1
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into
effective as of August 18, 2000 (the "Effective Date"), by and among ADD
Acquisition Corp., an Illinois corporation ("Buyer"); T & B Design, Inc., f/k/a
Advanced Digital Designs, Inc., an Illinois corporation ("ADD"); Advanced
Technologies, Inc., an Illinois corporation ("ATI"); 937 Plum Grove Road
Partnership ("937") hereinafter collectively referred to as ADD and Anthony
Vitucci and Bruce Karsten, President, Vice President, Directors and owners of
all issued and outstanding shares of stock in ADD ("Shareholders").
RECITALS:
A. ADD is engaged in the business of providing high-tech engineering
design services to clients in the electronics industry (the "Business").
B. Buyer is engaged in the business of designing, developing,
manufacturing and marketing leading-edge technology equipment including, but not
limited to, mobile computers and industrial products.
C. ADD desires to sell to Buyer, and Buyer desires to purchase from ADD,
on a going-concern basis, those certain hereinafter defined Purchased
Assets of ADD, other than certain hereinafter defined Excluded
Assets, all on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed as follows:
ARTICLE I
PURCHASE AND SALE
1.1 PURCHASED ASSETS. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date, ADD shall sell, transfer, assign, convey,
and deliver to Buyer, and Buyer shall purchase from ADD, on a going-concern
basis, free and clear of all Liens (except for hereinafter defined Permitted
Liens), all of the Business and operations of ADD related to the Business and,
except for the Excluded Assets as set forth in Section 1.2 hereof, all of the
assets and properties of ADD of every kind and description, wherever located,
tangible or intangible, used or useable in connection with the Business as the
same shall exist on the Effective Date (collectively, the "Purchased Assets"),
including, without limitation, all right, title, and interest of ADD in, to, and
under:
(a) All of the assets reflected on the Balance Sheet dated August 18,
2000, including, without limitation, cash; accounts receivable; all
contracts-in-progress and proposals; all customer listings; all computer
hardware, software, and accessories; all furniture and equipment; all pertinent
Business information, software product licenses and resale licenses; and those
assets acquired subsequent to the Balance Sheet Date (as hereinafter defined),
except those assets disposed of or converted into cash after the Balance Sheet
Date in the ordinary course of business;
2
(b) The name "Advanced Digital Designs, Inc." and Advanced
Technologies, Inc. and any derivation thereof, trademarks, trade names, service
marks, and copyrights, which ADD owns or has the right to use (and all goodwill
associated therewith), registered or unregistered, and the applications for
registration thereof, and the patents and applications therefor, and the
licenses relating to any of the foregoing listed in Schedule 4.16 (as further
defined in Section 4.16, the "Intellectual Property");
(c) All mailing lists, customer lists, subscriber lists, processes,
manuals or business procedures, trade secrets, designs, engineering drawings and
reports, know-how and other proprietary or confidential information used in or
relating to the Business;
(d) A copy of all books and records (including all data and other
information stored on discs, tapes, written, electronic or other media) of ADD
relating to the assets, properties and operations of the Business;
(e) All of ADD's rights, claims, or causes of action against third
parties relating to the assets, properties, or operations of the Business
arising out of transactions occurring prior to the Effective Date;
(f) All of ADD's interest in and to all telephone and telephone
facsimile numbers, Internet websites, and other directory listings of the
Business and any assumed or fictitious names related to the Business;
(g) All prepaid expenses and deposits that benefit the Buyer after
the Effective Date; and
(h) All other assets, properties and rights specifically set forth in
the Agreement as being sold, transferred or assigned to, or purchased by, Buyer.
1.2 EXCLUDED ASSETS. Notwithstanding the provisions of Section 1.1, the
Purchased Assets shall not include the assets listed on Schedule 1.2 ("Excluded
Assets").
1.3 ASSUMED LIABILITIES. As of the Effective Date, Buyer shall assume and
agree to discharge the following obligations and liabilities of ADD:
(a) All of the operating office and equipment lease liabilities of
ADD, except those liabilities subsequently discharged, to the extent incurred in
the ordinary course of business after the Balance Sheet Date; and
(b) All obligations of ADD to be paid or performed on or after the
Effective Date under the Purchased Contracts.
All of the foregoing liabilities and obligations to be assumed by
Buyer hereunder (excluding any Excluded Liabilities) are referred to herein as
the "Assumed Liabilities."
1.4 EXCLUDED LIABILITIES. Buyer shall not assume or be obligated to pay,
perform, or otherwise discharge any liability or obligation of ADD, direct or
indirect, known or unknown, absolute or contingent, not expressly assumed by
Buyer (all such liabilities and obligations not being assumed are herein
referred to as the "Excluded Liabilities") and, notwithstanding anything to the
contrary in Section 1.3, none of the following shall be "Assumed Liabilities"
for purposes of this Agreement:
3
(a) Any liabilities of ADD in respect of taxes of ADD for which ADD
and/or Shareholders is liable pursuant to Section 4.8;
(b) Any liabilities or obligations in respect of any Excluded Assets;
(c) Any other liabilities of any kind or nature whatsoever other than
those described in Section 1.3.
ARTICLE II
PURCHASE PRICE
2.1 PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Purchased Assets shall be equal to the sum of Three Million and No/100 Dollars
($3,000,000.00), payable by certified or cashier's check at the time of Closing
and subject to adjustment as provided herein, and an additional Three Million
and No/100 Dollars ($3,000,000.00), to be deposited at Closing with National
City Corporation and Subsidiaries, as escrowee, to be thereafter held and
disbursed according to the terms and conditions of an Escrow Agreement in
substantially the form contained in Exhibit A. ADD and each Shareholder hereby
absolutely and unconditionally guarantees and agrees to be a surety for the full
and prompt payment to Buyer, no later than ninety (90) days following Closing,
of all amounts due and owing under each account receivable included in the
Purchased Assets. In addition, ADD and each Shareholder acknowledges that any
refusal or failure to perform any guaranty shall constitute a breach of this
Agreement and shall entitle Buyer to indemnification under Article VI. ADD and
each Shareholder further agrees to pay to Buyer, upon demand, all amounts owing
under any account receivable which is not paid to Buyer within ninety (90) days
following Closing. Buyer agrees to attempt to collect all accounts receivable
within ninety (90) days following Closing, in a manner consistent with ADD's
existing collection practices, provided that Buyer shall not be required to
institute legal or any other collection proceedings in connection therewith.
Following expiration of the ninetieth day following Closing, Buyer shall provide
ADD and each Shareholder a written statement of accounts receivable that remain
unpaid and shall assign such accounts receivable to ADD upon receipt of payment
by ADD or any Shareholder under the foregoing guaranty.
