EXHIBIT 10.22
STOCK PURCHASE AGREEMENT
BY AND AMONG
BLISS ASSOCIATES, INC. ("Seller"),
THE BLISS ASSOCIATES, INC. 401(k) PROFIT SHARING PLAN,
▇▇▇▇ ▇. ▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
("the Selling Shareholders") and
PRIMIS INC. ("Primis")
TABLE OF CONTENTS
Page
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SECTION 1. SALE AND TRANSFER OF SHARES; CLOSING..................................................................1
1.1. SHARES..........................................................................................1
1.2. PURCHASE PRICE..................................................................................1
1.3. CLOSING.........................................................................................2
1.4. CASH CLOSING CONSIDERATION ADJUSTMENT...........................................................2
SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE SELLING SHAREHOLDERS.................................2
2.1. CORPORATE STANDING..............................................................................2
2.2. AUTHORIZATION; BINDING AGREEMENT................................................................3
2.3. CAPITALIZATION..................................................................................3
2.4. NO CONFLICT.....................................................................................3
2.4. NO CONFLICT.....................................................................................4
2.6. SUBSIDIARIES....................................................................................4
2.7. CONSENTS........................................................................................4
2.8. FINANCIAL STATEMENTS............................................................................4
2.9. INDEBTEDNESS FOR BORROWED MONEY; NO UNDISCLOSED LIABILITIES.....................................5
2.10. ABSENCE OF CHANGES..............................................................................5
2.11. TITLE TO PROPERTY AND ASSETS; LEASES............................................................6
2.12. LEGAL PROCEEDINGS...............................................................................6
2.13. ENVIRONMENTAL MATTERS...........................................................................6
2.14. LICENSES AND PERMITS; COMPLIANCE WITH LAWS......................................................7
2.15. EMPLOYEE BENEFIT PLANS..........................................................................7
2.16. LABOR RELATIONS................................................................................10
2.17. INSURANCE......................................................................................11
2.18. TAX MATTERS....................................................................................11
2.19. RELATED PARTY TRANSACTIONS.....................................................................11
2.20. BROKERS' AND FINDERS' FEES.....................................................................11
2.21. REGISTRATION RIGHTS............................................................................12
2.22. INTELLECTUAL PROPERTY..........................................................................12
2.23. YEAR 2000 COMPLIANCE...........................................................................12
2.24. REQUIRED VOTE OF SELLER STOCKHOLDERS...........................................................12
2.25. MATERIAL FACTS.................................................................................12
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PRIMIS..............................................................12
3.1. ORGANIZATION AND GOOD STANDING.................................................................13
3.2. AUTHORITY......................................................................................13
3.3. CAPITALIZATION.................................................................................13
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3.4. NO CONFLICT....................................................................................14
3.5. SUBSIDIARIES...................................................................................14
3.6. CONSENTS.......................................................................................14
3.7. FINANCIAL STATEMENTS...........................................................................14
3.8. LEGAL PROCEEDINGS..............................................................................15
3.9. BROKERS' AND FINDERS' FEES.....................................................................15
2.10. ABSENCE OF CHANGES.............................................................................15
SECTION 4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION...........................................16
4.1. SURVIVAL.......................................................................................16
4.2. INDEMNIFICATION................................................................................16
4.3 INDEMNIFICATION BY PRIMIS......................................................................17
4.4. LIMITATIONS ON INDEMNIFICATION.................................................................17
4.5. PROCEDURE FOR INDEMNIFICATION; THIRD PARTY CLAIMS..............................................18
4.6. EXCLUSIVE NATURE OF REMEDIES...................................................................18
4.7. RIGHT TO OFFSET................................................................................18
4.8. REMEDIES.......................................................................................18
SECTION 5. CONDUCT OF BUSINESS PENDING CONSUMMATION..............................................................19
5.1. AFFIRMATIVE COVENANTS OF BOTH PARTIES..........................................................19
5.2. NEGATIVE COVENANTS OF SELLER...................................................................20
SECTION 6. ADDITIONAL AGREEMENTS.................................................................................21
6.1. AGREEMENT AS TO EFFORTS TO CONSUMMATE..........................................................21
6.2. INVESTIGATION AND CONFIDENTIALITY..............................................................21
6.3. CERTAIN ACTIONS................................................................................22
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.....................................................22
7.1. CONDITIONS TO OBLIGATIONS OF EACH PARTY........................................................22
7.2. CONDITIONS TO OBLIGATIONS OF PRIMIS............................................................23
7.3. CONDITIONS TO OBLIGATIONS OF SELLER AND THE SELLING SHAREHOLDERS...............................24
SECTION 8. NON-COMPETITION.......................................................................................25
8.1. NON-COMPETITION AGREEMENT......................................................................25
8.2. SPECIFIC PERFORMANCE...........................................................................25
8.3. SEVERABILITY...................................................................................26
8.4. NO LIMITATION OF OTHER PROVISIONS..............................................................26
SECTION 9. GENERAL PROVISIONS....................................................................................26
9.1. TERMINATION....................................................................................26
9.2. DEFINITIONS....................................................................................27
9.3. PUBLIC STATEMENTS..............................................................................28
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9.4. NOTICES........................................................................................28
9.5. PARTIES IN INTEREST; ASSIGNMENT................................................................30
9.6. CONSTRUCTION; GOVERNING LAW....................................................................30
9.7. ENTIRE AGREEMENT; AMENDMENT AND WAIVER.........................................................30
9.8. SEVERABILITY...................................................................................31
9.9. COUNTERPARTS...................................................................................31
9.10. EXPENSES.......................................................................................31
9.11. TIME OF ESSENCE................................................................................31
9.13. DISCLOSURE LETTER..............................................................................31
Exhibits
Section 4.3 Exhibit 1
Section 6.4 Exhibit 2
Section 7.2(f) Exhibit 3
Section 7.2(h) Exhibit 4
Section 7.2(i) Exhibit 5
Section 7.2(j) Exhibit 6
Section 7.3(d) Exhibit 7
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT ("Agreement") is made and
entered into as of January 18, 2000 by and among (i) PRIMIS, INC., a Georgia
corporation ("Primis"), (ii) THE BLISS ASSOCIATES, INC. 401(k) PROFIT SHARING
PLAN (sometimes hereinafter referred to as the "Plan"), ▇▇▇▇ ▇. ▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (collectively
the "Selling Shareholders") and (iii) BLISS ASSOCIATES, INC., a Missouri
corporation ("Seller").
RECITALS
The Selling Shareholders desire to sell, and Primis desires to
purchase, all of the issued and outstanding shares of capital stock of Seller
(the "Shares"), for the consideration and on the terms set forth in this
Agreement.
AGREEMENT
In consideration of the premises and the mutual warranties,
representations, covenants and agreements herein contained and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
SECTION 1. SALE AND TRANSFER OF SHARES; CLOSING
1.1. SHARES. Subject to the terms and conditions of this Agreement, at
the Closing (as defined in Section 1.3), the Selling Shareholders will sell and
transfer the Shares to Primis, and Primis will purchase the Shares from the
Selling Shareholders.
1.2. PURCHASE PRICE. The purchase price for the Shares (the "Purchase
Price") shall be: (i) TWO MILLION ONE HUNDRED THOUSAND DOLLARS ($2,100,000)
payable in immediately available funds at Closing (the "Cash Closing
Consideration"); provided that such Cash Closing Consideration shall be subject
to adjustment as set forth in Section 1.4 below; and (ii) ONE MILLION FIFTY-FIVE
THOUSAND DOLLARS ($1,055,000) payable in cash on the first day after the first
anniversary of the Closing (the "Deferred Consideration"). Each of portions (i)
and (ii) of the Purchase Price shall be distributed as follows:
at Closing Deferred Payment
BLISS ASSOCIATES, INC. 401(K)
PROFIT SHARING PLAN $1,726,070.05 $1,055,000.00
▇▇▇▇ ▇. ▇▇▇ 117,443.85 none
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 117,443.85 none
▇▇▇▇▇▇ ▇. ▇▇▇▇ 117,443.85 none
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 117,443.85 none, and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 117,443.85 none.
1.3. CLOSING. The purchase and sale (the "Closing") provided for in
this Agreement will take place at the offices of ▇▇▇▇▇, Tarrant & ▇▇▇▇▇ in
Louisville, Kentucky, at 10:00 a.m. (local time) on January 18, 2000 or at such
other time and place as the parties may agree. Subject to the provisions of
Section 9.1, failure to consummate the purchase and sale provided for in this
Agreement on the date and time and at the place determined pursuant to this
Section 1.3 will not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
1.4. CASH CLOSING CONSIDERATION ADJUSTMENT.
1.4.(a) The Cash Closing Consideration is based upon Seller
having Closing Shareholders' Equity (as defined in Section 1.4(c)) of $550,000.
The Cash Closing Consideration shall be adjusted as follows: (i) if, as set
forth on the Closing Balance Sheet (as defined in Section 1.4(b)), the Closing
Shareholders' Equity is less than $550,000, the Cash Closing Consideration shall
be decreased on a dollar for dollar basis by the amount that the Closing
Shareholders' Equity is less than $550,000; and (ii) if, as set forth on the
Closing Balance Sheet, the Closing Shareholders' Equity exceeds $550,000, the
Cash Closing Consideration shall be increased on a dollar for dollar basis by
the amount that the Closing Shareholders' Equity is in excess of $550,000 (the
"Cash Closing Consideration Adjustment").
