PART II. ITEM 6(a) EXHIBITS EXHIBIT (10)
ASSET PURCHASE AGREEMENT
DATED AS OF MAY 3, 1996
BY AND AMONG
COPY USA, INC.,
CPI CORP.,
CONSUMER PROGRAMS INCORPORATED
AND
TEXAS PORTRAITS, L.P.
TABLE OF CONTENTS
Page
ARTICLE I. PURCHASE OF ASSETS. . . . . . . . . . 1
1.1. Purchase and Sale of Assets. . . . . . . . . . . . . . 1
1.1.1. [Intentionally Omitted] . . . . . . . . . . . . . . . 2
1.1.2. Accounts Receivable . . . . . . . . . . . . . . . . . 2
1.1.3. Contract Rights . . . . . . . . . . . . . . . . . . . 2
1.1.4. Inventories and Stores and Supplies . . . . . . . . . 2
1.1.5. Tangible Personal Property. . . . . . . . . . . . . . 2
1.1.6. Manufacturers' and Vendors' Warranties. . . . . . . . 2
1.1.7. Intellectual Property . . . . . . . . . . . . . . . . 2
1.1.8. Real Property . . . . . . . . . . . . . . . . . . . . 2
1.1.9. Governmental Licenses, Permits and Approvals. . . . . 3
1.1.10. Books and Records. . . . . . . . . . . . . . . . . . 3
1.1.11. Seller's Name. . . . . . . . . . . . . . . . . . . . 3
1.1.12. Prepaid Items. . . . . . . . . . . . . . . . . . . . 3
1.1.13. Miscellaneous Assets . . . . . . . . . . . . . . . . 3
1.2. Excluded Assets. . . . . . . . . . . . . . . . . . . . 3
1.2.1. Ordinary Course of Business Dispositions. . . . . . . 3
1.2.2. Contracts Terminated in the Ordinary Course of Business 3
1.2.3. Corporate Documents . . . . . . . . . . . . . . . . . 4
1.2.4. Employee Benefit Plans. . . . . . . . . . . . . . . . 4
1.2.5. Other Scheduled Assets. . . . . . . . . . . . . . . . 4
1.2.6. Home Office Equipment . . . . . . . . . . . . . . . . 4
1.3. Nonassignable Contracts, Permits . . . . . . . . . . . 4
1.3.1. Nonassignability . . . . . . . . . . . . . . . . . . 4
1.3.2. Seller to Use Best Efforts. . . . . . . . . . . . . . 4
1.3.3. If Waivers or Consents Cannot Be Obtained . . . . . . 5
ARTICLE II. ASSUMPTION OF LIABILITIES . . . . . . 5
2.1. Assumed Liabilities. . . . . . . . . . . . . . . . . . 5
2.2. Retained Liabilities. . . . . . . . . . . . . . . . . . 6
ARTICLE III. PURCHASE PRICE. . . . . . . . . . . . 7
3.1. Purchase Price . . . . . . . . . . . . . . . . . . . . 7
3.2. Purchase Price Adjustment. . . . . . . . . . . . . . . 8
3.3. Allocation of Purchase Price . . . . . . . . . . . . . 9
ARTICLE IV. THE CLOSING . . . . . . . . . . . . . 10
4.1. Date of Closing. . . . . . . . . . . . . . . . . . . . 10
ARTICLE V. REPRESENTATIONS AND WARRANTIES . . . . 10
5.1. Representations and Warranties of Seller and Parent. . 10
5.1.1. Organization and Good Standing. . . . . . . . . . . . 10
5.1.2. Authorization of Agreement; Binding Obligation. . . . 10
5.1.3. Intentionally Omitted . . . . . . . . . . . . . . . . 11
5.1.4. No Restrictions on Seller or Parent; Required Consents 11
5.1.5. No Third Party Options. . . . . . . . . . . . . . . . 11
TABLE OF CONTENTS (continued)
Page
5.1.6. Financial Statements. . . . . . . . . . . . . . . . . 11
5.1.7. Accounts Receivable . . . . . . . . . . . . . . . . . 12
5.1.8. Inventory . . . . . . . . . . . . . . . . . . . . . . 12
5.1.9. Absence of Undisclosed Liabilities. . . . . . . . . . 12
5.1.10. Books of Account . . . . . . . . . . . . . . . . . . 13
5.1.11. Contracts. . . . . . . . . . . . . . . . . . . . . . 13
5.1.12. Title to Assets. . . . . . . . . . . . . . . . . . . 15
5.1.13. Intellectual Property. . . . . . . . . . . . . . . . 15
5.1.14. [Intentionally Omitted]. . . . . . . . . . . . . . . 16
5.1.15. Condition of Assets. . . . . . . . . . . . . . . . . 16
5.1.16. Real Property. . . . . . . . . . . . . . . . . . . . 16
5.1.17. Insurance. . . . . . . . . . . . . . . . . . . . . . 17
5.1.18. Conduct of the Business Since the Interim Balance Sheet
Date . . . . . . . . . . . . . . . . . . . . . . . 17
5.1.19. [Intentionally Omitted]. . . . . . . . . . . . . . . 19
5.1.20. Personnel Information. . . . . . . . . . . . . . . . 19
5.1.21. Employee Benefit Plans . . . . . . . . . . . . . . . 20
5.1.22. Litigation; Decrees. . . . . . . . . . . . . . . . . 21
5.1.23. Compliance With Law; Permits . . . . . . . . . . . . 21
5.1.24. Environmental Matters. . . . . . . . . . . . . . . . 22
5.1.25. Taxes. . . . . . . . . . . . . . . . . . . . . . . . 25
5.1.26. Commissions or Finders Fees. . . . . . . . . . . . . 26
5.1.27. [Intentionally Omitted]. . . . . . . . . . . . . . . 26
5.1.28. [Intentionally Omitted]. . . . . . . . . . . . . . . 26
5.2. Representations and Warranties of Purchaser . . . . . 26
5.2.1. Corporate Organization. . . . . . . . . . . . . . . . 26
5.2.2. Authorization and Effect of Agreement . . . . . . . . 26
5.2.3. No Restrictions Against Purchase of the Assets. . . . 26
5.2.4. Financing Arrangements. . . . . . . . . . . . . . . . 27
ARTICLE VI. PRE-CLOSING COVENANTS . . . . . . . . 27
6.1. Access to Information . . . . . . . . . . . . . . . . 27
6.2. Conduct of Business . . . . . . . . . . . . . . . . . 27
6.3. Financial Statements. . . . . . . . . . . . . . . . . 29
6.4. Notification. . . . . . . . . . . . . . . . . . . . . 29
6.5. Cooperation . . . . . . . . . . . . . . . . . . . . . 29
6.6. No Inconsistent Action. . . . . . . . . . . . . . . . 29
6.7. Satisfaction of Conditions. . . . . . . . . . . . . . 30
6.8. Injunctions . . . . . . . . . . . . . . . . . . . . . 30
6.9. Filings . . . . . . . . . . . . . . . . . . . . . . . 30
6.10. Publicity . . . . . . . . . . . . . . . . . . . . . . 30
6.11. Acquisition Proposals . . . . . . . . . . . . . . . . 30
6.13. Transition Services Agreement . . . . . . . . . . . . 31
6.14. Leases. . . . . . . . . . . . . . . . . . . . . . . . 31
6.15. Master Contracts, Etc . . . . . . . . . . . . . . . . 31
TABLE OF CONTENTS (continued)
Page
ARTICLE VII. CONDITIONS TO CLOSING . . . . . . . 31
7.1. Conditions Precedent to Obligations of Purchaser. . . . 31
7.1.1. Representations, Warranties and Covenants . . . . . . 32
7.1.2. Closing Documents . . . . . . . . . . . . . . . . . . 32
7.1.3. Governmental Consents and Approvals . . . . . . . . . 32
7.1.4. No Adverse Proceedings. . . . . . . . . . . . . . . . 32
7.1.5. Third Party Consents. . . . . . . . . . . . . . . . . 32
7.1.6. Funding . . . . . . . . . . . . . . . . . . . . . . . 32
7.1.7. Employment Arrangement. . . . . . . . . . . . . . . . 33
7.2. Conditions Precedent to Obligations of Seller . . . . . 33
7.2.1. Representations, Warranties and Covenants . . . . . . 33
7.2.2. Closing Documents . . . . . . . . . . . . . . . . . . 33
7.2.3. Consents or Approvals . . . . . . . . . . . . . . . . 33
7.2.4. No Adverse Proceedings. . . . . . . . . . . . . . . . 33
7.2.5. Purchase Price. . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII. DOCUMENTS TO BE DELIVERED AT THE CLOSING . . 34
8.1. Documents to be Delivered by Seller . . . . . . . . . . 34
8.1.1. Transfer Documents. . . . . . . . . . . . . . . . . . 34
8.1.2. Certified Resolutions . . . . . . . . . . . . . . . . 34
8.1.3. Seller's Certificate. . . . . . . . . . . . . . . . . 34
8.1.4. [Intentionally Omitted] . . . . . . . . . . . . . . . 34
8.1.5. Good Standing Certificates. . . . . . . . . . . . . . 34
8.1.6. Receipts. . . . . . . . . . . . . . . . . . . . . . . 34
8.1.7. Lien Searches . . . . . . . . . . . . . . . . . . . . 34
8.1.8. Other Documents . . . . . . . . . . . . . . . . . . . 34
8.2. Documents to be Delivered by Purchaser. . . . . . . . . 35
8.2.1. Purchase Price. . . . . . . . . . . . . . . . . . . . 35
8.2.2. Certified Resolutions . . . . . . . . . . . . . . . . 35
8.2.3. Officer's Certificate . . . . . . . . . . . . . . . . 35
8.2.4. [Intentionally Omitted] . . . . . . . . . . . . . . . 35
8.2.5. Good Standing Certificates. . . . . . . . . . . . . . 35
8.2.6. Other Documents . . . . . . . . . . . . . . . . . . . 35
ARTICLE IX. POST-CLOSING COVENANTS . . . . . . . 35
9.1. Employee Benefits . . . . . . . . . . . . . . . . . . . 35
9.2. Severance and Non-Solicitation. . . . . . . . . . . . . 37
9.3. Discharge of Business Obligations . . . . . . . . . . . 37
9.4. Maintenance of Books and Records. . . . . . . . . . . . 37
9.5. Payments Received . . . . . . . . . . . . . . . . . . . 38
9.6. [Intentionally Omitted] . . . . . . . . . . . . . . . . 38
9.7. UCC Matters . . . . . . . . . . . . . . . . . . . . . . 38
9.8. Covenant Not to Compete . . . . . . . . . . . . . . . . 38
9.9. Post-Closing Notifications. . . . . . . . . . . . . . . 39
9.10. Certain Tax Matters . . . . . . . . . . . . . . . . . . 39
9.11. Insurance . . . . . . . . . . . . . . . . . . . . . . . 39
TABLE OF CONTENTS (continued)
Page
ARTICLE X. SURVIVAL AND INDEMNIFICATION . . . . . 40
10.1. Survival of Representations, Warranties and Covenants. 40
10.2. Definitions; Limitations on Liability. . . . . . . . . 40
10.3. Indemnification. . . . . . . . . . . . . . . . . . . . 41
10.4. Defense of Claims. . . . . . . . . . . . . . . . . . . 42
ARTICLE XI. TERMINATION . . . . . . . . . . . . . 44
11.1. Termination. . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE XII. MISCELLANEOUS PROVISIONS . . . . . . 45
12.1. Specific Performance . . . . . . . . . . . . . . . . . 45
12.2. Notices. . . . . . . . . . . . . . . . . . . . . . . . 45
12.3. Intentionally Omitted. . . . . . . . . . . . . . . . . 46
12.4. Expenses . . . . . . . . . . . . . . . . . . . . . . . 46
12.5. Successors and Assigns . . . . . . . . . . . . . . . . 46
12.6. Waiver . . . . . . . . . . . . . . . . . . . . . . . . 47
12.7. Entire Agreement . . . . . . . . . . . . . . . . . . . 47
12.8. Amendments and Supplements . . . . . . . . . . . . . . 47
12.9. Rights of the Parties. . . . . . . . . . . . . . . . . 48
12.10. Brokers . . . . . . . . . . . . . . . . . . . . . . . 48
12.11. Further Assurances. . . . . . . . . . . . . . . . . . 48
12.12. Transfers . . . . . . . . . . . . . . . . . . . . . . 48
12.13. Bulk Sales. . . . . . . . . . . . . . . . . . . . . . 48
12.14. Governing Law . . . . . . . . . . . . . . . . . . . . 48
12.15. Severability. . . . . . . . . . . . . . . . . . . . . 48
12.16. Execution in Counterparts . . . . . . . . . . . . . . 49
12.17. Titles and Headings . . . . . . . . . . . . . . . . . 49
12.18. Passage of Title and Risk of Loss . . . . . . . . . . 49
12.19. Certain Interpretive Matters and Definitions. . . . . 49
12.20. No Recourse . . . . . . . . . . . . . . . . . . . . . 49
12.21. Schedules and Exhibits. . . . . . . . . . . . . . . . 49
Exhibits
Exhibit 6.13 Transition Services Agreement
Schedules
Schedule 1.1.3 Contract Rights
Schedule 1.1.5 Tangible Personal Property
Schedule 1.1.7 Intellectual Property
Schedule 1.1.8 Real Property
Schedule 1.1.9 Permits
Schedule 1.1.13 Miscellaneous Assets
Schedule 1.2.5 Other Scheduled Assets
Schedule 3.3 Allocation of Purchase Price
Schedule 5.1.1 Certificates of Good Standing
Schedule 5.1.4 Restrictions on the Seller/No Consents
Schedule 5.1.6(a) Unaudited Balance Sheets of Seller
Schedule 5.1.6(b) Unaudited Statements of Income
Schedule 5.1.11 Contracts
Schedule 5.1.12 Title to Assets
Schedule 5.1.13 Intellectual Property
Schedule 5.1.16(a) Leased Real Property
Schedule 5.1.16(b) Leased Real Property Exceptions
Schedule 5.1.17 Insurance
Schedule 5.1.18(d) Amendments to Material Contracts
Schedule 5.1.18(g) Capital Expenditures
Schedule 5.1.20(a) Employee Arrangements
Schedule 5.1.20(b) Employees
Schedule 5.1.20(d) ERISA
Schedule 5.1.21 Employee Benefit Plans
Schedule 5.1.22 Litigation; Decrees
Schedule 5.1.23 Compliance with Law; Permits
Schedule 5.1.24 Environmental Matters
Schedule 5.1.25 Taxes
Schedule 6.15 Master Contracts
Schedule 9.1 At-Will Employees
Schedule 9.2(c) Seller's Employees
Schedule 12.19 Individuals with Knowledge
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CPI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Parent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Accounts Receivable . . . . . . . . . . . . . . . . . . . . . 2
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . 2
Tangible Personal Property. . . . . . . . . . . . . . . . . . 2
Intellectual Property . . . . . . . . . . . . . . . . . . . . 2
Real Property Leases. . . . . . . . . . . . . . . . . . . . . 2
Leased Real Property. . . . . . . . . . . . . . . . . . . . . 2
Real Property . . . . . . . . . . . . . . . . . . . . . . . . 2
Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . 3
Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . 5
Retained Liabilities. . . . . . . . . . . . . . . . . . . . . 6
Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Governmental Entity . . . . . . . . . . . . . . . . . . . . . 7
Tentative Allocation. . . . . . . . . . . . . . . . . . . . . 9
Closing Allocation. . . . . . . . . . . . . . . . . . . . . . 9
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . 10
GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Interim Balance Sheet . . . . . . . . . . . . . . . . . . . . 12
Interim Balance Sheet Date. . . . . . . . . . . . . . . . . . 12
liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 13
Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Permitted Liens . . . . . . . . . . . . . . . . . . . . . . . 15
Intellectual Property . . . . . . . . . . . . . . . . . . . . 15
Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Real Property Leases. . . . . . . . . . . . . . . . . . . . . 16
Leased Real Property. . . . . . . . . . . . . . . . . . . . . 16
Material Adverse Change . . . . . . . . . . . . . . . . . . . 18
Employee Arrangements . . . . . . . . . . . . . . . . . . . . 19
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Employee Plans. . . . . . . . . . . . . . . . . . . . . . . . 20
Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . 20
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Environmental Claim . . . . . . . . . . . . . . . . . . . . . 23
Environmental Costs and Liabilities . . . . . . . . . . . . . 23
Environmental Law . . . . . . . . . . . . . . . . . . . . . . 24
Environmental Permit. . . . . . . . . . . . . . . . . . . . . 24
Hazardous Material. . . . . . . . . . . . . . . . . . . . . . 24
Release . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Remedial Action . . . . . . . . . . . . . . . . . . . . . . . 24
foreign person. . . . . . . . . . . . . . . . . . . . . . . . 25
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . 25
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Supplemental Financial Statements . . . . . . . . . . . . . . 29
Acquisition Proposal. . . . . . . . . . . . . . . . . . . . . 30
Indemnity Payment . . . . . . . . . . . . . . . . . . . . . . 40
Indemnitee. . . . . . . . . . . . . . . . . . . . . . . . . . 40
Indemnifying Party. . . . . . . . . . . . . . . . . . . . . . 40
Indemnifiable Losses. . . . . . . . . . . . . . . . . . . . . 40
Third Party Claim . . . . . . . . . . . . . . . . . . . . . . 40
Direct Claim. . . . . . . . . . . . . . . . . . . . . . . . . 44
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . 49
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of the 3rd day of May, 1996, by and among
Consumer Programs Incorporated, a Missouri corporation ("CPI"),
Texas Portraits, L.P., a Texas limited partnership ("TPLP" and,
together with CPI, "Seller"), CPI Corp., a Delaware corporation
("Parent"), and Copy USA, Inc., a Delaware corporation
("Purchaser").