2.2 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
for tax purposes among the Purchased Assets in such amounts as Buyer may
reasonably request, in accordance with generally accepted accounting principles
and as set forth in Schedule 2.2. Such allocations shall be accepted by the
parties in writing at Closing and shall be binding on the parties. ADD shall
sign and submit all necessary forms to report this transaction for federal and
state income tax purposes in accordance with that allocation and shall not take
a position for tax purposes inconsistent therewith.
ARTICLE III
CLOSING
3.1 CLOSING DATE. The closing ("Closing") of the transactions
contemplated by this Agreement shall be held on August 18, 2000 ("Closing Date")
at the office of Buyer at 800 E. Northwest Highway, Suite 950, Palatine,
Illinois 60067. The Closing shall be deemed to be effective as of 12:01 A.M.,
Chicago Time, on the Effective Date.
4
3.3 BUYER'S DELIVERIES. At Closing, Buyer shall deliver to ADD all of
the following:
(a) A certificate of the Secretary or an Assistant Secretary of
Buyer, dated no earlier than thirty (30) days prior to the Closing Date, in form
and substance reasonably satisfactory to ADD, as to the resolutions of the Board
of Directors of Buyer authorizing the execution and performance of this
Agreement, and the transactions contemplated thereby;
(b) Such other documents as ADD may reasonably request or as may be
otherwise necessary to evidence and effect the sale, assignment, transfer,
conveyance and delivery of the Purchased Assets to Buyer;
(c) A Certificate of Good Standing issued by the Secretary of State
of Illinois, with respect to Buyer dated no earlier than thirty (30) days prior
to the Closing Date;
(d) The Escrow Agreement executed by an authorized officer of Buyer
and in substantially the form contained in Exhibit A;
(e) An Employment Agreement for each of the Shareholders executed by
an authorized officer of Buyer and in substantially the form contained in
Exhibit B;
(f) An Employment Agreement for each of the Key Employees executed by
an authorized officer of Buyer and in substantially the form contained in
Exhibit C.
3.4 ADD'S DELIVERIES. At Closing, ADD shall deliver to Buyer the
following:
(a) A certificate of the Secretary or an Assistant Secretary of ADD,
dated no earlier than thirty (30) days prior to the Closing Date, in form and
substance reasonably satisfactory to Buyer, as to the resolutions of the Board
of Directors of Buyer authorizing the execution and performance of this
Agreement, and the transactions contemplated thereby;
(b) Such other documents as Buyer may reasonably request or as may be
otherwise necessary to evidence and effect the sale, assignment, transfer,
conveyance and delivery of the Purchased Assets to Buyer;
(c) A Certificate of Good Standing issued by the Secretary of State
of Illinois, with respect to Buyer dated no earlier than thirty (30) days prior
to the Closing Date;
(d) The Escrow Agreement executed by an authorized officer of ADD and
each Shareholder and in substantially the form contained in Exhibit A;
(e) An Employment Agreement for each of the Shareholders executed by
each of the Shareholders and in substantially the form contained in Exhibit B;
(f) An Employment Agreement for each of the Key Employees executed by
each of the Key Employees and in substantially the form contained in Exhibit C:
(g) The Bill of Sale duly executed by an authorized officer of ADD
and in substantially the form contained in Exhibit D.
5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ADD AND SHAREHOLDERS
As a material inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, ADD and Shareholders each
hereby makes the following representations and warranties to Buyer, as of the
date hereof and as of the Effective Date:
4.1 CORPORATE STATUS. ADD is a corporation duly organized, legally
existing and in good standing, and has filed all required annual reports and
paid all required franchise and other taxes and fees, under the laws of the
State of Illinois. ADD has the requisite power and authority to own or lease its
property and to carry on its Business as now being conducted. ADD is legally
qualified to transact business as a foreign corporation in all jurisdictions
where the nature of its respective properties and the conduct of its business
requires such qualification (all of which jurisdictions are listed on Schedule
4.1) and is in good standing in each of the jurisdictions in which it is so
qualified. There is no pending or threatened proceeding for the dissolution,
liquidation, insolvency, or rehabilitation of ADD.
4.2 POWER AND AUTHORITY. Each of ADD and Shareholders has the power and
authority to execute and deliver this Agreement, to perform their respective
obligations hereunder and to consummate the transactions contemplated hereby.
Each of ADD and Shareholders has taken all action necessary to authorize the
execution and delivery of this Agreement, the performance of its respective
obligations hereunder and the consummation of the transactions contemplated
hereby.
4.3 ENFORCEABILITY. This Agreement has been or will have been at the time
of Closing duly executed and delivered by ADD and Shareholders and constitutes
or will constitute the legal, valid, and binding obligation of each of them,
enforceable against each of them in accordance with its terms.
4.4 NO RESTRICTIONS. There are no proxies, voting rights, Contracts, or
other agreements or understandings with respect to the voting of shares in ADD
or the transfer of the Purchased Assets other than as set forth in this
Agreement.
4.5 NO VIOLATION. Except as set forth on Schedule 4.5, the execution and
delivery of this Agreement by ADD, the performance of its respective obligations
hereunder and the consummation of the transactions contemplated by this
Agreement will not:
(a) contravene any provision of the Articles of Incorporation or
Bylaws of ADD;
(b) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against ADD;
(c) conflict with, result in any breach of, or constitute a default
(or an event which would, with the passage of time or the giving of notice or
both, constitute a default) under, or give rise to a right to terminate, amend,
modify, abandon or accelerate, any Contract which is applicable to, binding upon
or enforceable against ADD;
6
(d) result in or require the creation or imposition of any Lien upon
or with respect to any of the property or assets of ADD; or
(e) require the consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority, any court or
tribunal or any other Person.
4.6 FINANCIAL STATEMENTS. ADD has delivered to Buyer the unaudited
financial statements of ADD, as of December 31, 1997, December 31, 1998 and
December 31, 1999 and for the interim period ended June 30, 2000, and the
related statements of income and retained earnings for said periods
(collectively, the "Financial Statements") The balance sheet dated as of June
30, 2000, included in the Financial Statements is referred to herein as the
"Balance Sheet" and the "Balance Sheet Date" shall mean June 30, 2000. The
Financial Statements fairly present the financial position of ADD at each of the
balance sheet dates and the results of operations for the periods covered
thereby. Except as set forth in Schedule 4.6: (a) the books and records of ADD
fully and fairly reflect the transactions, properties, assets, and liabilities
of ADD; (b) there are no material, special or non-recurring items of income or
expense during the periods covered by the Financial Statements; and (c) the
Financial Statements reflect all adjustments necessary for a fair presentation
of the financial information contained therein.