1.4.(b) For purposes of this Section 1.4, "Closing Balance
Sheet" shall mean Seller's unaudited balance sheet as of the date of the Closing
prepared and delivered by Seller to Primis at the Closing. The Closing Balance
Sheet shall be prepared in accordance with GAAP applied on a consistent basis
with Seller's historical financial statements. Seller and its accountants shall
consult with Primis and its accountants in connection with the preparation of
the Closing Balance Sheet. The President of Seller shall deliver to Primis a
certificate to the effect that the Closing Balance Sheet was prepared on the
basis described in this Section 1.4(b).
1.4.(c) For purposes of this Section 1.4, "Closing
Shareholders' Equity" shall mean the shareholder's equity of Seller as reflected
on the Closing Balance Sheet.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER
AND THE SELLING SHAREHOLDERS
Seller and the Selling Shareholders, jointly and severally, represent
and warrant to Primis as follows:
2.1. CORPORATE STANDING. Seller is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Missouri.
Seller has all requisite power and authority to: (i) own, lease and operate its
properties and to carry on its business as now being conducted and as presently
proposed to be conducted; and (ii) to execute, deliver and perform this
Agreement and any other agreement to which Seller is a party, the execution and
delivery of which is contemplated hereby or thereby. Seller is duly qualified
and is authorized to transact business and
is in good standing as foreign corporation in each jurisdiction in which the
failure to so qualify would have a material adverse effect on its business,
properties, prospects or financial condition. Seller has delivered to Primis
true and complete copies of the Articles of Incorporation and Bylaws, and all
amendments thereto, of Seller.
2.2. AUTHORIZATION; BINDING AGREEMENT. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Seller and all necessary action on the part of the Plan. This Agreement has
been duly executed and delivered by Seller and Selling Shareholders and
constitutes the legal, valid and binding obligation of Seller and Selling
Shareholders enforceable against it and them in accordance with its terms except
as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors rights generally or (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).
2.3. CAPITALIZATION. As of the Closing Date, the authorized capital
stock of Seller consists of (i) 30,000 shares of Common Stock, $1.00 par value
per share, of which 2,151 shares are validly issued and outstanding, fully paid
and nonassessable and owned, beneficially and of record, as set forth in Section
2.3 of the Seller Disclosure Letter. Except as set forth in Section 2.3 of the
Seller Disclosure Letter, there are outstanding no subscriptions, options,
warrants, calls, commitments or rights (including conversion or preemptive
rights and rights of first refusal), proxy or stockholder agreements or
agreements of any character relating to shares of Seller's capital stock or any
instruments that can be converted into or exchanged for shares of Seller's
capital stock. None of the shares of Seller's capital stock has been issued in
violation of any preemptive right. All issuances, sales, redemptions, transfers
or purchases of the capital stock of Seller and any involvement in any transfer
of any such stock by Seller have been in compliance with all applicable
agreements and all applicable laws, including federal and state securities laws,
and all taxes thereon, if any, have been paid. Except as set forth in Section
2.3 of the Seller Disclosure Letter, there are no contractual obligations of
Seller to repurchase, redeem or otherwise acquire any shares of capital stock of
Seller. No bonds, debentures, notes or other indebtedness having the right to
vote (or convertible into or exercisable for securities having the right to
vote) on any matters on which shareholders of Seller may vote are issued or
outstanding. Except as set forth in Section 2.3 of the Seller Disclosure Letter,
Seller is not a party or subject to any agreement or understanding, and, to
Seller's knowledge, there is no agreement or understanding between any persons
that affects or relates to the voting or giving of written consents with respect
to any security or the voting by any director of Seller.
2.4. NO CONFLICT. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or 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 the loss of a material
benefit under, or the creation of a Lien, pledge, security interest, charge or
other encumbrance on assets (any such conflict, violation, default, right of
termination, cancellation or acceleration, loss or creation, a "Violation")
pursuant to, any provision of Seller's Articles of Incorporation or Bylaws, or
the
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governing documents of the Plan or result in any Violation of any material
lease, agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Seller, the Selling Shareholders or the properties or Assets of
Seller or the Selling Shareholders.
2.5. CONTRACTS AND OTHER COMMITMENTS; COMPLIANCE. Section 2.5 of the
Seller Disclosure Letter sets forth each material contract, agreement, lease,
loan, commitment and proposed transaction to which Seller is a party or is bound
(the "Contracts"). Seller is not bound by any judgment, order, writ or decree.
No event or condition has occurred or exists, or, to the knowledge of Seller, is
alleged by any of the other parties thereto to have occurred or existed, which
constitutes, or with lapse of time or giving of notice or both might constitute,
a default or breach under any Contract. Seller is not in violation or default of
any provision of its Articles of Incorporation or Bylaws, and Seller is not in
violation or default in any respect of any material provision of any Contract.
2.6. SUBSIDIARIES. Except as set forth in Section 2.6 of the Seller
Disclosure Letter, Seller does not own or control, directly or indirectly, any
interest in any other corporation, partnership, limited liability company,
association or other business entity. Seller is not a participant in any joint
venture, partnership or similar arrangement.
2.7. CONSENTS. No consent, approval, qualification, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, or other third party is required by or
with respect to Seller or Selling Shareholders in connection with the execution
and delivery of this Agreement, or the consummation by Seller and the Selling
Shareholders of the transactions contemplated hereby and thereby, which has not
already been obtained.
2.8. FINANCIAL STATEMENTS. Seller's unaudited balance sheet as of
December 31, 1999, and the related audited consolidated statement of income for
the year then ended ("Year End Financial Statements") and its audited balance
sheet as of September 30, 1999 and the related audited statement of income for
the nine months then ended (the "September Financial Statements"), are attached
to the Seller Disclosure Letter. The Year End Financial Statements and the
September Financial Statements were prepared on a cash basis, consistently
applied, and present fairly the financial condition and results of operations,
changes in stockholders' equity and cash flows for the periods referred to in
such (except for the omission of footnotes and other required schedules and
information). The balance sheets included in such Year End Financial Statements
and such September Financial Statements fairly present the financial condition
of Seller as of their respective dates and the statements of income included in
such Year End Financial Statements and such September Financial Statements
fairly present the results of operations of Seller for the periods then ended.
Except as set forth in Section 2.8 of the Sellers Disclosure Letter, Seller does
not have any liabilities or obligations of any nature, whether absolute,
contingent or otherwise, which are not fully reflected or reserved against in
the Year End Financial Statements and the September Financial Statements, except
for liabilities that may have arisen in the ordinary course of business and that
are
4
not required to be included in the Year End Financial Statements and the
September Financial Statements.
2.9. INDEBTEDNESS FOR BORROWED MONEY; NO UNDISCLOSED LIABILITIES.
Except as set forth in the Year End Financial Statements and the September
Financial Statements, Seller does not have any direct or indirect indebtedness
for borrowed money, indebtedness by way of lease-purchase arrangements,
guarantees, chattel mortgages or other security arrangements with any bank,
financial institution or other third party. Except as and to the extent
reflected and adequately reserved against in the Year End Financial Statements
and the September Financial Statements or incurred in the ordinary course of
business since September 30, 1999, as of the Closing, Seller will not have any
liability or obligation whatsoever, whether absolute, contingent or otherwise of
a nature required to be included in the Year End Financial Statements and the
September Financial Statements.
2.10. ABSENCE OF CHANGES. Except as set forth in Section 2.10 of the
Seller Disclosure Letter, since September 30, 1999, there has not been:
2.10.(a) any change in the assets, liabilities, financial
condition or operating results of Seller from that reflected in the
September Financial Statements, except changes in the ordinary course
of business or otherwise that have not, individually or in the
aggregate, materially and adversely affected the business, properties,
prospects or financial condition of Seller (as such business is
presently conducted and as it is presently proposed to be conducted);
2.10.(b) any damage, destruction or loss, whether or not
covered by insurance, affecting the business, properties, prospects, or
financial condition of Seller (as such business is presently conducted
and as it is presently proposed to be conducted);
2.10.(c) any waiver or compromise by Seller of a material
right or of a material debt owed to it;
2.10.(d) any satisfaction or discharge of any Lien, claim,
or encumbrance or payment of any obligation by Seller, except in the
ordinary course of business and that is not material to the business,
properties, or financial condition of Seller (as such business is
presently conducted and as it is presently proposed to be conducted);
2.10.(e) any material change to a material contract or
arrangement by which Seller or its assets is bound or subject;
2.10.(f) any material change in any compensation
arrangement or agreement with any employee or officer;
2.10.(g) any sale, assignment or transfer of any
intangible assets;
5
2.10.(h) any resignation or termination of employment of
any key officer or employee of Seller (and Seller does not know of any
impending resignation or termination of employment of any such key
officer or key employee);
2.10.(i) any mortgage, pledge, transfer of a security
interest in, or Lien, created by Seller with respect to any of their
properties or assets, except Liens for taxes not yet due or payable;
2.10.(j) any declaration, setting aside or payment of any
dividend or other distribution of Seller's assets in respect of any of
Seller's capital stock, or any direct or indirect redemption, purchase,
or other acquisition of any of such stock by Seller;
2.10.(k) any other event or condition of any character
that might materially and adversely affect the business, properties,
prospects or financial condition of Seller (as such business is
presently conducted and as it is presently proposed to be conducted);
or
2.10.(l) any agreement or commitment by Seller to do any
of the things described in this Section 2.10.
