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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 2, 1996 (June 18, 1996)
OSICOM TECHNOLOGIES, INC.
(Exact name of Registrant as specified in charter)
New Jersey 0-15810 22-2367234
State or other juris- (Commission (IRS Employer)
diction of incorporation File Number) Identification No.)
2800 28th Street, Suite 100, Santa Monica, CA 90405
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 828-7496
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 18, 1996, Osicom Technologies, Inc. ("Osicom") the registrant, and
Builders Warehouse Association, Inc. ("BWAI") entered into a definitive
agreement whereby Osicom will acquire substantially all of the assets of BWAI, a
rapidly growing manufacturer of high-speed computer networking products, in a
reorganization transaction. Under the terms of the agreement, shares of Osicom
common stock will be issued to BWAI for substantially all of BWAI's assets. The
Osicom common stock issued to BWAI will then be distributed to BWAI's
shareholders in a complete liquidation. BWAI will receive 0.94 share of Osicom
common stock for each common share of BWAI currently outstanding, which exchange
ratio represents a 10 percent premium to the market value of BWAI stock based on
the June 17, 1996 closing prices of $15 and $17.50 for BWAI and Osicom shares,
respectively.
Following the close of the transaction, Barry Witz, a director and chief
executive officer of BWAI, will join Osicom's board of directors which will be
expanded to five members. Sharon Chadha will, in addition to serving as chief
executive officer, accede to the office of chairman. Par Chadha, the current
chairman of both companies will remain on the board of Osicom, as will Dr. Xin
Cheng, Osicom's president. The remaining director position will be filled by
Leonard N. Hecht, president of Chrysalis Capital Group, an investment banking
company specializing in mergers and acquisitions. Mr. Hecht has served on the
board of directors of many public and private companies and was a founding
principal of Xerox Development Corporation, a wholly-owned subsidiary of the
Xerox Corporation.
The acquisition will qualify as a tax-free reorganization and will be completed
as soon as practical subject to regulatory clearance and approval by the
shareholders of both companies.
The assets acquired will continue to be used in the daily operations of the
businesses.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements and pro forma financial information of the
business acquired are expected to be filed by amendment to this filing
within sixty (60) days of the earliest date reported herein.
(b) Exhibit 2.1 Plan of Acquisition - Stock Purchase and Merger
Agreement between Osicom Technologies, Inc. and Builders Warehouse
Association, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Osicom Technologies, Inc.
(Registrant)
Dated: July 2, 1996 By: /s/ Sharon Chadha
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Sharon Chadha
Chief Executive Officer
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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
AGREEMENT made as of the 1st day of June, 1996, by and between Builders
Warehouse Association, Inc., a Colorado corporation ("BWAI"), having an address
at 2800 28th Street, Suite 100, Santa Monica, California 90405, and Osicom
Technologies, Inc., a New Jersey corporation ("Osicom") having an address at
2800 28th Street, Suite 100, Santa Monica, California 90405.
WHEREAS, BWAI is the owner of all of the issued and oustanding capital
stock of Sciteq Electronics, Inc., a California corporation, Uni Precision,
Ltd., a Hong Kong corporation, PDP Acquisition Corp., a California corporation,
Relialogic Technology Corporation, a California corporation and RNET Inc., a
Nevada corporation (each referred to individually as a "Subsidiary" and
collectively as the "Subsidiaries") and some of the outstanding capital stock of
XNET Technology, Inc., a California corporation ("XNET"); and
WHEREAS, BWAI wishes to sell to Osicom and Osicom wishes to purchase
from BWAI all of the capital stock of the Subsidiaries and the capital stock of
XNET owned by BWAI;
NOW, THEREFORE, in consideration of the mutual agreements recited
herein, the parties agree as follows:
ARTICLE I
ACQUISITION OF THE SUBSIDIARIES
1.01. Purchase and Sale. Subject to the terms and conditions of this
Agreement, and in reliance on the representations and warranties set forth
herein, on the Closing Date, as defined herein, BWAI will sell, transfer and
deliver to Osicom, and Osicom shall acquire from BWAI, all of the shares of
capital stock of the Subsidiaries and the capital stock of XNET owned by BWAI
(collectively, the "Shares"), free and clear of all liens, pledges,
encumbrances, charges and claims thereon. Certificates evidencing the Shares
shall be either duly endorsed in blank or accompanied by appropriate stock
powers endorsed in blank. Such certificates shall also be accompanied by
evidence satisfactory to Osicom of BWAI's payment of any applicable transfer
taxes.
1.02. Purchase Price. In consideration of the sale, transfer, and
delivery of the Shares by BWAI to Osicom, on the Closing Date, Osicom will pay
to BWAI, the sum of (a) 0.94 times (b) the sum of (i) the number of shares of
BWAI common stock outstanding on the Closing Date plus (ii) the number of
warrants and options to acquire BWAI stock outstanding on the Closing Date minus
(c) the exercise price for all such warrants and options, by issuing and
delivering to BWAI that number of shares of Osicom Common Stock ("Osicom Stock")
having a market value equal to such purchase price.
1.03. Stockholder Approval. The parties acknowledge
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that BWAI must solicit and obtain the approval of its stockholders to the
transactions contemplated by this Agreement. Simultaneously herewith,
stockholders of BWAI owning more than 50% of BWAI's outstanding common stock
have delivered to Osicom irrevocable proxies to vote in favor of the
transactions contemplated hereby. Upon (a) the completion of a meeting of BWAI's
stockholders at which the transactions contemplated hereby are approved and (b)
the effectiveness of the registration statement referred to in Section 1.04 of
this Agreement, the Closing will occur. The effective date of the transactions
contemplated hereby will be June 1, 1996.
1.04. Registration Rights. Promptly following the date of this
Agreement, Osicom shall prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement for the purpose of
registering the Osicom Common Stock under the Securities Act of 1933 as amended
(the "Act") for distribution by BWAI to its stockholders. Osicom will use its
best efforts to cause such registration statement to become effective as soon as
practicable. BWAI will supply to Osicom all relevant information concerning BWAI
necessary to the preparation of such registration statement. The registration
statement will be prepared and filed jointly with the aforesaid proxy statement.
1.05. Assumption of Liabilities. In connection with the transactions
contemplated hereby, Osicom agrees to assume, and indemnify BWAI against, those
liabilities listed on Schedule 1.05 to this Agreement.
1.06. Liquidating Trust. Upon liquidation of BWAI, a liquidating trust
will be created and funded to enable BWAI to satisfy any unpaid liability at
the time of liquidation.
