consistent with past
practice;
(c)
all debts, liabilities,
obligations and commitments arising
under the
Permits,
Personal
Property
Leases,
Office
Leases
and
Contracts
transferred to Buyer; and
(d)
all warranty obligations.
The
liabilities of Seller being assumed by Buyer are
hereinafter
collectively
referred to as the "ASSUMED LIABILITIES."
Section
1.3
NON-ASSIGNMENT OF CERTAIN
PROPERTY.
To the extent that the
assignment
hereunder of any of the Permits,
Personal
Property Leases,
Office
Leases or
Contracts
shall
require
the
consent of any other party (or in the
event that any of the same shall be nonassignable) (each, a
"CONSENT CONTRACT"),
neither this
Agreement nor any action taken
pursuant to its
provisions
shall
constitute
an
assignment
or an
agreement
to
assign if such
assignment
or
attempted assignment would constitute a breach thereof; PROVIDED,
HOWEVER, that
in each such
case,
Seller
shall use its good
faith
commercially
reasonable
efforts to obtain the
consent of such
other
party to an
assignment
to Buyer
without
being
obligated
to pay any fees or to make any other
payments to any
party to obtain any such
consent.
If such
consent is not
obtained,
(i) such
Consent
Contract shall not be deemed assigned at Closing,
(ii) Buyer shall act
as
Seller's
agent to
perform
Seller's
obligations
thereunder
and shall so
perform,
and (iii) Seller and/or CHC, at Buyer's expense,
shall cooperate with
Buyer in any
reasonable
arrangement
designed
to
provide
for Buyer the full
benefits
of
any
such
Consent
Contract
including,
without
limitation,
enforcement,
for the
account
and
benefit of Buyer,
of any and all rights of
Seller against any other person with respect to any such Consent
Contract.
When
such consents to the transfer,
conveyance and assignment of a Consent
Contract
have been obtained, if ever, such Consent Contract shall thereupon
automatically
be
transferred,
conveyed
and
assigned
to
Buyer,
and the
obligations
and
liabilities of Seller under such Consent Contract shall
automatically
cease to
be
excluded
from the Bill of Sale (as
hereinafter
defined) by reason of this
SECTION 1.3, without the payment of any additional consideration.
Section
1.4
LIABILITIES
NOT ASSUMED.
With the exception of the Assumed
Liabilities,
Buyer shall not, by execution and performance of this Agreement or
otherwise,
assume
or
otherwise
be
responsible
for
any
debt,
liability,
obligation
or
commitment
of any nature of
Seller,
whether
relating
to the
4
Business, any of Seller's other assets, operations, businesses or
activities, or
claims of such
liability or
obligation,
matured or
unmatured,
liquidated or
unliquidated,
fixed or contingent,
or known or unknown, whether arising out of
occurrences
prior to, at or after the Closing Date.
The
liabilities of Seller
not being
assumed
by Buyer are
hereinafter
collectively
referred
to as the
"EXCLUDED LIABILITIES."
ARTICLE II
PURCHASE PRICE
Section
2.1
CONSIDERATION.
Upon the terms and subject to the conditions
set forth in this
Agreement,
in
consideration
for the sale,
assignment
and
transfer of the Property, Buyer shall:
(a)
assume the Assumed Liabilities at the Closing as provided in
SECTION
1.2
hereof
pursuant
to a bill of
sale,
assignment
and
assumption
agreement in the form of EXHIBIT A hereto (the "BILL OF SALE"); and
(b)
at the
Closing
pay to Seller in cash by wire
transfer
of
immediately
available funds in accordance with Seller's written instructions to
Buyer, the sum of EIGHTY MILLION DOLLARS ($80,000,000) (the
"PURCHASE PRICE").
Section 2.2
PRORATIONS.
The
following
prorations
relating
to
the
Property will be made as of the Closing
Date,
with Seller liable to the extent
that such items relate to any time period up to and
including
the Closing Date
and Buyer liable to the extent that such items relate to periods
subsequent
to
the Closing Date:
(a)
Real and personal property taxes and assessments relating to
the Property and the Business;
(b)
Water,
sewer
and
other
similar
types
of
taxes,
and
installments on special benefit assessments;
(c)
Electric, gas, telephone and utility charges;
(d)
Charges
under
maintenance
and service
contracts and fees
under licenses transferred to or assumed by Buyer; and
(e)
Prepaid
expenses
of Seller or CHC to the
extent
that the
benefit thereof will be available to Buyer after the Closing Date.