2.11. TITLE TO PROPERTY AND ASSETS; LEASES.
2.11.(a) Section 2.11 of the Seller Disclosure Letter sets
forth a complete and accurate list and description of all the real
property and all the material personal property that Seller owns or
leases. Seller is not bound or committed to make any capital
improvement or expenditure with respect to any owned or leased real or
personal property.
2.11.(b) Except as set forth in Section 2.11 of the Seller
Disclosure Letter, Seller has good, valid and marketable title to all
the real, personal and mixed, tangible and intangible properties and
assets which it purports to own, free and clear of all Liens,
restrictions, claims, charges, security interests, easements or other
encumbrances of any nature whatsoever, except for Liens for current
taxes not yet due and payable. With respect to the property and assets
that it leases, Seller is in compliance with such leases and holds a
valid leasehold interest, free and clear of any Liens, claims and
encumbrances. All properties and Assets of Seller are in the possession
or control of Seller, and no other person is entitled to possession of
any such properties and assets.
2.12. LEGAL PROCEEDINGS. Except as set forth in Section 2.12 of the
Seller Disclosure Letter, there are no claims of any kind or any actions, suits,
proceedings, arbitrations or investigations pending or, to Seller's or Selling
Shareholders' knowledge, threatened against or affecting Seller or Selling
Shareholders against any asset, interest or right of Seller or Selling
Shareholders or which questions the validity of the transactions contemplated by
this Agreement.
2.13. ENVIRONMENTAL MATTERS. Seller is not in violation in any material
respect of any applicable statute, law or regulation relating to the environment
or occupational health and
6
safety (the "Environmental Laws") that would, individually, or, together with
all other such violations in the aggregate, result in a material and adverse
effect on the business and properties or financial condition of Seller and
Seller has no knowledge of any material expenditures necessary to comply with
the Environmental Laws.
2.14. LICENSES AND PERMITS; COMPLIANCE WITH LAWS. Seller holds all
franchises, permits, licenses, variances, exemptions, orders and approvals of
all governmental entities which are material to the operation of Seller's
business and is in compliance with the terms thereof. Seller has complied with,
and is not in any default under (and has not been charged with or received
notice with respect to, nor to Seller's knowledge is threatened with or under
investigation with respect to, any charge concerning any violation of any
provision of) any federal, state or local law, regulation, ordinance, rule or
order (whether executive, judicial, legislative or administrative) or any order,
writ, injunction or decree of any court, agency or instrumentality, and no
action, suit, proceeding, hearing, charge, claim, demand, or notice has been
filed or commenced against Seller alleging any failures to comply.
2.15. EMPLOYEE BENEFIT PLANS.
(a) Section 2.15 of Seller's Disclosure Letter lists each bonus,
pension (as defined in the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding (whether or not legally
binding) providing benefits to any current or former employee, officer or
director of Seller maintained, or contributed to, by Seller (collectively,
"Benefit Plans"), and any employment, consulting, severance, termination or
indemnification agreement, arrangement or understanding between Seller and any
officer, director or employee of Seller. Seller maintains no Benefit Plans other
than those listed in Section 2.15 of Seller's Disclosure Letter.
(b) No Benefit Plan provides medical or hospitalization benefits to
retirees or other former employees, other than medical benefits required to be
provided to qualified beneficiaries under the provisions of Section 4980B(f) of
the Internal Revenue Code (the "Code") and paid for entirely by the individual
electing such coverage.
(c) Each Benefit Plan has been administered in all material respects in
accordance with its terms. Seller and all the Benefit Plans are in compliance in
all material respects with the applicable provisions of ERISA, the Code and all
other applicable laws. There are no investigations by any governmental agency,
termination proceedings or other claims (except claims for benefits payable in
the normal operation of the Benefit Plans), suits or proceedings against or
involving any Benefit Plan or asserting any rights or claims to benefits under
any Benefit Plan that could give rise to any material liability, and, to the
knowledge of any Selling Shareholder and Seller, there are not any facts that
could give rise to any material liability in the event of any such
investigation, claim, suit or proceeding.
7
(d) Each Benefit Plan which is an Employee Benefit Pension Plan as
defined in Section 3(2) of ERISA ("Pension Plan"), has been the subject of
determination letters from the Internal Revenue Service to the effect that such
Pension Plans are qualified and exempt from Federal income taxes under Section
401(a) and 501(a), respectively, of the Code, and no such determination letter
has been revoked nor, to the knowledge of any Selling Shareholder and Seller,
has revocation been threatened, nor has any such Pension Plan been amended since
the date of its most recent determination letter or application therefore in any
respect that would adversely affect its qualification or, materially increase
its costs.
(e) No Pension Plan that Seller or any other company under common
control with Seller (within the meaning of Section 4001(a)(14) of ERISA)
("Affiliate") maintains, or to which Seller or any Affiliate is obligated to
contribute, other than any Pension Plan that is a "multiemployer plan" (as such
term is defined in Section 4001(a)(3) of ERISA) (collectively, the
"Multiemployer Pension Plans"), had, as of the respective last annual valuation
date for each such Pension Plan, an "unfunded benefit liability" (as such term
is defined in Section 4001(a)(18) of ERISA). No Selling Shareholder nor Seller
is aware of any facts or circumstances that would materially change the funded
status of any such Pension Plan. None of the Pension Plans has an "accumulated
funding deficiency" (as such term is defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived. All contributions to, and payments
from, the Pension Plans that may have been required to be made in accordance
with the Benefit Plans and, when applicable, Section 302 of ERISA or Section 412
of the Code, have been timely made, and there has been no application for or
waiver of the minimum funding standards imposed by Section 412 of the Code with
respect to any Pension Plan. All such contributions to, and payments from, the
Benefit Plans, except those payments to be made from a trust qualified under
Section 401(a) of the Code, for any period ending before the Closing Date that
are not yet, but will be, required to be made, will be properly accrued and
reflected in the proper books and records of Seller at the Closing Date. None of
Seller or any officer of Seller or any of the Benefit Plans of Seller which are
subject to ERISA, including the Pension Plans, or any trusts created thereunder,
any administrator or, to the knowledge of any Selling Shareholder and Seller,
any trustee thereof, has engaged in a "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) or any other breach
of fiduciary responsibility under ERISA that could subject Seller or any officer
of Seller to the tax or penalty on prohibited transactions imposed by such
Section 4975 or to any liability under Section 502(i) or (1) of ERISA. Neither
any of such plans nor any of such trusts have been terminated, nor has there
been any "reportable event" (as that term is defined in Section 4043 of ERISA)
with respect thereto during the last five years. Neither Seller, any
administrator or other fiduciary or, to the knowledge of any Selling Shareholder
and Seller, any trustee of any Benefit Plan nor any agent of any of the
foregoing has engaged in any transaction or acted or failed to act in a manner
that could subject Seller to any material liability for breach of fiduciary duty
under ERISA or any other applicable law. Seller (or any other employer that
since September 2, 1974 has ever been treated as a "single employer" under
Section 414(b)(c) or (m) of the Code with Seller or any Subsidiary) has never
been required to contribute to any Multiemployer Pension Plans.
(f) With respect to any Pension Plan subject to Title IV of ERISA
(including for
8
purposes of clause (1) below, any Pension Plan maintained by or contributed to
by Seller or any other company under common control with Seller within the
meaning of Section 414 of the Code and, for purposes of clause (2) below, any
Pension Plan maintained or contributed to by Seller or any other company under
common control with Seller within the meaning of Section 4001(a)(14) of ERISA):
Seller has not incurred any material liability on or prior to the date hereof
(1) to such Pension Plan or (2) to the Pension Benefit Guaranty Corporation
other than for the payment of remiums, all of which have been paid when due.
(g) With respect to any Benefit Plan that is an employee welfare
benefit plan: (1) no such Benefit Plan is unfunded or funded through a welfare
benefits fund, as such term is defined in Section 419(e) of the Code, (2) each
such Benefit Plan that is a group health plan, as such term is defined in
Section 5000(b)(1) of the Code, complies with the applicable requirements of
Section 4980B(f) of the Code and (3) to the knowledge of Shareholder and Seller
each such Benefit Plan (including any such Plan covering retirees or other
former employees) may be amended or terminated without material liability to
Seller on or at any time after the Closing Date.
(h) Each employee bonus or profit sharing plan providing benefits to
any current or former officer, director or employee of Seller is terminable by
Seller without notice at any time.
(i) No liability has been or is expected to be incurred by Seller or
Selling Shareholders (either directly or indirectly, including as a result of an
indemnification obligation) under or pursuant to ERISA or the Code, including,
penalties and excise taxes, that could following the Closing, become or remain a
liability of Seller's business being acquired by Primis or become a liability of
the Primis or of any benefit plans of the Primis and no event, transaction or
condition has occurred or exists that could result in any such liability to the
business, or following the Closing, to the Primis.
(j) The Plan will be terminated by appropriate board resolution adopted
by Seller's board of directors before the Closing Date with the effective date
of plan termination to be before the Closing Date. All contributions to the Plan
shall immediately cease on the effective date of the plan termination as stated
in the board resolution. Each employee bonus or profit sharing plan providing
benefits to any current or former officer, director or employee of Seller is
terminable by Seller without notice at any time.
(k) The individual shareholders who are parties to this Agreement are
the only participants in the Plan who have any portion of their account balance
in the Plan invested in shares of Seller's stock, and such participants have
made the appropriate written direction to the trustees of the Plan to act on
their behalf to sell such shares pursuant to the terms of this Agreement and the
trustees of the Plan are authorized to and have taken such other actions that
may be necessary or appropriate to transfer said shares to Primis pursuant to
the terms of this Agreement. All shares of Seller's stock are held by the
individual shareholders who are parties to this Agreement and the Plan and there
are no other outstanding shares held by any other person or plan.
