ASSET PURCHASE AGREEMENT
Agreement made as of the 25th day of March, 1998 by and among
Unidigital Inc., a Delaware corporation with its principal office at ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Unidigital"), its wholly-owned
subsidiary, Unison (NY), Inc., a Delaware corporation with its principal office
at c/o Unidigital Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Buyer"), Kwik International Color, Ltd., a New York corporation with its
principal office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the
"Seller") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the sole shareholder of the Seller (the
"Shareholder"). The Seller and the Shareholder are sometimes collectively
referred to herein as the "Selling Parties."
Preliminary Statement
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The Seller is engaged principally in the business of general printing,
color separation services and large format printing services (the "Business").
The Buyer desires to purchase, and the Seller desires to sell, all of the assets
and the Business of the Seller (except for the Excluded Assets (as defined
below)), for the consideration set forth below and the assumption of certain of
the Seller's liabilities set forth below, subject to the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. Sale and Delivery of the Assets
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1.1 Delivery of the Assets.
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(a) Subject to and upon the terms and conditions of this
Agreement, except as specifically provided in Section 1.1(b) hereof, at the
closing of the transactions contemplated by this Agreement (the "Closing"), the
Seller shall sell, transfer, convey, assign and deliver to the Buyer, and the
Buyer shall purchase from the Seller, free and clear of all liens, liabilities,
security interests, leasehold interests and encumbrances of any nature
whatsoever (except as otherwise expressly provided herein), all of the
properties, assets and other claims, rights and interests of the Seller or which
are used in the Business of whatever kind, character or description, whether
real, personal or mixed, tangible or intangible, wherever situated, including
without limitation:
(i) all inventories of raw materials, work in process, goods
in transit (i.e., inventories purchased by, but not delivered to, the Seller),
finished goods, office supplies, maintenance supplies, packaging materials,
spare parts and similar items (collectively, the "Inventory");
(ii) all accounts receivable and notes receivable (including
any security held by the Seller for the payment thereof) (collectively, the
"Accounts Receivable");
(iii)those prepaid expenses set forth in Schedule
1.1(a)(iii);
(iv) all rights under the contracts, agreements, leases,
licenses, purchase orders, customer sales agreements and other instruments set
forth on Schedule 2.9(b) and Schedule 2.13(b) attached hereto (collectively, the
"Contract Rights");
(v) except as set forth in Section 1.1(b)(iv), all books;
payment records; accounts; customer lists; environmental reports or studies;
correspondence; production records; technical, accounting, manufacturing and
procedural manuals; engineering data; development and design data; plans,
blueprints, specifications and drawings; employment and personnel records; and
other useful business records, including electronic media, and any confidential
or other information which has been reduced to writing, utilized in the conduct
of or relating to the Business or the Assets (as hereinafter defined), subject
to the Seller's right to retain copies thereof which the Seller reasonably
requires for its ongoing operation, winding-up or dissolution;
(vi) all rights of the Seller under express or implied
warranties from the suppliers of the Assets to the extent transferable (but
excluding such rights insofar as the same pertain to liabilities retained by the
Seller hereunder);
(vii)the motor vehicles and other rolling stock listed on
Schedule 1.1(a)(vii);
(viii)all of the machinery, equipment, tools, dies, tooling,
production fixtures, maintenance machinery and equipment, computers,
telecommunication systems, fittings and other office equipment, furniture,
leasehold improvements and construction in progress on the date hereof whether
or not reflected as capital assets in the accounting records of the Seller which
are owned by the Seller and used or useful in the Business including but not
limited to all of the foregoing located at the locations set forth on Schedule
1.1(a)(viii) (collectively, the "Fixed Assets");
(ix) all right, title and interest of the Seller in and to
all intangible property rights relating to the Business, including but not
limited to inventions, discoveries, trade secrets, processes, formulas,
know-how, United States and foreign patents, patent applications, trade names,
including but not limited to the name "Kwik International Color, Ltd.", or any
derivation thereof and those names listed on Schedule 2.20 attached hereto,
trademarks, trademark registrations, applications for trademark registrations,
copyrights, copyright registrations, certification marks, industrial designs,
technical expertise, research data and other similar property and the
registrations and applications for registration thereof owned by the Seller or,
where not owned, used by the Seller in the Business and all goodwill associated
thereto and all licenses and other agreements to which the Seller is a party (as
licensor or licensee) or by which the Seller is bound relating to any of the
foregoing kinds of property or rights to any "know-how" or disclosure or use of
ideas (collectively, the "Intangible Property");
(x) all transferable approvals, authorizations,
certifications, consents, variances, permissions, licenses and permits to or
from, or filings, notices or recordings to or
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with, federal, state, foreign, and local governmental authorities as held or
effected by the Seller in connection with the Assets;
(xi) all of the Seller's goodwill and the exclusive right to
use the names of the Seller as all or part of a corporate name;
(xii)except as specifically provided in Section 1.1(b)
hereof, all other assets, properties, claims, rights and interests of the Seller
which relate to the Business and exist on the date hereof, of every kind and
nature and description, whether tangible or intangible, real, personal or mixed;
and
(xiii)cash or cash equivalents ("Cash").
(b) Notwithstanding the provisions of Section 1.1(a) above, the
assets to be transferred to the Buyer under this Agreement shall not include (i)
any of Seller's rights or consideration under this Agreement, or (ii) any
refunds of federal, state, foreign or local income or other tax paid by the
Seller, or (iii) any insurance policies currently held by the Seller and related
premium agreements for general liability, product liability and workers
compensation insurance for periods prior to the date hereof, or (iv) the
financial books and records of the Seller (it being understood that the Seller
shall make such financial books and records available at the reasonable request
of the Buyer), or (v) those assets listed on Schedule 1.1(b) attached hereto
(collectively, the "Excluded Assets").
(c) The Inventory, Accounts Receivable, Contract Rights, Fixed
Assets, Intangible Property, Cash and other properties, assets and business of
the Seller described in Section 1.1(a) above, other than the Excluded Assets,
shall be referred to collectively as the "Assets."
1.2 Further Assurances.
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(a) At the Closing, the Seller shall execute and deliver a ▇▇▇▇
of Sale (the "▇▇▇▇ of Sale") substantially in the form attached hereto as
Exhibit A, and the assignments described in Sections 7.14(b) and (c) hereof. At
any time and from time to time after the Closing, at the Buyer's request and
without further consideration, the Selling Parties (or their successors)
promptly shall execute and deliver such assignments of leases and other
instruments of sale, transfer, conveyance, assignment and confirmation, and take
such other action, as the Buyer may reasonably request to more effectively
transfer, convey and assign to the Buyer, and to confirm the Buyer's title to,
all of the Assets and the Business, to put the Buyer in actual possession and
operating control thereof, to assist Buyer in exercising all rights with respect
thereto and to carry out the purpose and intent of this Agreement.