ARTICLE II
ADDITIONAL TRANSACTIONS
2.01. Acquisition of Osicom Stock. BWAI represents and warrants that
the Osicom Stock to be acquired pursuant to the terms of this Agreement is being
acquired for its own account, with no intention of assigning any participation
or interest therein, and without a view to the distribution of any portion
thereof, except in accordance with the Act. BWAI will not sell, assign, transfer
or encumber any of such shares unless (i) a registration statement under the Act
with respect thereto is in effect and the prospectus included therein meets the
requirements of Section 10 of the Act, or (ii) a no-action letter is obtained
from the staff of the Commission in respect of such proposed sale, assignment,
transfer or encumbering, or (iii) Osicom has received a written opinion of
counsel reasonably satisfactory to Osicom that, after an investigation of the
relevant facts, such counsel is of the opinion that such proposed sale,
assignment, transfer or encumbering does not require registration under the Act.
BWAI understands that the Osicom Stock is not being
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registered under the Act and must be held indefinitely unless it is subsequently
registered thereunder or an exemption from such registration is available. BWAI
understands that, except as otherwise provided in this Agreement, the Osicom
Stock is not being registered under the Act in part on the grounds that the
issuance thereof is exempt under Section 4(2) of the Act as a transaction by an
issuer not involving any public offering; that Osicom's reliance on such
exemption is predicated in part on the foregoing representation and warranty of
BWAI and that in the view of the Commission, the statutory basis for the
exemption claimed would not be present if, notwithstanding such representation
and warranty, BWAI contemplates acquiring any of the Osicom Stock for sale upon
the occurrence or non-occurrence of some predetermined event.
2.03. Restrictive Legend. BWAI understands that Osicom will have an
appropriate stop order placed on its records indicating the existence of the
terms of this Agreement, and that the certificates representing the Osicom Stock
shall bear the following legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE SOLD,
TRANSFERRED OR ENCUMBERED ONLY PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A
NO-ACTION LETTER FROM THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS UNNECESSARY."
2.04. Receipt of Information. BWAI, by delivering the Shares at the
Closing pursuant to Section 8.02 of this Agreement, shall be deemed without
further action of any kind to have acknowledged receipt of all information
required to be delivered to him with respect to the transactions contemplated by
this Agreement pursuant to Regulation D promulgated by the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended ("Regulation D").
2.05. Accredited Investor Status. BWAI represents and warrants to
Osicom that it is an accredited investor, as defined in Regulation D.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF OSICOM
Osicom makes the following representations and warranties to BWAI.
BWAI, in executing, delivering and consummating this Agreement, has relied and
will rely upon the correctness and completeness of each of such representations
and warranties:
3.01. Valid Corporate Existence; Qualification. Osicom
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is a corporation duly organized, validly existing and in good standing under the
laws of the State of New Jersey. Osicom has the corporate power to carry on its
business as now conducted and to own its assets. Osicom is duly qualified to
conduct business and is in good standing as a foreign corporation in those
jurisdictions set forth on Schedule 3.01, which are the only jurisdictions in
which Osicom is required to qualify in order to own its assets or properties or
to carry on its business as now conducted (except for such jurisdictions where
the failure to so qualify would not have a material adverse effect on Osicom),
and there has not been any claim by any other jurisdiction to the effect that
Osicom is required to qualify or otherwise be authorized to do business as a
foreign corporation therein (except for such jurisdictions where the failure to
so qualify would not have a material adverse effect on Osicom). The copies of
Osicom's Certificate of Incorporation (certified by the Secretary of State of
New Jersey) and By-Laws (certified by Osicom's secretary), as amended to date,
which have been delivered to BWAI, are true and complete copies of those
documents as now in effect. The minute books of Osicom contain accurate records
of all material meetings of its Board of Directors, Executive Committee of the
Board, if any, and shareholders since its incorporation, and accurately reflect
all transactions authorized therein in all material respects.
3.02. Capitalization. The authorized capital stock of Osicom consists
of 20,000,000 shares of Common Stock, par value $.10 per share, of which
3,056,174 shares were issued and outstanding, as of April 30, 1996; and
2,000,000 shares of Preferred Stock, of which 2500 Series A and 5269 Series B
shares were issued and outstanding, as of April 30, 1996. All of such shares of
Common Stock and Preferred Stock are duly authorized and validly issued and
outstanding, fully paid and nonassessable. Except as listed on Schedule 3.02,
there are no subscriptions, options, warrants, rights or calls or other
commitments or agreements to which Osicom or any of the Shareholders is a party
or by which it is bound, calling for the issuance, transfer, sale or other
disposition of any class of securities of Osicom. Other than the Preferred Stock
and those items disclosed on Schedule 3.02, there are no outstanding securities
of the Corporation convertible or exchangeable, actually or contingently, into
shares of Common Stock or any other securities of the Corporation.
3.03. Subsidiaries. Except as listed on Schedule 3.03, there are no
corporations, partnerships or other business entities controlled by Osicom. As
used herein, "controlled by" means (i) the ownership of not less than 50% of the
voting securities or other interests of a corporation, partnership or other
business entity, or (ii) the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a corporation,
partnership or other business entity, whether through the ownership of voting
shares, by contract or otherwise. Osicom has not made any investments in, nor
does it own, any of the capital stock of, or any other proprietary interest in,
any other corporation, partnership or other business entity. All references
herein to Osicom includes each entity listed on
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Schedule 3.03.
3.04. Consents. All requisite consents of governmental and other
regulatory agencies, foreign or domestic, and of other parties required to be
received by or on the part of Osicom, to enable Osicom to enter into and carry
out this Agreement in all material respects have been, or prior to the Closing
will have been, obtained.
3.05. Binding Nature of Agreement; Title to Shares. This Agreement
constitutes Osicom's valid and binding obligation and is enforceable in
accordance with its terms. The delivery of the Shares to BWAI at the Closing
pursuant to the provisions of this Agreement will transfer valid title thereto,
free and clear of all manner of liens, charges, encumbrances and claims.
3.06. Financial Statements. The books of account of Osicom fairly
reflect its income, expenses, assets and liabilities in all material respects.
The audited financial statements of the Osicom for the two years ended January
31, 1996 and the unaudited financial statements for the three (3) months ended
April 30, 1996 fairly present the financial position of Osicom as of the said
dates and the results of its operations for such fiscal years and period and,
except as set forth therein, were prepared in conformity with generally accepted
accounting principles consistently applied throughout the periods covered
thereby.
3.07. Liabilities. Except as set forth on Schedule 3.07, as at April
30, 1996, (the "Balance Sheet Date"), Osicom had no material debts, liabilities
or obligations, contingent or absolute, other than those debts, liabilities and
obligations reflected or reserved against Osicom's Balance Sheet at the Balance
Sheet Date (the "Balance Sheet") or arising after the Balance Sheet Date in the
ordinary course of Osicom's business.