4.7 LIABILITIES. Except as set forth on Schedule 4.7, ADD does not have
any liabilities or obligations, whether accrued, absolute, contingent, or
otherwise, except:
(a) to the extent reflected or taken into account in the Current
Balance Sheet and not heretofore paid or discharged;
(b) to the extent specifically set forth in or incorporated by
express reference in any of the Schedules attached hereto;
(c) liabilities incurred in the ordinary course of business
consistent with past practice since the date of the Current Balance Sheet (none
of which relates to breach of contract, breach of warranty, tort, infringement,
or violation of law, or which arose out of any action, suit, claim, governmental
investigation or arbitration proceeding);
(d) normal accruals, reclassifications, and audit adjustments which
would be reflected on an audited financial statement and which would not be
material in the aggregate;
(e) subcontractor liabilities specifically related to the Receivables
and set forth in Schedule 1.2, which ADD and Shareholders assume and agree to
pay; and
(f) operating leases calling for an annual gross rental exceeding Ten
Thousand and No/100 Dollars ($10,000).
4.8 LITIGATION. Except as set forth on Schedule 4.8, there is no action,
suit, or other legal or administrative proceeding or governmental investigation
pending or threatened by or against ADD or anticipated or contemplated by ADD,
nor is there any such action, suit, or other legal or administrative proceeding
or governmental investigation anticipated or contemplated against ADD, affecting
ADD or any of its respective properties or assets, or which question the
validity or enforceability of this Agreement or the transactions contemplated
hereby, and there is no basis for any of the foregoing. Except as set forth in
Schedule 4.8, there are no outstanding orders, decrees or stipulations issued by
any Governmental Authority in any proceeding to which
7
ADD is or was a party which have not been complied with in full or which
continue to impose any material obligations on ADD.
4.9 GOOD TITLE TO, CONDITION OF, AND ADEQUACY OF PURCHASED ASSETS.
(a) Except as set forth on Schedule 4.9, ADD has good and marketable
title to all of the Purchased Assets, free and clear of any Liens (other than
Permitted Liens) or restrictions on use.
(b) The Purchased Assets are in good operating condition, normal wear
and tear excepted, and have been maintained in accordance with sound industry
practices.
(c) The Purchased Assets constitute all of the assets and properties
necessary for the conduct of the Business of ADD in the manner in which and to
the extent to which such Business is currently being conducted.
4.10 COMPLIANCE WITH LAWS.
(a) Except as set forth in Schedule 4.10, ADD is and has been in
compliance in all material respects with all laws, regulations, and orders
applicable to it, its respective Business and operations (as conducted by it now
and in the past), and the Purchased Assets. Except as set forth on Schedule
4.10, ADD has not been cited, fined, or otherwise notified of any asserted past
or present failure to comply with any laws, regulations or orders which have not
been permanently cured and no proceeding with respect to any such violation is
pending or threatened.
(b) ADD has not made any payment of funds in connection with its
Business that is prohibited by law, and no funds have been set aside to be used
in connection with its Business for any payment prohibited by law.
(c) ADD is not subject to any Contract, decree or injunction which
restricts the continued operation of any Business or the expansion thereof to
other geographical areas, customers and suppliers, or lines of Business.
4.11 LABOR AND EMPLOYMENT MATTERS. ADD has complied with applicable laws,
rules, and regulations relating to employment, civil rights and equal employment
opportunities, including, but not limited to, the Civil Rights Act of 1964, and
the Fair Labor Standards Act.
4.12 EMPLOYEE BENEFIT PLANS.
(a) Employee Benefit Plans. Schedule 4.12 contains a list setting
forth each employee benefit plan or arrangement of ADD, including, but not
limited to, employee pension benefit plans, as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), employee
welfare benefit plans, as defined in Section 3(1) of ERISA, deferred
compensation plans, stock option plans, Section 125 Premium Only Plan, bonus
plans, stock purchase plans, hospitalization, disability and other insurance
plans, severance or termination pay plans and policies, whether or not described
in Section 3(3) of ERISA, in which employees, their spouses or dependents, of
ADD participate (the "Employee Benefit Plans").
(b) Compliance with Law. With respect to each Employee Benefit Plan:
(i) each has been administered in all material respects in
compliance with its terms and with all applicable laws,
including, but not
8
limited to, ERISA and the Internal Revenue Code of 1986,
as amended (the "Code");
(ii) no actions, suits, claims or disputes are pending or
threatened;
(iii) no audits, inquiries, reviews, proceedings, claims, or
demands are pending with any governmental or regulatory
agency;
(iv) there are no facts which could give rise to any material
liability in the event of any such investigation, claim,
action, suit, audit, review, or other proceeding;
(v) all reports, returns, and similar documents required to be
filed with any governmental agency or distributed to any
plan participant have been duly or timely filed or
distributed; and
(vi) no "prohibited transaction" has occurred within the
meaning of the applicable provisions of ERISA or the Code.
(c) Welfare Plans. Other than as disclosed in Schedule 4.12, ADD is
not obligated under any employee welfare benefit plan as described in Section
3(1) of ERISA ("Welfare Plan"), whether or not disclosed in Schedule 4.12, to
provide medical or death benefits with respect to any employee or former
employee of ADD or its predecessors after termination of employment.
(d) Other Liabilities. Except as set forth on Schedule 4.12, all
required or discretionary (in accordance with historical practices) payments,
premiums, contributions, reimbursements, or accruals for all periods ending
prior to or as of the Effective Date shall have been made or properly accrued on
the Current Balance Sheet.
4.13 TAX MATTERS. Except as set forth in Schedule 4.13 hereto, all Tax
returns required to be filed prior to the date hereof with respect to ADD or any
of its respective income, properties, franchises, or operations have been filed,
each such Tax Return has been prepared in compliance with all applicable laws
and regulations, and all such Tax Returns are true, complete, and accurate in
all respects. All Taxes due and payable by or with respect to ADD have been paid
or accrued on the Current Balance Sheet or will be accrued on its books and
records as of the Closing.
4.14 RECEIVABLES. ADD's accounts receivable are fully and accurately
reported in the Financial Statements, and determined in a manner consistent with
generally accepted accounting principles, arose from bona fide transactions, are
fully collectible within ninety (90) days of the date any such account
receivable arose, and accounts receivable as of Closing will be in a face amount
equal to at least the amount set forth in the Current Balance Sheet.