(b) The Selling Parties and the Buyer each will use its best
efforts to obtain as promptly as possible written consents to the transfer,
assignment or sublicense to the Buyer of all
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agreements, commitments, purchase orders, contracts, licenses, leases, rights
and other contract documents being transferred pursuant to Section 1.1(a) hereof
where the approval or other consent of any other person is required. If any such
approval or consent cannot be obtained, or if the parties hereafter agree in
writing that it is not in their respective best interests to obtain any such
approval or other consent, the Selling Parties will cooperate with the Buyer in
any reasonable arrangement designed to provide the Buyer with substantially the
same economic benefits as if such approval or other consent had been obtained
and the transfer effected on or before the date hereof.
1.3 Assumption of Liabilities.
-------------------------
(a) At the Closing, the Buyer shall execute and deliver an
Instrument of Assumption of Liabilities (the "Assumption Agreement")
substantially in the form attached hereto as Exhibit B, pursuant to which it
shall assume and agree to (i) perform, pay and discharge, in accordance with
their respective terms, all those liabilities and obligations set forth on
Schedule 1.3(a) attached hereto which were incurred in the ordinary course of
business of the Business and are outstanding on the date hereof (the obligations
set forth in (i) are collectively, the "Assumed Current Liabilities"); (ii)
perform in accordance with their terms those obligations outstanding on the date
hereof under the Contract Rights; and (iii) perform in accordance with their
terms those liabilities arising after the date hereof from any agreement,
contract, commitment or other contract documents which the Buyer has requested
be transferred to it pursuant to Section 1.1(a) but which has not been so
transferred due to the failure of the Seller to obtain the consent or approval
required for such transfer, provided that the Buyer has received substantially
the same economic benefit of such contract as if such consent or approval had
been obtained (the obligations set forth in (i), (ii) and (iii) are,
collectively, the "Assumed Liabilities").
(b) Except as otherwise provided herein, the Buyer shall not
assume any of the liabilities of the Selling Parties and shall purchase the
Assets free and clear of all liens, mortgages, security interests, encumbrances
and claims and the Selling Parties each represent, warrant and agree that the
Buyer shall not be or become liable for any claims, demands, liabilities or
obligations not expressly assumed in this Agreement of any kind whatsoever
arising out of or relating to the conduct of the Business by Seller or the
Assets or Assumed Liabilities prior to the date hereof. Without limiting the
foregoing, the Buyer shall not at the Closing assume or agree to perform, pay or
discharge, and the Selling Parties shall remain unconditionally liable for, all
obligations, liabilities and commitments, fixed or contingent, of the Selling
Parties other than the Assumed Liabilities, including but not limited to:
(i) severance, termination or other payments or benefits
(including but not limited to post-retirement benefits) including but not
limited to those owing under the Seller's severance policy or any employment
agreement to any employees (union or non-union), sales agents or independent
contractors employed by the Seller prior to the Closing (collectively, "Seller's
Employees"), liabilities arising under any federal, state, local or foreign
"plant closing law", liabilities accruing under the Seller's employee benefit
plans, vacation pay plans or
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programs, retirement plans, and liabilities for any Employee Plan (as defined in
Section 2.21 except those liabilities to Seller's Employees who become employees
of the Buyer after the Closing relating solely to and arising solely out of
their term of employment with the Buyer);
(ii) worker's compensation claims arising from events prior
to the Closing;
(iii)stock option or other stock-based awards made to
Seller's Employees;
(iv) liabilities for any federal, state, local or foreign
income taxes (including interest, penalties and additions to such taxes) or any
deferred income taxes of the Selling Parties;
(v) liabilities for any payroll taxes (including interest,
penalties and additions to such taxes), except those liabilities to Seller's
Employees who become employees of the Buyer after the Closing relating solely to
and arising solely out of their term of employment with the Buyer;
(vi) liabilities incurred for violations of occupational
safety, wage, health, welfare, employee benefit or environmental laws or
regulations prior to the date hereof;
(vii)liabilities to the extent related solely to the
Excluded Assets;
(viii)except as provided in Section 11 hereof, any tax
(including but not limited to any federal, state, local or foreign income,
franchise, single business, value added, excise, customs, intangible, sales,
transfer, recording, documentary or other tax) imposed upon, or incurred by, the
Selling Parties, if any, in connection with or related to this Agreement or the
transactions contemplated hereby (including interest, penalties and additions to
such taxes);
(ix) liabilities for any commercial rent taxes to the extent
accrued but not paid prior to the date hereof;
(x) other than the Assumed Liabilities, any liabilities of
the Seller to third parties arising out of the failure of the Seller to obtain
any necessary consents to the assignment to the Buyer of contracts or leases to
which the Seller is a party (including damages asserted by third parties for
breach of such contracts or leases due to the failure to obtain such consents);
(xi) liabilities, contingent or otherwise, which are not
disclosed on Schedule 1.3(a);
(xii)liabilities for borrowed money or liabilities, other
than the Assumed Liabilities, to creditors of the Selling Parties;
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(xiii)liabilities of the Seller for any state franchise taxes
or annual license or other fees relating to qualification as a foreign
corporation or authorization to do business in such states (including interest,
penalties and additions to such taxes and fees); and
(xiv)any other liabilities of any kind or nature whether now
in existence or arising hereafter not expressly assumed by the Buyer under
Section 1.3(a) hereof.
1.4 Purchase Price.
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(a) In consideration of the transfer of the Business and Assets
of the Seller to the Buyer hereunder, the Buyer will assume the Assumed
Liabilities and will pay an aggregate purchase price (the "Purchase Price"),
subject to the provisions of Sections 1.4(b) and (c), Section 1.5 and Section
1.7, equal to (i) $18,000,000 in cash payable to the Seller (such aggregate
amount of consideration to be paid in cash in accordance with the provisions of
this Section 1.4(a)(i) hereof being referred to herein as the "Cash
Consideration"), (ii) $750,000 payable to the Seller, such amount to be paid by
the issuance of a 5.7% subordinated promissory note (the "Note") in the form
attached hereto as Exhibit C, and (iii) $6,000,000 payable to the Shareholder,
such amount to be paid by the issuance of such number of shares of restricted
Unidigital common stock (the "Unidigital Stock"), which when multiplied by the
average closing prices of Unidigital's common stock for the twenty (20) trading
days immediately prior to the ten (10) trading days immediately prior to the
Closing (the "Stock Price"), shall have a market value of $6,000,000; provided,
however, that in no event shall the Stock Price be (A) less than $4.00 per
share, or (B) greater than $10.00 per share and provided, further, however, that
Unidigital, in its sole discretion, shall have the right to limit the number of
shares of Unidigital Stock delivered pursuant to this Section 1.4 to such number
of shares of Unidigital Stock equal to twenty percent (20%) of the then
outstanding number of shares of common stock of Unidigital minus one share (such
aggregate amount of consideration paid in stock in accordance with the
provisions of this Section 1.4(a)(iii) hereof being referred to herein as the
"Stock Consideration").