3.08. Action Since Balance Sheet Date. Except as otherwise expressly
provided or set forth in, or required by, this Agreement or as set forth in
Schedule 3.08, since the Balance Sheet Date, Osicom has not: (i) incurred any
material obligation or liability, absolute or contingent, except those arising
in the ordinary and usual course of its business; (iii) discharged or satisfied
any lien or encumbrance, except in he ordinary and usual course of business, or
paid or satisfied any liability, absolute or contingent, other than liabilities
as of the Balance Sheet Date and current liabilities incurred since the Balance
Sheet Date in the ordinary and usual course of business; (iii) made any wage or
salary increases or granted any bonuses other than wage and salary increases and
bonuses granted in accordance with its normal salary increase and bonus
policies; (iv) mortgaged, pledged or subjected to any lien or other encumbrance
any of its properties or assets, or permitted any of its property or assets to
be subjected to any lien or other encumbrance, except in the ordinary and usual
course of business; (v) sold, assigned or transferred any of its properties or
assets, except in the ordinary and usual course of business;
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(vi) entered into any transaction except in the ordinary course of its business;
(vii) waived any rights of substantial value, or cancelled, modified or waived
any indebtedness for borrowed money held by it, except in the ordinary and usual
course of business; (viii) declared, paid or set aside any dividends or other
distributions or payments on its capital stock, or redeemed or repurchased, or
agreed to redeem or repurchase, any shares of its capital stock; (ix) made any
loans or advances to any person, or assumed, guaranteed, endorsed or otherwise
became responsible for the obligations of any person; or (x) incurred any
indebtedness for borrowed money (except for endorsement, for collection or
deposit of negotiable instruments received in the ordinary and usual course of
business).
3.09. Adverse Developments. Except as otherwise expressly provided or
set forth in, or required by, this Agreement, since the Balance Sheet Date, to
the best knowledge of Osicom, there have been no changes in the properties,
operations or financial condition of the Corporation, and no event has occurred
other than in the ordinary and usual course of business which could be
reasonably expected to have a materially adverse effect upon the business of the
Corporation.
3.10. Taxes. Osicom delivered to BWAI true and complete copies of the
Federal income tax returns on Form 1120 of the Corporation as filed with the
Internal Revenue Service for each of the fiscal years ended January 31, 1996 and
1995, respectively. Except as set forth on Schedule 3.10, each of such returns
was prepared in conformity with information contained in the books and records
of Osicom and contains no untrue statement of a material fact or omits to state
any fact required to make any such return correct and complete in all material
respects. All taxes, including, without limitation, income, property, sales,
use, franchise, capital stock, excise, added value, employees' income
withholding, social security and unemployment taxes imposed by the United
States, any state or any foreign country, or by any other taxing authority,
which have or may have become due or payable by Osicom and all interest and
penalties thereon, whether disputed or not, have been paid in full or adequately
provided for by reserves shown in its books of account; all deposits required by
law to be made by Osicom with respect to estimated income, franchise and
employees' withholding taxes have been duly made; and all tax returns, including
estimated tax returns, required to be filed have been duly filed. No extension
of time for the assessment of deficiencies for any year is in effect. No
deficiency is proposed or, to the knowledge of Osicom, after reasonable inquiry,
threatened against Osicom. Schedule 3.10 sets forth a list of those states in
which income, franchise or sales and use tax returns were filed by Osicom for
the fiscal years ended January 31, 1996 and January 31, 1995, respectively.
3.11. Ownership of Assets. Except as set forth in Schedule 3.11, Osicom
owns outright, and has good and marketable title to all of its assets,
properties and business (including all assets reflected in the Balance Sheet,
except as the same may have
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been disposed of in the ordinary course of business since the Balance Sheet
Date), free and clear of all liens, mortgages, pledges, conditional sales
agreements, restrictions on transfer or other encumbrances or charges
(collectively, the "Encumbrances") except for Encumbrances arising by operation
of law rather than by grant of Osicom (for example, tax liens and mechanics
liens) in the ordinary course of Osicom's business for liabilities reflected in
the Balance Sheet and not more than $100,000 in the aggregate. Schedule 3.11
sets forth a true and complete list and brief description of all patents,
copyrights, trademarks, trade names and other similar intangible assets which
are either owned by Osicom or in which it has an interest. Except as set forth
on Schedule 3.11, no other person, firm or corporation has any proprietary or
other interest in any such intangible assets. Such assets so owned or leased
are, in the reasonable business judgment of Osicom, sufficient to permit Osicom
to conduct its business as now conducted in all material respects. Except as set
forth on Schedule 3.11, Osicom is not a party to or bound by any license or
agreement requiring the payment to any person, firm or corporation of any
royalty. Osicom, after reasonable inquiry, does not know, or have reasonable
grounds to know of any violation by others of the trademark, trade name or
patent rights of Osicom. Osicom is not infringing upon any patent, copyright,
trade name or trademark or otherwise is violating the rights of any third party
with respect thereto, and no proceedings have been instituted or, to the
knowledge of Osicom, after reasonable inquiry, are threatened, and no claim has
been received by Osicom alleging any such violation.
3.12. Insurance. Schedule 3.12 sets forth a list and brief description
of all policies of fire, liability and other forms of insurance held by Osicom
as of the date hereof. Except as set forth in Schedule 3.12, such policies are
valid, outstanding and enforceable policies, as to which premiums have been paid
currently. Except as set forth on Schedule 3.12, Osicom, after reasonable
inquiry, does not know of any state of facts, or of the occurrence of any event
which might reasonably form the basis for any claim exceeding $100,000 against
Osicom not fully covered by insurance for liability on account of any express or
implied warranty or tortious omission of commission.
3.13. Litigation, Compliance with Law. Except as set forth on Schedule
3.13, there are no actions, suits, proceedings or governmental investigations
relating to Osicom or to any of its properties, assets or businesses pending or,
to the knowledge of Osicom, after reasonable inquiry, threatened, or any order,
injunction, award or decree outstanding against Osicom or against or relating to
any of its properties, assets or businesses. Except as set forth in Schedule
3.13, to the best knowledge of Osicom, Osicom is not in violation or any law,
regulation, ordinance, order, injunction, decree, award or other requirement of
any governmental body, court or arbitrator relating to its properties, assets or
business which violation could have a material adverse effect on the Osicom.
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3.14. Real Property. Schedule 3.14 sets forth a brief description of
all real property which is owned by, or leased to Osicom, including all material
structures located hereon. Osicom owns outright the fee simple title in and to
the real properties shown on Schedule 3.14 as being owned by it, free and clear
of all claims, liens, mortgages, charges, or encumbrances of any nature
whatsoever, except as otherwise described on Schedule 3.14. The real property
leases described on Schedule 3.14 that relate to the leased properties described
therein are now in full force and effect, and all material amounts payable
thereunder have been paid. Except as set forth on Schedule 3.14, none of such
leases could reasonably be expected to result in material liability for
restoration of premises. All uses of such owned or leased property by Osicom
conform, in all material respects, to all applicable building and zoning
ordinances, laws, and regulations and, in the case of leased property, to all
terms of the leases relating thereto.
3.15. Interest in Assets. Except as set forth on Schedule 3.15, no
Shareholder of Osicom nor any member of his family nor any affiliate of a
Shareholder, owns any property or rights, tangible or intangible, including
without limitation technology and intellectual property rights, used in or
related, directly or indirectly, to the businesses of Osicom.