ARTICLE III
CLOSING
Section 3.1
CLOSING.
Unless
this
Agreement
is
earlier
terminated
pursuant to Article VIII, the consummation of the
transactions
contemplated by
this
Agreement,
including
the
purchase
and
sale
of the
Property
and the
5
assumption of the Assumed
Liabilities (the "CLOSING"),
shall take place at the
offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP, Park
Avenue Tower, 65
East 55th Street,
New York, New York 10022 within three (3) business days after
the date on which
the
conditions
set forth in
Article
VI are
satisfied
or
waived, unless another time or place shall be agreed to by the
parties (the date
on which such closing occurs being herein referred to as the
"CLOSING DATE").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section
4.1
REPRESENTATIONS AND WARRANTIES OF AXIUM AND BUYER. Axium and
Buyer hereby jointly and severally represent and warrant to Seller
and CHC as of
the date hereof and as of the Closing Date that:
(a)
CORPORATE
ORGANIZATION;
REQUISITE
AUTHORITY.
Axium
is a
corporation,
duly
organized,
validly
existing and in good standing under the
laws of the State of Delaware and has all requisite power and
authority to carry
on its
business as now being
conducted
and as
contemplated
to be
conducted
immediately
following
the Closing.
Buyer is a
corporation,
duly
organized,
validly
existing and in good standing under the laws of the State of
California
and has all requisite
power and authority to carry on its business as now being
conducted and as contemplated to be conducted immediately following
the Closing.
Complete and correct copies of the Certificate of Incorporation of
Axium and all
amendments thereto, certified by the Secretary of State of the
State of Delaware
and the
bylaws
of
Axium
and all
amendments
thereto
have
been
previously
delivered
to
Seller.
Complete
and
correct
copies
of
the
Articles
of
Incorporation of Buyer and all amendments thereto, certified by the
Secretary of
State of the State of
California
and the
bylaws
of Buyer and all
amendments
thereto have been previously delivered to Seller.
(b)
AUTHORIZATION;
VALIDITY.
Each of Axium
and
Buyer has all
requisite
corporate
power and
authority
to execute,
deliver and perform its
obligations under this Agreement, the Transition Services
Agreement, the Bill of
Sale and the Solvency
Certificate (as such terms are defined
herein),
and all
other agreements,
documents and instruments required to be executed by Axium or
Buyer pursuant hereto
(collectively,
the "BUYER AGREEMENTS") and to consummate
the transactions contemplated hereby and thereby. All necessary
corporate action
has been taken by Axium and Buyer with
respect to the
execution,
delivery and
performance
by Axium
and
Buyer of this
Agreement
and the
applicable
Buyer
Agreements and the
consummation
of the
transactions
contemplated
hereby and
thereby,
and no further corporate
authorization will be necessary to authorize
the execution and delivery by Axium or Buyer of, and the
performance
of either
Axium's or Buyer's
obligations
under,
this Agreement or the applicable
Buyer
Agreements.
Each of Axium
and
Buyer
has
delivered
to
Seller a copy of the
resolutions
of its Board of Directors
approving
the execution and delivery of
this Agreement and the applicable
Buyer
Agreements and the consummation of all
of the
transactions
contemplated
hereby and
thereby,
duly
certified
by an
authorized officer of Axium or Buyer, as applicable.
(c)
EXECUTION
AND
DELIVERY.
This
Agreement
has
been
duly
executed and delivered by Axium and Buyer and this
Agreement
constitutes,
and
when executed and delivered the Buyer Agreements will constitute,
legal,
valid
and binding obligations of Axium and Buyer,
enforceable against Axium or Buyer,
6
as applicable,
in accordance with their
respective
terms,
except (i) as such
enforceability
may be
limited by or
subject
to any
bankruptcy,
insolvency,
reorganization,
moratorium or other similar laws
affecting
creditors'
rights
generally,
(ii) as such obligations are subject to general principles of
equity
and (iii) as rights to indemnity
may be limited by federal or state
securities
laws or by public policy.