4.15 INVENTORY. ADD's inventory of Seller as of the Closing will be in an
amount not less than the amount set forth in the Current Balance Sheet, at cost
as determined in a manner consistent with generally accepted accounting
principles, and will consist of items of a quality and quantity which are good,
usable and saleable in the usual and ordinary course of business of ADD, at
customary prices therefor and will not include any items which are damaged,
obsolete or below standard quality.
9
4.16 LICENSES AND PERMITS. ADD possesses all licenses and required
governmental or official approvals, permits or authorizations (collectively, the
"Permits") for its Business and operations. All such Permits are valid and in
full force and effect, ADD is in full compliance with the requirements thereof,
and no proceeding is pending or threatened to revoke or amend any of them.
4.17 INTELLECTUAL PROPERTY. Schedule 4.17 sets forth a list of all
trademarks, service marks, trade names, copyrights, know-how, patents, trade
secrets, licenses (including licenses for the use of computer software
programs), all rights in mask works and other intellectual property used in the
conduct of ADD's Business (the "Intellectual Property") and all such rights,
titles and interests shall be transferred to Buyer at Closing, free and clear of
any liens or restrictions. ADD has full legal right, title, and interest in and
to all Intellectual Property used in its Business. The conduct of the Business
of ADD as presently conducted, and the unrestricted conduct and the unrestricted
use and exploitation of the Intellectual Property, does not infringe or
misappropriate any rights held or asserted by any Person, and no Person is
infringing on the Intellectual Property. No payments are required for the
continued use of the Intellectual Property, except as set forth in Schedule
4.16. None of the Intellectual Property has ever been declared invalid or
unenforceable, or is the subject of any pending or threatened action for
opposition, cancellation, declaration, infringement, or invalidity,
unenforceability or misappropriation or like claim, action or proceeding.
4.18 CONTRACTS. Schedule 4.18 sets forth a list of each Contract to which
ADD is a party or by which its properties or assets are bound and which is
material to its Business, assets, properties or prospects (the "Purchased
Contracts"), true and correct copies of which have been provided to Buyer. The
copy of each Purchased Contract provided to Buyer is a true and complete copy of
the document it purports to represent and reflects all amendments thereto made
through the date of this Agreement. Except as set forth on Schedule 4.18, ADD
has not violated any of the material terms or conditions of any Purchased
Contract or any term or condition which would permit termination or material
modification of any Purchased Contract, and all of the covenants to be performed
by any other party thereto have been fully performed and there are no claims for
breach or indemnification or notice of default or termination under any
Purchased Contract. Except as set forth on Schedule 4.17, no event has occurred
which constitutes, or after notice or the passage of time, or both, would
constitute, a material default by ADD under any Purchased Contract, and to the
best knowledge of ADD and Shareholders, no such event has occurred which
constitutes or would constitute a material default by any other party. Except as
set forth in Schedule 4.18, all Purchased Contracts are freely assignable to ADD
without notice to or the consent of any third party and, ADD is not subject to
any liability or payment resulting from renegotiation of amounts paid it under
any Purchased Contract. As used in this Section, Purchased Contracts shall
include, without limitation:
(a) loan agreements, indentures, mortgages, pledges, hypothecations,
deeds of trust, conditional sale or title retention agreements, security
agreements, equipment financing obligations or guaranties, or other sources of
contingent liability in respect of any indebtedness or obligations to any other
person, or letters of intent or commitment letters with respect to same;
(b) contracts obligating ADD to purchase or sell Products or
Services;
(c) leases of real or personal property not cancelable without
penalty on notice of sixty (60) days or less or calling for payment of an annual
gross rental exceeding Ten Thousand and No/100 Dollars ($10,000.00);
10
(d) distribution, sales agency, or franchise or similar agreements,
or agreements providing for an independent contractor's services, or letters of
intent with respect to same;
(e) employment agreements, management service agreements, consulting
agreements, confidentiality agreements, non-competition agreements, and any
other agreements relating to any employee, officer or director of ADD;
(f) licenses, assignments or transfers of trademarks, trade names,
service marks, patents, copyrights, trade secrets, or know how, or other
agreements regarding proprietary rights or intellectual property ("Licenses");
(g) any Contract relating to pending capital expenditures by ADD; and
(h) other material Contracts or understandings, irrespective of
subject matter and whether in writing, not entered into in the ordinary course
of business by ADD and not otherwise disclosed on the Schedules.
4.19 ACCURACY OF INFORMATION FURNISHED TO BUYER. No representation,
statement, or information made or furnished by ADD or Shareholders to Buyer or
any of Buyer's representatives, including those contained in this Agreement and
the various Schedules attached hereto and the other information and statements
referred to herein and previously furnished by ADD or Shareholders, contains or
shall contain any untrue statement of a material fact or omits any material fact
necessary to make the information contained therein not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
As a material inducement to ADD and Shareholders to enter into this
Agreement and to consummate the transactions contemplated hereby, Buyer makes
the following representations and warranties to ADD and Shareholders as of the
date hereof and as of the Closing Date:
5.1 CORPORATE STATUS. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Illinois.
5.2 CORPORATE POWER AND AUTHORITY. Buyer has, or at the time of Closing
will have, the corporate power and authority to execute and deliver this
Agreement, to perform its respective obligations hereunder, and consummate the
transactions contemplated hereby. Buyer has or at the time of Closing will have
taken all action necessary to authorize the execution and delivery of this
Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby. The execution and delivery of this
Agreement by Buyer, the performance by it of its obligations hereunder, and the
consummation by it of the transactions contemplated by this Agreement will not:
(a) contravene any provision of the Articles of Incorporation or
Bylaws of Buyer;
11
(b) in any material respect violate or conflict with any law,
statute, ordinance, rule, regulation, decree, writ, injunction, judgment, or
order of any Governmental Authority or of any arbitration award which is either
applicable to, binding upon, or enforceable against Buyer;
(c) conflict with, result in breach of, or constitute a default (or
any event which would, with the passage of time or the giving of notice or both,
constitute a default) under, or give rise to a right to terminate, amend,
modify, abandon or accelerate any material Contract;
(d) result in or require the creation or imposition of any lien upon
or with respect to any property or assets of Buyer; or
(e) require the consent, approval, authorization, or permit of, or
filing with or notification to, any Governmental Authority, any court or
tribunal, or any other Person.
5.3 ENFORCEABILITY. Each of this Agreement and the Other Agreements has
been, or will have been at the time of Closing, duly executed and delivered by
and constitutes or will constitute a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with their respective terms.
5.4 NO COMMISSIONS. Buyer has not incurred any obligation for any
finder's or broker's or agent's fees or commissions or similar compensation in
connection with the transactions contemplated hereby.