RECITALS:
A.Seller presently conducts the business (the "Business") of
operating a chain of copy stores under the names "CopyMat" and
"Copy USA"; and
B.Seller desires to sell and Purchaser desires to purchase, the
assets, rights and properties of Seller used or useful in the
operation of the Business and, in connection with such purchase
and sale, Purchaser is willing to assume certain obligations
and liabilities relating to the Business, all on the terms and
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I. PURCHASE OF ASSETS
1.1. Purchase and Sale of Assets. On the terms and subject to
the conditions hereof and subject to Sections 1.2 and 1.3, at
the Closing (as defined in Section 4.1), Seller will sell,
transfer, convey, assign and deliver, and Purchaser will
purchase and accept, all right, title and interest of Seller in
and to all rights, properties and assets of Seller used or
useful in connection with the Business (collectively, the
"Assets"), free and clear of all mortgages, liens, pledges,
security interests, charges, claims, restrictions and
encumbrances of any nature whatsoever except Permitted Liens
(as defined in Section 5.1.12), including without limitation
all of Seller's right, title and interest in and to the rights,
properties and assets described in this Section 1.1:
1.1.1. [Intentionally Omitted].
1.1.2. Accounts Receivable. All accounts receivable and any
notes receivable arising out of the operation of the Business
(the "Accounts Receivable");
1.1.3. Contract Rights. All rights and incidents of interest
as of the Closing in and to all leases, agreements and other
contracts and legally binding contractual rights and
obligations relating to the Business (collectively,
"Contracts"), including without limitation such of the
foregoing as are described on Schedule 1.1.3;
1.1.4. Inventories and Stores and Supplies. All raw materials,
components, work-in-process, finished products, packaging
materials, stores and supplies, spare parts and samples
relating to the Business (collectively, "Inventories");
1.1.5. Tangible Personal Property. All machinery and equipment,
tools, spare and maintenance parts, furniture, vehicles and all
other tangible personal property relating to the Business and
located on the Real Property (as hereinafter defined),
including without limitation, the tangible personal property
listed on Schedule 1.1.5 (collectively, the "Tangible Personal
Property");
1.1.6. Manufacturers' and Vendors' Warranties. All rights under
manufacturers' and vendors' warranties relating to items
included in the Assets and all similar rights against third
parties relating to items included in the Assets;
1.1.7. Intellectual Property. All right, title and interest in
and to all domestic and foreign letters patent, patents, patent
applications, patent licenses, software licenses and know-how
licenses, trade names, trademarks, registered copyrights,
service marks, trademark registrations and applications,
service ▇▇▇▇ registrations and applications and copyright
registrations and applications owned or used by Seller in the
operation of the Business and all trade secrets, technical
knowledge, know-how and related ownership, use and other rights
of Seller used in the operation of the Business, including but
not limited to those listed or described on Schedule 1.1.7
(collectively, the "Intellectual Property");
1.1.8. Real Property. The rights and incidents of interests of
Seller in and to all real property leases (the "Real Property
Leases") relating to the operations of the Business, including
but not limited to those listed or described on Schedule 1.1.8,
and all of Seller's rights as of the Closing in all of the
structures, fixtures and improvements located thereon (the
"Leased Real Property" or the "Real Property");
1.1.9. Governmental Licenses, Permits and Approvals. All rights
and incidents of interest of Seller in and to all licenses,
permits, authorizations and approvals (collectively, "Permits")
issued to Seller by any Governmental Entity (as defined in
Section 2.2) used in the Business, including without limitation
such of the foregoing as are listed in Schedule 1.1.9;
1.1.10. Books and Records. All the books and records of Seller
used in the Business, including without limitation all books
and records relating to employees, the purchase of materials,
supplies and services, financial, accounting and operations
matters, product engineering, research and development,
manufacture and sale of products and all customer and vendor
lists relating to the operation of the Business and all files
and documents (including credit information) relating to
customers and vendors of the Business;
1.1.11. Seller's Name. All Seller's rights to the names
"CopyMat," "Copy USA," "Image Explosion" and any variations
thereof;
1.1.12. Prepaid Items. All prepaid items, unbilled costs and
fees related to the Business; and
1.1.13. Miscellaneous Assets. Except for Excluded Assets (as
defined in Section 1.2), such other rights, properties and
assets owned by Seller, wherever located, that are (a)
reflected on the Interim Balance Sheet (as defined in Section
5.1.6) or were acquired subsequent to the Interim Balance Sheet
Date (as defined in Section 5.1.6) and are used in the
operation of the Business and are located on the Leased Real
Property or (b) are listed or described in Schedule 1.1.13.
1.2. Excluded Assets. Notwithstanding anything contained in
this Agreement to the contrary, the following rights,
properties and assets (collectively, the "Excluded Assets")
will not be included in the Assets:
1.2.1. Ordinary Course of Business Dispositions. All of the
Inventories which have been transferred or consumed by Seller
prior to the Closing in the ordinary course of the conduct of
the Business consistent with past practice;
1.2.2. Contracts Terminated in the Ordinary Course of Business.
All Contracts that have terminated or expired prior to the
Closing in the ordinary course of the conduct of the Business
consistent with past practice and as permitted hereunder;
1.2.3. Corporate Documents. Seller's corporate seal, minute
books, charter documents, corporate stock record books and such
other books and records as pertain to the organization,
existence or share capitalization of Seller and duplicate
copies of such records as are necessary to enable Seller to
file its tax returns and reports as well as any other records
or materials relating to Seller generally and not involving or
relating to the Assets or the operation or operations of the
Business;
1.2.4. Employee Benefit Plans. The Employee Plans and Pension
Plans (each as defined in Section 5.1.21) and all other
pension, profit sharing or cash or deferred (Section 401(k))
plans and trusts and the assets thereof and any other employee
benefit plan or arrangement and the assets thereof, if any,
maintained by Seller or any Affiliates (as defined in Section
12.19) thereof;
1.2.5. Other Scheduled Assets. Any right, property or asset
which is described on Schedule 1.2.5;
1.2.6. Home Office Equipment. Except as set forth on Schedule
1.1.5, all furniture, equipment and other tangible personal
property located at Parent's facility at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.3. Nonassignable Contracts, Permits, Manufacturers' and
Vendors' Warranties, and Real Property Leases.
1.3.1. Nonassignability. Without limiting or otherwise
affecting the rights of Purchaser pursuant to Articles VII or
X, to the extent that any Contract, Permit, Manufacturers' and
Vendors' warranties, or Real Property Leases to be assigned
pursuant to the terms of Sections 1.1.3, 1.1.6, 1.1.8 or 1.1.9
is not capable of being assigned without the consent, approval
or waiver of a third person or entity (including without
limitation a Governmental Entity), nothing in this Agreement
will constitute an assignment or require the assignment thereof
except to the extent provided in this Section 1.3.
1.3.2. Seller to Use Best Efforts. Notwithstanding anything
contained in this Agreement to the contrary, Seller will not be
obligated to assign to Purchaser any of its rights and
obligations in and to any of the Contracts, Permits,
Manufacturers' and Vendors' warranties, or Real Property Leases
referred to in Section 1.3.1 without first having obtained all
consents, approvals and waivers necessary for such assignment;
provided, however, that Seller shall use its best efforts to
obtain all such consents, approvals and waivers prior to and,
if the Closing occurs, after the Closing Date (as defined in
Section 4.1).
1.3.3. If Waivers or Consents Cannot Be Obtained. To the extent
that the consents, approvals and waivers referred to in Section
1.3.1 are not obtained by Seller, Seller shall use its best
efforts to (a) provide to Purchaser the financial and business
benefits of any Contract, Permit, Manufacturers' and Vendors'
warranties, or Real Property Leases referred to in Section
1.3.1 and (b) enforce, at the request of Purchaser, for the
account of Purchaser, any rights of Seller arising from any
such Contract, Permit, Manufacturers' and Vendors' warranties
or Real Property Leases (including without limitation the right
to elect to terminate in accordance with the terms thereof upon
the advice of Purchaser).
ARTICLE II. ASSUMPTION OF LIABILITIES
2.1. Assumed Liabilities. As of the Closing, Purchaser will
assume and thereafter in due course pay and fully satisfy the
following liabilities and obligations of Seller (the "Assumed
Liabilities") and no other liabilities or obligations:
(a) all liabilities and obligations of Seller in respect of
ordinary course trade payables and accrued expenses of the
Business existing as of the Interim Balance Sheet Date, but
only if and to the extent that the same are accrued or reserved
for on the Interim Balance Sheet and remain unpaid and
undischarged on the Closing Date;
(b) all liabilities and obligations of Seller in respect of
ordinary course trade payables, accrued expenses and severance
obligations (other than those severance obligations described
in Schedule 9.1(c) and 9.1(d)) of the Business arising in the
regular and ordinary course of the Business between the Interim
Balance Sheet Date and the Closing Date, to the extent that the
same remain unpaid and undischarged on the Closing Date;
(c) all liabilities and obligations of Seller in respect of the
Contracts described in Schedule 1.1.3 and all other contracts
of Seller arising in the ordinary course of Business consistent
with the past practice of Seller between the Interim Balance
Sheet Date and the Closing and as permitted under the terms of
this Agreement, except that Purchaser shall not assume or agree
to pay, discharge or perform any
(i) liabilities or obligations of the aforesaid character
existing as of the Interim Balance Sheet Date, and which under
GAAP (as defined herein and subject to the exceptions thereto
set forth in Schedule 5.1.6(b)) should have been accrued or
reserved for on a balance sheet or the notes thereto as a
liability or obligation, if and to the extent that the same
were not accrued or reserved for on the Interim Balance Sheet;
or
(ii) liabilities or obligations arising out of any breach by
Seller of any provision of any agreement, contract, commitment
or lease referred to in this paragraph (c), including but not
limited to liabilities or obligations arising out of Seller's
failure to perform any agreement, contract, commitment or lease
in accordance with its terms prior to the Closing.
2.2. Retained Liabilities. Notwithstanding anything contained
in this Agreement to the contrary, Purchaser does not assume or
agree to pay, satisfy, discharge or perform, and will not be
deemed by virtue of the execution and delivery of this
Agreement or any document delivered at the Closing pursuant to
this Agreement, or as a result of the consummation of the
transactions contemplated by this Agreement, to have assumed,
or to have agreed to pay, satisfy, discharge or perform, any
liability, obligation or indebtedness of Seller, whether
primary or secondary, direct or indirect, other than the
Assumed Liabilities. Seller will retain and pay, satisfy,
discharge and perform in accordance with the terms thereof, all
liabilities and obligations other than the Assumed Liabilities
to the extent specifically provided in Section 2.1, including
without limitation those set forth below (such liabilities and
obligations retained by Seller being referred to herein as the
"Retained Liabilities"):
(a) all obligations or liabilities of Seller or any predecessor
or Affiliate of Seller which relate to any of the Excluded
Assets;
(b) all obligations or liabilities of Seller or any predecessor
or Affiliate of Seller relating to Taxes (as defined in Section
5.1.25) for all periods, or portions thereof, except for Taxes
included in the Assumed Liabilities pursuant to Section 2.1;
(c) all obligations or liabilities for any legal, accounting,
investment banking, brokerage or similar fees or expenses
incurred by Seller in connection with, resulting from or
attributable to the transactions contemplated by this
Agreement;
(d) all obligations or liabilities for any borrowed money
incurred with respect to the Business prior to the Closing
Date;
(e) all liabilities and obligations of Seller or any predecessor
or Affiliate of Seller resulting from, caused by or arising out
of, directly or indirectly, the conduct of the Business or
ownership or lease of any of the Assets or any properties or
assets previously used in the Business at any time prior to or
on the Closing Date, including without limitation such of the
foregoing as constitute, may constitute or are alleged to
constitute a tort, breach of contract or violation or
requirement of any domestic or foreign statute, law, ordinance,
rule or regulation ("Law") of any domestic or foreign court,
government, governmental agency, authority, entity or
instrumentality ("Governmental Entity"), or which relate to,
result in or arise out of the existence or imposition of any
liability or obligation to remediate or contribute or otherwise
pay any amount under or in respect of any environmental,
superfund or other environmental cleanup or remedial Laws,
occupational safety and health Laws or other Laws;
(f) Subject to Section 9.2, all claims for severance, other
employee benefits (including without limitation benefits
mandated by Law) or other compensation or damages by or on
behalf of any employees (present or former), agents or
independent contractors of Seller or by or on behalf of any
Governmental Entity in respect of employees (present or
former), agents or independent contractors of Seller involving
any alleged employment loss, violation of any Law or
termination of employment actually or constructively (by
operation of Law or pre-existing Contract, including without
limitation any liability for severance), all liabilities and
obligations of Seller or any predecessor or Affiliate of Seller
with respect to employees (present or former), agents or
independent contractors of Seller under Employee Plans and any
Pension Plan, or in respect of payments for unemployment
compensation or unemployment insurance, all liabilities and
obligations with respect to physical, mental or other health
conditions of employees (present or former) including incurred
but not reported medical and dental liability claims, agents or
independent contractors of Seller existing prior to or at the
Closing and all other obligations in respect of employees
(present or former), agents or independent contractors of
Seller relating to periods of employment ending on or prior to
the Closing Date;
(g) all liabilities and obligations in respect of liabilities
that are classified as "Stock Bonus/Investment Growth" on a
balance sheet of the Business; and
(h) all liabilities and obligations in respect of liabilities
that are classified as "Officer Bonus" on a balance sheet of
the Business.
ARTICLE III. PURCHASE PRICE
3.1. Purchase Price. At the Closing, in addition to assuming
the Assumed Liabilities, Purchaser will pay for the Assets and
the covenants of Seller included herein an aggregate purchase
price equal to $4,768,225 subject to adjustment as provided in
Section 3.2 (the "Purchase Price").
3.2. Purchase Price Adjustment. (a) Not less than two
business days prior to the Closing, Seller shall deliver to
Purchaser a schedule (the "Pre-Closing Schedule"), setting
forth on an itemized basis (i) all cash receipts of the
Business from and including February 4, 1996 (the "Effective
Date") to and including April 13, 1996 ("Interim Cash
Receipts"), and all cash disbursements made by Seller from the
Effective Date to and including April 13, 1996 in respect of
ordinary course trade payables and accrued expenses of the
Business (which shall not include any liabilities which are
referred to herein as Retained Liabilities) ("Interim Cash
Disbursements") and (ii) all overhead expenses allocated to the
Business consistent with Parent's historic practice, but not to
exceed $27,878 for any one week period, from the Effective Date
to and including April 13, 1996 ("Interim Overhead Expenses").
The Purchase Price shall be reduced by the amount of the
Interim Cash Receipts and increased by the amount of the
Interim Cash Disbursements and Interim Overhead Expenses as set
forth on the Pre-Closing Schedule.
(b) As soon as practicable, but in no event later than 30 days
after the Closing, Seller will provide to Purchaser a schedule
(the "Post-Closing Schedule"), setting forth on an itemized
basis, with appropriate supporting detail, (i) all cash
receipts of the Business after April 13, 1996 to and including
the Closing Date ("Final Cash Receipts"), and all cash
disbursements made by Seller after April 13, 1996 to and
including the Closing Date in respect of ordinary course trade
payables and accrued expenses of the Business (which shall not
include any liabilities which are referred to herein as
Retained Liabilities) ("Final Cash Disbursements") and (ii) all
overhead expenses allocated to the Business consistent with
Parent's historic practice, but not to exceed $27,878 for any
one week period, after April 13, 1996 to and including the
Closing Date ("Final Overhead Expenses"). If the amount of the
Final Cash Receipts is greater than the sum of the amount of
the Final Cash Disbursements and Final Overhead Expenses then
Parent shall pay to Purchaser, in immediately available funds,
an amount equal to the difference. If the amount of the Final
Cash Receipts is less than the sum of the amount of the Final
Cash Disbursements and Final Overhead Expenses then Purchaser
shall pay to Seller, in immediately available funds, an amount
equal to the difference. Payments pursuant to this Section
3.2(b) shall be treated by the parties as an adjustment to the
Purchase Price.
(c) The Post-Closing Schedule shall be final and binding on
the parties unless, within 15 business days after delivery to
Purchaser, notice is given by Purchaser to Seller of its
objection setting forth in reasonable detail the basis for such
objection. If notice of objection is given, the parties shall
consult with each other with respect to the objection. If the
parties are unable to reach agreement within 15 days after the
notice of objection has been given, the dispute shall be
referred for resolution to a mutually acceptable firm of
certified public accountants for resolution, the costs and
expenses of which firm shall be borne equally by Purchaser and
Seller. If Purchaser and Seller cannot mutually agree upon
said firm of certified public accountants within 15 days, the
disputed Post-Closing Statement shall be jointly determined by
two firms of certified public accountants, one such firm being
selected by each of Purchaser and Seller, within ten days of
the expiration of said 15-day period, with Purchaser and Seller
each paying the costs and expenses of the firm selected by it.
In the event that the respective firms of certified public
accountants of Purchaser and Seller are unable to so agree
within 30 days of the selection of such two firms of certified
public accountants, such firms of certified public accountants
shall select a third firm of certified public accountants
(which shall be one of the six largest nationally recognized
public accounting firms in the United States) within ten days
of the expiration of said 30-day period to determine the Post-
Closing Statement pursuant to this Section 3.2 as soon as
practicable after being selected and whose determination shall
be final and binding upon the parties. The costs and expenses
of such third firm of certified public accountants shall be
borne equally by Purchaser and Seller. During the period from
the date of delivery of the Post-Closing Statement to Purchaser
through the date of resolution of any dispute regarding the
Post-Closing Statement as contemplated by this Section 3.2,
Parent, Seller and their respective successors will provide
Purchaser and its agents and representatives reasonable access
to the books, records, facilities and employees of Parent and
Seller for purposes specifically required for the review of
such Post-Closing Statement and the resolution of any related
dispute.
3.3. Allocation of Purchase Price. Schedule 3.3 hereto sets
forth the agreement of the parties as to a tentative allocation
of the Purchase Price among the Assets (determined as of
February 3, 1996) (including the Assumed Liabilities) (the
"Tentative Allocation"). On the Closing Date, and upon final
determination of the Post-Closing Statement, the parties shall
make appropriate adjustments to the Tentative Allocation and
shall update Schedule 3.3 to reflect any changes in the Assets
and/or the liabilities of Seller arising between February 3,
1996 and the Closing Date (the "Closing Allocation").