3.16. Salary Information. Schedule 3.16 contains a list of the names
and current salary rates of and bonus commitments to all present officers of
Osicom, and the names and current annual salary rates of all other persons
employed by Osicom whose annual salaries exceed $150,000.00.
3.17 No Breach. Neither the execution and delivery of this Agreement nor
compliance by Osicom with any of the provisions hereof nor the consummation of
the transactions contemplated hereby, will:
(a) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of Osicom;
(b) violate or, alone or with notice of the passage of time,
result in the material breach or termination of, or otherwise give any
contracting party the right to terminate, or declare a material default under,
the terms of any agreement or other document or undertaking, oral or written to
which Osicom is a party or by which any of them or any of their respective
properties or assets may be bound (except for such violations, conflicts,
breaches or defaults as to which required waivers or consents by other parties
have been, or will, prior to the Closing, be, obtained or which will not have a
material adverse effect on the Corporation);
(c) result in the creation of any lien, security interest, charge
or encumbrance upon any of the properties or assets of Osicom pursuant to the
terms of any such agreement or
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instrument;
(d) violate any judgment, order, injunction, decree or award
against, or binding upon, Osicom, or its properties or assets; or
(e) violate any law or regulation of any jurisdiction
relating to either of Osicom or any of the Subsidiaries or any of its
securities, assets or properties.
3.18. Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on directly with BWAI by
Osicom without the intervention of any broker, finder, investment banker or
other third party. Osicom has not engaged, consented to, or authorized any
broker, finder, investment banker or other third party to act on his or its
behalf, directly or indirectly, as a broker or finder in connection with the
transaction contemplated by this Agreement.
3.19. Change of Name. Osicom has not conducted business under any name
during the past three (3) years except those set forth on Schedule 3.19.
3.20. Environmental. As used in this Agreement, the term "Hazardous
Materials" shall mean any waste material which is regulated by any state or
local governmental authority in the states in which Osicom conducts business, or
the United States Government, including, but not limited to, any material or
sub- stance which is (i) defined as "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste" or "restricted hazardous
waste" under any provision of California law, (ii) petroleum, (iii) asbestos,
(iv) designated as a "hazardous substance" pursuant to Section 311 of the Clean
Water Act, 33 U.S.C. 1251 et seq. (33 U.S.C. 1321) or listed pursuant to Section
307 of the Clean Water Act (33 U.S.C. 1317), (v) defined as a "hazardous waste"
pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42
U.S.C. 6901 et seq. (42 U.S.C. 6901), or (vi) defined as a "hazardous substance"
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. 9601 et seq. (42 U.S.C. 9601). Except
as set forth on Schedule 3.27, the current operations of Osicom and its current
and, to the best knowledge of Osicom , its past use comply and then complied in
all material respects with all appli- cable laws and governmental regulations
including all applicable federal, state and local laws, ordinances, and
regulations pertained to air and water quality, Hazardous Materials, waste,
disposal or other environmental matters, including the Clean Water Act, the
Clean Air Act, the Federal Water Pollution Control Act, the Solid Waste Disposal
Act, the Resource Conservation Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, and the statutes, rules, regulations
and ordinances or the state, city and country in which Osicom's property is
located.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BWAI
BWAI makes the following representations and warranties to Osicom, and,
in executing this Agreement, has relied and will rely on the correctness and
completeness of such representations and warranties. Each reference to BWAI
includes each Subsidiary, to the extent appropriate. However, BWAI makes no
representations to Osicom concerning XNET.
4.01. Valid Corporate Existence; Qualification. BWAI is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado. BWAI has the corporate power to carry on its business as now
conducted and to own its assets. BWAI is duly qualified to conduct business and
is in good standing as a foreign corporation in those jurisdictions set forth on
Schedule 4.01, which are the only jurisdictions in which BWAI is required to
qualify in order to own its assets or properties or to carry on its business as
now conducted (except for such jurisdictions where the failure to so qualify
would not have a material adverse effect on BWAI), and there has not been any
claim by any other jurisdiction to the effect that BWAI is required to qualify
or otherwise be authorized to do business as a foreign corporation therein
(except for such jurisdictions where the failure to so qualify would not have a
material adverse effect on Osicom). The copies of BWAI's Certificate of
Incorporation (certified by the Secretary of State of Colorado) and By-Laws
(certified by BWAI's secretary), as amended to date, which have been delivered
to Osicom, are true and complete copies of those documents as now in effect. The
minute books of BWAI contain accurate records of all material meetings of its
Board of Directors, Executive Committee of the Board, if any, and shareholders
since its incorporation, and accurately reflect all transactions authorized
therein in all material respects.
4.02. Capitalization. The authorized capital stock of BWAI consists of
25,000,000 shares of Common Stock, par value $.008 per Share, of which 2,946,940
shares were issued and outstanding, as of February 29, 1996; and 10,000,000
shares of Preferred Stock, of which 286 Series A and 8,605 Series B shares were
issued and outstanding, as of February 29, 1996. All of such shares of Common
Stock and Preferred Stock are duly authorized and validly issued and
outstanding, fully paid and nonassessable. Except as listed on Schedule 4.02,
there are no subscriptions, options, warrants, rights or calls or other
commitments or agreements to which BWAI is a party or by which it is bound,
calling for the issuance, transfer, sale or other disposition of any class of
securities of BWAI. Other than the Preferred Stock and those items disclosed on
Schedule 4.02, there are no outstanding securities of BWAI convertible or
exchangeable, actually or contingently, into shares of Common Stock or any other
securities of BWAI.
4.03. Subsidiaries. Except as listed on Schedule 4.03, there are no
corporations, partnerships or other business entities
<PAGE> 11
controlled by BWAI.
4.04. Consents. All requisite consents of governmental and other
regulatory agencies, foreign or domestic, and of other parties required to be
received by or on the part of BWAI, to enable BWAI to enter into and carry out
this Agreement in all material respects have been, or prior to the Closing will
have been, obtained.
4.05. Binding Nature of Agreement; Title to Shares. This Agreement
constitutes BWAI's valid and binding obligation and is enforceable in accordance
with its terms. BWAI is and at the Closing will be, the sole record and
beneficial owners of the Shares, free and clear of all manner of liens, charges,
encumbrances, and claims. The delivery of the Shares to Osicom at the Closing
pursuant to the provisions of this Agreement will transfer valid title thereto,
free and clear of all manner of liens, charges, encumbrances and claims.
4.06. Financial Statements. The books of account of BWAI fairly reflect
its income, expenses, assets and liabilities in all material respects. The
audited financial statements of the BWAI for the year ended May 31, 1995
financial statements for the nine (9) months ended February 29, 1996 fairly
present the financial position of BWAI as of the said dates and the results of
its operations for such fiscal years and period and, except as set forth
therein, were prepared in conformity with generally accepted accounting
principles consistently applied throughout the periods covered thereby.
