Exhibit 10.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
GLOBALOPTIONS GROUP, INC.
AND
FACTICON, INC.
FEBRUARY 28, 2007
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT"), is made
February 28,
2007, by and among GLOBALOPTIONS GROUP, INC., a Delaware
corporation ("Buyer"),
Facticon, Inc., a Pennsylvania corporation ("SELLER").
RECITALS
Seller desires to sell, and Buyer desires to purchase,
the Assets (as
defined below) of Seller for the consideration and on the terms
set forth in
this Agreement.
AGREEMENT
The parties, intending to be legally bound, hereby agree as
follows:
ARTICLE I
SALE AND TRANSFER OF ASSETS; CLOSING
SECTION 1.1 ASSETS TO BE SOLD. Upon the terms and
subject to the
conditions set forth in this Agreement, at the Closing (as
defined in Section
1.6 below), Seller shall sell, convey, assign, transfer and
deliver to Buyer,
and Buyer shall purchase and acquire from Seller, free and clear
of any charge,
claim, equitable interest, lien, option, pledge, security
interest, mortgage,
encroachment, or restriction of any kind (an "ENCUMBRANCE"),
other than any
Encumbrance identified on ANNEX A as acceptable to Buyer
(a "PERMITTED
ENCUMBRANCE"), all of Seller's property and assets, personal or
mixed, tangible
and intangible, of every kind and description, wherever located,
belonging to
Seller and used in the conduct of the Seller's private
investigations and
security consulting business (the "BUSINESS"), including the
following (but
excluding the Excluded Assets):
(a) all equipment, furniture, office equipment,
computer hardware,
supplies, materials, vehicles, and other items of tangible
personal property
(other than inventory) of every kind owned or leased by Seller
(the "TANGIBLE
PERSONAL PROPERTY"), including those items described in SCHEDULE
2.7(B);
(b) all trade accounts receivable and all other
accounts or notes
receivable of Seller (the "ACCOUNTS RECEIVABLE");
(c) any oral or written contracts or agreement
(i) under which
Seller has or may acquire any rights or benefits, (ii) under which
Seller has or
may become subject to any obligation or liability, or (iii) by
which Seller or
any of the Assets is or may become bound (any such contract or
agreement, a
"SELLER CONTRACT"), including those Seller Contracts listed on
SCHEDULE 2.14;
(d) all Governmental Authorizations (as defined
in SECTION
2.11(B)) and all pending applications therefor or renewals thereof,
in each case
to the extent transferable to Buyer;
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(e) all data and records related to the operations of
Seller, and
copies of all records referenced in SECTION 1.2(E) below;
(f) all of the intangible rights and property of
Seller, including
the Intellectual Property Assets (as defined in SECTION
2.16) and the
Proprietary Assets (as defined in SECTION 2.16), going concern
value, goodwill,
telephone, telecopy, and e-mail addresses, websites, domain names,
and listings
including the name "Facticon," abbreviations thereof, and Facticon,
Inc., or any
previous name or names utilized by the Seller;
(g) all insurance benefits, including rights and
proceeds, arising
from or relating to the Assets prior to the Closing Date;
(h) all claims of Seller against third parties
relating to the
Assets;
(i) all cash and cash equivalents and all
securities and short
term investments, provided however, the parties agree that any
such cash and/or
cash equivalents will be used to satisy any State tax liens
filed upon the
Seller priot to Closing;
(j) all rights of Seller relating to deposits
and prepaid
expenses, claims for refunds and rights to offset in respect
thereof which are
not excluded under SECTION 1.2(F); and
(k) all other properties and assets of every kind,
character and
description, tangible or intangible, of every kind and
description, owned by
Seller, whether or not similar to the items specifically set forth
above.
All of the property and assets to be transferred to Buyer hereunder
are referred
to collectively as the "ASSETS". Notwithstanding the foregoing,
the transfer of
the Assets pursuant to this Agreement will not include the
assumption of any
liability or obligation in respect thereof unless the Buyer
expressly assumes
such liability or obligation pursuant to SECTION 1.4(A).