Purchaser and Seller agree to notify the other promptly, as
soon as either becomes aware of any circumstances which may
require any such adjustments to the Closing Allocation. Each
of Seller and Purchaser shall prepare and file all Tax Returns
in a manner consistent with the Closing Allocation. Purchaser
and Seller agree to consult with each other with respect to all
issues related to such Allocation in connection with any tax
audits, controversy or litigation. No party hereto shall take
or agree to any position inconsistent with the Allocation in
connection with any tax audit, controversy or litigation which
would adversely affect the taxes of any other party hereto to
any material extent without the prior written consent of such
other party. Such consent shall not be unreasonably withheld,
and shall not be necessary to the extent the party which takes
or agrees to such inconsistent position has indemnified the
other party against the effects of such action.
ARTICLE IV. THE CLOSING
4.1. Date of Closing. The consummation of the purchase and
sale of the Assets contemplated hereby (the "Closing") shall
take place on May 3, 1996 at the offices of CPI Corp., St.
Louis, Missouri (or at such other place as the parties may
designate) or such other date designated by the parties in
writing, after each of the conditions specified in Article VII
has been fulfilled (or waived by the party entitled to waive
that condition). The date on which the Closing is effected is
referred to in this Agreement as the "Closing Date." At the
Closing, the parties shall execute and deliver the documents
referred to in Article VIII.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of Seller and Parent.
Each of Seller and Parent, jointly and severally, make the
following representations and warranties to Purchaser, each of
which is true and correct as of the date hereof and shall be
true and correct as of the Closing Date and shall be unaffected
by any investigation heretofore or hereafter made by Purchaser.
5.1.1. Organization and Good Standing. Parent is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. CPI is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Missouri. TPLP is a
partnership duly formed, validly existing and in good standing
under the laws of the State of Texas. Each of CPI and Parent
has the requisite corporate power and TPLP has the requisite
partnership power and authority to own, lease or otherwise hold
the assets owned, leased or otherwise held by it and to carry
on the Business as presently conducted by it. CPI is in good
standing and duly qualified to conduct business as a foreign
corporation and TPLP is in good standing and duly qualified to
conduct business as a foreign partnership in every state of the
United States in which its ownership or lease of property or
conduct of the Business makes such qualification necessary.
Such of the foregoing states are listed on Schedule 5.1.1.
5.1.2. Authorization of Agreement; Binding Obligation. Each
of Seller and Parent has the requisite corporate or partnership
power to execute and to deliver this Agreement and to perform
the transactions contemplated hereby to be performed by them.
The execution and delivery by each of Seller and Parent of this
Agreement and the performance by them of the transactions
contemplated hereby to be performed by them have been duly
authorized by all necessary corporate, shareholder or
partnership, as the case may be, action on the part of Seller
and Parent. This Agreement has been, and the other agreements,
documents and instruments required to be delivered by Seller or
Parent in accordance with the provisions hereof will be, duly
executed and delivered by duly authorized officers of each of
CPI, Parent and the general partner of TPLP, and, assuming the
due execution and delivery of this Agreement by Purchaser,
constitutes a valid and binding obligation of Seller and Parent
enforceable against them in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights in general and subject to general principles
of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
5.1.3. Intentionally Omitted.
5.1.4. No Restrictions on Seller or Parent; Required Consents.
Except as listed or described on Schedule 5.1.4, the execution
and delivery of this Agreement by Seller or Parent does not,
and the performance by Seller or Parent of the transactions
contemplated hereby to be performed by them will not
(a) conflict with the certificate or articles of incorporation
or partnership agreement, as the case may be, or by-laws of
either Seller or Parent, (b) conflict with, or result in any
violation of, or constitute a default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or
to loss of a benefit that relates to the Business under, any
Contract, Permit, order, judgment or decree to which either
Seller or Parent is a party or by which any of their properties
are bound, (c) constitute a material violation of any law or
regulation applicable to either Seller or Parent and that
relates to the Business, or (d) to the best knowledge of Seller
and Parent result in the creation of any lien, charge or
encumbrance upon any of the Assets. No consent, approval,
order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required to be obtained
or made by or with respect to Seller or Parent in connection
with the execution and delivery of this Agreement by Seller or
Parent or the performance by Seller or Parent of the
transactions contemplated hereby to be performed by either of
them, except for such of the foregoing as are listed or
described on Schedule 5.1.4.
5.1.5. No Third Party Options. There are no existing
agreements, options, commitments or rights with, of or to any
person to acquire any of the Assets or any interest therein,
except for those contracts entered into in the normal course of
business consistent with past practice for the sale of
Inventory.
5.1.6. Financial Statements. Subject to the notes attached
thereto Schedule 5.1.6(a) reflects true and complete copies of
the unaudited balance sheets of Seller at February 3, 1996,
February 4, 1995 and February 5, 1994 and the related unaudited
statements of income for the fiscal years then ended, all of
which, except as set forth on Schedule 5.1.6(b), have been
prepared in accordance with United States generally accepted
accounting principles ("GAAP") consistently applied throughout
the periods involved. Such balance sheets, including the
related notes to the year-end statements, fairly present the
financial position, assets and liabilities (whether accrued,
absolute, contingent or otherwise) of Seller at the dates
indicated and such statements of income fairly present the
results of operations of Seller for the periods indicated.
References in this Agreement to the "Interim Balance Sheet"
shall mean the balance sheet of Seller as of February 3, 1996
referred to above; and references in this Agreement to the
"Interim Balance Sheet Date" shall be deemed to refer to
February 3, 1996. The Interim Balance Sheet specifically
identifies the assets and liabilities which, if the Closing had
been held on the Interim Balance Sheet Date, would have been
held by Purchaser subsequent to the Closing.
5.1.7. Accounts Receivable. The accounts receivable of Seller
as set forth on the Interim Balance Sheet or arising since the
date thereof are valid and genuine; have arisen solely out of
bona fide sales and deliveries of goods, performance of
services and other business transactions in the ordinary course
of business consistent with past practice, are not to the best
knowledge of Seller subject to valid defenses, set-offs or
counterclaims which have not been reserved for on the Interim
Balance Sheet; and are collectible within 120 days of the
Closing Date at the full recorded amount thereof less, in the
case of accounts receivable appearing on the Interim Balance
Sheet, the recorded allowance for collection losses on the
Interim Balance Sheet. The allowance for collection losses on
the Interim Balance Sheet has been determined in accordance
with GAAP except for such deviations thereto as are set forth
on Schedule 5.1.6(b), consistent with past practice.
5.1.8. Inventory. All inventory of Seller, including without
limitation raw materials, work-in process and finished goods,
reflected on the Interim Balance Sheet or acquired since the
date thereof was acquired and has been maintained in the
ordinary course of the Business; is of good and merchantable
quality; consists substantially of a quality, quantity and
condition usable, leasable or saleable in the ordinary course
of the Business; is valued at market; and is not subject to any
write-down or write-off. Seller is not under any liability or
obligation with respect to the return of inventory in the
possession of wholesalers, retailers or other customers.
5.1.9. Absence of Undisclosed Liabilities. Seller has no
material liabilities or obligations, either direct or indirect,
matured or unmatured or absolute, contingent or otherwise,
except:
(a) those liabilities or obligations set forth on the Interim
Balance Sheet and not heretofore paid or discharged;
(b) liabilities arising in the ordinary course of business under
any agreement, contract, commitment, lease or plan specifically
disclosed on Schedule 5.1.11; and
(c) those liabilities or obligations incurred, consistently with
past business practice, in or as a result of the normal and
ordinary course of business since the Interim Balance Sheet
Date.
For purposes of this Agreement, the term "liabilities" shall
include, without limitation, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage,
deficiency, cost, expense, obligation or responsibility,
whether fixed or contingent, known or unknown, asserted or
unasserted, ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated,
secured or unsecured.
5.1.10. Books of Account. The books, records and accounts of
Seller accurately and fairly reflect, in reasonable detail, the
transactions and the assets and liabilities of Seller relating
to the Business. Seller has not, in connection with the
operation of the Business, engaged in any transaction,
maintained any bank account or used any of the funds of Seller
except for transactions, bank accounts and funds which have
been and are reflected in the normally maintained books and
records of the Business.
5.1.11. Contracts. (a) Except as described on Schedule 5.1.11,
the Seller is not a party to any written or oral:
(i) agreement, contract or commitment for the future purchase
of, or payment for, supplies or products, or for the
performance of services by a third party which supplies,
products or services are used in the conduct of the Business
involving in any one case $10,000 or more;
(ii) agreement, contract or commitment to sell or supply
products or to perform services in connection with the Business
involving in any one case $10,000 or more;
(iii) agreement, contract or commitment relating to the
Business continuing over a period of more than six months from
the date hereof or exceeding $10,000 in value;
(iv) distribution, dealer, representative or sales agency
agreement, contract or commitment relating to the Business;
(v) lease under which the Seller is either lessor or lessee
relating to the Assets and involving payments in excess of
$5,000 per year or relating to any property at which the Assets
are located;
(vi) note, debenture, bond, equipment trust agreement, letter
of credit agreement, loan agreement or other contract or
commitment for the borrowing or lending of money relating to
the Business or agreement or arrangement for a line of credit
or guarantee, pledge or undertaking of the indebtedness of any
other person;
(vii) agreement, contract or commitment for any charitable or
political contribution relating to the Business;
(viii) commitment or agreement for any capital expenditure or
leasehold improvement in excess of $5,000 relating to the
Business;
(ix) agreement, contract or commitment limiting or restraining
the Seller, the Business or any successor thereto from engaging
or competing in any manner or in any business, nor, to Seller's
knowledge, is any employee of the Seller subject to any such
agreement, contract or commitment;
(x) material agreement, contract or commitment relating to the
Business not made in the ordinary course of business.
(b) Each of the agreements, contracts, commitments, leases,
plans and other instruments, documents and undertakings listed
or required to be listed on Schedule 5.1.11, or not required to
be listed therein because of the amount thereof in all material
respects, under which Purchaser is to acquire rights or
obligations hereunder relating to the Business is valid and
enforceable in accordance with its terms; Seller is, and to the
best of Seller's or Parent's knowledge all other parties
thereto are, in compliance in all material respects with the
provisions thereof; Seller is not, and to the best of Seller's
or Parent's knowledge no other party thereto is, in material
default in the performance, observance or fulfillment of any
obligation, covenant or condition contained therein; and no
event has occurred which with or without the giving of notice
or lapse of time, or both, would constitute a default
thereunder. Except as listed on Schedule 5.1.11, no written or
oral agreement, contract or commitment described or required to
be described on Schedule 5.1.11 requires the consent of any
party to its assignment in connection with the transactions
contemplated hereby.
5.1.12. Title to Assets. Except as listed or described on
Schedule 5.1.12, Seller has, and following the Closing,
Purchaser will have, good, valid and marketable title to the
Assets free and clear of all title defects or objections,
mortgages, liens, claims, charges, pledges, or other
encumbrances of any nature whatsoever, including without
limitation licenses, leases, chattel or other mortgages,
collateral security arrangements, pledges, title imperfections,
defect or objection liens, security interests, conditional and
installment sales agreements, charges, easements, encroachments
or restrictions, of any kind and other title or interest
retention arrangements, reservations or limitations of any
nature (collectively, "Liens"), other than (a) those reflected
or reserved against in the Interim Balance Sheet, (b) Liens for
Taxes, assessments and other governmental charges which are not
due and payable or which may thereafter be paid without
penalty, (c) deposits or pledges made to secure the payment of
utilities or similar services, workers' compensation,
unemployment insurance, pensions or social security
obligations, (d) interests or title of a lessor under a lease,
(e) easements, rights of way, restrictions or similar charges
not interfering with its ordinary conduct of business, and (f)
mechanics liens, materialmen's liens and other Liens by
suppliers of goods and services in the ordinary course of
business where payment for the related obligation has been (or
is being) made in full in accordance with the terms thereof.
(The items referred to in the exception to the immediately
preceding sentence are hereinafter referred to as "Permitted
Liens".)
5.1.13. Intellectual Property. Schedule 5.1.13 contains an
accurate and complete list of all domestic or foreign letters
patent, patent applications, patent licenses, software licenses
and know-how licenses, trade names, trademark registrations and
applications, service marks, copyrights, copyright
registrations or applications, trade secrets, or other
confidential proprietary information capable of being described
on such schedule which is owned or used by Seller in the
operation of the Business. Except as set forth on Schedule
5.1.13, Seller owns the entire right, title and interest in and
to all domestic and foreign letters patent, patents, patent
applications, patent licenses, software licenses and know-how
licenses, trade names, trademarks, registered copyrights,
service marks, trademark registrations and applications,
service ▇▇▇▇ registrations and applications and copyright
registrations and applications owned or used by Seller and all
trade secrets, technical knowledge, know-how and other
confidential proprietary information and related ownership, use
and other rights of Seller, including but not limited to those
listed or described on Schedule 5.1.13 (collectively, the
"Intellectual Property") including, without limitation, the
right to use and license the same. Except as set forth in
Schedule 5.1.13, there are no pending, or to the knowledge of
Seller or Parent, threatened actions of any nature affecting
the Intellectual Property. Schedule 5.1.13 lists all notices
or claims currently pending or received by Seller or Parent
which claim infringement of any domestic or foreign letters
patent, patent applications, patent licenses, software licenses
and know-how licenses, trade names, trademark registrations and
applications, service marks, copyrights, copyright
registrations or applications, trade secrets, technical
knowledge, know-how or other confidential proprietary
information. Except as set forth on Schedule 5.1.13, there is,
to the knowledge of Seller or Parent, no reasonable basis upon
which any material claim may be asserted against Seller for
infringement or misappropriation of any domestic or foreign
letters patent, patents, patent applications, patent licenses,
software licenses, and know-how licenses, trade names,
trademark registrations and applications, trademarks, service
marks, copyrights, copyright registrations or applications,
trade secrets, technical knowledge, know-how or other
confidential proprietary information. All letters patent,
registrations and certificates issued by any Governmental
Entity relating to any of the Intellectual Property and all
licenses and other agreements pursuant to which Seller uses any
of the Intellectual Property, are valid and subsisting, have
been properly maintained and neither Seller, nor to the
knowledge of Seller or Parent, any other person, is in default
or violation thereunder.
5.1.14. [Intentionally Omitted].
5.1.15. Condition of Assets. All the Assets are in good
operating condition and repair, subject to normal wear and
maintenance, are usable in the regular and ordinary course of
business and conform in all material respects to all applicable
Laws, and all licenses, authorizations and approvals
(collectively, "Permits") issued to Seller by any Governmental
Entity relating to their construction, use and operation. The
Assets constitute all assets and rights necessary to operate
the Business as currently conducted and as currently
contemplated to be conducted. No person other than Seller owns
any equipment or other tangible assets or properties situated
on the premises of Seller or necessary to the operation of the
Business of Seller, except for items leased pursuant to
agreements, contracts or commitments disclosed on
Schedule 5.1.11.
5.1.16. Real Property. (a) Seller does not now own any real
property. Schedule 5.1.16(a) hereto contains a complete and
accurate list and description of each real property lease (the
"Real Property Leases") to which Seller is a party by listing
the name of the landlord or sublandlord, a description of the
leased premises ("Leased Real Property"), the commencement and
expiration dates of the current term, the security deposited by
Seller with the landlord or sublandlord, if any, the monthly
rental (including base and all additional rents), and whether
consent is required pursuant to such Real Property Lease for
the consummation of the transactions contemplated hereby.
(b) All Real Property Leases are valid, binding and enforceable
in accordance with their terms, neither Seller nor, to the best
knowledge of Seller and Parent, any other party to any such
lease is in default thereunder, and no event of default or
other event that, with the giving of notice and/or the passage
of time, would constitute an event of default has occurred
thereunder with respect to Seller or, to the knowledge of
Seller or Parent, any other party thereto. To the knowledge of
Seller or Parent, the Leased Real Property has legal access to
adjacent public streets and roads and no conditions exist which
could result in the termination of such legal access. Except
as set forth on Schedule 5.1.16(b), to the knowledge of Seller
or Parent, all improvements located on the Leased Real Property
are in good condition and are structurally sound, and all
mechanical and other systems located therein are in good
operating condition, subject to normal wear. To the knowledge
of Seller or Parent, the Leased Real Property is properly zoned
for its present use under applicable zoning ordinances, and
there are no pending or, to the knowledge of Seller or Parent,
threatened actions or proceedings which could result in a
modification or termination of such zoning. Except as set
forth on Schedule 5.1.16(b), Seller has not received notice
that any of the Leased Real Property is subject to any
governmental decree or order to be sold or is being condemned,
expropriated or otherwise taken by any public authority with or
without payment of compensation therefor, nor, to the best
knowledge of Seller or Parent, has any such condemnation,
expropriation or taking been proposed.
5.1.17. Insurance. To the knowledge of Seller or Parent,
Seller has insurance policies in full force and effect for such
amounts as are sufficient for material compliance with all
agreements to which Seller is a party or by which it is bound.
Set forth in Schedule 5.1.17 is a list of all fire, liability
and other forms of insurance and all fidelity bonds held by or
applicable to Seller or the Business, setting forth, in respect
of each such policy, the policy name, policy number, carrier,
term, type of coverage and annual premium. Except as set forth
in Schedule 5.1.17, no event relating to Seller or the Business
has occurred which can reasonably be expected to result in a
retroactive upward adjustment in premiums under any such
insurance policies or which is likely to result in a
prospective upward adjustment in such premiums. Excluding
insurance policies that have expired and been replaced in the
ordinary course of business, no insurance policy has been
cancelled within the last two years and, to Seller's or
Parent's knowledge, no threat has been made to cancel any
insurance policy of Seller during such period. Except as noted
on Schedule 5.1.17, all such insurance will remain in full
force and effect with respect to periods before the Closing.