ARTICLE VI
CLOSING CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective obligations of
each party to effect the transactions contemplated hereby shall be subject to
the fulfillment at or before the Closing Date of the condition that neither ADD,
Shareholders nor Buyer shall be subject to any order, decree or injunction of a
court of competent jurisdiction which prevents or delays any of the transactions
contemplated by this Agreement.
6.2 CONDITIONS TO THE OBLIGATIONS OF ADD AND SHAREHOLDERS. The
obligations of ADD and Shareholders to effect the transactions contemplated
hereby shall be further subject to the fulfillment at or before the Closing Date
of the following conditions, any one or more of which may be waived by ADD and
Shareholders:
(a) COMPLIANCE BY BUYER. Buyer shall have performed and complied in
all material respects with the provisions contained in this Agreement required
to be performed and complied with by it at or before the Closing Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer set forth in this Agreement were true and correct in all
material respects as of the date of this Agreement and shall also be true and
correct in all material respects as of the Closing Date as though made at and as
of the Closing Date (except as otherwise contemplated by this Agreement), and
ADD and Shareholders shall have received certificates to that effect signed by
the President of Buyer.
12
6.3 CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligations of Buyer to
effect the transactions contemplated hereby shall be further subject to the
fulfillment at or before the Closing Date of the following conditions, any one
or more of which may be waived by Buyer.
(a) COMPLIANCE BY ADD AND SHAREHOLDERS. ADD and Shareholders shall
have performed and complied in all material respects with the provisions
contained in this Agreement required to be performed and complied with by them
at or before the Closing Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of ADD and Shareholders set forth in this Agreement shall have been
true and correct in all material respects as of the date of this Agreement and
shall also be true and correct in all material respects as of the Closing Date
as though made at and as of the Closing Date (except as otherwise contemplated
by this Agreement), and Buyer shall have received a certificate to that effect
signed by the President of ADD.
(c) INSPECTION PERIOD. During the sixty (60) day period commencing
with the date hereof (the "Inspection Period"), Buyer may review ADD's assets,
records, and other documents and operations and ADD and Shareholders shall, at
all reasonable times upon at least twenty-four (24) hours' prior notice, provide
Buyer access to the ADD's premises for the purpose of performing, at Buyer's
expense, any inspection of the assets, records and other documents and with
operations of ADD. In addition during said Inspection Period Buyer may contact
ADD's suppliers, distributors and clients to review the present relationship
between ADD and such suppliers, distributors and clients. If for any reason
Buyer reasonably determines during the Inspection Period that the results of any
such inspection are unacceptable or unsatisfactory for to Buyer, Buyer shall
immediately provide ADD and Shareholders written notice thereof, whereupon this
Agreement shall become null and void and of no further force and effect. In the
absence of Buyer's delivery of such notice to ADD and Shareholders during the
Inspection Period, Buyer shall be deemed to have determined its inspection
results acceptable or satisfactory. Notwithstanding anything to the contrary
herein, the effect of any representations and warranties made by ADD or
Shareholders in this Agreement shall not be diminished by any inspections or
investigations made by Buyer, except the Buyer shall have no recourse against
ADD or Shareholders to the extent that Buyer actually discovers prior to Closing
one or more breaches of any representations or warranties made by ADD and
Shareholders in this Agreement.
(e) CORPORATE AUTHORITY; CONSENTS; PERMITS. ADD and Shareholders
shall have delivered to Buyer evidence satisfactory to Buyer that ADD and
Shareholders shall have obtained any and all permits, authorizations, lessor
consents and approvals of any person or public body or authority required
effectively to transfer the Purchased Assets to Buyer and to enable Buyer to
continue ADD's Business operations substantially similar to the operations
conducted by ADD immediately prior to Closing.
6.4 OTHER DOCUMENTS. Each of the parties will furnish to the other party
such certificates of such party's shareholders, officers, directors, employees,
or such other documents, as may be reasonably necessary to evidence fulfillment
of the conditions set forth in this Article VI as the other party may reasonably
request.
13
ARTICLE VII
EMPLOYEE MATTERS
7.1 EMPLOYEES. ADD shall deliver to Buyer not less than five (5) days prior to
Closing a list of all ADD employees and their compensation as of the most recent
date for which information is available and shall advise Buyer of any changes in
such information through the Closing Date.
7.2 WORKERS' COMPENSATION. Buyer shall be liable for all workers' compensation
claims made by ADD employees which relate to events occurring after the Closing
Date. ADD shall remain liable for all workers' compensation claims made by ADD's
former employees which relate to events occurring on or before the Closing Date
and shall hold harmless and indemnify Buyer from and against such claims. ADD
shall provide Buyer with satisfactory evidence of workers' compensation
insurance coverage through the Closing Date.
ARTICLE VIII
TERMINATION
8.1. TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) By the written agreement of the parties;
(b) By any party upon written notice to the others after 5:00 p.m.
Central Standard Time on August 31, 2000 if the transactions contemplated hereby
shall not have been consummated pursuant hereto, unless such date is extended by
the mutual written consent of the parties; or
(c) By either Buyer or ADD if: (i) the representations and warranties of
ADD and Shareholders or Buyer, respectively, shall not have been true and
correct in all respects as of the date when made; (ii) ADD and Shareholders or
Buyer, respectively, shall have failed to perform and comply with, in all
material respects, all agreements and covenants required by this Agreement to
have been performed or complied with by such parties prior to the time of such
termination and such failure to perform or comply shall be incurable or shall
not have been cured within a reasonable period of time but not less than ten
(10) days in duration following notice of such failure, provided that the
terminating party shall have performed and complied with, in all material
respects, all agreements and covenants required by this Agreement to have been
performed or complied with by such terminating party prior to such time; or
(iii) any event shall have occurred or any fact or condition shall exist that
shall have made it impossible to satisfy a condition precedent to the
terminating party's obligations to consummate the transactions contemplated by
this Agreement, unless the occurrence of such event or existence of such fact or
condition shall be due to the failure of the party seeking to terminate this
Agreement or any of its associates or affiliates to perform or comply with any
of the covenants, agreements, or conditions hereof to be performed or complied
with by such party or any of its associates or affiliates prior to Closing.
8.2. EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to the provisions of Section 8.1, this Agreement shall become
null and void and of no further force and effect, without any liability on the
part of any party hereto, or any of its
14
directors, officers, employees, agents, consultants, representatives, advisers,
shareholders, associates or affiliates.