(d)
GOVERNMENTAL
CONSENTS.
Except
pursuant
to
the
Hart-Scott-Rodino
Antitrust
Improvements
Act of 1976,
as
amended
(the "HSR
ACT"), no action,
waiver or consent by any federal,
state,
municipal or other
governmental
department,
commission or agency
("GOVERNMENTAL
AUTHORITY")
is
necessary
to make
this
Agreement
and the
applicable
Buyer
Agreements,
as
appropriate,
valid instruments
binding upon Axium and Buyer in accordance with
their
respective
terms and
neither
Axium nor Buyer is required to submit any
notice,
report or other filing with any
Governmental
Authority in
connection
with the
execution,
delivery or
performance
of this
Agreement or any of the
Buyer Agreements.
(e)
NO
CONFLICTS;
ABSENCE OF DEFAULT.
Neither the
execution,
delivery
and
performance
of this
Agreement
or any of the
applicable
Buyer
Agreements
by Axium or Buyer,
nor the
consummation
by Axium and Buyer of the
transactions
contemplated hereby and thereby, nor compliance by Axium and Buyer
with the provisions hereof and thereof will (i) conflict with or
violate Axium's
or Buyer's
Certificate of
Incorporation or Articles of
Incorporation,
as the
case may be, or bylaws or (ii) conflict with or violate any law,
administrative
regulation or rule or court order, writ,
judgment or decree (a "LAW" or "LAWS")
applicable
to Axium or Buyer except for any such
conflict or
violation
which
would not reasonably be expected to have a material adverse effect
on Axium's or
Buyer's
financial
condition
or
ability
to
consummate
the
transactions
contemplated
by this
Agreement (a "BUYER
MATERIAL
ADVERSE
EFFECT") or (iii)
breach,
conflict with,
violate or cause a default under any material contract,
license or agreement,
permit, instrument or obligation to which either Axium or
Buyer or any of their
assets
is or may be bound.
Neither
the
execution
and
delivery
of
this
Agreement
and
the
applicable
Buyer
Agreements,
nor the
consummation of the transactions
contemplated hereby and thereby,
will require
any consent, waiver, approval, exemption,
registration,
declaration,
license,
authorization
or permit of, or filing with or notification to, any other person
or entity. There are no corporate, contractual,
statutory or other restrictions
of any kind
upon the
power
and
authority
of Axium or Buyer to
execute
and
deliver this Agreement and the applicable Buyer Agreements and to
consummate the
transactions contemplated hereunder and thereunder.
(f)
BROKER.
No broker,
finder or investment banker is entitled
to any
brokerage
or finder's
fee or other
commission
from Axium or Buyer in
connection with the transactions contemplated hereby based upon the
arrangements
made by or on behalf of Axium or Buyer.
(g)
LITIGATION.
There is no suit,
action or
administrative or
other legal proceeding,
nor any order, decree or judgment in progress,
pending
or in effect, or to the knowledge of Axium or Buyer, threatened
against Axium or
Buyer in connection
with or relating to the
transactions
contemplated by this
Agreement,
or any other
agreement
to be executed
by Axium or Buyer
pursuant
hereto,
and Axium
and Buyer do not know or have any
reason to be aware of any
basis for the same.
7
(h)
SOLVENCY.
Each of Axium and Buyer is
Solvent
(as
defined
below).
Neither
Axium nor Buyer
will
fail to be
Solvent
as a result of the
execution
and
delivery
of
this
Agreement
or any of the
other
agreements,
documents,
or
instruments
to
which
it is a
party
or as a
result
of
the
transactions contemplated hereunder.
"SOLVENT" shall mean, when used with respect to any person or
entity,
that
at the time of determination:
(i)
it is then
able
and
expects
to be able to pay its
debts as they mature; and
(ii)
it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
(i)
FINANCING.
Buyer has received
financing
commitments
from
GoldenTree
Asset
Management,
LP and such
commitments
shall provide adequate
financing to
consummate
the
transactions
contemplated
hereby,
by the Buyer
Agreements and by the Seller Agreements, as applicable.
(j)
NO
DEFAULT.