No event has occurred, including, without limitation, the
failure by Seller to give any notice or information or Seller
giving any inaccurate or erroneous notice or information, which
limits or impairs the rights of Seller under any such insurance
policies.
5.1.18. Conduct of the Business Since the Interim Balance
Sheet Date. Since the Interim Balance Sheet Date, Seller has
not:
(a) incurred any liabilities, other than liabilities incurred in
the ordinary course of business consistent with past practice,
or discharged or satisfied any lien or encumbrance, or paid any
liabilities, other than in the ordinary course of business
consistent with past practice, or failed to pay or discharge
when due any liabilities of which the failure to pay or
discharge has caused or will cause any material damage or risk
of material loss to it or any of its assets or properties;
(b) sold, encumbered, assigned or transferred any assets or
properties which would have been included in the Assets, except
for the sale of Assets in the ordinary course of business
consistent with past practice;
(c) created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of
its Assets to any mortgage, lien, pledge, security interest,
conditional sales contract or other encumbrance of any nature
whatsoever, except for Permitted Liens;
(d) made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to
which it is a party or by which it is bound, or cancelled,
modified or waived any material debts or claims held by it or
waived any rights of material value, whether or not in the
ordinary course of business, except as set forth on Schedule
5.1.18(d);
(e) [Intentionally Omitted]
(f) suffered any material adverse change in the Business or in
the results of operations, assets, properties, prospects or
conditions (financial or otherwise) in the Business (a
"Material Adverse Change");
(g) made commitments or agreement for capital expenditures or
capital additions or betterments exceeding in the aggregate
$5,000 except as set forth in Schedule 5.1.18(g);
(h) increased the salaries or other compensation of, or made any
advance (excluding advances for ordinary and necessary business
expenses) or loan to, any of its employees or made any increase
in, or any addition to, other benefits to which any of its
employees may be entitled except for annual compensation
adjustments of approximately 3% per employee which were
effective February 4, 1996 and promotional increases which do
not exceed $47,000 in the aggregate;
(i) changed any of the accounting principles followed by it or
the methods of applying such principles; or
(j) other than the transactions contemplated hereby, entered
into any transaction other than in the ordinary course of
business consistent with past practice;
5.1.19. [Intentionally Omitted].
5.1.20. Personnel Information.
(a) Neither Seller nor any Affiliate of Seller is a party to,
has any obligation with respect to, or is bound by any
employment or consulting agreement or any collective bargaining
agreement or other labor agreement, or any pension, retirement,
stock option, stock purchase, stock award, savings, profit
sharing, deferred compensation, bonus, incentive compensation,
change in control, group insurance, salary continuation during
any absence from active employment for disability or other
reasons, severance, sick days or other incentive or welfare
contract, policy, plan or arrangement with respect to any
employee, officer, director or other person and relating to the
Business (the "Employee Arrangements"), except as set forth on
Schedules 5.1.20(a) or 5.1.21(a).
(b) Schedule 5.1.20(b) hereto contains a true and complete list
of all persons employed by Seller in the operation of the
Business, including date of hire, a description of material
compensation arrangements (other than employee benefit plans
set forth in Schedules 5.1.20(a) or 5.1.21(a)) for each such
person, and a list of other terms of any and all agreements
affecting such persons. Except as set forth on Schedule
5.1.20(b), to the best knowledge of Seller and Parent no
employee material to the Business will terminate his or her
employment with Seller as a result of the consummation of the
transactions contemplated by this Agreement or otherwise.
(c) Seller has not agreed to recognize any union or other
collective bargaining unit, nor has any union or other
collective bargaining unit been certified as representing any
of Seller's employees employed in the operation of the
Business. To the best of Seller's knowledge, there has been no
organizational effort made or threatened by or on behalf of any
labor union with respect to employees of Seller employed in the
operation of the Business within the preceding three years.
There is no labor strike, slowdown, work stoppage or lockout
actually pending or, to the knowledge of Seller or Parent,
threatened against or affecting Seller and related to the
Business.
(d) Except as listed or described on Schedule 5.1.20(d), Seller,
with respect to its employees employed in the Business, (i) has
no written personnel policy applicable to such employees,
(ii) is in compliance in all material respects with all
applicable Laws regarding employment and employment practices,
including without limitation, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and those laws
relating to terms and conditions of employment, wages and
hours, occupational safety and health and workers' compensation
and is not engaged in any unfair labor practices, (iii) has no
unfair labor practice charges or complaints pending or
threatened against it before the National Labor Relations
Board, (iv) has no grievances pending or, to the best of
Seller's or Parent's knowledge, threatened against it, and
(v) has no charges threatened or pending before the Equal
Employment Opportunity Commission or any state or local agency
responsible for the prevention of unlawful employment
practices.
5.1.21. Employee Benefit Plans. (a) All "employee benefit
plans," as defined by Section 3(3) of ERISA, maintained by
Parent (the "Employee Plans") are listed on Schedule 5.1.20(a)
or 5.1.21(a). Any Employee Plans which constitute "employee
pension benefit plans" as defined in Section 3(2) of ERISA (the
"Pension Plans") are so designated on Schedule 5.1.21(a).
There are no trades or businesses (whether or not incorporated)
which are or have ever been under common control, or which are
or have ever been treated as a single employer, with Seller
under Section 414(b), (c), (m) or (o) of the Internal Revenue
Code of 1986 as amended (the "Code") (an "ERISA Affiliate"),
except as set forth on Schedule 5.1.21(a). Neither Seller nor
any ERISA Affiliate has during the preceding six years made or
had an obligation to make contributions to any benefit plan
described in Sections 4001(a)(3), 4063 or 4064 of ERISA. The
Seller and its ERISA affiliates have one Pension Plan which is
subject to Title IV of ERISA, as designated on Schedule
5.1.21(a).
(b) Except as set forth on Schedule 5.1.21(b), (i) each Pension
Plan is qualified under Section 401 of the Code, and any trust
maintained pursuant thereto is exempt from federal income
taxation under Section 501 of the Code; and (ii) the Employee
Plans and Employee Arrangements have been maintained, in all
material respects, in accordance with their terms and
applicable law, and Seller has complied with respect to each
Employee Plan, in all material respects, with the reporting,
notice and disclosure requirements of ERISA and no "party in
interest" or "disqualified person" has engaged in a "prohibited
transaction" within the meaning of Section 406 of ERISA or
Section 4975 of the Code.
(c) All contributions required to have been made under any
Employee Plans or any law (without regard to any waivers
granted under Section 412 of the Code) to any trusts
established thereunder or in connection therewith have been
made.
(d) With respect to each Employee Plan, a complete and correct
copy of each of the following documents (if applicable) has
been made available to Purchaser: (i) the most recent plan and
related trust documents, and all amendments thereto; (ii) the
most recent summary plan description, and all related summaries
of material modifications; (iii) the most recent Form 5500
(including schedules); (iv) the most recent IRS determination
letter; and (v) the most recent actuarial reports (including
reports prepared for purposes of Financial Accounting Standards
Board report no. 87, 106 and 112).
(e) Except as disclosed in Schedule 5.1.21(e), to the knowledge
of the Parent or its Affiliates, there are no pending or
threatened actions, claims or proceedings against any Employee
Plan or its assets, plan sponsor, plan administrator or
fiduciaries with respect to the operation of such plan (other
than routine benefit claims).
(f) Except as disclosed in Schedule 5.1.21(f), Seller does not
maintain retiree life or retiree health plans which provide for
continuing benefits or coverage except: (i) as may be required
under Part 6 of Title I of ERISA and at the expense of the
participant or the participant's beneficiary; or (ii) a medical
expense reimbursement account plan pursuant to Section 125 of
the Code.
(g) Except as disclosed in Schedule 5.1.21(g), neither the
execution and delivery of this Agreement nor the consummation
of the transactions contemplated hereby will: (i) result in
any payment becoming due to any employee (current, former or
retired) of Seller; (ii) increase any benefits under any
Employee Plan or any arrangement described in Section
5.1.20(a); or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
5.1.22. Litigation; Decrees. There are no judicial or
administrative actions, proceedings or investigations pending
or, to Seller's or Parent's knowledge, threatened that question
the validity of this Agreement or any action taken or to be
taken by Seller in connection with this Agreement. Except as
listed or described on Schedules 5.1.22 or 5.1.23, there are no
(i) lawsuits, claims, administrative or other proceedings or
investigations relating to the conduct of the Business pending
or, to Seller's or Parent's knowledge, threatened by, against
or affecting Seller or any Affiliate thereof or (ii) judgments,
orders or decrees of any Governmental Entity binding on Seller
relating to the Business or the Assets.
5.1.23. Compliance With Law; Permits. Seller has complied
with each Law, judgment, order and decree of any Governmental
Entity to which Seller or its business, operations, assets or
properties is subject and is not currently in violation of any
of the foregoing. Seller owns, holds, possesses or lawfully
uses in the operation of its business all material Permits
which are in any manner necessary for it to conduct the
Business as now or previously conducted or for the ownership
and use of the Assets, free and clear of all liens, charges,
restrictions and encumbrances and in compliance with all Laws.
All such Permits are listed and described on Schedule 5.1.23.
Seller is not in default, nor has it received any notice of any
claim of default, with respect to any such Permits. All such
Permits are renewable by their terms or in the ordinary course
of business without the need to comply with any special
qualification procedures or to pay any amounts other than
routine filing fees. None of such Permits will be materially
and adversely affected by consummation of the transactions
contemplated hereby. No shareholder, director, officer,
employee or former employee of Seller or any Affiliates of
Seller, or any other person, firm or corporation owns or has
any proprietary, financial or other interest (direct or
indirect) in any Permits which Seller owns, possesses or uses
in the operation of the Business as now or previously
conducted.
5.1.24. Environmental Matters. Except as set forth in
Schedule 5.1.24:
(a) the operation of the Business is in compliance with all
applicable Environmental Laws, except where noncompliance could
not reasonably be expected to result in Environmental Costs and
Liabilities in excess of $10,000 in the aggregate;
(b) to the best knowledge of Seller and Parent, Seller, in
connection with the operation of the Business, is not required
to obtain any Environmental Permits;
(c) there are no judicial or administrative actions, proceedings
or investigations pending or, to Seller's or Parent's
knowledge, threatened against Seller alleging the violation of
any Environmental Law arising out of the operation of the
Business;
(d) none of Seller, to the best of Seller's or Parent's
knowledge, any predecessor of Seller, or, to the best of
Seller's or Parent's knowledge, any current or former owner or
operator of premises currently leased or operated by Seller in
each case in connection with the operation of the Business has
filed any notice under any Environmental Law indicating past or
present treatment, storage, or disposal of or reporting a
Release or threatened Release of Hazardous Material into the
environment;
(e) neither Seller nor, to the best of Seller's or Parent's
knowledge, any of its past or current facilities and
operations, or, to the best of Seller's or Parent's knowledge,
any predecessor of Seller in each case in connection with the
operation of the Business, is subject to any outstanding
written order, injunction, judgment, decree, ruling, assessment
or arbitration award or any agreement with any Governmental
Entity or other person, or to any federal, state, local or
foreign investigation respecting (i) Environmental Laws,
(ii) Remedial Action, (iii) any Environmental Claim or (iv) the
Release or threatened Release of any Hazardous Material;
(f) all the Real Property, is free of contamination by or from
any Hazardous Materials at concentrations exceeding those
allowed by Environmental Laws;
(g) the Business does not, to the best of Seller's or Parent's
knowledge, involve the generation, transportation, treatment,
storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state, local or foreign equivalent;
(h) to Seller's knowledge there is not now, on, in or under the
Real Property (i) any underground storage tanks, above-ground
storage tanks, dikes or impoundments containing Hazardous
Materials, (ii) any asbestos-containing materials, (iii) any
polychlorinated biphenyls or (iv) any radioactive substances;
and
(i) Seller, in connection with the operation of the Business, is
not subject to Environmental Costs and Liabilities with respect
to Hazardous Materials, and to Seller's knowledge no facts or
circumstances exist which could give rise to Environmental
Costs and Liabilities.
(j) For purposes of the foregoing Section 5.1.24:
"Environmental Claim" means any accusation, allegation, notice
of violation, action, claim, lien, demand, abatement or other
order or directive (conditional or otherwise) by any
Governmental Entity or any other person (including any employee
or former employee of any contractor or subcontractor of
Seller) for personal injury (including sickness, disease or
death), tangible or intangible property damage, damage to the
environment (including natural resources), nuisance, pollution,
contamination, trespass or other adverse effects on the
environment, or for fines, penalties or restrictions resulting
from or based upon (i) the existence, or the continuation of
the existence, of a Release (including, without limitation,
sudden or non-sudden accidental or non-accidental Releases) of,
or exposure to, any Hazardous Material, odor or audible noise
in, into or onto the environment (including, without
limitation, the air, soil, surface water or ground water) at,
in, by, from or related to the Real Property or any other
property currently or formerly owned, operated or leased by
Seller or any activities or operations thereof; (ii) the
transportation, storage, treatment or disposal of Hazardous
Materials in connection with the Real Property or any other
property currently or formerly owned, operated or leased by
Seller or the operation of the Business; or (iii) the
violation, or alleged violation, of any Environmental Laws or
Environmental Permits relating to environmental matters
connected with the Real Property or any other property
currently or formerly owned, operated or leased by Seller.
"Environmental Costs and Liabilities" shall mean any and all
losses, liabilities, obligations, damages, fines, penalties,
judgments, actions, claims, costs and expenses (including fees,
disbursements and expenses of legal counsel, experts, engineers
and consultants and the costs of investigation and feasibility
studies, remedial or removal actions and cleanup activities
relating to the Business) arising from or under any
Environmental Law or Environmental Claim or any order or
agreement now in effect with any Governmental Entity or other
person.
"Environmental Law" means any applicable federal, state, local
or foreign law (including common law), statute, code,
ordinance, rule, regulation or other requirement relating to
the Business relating to the environment, natural resources, or
public and employee health and safety and includes, but is not
limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. S.S 9601, et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. S.S 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C.
S.S 6901, et seq., the Clean Water Act, 33 U.S.C. S.S 1251 et seq.,
the Clean Air Act, 33 U.S.C. S.S 2601, et seq., the Toxic
Substances Control Act, 15 U.S.C. S.S 2601, et seq., the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. S.S 136, et
seq., the Oil Pollution Act of 1990, 33 U.S.C. S.S 2701, et seq.,
the Federal Safe Drinking Water Act, 42 U.S.C. S.S 300F, et seq.,
and the Occupational Safety and Health Act, 29 U.S.C. S.S 651, et,
seq., as such laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and all analogous
state or local statutes.
"Environmental Permit" means any permit, approval,
authorization, license, variance, registration, or permission
required under any applicable Environmental Law.
"Hazardous Material" means any substance, material or waste
which is regulated by any Governmental Entity, including,
without limitation, any material, substance or waste which is
defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous substance,"
"restricted hazardous waste," "contaminant," "toxic waste" or
"toxic substance" under any provision of Environmental Law,
which includes, but is not limited to, petroleum, petroleum
products (including crude oil and any fraction thereof),
asbestos, asbestos-containing materials, urea formaldehyde and
polychlorinated biphenyls.
"Release" means any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal,
discharge, dispersal, leaching, or migration on or into the
indoor or outdoor environment.
"Remedial Action" means all actions, including, without
limitation, any capital expenditures, required or voluntarily
taken to (i) clean up, remove or treat any Hazardous Material
or other substance; (ii) prevent the Release or threat of
Release, or minimize the further Release, of any Hazardous
Material so it does not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor
environment; (iii) perform pre-remedial studies and
investigations or post-remedial monitoring and care; or
(iv) bring facilities on any property owned, operated or leased
by Seller and the facilities located and operations conducted
thereon into compliance with all Environmental Laws and
Environmental Permits.
5.1.25. Taxes. Except as disclosed in Schedule 5.1.25:
(a) All Tax Returns required to be filed by Seller with respect
to the Business have been duly and timely filed. Seller has
duly and timely paid (or there has been paid on its behalf) all
Taxes that are due, or claimed or asserted by any taxing
authority to be due, from or with respect to the Business or
the Assets. Seller has withheld and paid all Taxes required by
all applicable laws to be withheld or paid in connection with
any amounts paid or owing to any employee, creditor,
independent contractor or other third party in connection with
the Business or the Assets.
(b) No audit or other proceeding by any court, governmental or
regulatory authority, or similar person is pending or, to the
knowledge of Seller or Parent, threatened in regard to any
Taxes due from or with respect to the Business or the Assets or
any Tax Return filed by or with respect to the Business or the
Assets. No written assessment of Taxes is proposed against
Seller with respect to the Business or the Assets.
(c) There is no contract, agreement, plan or arrangement
covering any person and entered into in connection with the
Business that, individually or collectively, could give rise to
the payment of any amount that would not be deductible by
Seller by reason of Section 280G of the Code.
(d) Seller is not a "foreign person" within the meaning of
Section 1445(b)(2) of the Code.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"Taxes" shall mean all taxes, charges, fees, levies, or other
similar assessments or liabilities, including without
limitation (a) income, gross receipts, ad valorem, premium,
excise, real property, personal property, sales, use, transfer,
withholding, employment, payroll, medicare, and franchise taxes
imposed by the United States of America, or by any state,
local, or foreign government, or any subdivision, agency, or
other similar Person of the United States or any such
government; and (b) any interest, fines, penalties,
assessments, or additions to taxes resulting from, attributable
to, or incurred in connection with any Tax or any contest,
dispute, or refund thereof. "Tax Returns" shall mean any
report, return, or statement required to be supplied to a
taxing authority in connection with Taxes.
5.1.26. Commissions or Finders Fees. Except for an investment
banking fee payable to Financo, Inc., neither Seller nor Parent
nor any person or entity acting on the behalf of Seller or
Parent has agreed to pay a commission, finder's fee or similar
payment in connection with this Agreement or any matter related
hereto to any person or entity.
5.1.27. [Intentionally Omitted].
5.1.28 [Intentionally Omitted].