ARTICLE IX
INDEMNIFICATION
9.1 AGREEMENT BY ADD AND SHAREHOLDERS TO INDEMNIFY. ADD and Shareholders
each agrees to indemnify, defend and hold Buyer harmless from and against the
aggregate of all Buyer Indemnifiable Damages (as defined below); provided,
however, that the aggregate indemnification liability of ADD and Shareholders
collectively shall not exceed the Purchase Price (plus any costs of collection).
(a) For purposes of this Agreement, "Buyer Indemnifiable Damages"
means, without limitation, the aggregate of all expenses, losses, costs, claims,
diminution in value, deficiencies, liabilities and damages (including, without
limitation as to type of expense, related counsel and paralegal fees and
expenses) incurred or suffered by Buyer, to the extent:
(i) resulting from any material breach of a representation or
warranty made by ADD or Shareholders in or pursuant to
this Agreement;
(ii) resulting from any material breach of the covenants or
agreements made by ADD or Shareholders pursuant to this
Agreement or Shareholder's Employment Agreement;
(iii) resulting from any inaccuracy in any certificate or
environmental report delivered by ADD or Shareholders,
pursuant to this Agreement;
(iv) resulting from any Excluded Assets or Liabilities, and
specifically including subcontractor liabilities related
to the Receivables; or
(v) resulting from any fact, condition, event, act, omission,
or other matter whose occurrence or failure to occur would
have constituted a material breach of a representation or
warranty made by ADD or Shareholders in or pursuant to
this Agreement were not that representation or warranty
qualified by the words "to the best knowledge of" or other
words of similar import
(b) Each of the representations and warranties made by ADD and
Shareholders in this Agreement or pursuant hereto shall survive for a period
commencing with the Closing Date and continuing through the second anniversary
of the Closing Date, except as follows:
(i) the representations and warranties to the extent relating
to tax attributes or liabilities with respect to Taxes of
ADD, shall expire at the time the period of limitations
(including any extensions thereof pursuant to the delivery
of waivers of the applicable period of limitations)
expires for the assessment by the taxing authority of
additional Taxes with respect to which the representations
and warranties relate;
15
(ii) the representations and warranties of the Shareholders and
ADD contained in Sections 4.12 shall expire at the time
the latest period of limitations expires for the
enforcement by an applicable Governmental Authority of any
remedy with respect to which the particular
representations and warranties of the Shareholders related
and if there is no such period of limitations, then the
representations and warranties shall continue
indefinitely; and
(iii) the representations and warranties of ADD and Shareholders
contained in Sections 4.1 through 4.6 shall not expire,
but shall continue indefinitely, except for the
representations and warranties contained in Section 4.1,
which shall expire upon the earlier of liquidation and
dissolution of ADD or the expiration of the applicable
statute of limitation. No claim for the recovery of Buyer
Indemnifiable Damages may be asserted by Buyer after such
representations and warranties shall thus expire;
provided, however, that claims for Buyer Indemnifiable
Damages first asserted within the applicable period shall
not thereafter be barred. Notwithstanding any knowledge of
facts determined or determinable by any party by
investigation, each party shall have the right to fully
rely on the representations, warranties, covenants and
agreements of the other parties contained in this
Agreement or in any other documents or papers delivered in
connection herewith. Each representation, warranty,
covenant, and agreement of the parties contained in this
Agreement is independent of each other representation,
warranty, covenant, and agreement.
(c) In the event that Buyer believes it is entitled to a claim for
any Buyer Indemnifiable Damages hereunder, Buyer shall promptly give written
notice to ADD of such claim and the amount or the estimated amount of such
claim, and the basis for such claim. If neither ADD nor Shareholders pay the
amount of the claim for Buyer Indemnifiable Damages to Buyer within fourteen
(14) days, then Buyer may take any action or exercise any remedy available to
Buyer by appropriate legal proceedings to collect the Buyer Indemnifiable
Damages or make a claim for payment including, but not limited to, suspension
and offset of any payment or benefits under the Escrow Agreement and either
Shareholder's Employment Agreement. However, this Section will not apply to any
breach by ADD or Shareholders with regard to any representation or warranty of
which ADD or Shareholders had Knowledge at any time prior to the date on which
such representation and warranty is made or any intentional breach by ADD or
Shareholders of any covenant or obligation hereunder or under either
Shareholder's Employment Agreement, in which case ADD and Shareholders will be
liable for all Damages with respect to such breaches and Buyer may immediately
suspend and offset any principal, interest or other payments or benefits under
the Escrow Agreement and either Shareholder's Employment Agreement.
9.2 CONDITIONS OF INDEMNIFICATION OF BUYER. Except as otherwise provided
in Section 9.1, the obligations and liabilities of ADD and Shareholders
hereunder with respect to the indemnities pursuant to this Article IX resulting
from any claim or other assertion of liabilities by third parties (hereinafter
called collectively the "Buyer Claims") shall be subject to the following terms
and conditions:
16
(a) Buyer must give ADD and Shareholders notice of any such Buyer
Claim promptly after Buyer receives notice thereof;
(b) ADD and Shareholders shall have the right to undertake, by
counsel or other representatives of their own choosing, the defense of such
Buyer Claim; provided, however, if a Buyer Claim is made against Buyer that
exceeds the value of the Indemnification Security at such time, Buyer shall have
the right to control the defense of the Buyer Claim;
(c) in the event ADD and Shareholders shall elect not to undertake
such defense, or within a reasonable time after notice of any such Buyer Claim
from Buyer shall fail to defend, Buyer (upon further written notice to ADD and
Shareholders) shall have the right to undertake the defense, compromise, or
settlement of such Buyer Claim, by counsel or other representatives of its own
choosing, on behalf of and for the account and risk of ADD and Shareholders
(subject to the right of ADD and Shareholders to assume defense of such Buyer
Claim at any time prior to settlement, compromise or final determination
thereof);
(d) anything in this Section 9.2 to the contrary notwithstanding:
(i) Buyer shall have the right, at its own cost and expense,
to have its own counsel to protect its own interests and
participate in the defense, compromise, or settlement of
the Buyer Claim;
(ii) Neither ADD nor Shareholders shall, without Buyer's
written consent, settle, or compromise any Buyer Claim or
consent to entry of any judgement which does not include
as an unconditional term thereof the giving by the
claimant or the plaintiff to Buyer of a release from all
liability in respect of such Buyer Claim; and
(iii) Buyer, by counsel or other representatives of its own
choosing and at its sole cost and expense, shall have the
right to consult with ADD, Shareholders and their
respective counsel or other representatives concerning
such Buyer Claim, and ADD, Shareholders and Buyer and
their respective counsel shall cooperate with respect to
such Buyer Claim.