9
(l) The Bliss Associates, Inc. Employee Stock Ownership Plan and Trust
(the "ESOP") has been properly and legally terminated and plan assets
distributed to participants. No liability (including penalties, interest and
excise taxes) has been or is expected to be incurred by Seller or Selling
Shareholders with respect to the ESOP, that could following the Closing, become
or remain a liability of Seller's business being acquired by Primis or become a
liability of Primis or of any benefit plans of Primis and no event, transaction
or condition has occurred or exists that could result in any such liability to
the business, or following the Closing, to Primis.
(m) The Bliss Associates, Inc. Deferred Compensation Plan, all of the
assets held by the plan, and all obligations and liabilities with respect
thereto, have been legally transferred from Seller to eBliss, LLC, a Missouri
limited liability company, said obligations and liabilities being wholly assumed
by eBliss, LLC, and further releasing Seller and Primis from any obligation or
liability with respect thereto, before the Closing Date. There is not and has
not been a legally established related rabbi trust (i.e., the Bliss Associates,
Inc., Deferred Compensation Trust), associated with the Bliss Associates, Inc.
Deferred Compensation Plan inasmuch as the trust was never funded, no assets
were transferred thereto and trust documents have not been and will not be
executed or delivered by Seller. Neither Seller nor Primis shall have any
liability with respect to the plan or trust effective as of the Closing Date.
2.16. LABOR RELATIONS.
2.16.(a) Seller is in compliance in all material respects
with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours and
occupational safety and health;
2.16.(b) There is no unfair labor practice charge or
complaint or any other matter against or involving Seller pending or,
to Seller's knowledge, threatened before the National Labor Relations
Board, any other agency or any court of law;
2.16.(c) There is no labor strike, dispute, slowdown or
stoppage actually pending or, to Seller's knowledge, threatened against
Seller;
2.16.(d) Seller is not a party to or bound by any
collective bargaining agreement or any similar labor union
arrangement;
2.16.(e) There are no charges, investigations,
administrative proceedings or formal complaints of discrimination
(including discrimination based upon sex, age, marital status, race,
color, religion, national origin, sexual preference, disability,
handicap or veteran status) pending or, to Seller's knowledge,
threatened, before the Equal Employment Opportunity Commission or any
federal, state or local agency or court against Seller. There are no
pending governmental audits of the equal employment opportunity
practices of Seller and, to Seller's best knowledge, no basis for any
such claim exists; and
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2.16.(f) Seller is in compliance in all material respects
with the requirements of the Americans with Disabilities Act.
2.17. INSURANCE. Seller maintains insurance policies, including
property, casualty, liability and other insurance with respect to its assets and
business in amounts customary for similarly situated companies and sufficient in
amount to allow it to replace any of its properties that might be damaged or
destroyed. Seller is not liable for any material retroactive premium adjustments
with respect to any of its insurance policies or bonds. All such policies and
bonds are listed in Section 2.17 of the Seller Disclosure Letter and are legal,
valid and enforceable and in full force and effect and Seller is not in breach
or default (including with respect to the payment of premiums or the giving of
notices) and no event has occurred which, with notice or the lapse of time,
would constitute such a breach . Seller has not received any notice of premium
increases or cancellations with respect to any of such policies and bonds.
Seller believes the amount and type of Seller's insurance coverage is adequate
for Seller's business and is consistent with good business practice.
2.18. TAX MATTERS. Seller has timely filed or caused to be filed all
federal, state, foreign and local income, franchise, gross receipts, payroll,
sales, use, withholding, occupancy, excise, real and personal property,
employment and other tax returns, tax information returns and reports ("Tax
Returns") required to be filed and all such Tax Returns were correct and
complete in all material respects. Seller has paid, or made adequate provisions
for the payment of, all taxes, duties or assessments of any nature whatsoever,
interest payments, penalties and additions (whether or not reflected in the
returns as filed) due and payable (and/or properly accruable for all periods
ending on or before the date of this Agreement) to any city, county, state,
foreign country, the United States or any other taxing authority. There are no
security interests on any of the assets of Seller that arise in connection with
any failure (or alleged failure) to pay any tax. Seller has withheld and paid
all taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other third party.
2.19. RELATED PARTY TRANSACTIONS. Except as set forth in Section 2.19
of the Seller Disclosure Letter, no employee, officer or holder of Seller's
capital stock or member of his immediate family is indebted to Seller, nor is
Seller indebted (or committed to make loans or extend or guarantee credit) to
any of them, other than (i) for payment of salary for services rendered, (ii)
reimbursement for reasonable expenses, or advances with respect to expenses to
be, incurred on behalf of Seller, and (iii) for other standard employee benefits
made generally available to all employees. To the Seller's knowledge, none of
such persons has any direct or indirect ownership interest in any firm or
corporation with which Seller has a business relationship, or any firm or
corporation that competes with Seller, except that employees, stockholders, and
officers of Seller and members of their immediate families may own stock in
publicly traded companies that may compete with Seller.
2.20. BROKERS' AND FINDERS' FEES. Seller has not employed any broker or
finder or incurred any liability for fees or commissions payable to any broker
or finder in connection with the negotiations relating to or the transactions
contemplated by this Agreement.
11
2.21. REGISTRATION RIGHTS. Except as set forth in Section 2.21 of the
Seller Disclosure Letter, Seller is not presently under any obligation and has
not granted any rights to register under the Securities Act any of its
outstanding securities or any of its securities that may be subsequently issued.
2.22. INTELLECTUAL PROPERTY. Section 2.22 of the Seller Disclosure
Letter sets forth a complete and correct list of all intellectual property,
including, without limitation, trademarks, service marks, patents, copyrights
and applications, used in the conduct of the business of Seller other than
commercially available software programs. Seller either owns or has properly
licensed all rights necessary or required to provide and perform the services it
now provides and performs. Seller's provision or operation of such services will
not violate or infringe any intellectual property laws or violate or infringe
any rights of third parties. There is no complaint, action or proceeding before
any court pending or, to Seller's knowledge, threatened against Seller asserting
that Seller's use of any intellectual property infringes the rights of any third
party or otherwise contesting Seller's rights with respect to any intellectual
property, and there is no basis for such assertion or contest. There are no
claims or demands by third parties whether based upon federal or state law,
statute or common laws connected with or arising out of or relating to the
holding or use of the name "▇▇▇▇▇.▇▇▇" prior to the date hereof. To Seller's
knowledge, no third party is infringing on Seller's rights with respect to its
intellectual property.
2.23. YEAR 2000 COMPLIANCE. All devices, systems, machinery,
information technology, computer software and hardware, and other date-sensitive
technology necessary for Seller to carry on its businesses as presently
conducted and as contemplated to be conducted in the future are Year 2000
Compliant or will be Year 2000 Compliant within a period of time calculated to
result in no material disruption of any of Seller's business operations. The
term "Year 2000 Compliant" means each of the aforementioned items are designed
to be used prior to, during and after the year 2000 and will operate during each
such time period without error relating to date data, specifically including any
error to, or the product of, date data which represents or references different
centuries or more than one century, except that software of the Seller as
disclosed on Schedule 2.23 will not account for periods greater than 100 years.
2.24. REQUIRED VOTE OF SELLER STOCKHOLDERS. No vote of the security
holders of Seller is required by law, Seller's Articles of Incorporation or
Bylaws or otherwise in order for Seller to consummate the transactions
contemplated hereby.
2.25. MATERIAL FACTS. This Agreement and the Sellers Disclosure Letter
and certificates furnished by Seller and Selling Shareholders to Primis at the
Closing, do not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements contained herein or therein,
in light of the circumstances in which they are made, not misleading.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PRIMIS
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Except as set forth in the disclosure letter dated the date hereof
delivered to each Selling Shareholder (the "Primis Disclosure Letter"), Primis
represents and warrants to the Selling Shareholders as follows:
3.1. ORGANIZATION AND GOOD STANDING. Primis is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Georgia. Primis has all requisite power and authority to: (i) own, lease and
operate its properties and to carry on its business as now being conducted and
as presently proposed to be conducted; and (ii) to execute, deliver and perform
this Agreement and any other agreement to which Primis is a party, the execution
and delivery of which is contemplated hereby or thereby. Primis is duly
qualified and is authorized to transact business and is in good standing as
foreign corporation in each jurisdiction in which the failure to so qualify
would have a material adverse effect on its business, properties, prospects or
financial condition.
3.2. AUTHORITY. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Primis. This Agreement has been
duly executed and delivered by Primis and constitutes the legal, valid and
binding obligation of Primis enforceable against it in accordance with its terms
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors rights generally or (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).