(b) In the event that the value of the Stock Consideration paid
to the Shareholder is less than $6,000,000 (determined by multiplying the Stock
Price by the number of shares of Unidigital Stock actually delivered by
Unidigital pursuant to Section 1.4(a)(iii) hereof), the Buyer shall pay
additional cash consideration (the "Additional Cash Consideration") to the
Shareholder, such that the sum of the value of the Stock Consideration and the
Additional Cash Consideration is equal to $6,000,000.
(c) As promptly as possible following the Closing, but in no
event later than sixty (60) days following the Closing, the Buyer and the Seller
shall cooperate in the preparation of Schedule 1.4(c) setting forth Minimum Net
Asset Value (as defined below) as of the date hereof. In the event that such
Minimum Net Asset Value is less than $3,500,000, the Purchase Price payable to
the Selling Parties shall be reduced by the amount of such deficiency. Such
deficiency shall be paid to the Buyer pursuant to the terms of the Escrow
Agreement (as defined below) to the extent available.
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(d) In the event the Seller disputes Schedule 1.4(c), the Seller
shall notify the Buyer in writing within twenty (20) calendar days after
delivery of Schedule 1.4(c) setting forth the amount, nature and basis of the
dispute.
Within the following thirty (30) days, the parties shall use
their best efforts to resolve such dispute. Upon their failure to do so, the
dispute shall be submitted for arbitration as follows:
(i) The arbitrator shall be a public accounting firm located
in the City of New York, State of New York. In the event the selected arbitrator
declines or is unable to serve for any reason, the parties shall select another
arbitrator. Upon their failure to agree on another arbitrator, the Commercial
Arbitration Rules of the American Arbitration Association shall be invoked to
make such selection.
(ii) The arbitrator shall follow the Commercial Arbitration
Rules of the American Arbitration Association, except as otherwise provided
herein. The arbitrator shall substantially comply with the rules of evidence;
shall grant essential but limited discovery; shall provide for the exchange of
witness lists and exhibit copies; shall conduct a pretrial and consider
dispositive motions. Each party shall have the right to request the arbitrator
to make findings of specific factual issues.
The arbitrator shall complete its proceedings and render its
decision within forty (40) days after submission of the dispute to it, unless
both parties agree to an extension. Each party shall cooperate with the
arbitrator to comply with procedural time requirements and the failure of either
to do so shall entitle the arbitrator to extend the arbitration proceedings
accordingly and to impose sanctions on the party responsible for the delay,
payable to the other party.
In the event the arbitrator does not fulfill its responsibilities
on a timely basis, either party shall have the right to require a replacement
and the appointment of a new arbitrator.
(iii)The decision of the arbitrator shall be final and
binding upon the parties and accordingly a judgment by a court of competent
jurisdiction may be entered in accordance therewith.
(e) For purposes of this Agreement, "Minimum Net Asset Value"
shall mean the aggregate value of the Assets acquired hereunder less (i) the
Assumed Current Liabilities and (ii) the capital lease obligations (net of
current portion included in Assumed Current Liabilities) assumed hereunder.
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1.5 The Closing.
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(a) The Closing shall take place at the offices of ▇▇▇▇▇▇
Davidoff ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Kass, counsel to the Seller, on the date hereof. The
transfer of the Assets by the Seller to the Buyer shall be deemed to occur on
the date hereof.
(b) Subject to Section 1.5(c) and Section 1.7, at the Closing,
the Buyer shall pay the Purchase Price in the following manner:
(i) by the assumption of the Assumed Liabilities;
(ii) payment of the Cash Consideration;
(iii) delivery of the Note;
(iv) payment of the Additional Cash Consideration, if any;
and
(v) delivery of the Stock Consideration.
(c) At the Closing, the Buyer shall deliver a portion of the Cash
Consideration equal to $1,000,000 and such number of shares of Unidigital Stock
which have a market value of $1,000,000 (determined in accordance with the
provisions set forth in Section 1.4(a)) (collectively, the "Escrow Amount") to a
third-party escrow agent, reasonably acceptable to the Seller and the Buyer (the
"Escrow Agent"), pursuant to an Escrow Agreement (the "Escrow Agreement")
substantially in the form attached hereto as Exhibit D. The disbursement of the
Escrow Amount held by the Escrow Agent shall be done in accordance with the
terms of the Escrow Agreement.
(d) Subject to Section 1.7, the Cash Consideration shall be paid
to the Seller by wire transfer to an account to be specified by the Seller.
1.6 Allocation of Purchase Price. The aggregate amount of the Purchase
Price shall, for tax purposes only, be allocated among the Assets and Assumed
Liabilities substantially in accordance with the amounts set forth on Schedule
1.6. The Seller and the Buyer agree that they will not take any position which
is materially inconsistent with the allocations provided for in this Agreement
in preparing income, capital or franchise tax returns.
1.7 Use of Proceeds. At the Closing, the Buyer shall direct that a
portion of the Cash Consideration be paid as set forth on Schedule 1.7 attached
hereto.
2. Representations of the Selling Parties
--------------------------------------
The representations and warranties made by the Selling Parties
herein or in any instrument or document furnished in connection herewith shall
survive the Closing until (and including) the second anniversary of the date
hereof, except for any representations or warranties
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relating to any tax matters which shall survive through the appropriate statute
of limitations. The representations and warranties in this Section 2 or in any
document delivered to the Buyer pursuant to this Agreement are deemed to be
material and the Buyer is entering into this Agreement relying on such
representations and warranties. The Selling Parties, jointly and severally,
represent and warrant to the Buyer as follows (it being understood that all
references in this Section 2 to the Seller shall be deemed to include any of
Seller's subsidiaries, unless the context otherwise requires):
2.1 Organization. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and has all requisite power and authority (corporate and other) to own its
properties, to carry on its business as now being conducted, to execute and
deliver this Agreement and the agreements contemplated herein, and to consummate
the transactions contemplated hereby. Schedule 2.1 sets forth the authorized and
outstanding capital stock of the Seller as well as the record and beneficial
owners thereof. Except as set forth on Schedule 2.1, the Seller does not own or
control, directly or indirectly, any corporation, partnership, association or
business entity. The Seller is duly qualified to do business and in good
standing in all jurisdictions in which its ownership of property or the
character of its business requires such qualification. Schedule 2.1 contains a
true, correct and complete list of all of the jurisdictions in which the
ownership of the property used in the Business or the nature of the Business
requires qualification.