SECTION 1.2 EXCLUDED ASSETS. Notwithstanding anything to
the contrary
contained in Section 1.1 or elsewhere in this Agreement, the
following items
(collectively, the "EXCLUDED ASSETS") are not part of the sale
and purchase
contemplated hereunder, are excluded from the Assets, and
will remain the
property of Seller after the Closing:
(a) the minute book, membership records, and
company seal of
Seller;
(b) the equity of Seller and/or loan
receivables from
stockholders;
(c) all of Seller's life insurance policies and
rights thereunder
(except to the extent specified in Sections 1.1(h) and (i));
(d) all personnel records and other records
that Seller is
required by law to retain in its possession;
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(e) all claims for refund of taxes and other
governmental charges
of whatever nature;
(f) all rights in connection with and assets of
any Employee
Benefit Plans (as defined in Section 2.10 below);
(g) all rights of Seller in connection with the
transactions
contemplated hereby; and
(h) the property and assets expressly designated in
and including
the five real estate leases not being assumed by the Buyer
SCHEDULE 2.7(A).
Provided, however, the Buyer shall reimburse the Seller for
the use of real
estate leases located in Boston, Philadelphia, Pittsburg and New
Jersey for the
remainder of the respective lease terms (5/15/07, 5/31/07, 7/31,07
and 4/30/07,
respectively), and for the period of use for the Dallas lease,
subsequent to the
Closing Date, and such reimbursement shall be equal to the
respective monthly
lease cost for such leased property including any common area
cost and utility
cost. The reimbursement shall be paid in advance for each
month for the
anticipated use of said leased property.
SECTION 1.3 PURCHASE PRICE. The consideration for the
Assets (the
"PURCHASE PRICE") will be Two Million Eight Hundred Thousand and
No/100 Dollars
($2,800,000) wherein the Purchase Price shall include: (i) cash in
the amount of
One Million Four Hundred Thousand and No/ Dollars ($1,400,000)
("Cash Portion");
and (ii) Buyer's stock in the amount of One Million Four Hundred
Thousand and
No/ Dollars ($1,400,000) ("Stock Portion"), and the assumption
of the Assumed
Liabilities (as defined in Section 1.4 below).
In accordance with SECTION 1.7(B), at the Closing, the Purchase
Price shall be
delivered by Buyer to Seller, as follows: (A) the payment of One
Million Three
Hundred Thousand and No/100 Dollars ($1,300,000) by wire to an
escrow account,
wherein the Seller's and Buyer's legal counsels will jointly
agree as to the
distribution, anticipated as follows: (i) Seller's creditors,
including but not
limited to (x) the Internal Revenue Service; (y) various States to
satisfy State
tax liens; and (z) Seller's financial institution for its line of
credit; and
(ii) any remaining cash shall be delivered to the Law Offices
of Morton S.
Taubman and McNichol, Byrne & Matlawski, P.C., as a joint
escrow agent (the
"ESCROW AGENT") under the Escrow Agreement (as defined in SECTION
1.7(A) below),
(B) at Closing, an amount equal to Seven Hundred and Fifty
Thousand and No/100
Dollars ($750,000) of the Stock Portion of the Purchase Price shall
be delivered
to the Escrow Agent under the Escrow Ageement, as such Stock
Portion is
determined in accordance with SECTION 1.3(B); (C) at Closing, a
promissory note
in the amount of One Hundred Thousand and No/100 Dollars ($100,000)
(in the form
of Exhibit 1.3(a), the "Promissory Note 1") of the Cash Portion of
the Purchase
Price to be delivered to the the Escrow Agent under the Escrow
Agreement; (D) at
Closing, stock in an amount equal to Two Hundred Fifty
Thousand and No/100
Dollars ($250,000) of the Stock Portion of the Purchase price to
the Seller, (in
the form of Exhibit 1.3 (b), the "Promissory Note 2") to be
delivered to the
Escrow Agent under the Escrow Agreement; and (E) at Closing, the
remaining Stock
Portion ($400,000) shall be placed in escrow by the Buyer and held
by the Buyer
for the benefit of the Seller (the "Escrowed Stock"), and said
Escrowed Stock,
subject to the last sentence of this Section 1.3(a), shall be
distributed to the
Seller as follows: (i) one year from the date of Closing, an amount
equal to Two
Hundred Thousand and No/100 Dollars ($200,000) of the Escrowed
Stock , as such
Stock Portion is determined in accordance with SECTION 1.3(B), of
the Purchase
Price ; and (ii) two years from the date of Closing, an amount
equal to Two
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Hundred Thousand and No/100 Dollars ($200,000) of the Escrowed
Stock, as such
Stock Portion is determined in accordance with SECTION 1.3(B), of
the Purchase
Price Any Escrowed Stock not yet distributed shall be forfeited by
the Buyer, if
the Employment of Messrs. Bullock and Jensen are terminated for
cause (as that
term is defined in the Employment Agreements) and/or Messrs.