9.3 MINIMUM THRESHOLD FOR INDEMNIFICATION BY ADD AND SHAREHOLDERS. No
indemnification shall be paid by ADD or Shareholders under Sections 9.1 (a)(i)
through (viii) hereof until such time as the amount for which indemnification
would otherwise be due to any and all parties entitled to indemnification from
ADD or Shareholders hereunder exceeds Ten Thousand and No/100 Dollars
($10,000.00) in the aggregate, and then only to the extent of the excess over
Ten Thousand and No/100 Dollars ($10,000.00).
ARTICLE X
ADDITIONAL AGREEMENTS
10.1 CONDUCT OF OPERATIONS. During the period from the date of this
Agreement to the Closing Date, ADD and Shareholders conduct ADD's Business
operations in the manner in which they have customarily and ordinarily conducted
such Business operations in the past, preserve intact ADD's assets and Business
operations and report regularly to Buyer as to the
17
general status thereof and as to any material event affecting ADD's assets and
Business operations. During the period from the date of this Agreement to the
Closing Date, ADD and Shareholders will not, other than in the normal course of
business, take, without the prior written consent of Buyer, any action which
could reasonably be expected to materially adversely affect the assets or
Business operations of ADD.
10.2 COOPERATION. From and after the Closing Date, the parties shall
cooperate with each other in connection with the administration of employee
matters, the filing of Tax Returns and other reports required by governmental
authorities and the defense of any claim or litigation made or instituted
against either party in respect of ADD's operations before the Closing Date,
which cooperation shall include, but not be limited to, making available
employees for the purposes of providing technical or expert testimony and
advice.
10.3 BEST EFFORTS. Subject to the terms and conditions of this Agreement,
each of the parties will use its best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
as soon as practicable the transactions contemplated by this Agreement.
10.4 FURTHER ASSURANCES. From time to time, without further consideration,
ADD and Shareholders, at their own expense, will execute and deliver, or cause
to be executed and delivered, such documents as Buyer may reasonably request to
more effectively consummate the transactions contemplated hereby and to vest in
Buyer good title to the Purchased Assets. From time to time, without further
consideration, Buyer, at its own expense, will execute and deliver, or cause to
be executed and delivered, such documents as ADD and Shareholders may reasonably
request to more effectively consummate the transactions contemplated hereby.
10.5 NEGOTIATIONS WITH OTHERS. During the period from the date of this
Agreement to the Closing Date, ADD and Shareholders will not, directly or
indirectly, engage in discussions or negotiations with any person or entity
(other than Buyer) concerning any possible proposal regarding a sale or transfer
of all or any part of the assets or Business operations of ADD. ADD and
Shareholders agree to disclose to Buyer the existence and content of any
communication they receive concerning any such possible proposal as soon as
practicable after receipt of the communication.
10.6 BROKERS. Each of the parties represents and warrants to the other
that no broker, finder or other person is entitled to any brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement. Each party will each pay or discharge, and will each indemnify
and hold the other harmless from and against, any and all other claims or
liabilities for all brokerage fees, commissions and finder's fees incurred by
reason of any action taken by such party.
10.7 SALES AND TRANSFER TAXES AND FEES. Any sales and transfer Taxes and
fees directly incurred in connection with this Agreement and the transactions
contemplated hereby will be borne by ADD. Add and Shareholder will file all
necessary Tax Returns and other documentation, if any, with respect to all such
sales, transfer and recording Taxes and fees relating to ADD.
10.8 TAX TREATMENT. Each party shall execute and deliver such additional
instruments
18
and other documents and shall take such further actions as may be necessary or
appropriate to effectuate, carry out, and comply with all of the terms of this
Agreement and the transactions contemplated hereby.
10.9 OTHER AGREEMENTS. The parties agree that the non-competition
covenants contained in Shareholders' Employment Agreements are an integral part
of this Agreement.
10.10 CORPORATE NAME CHANGE. ADD shall, immediately following the Closing,
execute and deliver to Buyer for filing all documents or certificates necessary
to change the legal, trade or assumed name of ADD to any name not confusingly
similar to Advanced Digital Designs, Inc.
ARTICLE XI
DEFINITIONS
11.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
"Assumed Liabilities" defined in Section 1.3.
"Balance Sheet" means the unaudited balance sheet of ADD as of June
30, 2000, included in Schedule 4.6.
"Balance Sheet Date" means June 30, 2000.
"Bill of Sale" means the Bill of Sale in the form attached hereto as
Exhibit A.
"Business" defined in the Recitals to this Agreement.
"Buyer Claims" as defined in Section 9.2.
"Buyer Indemnifiable Damages" defined in Section 9.1(a).
"Closing Date" defined in Section 3.1.
"Code" defined in Section 4.12.
"Contract" means any indenture, lease, sublease, license, loan
agreement, mortgage, note, indenture, restriction, will, trust, commitment,
obligation, or other contract, agreement or instrument, whether written or oral.
"Current Balance Sheet" defined in Section 4.6.
"Effective Date" defined in preamble.
"Employee Benefit Plans" defined in Section 4.12.
"Employment Agreement" means the Employment Agreement between Buyer
and Shareholders in the form attached hereto as Exhibit B.
19
"Excluded Assets" defined in Section 1.2.
"Excluded Liabilities" defined in Section 1.4.
"Financial Statements" defined in Section 4.6.
"Governmental Authority" means any nation or government, any state,
regional, local, or other political subdivision thereof, and any entity or
official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Intellectual Property" defined in Section 4.17.
"Licenses" defined in Section 4.18.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, but not limited to, any conditional sale
or other title retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code or comparable law or any jurisdiction in connection with such
mortgage, pledge, security interest, encumbrance, lien or charge).
"Material Adverse Change (or Effect)" means a change (or effect), in
the condition (financial or otherwise), properties, assets, liabilities, rights,
obligations, operations, Business, or prospects which change (or effect)
individually or in the aggregate, does, may, or may reasonably be expected to,
result in a financial loss relating to such condition, properties, assets,
liabilities, rights, obligations, operations, Business or prospects in excess of
Ten Thousand and No/100 Dollars ($10,000.00).
"Permitted Liens" means: (a) liens for taxes and other governmental
charges and assessments which are not yet due and payable; (b) liens of
landlords and liens of carriers, warehousemen, mechanics, and materialmen and
other like liens arising in the ordinary course of business for sums not yet due
and payable; and (c) other liens or imperfections on property which are not
material in amount or do not materially detract from the value of or materially
impair the existing use of the property affected by such lien or imperfection.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, estate, trust, unincorporated association, joint
venture, Governmental Authority, or other entity, of whatever nature.