2.2 Authorization. The execution and delivery of this Agreement (and
all other agreements provided for herein) by the Seller, and the consummation by
the Seller of all transactions contemplated hereby, has been duly authorized by
all requisite corporate and shareholder action. This Agreement and all such
other agreements and obligations entered into and undertaken in connection with
the transactions contemplated hereby to which the Seller is a party constitutes
the valid and legally binding obligations of the Seller, enforceable against it,
in accordance with their respective terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally. The execution, delivery and performance by the
Seller of this Agreement and the agreements provided for herein, and the
consummation by the Buyer of the transactions contemplated hereby and thereby,
will not, with or without the giving of notice or the passage of time or both,
(a) violate the provisions of any law, rule or regulation applicable to the
Seller; (b) violate the provisions of the Certificate of Incorporation or Bylaws
of the Seller; (c) violate any judgment, decree, order or award of any court,
governmental body or arbitrator; or (d) conflict with or result in the breach or
termination of any term or provision of, or constitute a default under, or cause
any acceleration under, or cause the creation of any lien, charge or encumbrance
upon the properties or assets of the Seller pursuant to, any indenture,
mortgage, deed of trust or other instrument or agreement to which any of them is
a party or by which any of them or any of their properties is or may be bound,
other than with respect to obligations of Seller which will be discharged at or
prior to Closing. Schedule 2.2 attached hereto sets forth a true, correct and
complete list of all consents, approvals, permissions, licenses, authorizations
and other requirements prescribed by law, rule, regulation or by contract in
connection with the
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consummation by the Seller of the transactions contemplated by this Agreement.
Except as indicated on Schedule 2.2, all such items have been obtained and
satisfied.
2.3 Ownership of the Assets. Schedule 2.3 attached hereto sets forth a
true, correct and complete list of all claims, liabilities, liens, pledges,
charges, encumbrances and equities of any kind affecting their respective Assets
(collectively, the "Encumbrances"). The Seller is the true and lawful owner of
the Assets, and has the right to sell and transfer to the Buyer good and
marketable title to all Assets, which are free and clear of all Encumbrances.
The delivery to the Buyer of the instruments of transfer of ownership
contemplated by this Agreement will vest good and marketable title to all Assets
in the Buyer, free and clear of all liens, mortgages, pledges, security
interests, restrictions, prior assignments, encumbrances and claims of any kind
or nature whatsoever. The Assets to be conveyed to the Buyer hereunder
constitute all properties, assets, rights and claims which are necessary to the
conduct of the Business as currently conducted by the Seller.
2.4 Financial Statements.
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(a) The Seller has previously delivered to the Buyer its audited
balance sheets as of December 31, 1996 and 1997, and the related statements of
operations, shareholders' equity and changes in financial position of the Seller
for the fiscal years then ended (collectively, the "Audited Financial
Statements"). As promptly as possible following the Closing, but in no event
later than sixty (60) days following the Closing, the Seller shall deliver to
the Buyer an unaudited balance sheet as of February 28, 1998, and the related
statements of operations, shareholders' equity and changes in financial position
of the Seller for each of the months ended January 31, 1998 and February 28,
1998, respectively (collectively, the "Unaudited Financial Statements" and,
together with the Audited Financial Statements, the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied consistently with past practice.
(b) The Financial Statements are accurate and complete, and
fairly present, as of their respective dates, the financial condition, retained
earnings (deficit), assets and liabilities of the Seller and the results of
operations of the Seller's business for the periods indicated. Nothing has come
to the attention of the Seller since the date of the Financial Statements which
would lead it to believe that the reserves and accruals shown thereon are
inadequate for all reasonably anticipated losses, costs and expenses and the
Seller reasonably believes that such reserves and accruals are adequate for all
of such losses, costs and expenses.
(c) Schedule 2.4(c) attached hereto sets forth Adjusted EBITDA
(as defined below) for the twelve-month period ended December 31, 1997.
(d) For purposes of this Agreement, "Adjusted EBITDA" shall mean
the Seller's audited earnings before interest, taxes, depreciation and
amortization, plus annual remuneration in excess of $500,000 paid by the Seller
to the Shareholder (provided such remuneration is paid to the Shareholder as
compensation in the normal course of performance of
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his duties as an employee, officer and director of the Seller), plus certain
non-recurring, non-operating expenses as shall have been approved by the Buyer.
2.5 Litigation. Except as set forth on Schedule 2.5, the Seller is not
a party to, or to the Selling Parties' best knowledge threatened with, and none
of the Assets are subject to, any litigation, suit, action, investigation (to
the best of the Selling Parties' knowledge), grievance, arbitration, proceeding,
or controversy or claim before any court, administrative agency or other
governmental authority relating to or affecting the Assets or the business,
properties, condition (financial or otherwise) or prospects of the Business. The
Seller is not in violation of or in default with respect to any judgment, order,
award, writ, injunction, decree or rule of any court, governmental department,
commission, agency, instrumentality, arbitrator, administrative agency or
governmental authority or any regulation of any administrative agency or
governmental authority, where such violation or default would have a material
adverse effect upon the Assets, the business, properties, condition (financial
or otherwise) or prospects of the Business or the consummation of the
transactions contemplated hereby. The Seller has not received notice of any
product liability claim, warranty claim or other claim whatsoever which, if
decided adversely, would have a material adverse effect on the Assets or the
business, condition (financial or otherwise), properties or prospects of the
Business.
2.6 Insurance. Schedule 2.6 sets forth a true, correct and complete
list of all fire, theft, casualty, general liability, workers compensation,
business interruption, environmental impairment, product liability, automobile
and other insurance policies insuring the Assets or business of the Business and
of all life insurance policies maintained for any employees of the Business,
specifying the type of coverage, the amount of coverage, the premium, the
insurer and the expiration date of each such policy (collectively, the
"Insurance Policies") and all claims made under such Insurance Policies since
January 1, 1993. True, correct and complete copies of all of the Insurance
Policies have been previously delivered by the Seller to the Buyer. The
Insurance Policies are in full force and effect and are in amounts and of a
nature which are adequate and customary for the business of the Business. All
premiums due on the Insurance Policies or renewals thereof have been paid and
there is no default under any of the Insurance Policies. Except as set forth on
Schedule 2.6, the Seller has not received any notice or other communication from
any issuer of the Insurance Policies canceling or materially amending any of the
Insurance Policies, materially increasing any deductibles or retained amounts
thereunder, or materially increasing the annual or other premiums payable
thereunder, and, to the best knowledge of the Selling Parties, no such
cancellation, amendment or increase of deductibles, retainers or premiums is
threatened.
2.7 Inventory. Schedule 2.7 sets forth a true, correct and complete
list of the Inventory as of the date hereof, including a description and
valuation thereof. At the Closing, the Inventory will consist of items of a
quality and quantity which are usable or saleable, without discount and at
values at least equal to the values indicated on the latest balance sheet
included in the Financial Statements, in the ordinary course of business, except
as otherwise reserved or provided for in accordance with the procedures set
forth on Schedule 2.7, conducted by and
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within the normal operating cycle of the Business. At the Closing, the value of
all items of obsolete materials, excess quantities of materials and of materials
of below standard quantity will be reserved for in accordance with the
procedures set forth in Schedule 2.7, and to the extent not inconsistent, with
generally accepted accounting principles.