Bullock and Jensen
terminate their Employment prior to the term of said Employment
Agreement (the
"Termination of Employment").
(b) The number of shares of Buyer Common Stock comprising the
Stock Portion
shall be equal to number of shares resulting from $1,400,000
divided by the
higher of: (i) the Fair Market Value of a Share at the Closing
Date or $2.00.
"FAIR MARKET VALUE OF A SHARE" shall mean the average of the
closing prices of
the sales of Buyer Common Stock on all securities exchanges on
which Buyer
Common Stock may at the time be listed, or, if there have been no
sales on any
such exchange on any day, the average of the highest bid and lowest
asked prices
on all such exchanges at the end of such day, or, if on any day
Buyer Common
Stock are not so listed, the average of the representative bid and
asked prices
quoted in the NASDAQ System as of 4:00 P.M., New York time, or,
if on any day
Buyer Common Stock are not quoted in the NASDAQ System, the
average of the
highest bid and lowest asked prices on such day in the domestic
over-the-counter
market as reported by the National Quotation Bureau Incorporated,
or any similar
successor organization, in each such case averaged over a period
of 180 trading
days consisting of the trading day as of which the Fair Market
Value of a Share
is being determined and the 180 consecutive trading days prior to
such day. All
Shares issued herein will be subject to Rule 144
promulgated under the
Securities Act of 1933, as amended.
SECTION 1.4 LIABILITIES.
(a) At the Closing, Buyer shall assume and be
obligated to
discharge only the following specifically enumerated liabilities
and obligations
of Seller (the "ASSUMED LIABILITIES"):
(i) any trade account payable that is incurred
by Seller in
the Ordinary Course of Business at the Closing Date, in each case
which remains
unpaid as of the Closing, providing such account payables are
described and aged
in Schedule 1.4(a)(i);
(ii) any liability arising after the Closing
under any Seller
Contract included in the Assets (other than any liability
arising out of or
relating to a breach which occurred prior to the Closing); and
(iii) any liability of Seller described
in SCHEDULE
1.4(A)(III), including an amount up to Fifty Thousand and
No/100 Dollars
($50,000) for : (i) an accrual for accounting services
required to provide
audited financial statements as required under SECTION 2.4 of this
Agreement and
(ii) any legal fees incurred in the review, negotiation or
preparation hereof.
(b) All liabilities and obligations of Seller,
whether arising
prior to the Closing Date, other than the Assumed Liabilities,
are referred to
as the "RETAINED LIABILITIES". All of the Retained Liabilities
will remain the
sole responsibility of and will be retained solely by
Seller. Retained
Liabilities include, but not limited to: (i) subject to Section
1.2(h), the five
real estate leases ; (ii) subject to Section 1.4(a) (iii),
the legal and
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accounting fees incurred by the Seller as a result of the
anticipated
transaction under this Agreement, whether such fees are incurred
before or after
the Closing Date; and (iii) any tax liabilities not disclosed
herein.
SECTION 1.5 ALLOCATION. The Purchase Price will be allocated
as set forth
in EXHIBIT 1.5. After the Closing, the parties shall make
consistent use of the
allocation specified in EXHIBIT 1.5 for all tax purposes and in
any tax returns
filed with the Internal Revenue Service in respect thereof,
including IRS Form
8594.
SECTION 1.6 CLOSING. The consummation of the purchase and
sale provided
for in this Agreement (the "CLOSING") will take place at Buyer's
offices at New
York City, at 10:00 a.m. (local time) on a date mutually
agreed to by the
parties but not later than February 28, 2007 (the "CLOSING
DATE"). Provided,
however, the Closing Date shall be automatically extended to
permit the Seller
sufficient time to provide the audited financial statements
required in a form
in compliance with Section 2.4 of this Agreement, but in no
event later than
March 31, 2007. Delivery of documents at the Closing may be
accomplished by
facsimile and/or PDF electronic files, to be followed by delivery
of originals
by overnight courier, of national reputation, the day after
Closing.