5.2. Representations and Warranties of Purchaser. Purchaser
makes the following representations and warranties to Seller
and Parent, each of which is true and correct as of the date
hereof and shall be true and correct as of the Closing Date and
shall be unaffected by any investigation heretofore or
hereafter made by Seller or Parent.
5.2.1. Corporate Organization. Purchaser is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate
power and authority to own, lease or otherwise hold its
properties and assets and to carry on its business as presently
conducted.
5.2.2. Authorization and Effect of Agreement. Purchaser has
the requisite corporate power to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby to be consummated by it. The execution and delivery by
Purchaser of this Agreement and the consummation by it of the
transactions contemplated hereby to be consummated by it have
been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by Purchaser
and, assuming the due execution and delivery of this Agreement
by the other parties hereto, constitutes a valid and binding
obligation of Purchaser, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in
general and subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
5.2.3. No Restrictions Against Purchase of the Assets. The
execution and delivery of this Agreement by Purchaser does not,
and the performance by it of the transactions contemplated
hereby to be performed by it will not (a) conflict with its
certificate of incorporation or by-laws, (b) conflict with, or
result in any violation of, or constitute a default (with or
without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any
obligation or to loss of a benefit under, any material contract
or permit, order, judgment or decree to which it is a party or
by which it is bound, or (c) constitute a violation of any law
or regulation applicable to it. No consent, approval, order or
authorization of, or registration, declaration or filing with
any Governmental Entity is required to be obtained or made by
or with respect to Purchaser in connection with its execution
and delivery of this Agreement or the consummation by it.
5.2.4. Financing Arrangements. Purchaser has delivered to
Seller true and correct copies of the Commitment Letter, dated
April 5, 1996, from Bankers Trust Company relating to the terms
and conditions of Purchaser's financing of the transaction
contemplated hereby (the "Financing").
ARTICLE VI. PRE-CLOSING COVENANTS
6.1. Access to Information. Prior to the Closing, upon
reasonable notice from Purchaser to Seller, Seller will afford
to the officers, attorneys, accountants or other authorized
representatives of Purchaser reasonable access which shall not
be unreasonably disruptive to the normal operations of the
Business and shall be during normal business hours to the
employees, Assets, facilities and the books and records of
Seller so as to afford Purchaser full opportunity to make such
review, examination and investigation of the Business as
Purchaser may desire to make. Purchaser will be permitted to
make extracts from or to make copies of such books and records
as may be reasonably necessary in connection therewith. Prior
to the Closing, Seller will promptly furnish or cause to be
furnished to Purchaser such financial and operating data and
other information as Purchaser may reasonably request.
6.2. Conduct of Business. With respect to the Business,
except as consented to by Purchaser in writing, during the
period from the date of the Agreement and continuing until the
Closing Date, Seller will, and will cause its Affiliates to,
and Parent will cause Seller to:
(a) use their respective best efforts to (i) carry on the
Business in the usual, regular and ordinary course as presently
conducted and consistent with past practice, (ii) keep the
Business intact, (iii) keep available the services of the
present employees of the Business material to the Business
(other than ▇▇. ▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇), (iv) collect
outstanding Accounts Receivable, and (v) maintain and preserve
the relationships of customers, suppliers and others having
business dealings with the Business;
(b) maintain the Assets in at least as good condition as they
were being maintained as of the date hereof, and except for
sales in the ordinary course of business, not move any Asset to
any location other than the Real Property;
(c) not sell, lease or dispose of, or make any contract for the
sale, lease or disposition of, or subject to Lien, any Assets
other than in the ordinary course of the Business;
(d) not intentionally incur any liability or obligation
(absolute, accrued, contingent or otherwise) assume, guarantee,
endorse or otherwise as an accommodation become responsible for
the obligations of any other person, other than in the
ordinary course of business;
(e) not amend or terminate any Contract or other agreement,
other than in the ordinary course of business consistent with
past practices;
(f) not make any change in financial or tax accounting methods,
principles or practices unless required by GAAP or applicable
law;
(g) not extend credit in the sale of products, collection of
receivables or otherwise, other than in the ordinary course of
business consistent with past practices;
(h) not fail to maintain its books, accounts and records in the
usual, regular and ordinary manner on a basis consistent with
prior years;
(i) not grant to any employee of the Business any increase in
compensation or in severance or termination pay, grant any
severance or termination pay, or enter into any employment
agreement with any employee, except as may be required under
employment or termination agreements in effect on the date of
this Agreement;
(j) not enter into any agreement, including an agreement to
purchase or lease Assets which includes an aggregate payment or
commitment on the part of either party of more than $5,000,
other than in the ordinary course of business consistent with
past practice;
(k) not adopt or amend any Employee Plan or collective
bargaining agreements, except as required by Law;
(l) maintain in full force and effect all insurance described in
Schedule 5.1.17; and
(m) not take or omit to take any action as a result of which any
representation or warranty of Seller in Article V would be
rendered untrue or incorrect if such representation or warranty
were made immediately following the taking or failure to take
such action.
6.3. Financial Statements. Within thirty (30) days of the end
of each period following the Interim Balance Sheet Date, Parent
shall deliver to Purchaser an unaudited income statement and a
balance sheet of Seller for the period then ended
(collectively, the "Supplemental Financial Statements"). The
Supplemental Financial Statements shall be certified by the
Chief Financial Officer of Parent. Such certification shall
state that the Supplemental Financial Statements were prepared
in accordance with GAAP applied in a manner (including any
deviations therefrom) consistent with the application of those
principles used in the preparation of the Interim Balance
Sheet.
6.4. Notification. (a) Seller and Parent shall notify
Purchaser, and Purchaser shall notify Seller and Parent, of any
litigation, arbitration or administrative proceeding pending
or, to its knowledge, threatened against Seller or Parent, or
Purchaser, as the case may be, which challenges the
transactions contemplated hereby.
(b) Seller and Parent will provide prompt written notice to
Purchaser of any change in any of the information contained in
its representations and warranties made in Article V hereof or
any Exhibits or Schedules referred to herein or attached hereto
and shall promptly furnish any information which Purchaser may
reasonably request in relation to such change. No such notice
shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Section 7.1.1(a)
hereof or the compliance by Seller or Parent with the covenant
set forth in Section 6.1 hereof; provided, however, that by
consummating the transactions contemplated hereby, Purchaser
waives any right or claim it may other wise have or have had on
account of any event occurring subsequent to the date hereof,
that renders any representation or warranty under this
Agreement inaccurate, so long as Seller has disclosed such
event or fact to Purchaser in writing promptly after the Seller
becomes aware of such event or fact.
6.5. Cooperation. The parties hereto shall cooperate fully
with each other in taking any actions, including actions to
obtain the required consent of any Governmental Entity or any
third party, necessary or helpful to accomplish the
transactions contemplated by this Agreement; provided, however,
that no party shall be required to take any action which would
have a material adverse effect upon it or any Affiliate.
6.6. No Inconsistent Action. No party hereto shall take any
action which is materially inconsistent with its obligations
under this Agreement.
6.7. Satisfaction of Conditions. Without limiting the
generality or effect of any provision of Article VII, prior to
the Closing, each of the parties will use reasonable efforts
with due diligence and in good faith to satisfy promptly all
conditions required hereby to be satisfied by such party in
order to expedite the consummation of the transactions
contemplated hereby.
6.8. Injunctions. Without limiting the generality or effect
of any provision of Section 6.9 or Article VII, if any United
States, state or foreign court having jurisdiction over any
party issues or otherwise promulgates any injunction, decree or
similar order prior to the Closing which prohibits the
consummation of the transactions contemplated hereby, the
parties will use their respective reasonable efforts to have
such injunction dissolved or otherwise eliminated as promptly
as possible and, prior to or after the Closing, to pursue the
underlying litigation diligently and in good faith.
6.9. Filings. As promptly as practicable after the execution
of this Agreement, each party shall use its reasonable efforts
to obtain, and to cooperate with the other party in obtaining,
all authorizations, consents, orders and approvals of any
Governmental Entity that may be or become necessary in
connection with the consummation of the transactions
contemplated by this Agreement, and to take all reasonable
actions to avoid the entry of any order or decree by any
Governmental Entity prohibiting the consummation of the
transactions contemplated hereby, and shall furnish to the
other all such information in its possession as may be
necessary for the completion of the reports or notifications to
be filed by the other.
6.10. Publicity. Prior to the Closing, no party hereto will
issue or cause the publication of any press release or other
public announcement with respect to this Agreement or the
transactions contemplated hereby without the prior consent of
the other party, which consent will not be unreasonably
withheld; provided, however, that nothing herein will prohibit
either party from issuing or causing publication of any such
press release or public announcement to the extent that such
party determines such action to be required by Law or the rules
of any national stock exchange applicable to it or its
Affiliates, in which event the party making such determination
will, if practicable in the circumstances, use reasonable
efforts to allow the other party reasonable time to comment on
such release or announcement in advance of its issuance.
6.11. Acquisition Proposals. From and after the date of this
Agreement, Seller and Parent shall not, nor shall they
authorize or permit any officer, director or employee of, or
any investment banker, attorney, accountant or other
representative retained by, Seller or Parent to, solicit,
initiate or encourage submission of any proposal or offer
(including by way of furnishing information) from any person
which constitutes, or may reasonably be expected to lead to,
any Acquisition Proposal. As used in this Agreement,
"Acquisition Proposal" shall mean any proposal for a merger or
other business combination involving Seller or any proposal or
offer to acquire in any manner a substantial portion of the
assets of Seller used or useful in the Business.
6.12. Books and Records. On the Closing Date, Seller will
deliver to Purchaser all books and records of Seller used or
useful in the Business and described in Section 1.1.10.
6.13. Transition Services Agreement. On or prior to the
Closing Date, Parent and Purchaser will execute and deliver the
Transition Services Agreement in the form of Exhibit 6.13.
6.14. Leases. On or prior to the Closing Date, Seller and
Purchaser will execute and deliver assignments of the Real
Property Leases for San Francisco(2) and St. Louis or Subleases
relating to the operation of Seller's or its Affiliate's
photofinish operations at such locations.
6.15. Master Contracts, Etc. (a) Schedule 6.15 sets forth a
list of certain Contracts ("Master Contracts"), including
without limitation vehicle leases and other agreements relating
to the Business under which Seller has any liability. From and
after the Closing, Seller will use its best efforts to obtain
and have issued replacements for each such Master Contract and
to obtain any amendments, novations, releases, waivers,
consents or approvals necessary to release Seller from all
liability thereunder arising after the Closing Date, in each
case as promptly as practicable.
(b) Without limiting the generality or effect of Section
6.15(a), following the Closing, Seller will assist Purchaser to
negotiate with the lessor under each vehicle lease described on
Schedule 6.15 (the "Vehicle Leases") a new lease, with
Purchaser as lessee. If Purchaser is unable to negotiate new
leases of such vehicles on terms acceptable to Purchaser,
Purchaser may, at its option, require Seller to exercise
Seller's rights under the Vehicle Leases to direct the leasing
company to sell such vehicles and transfer them to Purchaser at
a price not to exceed $7,100. Until arrangements have been
made pursuant to the foregoing provisions of this Section
6.15(b), Seller will give Purchaser the full use of such
vehicles at the cost and expense of Purchaser.
ARTICLE VII. CONDITIONS TO CLOSING
7.1. Conditions Precedent to Obligations of Purchaser.. The
obligations of Purchaser under this Agreement to consummate the
transactions contemplated hereby will be subject to the
satisfaction, at or prior to Closing, of all of the following
conditions, any one or more of which may be waived at the
option of Purchaser:
7.1.1. Representations, Warranties and Covenants.
(a) All representations and warranties of Seller and Parent
made in this Agreement or in any Exhibit, Schedule or document
delivered pursuant hereto, shall be true and complete in all
material respects as of the date hereof and on and as of the
Closing Date as if made on and as of that date.
(b) All of the terms, covenants and conditions to be complied
with and performed by the Parent and Seller on or prior to the
Closing Date shall have been complied with or performed.
(c) Purchaser shall have received a certificate, dated as of
the Closing Date, executed by Parent and Seller, certifying in
such detail as Purchaser may reasonably request that the
conditions specified in Sections 7.1.1(a) and (b) hereof have
been fulfilled.
7.1.2. Closing Documents. Parent and Seller shall have
delivered to Purchaser the documents identified in Section 8.1.
7.1.3. Governmental Consents and Approvals. Each of the
governmental and other approvals, consents or waivers listed on
Schedule 5.1.4 shall have been obtained and all Permits and
Environmental Permits which Purchaser shall reasonably
determine to be necessary to continue the operation of the
Business following the Closing shall have been obtained.
7.1.4. No Adverse Proceedings. No suit, action, claim or
governmental proceeding shall be pending against, and no order,
decree or judgment of any court, agency or Governmental Entity
shall have been rendered against, any party hereto which would
render it unlawful, as of the Closing Date, to effect the
transactions contemplated by this Agreement in accordance with
its terms.
7.1.5. Third Party Consents. Seller shall have obtained and
shall have delivered to Purchaser all third-party consents
required as a result of the transaction contemplated hereby
with respect to the contracts listed on Schedule 5.1.11.
7.1.6. Funding. Purchaser shall have received the proceeds of
the Financing.
7.1.7. Employment Arrangement. Purchaser and ▇▇▇▇▇▇ ▇▇▇▇▇▇
shall have executed and delivered an Employment Agreement on
terms and conditions satisfactory to Purchaser in its sole
discretion.
7.2. Conditions Precedent to Obligations of Seller. The
obligations of Seller under this Agreement to consummate the
transactions contemplated hereby will be subject to the
satisfaction, at or prior to the Closing, of all the following
conditions, any one or more of which may be waived at the
option of Seller:
7.2.1. Representations, Warranties and Covenants.
(a) All representations and warranties of Purchaser made in
this Agreement or in any Exhibit, Schedule or document
delivered pursuant hereto, shall be true and complete in all
material respects as of the date hereof and on and as of the
Closing Date as if made on and as of that date.
(b) All of the terms, covenants and conditions to be complied
with and performed by Purchaser on or prior to the Closing Date
shall have been complied with or performed.
(c) Seller shall have received a certificate, dated as of the
Closing Date, executed on behalf of Purchaser by an authorized
officer thereof, certifying in such detail as Seller may
reasonably request that the conditions specified in Sections
7.2.1(a) and (b) have been fulfilled.
7.2.2. Closing Documents. Purchaser shall have delivered to
Seller the documents identified in Section 8.2.
7.2.3. Consents or Approvals. Each of the governmental and
other approvals, consents or waivers listed on Schedules 5.1.4
shall have been obtained.
7.2.4. No Adverse Proceedings. No suit, action, claim or
governmental proceeding shall be pending against, and no order,
decree or judgment of any court, agency or other Governmental
Entity shall have been rendered against, any party hereto which
would render it unlawful, as of the Closing Date, to effect the
transactions contemplated by this Agreement in accordance with
its terms.
7.2.5. Purchase Price. Purchaser shall have delivered to
Seller the Purchase Price by wire transfer of immediately
available funds.
ARTICLE VIII. DOCUMENTS TO BE DELIVERED AT THE CLOSING
8.1. Documents to be Delivered by Seller. At the Closing,
Seller will deliver to Purchaser the following, at the expense
of Seller and in proper form for recording when appropriate:
8.1.1. Transfer Documents. Such instruments of transfer as
Purchaser may reasonably request conveying and transferring
title to the Assets.
8.1.2. Certified Resolutions. Certified resolutions of the
Boards of Directors and the shareholders of Seller approving
the execution and delivery of this Agreement and each of the
other documents delivered by Seller pursuant hereto and
authorizing the consummation of the transactions contemplated
hereby and thereby.
8.1.3. Seller's Certificate. A certificate, dated the Closing
Date, executed by Parent and Seller in the form described in
Section 7.1.1.
8.1.4. [Intentionally Omitted].
8.1.5. Good Standing Certificates. Governmental certificates
showing that Seller and Parent are duly incorporated and in
good standing in the state of its incorporation and in good
standing in each state listed on Schedule 5.1.1 certified as of
a date not more than ten (10) days before the Closing Date.
8.1.6. Receipts. Appropriate receipts.
8.1.7. Lien Searches. Federal and state tax, lien and
judgment lien searches on standard form of Request for
Information (Uniform Commercial Code Form UCC-11) for entries
in the name of CPI Copy Services, Inc. (including under any
assumed names) completed and certified by Secretary of State of
the States of California, Georgia, Missouri and Texas and the
Clerks for the counties of Alamada, California; Contra Costa,
California; Los Angeles, California; San Francisco, California;
Santa Clara, California; ▇▇▇▇, Georgia; Gwinnett, Georgia;
▇▇▇▇▇▇, Georgia; St. Louis County, Missouri; City of St. Louis,
Missouri; Dallas, Texas; Collin, Texas, dated no earlier than
thirty (30) days prior to Closing Date and showing the absence
of any such liens on the Assets;
8.1.8. Other Documents. Such additional information and
materials as Purchaser shall reasonably request.
8.2. Documents to be Delivered by Purchaser. At the Closing,
Purchaser will deliver to Seller, at the expense of Purchaser:
8.2.1. Purchase Price. Evidence of a wire transfer in the
amount of the Purchase Price.
8.2.2. Certified Resolutions. Certified resolutions of the
Boards of Directors of Purchaser approving the execution and
delivery of this Agreement and each of the other documents
delivered by Purchaser pursuant hereto and authorizing the
consummation of the transactions contemplated hereby and
thereby.
8.2.3. Officer's Certificate. A certificate, dated the
Closing Date, executed on behalf of the Purchaser in the form
described in Section 7.2.1.
8.2.4. [Intentionally Omitted].
8.2.5. Good Standing Certificates. Governmental certificates
showing that each Purchaser is duly incorporated and in good
standing in the state of its incorporation certified as of a
date not more than ten (10) days before the Closing Date
8.2.6. Other Documents. Such additional information and
materials as Seller shall reasonably request.