2.8 Fixed Assets. Schedule 2.8 sets forth a true, correct and complete
list of all Fixed Assets as of the date hereof, including a description and the
cost and accumulated depreciation on an aggregate basis with respect to all
Fixed Assets. Except as set forth in Schedule 2.8, as of the date hereof, the
Fixed Assets are in good condition and repair and are sufficiently operational
(apart from ordinary wear and tear) to enable the Buyer to conduct the business
in essentially the same manner in which it has heretofore been conducted by the
Seller.
2.9 Leases. Schedule 2.9(a) attached hereto sets forth a true, correct
and complete list as of the date hereof of all leases of real estate,
identifying separately each ground lease, to which the Seller is a party as
lessee or tenant or which the Seller uses in the operations of the Business.
Schedule 2.9(b) attached hereto sets forth a list of all leases of real estate
which the Buyer will assume pursuant to this Agreement (the "Leases"). True,
correct and complete copies of the Leases, and all amendments, modifications and
supplemental agreements thereto, have previously been delivered by the Seller to
the Buyer. The Leases are in full force and effect, are binding and enforceable
against each of the parties thereto in accordance with their respective terms
and, except as set forth on Schedule 2.9(b) attached hereto, have not been
modified or amended since the date of delivery to the Buyer. No party to any
Lease has sent written notice to the other claiming that such party is in
default thereunder, which default remains uncured. Except as set forth on
Schedule 2.9(b) attached hereto, there has not occurred any event which would
constitute a breach of or default in the performance of any material covenant,
agreement or condition contained in any Lease by either party thereto, nor has
there occurred any event which with the passage of time or the giving of notice
or both would constitute such a breach or material default. The Seller is not
obligated to pay any leasing or brokerage commission relating to any Lease and
will not have any enforceable obligation to pay any leasing or brokerage
commission upon the renewal or extension of any Lease. No material construction,
alteration or other leasehold improvement work with respect to any of the Leases
remains to be paid for or to be performed by any party under any Lease. Seller
has fulfilled all material obligations required pursuant to the Leases to have
been performed by Seller. None of the Leases imposes any restrictions that would
materially interfere with the continued operation of the business as currently
conducted on any of the properties that are the subject of the Leases. There is
no pending or, to the best of the Selling Parties' knowledge, threatened eminent
domain taking or condemnation that will or may affect any of the properties that
are the subject of the Leases.
2.10 Change in Financial Condition and Assets. Since December 31,
1996, there has been no change which materially and adversely affects the Assets
or the business, properties, condition (financial or otherwise) or prospects of
the Business. The Selling Parties have no knowledge of any existing or
threatened occurrence, event or development related to the Assets or the
business, properties, condition (financial or otherwise) or prospects of the
Business which
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could have a material adverse effect on the Assets or the business, properties,
condition (financial or otherwise) or prospects of the Business.
2.11 Accounts Receivable. Schedule 2.11 sets forth a true, correct and
complete list of all Accounts Receivable, including an aging thereof as of the
date hereof. All Accounts Receivable arose out of the sales of inventory or
services in the ordinary course of business and are collectible in the values
set forth on Schedule 2.11 net of the respective reserves shown on the latest
balance sheet included in the Audited Financial Statements (which reserves are
adequate and calculated consistent with past practice). Except as set forth on
Schedule 2.11, there is no contest, claim, or right of set-off, other than
returns in the ordinary course of business, under any contract or agreement with
any account debtor of an Account Receivable relating to the amount or validity
of such Account Receivable.
2.12 Books and Records. The general ledgers, minute books and books of
account of the Seller with respect to the Business, all federal, state, local
and foreign income, franchise, property and other tax returns filed by the
Seller, with respect to the Assets, and all other books and records of the
Seller with respect to the Business, all of which have been made available to
the Buyer, are in all material respects complete and correct and have been
maintained in accordance with good business practice and in accordance with all
applicable procedures required by laws and regulations other than any digression
from such practice and procedures which has no material and adverse effect on
the Assets or the Business, or the valuations thereof for the purposes of this
Agreement, as conducted as of and prior to the date hereof.
2.13 Contracts and Commitments.
-------------------------
(a) Schedule 2.13(a) attached hereto contains a true, complete
and correct list and description of the following contracts and agreements,
whether written or oral, which relate to the Business:
(i) all loan agreements, indentures, mortgages and
guaranties to which the Seller is a party or by which the Seller or its property
is bound;
(ii) all pledges, conditional sale or title retention
agreements, security agreements, equipment obligations, personal property leases
and lease purchase agreements relating to any of the Assets to which the Seller
is a party or by which the Seller or any of its property is bound;
(iii)all contracts, agreements, commitments, purchase orders
(other than merchandise deliveries to customers in the normal course of business
upon standard terms) or other understandings or arrangements to which the Seller
is a party or by which any of their respective property is bound which (A)
involve payments or receipts by any of them of more than $10,000 in the case of
any single contract, agreement, commitment, understanding or arrangement under
which full performance (including payment) has not been rendered by all
- 13 -
parties thereto or (B) may materially adversely affect the condition (financial
or otherwise) or the properties, Assets, business or prospects of the Business;
(iv) all collective bargaining agreements, employment and
consulting agreements, non-competition agreements, trust agreements, executive
compensation plans, bonus, 401(k), or profit-sharing plans, deferred
compensation agreements, pension plans, retirement plans, employee stock option
or stock purchase plans and group life, health and accident insurance and other
employee benefit plans, agreements, memoranda of understanding, arrangements or
commitments to which the Seller is a party or by which the Seller or any of its
property is bound;
(v) all agency, distributor, sales representative and
similar agreements to which the Seller is a party;
(vi) all contracts, agreements or other understandings or
arrangements, whether written or oral, between the Seller and any shareholder,
employee, officer or director of the Seller which may affect the Business as
conducted as of and prior to the date hereof or the Assets;
(vii)all leases, whether operating, capital or otherwise,
under which the Seller is lessor or lessee, including, without limitation, all
equipment leases;
(viii)all contracts, agreements and other documents or
information relating to past disposal of waste (whether or not hazardous) which
are available;
(ix) all return policies and product warranties relating to
products or goods manufactured or distributed by the Business as the same are
currently in effect or may have been in effect from time to time since December
31, 1996, as well as any exception to such policies, all cooperative advertising
arrangements and all rebate, discount or allowance arrangements;
(x) all contracts related to operation, maintenance or
management of the leased facilities under any Leases (the "Leased Premises")
other than immaterial contracts which do not constitute a part of Assumed
Liabilities; and
(xi) any licensing agreements, franchise agreements and
other material agreement or contract entered into by the Seller.