SECTION 1.7 CLOSING OBLIGATIONS.
(a) At the Closing, Seller shall deliver to Buyer:
(i) a bill of sale for all of the Assets in
a form to be
agreed upon (the "BILL OF SALE"), executed by Seller;
(ii) an assignment of all of the Assets which
are intangible
personal property in the form of EXHIBIT 1.7(A)(II), which
assignment shall also
contain Buyer's undertaking and assumption of the Assumed
Liabilities (the
"ASSIGNMENT AND ASSUMPTION AGREEMENT"), executed by Seller;
(iii) releases from the Internal Revenue
Service for its tax
lien and any States with their respective tax liens or soon
thereafter;
(iv) copies of any other consent (excluding
consents relating
to the Non-Material Contracts (as defined in SECTION 1.8 below))
required to be
obtained in connection with the execution and delivery of this
Agreement and the
consummation of the transactions contemplated hereby as
disclosed on SCHEDULE
2.2(C);
(v) an escrow agreement in the form of
EXHIBIT 1.7(A)(V),
executed by Seller, Buyer and the Escrow Agent (the "ESCROW
AGREEMENT");
(vi) the employment agreements in the form
of EXHIBIT
1.7(A)(VI), executed by John Bullock and Jim Jensen (the
"EMPLOYMENT
AGREEMENTS");
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(vii) the noncompetition, nondisclosure and
nonsolicitation
agreements that have been previously executed by employees and
assigned to the
Seller, listed on SCHEDULE 1.7.(A)(VII);
(viii) a certificate of the Secretary of Seller
certifying, as
complete and accurate as of the Closing, attached copies of
the Articles of
Incorporation and the bylaws of Seller, certifying and attaching
all requisite
resolutions or actions of Seller's shareholders approving the
execution and
delivery of this Agreement and the consummation of the transactions
contemplated
hereby and the change of name contemplated by SECTION 4.5 and
certifying to the
incumbency of the officers of Seller executing this Agreement
and any other
document relating to the transactions contemplated hereby and
accompanied by the
requisite documents for amending the Articles of
Incorporation of Seller
required to effect such change of name in form sufficient for
filing with the
State of Pennsylvania;
(ix) an opinion of counsel of the Seller, dated
the Closing
Date, in a form customary for a similar transactions;
(x) the Articles of Incorporation and all
amendments thereto
of Seller, duly certified as of a recent date by the Secretary of
State of the
Commonweath of Pennsylvania;
(xi) certificates as to the good standing of
Seller and
payment of all applicable state taxes by Seller, executed by the
appropriate
officials of the jurisdiction of Seller's incorporation and each
jurisdiction in
which Seller is licensed or qualified to do business as a foreign
corporation as
specified in SCHEDULE 2.1 To the extent that such
certificates cannot be
provided prior to Closing, seller agrees to indemnify and hold
harmless Buyer
for the non-payment of sales and income taxes for any of the
jurisdictions in
which Seller is licensed and qualified to do business as a foreign
corporation;
and
(xii) such other deeds, bills of sale,
assignments,
certificates of title, documents and other instruments of
transfer and
conveyance as may reasonably be requested by Buyer, each in form
and substance
reasonably satisfactory to Buyer and its counsel and executed by
Seller for the
purpose of facilitating the consummation or performance of the
transactions
contemplated hereby.