4.07. Liabilities. Except as set forth on Schedule 4.07, as at February
29, 1996, (the "Balance Sheet Date"), BWAI had no material debts, liabilities or
obligations, contingent or absolute, other than those debts, liabilities and
obligations reflected or reserved against BWAI's Balance Sheet at the Balance
Sheet Date (the "Balance Sheet") or arising after the Balance Sheet Date in the
ordinary course of BWAI's business.
4.08. Action Since Balance Sheet Date. Except as otherwise expressly
provided or set forth in, or required by, this Agreement or as set forth in
Schedule 4.08, since the Balance Sheet Date, BWAI has not: (i) incurred any
material obligation or liability, absolute or contingent, except those arising
in the ordinary and usual course of its business; (ii) discharged or satisfied
any lien or encumbrance, except in the ordinary and usual course of business, or
paid or satisfied any liability, absolute or contingent, other than liabilities
as of the Balance Sheet Date and current liabilities incurred since the Balance
Sheet Date in the ordinary and usual course of business; (iiv) made any wage or
salary increases or granted any bonuses other than wage and salary increases and
bonuses granted in accordance with its normal salary increase and bonus
policies; (iv) mortgaged, pledged or subjected to any lien or other encumbrance
any of its properties or assets, or permitted any of its property or assets to
be subjected to any lien
<PAGE> 12
or other encumbrance, except in the ordinary and usual course of business; (v)
sold, assigned or transferred any of its properties or assets, except in the
ordinary and usual course of business; (vi) entered into any transaction except
in the ordinary course of its business; (vii) waived any rights of substantial
value, or cancelled, modified or waived any indebtedness for borrowed money held
by it, except in the ordinary and usual course of business; (viii) declared,
paid or set aside any dividends or other distributions or payments on its
capital stock, or redeemed or repurchased, or agreed to redeem or repurchase,
any shares of its capital stock; (ix) made any loans or advances to any person,
or assumed, guaranteed, endorsed or otherwise became responsible for the
obligations of any person; or (x) incurred any indebtedness for borrowed money
(except for endorsement, for collection or deposit of negotiable instruments
received in the ordinary and usual course of business).
4.09. Adverse Developments. Except as otherwise expressly provided or
set forth in, or required by, this Agreement, since the Balance Sheet Date, to
the best knowledge of BWAI, there have been no changes in the properties,
operations or financial condition of BWAI, and no event has occurred other than
in the ordinary and usual course of business which could be reasonably expected
to have a materially adverse effect upon the business of BWAI.
4.10. Taxes. BWAI delivered to Osicom true and complete copies of the
Federal income tax returns on Form 1120 of the Corporation as filed with the
Internal Revenue Service for each of the fiscal years ended May 31, 1994 and
1995, respectively. Except as set forth on Schedule 4.10, each of such returns
was prepared in conformity with information contained in the books and records
of BWAI and contains no untrue statement of a material fact or omits to state
any fact required to make any such return correct and complete in all material
respects. All taxes, including, without limitation, income, property, sales,
use, franchise, capital stock, excise, added value, employees' income
withholding, social security and unemployment taxes imposed by the United
States, any state or any foreign country, or by any other taxing authority,
which have or may have become due or payable by Osicom and all interest and
penalties thereon, whether disputed or not, have been paid in full or adequately
provided for by reserves shown in its books of account; all deposits required by
law to be made by BWAI with respect to estimated income, franchise and
employees' withholding taxes have been duly made; and all tax returns, including
estimated tax returns, required to be filed have been duly filed. No extension
of time for the assessment of deficiencies for any year is in effect. No
deficiency is proposed or, to the knowledge of BWAI, after reasonable inquiry,
threatened against BWAI. Schedule 3.10 sets forth a list of those states in
which income, franchise or sales and use tax returns were filed by BWAI for the
fiscal years ended May 31, 1994 and May 31, 1995, respectively.
4.11. Ownership of Assets. Except as set forth in
<PAGE> 13
Schedule 4.11, BWAI owns outright, and has good and marketable title to all of
its assets, properties and business (including all assets reflected in the
Balance Sheet, except as the same may have been disposed of in the ordinary
course of business since the Balance Sheet Date), free and clear of all liens,
mortgages, pledges, conditional sales agreements, restrictions on transfer or
other encumbrances or charges (collectively, the "Encumbrances") except for
Encumbrances arising by operation of law rather than by grant of BWAI (for
example, tax liens and mechanics liens) in the ordinary course of BWAI's
business for liabilities reflected in the Balance Sheet and not more than
$100,000 in the aggregate. Schedule 3.11 sets forth a true and complete list and
brief description of all patents, copyrights, trademarks, trade names and other
similar intangible assets which are either owned by BWAI or in which it has an
interest. Except as set forth on Schedule 3.11, no other person, firm or
corporation has any proprietary or other interest in any such intangible assets.
Such assets so owned or leased are, in the reasonable business judgment of BWAI,
sufficient to permit BWAI to conduct its business as now conducted in all
material respects. Except as set forth on Schedule 3.11, BWAI is not a party to
or bound by any license or agreement requiring the payment to any person, firm
or corporation of any royalty. BWAI, after reasonable inquiry, does know, or
have reasonable grounds to know of any violation by others of the trademark,
trade name or patent rights of BWAI. BWAI is not infringing upon any patent,
copyright, trade name or trademark or otherwise is violating the rights of any
third party with respect thereto, and no proceedings have been instituted or, to
the knowledge of BWAI, after reasonable inquiry, are threatened, and no claim
has been received by BWAI alleging any such violation.
4.12. Insurance. Schedule 4.12 sets forth a list and brief description
of all policies of fire, liability and other forms of insurance held by BWAI as
of the date hereof. Except as set forth in Schedule 4.12, such policies are
valid, outstanding and enforceable policies, as to which premiums have been paid
currently. Except as set forth on Schedule 4.12, BWAI, after reasonable inquiry,
does not know of any state of facts, or of the occurrence of any event which
might reasonably form the basis for any claim exceeding $25,000 against BWAI not
fully covered by insurance for liability on account of any express or implied
warranty or tortious omission of commission.
4.13. Litigation, Compliance with Law. Except as set forth on Schedule
4.13, there are no actions, suits, proceedings or governmental investigations
relating to BWAI or to any of its properties, assets or businesses pending or,
to the knowledge of BWAI, after reasonable inquiry, threatened, or any order,
injunction, award or decree outstanding against BWAI or against or relating to
any of its properties, assets or businesses. Except as set forth in Schedule
4.13, to the best knowledge of BWAI, BWAI is not in violation or any law,
regulation, ordinance, order, injunction, decree, award or other requirement of
any governmental body, court or arbitrator relating to its properties, assets or
<PAGE> 14
business which violation could have a material adverse effect on the Osicom.