(b) Schedule 2.13(b) attached hereto sets forth a true, correct
and complete list of the contracts and agreements, whether written or oral,
which are to be assigned from the Seller to the Buyer at the Closing
(collectively, the "Contracts").
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(c) Except as set forth on Schedule 2.13(c), the continuation,
validity and effectiveness of each Contract would not be affected by the
transfer thereof to the Buyer under this Agreement and all such Contracts are
assignable to the Buyer without a consent and:
(i) each Contract is a valid and binding agreement of the
Seller, enforceable against the Seller in accordance with its terms, and the
Selling Parties have no knowledge that any Contract is not a valid and binding
agreement of the other parties thereto:
(ii) the Seller has fulfilled all material obligations
required pursuant to the Contracts to have been performed by it prior to the
date hereof;
(iii)the Seller is not in breach of or default under any
Contract, and no event has occurred which with the passage of time or giving of
notice or both would constitute such a default, result in a loss of rights or
result in the creation of any lien, charge or encumbrance, thereunder or
pursuant thereto (an "Inchoate Default"); and
(iv) to the best knowledge of the Selling Parties, there is
no existing breach or default by any other party to any Contract, and no
Inchoate Default.
(d) True, correct and complete copies of all of the foregoing
contracts and agreements (other than all unfilled purchase orders and all
unfilled customer orders), including but not limited to the Contracts, and a
list of all unfilled purchase orders and all unfilled customer orders, have been
delivered by the Seller to the Buyer prior to the date hereof.
2.14 Compliance with Laws. The Seller has all requisite licenses,
permits and certificates, including health and safety permits, from federal,
state, local and foreign authorities necessary to conduct the Business and own
and operate the Assets (collectively, the "Permits"). Schedule 2.14 sets forth a
true, correct and complete list of all such Permits, copies of which previously
have been delivered by the Seller to the Buyer. The Seller has not engaged in
any activity which would cause or, to the knowledge of the Selling Parties,
permit revocation or suspension of any such Permit and no action or proceeding
looking to or contemplating the revocation or suspension of any such Permit is
pending or threatened. There are no existing defaults or Inchoate Defaults by
the Seller under any Permit. The Selling Parties have no knowledge of any
default or claimed or purported or alleged default or Inchoate Defaults on the
part of any party in the performance of any obligation to be performed or paid
by any party under any Permit. Except as set forth in Schedule 2.14, the
consummation of the transactions contemplated by this Agreement will in no way
affect the continuation, validity or effectiveness of the Permits or require the
consent of any third party under any such Permit. The Seller is not in violation
of any law, regulation or ordinance (including but not limited to laws,
regulations or ordinances relating to building, zoning, land use or similar
matters) relating to its properties, the violation of which could have a
material adverse effect on the Assets or the business, properties, condition
(financial or otherwise) or prospects of the Seller. The business of the Seller
does not violate, in any material respect, and the Seller is not in violation
of, any federal, state, local or foreign laws, regulations or orders, the
violation or enforcement of which would have a material
- 15 -
and adverse effect on the Assets, business, properties, condition (financial or
otherwise) or prospects of the Seller. Except as set forth on Schedule 2.14, the
Seller has not received any notice or communication from any federal, state,
foreign, or local governmental or regulatory authority or otherwise of any such
violation or noncompliance and has not received any notice prior to such time of
any violation that has not been cured.
2.15 Employee Relations.
------------------
(a) The Seller is in compliance with all material federal, state,
local and foreign laws respecting employment and employment practices, terms and
conditions of employment, and wages and hours, and is not engaged in any unfair
labor practice, and there are no arrears in the payment of wages or taxes or
workers compensation assessments or penalties.
(b) Except as set forth on Schedule 2.15:
(i) none of Seller's Employees are represented by any labor
union;
(ii) there is no unfair labor practice complaint against the
Seller pending before the National Labor Relations Board or any state, foreign,
or local agency affecting the Seller;
(iii)there is no pending labor strike or other material
labor trouble affecting the Seller (including but not limited to any
organizational campaign);
(iv) there is no material labor grievance pending against or
affecting the Seller;
(v) there is no pending organizing activities respecting the
Seller's Employees;
(vi) there are no pending arbitration proceedings arising
out of or under any collective bargaining agreement to which the Seller is a
party, or to the best knowledge of the Selling Parties, any basis for which a
claim may be made under any collective bargaining agreement to which the Seller
is a party affecting the Seller's Employees; and
(vii)there is no pending litigation, or other proceeding or
basis for an unasserted claim against the Seller by any employee or group of
employees or independent contractor or group of independent contractors which is
based on claims arising out of any employee's or group of employees' employment
relationship with the Seller or any independent contractor's or group of
independent contractors' independent consulting relationship with the Seller
(insofar as such relationship pertains to the Business of the Seller), including
but not limited to claims for contract, tort, discrimination, employee benefits,
commissions, wrongful termination, age discrimination, sexual harassment, sexual
discrimination and any and all common law or statutory claims.
- 16 -
(c) The Seller has not violated the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. Sections ▇▇▇▇-▇▇ (▇▇▇ "▇▇▇▇ ▇▇▇") or any
similar state or local law. Except as set forth on Schedule 2.15, since July 1,
1997, the Seller has not terminated any employees.
2.16 Absence of Certain Changes or Events. Except as set forth on
Schedule 2.16, since December 31, 1996, the Seller has not entered into any
transaction which is not in the usual and ordinary course of business, and,
without limiting the generality of the foregoing, the Seller has not:
(a) Mortgaged, pledged or subjected to lien, charge or other
encumbrance any of the Assets;
(b) Sold or purchased, assigned or transferred any of its Assets
(except for Inventory sold in the ordinary course of business);
(c) Made any material amendment to or termination of any Contract
or done any act or omitted to do any act which would cause the breach of any
Contract;
(d) Suffered any casualty losses, whether insured or uninsured,
and whether or not in the control of the Seller, in excess of $25,000 in the
aggregate, or waived any rights of any value unless such loss or waiver is
reflected in the Financial Statements;
(e) Authorized or issued recall notices for any of its products
relating to the Business or initiated any safety investigations relating to the
Business; or
(f) Received notice of any litigation, warranty claim or products
liability claims relating to the Business.
2.17 Customers. The Seller has heretofore provided to the Buyer a
true, correct and complete list of the names and addresses of all customers of
the Seller. None of the 30 customers which accounted for the largest dollar
volume of purchases from the Seller for the twelve month periods ended December
31, 1996 and December 31, 1997, respectively, has notified the Seller that it
intends to discontinue its relationship with the Seller nor, to the best of the
Selling Parties' knowledge, does there exist any actual or threatened
termination, cancellation or limitation of, or any modification or change in,
the business relationship of the Seller with any such customer nor does there
exist a present condition or state of facts or circumstances known to the Seller
involving such customers which would materially adversely affect the Business or
prevent the Buyer from conducting the Business after the consummation of the
transactions contemplated by this Agreement in essentially the same manner in
which it has heretofore been conducted by the Seller. The Seller has no
consignment sales in effect as of the date hereof and no customer has any return
rights except as set forth on Schedule 2.13(a).