Neither
Axium
nor Buyer is in
default
with
respect to any indebtedness,
note, indenture, loan agreement,
mortgage, lease,
deed,
or other
agreement
to which Axium or Buyer is a party or by which it is
bound,
and
neither
Axium nor Buyer has
received
any notice or demands
with
respect
to the same,
which
default
or demand
would
cause a Buyer
Material
Adverse Effect.
Section
4.2
REPRESENTATIONS
AND
WARRANTIES
OF SELLER AND CHC. Each of
the
following
representations
and
warranties
by CHC and
Seller to Buyer is
qualified by all of the Seller's disclosure
schedules annexed hereto, which set
forth certain disclosures concerning the Seller and its business.
Seller and CHC
hereby
represent
and
warrant
to Buyer as of the
date
hereof
and as of the
Closing Date that:
(a)
CORPORATE
ORGANIZATION;
REQUISITE
AUTHORITY
TO
CONDUCT
BUSINESS.
Seller is a corporation duly organized,
validly existing and in good
standing under the laws of the State of Delaware and has all
requisite power and
authority to own,
operate or lease the Property and to carry on the Business as
now being conducted.
CHC is a corporation duly organized,
validly existing and
in good standing
under the laws of the State of New York.
Complete and correct
copies of the Certificate of Incorporation of Seller and all
amendments thereto,
certified by the Secretary of State of the State of Delaware,
and the bylaws of
Seller
and all
amendments
thereto
have
been
previously
delivered
or made
available to Buyer.
Seller is duly
qualified or licensed to do business and is
in good
standing as a foreign
corporation
in each
jurisdiction
in which the
ownership
or leasing of the
Property
or the
transaction
of
business by the
Business requires it to be so qualified or licensed, except where
the failure to
be so qualified or licensed would not in the aggregate reasonably
be expected to
have a
Seller
Material
Adverse
Effect.
As used in this
Agreement,
"SELLER
MATERIAL
ADVERSE
EFFECT"
means a
material
adverse
effect on the
business,
financial
condition or results of
operations of the Business or the ability of
Seller to consummate the transactions contemplated by this
Agreement,
except in
each case for any such effects
resulting
from,
arising out of, or relating to
(a)
legal,
accounting
or
investment
banking
fees
for
the
negotiation,
8
preparation and execution of this Agreement,
(b) the entry into or announcement
of this Agreement and the other transactions contemplated hereby,
(c) any change
in or
interpretations
of (i) GAAP or (ii) any Law,
(d) any change in interest
rates or
general
economic
conditions
in the
industries
or markets in which
Seller or any of its subsidiaries operates or affecting United
States or foreign
economies
in
general
or
United
States
or
foreign
financial,
banking
or
securities markets,
(e) any action taken by Buyer or any of its Affiliates,
or
(f) any natural disaster or act of God.
(b)
AUTHORIZATION;
VALIDITY. Seller has all requisite power and
authority to execute,
deliver and perform its obligations under this Agreement,
and the Transition Services
Agreement,
the Bill of Sale, the IP Assignment (as
such
term
is
defined
herein),
and
all
other
agreements,
documents
and
instruments required to be executed by Seller pursuant hereto
(collectively, the
"SELLER AGREEMENTS"), and to consummate the transactions
contemplated hereby and
thereby.
CHC has all
requisite
power and
authority
to execute,
deliver and
perform its obligations
under this Agreement and to consummate the transactions
contemplated
hereby and thereby.
All necessary corporate action has been taken
by Seller with respect to the execution,
delivery and
performance by Seller of
this
Agreement
and
the
Seller
Agreements
and
the
consummation
of
the
transactions
contemplated
hereby
and
thereby,
and
no
further
corporate
authorization
will be
necessary
to authorize
the
execution
and delivery by
Seller and the performance of its obligations under this Agreement
or the Seller
Agreements. All necessary corporate action has been taken by CHC
with respect to
the
execution,
delivery
and
performance
by CHC of
this
Agreement
and the
consummation of the transactions
contemplated
hereby, and no further corporate
authorization
will be necessary to authorize
the execution and delivery by CHC
and the
performance of its
obligations
under this
Agreement
(other than the
requisite approval of the transactions
contemplated
hereby by the shareholders
of CHC in accordance with CHC'S
Certificate of
Incorporation
and the New York
Business Corporation Law ("NYBCL")).