3.3. CAPITALIZATION. Except as otherwise noted in Section 3.3 of the
Primis Disclosure Letter, immediately prior to the Closing, the authorized
capital stock of Primis consists of 23,000,000 shares comprised of (i)
15,000,000 shares of Common Stock authorized, par value $.01 per share, of which
7,078,671 shares are issued and outstanding, (ii) 1,200,000 shares of Series A
Convertible Preferred Stock authorized, par value $.01 per share, of which
1,091,242 shares are issued and outstanding, (iii) 3,000,000 shares of Series B
Convertible Preferred Stock authorized, of which 725,130 shares are issued and
outstanding, and (iv)2,500,000 shares of Series C Convertible Preferred Stock
authorized, par value $.01 per share, of which no shares are issued and
outstanding. The Company also has reserved for issuance under its Third Amended
and Restated 1997 Employee Stock Option Plan 1,650,000 shares of Common Stock,
par value $.01 per share. All such outstanding shares have been duly authorized
and validly issued and are fully paid and nonassessable. Except as set forth in
Section 3.3 of the Primis Disclosure Letter, there are no contracts relating to
the issuance, sale or transfer of these securities. Except as set forth in
Section 3.3 of the Primis Disclosure Letter, there are outstanding no
subscriptions, options, warrants, calls, commitments or rights (including
conversion or preemptive rights and rights of first refusal), proxy or
stockholder agreements or agreements of any character relating to shares of
Primis's capital stock or any instruments that can be converted into or
exchanged for shares of Primis's capital stock. None of the shares of Primis's
capital stock has been issued in violation of any preemptive right. All
issuances, sales, redemptions, transfers or purchases of the capital stock of
Primis and any involvement in any transfer of any such stock by Primis have been
in compliance with all applicable agreements and all applicable laws, including
federal and state securities laws, and all taxes thereon,
13
if any, have been paid. Except as set forth in Section 3.3 of the Primis
Disclosure Letter, there are no contractual obligations of Primis to repurchase,
redeem or otherwise acquire any shares of capital stock of Primis. No bonds,
debentures, notes or other indebtedness having the right to vote (or convertible
into or exercisable for securities having the right to vote) on any matters on
which shareholders of Primis may vote are issued or outstanding. Except as set
forth in Section 3.3 of the Primis Disclosure Letter, Primis is not a party or
subject to any agreement or understanding, and, to Primis's best knowledge,
there is no agreement or understanding between any persons that affects or
relates to the voting or giving of written consents with respect to any security
or the voting by any director of Primis.
3.4. NO CONFLICT. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby and thereby
will not, conflict with, or result in any violation of, or 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 the loss of a
material benefit under, or the creation of a Lien, pledge, security interest,
charge or other encumbrance on assets (any such conflict, violation, default,
right of termination, cancellation or acceleration, loss or creation, a
"Violation") pursuant to, any provision of Primis's Articles of Incorporation or
Bylaws, or the Articles of Incorporation or bylaws of any Primis Subsidiary, or
result in any Violation of any material lease, agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Primis or any Primis
Subsidiary or Primis's or any Primis Subsidiary's properties or Assets.
3.5. SUBSIDIARIES. Except as set forth in Section 3.5 of the Primis
Disclosure Letter, Primis does not own or control, directly or indirectly, any
interest in any other corporation, partnership, limited liability company,
association or other business entity. Neither Primis nor any Primis Subsidiary
is a participant in any joint venture, partnership or similar arrangement.
3.6. CONSENTS. No consent, approval, qualification, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, or other third party is required by or
with respect to Primis in connection with the execution and delivery of this
Agreement, or the consummation by Primis of the transactions contemplated hereby
and thereby, which has not already been obtained.
3.7. FINANCIAL STATEMENTS. Primis's audited consolidated balance sheet
as of December 31, 1998, and the related audited consolidated statement of
income for the year then ended and its unaudited balance sheet as of September
30, 1999 and the related unaudited statement of income for the nine months then
ended (the "Primis Financial Statements"), are attached to the Primis Disclosure
Letter. The Primis Financial Statements were prepared in accordance with GAAP
(except for the omission of footnotes and other required schedules and
information and year end accruals which are immaterial, in the aggregate, in
amount). The balance sheets included in such Primis Financial Statements fairly
present the financial condition of Primis and its Subsidiaries as of their
respective dates and the statements of income included in such Primis Financial
Statements fairly present the results of operations of Primis and the Primis
Subsidiaries for the periods then
14
ended. None of Primis or any of the Primis Subsidiaries has any liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise,
which are not fully reflected or reserved against in the Primis Financial
Statements, except for liabilities that may have arisen in the ordinary course
of business and that are not required by GAAP to be included in the Primis
Financial Statements.
3.8. LEGAL PROCEEDINGS. Except as set forth in Section 3.8 of the
Primis Disclosure Letter, there are no claims of any kind or any actions, suits,
proceedings, arbitrations or investigations pending or, to Primis's best
knowledge, threatened against or affecting Primis or any Primis Subsidiary
against any asset, interest or right of Primis or any Primis Subsidiary or which
questions the validity of the transactions contemplated by this Agreement.
3.9. BROKERS' AND FINDERS' FEES. Primis has not employed any broker,
finder or financial advisor or incurred any liability for fees or commissions
payable to any broker, finder or financial advisor in connection with the
negotiations relating to or the transactions contemplated by this Agreement.
3.10. ABSENCE OF CHANGES. Except as set forth in Section 3.10 of the
Primis Disclosure Letter, since September 30, 1999, there has not been:
3.10.(a) any change in the assets, liabilities, financial
condition or operating results of Primis from that reflected in the
Primis Financial Statements, except changes in the ordinary course of
business or otherwise that have not, individually or in the aggregate,
materially and adversely affected the business, properties, prospects
or financial condition of Primis (as such business is presently
conducted and as it is presently proposed to be conducted);
3.10.(b) any damage, destruction or loss, whether or not
covered by insurance, affecting the business, properties, prospects, or
financial condition of Primis (as such business is presently conducted
and as it is presently proposed to be conducted);
3.10.(c) any waiver or compromise by Primis of a
material right or of a material debt owed to it;
3.10.(d) any satisfaction or discharge of any Lien, claim,
or encumbrance or payment of any obligation by Primis, except in the
ordinary course of business and that is not material to the business,
properties, or financial condition of Primis (as such business is
presently conducted and as it is presently proposed to be conducted);
3.10.(e) any material change to a material contract or
arrangement by which Primis or its assets is bound or subject;
3.10.(f) any material change in any compensation
arrangement or agreement with any employee or officer;
15
3.10.(g) any sale, assignment or transfer of any
intangible assets;
3.10.(h) any resignation or termination of employment of
any key officer or employee of Primis (and Primis does not know of any
impending resignation or termination of employment of any such key
officer or key employee);
3.10.(i) any mortgage, pledge, transfer of a security
interest in, or Lien, created by Primis with respect to any of their
properties or assets, except Liens for taxes not yet due or payable;
3.10.(j) any declaration, setting aside or payment of any
dividend or other distribution of Primis' assets in respect of any of
Primis' capital stock, or any direct or indirect redemption, purchase,
or other acquisition of any of such stock by Primis;
3.10.(k) any other event or condition of any character
that might materially and adversely affect the business, properties,
prospects or financial condition of Primis (as such business is
presently conducted and as it is presently proposed to be conducted);
or
3.10.(l) any agreement or commitment by Primis to do any
of the things described in this Section 3.10.
SECTION 4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
4.1. SURVIVAL. After the Closing, any claim for indemnification must be
asserted by notice given no later than the end of the Survival Period (as
defined herein). Except as provided in Section 8 of this Agreement, all
representations, warranties, covenants, and obligations in this Agreement and
any other certificate delivered pursuant to this Agreement at the Closing will
survive the Closing until the first anniversary of the Closing; provided,
however, any claims for fraud or intentional breach shall survive indefinitely.
The right to indemnification, payment of damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing, with respect to the accuracy or
inaccuracy of or compliance with any such representation, warranty, covenant, or
obligation. The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
damages, or other remedy based on such representations, warranties, covenants,
and obligations.
4.2. INDEMNIFICATION. Seller, the non-Plan Selling Shareholders, and
the individual accounts in the Plan held by the non-Plan Selling Shareholders as
participants in the Plan (the "Specified Plan Accounts"), jointly and severally,
will indemnify and hold harmless Primis and its stockholders, controlling
persons, and Affiliates (except for Selling Shareholders and the Specified
16
Plan Accounts) (collectively, the "Indemnified Persons") for, and will pay to
the Indemnified Persons the amount of, any loss, liability, claim, damage,
expense (including costs of investigation and defense and reasonable attorneys'
fees) whether or not involving a third-party claim (collectively, "Damages"),
arising, directly or indirectly, from or in connection with: any breach of any
representation or warranty made by Seller and the Selling Shareholders in this
Agreement or any other certificate delivered by Seller and the Selling
Shareholders pursuant to this Agreement at the Closing; and any breach by Seller
or any Selling Shareholder of any covenant or obligation of Seller or such
Selling Shareholder in this Agreement. Notwithstanding the foregoing, under no
circumstances will any participants in the Plan other than the non-Plan Selling
Shareholders (and then, only to the extent provided for in this Article 4) be
liable to Primis nor will any accounts in the Plan associated with such
participants be used in satisfying any such liability to Primis.
4.3. INDEMNIFICATION BY PRIMIS. Primis will indemnify and hold harmless
Seller for any Damages arising, directly or indirectly, from or in connection
with: any breach of any representation or warranty made by Primis in this
Agreement or in any other certificate or document delivered by Primis pursuant
to this Agreement; and any breach by Primis of any covenant or obligation of
Primis in this Agreement or closing certificates.
4.4 LIMITATIONS ON INDEMNIFICATION. No party to this Agreement will nor
will the Specified Plan Accounts have any obligation to indemnify any
Indemnified Person unless and until the aggregate of all Damages exceeds $25,000
("Indemnification Threshold"), in which case the indemnifying party will then be
obligated to indemnify the Indemnified Party for all such Damages in excess of
$25,000.