ARTICLE IX. POST-CLOSING COVENANTS
9.1. Employee Benefits. (a) Seller shall pay directly to each
employee of the Business that portion of all benefits
(including the arrangements, plans and programs set forth in
Schedules 5.1.21(a) and 5.1.21(b)) which has been accrued on
behalf of that employee (or is attributable to expenses
properly incurred by that employee) in accordance with their
terms, and Purchaser shall assume no liability therefor. No
portion of the assets of any Employee Benefit Plan, Pension
Plan or any other plan, fund, program or arrangement, written
or unwritten, heretofore sponsored or maintained by Seller (and
no amount attributable to any such plan, fund, program or
arrangement) shall be transferred to Purchaser, and Purchaser
shall not be required to continue any such plan, fund, program
or arrangement after the Closing Date. The amounts payable on
account of all benefit arrangements listed on Schedule
5.1.20(a) or Schedule 5.1.21(a) (other than as specified in the
following subsections) shall be determined with reference to
the date of the event by reason of which such amounts become
payable, without regard to conditions subsequent, and Purchaser
shall not be liable for any claim for insurance, reimbursement
or other benefits payable by reason of any event which occurs
prior to the Closing Date. All amounts payable directly to
employees, or to any fund, program, arrangement or plan
maintained by Seller therefor shall be paid by Seller within 30
days after the Closing Date to the extent that such payment is
not inconsistent with the terms of such fund, program,
arrangement or plan. All employees of Seller who are employed
by Purchaser on or after the Closing Date shall be new
employees of Purchaser.
(b) Purchaser shall offer employment on an "at will" basis after
the Closing Date to any employee of Seller listed on Schedule
9.1(b) who was actively employed in the Business on the last
day of business immediately preceding the Closing Date or who
was temporarily absent on the last day of business immediately
preceding the Closing Date from active employment in the
Business and has rights of re-employment upon termination of
such employee's temporary absence; provided, however, that the
Purchaser shall not be obligated to employ any of such
employees of Seller if the Closing does not occur. Each offer
of employment to any Business employee shall be on terms and
conditions substantially similar to the terms and conditions of
each such employee's employment with Seller as of the Closing
Date as determined by the Purchaser in its sole discretion;
provided, however, that Purchaser shall offer each employee of
Seller base wages at least equal to the base wages paid by
Seller to such employee as of the Closing Date. Each employee
who accepts the offer of employment shall be deemed to be an
employee of the Purchaser ("Transferred Employee") on the day
he commences active employment with the Purchaser (not earlier
than the Closing Date). Purchaser acknowledges that it shall
assume the accrued payroll and ordinary payroll related
liabilities and accrued vacation and sick leave calculated as
of the Closing Date of those employees of Seller who accept
employment with Purchaser. Seller acknowledges that it shall
be responsible for the payment of all accrued employee benefits
and other compensation payable to its employees through the
Closing Date not expressly assumed by Purchaser hereunder and
for all accrued payroll, accrued vacation and severance costs
payable to any employee of Seller not accepting employment with
Purchaser as provided for in Section 9.2 below. Subject to
applicable laws, Purchaser shall have the right to dismiss any
or all Transferred Employees at any time, with or without
cause, and to change the terms and conditions of employment of
any or all Transferred Employees. For purposes of this Section
9.1, an individual shall be deemed temporarily absent from
active employment on the Closing Date if such individual is
absent from work for any reason (including disability, illness,
injury, worker's compensation, leave of absence or layoff)
other than by reason of vacation, in which case the employee is
considered to be an active employee.
(c) Notwithstanding anything contained in this Agreement to the
contrary (i) Seller shall be liable for and shall pay all
benefits and severance payments, if any, for those employees
listed on Schedule 9.1(c) and Purchaser shall have no
obligation to offer employment to such employees, and (ii)
Seller and Purchaser shall each pay one-half of any severance
payments to those employees listed on Schedule 9.1(d) and
Purchaser shall have no obligation to offer employment to such
employees.
9.2. Severance and Non-Solicitation. (a) Seller shall
terminate effective as of the Closing Date all employment
arrangements it has with any of the Employees who are to be
offered employment by Purchaser. Seller shall be responsible
for any severance or similar obligations arising from the
transaction contemplated hereby for those Employees of Seller
(i) terminated pursuant to this Section 9.2 and offered
employment by Purchaser pursuant to Section 9.1(b) but who do
not accept such employment and (ii) terminated pursuant to this
Section 9.2, and classified as "home office" employees and were
not offered employment by Purchaser pursuant to Section 9.1(b).
Purchaser shall be responsible for any severance or similar
obligation arising from the transaction contemplated hereby for
those Employees of Seller who are classified as "field
employees" who were terminated pursuant to this Section 9.2 and
not offered employment by Purchaser pursuant to Section 9.1(b).
(b) Until the first anniversary of the Closing Date, Seller
and Parent covenant and agree that they will not, and that they
will cause each of their respective affiliates not to, directly
or indirectly solicit or offer employment to or employ any
employee of Purchaser (i) who was an Employee to whom Purchaser
offered employment but who did not become an employee of
Purchaser, or (ii) who is then an employee of Purchaser.
(c) Until the first anniversary of the Closing Date, Purchaser
covenants and agrees it will not directly or indirectly solicit
or offer employment to or employ any employee of Seller or of
any affiliate of Seller listed on Schedule 9.2(c) who is then
an employee of Seller or of any such scheduled affiliate.
9.3. Discharge of Business Obligations. From and after the
Closing Date, Seller shall pay and discharge, in accordance
with past practice but not less than on a timely basis, all
obligations and liabilities incurred prior to the Closing Date
in respect of the Business, its operations or the assets and
properties used therein (except for those expressly assumed by
Purchaser hereunder), including without limitation any
liabilities or obligations to employees, trade creditors and
clients of the Business.
9.4. Maintenance of Books and Records. Each of Parent, Seller
and Purchaser shall preserve in accordance with their
respective retention policies in effect on the Closing Date all
records possessed or to be possessed by such party relating to
any of the assets, liabilities or business of the Business
prior to the Closing Date. After the Closing Date, where there
is a legitimate purpose, such party shall provide the other
parties with access, upon prior reasonable written request
specifying the need therefor, during regular business hours, to
(i) the officers and employees of such party and (ii) the books
of account and records of such party, but, in each case, only
to the extent relating to the assets, liabilities or business
of the Business prior to the Closing Date, and the other
parties and their representatives shall have the right to make
copies of such books and records; provided, however, that the
foregoing right of access shall not be exercisable in such a
manner as to interfere unreasonably with the normal operations
and business of such party; and further, provided, that, as to
so much of such information as constitutes trade secrets or
confidential business information of such party, the requesting
party and its officers, directors and representatives will use
due care to not disclose such information except (i) as
required by law, (ii) with the prior written consent of such
party, which consent shall not be unreasonably withheld, or
(iii) where such information becomes available to the public
generally, or becomes generally known to competitors of such
party, through sources other than the requesting party, its
affiliates or its officers, directors or representatives. Such
records may nevertheless be destroyed by a party if such party
sends to the other parties written notice of its intent to
destroy records, specifying with particularity the contents of
the records to be destroyed. Such records may then be
destroyed after the 30th day after such notice is given unless
another party objects to the destruction, in which case the
party seeking to destroy the records shall either agree to
retain such records or deliver such records to the objecting
party.
9.5. Payments Received. Parent, Seller and Purchaser each agree
that after the Closing they will hold and will promptly
transfer and deliver to the other, from time to time as and
when received by them, any cash, checks with appropriate
endorsements (using their best efforts not to convert such
checks into cash), or other property that they may receive on
or after the Closing which properly belongs to the other party,
including without limitation any insurance proceeds, and will
account to the other for all such receipts. From and after the
Closing, Purchaser shall have the right and authority to
endorse without recourse the name of Seller on any check or any
other evidences of indebtedness received by Purchaser on
account of the Business and the Assets transferred to Purchaser
hereunder.
9.6. [Intentionally Omitted].
9.7. UCC Matters. From and after the Closing Date, Seller will
promptly refer all inquiries with respect to ownership of the
Assets or the Business to Purchaser. In addition, Seller will
execute such documents and financing statements as Purchaser
may request from time to time to evidence transfer of the
Assets to Purchaser, including any necessary assignments of
financing statements.
9.8. Covenant Not to Compete. (a) Seller and Parent agree
that for a period of three years after the Closing Date,
neither it nor any of its Affiliates will, directly or
indirectly, own, manage, operate, control or participate in the
ownership, management, operation or control of any business,
whether in corporate, proprietorship or partnership form or
otherwise, that is engaged in producing or securing the
production of high speed copying of text documents. Purchaser
acknowledges that Seller and Parent are engaged in other
imaging businesses, including portrait studios and
photofinishing, and in research and development activities
involving color digital imaging. Purchaser further
acknowledges that nothing in this Agreement shall restrict the
right of Seller, Parent or their Affiliates to continue or to
expand their (i) current imaging operations; (ii) research and
development activities; or (iii) pursuit of new lines of
business or technologies; provided that they do not engage in
the business of producing or securing the production of high
speed copying of text documents. Purchaser agrees that
Seller's continued operation of its Imageland/Image Explosion
store in Chicago, Illinois, in the manner operated as of the
date hereof will not violate the provisions of this covenant.
(b) The parties hereto specifically acknowledge and agree that
the remedy at law for any breach of the foregoing will be
inadequate and that the Purchaser, in addition to any other
relief available to it, shall be entitled to temporary and
permanent injunctive relief without the necessity of proving
actual damage or posting any bond whatsoever. In the event
that the provisions of this Section 9.8 should ever be deemed
to exceed the limitation provided by applicable law, then the
parties hereto agree that such provisions shall be reformed to
set forth the maximum limitations permitted.
9.9. Post-Closing Notifications. Purchaser, Parent and Seller
will, and each will cause their respective Affiliates to,
comply with any post-Closing notification or other
requirements, to the extent then applicable to such party, of
any antitrust, trade competition, investment or control, export
or other Law of any Governmental Entity having jurisdiction
over Purchaser, Parent or Seller.
9.10. Certain Tax Matters. All sales, use, transfer, stamp,
conveyance, value added or other similar taxes, duties, excises
or governmental charges imposed by any taxing jurisdiction,
domestic or foreign, and all recording or filing fees, notarial
fees and other similar costs of Closing with respect to the
transfer of the Assets or otherwise on account of this
Agreement or the transactions contemplated hereby will be borne
by Seller.
9.11. Insurance. With respect to any loss, liability or damage
relating to, resulting from or arising out of the conduct of
the Business on or prior to the Closing Date for which Seller
would be entitled to assert, or cause any Affiliate or other
person or entity to assert, a claim for recovery under any
policy of insurance maintained by or for the benefit of Seller
or any Affiliate thereof in respect of the Business or the
Assets, at the request of Purchaser, Seller will use reasonable
efforts to assert, or to assist Purchaser to assert, one or
more claims under such insurance covering such loss, liability
or damage if Purchaser is not itself entitled to assert such
claim but Seller is so entitled.
ARTICLE X. SURVIVAL AND INDEMNIFICATION
10.1. Survival of Representations, Warranties and Covenants.
(a) The representations and warranties contained in this
Agreement (except for Parent's and Seller's representations and
warranties contained in Section 5.1.2 which shall survive
Closing without limitation as to durations and except for
Parent's and Seller's representations and warranties contained
in Section 5.1.25 which shall survive the Closing until 60 days
after the expiration of the statute of limitation applicable
thereto) or in any list, certificate, or other instrument
furnished by or on behalf of any party hereto in connection
with the transactions contemplated hereby (a "Closing
Document") shall survive to the date that is 60 days following
the date of receipt by the Purchaser of the report of its
independent public accountants with respect to its audited
financial statements for the fiscal year ended February 7,
1998. Any claim for indemnification with respect to any of
such matters which is not asserted by notice given as herein
provided relating thereto within such specified period of
survival may not be pursued and is hereby irrevocably waived
after such time. Any claim for an Indemnifiable Loss (as
hereinafter defined) asserted within such period of survival as
herein provided will be timely made for purposes hereof.
(b) Unless a specified period is set forth in this Agreement (in
which event such specified period will control), the covenants
in this Agreement will survive the Closing and remain in effect
indefinitely.
10.2. Definitions; Limitations on Liability. (a) For purposes
of this Agreement, (i) "Indemnity Payment" means any amount of
Indemnifiable Losses required to be paid pursuant to this
Agreement, (ii) "Indemnitee" means any person or entity
entitled to indemnification under this Agreement,
(iii) "Indemnifying Party" means any person or entity required
to provide indemnification under this Agreement,
(iv) "Indemnifiable Losses" means any and all damages, losses,
liabilities, obligations, costs and expenses, and any and all
claims, demands or suits (by any person or entity, including
without limitation any Governmental Entity), including without
limitation the costs and expenses of any and all actions,
suits, proceedings, demands, assessments, judgments,
settlements and compromises relating thereto and including
reasonable attorneys' fees and expenses in connection
therewith, (v) "Third Party Claim" means any claim, action or
proceeding made or brought by any person or entity who or which
is not a party to this Agreement or an Affiliate of a party to
this Agreement, (vi) "Purchaser Indemnitee" means any person
that is entitled to be indemnified by Seller or Parent under
the terms of this Agreement and (vii) "Seller Indemnitee" means
any person that is entitled to be indemnified by Purchaser
under the terms of this Agreement.
(b) Notwithstanding any other provision hereof or of any
applicable Law, no Purchaser Indemnitee entitled to
indemnification under this Agreement will be entitled to make a
claim in respect of any breach of a representation or warranty
under Section 10.3(a)(i) hereof unless and until the aggregate
amount of all claims by all Purchaser Indemnitees in respect of
breaches of representations and warranties asserted for
Indemnifiable Losses under Section 10.3(a)(i) hereof exceeds
$100,000, in which event the Purchaser Indemnitees will be
entitled to indemnification to the extent such Indemnifiable
Losses claimed under this Agreement with respect to breaches of
representations and warranties exceed $100,000.
(c) Notwithstanding any other provision hereof or of any
applicable Law, no Seller Indemnitee entitled to
indemnification under this Agreement will be entitled to make a
claim in respect of any breach of a representation or warranty
under Section 10.3(b)(i) hereof unless and until the aggregate
amount of all claims by all Seller Indemnitees in respect of
breaches of representations and warranties asserted for
Indemnifiable Losses under Section 10.3(b)(i) hereof exceeds
$100,000, in which event the Seller Indemnitees will be
entitled to indemnification to the extent of such Indemnifiable
Losses claimed under this Agreement with respect to breaches of
representations and warranties exceed $100,000.
10.3. Indemnification. (a) Subject to Sections 10.1 and 10.2,
from and after the Closing, Seller and Parent agree, jointly
and severally, to indemnify, defend and hold harmless Purchaser
and its Affiliates and their respective directors, officers,
partners, employees, agents and representatives from and
against any and all Indemnifiable Losses to the extent relating
to, resulting from or arising out of:
(i)any breach of representation or warranty of Seller or Parent
under the terms of this Agreement or in any Closing Documents;
(ii)any breach or nonfulfillment of any agreement or covenant of
Seller or Parent under the terms of this Agreement;
(iii)any Excluded Asset;
(iv)any Retained Liabilities; and
(v)the conduct of the Business or any portion thereof or the use or
ownership of any of the Assets on or prior to the Closing Date
except for Assumed Liabilities.
(b) Subject to Sections 10.1 and 10.2, from and after the
Closing, Purchaser agrees to indemnify, defend and hold
harmless Seller and its Affiliates and their respective
directors, officers, partners, employees, agents or
representatives from and against any and all Indemnifiable
Losses to the extent relating to, resulting from or arising out
of:
(i)any breach of representation or warranty of Purchaser under the
terms of this Agreement or in any Closing Document;
(ii)any breach or nonfulfillment of any agreement or covenant of
Purchaser under the terms of this Agreement;
(iii)any Assumed Liabilities; and
(iv)the conduct of the Business or any portion thereof or use or
ownership of any of the Assets after the Closing Date except
for Retained Liabilities.
10.4. Defense of Claims. (a) If any Indemnitee receives
notice of assertion or commencement of any Third Party Claim
against such Indemnitee with respect to which an Indemnifying
Party is obligated to provide indemnification under this
Agreement, the Indemnitee will give such Indemnifying Party
reasonably prompt written notice thereof, but in any event not
later than 30 calendar days after receipt of such notice of
such Third Party Claim. Such notice (the "Third Party Claim
Notice") will describe the Third Party Claim in reasonable
detail, will include copies of all material written evidence
thereof and will indicate the estimated amount, if reasonably
practicable, of the Indemnifiable Loss that has been or may be
sustained by the Indemnitee. The Indemnifying Party shall have
14 days from its receipt of a Third Party Claim Notice (the
"Third Party Claim Notice Period") to notify Indemnitee (i)
whether the Indemnifying Party disputes the Indemnitee's right
of indemnification with respect to such Third Party Claim, and
(ii) if the Indemnifying Party does not dispute such right of
indemnification, whether or not it desires to defend the
Indemnitee against such Third Party Claim.
(b If the Indemnifying Party notifies the Indemnitee within the
Third Party Claim Notice Period that (i) the Indemnifying Party
does not dispute the Indemnitee's right of indemnification and
(ii) the Indemnifying Party desires to defend against such
Third Party Claim, then the Indemnifying Party shall have the
right to assume and control the defense of such Third Party
Claim by appropriate proceedings with counsel reasonably
acceptable to Indemnitee at the Indemnifying Party's sole cost
and expense. The Indemnitee may participate in, but not
control, any such defense or settlement at its sole cost and
expense.
(c) If the Indemnifying Party (i) disputes the Indemnitee's
right of indemnification with respect to a Third Party Claim,
(ii) does not dispute such right of indemnification but fails
to promptly assume and prosecute the defense of such Third
Party Claim, (iii) does not dispute such right of
indemnification but a conflict or potential conflict exists
between the Indemnifying Party and the Indemnitee or (iv) is
not entitled to assume defense of such Third Party Claim under
Section 10.4(b), then the Indemnitee shall be entitled to
assume and control the defense of such Third Party Claim with
counsel reasonably acceptable to the Indemnifying Party. If
the Indemnifying Party does not assume the defense of a Third
Party Claim for any reason, it may still participate in, but
not control, the defense of such Third Party Claim at the
Indemnifying Party's sole cost and expense.