(c)
EXECUTION
AND
DELIVERY.
(i) This
Agreement has been duly
executed
and
delivered
by Seller
and this
Agreement
constitutes,
and when
executed and delivered the Seller Agreements will constitute,
legal,
valid and
binding
obligations of Seller,
enforceable
against Seller in accordance
with
their
respective
terms,
and (ii) this
Agreement
has been duly
executed and
delivered by CHC and
constitutes a legal,
valid and binding
obligation of CHC
enforceable against CHC in accordance with its terms; except, in
both cases, (x)
as
such
enforceability
may
be
limited
by or
subject
to
any
bankruptcy,
insolvency,
reorganization,
moratorium
or
other
similar
laws
affecting
creditors'
rights
generally,
(y) as such
obligations
are subject to general
principles of equity and (z) as rights to indemnity may be limited
by federal or
state securities laws or by public policy.
(d)
GOVERNMENTAL CONSENTS;
PERMITS.
Except pursuant to the HSR
Act and as set forth on
SCHEDULE
4.2(D),
no action,
waiver or consent by any
Governmental
Authority
is
necessary
to make this
Agreement
and the
Seller
Agreements, as appropriate,
valid instruments binding upon Seller in accordance
with their
respective
terms and Seller is not
required
to submit any notice,
report or other filing with any
Governmental
Authority in connection
with the
execution,
delivery
or
performance
of this
Agreement
or any of the
Seller
Agreements,
except where the failure to do so would not have a Seller
Material
Adverse Effect.
The Permits listed on SCHEDULE 1.1(A)(V) are all of the permits
necessary to sell the products and services of the Business being
sold as of the
date hereof.
9
(e)
CONFLICTS;
ABSENCE
OF
DEFAULT.
Neither
the
execution,
delivery or
performance
of this
Agreement or any of the Seller
Agreements by
Seller, nor the execution, delivery or performance of this
Agreement by CHC, nor
the
consummation
by Seller
or CHC of the
transactions
contemplated
by such
documents to which it is a party,
nor
compliance
by Seller or CHC with any of
the
provisions of such documents to which it is a party will (i) in the
case of
Seller,
conflict
with or violate
Seller's
Certificate
of
Incorporation
or
bylaws,
and in the case of CHC,
conflict with or violate CHC's
Certificate of
Incorporation or bylaws; (ii) conflict with or violate any Law
applicable to the
Business
or any of the
Property,
which would have a Seller
Material
Adverse
Effect;
or (iii) breach,
conflict
with,
violate or cause a default under any
material contract, license or agreement,
permit, instrument, or obligation (the
"SELLER
CONTRACTS")
to which
Seller or any of its
assets is or may be bound,
except for any such
breach,
conflict,
violation
or default
which
would not
reasonably be expected to cause a Seller Material
Adverse
Effect.
Neither the
execution and delivery of this Agreement and the Seller Agreements,
in the case
of Seller, nor the execution and delivery of this Agreement, in the
case of CHC,
nor the consummation by Seller or CHC of the
transactions
contemplated by such
documents
to which it is a party will require any
consent,
waiver,
approval,
exemption,
registration,
declaration,
license, authorization or permit of, or
filing with or notification
to, any other person or entity,
except for the HSR
Act (as herein
defined)
and such
consents,
waivers,
approvals,
exemptions,
registrations,
declarations,
licenses
authorizations,
permits,
filings
or
notifications
which have been
obtained
or are listed on SCHEDULE
4.2(E),
or
which, if not obtained or made, will not allow for the termination,
cancellation
or acceleration of any obligation to repay under,
any of the terms,
conditions
or
provisions
of any
Contract or
obligation.
Seller's
inability
to obtain
consents to the
assignment of Contracts to Buyer shall not
constitute a breach
or default of any provision of this Agreement.