(b) At the Closing, Buyer shall deliver to Seller:
(i) The Cash Portion and the Stock Portion in
accordance with
Section 1.3 of this Agreement, by wire transfer to Seller's
counsel's escrow
account;
(ii) the Assignment and Assumption Agreement,
executed by
Buyer;
(iii) the Escrow Agreement, executed by Buyer
and the Escrow
Agent, together with the delivery of an amount equal Seven Hundred
Thousand and
Fifty Thousand and No/100 Dollars ($750,000.00) of Stock; One
Hundred Thousand
and No/100 Dollars ($100,000) Promissory Note; and Two Hundred
Fifty Thousand
and No/100 Dollars ($250,000) of Stock to the Escrow Agent;
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(iv) the Employment Agreements, executed by
Buyer;
(v) the Noncompetition Agreements, executed by
Buyer;
(vi) a certificate of the Secretary of Buyer
certifying, as
complete and accurate as of the Closing, attached copies of the
bylaws of Buyer
and certifying and attaching all requisite resolutions or
actions of Buyer's
board of directors approving the execution and delivery of this
Agreement and
the consummation of the transactions contemplated hereby and
certifying to the
incumbency of the officers of Buyer executing this Agreement
and any other
document relating to the transactions contemplated hereby; and
(vii) a stock option plan for the executives and
employees of
the Seller to be available to said employees subsequent to the
Closing Date, and
said option plan will contain in part: (x) stock options priced
at the end of
the Closing Date at the market value of $420,000 as of the end
of the Closing
Date; (y) with a vesting schedule of three years; and (z)
distribution list of
said stock options to employees determined by the Seller.
SECTION 1. 8 CONSENTS. Buyer may waive the requirement that
Seller obtain
consents to assignment with respect to any of the Seller Contracts
disclosed on
SCHEDULE 2.2(C) (the contracts with respect to which Buyer grants
such waiver,
the "NON-MATERIAL CONTRACTS"), in which case any such
Non-Material Contracts
will be identified as such on SCHEDULE 2.2(C). Notwithstanding
anything to the
contrary in this Agreement, if any consents to assignment
relating to the
Non-Material Contracts have not been obtained at or prior to the
Closing, this
Agreement will not constitute an assignment or an agreement to
assign if such
assignment or attempted assignment would constitute a breach of the
Non-Material
Contract or result in the loss or diminution thereof; PROVIDED,
HOWEVER, that in
each such case, Seller shall take commercially reasonable
steps after the
Closing to obtain the consent of such other party to the
Non-Material Contract
to the assignment of such Non-Material Contract to the Buyer. If
such consent is
not obtained, Seller shall cooperate with the Buyer to the
extent legally
permissible and feasible in any reasonable arrangement designed
to provide for
Buyer the benefits of any Non-Material Contract, including,
without limitation,
the enforcement, for the account and benefit of the Buyer, of any
and all rights
of Seller against any other person with respect to a Non-Material
Contract.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
SECTION 2.1 ORGANIZATION AND GOOD STANDING.
(a) Seller is a corporation duly organized, validly
existing, and
in good standing under the laws of the State of the
Commonwealth of
Pennsylvania, with full corporate power and authority to conduct
its business as
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it is now being conducted, to own or use its properties and
assets, and to
perform all its obligations under its contracts. Seller is duly
qualified to do
business as a foreign corporation and is in good standing under the
laws of each
state or other jurisdiction set forth in SCHEDULE 2.1.
(b) Complete and accurate copies of the articles of
incorporation
and bylaws of Seller (collectively, the "GOVERNING DOCUMENTS"), as
currently in
effect, have been delivered to Buyer.
(c) Seller does not own and has not entered into any
agreement or
contract to acquire, any equity securities or other securities of
any person or
any direct or indirect equity ownership interest in any other
business.
SECTION 2.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid,
and binding
obligation of Seller. Upon the execution and delivery by Seller
of each of the
documents and instruments to be executed and delivered by
Seller at Closing
pursuant to SECTION 1.7(A) (collectively, the "SELLER'S CLOSING
DOCUMENTS"),
each of Seller's Closing Documents will constitute the legal,
valid, and binding
obligation of Seller, enforceable against Seller in
accordance with their
respective terms. Seller has the right, power, authority, and
capacity to
execute and deliver this Agreement and Seller's Closing Documents
and to perform
its obligations under this Agreement and Seller's Closing
Documents, and such
action has been duly authorized by all necessary action by Seller's
Members.
(b) Neither the execution and delivery of this
Agreement nor the
consummation or performance of any of the transactions
contemplated hereby will
(with or without notice or lapse of time): (i) contravene,
conflict with, or
result in a violation of any provision of any of the Governing
Documents of
Seller, (ii) contravene, conflict with, or result in a violation
of any Legal
Requirement (as defined in SECTION 2.11(A) below) or Order
(as defined in
SECTION 2.12(B) below) of any court or governmental authority to
which Seller or
any of the Assets are subject, or (iii) breach any provision of,
give any person
the right to declare a default or exercise any remedy under,
accelerate the
maturity or performance of or payment under, result in the
creation or
imposition of any Encumbrance upon any of the Assets under,
or cancel,
terminate, or modify, any contract to which Seller is a party or by
which Seller
or the Assets are bound.