"Purchased Assets" defined in Section 1.1.
"Purchased Contracts" defined in Section 4.18.
"Purchase Price" defined in Section 2.1
"Receivables" means all receivables of ADD, including all trade
account receivables arising from the provision of services, as set forth in the
Financial Statements.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax Return" means any tax return, filing or information statement
required to be filed in connection with or with respect to any Taxes; and
20
"Taxes" means all taxes, fees or other assessments, including, but
not limited to, income, excise, property, sales, franchise, intangible,
withholding, social security, and unemployment taxes imposed by any federal,
state, local or foreign governmental agency, and any interest or penalties
related thereto.
"Welfare Plan" defined in Section 4.12.
11.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.
(c) As used herein, the neuter gender shall also denote the masculine
and feminine, and the masculine gender shall also denote the neuter and
feminine, where the context so permits.
ARTICLE XII
GENERAL PROVISIONS
12.1 SURVIVAL OF OBLIGATIONS. All representations, warranties, covenants
and obligations contained in this Agreement shall survive for such time as the
indemnity for the breach thereof shall survive as set forth in Sections 9.1 and
9.2, and subject to the minimum threshold for indemnification set forth in
Section 9.3.
12.2 NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given, delivered, and
received:
(a) when delivered, if delivered personally by a commercial
messenger delivery service with verification of delivery;
(b) two (2) days after mailing, when sent by registered or certified
mail, return receipt requested, and postage prepaid;
(c) one business day after delivery to a private courier service,
when delivered to a private courier service providing documented overnight
service;
(d) on the date of delivery if delivered by facsimile and
electronically confirmed before 5:00 P.M. Chicago Time on any business day; or
(e) on the next business day if delivered by facsimile and
electronically confirmed either after 5:00 P.M. Chicago Time) or on a
non-business day, in each case addressed as follows:
21
If to ADD or
Shareholders: Mr. Anthony Vitucci CEO
Advanced Digital Designs, Inc.
9378 N. Plum Grove Road
Schaumburg, Illinois 60173
Telephone: 847.619.4800
Facsimile: 847.619.5001
With a copy to: Mr. Daniel F. Gridley
210 W. Main Street
Barrington, Illinois 60010
Telephone: 847-381-8683
Facsimile: 847-381-8684
If to Buyer: Mr. Christopher L. Geier
Executive Vice President
ADD Acquisition Corp.
Dauphin Technology, Inc.
800 E. Northwest Highway, Suite 950
Palatine, Illinois 60067
Telephone: 847-358-4406/201
Facsimile: 847-358-4407
With a copy to: Ronald P. Duplack, Esq.
Rieck and Crotty, P.C.
55 West Monroe Street, Suite 3390
Chicago, Illinois 60603
Telephone: 312-726-4646
Facsimile: 312-726-0647
or to such other address or addresses as may hereafter by specified by notice
given by any of the above to others.
12.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.
12.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Exhibits and
Schedules referred to herein and the documents delivered pursuant hereto contain
the entire understanding of the parties hereto with regard to the subject matter
contained herein or therein, and supersede all prior agreements, understandings,
or letters of intent between or among any of the parties hereto. This Agreement
shall not be amended, modified, or supplemented except by a written instrument
signed by an authorized representative of each of the parties hereto.
12.5 INTERPRETATION. Article titles and headings to sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. The Schedules and
Exhibits referred to herein shall be construed with and as an integral part of
this Agreement to the same extent as if they were set forth verbatim herein.
22
12.6 EXPENSES. Except as otherwise set forth herein, each party hereto
will pay all costs and expenses incident to its negotiation and preparation of
this Agreement and to its performance and compliance with all agreements and
conditions contained herein on its part to be performed or complied with,
including the fees, expenses, and disbursements of its counsel and accountants.
12.7 PARTIAL INVALIDITY. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal, or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality, or unenforceability without invalidating the remainder
of such invalid, illegal, or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
12.8 GOVERNING LAW. This Agreement shall be enforced in accordance with
the laws of the State of Illinois and shall be construed in accordance
therewith. The parties hereto agree that all actions or proceedings arising in
connection with this Agreement shall be tried and litigated exclusively in the
State and Federal courts located in the County of Cook, State of Illinois. The
aforementioned choice of venue is intended by the parties to be mandatory and
not permissive in nature, thereby precluding the possibility of litigation
between the parties with respect to or arising out of this Agreement in any
jurisdiction other than that specified in this Section. Each party hereby waives
any right it may have to assert the doctrine of forum non conveniens or similar
doctrine or to object to venue with respect to any proceeding brought in
accordance with this Section, and stipulates that the State and Federal courts
located in the County of Cook, State of Illinois shall have in personam
jurisdiction and venue over each of them for the purpose of litigating any
dispute, controversy, or proceeding arising out of or related to this Agreement.
Each party hereby authorizes and accepts service of process sufficient for
personal mail, return receipt requested, postage prepaid, to its address for the
giving of notices as set forth in this Agreement. Any final judgment rendered
against a party in any action of proceeding shall be conclusive as to the
subject of such final judgment and may be enforced in other jurisdictions in any
manner provided by law.
12.9 PUBLIC ANNOUNCEMENTS. No party shall disclose the existence of this
Agreement, or the transactions contemplated herein, or make any public
announcement regarding the same, without the prior written notice to, and
approval of, each of the other parties.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed the day and year first above written.
ADD Acquisition Corp.,
an Illinois corporation
By: /s/ Christopher L. Geier /s/ Luke Lukens
--------------------------------- -------------------------------
Christopher L. Geier Luke Lukens, CFO
Executive Vice President
ADVANCED DIGITAL DESIGNS, INC.,
an Illinois corporation
By: /s/ Bruce Karsten /s/ Anthony Vitucci
--------------------------------- -------------------------------
Bruce Karsten, President Anthony Vitucci, Vice President
ADVANCED TECHNOLOGIES, INC.,
an Illinois corporation
By: /s/ Bruce Karsten /s/ Anthony Vitucci
--------------------------------- -------------------------------
Bruce Karsten, President Anthony Vitucci, Vice President
937 PLUM GROVE ROAD PARTNERSHIP
an Illinois partnership
By: /s/ Bruce Karsten /s/ Anthony Vitucci
--------------------------------- -------------------------------
Bruce Karsten, Partner Anthony Vitucci, Partner
By: /s/ Bruce Karsten /s/ Anthony Vitucci
--------------------------------- -------------------------------
Bruce Karsten Anthony Vitucci