- 17 -
2.18 Suppliers. Schedule 2.18 sets forth a true, correct and complete
list of the names and addresses of the ten suppliers of the Seller which
accounted for the largest dollar volume of purchases by the Seller for the
twelve month periods ended December 31, 1996 and December 31, 1997,
respectively. The Seller is not a party to any requirements contract relating to
the purchase of inventory, finished goods or other property used in the conduct
of the Business. None of the Seller's suppliers has notified the Seller that it
intends to discontinue its relationship with the Seller, nor raise its prices so
as to materially adversely affect the Business nor, to the best of the Selling
Parties' knowledge, does there exist any actual or threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship of the Seller with any such supplier, nor does there exist a
present condition or state of facts or circumstances known to the Selling
Parties involving such suppliers which would materially adversely affect the
Business or prevent the Buyer from conducting the Business after the
consummation of the transactions contemplated by this Agreement in essentially
the same manner in which it has heretofore been conducted by the Seller.
2.19 Prepayments and Deposits. Except as set forth on Schedule 2.19,
the Seller has no prepayments or deposits from customers for products to be
shipped, or services to be performed, by the Seller after the date hereof.
2.20 Trade Names and Other Intangible Property.
-----------------------------------------
(a) Schedule 2.20 attached hereto sets forth a true, correct and
complete list and a description of all Intangible Property. True, correct and
complete copies of all licenses and other agreements relating to the Intangible
Property have been previously delivered by the Seller to the Buyer. The Selling
Parties have no knowledge of any default or claimed or purported or alleged
default or state of facts which with notice or lapse of time or both would
constitute a default on the part of any party in the performance of any
obligation to be performed or paid by any party under any such license or
agreement. During the past five years the only name by which the Seller has been
known or which the Seller has used is its corporate name set forth in the
preamble of this Agreement.
(b) Except as otherwise disclosed in Schedule 2.20 attached
hereto, the Seller is the sole and exclusive owner, free and clear of all liens,
claims and restrictions, of all Intangible Property and all designs, permits,
labels and packages used on or in connection therewith. The Intangible Property
owned by the Seller is sufficient to conduct the Business, as presently
conducted. The Seller has received no notice of, and has no knowledge of any
basis for, a claim against it that any of its operations, activities, products
or publications infringes on any patent, trademark, trade name, copyright or
other property right of a third party, or that it is illegally or otherwise
using the trade secrets, formulae or any property rights of others. Except as
otherwise disclosed in Schedule 2.20, the Seller (i) has no disputes with or
claims against any third party for infringement by such third party of any trade
name or other Intangible Property of the Seller, and (ii) is not obligated or
under any liability whatsoever to make any payments by way of royalties, fees or
otherwise to any owner or licensee of, or other claimant to, any patent,
- 18 -
trademark, trade name, copyright or other property right, with respect to the
use thereof or in connection with the conduct of the Business or otherwise. The
Seller has taken all steps reasonably necessary to protect its right, title and
interest in and to the Intangible Property. Except as set forth in Schedule
2.20, the consummation of the transactions contemplated by this Agreement
(including any required financing) will in no way affect the continuation,
validity or effectiveness of the Intangible Property or require the consent of
any third party in respect of the Intangible Property.
2.21 Employee Benefit Plans.
----------------------
(a) ERISA. Except as set forth on Schedule 2.21(a), neither the
Seller nor any person, firm, corporation or entity which is (or within the past
five years has been) a member with the Seller of a "controlled or affiliated
group", within the meaning of Section 414(b), (c), (m), (n) or (o) of the
Internal Revenue Code of 1986, as amended (the "Code"), has maintained,
sponsored or contributed to any "pension plan" within the meaning of Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), any "welfare plan" within the meaning of Section 3(1) of ERISA, or
any other employee benefit plan, program, practice or arrangement, whether or
not subject to ERISA (a "non-ERISA plan") (such pension plans, welfare plans and
non-ERISA plans of the Seller being herein referred to as the "Employee Plans").
Except as set forth on Schedule 2.21(a), the Seller has provided the Buyer with
a true, correct and complete copy of each pension plan, each welfare plan and
each non-ERISA plan listed on such Schedule, together with a copy of the most
recent summary plan description and annual report (if applicable) with respect
to each such plan. Except as set forth on Schedule 2.21(a), each pension plan
listed on such Schedule is a "qualified plan" within the meaning of Section 401
of the Code. Except as set forth on Schedule 2.21(a), each pension plan, each
welfare plan and each non-ERISA plan listed on such Schedule has been
administered in accordance with its terms, and each pension plan and welfare
plan has been operated and administered in accordance with all applicable
requirements of ERISA and the Code. Without limiting the generality of the
foregoing, no trustee, administrator, sponsor, or other party-in-interest or
disqualified person, has engaged or participated in any "prohibited
transaction", as that term is defined in Section 4975(c)(1) of the Code, with
respect to any pension plan or welfare plan listed on Schedule 2.21(a). Without
limiting the generality of the foregoing, in connection with all welfare or
non-ERISA plans which are subject to continuation coverage under Section 4980B
of the Code, all notices and elections with respect to such coverage have been
made in compliance with the requirements of Section 4980B. With respect to each
"defined benefit pension plan", as defined in Section 3(35) of ERISA, identified
on Schedule 2.21(a): (i) the fair market value of the assets thereof as of the
date hereof is as set forth on such Schedule; (ii) the present value of all
accrued benefits thereunder, determined as if such pension plan terminated on
the date hereof, is as set forth on Schedule 2.21(a); (iii) if any such plan is
a "multiemployer plan", as defined in Section 3(37) of ERISA, the present value
of the contingent liability of the Seller both in the event of the termination
of such plan and in the event that the Seller withdraws therefrom is as set
forth on Schedule 2.21(a); (iv) no such plan has incurred an "accumulated
funding deficiency", as such term is defined in Section 302 of ERISA, and (v) no
such pension
- 19 -
plan has terminated, nor has any "reportable event", within the meaning of
Section 4043 of ERISA, occurred with respect to such plan. All contributions for
all periods ending prior to the date hereof (including periods from the first
day of the current plan year to the date hereof) will be made prior to the date
hereof by the Seller in accordance with past practice with respect to pension
plans, welfare plans and non-ERISA plans. All insurance premiums (including
premiums to the Pension Benefit Guaranty Corporation) have been paid in full,
subject only to normal retrospective adjustments in the ordinary course of
business, with regard to applicable plans for policy years or other applicable
policy periods ending on or before the date hereof. Except as set forth on
Schedule 2.21(a), the Seller has no obligations or liabilities with respect to
any unfunded post-retirement medical benefits as of the date hereof.
