Subsidiary.
"Systems" has the meaning set forth in Section 4.27 below.
"Target" has the meaning set forth in the preface above.
"Tax" or "Taxes" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code §59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not and including any obligations to
indemnify or otherwise assume or succeed to the Tax liability of any other
Person.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third-Party Claim" has the meaning set forth in Section 8.4 below.
2.
PURCHASE AND SALE OF MEMBERSHIP INTERESTS.
2.1
BASIC TRANSACTION.
ON AND SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, BUYER AGREES TO PURCHASE FROM EACH SELLER, AND EACH SELLER
AGREES TO SELL TO BUYER, ALL OF HIS OR HER OR ITS MEMBERSHIP INTERESTS FOR THE
CONSIDERATION SPECIFIED BELOW IN THIS SECTION 2.
2.2
DEPOSIT.
CONCURRENTLY WITH THE EXECUTION OF THIS AGREEMENT, BUYER
IS DELIVERING TO SELLERS A DEPOSIT OF $2,000,000 (THE "DEPOSIT") BY WIRE
TRANSFER OR DELIVERY OF OTHER IMMEDIATELY AVAILABLE FUNDS.
THE DEPOSIT SHALL BE
HELD BY U.S. BANK NATIONAL ASSOCIATION, AS ESCROW AGENT, PURSUANT TO THE TERMS
OF THE ESCROW AGREEMENT OF EVEN DATE HEREWITH (THE "ESCROW AGREEMENT"), A COPY
OF WHICH IS ATTACHED HERETO AS EXHIBIT B.
THE DEPOSIT AND ANY INTEREST OR OTHER
INCOME THEREON SHALL EITHER BE CREDITED TOWARD THE CASH PAYMENT TO SELLERS AT
CLOSING, FORFEITED TO SELLERS, OR REFUNDED TO BUYER UPON THE OCCURRENCE OF
CERTAIN EVENTS DESCRIBED IN THIS AGREEMENT.
FOR INCOME TAX PURPOSES, THE
DEPOSIT SHALL BE TREATED AS OWNED BY BUYER DURING THE ESCROW PERIOD, AND ALL
INTEREST OR OTHER INCOME EARNED ON THE DEPOSIT UNDER THE ESCROW AGREEMENT SHALL
BE TREATED AS TAXABLE INCOME OF BUYER AND SHALL BE REPORTED AS SUCH TO THE
INTERNAL REVENUE SERVICE AND OTHER TAXING AUTHORITIES.
THE PARTIES AGREE TO
TREAT THE DEPOSIT AND THE ESCROW AGREEMENT CONSISTENTLY WITH THE FOREGOING FOR
ALL TAX REPORTING PURPOSES.
2.3
PRELIMINARY PURCHASE PRICE.
BUYER AGREES TO PAY TO SELLERS AT THE
CLOSING $10,000,000 (THE "PRELIMINARY PURCHASE PRICE") BY (1) DELIVERY OF CASH
EQUAL TO THE DIFFERENCE OF PRELIMINARY PURCHASE PRICE LESS THE AMOUNT OF THE
DEPOSIT AND ANY INTEREST OR OTHER INCOME EARNED ON THE DEPOSIT AND (2) RELEASE
OF THE DEPOSIT AND ANY INTEREST OR OTHER INCOME EARNED ON THE DEPOSIT.
THE
PRELIMINARY PURCHASE PRICE SHALL BE ALLOCATED AMONG SELLERS IN ACCORDANCE WITH
7
THE PERCENTAGES SET FORTH ON SCHEDULE 2.3 HEREOF (THE "PERCENTAGE OWNERSHIP
AMOUNTS").
THE PRELIMINARY PURCHASE PRICE SHALL BE SUBJECT TO POST-CLOSING
ADJUSTMENT AS SET FORTH IN SECTION 2.6.
2.4
CLOSING.
THE CLOSING OF THE