No person shall be entitled to indemnification under this Article 4 if
and to the extent that such person's claim for indemnification is directly or
indirectly related to a breach by such person of any representation, warranty,
covenant or other agreement set forth in this Agreement.
Notwithstanding any other term of this Agreement, (i) no paying party
shall be liable under this Article 4 for an amount that exceeds the amount of
the Purchase Price defined in SECTION 1.2 of this Agreement and, (ii) if Seller
or any Selling Shareholder is the paying party under this Article 4, the
obligation of Seller or Selling Shareholder to make indemnification payments
shall be limited to the portion of such Purchase Price actually received by such
party in cash , and any difference between such amount and the Purchase Price
shall be obtained by Primis through its exercise of the right of offset under
Section 4.6 of this Agreement. The limitation on indemnification payments
provided in this paragraph shall be in the aggregate for Selling Shareholders
and Seller combined and shall not be construed as separate indemnification
limitations for each of Selling Shareholder or Seller.
17
4.5. PROCEDURE FOR INDEMNIFICATION; THIRD PARTY CLAIMS.
4.5.(a) Promptly after receipt by an indemnified party under
Section 4.2 or 4.3 of notice of the commencement of any proceeding against it,
such indemnified party will, if a claim is to be made against an indemnifying
party under such Section, give written notice to the indemnifying party of the
commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
4.5.(b) If any proceeding is brought against an indemnified
party and it gives written notice to the indemnifying party of the commencement
of such proceeding and reasonable details regarding the controversy subject to
such proceeding, the indemnifying party will, unless the claim involves taxes,
be entitled to participate in such proceeding and, to the extent that it wishes
(unless (i) the indemnifying party is also a party to such proceeding and the
indemnified party determines in good faith that joint representation would be
unethical, or (ii) the indemnifying party fails to provide reasonable assurance
to the indemnified party of its financial capacity to defend such proceeding and
provide indemnification with respect to such proceeding), to assume the defense
of such proceeding with counsel satisfactory to the indemnified party and, after
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such proceeding, the indemnifying party will not, as long
as it diligently conducts such defense, be liable to the indemnified party under
this Section 4 for any fees of other counsel or any other expenses with respect
to the defense of such proceeding, in each case subsequently incurred by the
indemnified party in connection with the defense of such proceeding. If the
indemnifying party assumes the defense of a proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that proceeding are within the scope of and subject to indemnification; and (ii)
no compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent; and (iii) the indemnified party
will have no liability with respect to any compromise or settlement of such
claims effected without its consent. If written notice (including reasonable
details) is given to an indemnifying party of the commencement of any proceeding
and the indemnifying party does not, within thirty (30) days after the
indemnified party's notice is given, give written notice to the indemnified
party of its election to assume the defense of such proceeding, the indemnifying
party will be bound by any determination made in such proceeding or any
compromise or settlement effected by the indemnified party.
4.5.(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
proceeding may adversely affect it or its Affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by written notice to the indemnifying
party, assume the exclusive right to defend, compromise, or settle such
proceeding, but the indemnifying party will not be bound by any determination of
a proceeding so defended or any compromise or settlement effected without its
consent (which may not be unreasonably withheld).
18
4.6. EXCLUSIVE NATURE OF REMEDIES. Except for the remedy of specific
performance and other equitable remedies and except to the extent that any of
the parties shall have engaged in fraud or an intentional breach of this
Agreement, if the transactions contemplated by this Agreement are consummated
the rights and remedies set forth in this Article 4 shall be the exclusive
rights or remedies available to a party with respect to claims against any of
the other parties hereto or any of their respective affiliates, shareholders,
members, officers, directors and employees, and heirs, successors and assigns,
for which indemnification is authorized or provided pursuant to this Article.
4.7 RIGHT TO OFFSET. Primis shall have the right to offset the amount
of any Fully Resolved Claim against any part of the Deferred Consideration that
has not yet been paid to Selling Shareholders. For purposes of this Section 4.7,
a "Fully Resolved Claim" shall be any claim for indemnification by Primis under
Section 4.2 which has been fully resolved pursuant to the terms of Section 4.8
of this Agreement.
4.8 REMEDIES. To the extent feasible, the parties desire to resolve any
controversies arising out of or relating to this Agreement, including any claim
for Damages, rescission, specific performance or other legal or equitable
relief, through discussions and good faith negotiations with each other. In the
event that, after good faith discussions and negotiations, such controversies
cannot be resolved solely among the parties within thirty (30) days after such
discussions have commenced, the parties may, if the controversy is for Damages
or other non-injunctive relief, select a type of non-binding formal or informal
alternative dispute resolution (ADR) method that is appropriate and feasible
under the circumstances such as mini-trial, mediation or the like, and to work
in good faith to resolve the controversy, and if the controversy is for
injunctive relief, the aggrieved party may appeal immediately to a court of
competent jurisdiction. If the parties are unable to resolve a controversy
relating to Damages or other non-injunctive relief amongst themselves, after
working in good faith and having taken advantage of an appropriate ADR method or
methods, such controversy may be settled by appropriate binding arbitration or
litigation and appeals, and any Damages established by reason of such
arbitration or litigation (upon exhaustion of all appellate remedies) shall be
deemed to be finally determined (i.e. "Fully Resolved Claim").
Arbitration of any controversy shall be settled in the City of Atlanta, State of
Georgia, in accordance with the rules then obtaining of the American Arbitration
Association. The determination of the arbitrator when made shall be binding upon
all parties bound by the terms of this Agreement. Judgment upon the award
rendered by the arbitrator may be entered in any court of competent
jurisdiction. The foregoing notwithstanding, Primis shall have the right to seek
injunctive relief from any court of competent jurisdiction in the event of any
breach or threatened breach of Article 8 of this Agreement.
SECTION 5. CONDUCT OF BUSINESS PENDING CONSUMMATION
5.1. AFFIRMATIVE COVENANTS OF BOTH PARTIES. From the date of this
Agreement until the earlier of the Closing or the termination of this Agreement
prior to Closing, unless the prior written consent of the other party shall have
been obtained, and except as otherwise
19
expressly contemplated herein, each party shall operate its business only in the
usual, regular, and ordinary course, preserve intact its business organization
and Assets and maintain its rights and franchises, and use its reasonable
efforts to maintain its current employee relationships.
5.2. NEGATIVE COVENANTS OF SELLER. From the date of this Agreement
until the earlier of the Closing or the termination of this Agreement prior to
Closing, Seller covenants and agrees that it will not do or agree or commit to
do any of the following without the prior written consent of Primis:
5.2.(a) amend the Articles of Incorporation, Bylaws, or
other governing instruments of Seller, or
5.2.(b) incur, guarantee, or otherwise become responsible
for, any additional debt obligation or other obligation for borrowed
money or impose, or suffer the imposition, on any Asset of Seller of
any Lien or permit any such Lien to exist; or
5.2.(c) repurchase, redeem, or otherwise acquire or
exchange, directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of Seller, or declare
or pay any dividend or make any other distribution in respect of
Seller's capital stock; or
5.2.(d) except for this Agreement, issue, sell, pledge,
encumber, authorize the issuance of, enter into any contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional shares of Seller's capital
stock, or any stock appreciation rights, or any option, warrant,
conversion, or other right to acquire any such stock, or any security
convertible into any such stock; or
5.2.(e) adjust, split, combine, or reclassify any of
Seller's capital stock or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Seller's
capital stock, or sell, lease, mortgage, or otherwise dispose of or
otherwise encumber any Asset; or
5.2.(f) purchase any securities or make any material
investment, either by purchase of stock or securities, contributions to
capital, Asset transfers, or purchase of any Assets, in any person; or
5.2.(g) grant any increase in compensation or benefits to
the employees or officers of Seller, except in accordance with the
ordinary course of business consistent with past practice or as
required by Law; pay any severance or termination pay or any bonus
other than pursuant to written policies or written contracts in effect
on the date of this Agreement; enter into or amend any severance
agreements with officers or employees of Seller; grant any material
increase in fees or other increases in compensation or other benefits
to directors of Seller except in accordance with the ordinary course of
business consistent with past
20
practice; or voluntarily accelerate the vesting of any stock options or
other stock-based compensation or employee benefits; or
5.2.(h) enter into or amend any employment contract
between Seller and any person (unless such amendment is required by Law
or a pre-existing contractual obligation) that Seller does not have the
unconditional right to terminate without liability (other than
liability for services already rendered), at any time on or after the
Closing; or
5.2.(i) adopt any new employee benefit plan of Seller or
make any material change in or to any existing employee benefit plans
of Seller other than any such change that is required by Law or that,
in the opinion of counsel, is necessary or advisable to maintain the
tax qualified status of any such plan; or
5.2.(j) except in the ordinary course of business, modify,
amend, or terminate any material contract or waive, release,
compromise, or assign any material rights or claims.
SECTION 6. ADDITIONAL AGREEMENTS
6.1. AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each party agrees to use its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, or advisable under applicable laws to consummate and
make effective, as soon as reasonably practicable after the date of this
Agreement, the transactions contemplated by this Agreement.
6.2. INVESTIGATION AND CONFIDENTIALITY.
6.2.(a) Prior to the Closing, each party shall keep the
other party advised of all material developments relevant to its
business and to consummation of the transactions contemplated by this
Agreement and shall permit the other party to make or cause to be made
such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as
the other party reasonably requests, provided that such investigation
shall be reasonably related to the transactions contemplated hereby and
shall not interfere unnecessarily with normal operations. No
investigation by a party shall affect the representations and
warranties of the other party.