(c) Except as set forth in SCHEDULE 2.2(C), Seller is
not and will
not be required to give any notice to or obtain any consent from
any person in
connection with the execution and delivery of this Agreement or the
consummation
or performance of the transactions contemplated hereby (including
the assignment
of the Seller Contracts hereunder).
SECTION 2.3 CAPITALIZATION. The authorized equity of
Seller consist of
common stock held entirely by the parties listed on SCHEDULE 2.3.
SECTION 2.4 FINANCIAL STATEMENTS. Attached hereto as
SCHEDULE 2.4 are the
Seller's unaudited Balance Sheets and unaudited profit and loss
statement for
the twelve months ended December 31, 2004, December 31, 2005 and
December 31,
2006 (the "FINANCIAL STATEMENTS"). The Financial Statements
fairly present the
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financial condition and the results of operations of Seller as at
the respective
dates of and for the periods referred to in such financial
statements, all in
accordance with generally accepted accounting principals ("GAAP")
except as set
forth on SCHEDULE 2.4. The Financial Statements have been prepared
from and are
in accordance with the books and records of Seller. Seller shall
provide to the
Buyer, on or before Closing, a draft audited financial statements
for the years
ended December 31, 2004, December 31, 2005, December 31, 2006, and
within forty
five (45) days of the Closing Date the audited financial
statements for the
years ended December 31, 2005 and December 31, 2006 and for the
stub period up
to the Closing Date, and such financial statements shall
be materially
consistent with the previously submitted unaudited Financial
Statements. The
aforementioned audited financial statements must be in the form
and an opinion
of an independent certified public accountant attached to meet
the standards
required by the Securities and Exchange Commission, and the
independent
certified public accountant must provide its consent to the use of
the Seller's
audited financial statements in the Buyer's 8-K and other
registration filings
with the Securities and Exchange Commission. Further, the
Seller's independent
public accountant shall make all of its work papers and
other supporting
documents it utilized in proving its opinion available, if needed
for review by
the Buyer's independent public accountant.
SECTION 2.5 SUFFICIENCY OF ASSETS. The Assets (a)
constitute all of the
assets, tangible and intangible, necessary to conduct Seller's
business in the
manner presently operated by Seller, and (b) constitute all of
the operating
assets of Seller, other than certain real estate leased.
SECTION 2.6 REAL PROPERTY LEASES. SCHEDULE 2.6 sets forth
all leases of
real property to which the Seller is a party (the "LEASES").
Complete and
accurate copies of the Leases, as amended or modified, have been
delivered to
Buyer. The Buyer will not assume any of the Leases. Seller enjoys
peaceful and
undisturbed possession of all such real property.
SECTION 2.7 PERSONAL PROPERTY.
(a) Except as set forth on SCHEDULE 2.7(A), Seller
owns good and
transferable title to all of its Assets (excluding its interest
in the real
property described in SCHEDULE 2.6), free and clear of any
Encumbrances other
than Permitted Encumbrances.
(b) SCHEDULE 2.7(B) sets forth all items of
Tangible Personal
Property with an initial, nondepreciated book value in excess of
$2,500. Each
item of Tangible Personal Property is in good repair and
good operating
condition, ordinary wear and tear excepted, and is suitable for
immediate use in
the ordinary course of business, No item of Tangible Personal
Property is in
need of repair or replacement other than as part of routine
maintenance in the
ordinary course of business. All Tangible Personal Property is in
the possession
of Seller.
SECTION 2.8 TAXES. Except as set forth in Schedule 2.8,
Seller, to the
best of its knowledge, has timely filed all tax returns
(federal, state or
local) required to be filed by it in accordance with
applicable Legal
Requirements (AS DEFINED IN SECTION 2.11(A)). All of such tax
returns are
accurate and complete in all material respects. Seller has
paid or made
provision for the payment of all taxes that have or may become
due for all
periods covered by the tax returns or otherwise, or pursuant to
any assessment
received by Seller. There is no dispute or claim concerning any
taxes of Seller
either claimed or raised by any governmental authority in
writing. Seller has
not requested or been given any extension of time within which to
file returns
in respect of any taxes for which Seller may be liable. All taxes
that Seller is
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or was required by Legal Requirements to withhold, deduct or
collect have been
duly withheld, deducted and collected and, to the extent
required, have been
paid to the proper governmental authority.