4.14. Real Property. Schedule 4.14 sets forth a brief description of
all real property which is owned by, or leased to BWAI, including all material
structures located hereon. BWAI owns outright the fee simple title in and to the
real properties shown on Schedule 3.14 as being owned by it, free and clear of
all claims, liens, mortgages, charges, or encumbrances of any nature whatsoever,
except as otherwise described on Schedule 4.14. The real property leases
described on Schedule 4.14 that relate to the leased properties described
therein are now in full force and effect, and all material amounts payable
thereunder have been paid. Except as set forth on Schedule 4.14, none of such
leases could reasonably be expected to result in material liability for
restoration of premises. All uses of such owned or leased property by BWAI
conform, in all material respects, to all applicable building and zoning
ordinances, laws, and regulations and, in the case of leased property, to all
terms of the leases relating thereto.
4.15. Agreements and Obligations; Performance. Except as listed and
briefly described on Schedule 4.15 (the "Listed Agreements"), BWAI is not a
party to, or bound by any: (i) written or oral agreement or other contractual
commitment, understanding or obligation which involves aggregate payments or
receipts in excess of $25,000; (ii) contract, arrangement, commitment or
understanding which involves aggregate payments or receipts in excess of $25,000
that cannot be cancelled on thirty (30) days or less notice without penalty or
premium or any continuing obligation or liability; (iii) contractual obligation
or contractual liability of any kind to its shareholders; (iv) contract,
arrangement, commitment or understanding with its customers or any officer,
employee, shareholder, director, representative or agent thereof for the
repurchase of products, sharing of fees, the rebating of charges to such
customers, bribes, kickbacks from such customers or other similar arrangements;
(v) contract for the purchase or sale of any materials, products or supplies
which contain, or which commits or will commit it for a fixed term; (vi)
contract of employment with any officer or employee not terminable at will
without penalty or premium or any continuing obligation of liability; (vii)
deferred compensation, bonus or incentive plan or agreement not cancelable at
will without penalty or premium or any continuing obligation or liability;
(viii) management or consulting agreement not terminable at will without penalty
or premium or any continuing obligation or liability; (ix) lease for real or
personal property (including borrowings thereon), license or royalty agreement;
(x) union or other collective bargaining agreement; (xi) agreement, commitment
or understanding relating to the indebtedness for borrowed money; (xii) contract
involving aggregate payments or receipts of $25,000 or more which, by its terms,
requires the consent of any party thereto to the consummation of the
transactions contemplated hereby; (xiii) contract containing covenants limiting
the freedom of Osicom to engage or compete in any line or business or with any
<PAGE> 15
person in any geographical area; (xiv) contract or opinion relating to the
acquisition or sale of any business; (xv) voting trust agreement or similar
shareholders' agreement; (xvi) other contract, agreement, commitment or
understanding which materially affects any of its properties, assets or
business, whether directly or indirectly, or which was entered into other than
in the ordinary course of business. Except as set forth on Schedule 4.15, BWAI
has not during the last 36 months entered into any of the types of contracts,
arrangements, commitments or understandings with any of its suppliers or
customers referred to in item (iv) of this Section 3.15. A true and correct copy
of each of the written listed Agreements, has been and delivered to Osicom. BWAI
has in all material respects performed all obligations required to be performed
by it to date under all of the Listed Agreements, is not in default in any
material respect under any of the Listed Agreements and has received no notice
of any default or alleged default thereunder which has not heretofore been cured
or which notice has not heretofore been withdrawn. BWAI, after reasonable
inquiry, knows of any material default under any of the Listed Agreements by any
other party thereto or by any other person, firm or corporation bound
thereunder.
4.16. Permits and Licenses. Schedule 4.16 sets forth all permits,
licenses, orders, franchises and approvals from all federal, state, local and
foreign governmental regulatory bodies held by BWAI. BWAI has all permits,
licenses, orders and approvals of all federal, state, local and foreign
governmental or regulatory bodies required of it to carry on its business as
presently conducted in all material respects; all such other permits, licenses,
orders, franchises and approvals are in full force and effect, and to the
knowledge of each of the Shareholders, after reasonable inquiry, no suspension
or cancellation or any of such other permits, licenses, etc. is threatened; and
BWAI and the Subsidiaries are each in compliance in all material respects with
all requirements, standards and procedures of the federal, state, local and
foreign governmental bodies which have issued such permits, licenses, orders,
franchises and approvals. Said Schedule 4.18 also sets forth a brief description
of all vans, automobiles, trucks or other vehicles owned or leased by each of
BWAI and the Subsidiaries and the state of title thereof.
4.17. Interest in Assets. Except as set forth on Schedule 4.17, no
shareholder of BWAI nor any member of his family nor any affiliate of a
shareholder, owns any property or rights, tangible or intangible, including
without limitation technology and intellectual property rights, used in or
related, directly or indirectly, to the business of BWAI.
4.18. Salary Information. Schedule 4.18 contains a list of the names
and current salary rates of and bonus commitments to all present officers of
BWAI, and the names and current annual salary rates of all other persons
employed by BWAI whose annual salaries exceed $150,000.00.
<PAGE> 16
4.19. No Breach. Neither the execution and delivery of this Agreement
nor compliance by BWAI with any of the provisions hereof nor the consummation of
the transactions contemplated hereby, will:
(a) violate or conflict with any provision of the Certificate
of Incorporation or By-Laws of BWAI;
(b) violate or, alone or with notice of the passage of time,
result in the material breach or termination of, or otherwise give any
contracting party the right to terminate, or declare a material default under,
the terms of any agreement or other document or undertaking, oral or written to
which BWAI is a party or by which any of them or any of their respective
properties or assets may be bound (except for such violations, conflicts,
breaches or defaults as to which required waivers or consents by other parties
have been, or will, prior to the Closing, be, obtained or which will not have a
material adverse effect on BWAI);
(c) result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of BWAI or any of the
Subsidiaries pursuant to the terms of any such agreement or instrument;
(d) violate any judgment, order, injunction, decree or award
against, or binding upon, any of BWAI, the Subsidiaries or any Shareholder or
upon their respective properties or assets; or
(e) violate any law or regulation of any jurisdiction relating
to either of BWAI or any of the Subsidiaries or any of their respective
securities, assets or properties.
4.20. Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on directly with Osicom by
BWAI without the intervention of any broker, finder, investment banker or other
third party. BWAI has not engaged, consented to, or authorized any broker,
finder, investment banker or other third party to act on his or its behalf,
directly or indirectly, as a broker or finder in connection with the transaction
contemplated by this Agreement.
4.21. Change of Name. BWAI has not conducted business under any name
during the past three (3) years except those set forth on Schedule 4.21.
4.22. Environmental. Except as set forth on Schedule 4.22, the current
operations of BWAI and its current and, to the best knowledge of BWAI, its past
use comply and then complied in all material respects with all applicable laws
and governmental regulations including all applicable federal, state and local
laws, ordinances, and regulations pertained to air and water quality, Hazardous
Materials, waste, disposal or other environmental matters, including the Clean
Water Act, the Clean Air Act, the Federal Water Pollution Control Act, the Solid
Waste Disposal Act,
<PAGE> 17
the Resource Conservation Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, and the statutes, rules, regulations
and ordinances or the state, city and country in which BWAI's property is
located.