(d) The party responsible for the defense of any Third Party
Claim (the "Responsible Party") shall, to the extent reasonably
requested by the other party, keep such other party informed as
to the status of any Third Party Claim for which such party is
not the Responsible Party, including, without limitation, all
settlement negotiations and offers. With respect to a Third
Party Claim for which the Indemnifying Party is the Responsible
Party, the Indemnitee shall make available to the Indemnifying
Party and its representatives all books and records of the
Indemnitees relating to such Third Party Claim and shall render
to the Indemnifying Party such assistance and access to records
and the representatives of the Indemnitee as the Indemnifying
Party and its representatives may reasonably request, except
that the Indemnitee shall not be required to make available to
the Indemnifying Party and its representatives any books,
records, documents or other information that the Indemnitee
reasonably determines to be confidential or subject to
attorney-client privilege unless and until the Indemnifying
Party shall have entered into such agreements as the Indemnitee
reasonably deems to be necessary in light of all surrounding
circumstances (including, without limitation, the Indemnifying
Party's need for information in connection with the
investigation or defense of a Third Party Claim) to protect
such confidentiality or privilege.
(e) Neither the Indemnifying Party, on the one hand, nor the
Indemnitee, on the other hand, shall enter into any settlement
of any Third Party Claim without the prior written consent of
the other party, which consent shall not be unreasonably
withheld. The Responsible Party shall promptly notify the
other party of each settlement offer (including whether or not
the Responsible Party is willing to accept the proposed
settlement offer) with respect to a Third Party Claim. Such
other party agrees to notify the Responsible Party with
reasonable promptness whether or not such party is willing to
accept the proposed settlement offer. If an Indemnitee fails
to consent to any settlement offer of a Third Party Claim
(whether or not the Indemnitee is the Responsible Party with
respect to such Third Party Claim), the Indemnitee may continue
to contest or defend such Third Party Claim and, in such event,
the maximum liability of the Indemnifying Party with respect to
such Third Party Claim (including the reasonable costs and
expenses of contesting or defending such Third Party Claim
incurred after the Indemnitee fails to consent to such
settlement offer) shall not exceed the full amount of such
settlement offer. If the Indemnifying Party fails to consent
to any settlement offer of a Third Party Claim (whether or not
the Indemnifying Party is the Responsible Party with respect to
such Third Party Claim), the Indemnifying Party may continue to
contest or defend such Third Party Claim and, in such event,
the Indemnifying Party shall be liable to the Indemnitee for
the amount of the Indemnification Loss ultimately recovered
against Indemnitee as a result of such Third Party Claim.
(f) A failure to give timely notice or to include any specified
information in any notice as provided in Sections 10.4(a) or
10.4(b) will not affect the rights or obligations of any party
hereunder except and only to the extent that, as a result of
such failure, any party which was entitled to receive such
notice was deprived of its right to recover any payment under
its applicable insurance coverage or was otherwise damaged as a
result of such failure.
(g) The Indemnifying Party will have a period of 30 calendar
days within which to respond in writing to any claim by an
Indemnitee on account of an Indemnifiable Loss which does not
result from a Third Party Claim (a "Direct Claim"). If the
Indemnifying Party does not so respond within such 30 calendar
day period, the Indemnifying Party will be deemed to have
rejected such claim, in which event the Indemnitee will be free
to pursue such remedies as may be available to the Indemnitee
on the terms and subject to the provisions of this Article X.
(h) Any indemnification payment hereunder shall be treated as an
adjustment to the Purchase Price.
ARTICLE XI. TERMINATION
11.1. Termination. Notwithstanding anything contained in this
Agreement to the contrary, this Agreement may be terminated at
any time prior to the Closing, if the party seeking to
terminate is not then in material default or breach of this
Agreement:
(a) By the mutual written consent of Purchaser and Parent;
(b) By either Purchaser or Parent if the Closing shall not have
occurred on or before June 30, 1996; provided that the right to
terminate this Agreement pursuant to this Section 10.1(b) shall
not be available to any party whose delay or failure to fulfill
any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before
such date;
(c) By either Purchaser or Parent if there shall have been
entered a final, nonappealable order or injunction of any
Governmental Entity restraining or prohibiting the consummation
of the transactions contemplated hereby or any material part
thereof; or
(d) By either Purchaser or Parent if, prior to the Closing Date,
the other party is in material breach of any representation,
warranty, covenant or agreement herein contained and such
breach shall not be cured within fifteen (15) days of the date
of notice of default served by the party claiming such material
default, provided that such terminating party shall not also be
in material breach of this Agreement at the time notice of
termination is delivered.
provided, however, that in no event shall termination of this
Agreement relieve any party of any liability for breaches of
this Agreement prior to the date of termination.
ARTICLE XII. MISCELLANEOUS PROVISIONS
12.1. Specific Performance. The parties recognize that if
Seller refuses to perform under the provisions of this
Agreement, monetary damages alone will not be adequate to
compensate Purchaser for its injury. Purchaser shall therefore
be entitled, in addition to any other remedies that may be
available, to obtain specific performance of the terms of this
Agreement. If any action is brought by Purchaser to enforce
this Agreement, Seller shall waive the defense that there is an
adequate remedy at law.
12.2. Notices. All notices and other communications required
or permitted hereunder will be in writing and, unless otherwise
provided in this Agreement, will be deemed to have been duly
given when delivered in person or when dispatched by electronic
facsimile transfer or one business day after having been
dispatched by a nationally recognized overnight courier service
to the appropriate party at the address specified below:
(a) If to Parent or Seller, to:
CPI Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇▇
with a copy to:
CPI Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
(b) If to Purchaser, to:
▇▇▇▇▇ & Partners, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address or addresses as any such party may
from time to time designate as to itself by like notice.
12.3. Intentionally Omitted.
12.4. Expenses. Except as otherwise expressly provided
herein, Seller will pay any expenses incurred by it incident to
this Agreement and in preparing to consummate and consummating
the transactions provided for herein. Purchaser will pay any
expenses incurred by it incident to this Agreement and in
preparing to consummate and consummating the transactions
provided for herein.
12.5. Successors and Assigns. This Agreement will be binding
upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but will not be
assignable or delegable by any party without the prior written
consent of the other party which shall not be unreasonably
withheld; provided, however, that (a) nothing in this Agreement
is intended to limit Purchaser's ability to sell or to transfer
any or all of the Assets following the Closing Date, (b) upon
notice to Parent and Seller, Purchaser may assign or delegate
any or all of its rights or obligations under this Agreement to
any Affiliate thereof or to any person or entity that acquires
all or substantially all of the assets or voting stock of
Purchaser, and (c) Purchaser may make a collateral assignment
of its rights under this Agreement to any institutional lender
who provides funds to Purchaser for the acquisition of the
Assets; provided, however, that no assignment shall relieve
Purchaser of its obligations hereunder. Parent and Seller
agree to execute acknowledgements of such assignment(s) and
collateral assignments in such forms as Purchaser or
Purchaser's institutional lender(s) may from time to time
reasonably request. In the event of such a proposed assignment
by Purchaser, the provisions of this Agreement shall inure to
the benefit of and be binding upon Purchaser's assigns.
12.6. Waiver. Purchaser, Parent and Seller by written notice
to the other may (a) extend the time for performance of any of
the obligations of the other under this Agreement, (b) waive
any inaccuracies in the representations or warranties of the
other contained in this Agreement or in any document delivered
in connection herewith, (c) waive compliance with any of the
conditions or covenants of the other contained in this
Agreement, or (d) waive or modify performance of any of the
obligations of the other under this Agreement; provided,
however, that no such party may, without the prior written
consent of the other party, make or grant such extension of
time, waiver of inaccuracies or compliance or waiver or
modification of performance with respect to its (or any of its
Affiliates) representations, warranties, conditions or
covenants hereunder. Except as provided in the immediately
preceding sentence, no action taken pursuant to this Agreement
will be deemed to constitute a waiver of compliance with any
representations, warranties, conditions or covenants contained
in this Agreement and will not operate or be construed as a
waiver of any subsequent breach, whether of a similar or
dissimilar nature.
12.7. Entire Agreement. This Agreement (including the
Schedules hereto) supersedes any other agreement, whether
written or oral, that may have been made or entered into by any
party or any of their respective Affiliates (or by any
director, officer or representative thereof) relating to the
matters contemplated hereby. This Agreement (together with the
Exhibits and Schedules hereto) constitutes the entire agreement
by and among the parties hereto and there are no agreements or
commitments by or among such parties or their Affiliates except
as expressly set forth herein.
12.8. Amendments and Supplements. This Agreement may be
amended or supplemented at any time by additional written
agreements signed by the parties hereto.
12.9. Rights of the Parties. Except as provided in Article X
or in Section 12.4, nothing expressed or implied in this
Agreement is intended or will be construed to confer upon or
give any person or entity other than the parties hereto and
their respective Affiliates any rights or remedies under or by
reason of this Agreement or any transaction contemplated
hereby.
12.10. Brokers. Purchaser hereby agrees to indemnify and hold
harmless Seller and Parent, and Seller and Parent hereby agrees
to indemnify and hold harmless Purchaser, against any
liability, claim, loss, damage or expense incurred by Purchaser
or by Seller and Parent, respectively, relating to any fees or
commissions owed to any broker, finder, or financial advisor as
a result of actions taken by Purchaser or by Seller and Parent,
respectively.
12.11. Further Assurances. From time to time, as and when
requested by either party, the other party will execute and
deliver, or cause to be executed and delivered, all such
documents and instruments as may be reasonably necessary to
consummate the transactions contemplated by this Agreement.
12.12. Transfers. Purchaser, Seller and Parent will cooperate
and take such action as may be reasonably requested by the
other in order to effect an orderly transfer of the Assets and
the Business with a minimum of disruption to the operations and
employees of the businesses of Purchaser, Seller and Parent.
12.13. Bulk Sales. Purchaser waives compliance by Seller with
the provisions of the so-called bulk sales Law of any
jurisdiction; provided, however, that Seller will indemnify,
defend and hold harmless Purchaser and its Affiliates in
respect of any Indemnifiable Loss relating to, resulting from
or arising out of Seller's failure so to comply with such Laws
in connection with the transactions contemplated by this
Agreement.
12.14. Governing Law. This Agreement, including without
limitation, the interpretation, construction and validity
hereof, shall be governed by the Laws of the State of Missouri.
12.15. Severability. The parties agree that if one or more
provisions contained in this Agreement shall be deemed or held
to be invalid, illegal or unenforceable in any respect under
any applicable Law, this Agreement shall be construed with the
invalid, illegal or unenforceable provision deleted, and the
validity, legality and enforceability of the remaining
provisions contained herein shall not be affected or impaired
thereby.
12.16. Execution in Counterparts. This Agreement may be
executed in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute
one and the same agreement.
12.17. Titles and Headings. 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.
12.18. Passage of Title and Risk of Loss. Legal title,
equitable title and risk of loss with respect to the Assets
will not pass to Purchaser until such Assets are transferred at
the Closing, which transfer, once it has occurred, will be
deemed effective for tax, accounting and other computational
purposes as of 11:59 P.M. (Central Time) on the Closing Date.
12.19. Certain Interpretive Matters and Definitions.
(a) Unless the context otherwise requires, (i) all references
to Sections, Articles or Schedules are to Sections, Articles or
Schedules of or to this Agreement, (ii) each term defined in
this Agreement has the meaning assigned to it, (iii) each
accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with GAAP, (iv) "or" is
disjunctive but not necessarily exclusive, (v) words in the
singular include the plural and vice versa, (viii) the terms
"Subsidiary" and "Affiliate" have the meanings given to those
terms in Rule 12b-2 of Regulation 12B under the 1934 Act and
(ix) the phrase "to the knowledge of Seller and Parent" (or
similar references to Seller's or Parent's knowledge) shall
mean the knowledge, after due inquiry, of all individuals
listed on Schedule 12.19. All references to "$" or dollar
amounts will be to lawful currency of the United States of
America.
(b) No provision of this Agreement will be interpreted in favor
of, or against, either of the parties hereto by reason of the
extent to which either such party or its counsel participated
in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or
thereof.
12.20. No Recourse. Notwithstanding any of the terms or
provisions of this Agreement, Parent and Seller, on the one
hand, and Purchaser, on the other hand, agree that neither it
nor any person acting on its behalf may assert any claims or
cause of action against any officer or director of Purchaser or
stockholder of Purchaser, on the one hand, or Parent and Seller
or any stockholder of Parent on the other hand, in connection
with or arising out of this Agreement or the transactions
contemplated hereby.
12.21. Schedules and Exhibits. This Agreement provides for
the delivery of a number of schedules and exhibits
(respectively, the "Schedules" and the "Exhibits") identified
by various numbers and letters throughout this Agreement. The
Schedules and Exhibits are to be negotiated by the parties
hereto in good faith. Should the parties hereto fail to reach
an agreement on the Schedules and Exhibits by the close of
business of April 30, 1996, Purchaser may declare this
Agreement to be null and void by written notice to Parent and
Seller without any liability whatsoever.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CONSUMER PROGRAMS INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
CPI CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
TEXAS PORTRAITS, L.P.
BY: CONSUMER PROGRAMS, INCORPORATED,
its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
COPY USA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
EXHIBIT 6.13
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (this "Agreement"),
dated May 3, 1996, is entered into between Consumer Programs
Incorporated, a Missouri corporation ("CPI"), Texas Portraits,
L.P., a Texas limited partnership ("TPLP" and together with
CPI, the "Service Provider"), and Copy USA, Inc., a Delaware
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company desires to retain Service Provider to
provide certain services to the Company, and Service Provider
desires to provide such services to the Company:
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein set forth, the parties
hereto agree as follows:
1. Services. The Company hereby retains the Service
Provider to the Company, through the Service Provider's own
personnel, those services listed on Exhibit A hereto
(individually, a "Service", and together, the "Services"). The
Services may be rendered at the Service Provider's offices or
at such other locations selected by the Service Provider as the
Company and the Service Provider shall from time to time agree.
2. Agreement Term. Termination of Services. (a) The
term of this Agreement shall commence on the date hereof and
shall continue for a period of 60 days following the date
hereof; provided, however, that the Company shall have the
option to extend such 60 day period for an additional 60 days
by giving the Service Provider written notice of its election
to extend not less than 5 days prior to the expiration of the
initial 60 day period (such term, including any extension
thereof, is hereinafter referred to as the "Transition
Period").
(b) Notwithstanding the foregoing paragraph (a), the
Company may, at any time during the Transition Period, cancel
any Service by 10 days written notice to the Service Provider.
Upon expiration of such 10 days, the Services Fee (as
hereinafter defined) shall, without any further action by the
parties hereto, be reduced by the amount of the weekly fees
relating to the terminated Service as set forth on Exhibit A.
3. Payment for Services. In consideration of the
Service Provider providing the Services to the Company during
the Transition Period, the Company will pay the Service
Provider 15 days following receipt of a weekly invoice in
accordance with Exhibit A. The invoice will set forth the
number of weeks that service was provided and the total payment
per week using the applicable rates as set forth on Exhibit A
with respect to each of the Services (the "Services Fee").
4. Indemnification. The Company will, to the fullest
extent permitted by applicable law, indemnify and hold harmless
the Service Provider, its affiliates and associates, and each
of the respective owners, partners, officers, directors,
employees and agents of each of the foregoing, from and against
any loss, liability, damage, claim or expenses (including the
fees and expenses of counsel) arising as a result or in
connection with the provision of the Services by the Service
Provider hereunder or other activities on behalf of the Company
and its subsidiaries, other than acts or omissions of the
Service Provider which constitute gross negligence or willful
misconduct.
5. Defense of Claims. (a) Service Provider agrees
that during the Transition Period and for a reasonable period
thereafter, Service Provider will cooperate with the Company,
at the Company's request and expense, in the defense of any
claims that may be made against the Company or its
subsidiaries, to the extent that such claims may relate to the
Services performed by Service Provider for the Company during
the Transition Period. The Service Provider agrees to promptly
inform the Company if it becomes aware of any lawsuits
involving such claims that may be filed against the Company.
The Company agrees to reimburse Service Provider for all of
Service Provider's reasonable out-of-pocket expenses associated
with such cooperation, including travel expenses. During the
Transition Period, the time devoted to such cooperation shall
be treated as time spent rendering the Services. For periods
following the Transition Period, the Company agrees to provide
reasonable compensation to Service Provider for such
cooperation.
(b) The Company agrees that during the Transition
Period and for a reasonable period thereafter, the Company will
cooperate with the Service Provider, at the Service Provider's
request and expense, in defense of any claims that may be made
against the Service Provider or its subsidiaries, to the extent
that such claims may relate to the Services performed by the
Service Provider for the Company during the Transition Period.
The Company agrees to promptly inform the Service Provider if
it becomes aware of any losses involving such claims that may
be filed against Service Provider agrees to reimburse the
Company for all of the Company's reasonable out-of-pocket
expenses associated with such cooperation, including travel
expenses and to provide reasonable compensation for such
cooperation.
6. Entire Agreement. This Agreement sets forth the
entire understanding of the parties with respect to the Service
Provider's rendering of the Services to the Company. This
Agreement may only be modified, waived or amended expressly by
an instrument in writing signed by the parties hereto.
7. Nonalienation. The Services are hereby deemed
personal in nature and as such the Agreement may not be
assigned by either party except to a parent (or a subsidiary of
such parent) or a subsidiary. Any permitted assignment of this
Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
8. Severability. In the event that any provision of
this Agreement shall be held to be void or unenforceable in
whole or in part, the remaining provisions of this Agreement
and the remaining portion of any provision held void or
unenforceable in part shall continue in full force and effect.