SECTION 2.9 EMPLOYEES. SCHEDULE 2.9 sets forth a complete
and accurate
list, giving name, job title, current compensation paid or
payable, sick and
vacation leave that is accrued but unused, and services credited
for purposes of
vesting and eligibility to participate under any Employee
Benefit Plan (as
defined below) (in each case, to the extent applicable), (a) for
each employee
of Seller, including each employee on leave of absence or layoff
status (the
"EMPLOYEES"), and (b) for any independent contractors who render
services on a
regular basis to, or are under contract with, Seller. Seller has
not experienced
any organized slowdown, work interruption strike, or work
stoppage by its
employees, and, to the knowledge of Seller, and the stockholders,
there is no
strike, labor dispute, or union organization activity pending or
threatened that
affects Seller's Employees. None of the Employees belongs to
any union or
collective bargaining unit applicable to his employment with the
Seller. Except
as set forth on SCHEDULE 2.9, no Employee of Seller is
bound by (a) any
employment or similar contract or agreement with Seller, or (b)
any contract or
agreement that purports to limit or restrict the ability of such
Employee to (i)
perform his duties as an employee of Seller, or (ii) engage in
any conduct,
activity, or practice relating to Seller's business.
SECTION 2.10 EMPLOYEE BENEFITS. SCHEDULE 2.10 sets
forth all plans,
programs, or arrangements that Seller has maintained, sponsored,
adopted, or
obligated itself under with respect to employees' benefits,
including pension or
retirement plans, medical or dental plans, life or
long-term disability
insurance, bonus or incentive compensation, or stock
option or equity
participation plans (the "EMPLOYEE BENEFIT PLANS"). Seller has no
liability or
obligation with respect to any Employee under any Employee
Benefit Plan other
than normal salary or wage accruals and paid vacation, sick leave,
and holiday
accruals in accordance with Seller's practice and policy. Seller
has performed
all obligations required to be performed under, and has complied
with all Legal
Requirements in connection with, all such Employee Benefit Plans
and is not in
arrears under any of the terms thereof.
SECTION 2.11 COMPLIANCE WITH LEGAL REQUIREMENTS,
GOVERNMENTAL
AUTHORIZATIONS.
(a) Except as set forth on SCHEDULE 2.11(A),
Seller, to the best
of its knowledge, is, and at all times since January 1, 2002,
has been, in
compliance in all material respects with any federal, state,
or local law,
ordinance or regulation (including with respect to environmental,
disposal of
hazardous substances, or public health or safety) (a "LEGAL
REQUIREMENT"), that
is or was applicable to the operation of its business or the
ownership or use of
any of its assets. Seller has not received, at any time since
January 1, 2002,
any notice or other communication (whether oral or
written) from any
governmental authority or any other person regarding any
actual or alleged
violation of, or failure to comply with, any Legal
Requirement with the
exception of the Potential Tax Audit.
(b) SCHEDULE 2.11(B) contains a complete and accurate
list of each
approval, license or permit (the "GOVERNMENTAL AUTHORIZATIONS")
that is held by
Seller or that otherwise relates to the Seller's business or the
Assets. The
Governmental Authorizations listed in SCHEDULE 2.11(B)
collectively constitute
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all of the approvals, licenses and permits necessary to
permit Seller to
lawfully conduct and operate its business in the manner it
currently conducts
and operates such business and to permit Seller to own and use its
assets in the
manner in which it currently owns and uses such assets. The
Buyer will review
each Government Authorization with the corresponding jurisdiction
and determine
the necessity to submit new applications if needed to qualify to
continue the
operation of the Seller in such jurisdiction.
SECTION 2.12 LEGAL PROCEEDINGS, ORDERS.
(a) Except as set forth in SCHEDULE 2.12(A), there
are no actions
or proceedings pending by or against Seller or that otherwise
relate
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