6.2.(b) Each party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior
to the Closing, each party shall promptly return or certify the
destruction of all documents and copies thereof, and all work papers
containing confidential information received from the other party.
21
6.2.(c) Each party agrees to give the other party notice
as soon as practicable after any determination by it of any fact or
occurrence relating to the other party which it has discovered through
the course of its investigation and which represents, or is reasonably
likely to represent, either a material breach of any representation,
warranty, covenant, or agreement of the other party or which has had or
is reasonably likely to have a material adverse effect on the other
party.
6.3. CERTAIN ACTIONS. Except with respect to this Agreement and the
transactions contemplated hereby, neither Seller nor any Affiliate thereof nor
any Representatives thereof retained by Seller shall directly or indirectly
solicit or engage in negotiations concerning any Acquisition Proposal, or
provide any confidential information or assistance to, or have any discussions
with, any person with respect to an Acquisition Proposal prior to the Closing.
6.4. ASSIGNMENT AGREEMENT. Primis and Selling Shareholders agree that
Seller will execute, immediately prior to Closing, an Assignment Agreement,
substantially in the form attached hereto as EXHIBIT 2, to assign Seller's
rights to the Internet domain name "▇▇▇▇▇.▇▇▇" to the Selling Shareholders.
After the Closing, Primis will promptly execute Articles of Amendment to the
Bliss Associates, Inc. Articles of Incorporation to change the corporate name to
a name substantially dissimilar from "Bliss Associates, Inc."
6.5. SELLER'S EMPLOYEES. At Closing, Primis will employ Seller's active
employees, including ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇, at each employee's current
level of compensation, including the assumption by Primis of any accrued
vacation or sick pay at Closing under Seller's Benefit Plans. Nothing in the
preceding sentence shall preclude Primis from treating Seller's active employees
as its own employees at will after Closing, with continued employment at the
sole discretion of Primis.
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
7.1. CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each party to perform this Agreement and to consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both parties pursuant to Section 9.7 of
this Agreement:
7.1.(a) All Consents of, filings and registrations with,
and notifications to, all Regulatory Authorities required for
consummation of the transactions contemplated hereby shall have been
obtained or made and shall be in full force and effect and all waiting
periods required by Law shall have expired.
7.1.(b) Each party shall have obtained any and all
Consents required for consummation of the transactions contemplated
hereby or for the preventing of any default under any Contract or
permit of such party which, if not obtained or made, is reasonably
likely to have, individually or in the aggregate, a material adverse
effect on such party.
22
7.1.(c) No court or governmental or Regulatory Authority
of competent jurisdiction shall have enacted, issued, promulgated,
enforced, or entered any Law or order (whether temporary, preliminary,
or permanent) or taken any other action which prohibits, restricts, or
makes illegal consummation of the transactions contemplated by this
Agreement.
7.2. CONDITIONS TO OBLIGATIONS OF PRIMIS. The obligations of Primis to
perform this Agreement and consummate the transactions contemplated hereby are
subject to the satisfaction of the following conditions, unless waived by Primis
pursuant to Section 9.7 of this Agreement:
7.2.(a) The representations and warranties of Seller and
the Selling Shareholders set forth in this Agreement shall be true and
accurate in all material respects as of the date of this Agreement and
as of the Closing with the same effect as though all such
representations and warranties had been made on and as of the Closing
(provided that representations and warranties which are confined to a
specified date shall speak only as of such date).
7.2.(b) Each and all of the agreements and covenants of
Seller to be performed and complied with pursuant to this Agreement and
the other agreements contemplated hereby prior to the Closing shall
have been duly performed and complied with in all material respects.
7.2.(c) Seller shall have delivered to Primis (i) a
certificate, dated as of the Closing and signed on its behalf by its
duly authorized officers, to the effect that the conditions of its
obligations set forth in Section 7.2(a) and 7.2(b) of this Agreement
have been satisfied and (ii) certified copies of resolutions duly
adopted by Seller's Board of Directors, and Trustees of the Plan,
evidencing the taking of all corporate action necessary to authorize
the execution, delivery, and performance of this Agreement, and the
consummation of the transactions contemplated hereby and thereby, all
in such reasonable detail as Primis and its counsel shall request.
7.2.(d) Since September 30, 1999, there shall not have
been any material adverse change in the Seller's Assets or business,
working capital, liabilities, financial condition, business prospects
or relationships with any suppliers or customers or any material change
or any material commitment or transaction of any nature that would
adversely affect the business of Seller or any agreement in writing to
take any such action.
7.2.(e) There shall not have been any damage or
destruction materially adversely affecting the Seller's Assets or
business;
7.2.(f) Each Selling Shareholder shall have executed a
shareholders' release substantially in the form attached hereto as
EXHIBIT 3.
23
7.2.(g) Primis shall have completed its due diligence
investigation of Seller, which shall be satisfactory to Primis in its
sole discretion.
7.2.(h) Primis shall have received opinions of Seller's
counsel and Plan counsel substantially in the form of EXHIBIT 4
attached hereto.
7.2.(i) Primis shall have received certified copies of
resolutions duly adopted by Seller's Board of Directors for the
termination of Seller's 401(k) plan substantially in the form of
EXHIBIT 5 attached hereto.
7.2.(j) Primis shall have received certified copies of
resolutions duly adopted by Seller's Board of Directors related to
Seller's Deferred Compensation Plan and related rabbi trust, the Bliss
Associates, Inc. Deferred Compensation Trust to provide for a transfer
of the assets held by the plan and trust, and all obligations and
liabilities with respect thereto, from Bliss Associates, Inc. to
eBliss, LLC, a Missouri limited liability company,substantially in the
form of EXHIBIT 6 attached hereto.
7.3. CONDITIONS TO OBLIGATIONS OF SELLER AND THE SELLING SHAREHOLDERS.
The obligations of Seller and the Selling Shareholders to perform this Agreement
and consummate the transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Seller and the
Selling Shareholders pursuant to Section 9.7 of this Agreement:
7.3.(a) The representations and warranties of Primis set
forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing with
the same effect as though all such representations and warranties had
been made on and as of the Closing (provided that representations and
warranties which are confined to a specified date shall speak only as
of such date).
7.3.(b) Each and all of the agreements and covenants of
Primis to be performed and complied with pursuant to this Agreement and
the other agreements contemplated hereby prior to the Closing shall
have been duly performed and complied with in all material respects.
7.3.(c) Primis shall have delivered to Seller (i) a
certificate, dated as of the Closing and signed on its behalf by its
duly authorized officers, to the effect that the conditions of its
obligations set forth in Sections 7.3(a) and 7.3(b) of this Agreement
have been satisfied and (ii) certified copies of resolutions duly
adopted by Primis's Board of Directors evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Seller and its
counsel shall request.
7.3.(d) The Selling Parties shall have received the
opinion of Primis' counsel substantially in the form of EXHIBIT 7
attached hereto.
24
7.3.(e) Since September 30, 1999, there shall not have
been any material adverse change in Primis' Assets or business, working
capital, liabilities, financial condition, business prospects or
relationships with any suppliers or customers or any material change or
any material commitment or transaction of any nature that would
adversely affect the business of Seller or any agreement in writing to
take any such action.
SECTION 8. NON-COMPETITION
8.1. NON-COMPETITION AGREEMENT. Each of the Selling Shareholders agree
that from and after the Closing until five (5) years after the Closing (such
date being referred to herein as the "ENDING DATE" and the period beginning on
the Closing Date and ending on the Ending Date, being referred to herein as the
"NON-COMPETITION PERIOD"), neither Selling Shareholder nor any of their
Affiliates will, directly or indirectly:
8.1.(a) except as an officer or employee of Primis or any
Subsidiary of Primis, engage in, control, advise, manage, serve as a
director, officer or employee of, act as a consultant to, receive any
material economic benefit from (except as a passive investor in
publicly-held companies, holding less than one percent of its
outstanding voting common stock or in mutual funds) or exert any
influence upon, any business which conducts activities anywhere in the
counties within the states of Missouri and Kansas in which Seller or
its employees have performed an appraisal within the past five (5)
years or any county in which Primis employees perform appraisals, or
plan to perform appraisals, during the Non-Competition Period;
8.1.(b) except in connection with any duties as an officer
or employee of Primis or other Subsidiary of Primis, solicit, divert or
attempt to solicit or divert any party who is, was or was solicited to
become, a customer of Primis at any time prior to the Closing;
8.1.(c) employ, solicit for employment or encourage to
leave their employment, any person who was during the one-year period
prior to such employment, solicitation or encouragement or is an
officer or employee of Primis;
8.1.(d) induce or attempt to induce any third party to
cease doing business with Primis; or
8.1.(e) make any statement to any third party, including
the press or media, reasonably likely to result in adverse publicity
for Primis.
8.2. SPECIFIC PERFORMANCE. Each of the Selling Shareholders recognizes
and affirms that in the event of breach by any of them of any of the provisions
of this Section, money damages would be inadequate and Primis would have no
adequate remedy at law. Accordingly, each of the Selling Shareholders agrees
that Primis shall have the right, in addition to any other rights and
25
remedies existing in its favor, to enforce its rights and the Selling
Shareholders' obligations under this Section not only by an action or actions
for damages but also by an action or actions for specific performance,
injunction and/or other equitable relief in order to enforce or prevent any
violations (whether anticipatory, continuing or future of the provisions of this
Section (including the extension of the Non-Competition Period by a period equal
to (i) the length of the violation of this Section 8 plus (ii) the length of any
court proceedings necessary to stop such violation). In the event of a breach or
violation by any of the Selling Shareholders of any of the provisions of this
Section 8, the running of the Non-Competition Period (but not of the
Shareholders' obligations under this Section 8) shall be suspended with respect
to the Selling Shareholders during the continuance of any actual breach or
violation.