ARTICLE V
PRE-CLOSING COVENANTS
Osicom and BWAI hereby covenant that, from and after the date hereof,
and until the Closing or earlier termination of this Agreement:
5.01. Access. Each shall afford to the officers, attorneys, accountants
and other authorized representatives of the other free and full access, during
regular business hours and upon reasonable notice, to the books, records,
personnel and properties of such corporation (including, without limitation, the
work papers prepared by such corporation's auditors) so that the other may have
full opportunity to make such review, examination and investigation as it may
desire of the businesses and affairs. Each will cause its employees, accountants
and attorneys to cooperate fully with said review, examination and investigation
and to make full disclosure to Osicom of all material facts affecting their
respective financial conditions and business operations.
5.02. Conduct of Business. Each corporation shall conduct its business
only in the ordinary and usual course and make no material change in any of
their policies without the prior written consent of the other.
5.03. Insurance. Each corporation shall maintain in force the insurance
policies listed on Schedule 3.12 or 4.12, as the case may be, except to the
extent that they may be replaced with equivalent policies at the same or lower
rates approved by BWAI.
5.04. Liabilities. Neither corporation shall incur any obligation or
liability, absolute or contingent, except for those incurred in the ordinary and
usual course of its business; nor shall it pay any obligation or liability other
than: (i) the foregoing obligations and liabilities, (ii) debts, liabilities,
and obligations set forth in its Balance Sheet; (iii) debts, liabilities and
obligations arising after the Balance Sheet Date in the ordinary course of their
respective businesses; and (iv) debts, liabilities and obligations under the
contracts, agreements, past practices, arrangements, relationships, documents
and instruments listed, described or contained in this Agreement or in the
Schedules annexed to this Agreement.
5.05. Preservation of Business. Each will use its best efforts to
preserve its business organization intact, to keep available the services of
their present officers, employees and consultants (except as the other may
otherwise approve), and to
<PAGE> 18
preserve its goodwill.
5.06. No Breach. Each will (i) use its best efforts to assure that all
of its representations and warranties contained herein are true in all material
respects of the Closing as if repeated at and occur with respect to any of its
covenants, representations or warranties contained herein that has not been
cured by the Closing; (ii) not voluntarily take any action or do anything which
will cause a material breach of or default respecting such covenants,
representations or warranties; and (iii) promptly notify each other of any event
or fact which represents or is like to cause such a breach or default.
5.07. No Negotiations. Neither corporation nor any of its officers or
directors shall enter into or conduct negotiations, or enter into any agreement
or understanding, for the sale or possible sale of any securities of such
corporation or of the business or the assets of such corporation, with anyone
other than the other unless the Closing shall not have occurred by September 30,
1996.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS TO BWAI TO CLOSE
The obligations of BWAI to enter into and complete the Closing is
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions, any one or more of which may be waived by BWAI (except
when the fulfillment of such condition is a requirement of law).
6.01. Representations and Warranties. All representations and
warranties of Osicom contained in this Agreement and in any written statement
(including financial statements), exhibit, certificate, schedule or other
document delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true and correct in all material respects as at the
Closing Date, as if made at the Closing and as of the Closing Date.
6.02. Covenants. Osicom shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by it prior to or at the Closing.
6.03. No Action. No action, suit, proceeding or investigation shall
have been instituted, and be continuing before a court or before or by a
governmental body or agency, and be unresolved, to restrain or to prevent or to
obtain damages in respect of, the carrying out of the transactions contemplated
hereby, or which might materially and adversely affect the right of BWAI to
consummate the transactions contemplated hereby or to own or control the Osicom
Stock after the Closing Date, or which might have a materially adverse effect
thereon.
6.04. Consents, Licenses and Permits. BWAI and Osicom
<PAGE> 19
shall have each obtained all consents, licenses and permits of third parties
necessary for the performance by each of them of all of their respective
obligations under this Agreement, and such other consents, if any, to prevent
(i) agreements of the Osicom from terminating, the termination of which, in the
aggregate, would have a material adverse effect on the business, financial
condition or assets of Osicom, or (ii) any material indebtedness of any of
Osicom from becoming due or being subject to becoming due with the passage of
time or on notice as a result of the performance of this Agreement, any other
provisions of this Agreement to the contrary notwithstanding.
6.05. Certificate. BWAI shall have received a certificate dated the
Closing Date, signed by the President of Osicom as to the satisfaction of the
conditions contained in Sections 6.01 and 6.02.
6.06. Opinion. BWAI shall have received the written opinion of Osicom's
counsel, dated the Closing Date, in form and substance satisfactory to BWAI and
its counsel to the effect set forth on Exhibit 6.06 hereto.
6.07. No Material Adverse Change. There shall have been no materially
adverse change at the Closing Date in the business, assets and properties or
financial status of Osicom since the Balance Sheet Date.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF
OSICOM TO CLOSE
The obligation of Osicom to enter into and complete the Closing is
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions, any one or more of which may be waived by Osicom (except
when the fulfillment of such condition is a requirement of law).
7.01. Representations and Warranties. All representations and
warranties of BWAI contained in this Agreement and in any written statement,
schedule or other document delivered pursuant hereto or in connection with the
transactions contemplated hereby shall be true and correct in all material
respects as at the Closing Date, as if made at the Closing and as of the Closing
Date.
7.02. Covenants. BWAI shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by it prior to or at the Closing.
7.03. No Actions. No action suit, proceedings, or investigation shall
have been instituted, and be continuing, before a court or before or by a
governmental body or agency, or have been threatened, and be unresolved, by any
governmental body or agency to restrain or prevent, or obtain damages in respect
of, the
<PAGE> 20
carrying out of the transactions contemplated hereby.
7.04. Consents, Licenses and Permits. BWAI and Osicom shall have each
obtained all consents, licenses and permits of third parties necessary for the
performance by each of them of all of their respective obligations under this
Agreement, and such other consents, if any, to prevent (i) agreements of Osicom
from terminating, the termination of which, in the aggregate, would have a
material adverse effect on the business, financial condition or assets of
Osicom, or (ii) any material indebtedness of any of Osicom from becomeing due or
being subject to becoming due with the passage of time or on notice as a result
of the performance of this Agreement, any other provisions of this Agreement to
the contrary notwithstanding.
7.05. Certificates. The Shareholders shall have received a certificate
of BWAI,dated the Closing Date, signed by the Chief Executive Officer, President
or any Vice President of BWA I as to the satisfaction of the conditions
contained in Sections 7.01 and 7.02.
7.06. Opinion. Osicom shall have received the written opinion of BWAI's
counsel, dated the Closing Date, in form and substance satisfactory to Osicom
and its counsel to the effect set forth on Exhibit 7.06 to this Agreement.
7.07. No Material Adverse Change. There shall have been no materially
adverse change at the Closing Date in the Business, assets and properties or
financial status of Osicom since the Balance Sheet Date.