Neither the execution,
delivery
or performance of this Agreement or any of the Seller Agreements by
Seller,
nor
the
execution,
delivery
or
performance
of this
Agreement
by CHC,
nor the
consummation by Seller or CHC of the transactions contemplated by
such documents
to
which
it is a
party,
nor
compliance
by
Seller
or CHC
with any of the
provisions of such documents to which it is a party,
will
constitute a default
(in and of itself or with the giving of notice,
passage of time or both)
under
the Seller Contracts, or result in the creation or imposition of
any encumbrance
upon,
or giving to any other
party or
parties
any claim,
interest
or right
including
rights of
termination
or
cancellation
in, or with respect to, the
Business or Property,
which would have a Seller
Material
Adverse
Effect;
or
result in the loss of any
license,
franchise or legal
privilege
possessed by
Seller or give a right of
termination
to any party to any
agreement
or other
instrument
to which
Seller is a party or by which any of the
Property
or the
Business is bound, which would have a Seller Material Adverse
Effect. Except for
the approval of CHC's
shareholders
and except as set forth on SCHEDULE 4.2(E),
there are no corporate, contractual, statutory or other
restrictions of any kind
upon the power and authority of Seller to execute and deliver this
Agreement and
the
Seller
Agreements,
upon the power and
authority
of CHC to
execute
and
deliver this
Agreement,
and for Seller or CHC to consummate
the
transactions
contemplated by such documents to which it is a party.
(f)
ENVIRONMENTAL MATTERS.
(i)
Except as set forth on
SCHEDULE
4.2(F) and in CHC's
annual,
quarterly
and current
reports as filed since January 1, 2005 with the
United States
Securities
and Exchange
Commission on Forms 10-K,
10-Q and 8-K
pursuant
to the
Securities
and
Exchange
Act of 1934,
as amended
(the "SEC
REPORTS"),
(A) Seller is in compliance with all applicable
Environmental Laws,
10
except
where
failure
to be in
compliance
would
not have a Seller
Material
Adverse Effect; (B) there is no Environmental
Claim pending against Seller; (C)
Seller has obtained all material
permits,
approvals,
identification
numbers,
licenses or other
authorizations
required under any
applicable
Environmental
Laws (the "ENVIRONMENTAL
PERMITS") and is and has been in compliance with their
requirements;
(D) there are no underground or aboveground
storage tanks or any
surface
impoundments,
septic tanks,
pits, sumps or lagoons in which Hazardous
Materials
are being or have been
treated,
stored or
disposed
of on any real
property
currently
owned or leased by Seller
other
than in
compliance
with
Environmental Laws; (E) Seller has not undertaken or completed any
investigation
or
assessment
or
remedial or response
action
relating to any such
release,
discharge or disposal of or contamination with Hazardous
Materials at any site,
location or operation of the
Business,
either
voluntarily
or pursuant to the
order of any Governmental
Entity or the requirements of any Environmental
Law;
and (F) except as set forth on SCHEDULE 4.2(F), there have been no
Environmental
Claims against the Seller.
(ii)
For purposes of this SECTION 4.2(F):
(A)
"ENVIRONMENTAL
CLAIM" shall mean any claim,
action,
demand,
order,
or notice by or on behalf of,
any
Governmental
Authority
or
person alleging
potential
liability arising out of, based on or resulting from
the
violation of any
Environmental
Law or permit or relating to any Hazardous
Materials.
(B)
"ENVIRONMENTAL
LAWS"
shall
mean all Laws
that are
applicable
to the Business or the Property
relating to Releases or
threatened
Releases of Hazardous Materials or otherwise relating to pollution
or protection
of the environment,
health,
safety or natural
resources,
including,
without
limitation,
those
relating
to (A) the
Releases
or
threatened
releases
of
Hazardous
Materials
or
materials
containing
Hazardous
Materials or (B) the
manufacture,
generation,
handling,
treatment, storage, transport, disposal or
handling of Hazardous Materials or materials containing Hazardous
Materials.
(C)
"HAZARDOUS
MATERIALS" means all substances,
matters
and
other
particles
defined
or
listed
as
"hazardous"
or
"toxic"
under
Environmental
Laws or are
otherwise
subject to or regulated by
Environmental
Laws.
(D)
"RELEASE"
shall mean any release,
spill,
emission,
leaking, pumping, pouring, injection,
escaping,
deposit, disposal,
discharge,
dispersal, dumping, leaching or migration of Hazardous Materials
into the indoor
or outdoor
environment,
including the movement of Hazardous
Materials through
the air, soil, surface water or groundwater.
(g)
ABSENCE OF CERTAIN
CHANGES AND EVENTS.