8.3. SEVERABILITY. If at any time any of the provisions of this Section
8 shall be determined to be invalid or unenforceable by reason of being vague or
unreasonable as to duration, area, scope of activity or otherwise, then this
Section 8 shall be considered divisible (with the other provisions to remain in
full force and effect) and the invalid or unenforceable provisions shall become
and be deemed to be immediately amended to include only such time, area, scope
of activity and other restrictions, as shall be determined to be reasonable and
enforceable by the court or other body having jurisdiction over the matter, and
the Selling Shareholders expressly agree that this Agreement, as so amended,
shall be valid and binding as though any invalid or unenforceable provision had
not been included herein.
8.4. NO LIMITATION OF OTHER PROVISIONS. The provisions of this Section
8 shall be in addition to, and not in limitation of, any other provisions
contained in any other agreement restricting competition by any Selling
Shareholder.
SECTION 9. GENERAL PROVISIONS
9.1. TERMINATION. Notwithstanding any other provision of this
Agreement, this Agreement may be terminated at any time prior to the Closing:
9.1.(a) By mutual consent of the Board of Directors of
Primis and the Board of Directors of Seller; or
9.1.(b) By the Board of Directors of either party
(provided that the terminating party is not then in breach of any
representation or warranty contained in this Agreement) in the event of
an inaccuracy of any representation or warranty of the other party
contained in this Agreement which cannot be or has not been cured
within 30 days after the giving of written notice to the breaching
party of such inaccuracy; or
9.1.(c) By the Board of Directors of either party
(provided that the terminating party is not then in breach of any
representation or warranty contained in this Agreement) in the event of
a material breach by the other party of any covenant or agreement
contained in this Agreement which cannot be or has not been cured
within 30 days after the giving of written notice to the breaching
party of such breach; or
26
9.1.(d) By the Board of Directors of either party in the
event that the Closing shall not have been consummated by February 29,
2000, if the failure to consummate the transactions contemplated hereby
on or before such date is not caused by any breach of this Agreement by
the party electing to terminate pursuant to this Section.
In the event of the termination and abandonment of this
Agreement, this Agreement shall become void and have no effect, except that the
provisions of this Section 9.1 and Sections 6.2 and 9.10 of this Agreement shall
survive any such termination and abandonment.
9.2. DEFINITIONS. Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition of all
of the stock or Assets of, or other business combination involving such party or
any of its Subsidiaries or the acquisition of a substantial equity interest in,
or a substantial portion of the Assets of, such party or any of its
Subsidiaries.
"AFFILIATE" of a person shall mean any other person directly,
or indirectly through one or more intermediaries, controlling, controlled by or
under common control with such person.
"AGREEMENT" shall mean this Agreement, including the Exhibits
and schedules hereto delivered pursuant hereto and incorporated herein by
reference.
"ASSETS" of a person shall mean all of the assets, properties,
businesses, and rights of such person of every kind, nature, character, and
description, whether real, personal, or mixed, tangible or intangible, accrued
or contingent, or otherwise relating to or utilized in such person's business,
directly or indirectly, in whole or in part, whether or not carried on the books
and records of such person, and whether or not owned in the name of such person
or any Affiliate of such person and wherever located.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any person pursuant to
any contract, Law, order, or permit.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"LAW" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a person or
its Assets, liabilities, or business, including those promulgated, interpreted,
or enforced by any Regulatory Authority.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention,
or other security arrangement, or any adverse right or
27
interest, charge, or claim of any nature whatsoever of, on, or with respect to
any property or property interest, other than Liens for property taxes not yet
due and payable.
"PRIMIS COMMON STOCK" shall mean the $.01 par value common
stock of Primis.
"PRIMIS DISCLOSURE LETTER" shall mean the letter delivered
prior to the execution of this Agreement to Seller describing in reasonable
detail the matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section or subsection of this Agreement
under which such disclosure is being made.
"REGULATORY AUTHORITIES" shall mean, collectively, all federal
and state regulatory agencies having jurisdiction over the parties and their
respective Subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a person.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SELLER DISCLOSURE LETTER" shall mean the letter delivered
prior to the execution of this Agreement to Primis describing in reasonable
detail the matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section or subsection of this Agreement
under which such disclosure is being made.
"SUBSIDIARIES" shall mean all those corporations or other
entities of which the entity in question owns or controls 50% or more of the
outstanding equity securities either directly or through an unbroken chain of
entities as to each of which 50% or more of the outstanding equity securities is
owned directly or indirectly by its parent.
9.3. PUBLIC STATEMENTS. Except as required by law, neither Seller, the
Selling Shareholders nor Primis shall, without the prior written approval of the
other party hereto, make any press release or other public announcement
concerning the transactions contemplated by this Agreement. Primis, Seller and
the Selling Shareholders may disclose information with respect to the
transaction contemplated hereby to their respective employees, agents,
consultants and third parties only to the extent such persons have a need to
know such information or as may be required by law, rule, regulation, decree or
court order.
9.4. NOTICES. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be mailed by first class,
registered, or certified mail, postage prepaid, or sent via overnight courier
service, or delivered personally and sent by facsimile:
28
(a) If to Primis:
Primis, Inc.
Attn.: Chief Legal Officer
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇, Tarrant & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
(b) If to Seller or the Selling Shareholders:
"Seller"
Bliss Associates, Inc.
720 Commerce Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
"Selling Shareholders"
▇▇▇▇ ▇. ▇▇▇, as Shareholder and Plan Participant
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Shareholder and Plan Participant
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇, as Shareholder and Plan Participant
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
29
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Shareholder and Plan Participant
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Shareholder and Plan Participant
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
P. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ White ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
or to such other address of which the addressee shall have notified the sender
in writing. Notices mailed in accordance with this section shall be deemed given
when mailed, and notices sent by overnight courier service shall be deemed given
when placed in the hands of a representative of such service.
9.5. PARTIES IN INTEREST; ASSIGNMENT. Except as otherwise provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of either party to this Agreement shall bind and inure to the benefit of their
respective heirs, executors, successors, and assigns, whether so expressed or
not. Nothing in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto and their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement. This Agreement is not assignable (whether by merger, operation
of law or otherwise) and any purported assignment shall be null and void.
9.6. CONSTRUCTION; GOVERNING LAW. The section headings contained in
this Agreement are inserted as a matter of convenience and shall not affect in
any way the construction of the terms of this Agreement. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of
Missouri, without regard to the principles of conflicts of laws thereof.
9.7. ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement, including
the Seller Disclosure Letter, the Primis Disclosure Letter and Exhibits and
Schedules hereto, along with each of the Employment Agreements with each of the
Selling Shareholders ("Employment Agreement" or collectively "Employment
Agreements"), constitutes and contains the entire agreement between the parties
hereto with respect to the transactions contemplated hereby and supersedes any
prior writing by the parties. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of Seller and Primis (or its permitted assigns). Any amendment
or waiver effected in accordance with this paragraph shall be
30
binding upon each holder of any securities purchased under this Agreement at the
time outstanding (including securities into which such securities have been
converted), each future holder of all such securities, and Seller.
9.8. SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of the
remaining provisions.
9.9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement.
9.10. EXPENSES. Each party shall pay their respective legal and
out-of-pocket expenses incurred in connection with this Agreement and the
transactions contemplated hereby.
9.11. TIME OF ESSENCE. Time is of the essence to the performance of the
obligations set forth in this Agreement.
9.12. DISCLOSURE LETTER.
9.12.(a) The disclosures in the Seller Disclosure Letter and
the Primis Disclosure Letter, and those in any supplement thereto, must relate
only to the representations and warranties in the Section of the Agreement to
which they expressly relate and not to any other representation or warranty in
this Agreement.
9.12.(b) In the event of any inconsistency between the
statements in the body of this Agreement and those in the Seller Disclosure
Letter or the Primis Disclosure Letter (other than an exception expressly set
forth as such in the Seller Disclosure Letter or the Primis Disclosure Letter
with respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
[ REMAINDER OF PAGE INTENTIONALLY LEFT BLANK ]
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IN WITNESS WHEREOF, Seller, the Selling Shareholders and
Primis have caused this Agreement to be executed as of the day and year first
written above.
"Seller"
BLISS ASSOCIATES, INC.
By: __________________________________________
Name: __________________________________________
Title: __________________________________________
"Selling Shareholders"
_________________________________________________
▇▇▇▇ ▇. ▇▇▇, as Shareholder and Plan Participant
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
_________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Shareholder and Plan Participant
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
_________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇, as Shareholder and Plan Participant
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
_________________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Shareholder and Plan Participant
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
_________________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Shareholder and Plan Participant
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Signature Page to Stock Purchase Agreement
32
BLISS ASSOCIATES, INC. 401(K) PROFIT SHARING PLAN
_______________________________________________
▇▇▇▇ ▇. ▇▇▇, as Trustee
_______________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee
_______________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇, as Trustee
_______________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee
_______________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Trustee
"Primis"
PRIMIS, INC.
By: ________________________________________
Name: ________________________________________
Title: ________________________________________
Signature Page to Stock Purchase Agreement
33