9. Notice. Except as otherwise specifically provided
herein, notice given hereunder shall be deemed sufficient if
delivered personally or sent by registered or certified mail to
the address of the party for whom intended at the principal
executive offices of such party, or at such other address as
such party may hereinafter specify by written notice to the
other party.
10. Waiver of Breach. No waiver by any party of any
breach of any provision of this Agreement shall be deemed a
continuing waiver or a waiver of any preceding or succeeding
breach of such provision or of any other provision herein
contained. The failure of any party hereto to take any action
by reason of such breach will not deprive such party of the
right to take action at any time while such breach continues.
11. Independent Contractor. The Company and Service
Provider acknowledge the relationship created by this Agreement
is that of an independent contractor. Nothing contained herein
shall be construed to create a relationship of employer and
employee between the Company and Service Provider or any of
Service Provider's employees:
a. Service Provider shall have the sole discretion
to determine the manner and means by which its employees shall
perform their duties, the hours of work of any of its employees
and, subject to the nature of the Services required, when and
where such Services are to be performed.
b. Service Provider shall be solely responsible for
all wages, salaries and benefits of its employees, for all
employment and employment-related taxes and for insurance
coverage required for such employees by law (e.g. workers'
compensation insurance, disability insurance, unemployment
insurance, etc.).
c. Neither Service Provider nor any of its employees
will be entitled to any benefits provided by the Company to its
employees (e.g. group insurance, pension, etc.).
d. Service Provider agrees to comply with all
applicable federal, state, county and local laws, ordinances,
regulations and codes in the performance of its duties under
this Agreement, including laws and executive orders relating to
equal employment opportunity and nondiscrimination in
employment.
12. Choice of Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Missouri without regard to the conflict-of-laws rules thereof.
13. Headings. The headings contained herein are for
reference purposes only and the interpretation of this
Agreement shall be unaffected thereby.
14. Survival. Sections 4 through 12 shall survive
the termination of this Agreement.
15. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original and all of which together shall constitute a single
instrument.
[THE REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CONSUMER PROGRAMS INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
TEXAS PORTRAITS, L.P.
BY: CONSUMER PROGRAMS, INCORPORATED,
General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
COPY USA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
Exhibit A
- ---------
Copy USA, Inc.
Transition Services
Summary
Cost per Week
-------------------------------------
Initial Extended
Service 60 days 60 days
Human/Resources/ $1,083 $2,434
Payroll/Deposits
Benefit Costs Actual cost Actual cost
of claims of claims
incurred plus incurred plus
premiums and premiums and
administrative administrative
fees on life, fees on life,
AD&D, stop loss AD&D, stop loss
and disability. and disability.
Benefit administration $200 $200
Financial Services $948 $1,431
Accounts Payable $815 $1,910
Real Estate $100 $188
Accounts Receivable $1,758 $8,322
Treasury $69 $69
Copy USA, Inc.
Transition Services
Overall
* CPI will provide to Copy USA, Inc. (the "Company") the
following via a wire transfer:
* Lockbox receipts of the Company for the week ending two
weeks prior to the submission date. This will be
provided weekly.
* Cash sales receipts net of service fees and returned
checks for the preceding month on the 15th of the
following month.
* Credit card receipts for the week ending two weeks prior
to the submission date. This will be provided weekly.
* On a weekly basis, CPI will provide a detail of the
following:
* Cash disbursements made on behalf of the Company for the
week ending two weeks prior to the submission date.
* Transition services provided by CPI for the preceding
week.
The invoice for transition services will be payable within 15
days of receipt.
Copy USA, Inc.
Transition Services
Benefits
CPI shall provide the following services to Copy USA, Inc. (the
"Company") for the term of this Agreement:
* CPI shall administer the health and welfare benefits
under the CPI Corp. benefit plans to the eligible
employees of the Company for the term of this Agreement.
* The services shall include the following benefit plans:
medical, dental, life, section 125, short term
disability,long term disability.
* In accordance with the Purchase Agreement, CPI will be
responsible for run out claims (incurred prior to the
Closing Date) and will not be billed to the Company.
* Appropriate administrative needs will be covered in the
case an employee becomes permanently disabled.
Cost of service shall include the following:
* Actual amount of premiums and administrative fees paid
by CPI.
* All claims with dates of service during the period from
the Closing Date to the end of the term of this
Agreement, including claims incurred during this period
but not paid.
* An administrative fee equal to $200 per week charged by
CPI to perform service.
* The Company will reimburse CPI for stop loss coverage
which was purchased separately to cover the Company.
Term: 60 days, with a 60 day extension
Termination: At any time by the Company, with a 10 day
written notice.
Copy USA, Inc.
Transition Services
Human Resources/Payroll Services/Deposit
CPI shall provide the following services to Copy USA, Inc. (the
"Company"), for the term of this Agreement:
* CPI shall process and issue checks for Payroll (as
defined below) to all salaried and hourly employees of
the Company on a rate of pay basis consistent with past
practice.
* CPI shall deliver the checks for the Payroll on a basis
consistent with past practice.
* CPI shall file and pay all taxes due in connection with
the total amount of salaries paid, including all
federal, state and local income taxes, social security
and Medicare payments, related employer matching
payments and any other payment required by governmental
authorities. CPI shall file all Payroll tax returns on
behalf of the Company.
* "Payroll" shall mean the total of salaries, taxes,
related matching payments, employer matching payments
under benefit plans and all other amounts paid by CPI
pursuant to this Agreement.
* CPI shall deduct, on a basis consistent with past
practice, amounts from the employees paychecks for all
taxes, welfare plan and garnishments. No other
deductions shall be made.
* At the end of the term of this Agreement, CPI shall
deliver to the Company copies of all records on magnetic
tape media for the 1996 fiscal year.
* Administrative services related to hiring and firing
personnel.
Term: 60 days
Cost of Service: $1,083 per week during initial 60 day term
$2,434 per week during 60 day extension
Termination: At any time by the Company, with a 10 day
written notice
Copy USA, Inc.
Transition Services
Real Estate
CPI shall provide the following services to Copy USA, Inc. (the
"Company"), for the term of this Agreement:
* CPI shall maintain all rental contracts and provide the
necessary support services, consistent with historical
practices.
* CPI shall make all payments for rent and related charges
at stores.
Term: 60 days, with a 60 day extension
Cost of Service $100 per week during initial 60 day term
$188 per week during 60 day extension
Termination: At any time by the Company, with a 10 day
written notice
Copy USA, Inc.
Transition Services
Financial Services
CPI shall provide the following services to Copy USA, Inc. (the
"Company"), for the term of this Agreement:
* CPI shall provide accounting and financial services
requested by the Company to accurately and efficiently
support the operations of the Company.
* CPI shall maintain the necessary financial records in
order to enable CPI to prepare the monthly BVRs and
balance sheets.
* CPI shall reconcile the detail accounts to the financial
reports.
Term: 60 days, with a 60 day extension
Cost of Service: $948 per week during initial 60 day term
$1,431 per week during 60 day extension
Termination: At any time by the Company, with a 10 day
written notice
Copy USA, Inc.
Transition Services
Accounts Payable
CPI shall provide the following services to Copy USA, Inc. (the
"Company"), for the term of this Agreement:
* CPI shall provide all services which are necessary to
process the recording and payment history for services
and materials used by the Company, consistent with
historical practices.
* CPI shall maintain a separate ledger of accounts payable
and cash disbursements of the Company.
Term: 60 days, with a 60 day extension
Cost of Service: $815 per week during initial 60 day term
$1,910 per week during 60 day extension
Termination: At any time by the Company, with a 10 day
written notice
Copy USA, Inc.
Transition Services
Accounts Receivable
CPI shall provide the following services to Copy USA, Inc. (the
"Company"), for the term of this Agreement:
* CPI shall provide the necessary services for credits
and collections which shall include:
* Researching and processing new credit accounts
* Requesting additional data as needed
* Processing of name and address changes, bankruptcy
notices and letters of rejection
* Setup one time charges, including sending customer
letter and application
* CPI shall provide the necessary services for the "POS
Audit Report", which shall include researching and
adjusting out of balance reports, verifying and
processing charges.
* CPI shall provide the necessary services for processing
customer checks into the A/R System, preparing daily
bank deposits and contacting customers as necessary.
* CPI shall provide the necessary services for customer
service and billing, which shall include:
* Pulling invoices to go with statements
* Processing rejected charges from A/R system
* Answering telephones requesting clarification
(signature) or copy of invoices
* Mailing statements and filing invoices/correspondence
Term: 60 days, with a 60 day extension
Cost of Service: $1,758 per week during initial 60 day term
$8,322 per week during 60 day extension
Termination: At any time by the Company, with a 10 day
written notice
Copy USA, Inc.
Transition Services
Treasury
CPI shall provide the following services to Copy USA, Inc. (the
"Company"), for the term of this Agreement:
* CPI shall provide all services in the Treasury
Department to support the company related to banking
services and support.
Term: 60 days, with a 60 day extension
Cost of Service: $69 per week during initial 60 day term
$69 per week during 60 day extension
Termination: At any time by the Company, with a 10 day
written notice
SCHEDULE 1.1.3
CONTRACT RIGHTS
(INCLUDING EQUIPMENT LEASES)
- ---------------------------------------------------------------
EQUIPMENT LEASES
- - Agreement with ▇▇▇▇▇▇ Group, Inc. d/b/a Copying Concepts
Office, dated 3/29/95 for four (4) Minolta CF-80 copiers.
Monthly rent payment of $798.00 each for 36 months lease
term.
- - Agreement with ▇▇▇▇▇▇ Group, Inc. d/b/a Copying Concepts
Leasing Division, dated 5/01/95 for three (3) EFI Fiery 200i.
Monthly rental payment of $1,111.63 each for 12 months lease
term.
- - Agreement with Canon U.S.A. Inc., dated 12/23/94 for twenty-
five (25) CLC 800 copiers. Monthly rental payment of
$1,400.00 each for 60 months lease term.
- - Agreement with Canon U.S.A. Inc., dated 2/09/95 for twenty-two
(22) CLC 800 Film Projectors. Monthly rental payment of
$106.90 each for 59 months lease term.
- - Agreement with Emerald Financial Group, Inc., dated 5/15/95 for
six(6) Mug Presses and six (6) T-shirt Presses. Monthly
rental payment of $979.86 total for 24 months lease term.
- - Agreement with ▇▇▇▇▇▇ Group, Inc. d/b/a Copying Concepts
Leasing Division, dated 12/29/95 for one (1) Canon Color Pass
3000. Monthly rental payment of $916.11 for 24 months lease
term.
- - Agreement with ▇▇▇▇▇▇ Group, Inc. D/b/a Copying Concepts
Leasing Division, dated 1/24/95 for five (5) Encad Novajet
Printers with Five (5) Pisa Photoscript 3000. Monthly rental
payment of $815.24 each for 36 months lease term.
- - Agreement with Datamax Office Systems, dated 7/17/95 for six
(6) Canon 6650 copiers. Monthly rental payment of $.019 per
copy on a month-to-month lease term.
- - Agreement with Datamax Office Systems, dated 9/01/95 for eight
(8) Selex 7260 copiers. Monthly rental payment of $.019 per
copy on a month-to-month lease term.
SCHEDULE 1.1.3
CONTRACT RIGHTS
(INCLUDING EQUIPMENT LEASES)
(continued)
- ---------------------------------------------------------------
EQUIPMENT MAINTENANCE AGREEMENTS
- - Agreement with Midwest Binding Systems, Inc., dated 9/01/95 for
eight (8) Binding Systems. Annual maintenance agreements
totaling $2,400 expiring 8/30/96.
- - Agreement with General Binding Corporation, dated 5/01/95 for
twenty-eight (28) Binding Systems. Annual maintenance
agreements totaling $2,400 expiring 8/30/96.
- - Agreement with General Binding Corporation, dated 10/01/95 for
twelve (12) Binding Systems. Annual maintenance agreements
totaling $4,296.00 expiring 10/01/96.
- - Agreement with ▇▇▇▇▇▇▇ Graphic Equipment, dated 9/02/95 for
eighteen (18) Bidding Systems. Annual maintenance agreements
totaling $5,728.50 expiring 9/02/96.
- - Agreement with Xerox Corporation, dated 1/01/96 for twenty-nine
(29) Xerox 5334 copiers. Annual maintenance agreements include
a monthly use charge plus charge per copy or copy allowance.
- - Agreement with ▇▇▇▇▇▇▇ Kodak Company, dated 9/25/95 for fifteen
(15) Canon CLC 550 copiers. Variable maintenance of $.15 per
copy.
- - Agreement with Canon U.S.A. Inc., dated 9/15/95 for two (2)
Selex 2350 copiers. Monthly fixed maintenance of $181.00 each
with combined usage of 10,000 copies and monthly variable
maintenance $.017 per copy for 10,000 + copies.
- - Agreement with ▇▇▇▇▇▇▇ Kodak Company, dated 7/01/94, National
Account Contract Terms and Conditions and other Schedules as
contained therein.
OFFICE SUPPLY AGREEMENTS
- - Agreement with Champion International Corporation d/b/a
Nationwide Papers, dated 9/01/92.
- - Price quotes with ▇▇▇▇ Paper Company, effective 3/25/96.
- - Price quotes with Unisource, effective 3/12/96.
SCHEDULE 1.1.3
CONTRACT RIGHTS
(INCLUDING EQUIPMENT RIGHTS
(continued)
- -----------------------------------------------------------------
BUILDING REPAIR AND MAINTENANCE AGREEMENTS
- - Agreement with Soderstrum Lighting Services, Inc., dated
3/01/95 for lighting maintenance services at eighteen (18)
CopyMat locations. Monthly contract fees totaling $966.86 for
36 months.
- - Agreement with United Services Company, Inc. d/b/a Air Experts,
dated 2/01/95 for Heating and Air Conditioning Preventative
Maintenance services at four (4) Copy USA locations. Annual
contract fees totaling $1,008.00 expiring 1/31/97.
- - Agreement with Tony's Refrigeration Heating & Air Conditioning,
dated 3/09/94 for Heating and Air Conditioning Maintenance
services at twelve (12) CopyMat locations. Quarterly contract
fees totaling $1,879.50 on month-to-month term.
- - Agreement with Georgia Air Contractors Inc., dated 11/07/94 for
Heating, Air Conditional & Refrigeration Maintenance services
for five (5) Copy USA locations. Quarterly contract fees
totaling $625.00 on month-to-month term.
- - Agreement with ADT Security Systems, for Security Services to
twenty-seven (27) locations. Quarterly monitoring fees
totaling $3,461.48.
- - Agreement with ▇▇▇▇▇▇▇ Protective Services Company for Security
Services to three (3) locations. Monthly monitoring fees
totaling $146.35.
- - Agreement with Coast Alarm, Inc. For Security Services to two
(2) locations. Quarterly monitoring fees totaling $270.00.
SCHEDULE 1.1.3
CONTRACT RIGHTS
(INCLUDING EQUIPMENT RIGHTS
(continued)
- -----------------------------------------------------------------
VEHICLE LEASES/FLEET SERVICES
- - Agreement with GE Capital for Vehicle Leasing and Fleet
Services for the following units:
1. Unit #976 - 93 Ford Aerostar Van
2. Unit #1203 - 93 Ford Aerostar Van
3. Unit #1391 - 94 Ford Escort Wagon
4. Unit #205 - 93 Ford Aerostar Van
5. Unit #781 - 94 Ford Escort Wagon
6. Unit #782 - 94 Ford Escort Wagon
7. Unit #186 - 94 Ford Aerostar Van
8. Unit #197 - 93 Ford Aerostar Van
9. Unit #201 - 93 Ford ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇ #▇▇▇ - ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇. Unit #783 - 94 Ford Escort Wagon
12. ▇▇▇▇ #▇▇▇ - ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇. Unit #937 - 93 Ford Aerostar Van
FLEET SERVICES ONLY, LEASING CONTRACT WITH WHEELS, INC
14. Unit #1748 - 94 Ford Escort Wagon
15. ▇▇▇▇ #▇▇▇▇ - ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇. Unit #6904 - 90 Ford Aerostar Van
AGREEMENT WITH WHEELS, INC. FOR VEHICLE LEASING FOR THE FOLLOWING
VEHICLES
1. Unit #1748 - 94 Ford Escort Wagon
2. Unit #5446 - 90 Ford Aerostar Van
3. Unit #6904 - 90 Ford Aerostar Van
SCHEDULE 1.1.5
TANGIBLE PERSONAL PROPERTY
- -----------------------------------------------------------------
- - Two (2) Compaq Prolinea 4/33s Computers
- - One (1) NCR System 3230 Computer
- - One (1) Supermac
- - One (1) US Robotics Modem
- - Two (2) External Syquest Drives
- - One (1) Hewlett Packard Laser Jet IIP Printer
- - One (1) Hewlett Packard Laser Jet III Printer
- - Three (3) Calculators
- - Four (4) Silicon Wrist Pads
- - Miscellaneous Desk Supplies
SCHEDULE 1.1.7
INTELLECTUAL PROPERTY
TITLE DATE DATE OF
OF REG. FILING CLASSES
1. Copy USA 10/31/89 10/03/88 Int'l Class 35
Reg. No. 1,564,044
2. Copy USA 9/11/90 7/03/89 Int'l Classes
Reg. No. 1,613,202 35, 39, 40 & 42
3. Copy USA 2/07/95 Int'l Class 35
4. Copy USA 6/19/90 11/21/88 Int'l Class 35
(Stylized Letters)
Reg. No. 1,603,230
5. Image Explosion(sm) 12/27/94 Int'l Class 35
6. Image Explosion 1/03/95 Int'l Class 35
and Design
7. Show Your True 2/27/95 Int'l Class 35
Colors(sm)
8. We're here to help 2/27/95 Int'l Class 42
you look great(sm)
9. You've never seen 9/18/90 7/03/89 Int'l Classes
a copy like this 35, 38, 39,
before(sm) 40 & 42
Reg. No. 1,614,157
SCHEDULE 1.1.8
REAL PROPERTY LEASES