Except as set forth
on SCHEDULE 4.2(G), since September 30, 2006, there has not been:
(i)
Any Seller Material Adverse Effect;
(ii)
Other
than
in the
usual
and
ordinary
course
of
business,
any increase in amounts payable by Seller to or for the benefit of
or
committed to be paid by Seller to or for the benefit of any
officer, consultant,
agent or employee
of Seller,
in any
capacity,
whether in the form of salary,
bonus,
consulting fee,
directors fee or otherwise,
or in any benefits granted
11
under any bonus, stock option,
profit sharing,
pension,
retirement,
deferred
compensation,
insurance,
or other direct or indirect benefit plan with respect
to any such person;
(iii)
Any transaction entered into or carried out by Seller
other than in the ordinary
and usual
course of its
business
resulting in the
incurrence of liabilities or obligations of Seller;
(iv)
Any material
change made by Seller in the methods of
doing
business or in the
accounting
principles
or practices or the method of
application of such principles or practices;
(v)
Any
mortgage,
pledge,
lien,
security
interest,
hypothecation, charge or other encumbrance imposed or agreed to be
imposed on or
with respect to the Property which will not be discharged
prior to the Closing,
except for Permitted Liens (as hereinafter defined);
(vi)
Any
sale,
lease or
other
disposition
of,
or any
agreement to sell, lease or otherwise
dispose of any Property,
individually in
excess of $100,000,
or in the aggregate in excess of $250,000,
excluding sales
in the ordinary course of business;
(vii)
Any purchase of or any agreement to purchase
capital
assets or any lease or any agreement to lease, as lessee,
any capital assets of
the Business individually in excess of $100,000 or in the aggregate
in excess of
$250,000;
(viii) Any modification, waiver, change, amendment, release,
rescission or termination
of, or accord and
satisfaction
with respect to, any
term,
condition
or
provision
of any
contract,
agreement,
license or other
instrument
to which
Seller
is a party,
which
would
have a Seller
Material
Adverse
Effect,
other than any
satisfaction by performance in accordance with
the terms thereof in the usual and ordinary course of its business;
(ix)
Any damage,
destruction or similar loss,
whether or
not covered by insurance,
adversely
affecting the Seller in excess of $100,000
individually, or $250,000 in the aggregate;
(x)
Any
strike,
picketing,
work
slowdown
or
labor
disturbance with respect to the Business; or
(xi)
To the
knowledge of Seller or CHC, any change in any
Law applicable to or binding upon the Business or the Property,
which would have
a Seller Material Adverse Effect.
(h)
TAXES AND TAX RETURNS.
(i) For purposes of this
Agreement,
(A) the term
"TAXES"
shall
mean all
taxes,
charges,
fees,
levies or other
assessments,
including,
without limitation,
income,
gross receipts,
excise,
property, use, sales, transfer, license, payroll and franchise or
other taxes of
any kind
whatsoever,
imposed by the
United
States,
or any
state,
local or
foreign
government
or
subdivision
or agency
thereof
whether
computed on a
unitary,
combined or any other basis;
and such term shall include any interest
and
penalties or additions to tax; and (B) the term "TAX RETURN" shall
mean any
12
report,
return or other information
required to be filed with,
supplied to or
otherwise made available to a taxing authority in connection with
Taxes.
(ii)
Except for
transfer tax returns in
connection
with
the
transactions
contemplated by this Agreement,
which will be filed promptly
after the
Closing
Date,
Seller
has (A)
filed
with the
appropriate
taxing
authorities all Tax Returns relating to the Property or the
Business required to
be filed for any period ending on or before the Closing Date (or
are properly on
extension), and all such filed Tax Returns are true, correct and
complete in all
material
respects,
and (B) paid in full all Taxes
shown to be due on such Tax
Returns, together with any penalties or fines due in connection
therewith. There
are no liens for Taxes upon the Property
except for statutory liens for current
Taxes not yet due and payable.
Seller will file appropriate Tax Returns for any
period ending on or before the Closing Date,
and pay any Taxes for such periods
when due.
Seller has not received any outstanding
notice of audit,
and is not
undergoing
any audit,
of Tax Returns
relating to the Property or the Business
and has never
received any notice of deficiency
or asse