ARTICLE VIII
CLOSING
8.01. Location. The Closing provided for herein shall take place at the
office of Greenbaum, Rowe, Smith, Ravin, Davis & Himmel, 99 Wood Avenue South,
P.O. Box 5600, Woodbridge, New Jersey 07095 or at such other location as the
parties agree, within two (2) business days following the approval of BWAI's
stockholders as referred to in Section 1.04. Such date is referred to in this
Agreement as the "Closing Date." The Closing will be effective as of June 1,
1996.
8.02. Items to be Delivered by Osicom. At the Closing, Osicom will
deliver or cause to be delivered to BWAI:
(a) Certificates representing the Osicom Shares in accordance
with Section 1.02 hereof, accompanied by all instruments and documents as in the
opinion of BWAI's counsel shall be necessary to effect the issue of the Shares,
free and clear of all manner of liens, pledges, encumbrances, charges and claims
thereon;
(b) The certificate required by Section 6.05;
(c) The opinion of Osicom's counsel as required by Section
6.06; and
<PAGE> 21
(d) Such other certified resolutions, documents and
certificates as are required to be delivered by Osicom pursuant to the
provisions of this Agreement.
8.03. Items to be Delivered by BWAI. At the Closing, BWAI will deliver
or cause to be delivered to the Shareholders:
(a) The certificates representing the Shares to be conveyed
pursuant to Section 1.01;
(b) The certificate required by Section 7.05;
(c) The opinion of BWAI's counsel as required by Section 7.06;
and
(d) Such other certified resolutions, documents and
certificates as are required to be delivered by BWAI pursuant to the provisions
of this Agreement.
ARTICLE IX
TERMINATION AND WAIVER
9.01. Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions provided
for herein abandoned at any time prior to the Closing Date:
(a) By mutual consent of BWAI and Osicom;
(b) By either party if any material legal action or proceeding
shall have been instituted or threatened seeking to restrain, prohibit,
invalidate or otherwise affect the consummation of the transactions contemplated
by this Agreement which makes it inadvisable, in the judgment of such party, to
consummate same.
In the event that this Agreement is terminated as described above, this
Agreement shall be void and of no force and effect, without any liability or
obligation on the part of any of the parties hereto except for any liability
which may arise pursuant to Section 10.02.
9.02. Waiver. Any condition to the performance of Osicom or BWAI which
legally may be waived on or prior to the Closing Date may be waived at any time
by the party entitled to the benefit thereof by action taken or authorized by an
instrument in writing executed by the relevant party or parties. The failure of
any party at any time or times to require performance of any provision hereof
shall in no manner affect the right of such party
<PAGE> 22
as a later time to enforce the same. No waiver by any party of the breach of any
term, covenant, representation or warranty contained in this Agreement as a
condition to such party's obligations hereunder shall release or affect any
liability resulting from such breach, and no waiver of any nature, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition or of any
breach of any other term, covenant, representation or warranty of this
Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01. Expenses. Each of the parties hereto shall bear its own expenses
in connection herewith.
10.02. Confidential Information. Each party agrees that such party and
its representatives will hold in strict confidence all information and documents
received from the other parties and, if the transactions herein contemplated
shall not be consummated, each party will continue to hold such information and
documents in strict confidence and will return to such other party all such
documents (including the documents annexed to this Agreement) then in such
receiving party's possession without retaining copies thereof: provided,
however, that each party's obligations under this Section 10.02 to maintain such
confidentiality shall not apply to any information or documents that are in the
public domain at the time furnished by the others or that become in the public
domain thereafter through any means other than as a result of any act of the
receiving party or of its agents, officers, directors or shareholders which
constitutes a breach of this Agreement, or that are required by applicable law
to be disclosed.
10.03. Modification, Termination or Waiver. This Agreement may be
amended, modified, superseded or terminated, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, but only by a
written instrument executed by the party waiving compliance. The failure of any
party at any time or times to require performance of any provision hereof shall
in no manner affect the right of such party at a later time to enforce the same.
10.04. Publicity. The parties agree that no publicity release or other
public announcement concerning the transactions contemplated by this Agreement
shall be issued by either party without the advance approval of both the form
and substance of the same by the other party and its counsel, which approval, in
the case of any publicity, release or other public announcement required by
applicable law, shall not be unreasonably withheld or delayed.
10.05. Notices. Any notice or other communication required or which may
be given hereunder shall be in writing and either be delivered personally or by
reputable overnight delivery
<PAGE> 23
service, or be mailed, certified or registered mail, postage
prepaid, as follows:
If to Osicom, to:
2800 28th Street, Suite 100
Santa Monica, CA 90405
With a copy to:
Greenbaum, Rowe, Smith,
Ravin, Davis & Himmel
99 Wood Avenue South
P.O. Box 5600
Woodbridge, New Jersey 07095
Attention: W. Raymond Felton
and if to BWAI, to:
2800 28th Street, Suite 100
Santa Monica, CA 90405
With a copy to:
Michael Sobel, Esq.
1322 Benedict Canyon Drive
Beverly Hills, California 90210-2020
The parties may change the persons and addresses to which the notices
or other communications are to be sent to it by giving written notice of any
such change in the manner provided herein for giving notice.
<PAGE> 24
10.06. Binding Effect and Assignment. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto; provided, however, that no assignment of any rights or delegation of any
obligations provided for herein may be made by any party without the express
consent of the other parties, and except that BWAI may assign this Agreement to
our affiliate of BWAI.
10.07. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof.
10.08. Schedules. All Schedules annexed hereto and the documents and
instruments referred to herein or required to be delivered simultaneously
herewith or at the Closing are expressly made a part of this Agreement as fully
as though completely set forth herein, and all references to this Agreement
herein or in any of such Schedules, documents or instruments shall be deemed to
refer to and include all such Schedules, documents and instruments.
10.09. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey applicable to agreements
made and to be performed entirely within that state, excluding the choice of law
rules thereof.
10.10. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but which together shall
constitute one and the same instrument.
10.11. Section Headings. The section headings contained in this
Agreement are inserted for conveniences of reference only and shall not affect
the meaning or interpretation of this Agreement.
10.12. Legal Representation. Osicom is represented in the transactions
contemplated by this Agreement by Greenbaum, Rowe, Smith, Ravin, Davis & Himmel.
Although Greenbaum, Rowe, Smith, Ravin, Davis & Himmel has from time to time
rendered legal services to BWAI, such firm is not representing BWAI in this
transaction, and BWAI acknowledges that it has retained separate counsel with
respect hereto.
<PAGE> 25
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION,
INC.
By: /s/Barry Witz
--------------------------
Name: Barry Witz
--------------------------
Title: CEO
--------------------------
OSICOM TECHNOLOGIES, INC.
By: /s/Sharon Gill Chadha
--------------------------
Name: Sharon Gill Chadha
--------------------------
Title: CEO
--------------------------