(b) Claims and Litigation. Except as set forth on Schedule
2.21(b), to the best of the Selling Parties' knowledge, there are no threatened
or pending claims, suits or other proceedings by present or former employees of
Seller, plan participants, beneficiaries or spouses of any of the above, the
Internal Revenue Service, the Pension Benefit Guaranty Corporation, or any other
pension or entity involving any Employee Plan, including claims against the
assets of any trust, involving any Employee Plan, or any rights or benefits
thereunder, other than ordinary and usual claims for benefits to participants or
beneficiaries, including claims pursuant to domestic relations orders and there
is no basis for any legal action, proceeding or investigation with respect to
such plans.
2.22 Leased Premises.
---------------
(a) Schedule 2.22 contains a true, correct and complete list of
address and legal description of all Leased Premises.
(b) Except as set forth on Schedule 2.22, no work has been
performed on or materials supplied to the Leased Premises within any applicable
statutory period which could give rise to mechanics or materialmen's liens; all
bills and claims for labor performed and materials furnished to or for the
benefit of the Leased Premises for all periods prior to the Closing shall be
paid in full, and the Selling Parties have no knowledge of any mechanic's or
materialmen's liens, whether or not perfected, on or affecting any portion of
the Leased Premises.
(c) There is no pending or threatened condemnation or eminent
domain proceeding with respect to the Leased Premises.
(d) Except as set forth on Schedule 2.22, there are no taxes or
betterment or special assessments other than ordinary real estate taxes pending
or payable against the Leased Premises and there are no contingencies existing
under which any assessment for real estate taxes may be retroactively filed
against the Leased Premises; the Selling Parties have no knowledge of any
proposed special assessment that may affect the Leased Premises or any part
thereof; there are no penalties due with respect to real estate taxes and/or
impositions, and all real estate taxes and/or impositions (excepting those for
the current year that are not yet due and payable) with
- 20 -
respect to the Leased Premises have been paid in full; there are no taxes or
levies, permit fees or connection fees which must be paid respecting existing
curb cuts, sewer hookups, water-main hookups or services of a like nature.
(e) The Leased Premises comply with the requirements of all
building, zoning, subdivision, health, safety, environmental, pollution control,
waste products, sewage control and all other applicable statutes, laws, codes,
ordinances, rules, orders, regulations and decrees (collectively, the
"Government Regulations") of any and all government agencies. To the extent set
forth in Schedule 2.14, the Seller has obtained and provided to the Buyer all
consents, permits, licenses and approvals required by such Government
Regulations, such consents, permits, licenses and approvals are in full force
and effect, have been properly and validly issued, and on or prior to the date
hereof will be assigned to the Buyer by the Seller to the extent the same are
assignable. Except as set forth in Schedule 2.14, there is no uncured breach of
any condition or requirement imposed by, or pursuant to, any permit or license
issued with respect to the Leased Premises. There is no action pending or, to
the best of the Selling Parties' knowledge, threatened by any government
agencies claiming that the Leased Premises violates such Government Regulations
or threatening to shut down the Business or the use of the Assets or to prevent
the Assets from being used as presently used.
(f) Except as set forth on Schedule 2.22, there are no actions,
suits, petitions, notices or proceedings pending, given or, to the best of the
Seller's knowledge, threatened by any persons or government agencies before any
court, government agencies or instrumentalities, administrative or otherwise,
which if given, commenced or concluded would have a material adverse effect on
the value, occupancy, use or operation of the Leased Premises.
(g) The structural components of all of the buildings located on
the Leased Premises are in good condition and repair, normal wear and tear
excepted.
(h) The Selling Parties (i) have not received notice and (ii)
have no knowledge of the existence of any outstanding notice:
(A) from any federal, state, county, municipal or
foreign authority alleging any health, safety, pollution, environmental, zoning
or other violation of law with respect to the Leased Premises or any part
thereof that has not been entirely corrected; or
(B) from any insurance company or bonding company
with respect to any defects or inadequacies in the Leased Premises or any part
thereof that would adversely affect the insurability of same or cause the
imposition of extraordinary premiums or charges therefor or any termination or
threatened termination of any policy of insurance or bond relating thereto.
2.23 Bank Accounts; Securities. Set forth in Schedule 2.23 is a list
of all bank accounts, safe deposit boxes, money market funds, certificates of
deposit, stocks, bonds, notes
- 21 -
and other securities in the names of or owned or controlled by the Seller, all
of which are included in the Assets.
2.24 Disclosure. No representation or warranty by the Selling Parties
in this Agreement or in any Exhibit hereto, or in any list, statement, document
or information set forth in or attached to any Schedule delivered or to be
delivered pursuant to this Agreement, contains or will contain any untrue
statement of a material fact or omits or will omit any material fact necessary
in order to make the statements contained therein not misleading. The Selling
Parties have disclosed to the Buyer all material facts pertaining to the
transactions contemplated by this Agreement.
2.25 Brokers. Except for the fees owed by the Seller to Swarthmore
Associates, all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by the Seller without the intervention
of any other person in such manner as to give rise to any valid claim for a
finder's fee, brokerage commission or other like payment.
2.26 Preservation of Assets. Except as set forth on Schedule 2.26, the
Seller has not sold, assigned or transferred any of the Assets, other than in
the ordinary course of business, or declared or paid any dividend or other
distribution in respect of shares of capital stock or made any purchase,
redemption or other acquisition, directly or indirectly, of any outstanding
shares of its capital stock, since January 1, 1996.
2.27 Environmental Compliance.
------------------------
(a) The Seller has obtained all permits, licenses and other
authorizations required under Federal, state and local laws, relating to
protection of the Environment (as defined below), including laws relating to any
Release (as defined below) of or presence of pollutants, contaminants, or
hazardous or toxic materials or wastes into or in soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air,
and/or any environmental medium (the "Environment") or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or hazardous or toxic
materials or waste. Schedule 2.27 hereto sets forth a complete and accurate list
of all such permits, licenses and other authorizations obtained by the Seller,
copies of which have been delivered to the Buyer. The Seller is in full
compliance with all terms and conditions of such permits, licenses and other
authorizations. To the best of the Selling Parties' knowledge, except as set
forth on Schedule 2.27, there are no proposed or pending changes in the federal,
state, county or local laws, regulations, standards, or in the Seller's permits,
licenses or authorizations relating to pollution or protection of the
Environment that would increase the present costs of compliance with such laws
or change any methods of operation.
(b) Except as indicated on Schedule 2.27 neither the Seller has,
and, to the best of the Selling Parties' knowledge, after due inquiry, none of
the Seller's employees, agents, contractors or subcontractors have, used,
generated, processed, stored, transported, recycled, Released or otherwise
handled any Hazardous Materials (as defined below) except as permitted
- 22 -
by law on or about any real property related to the Seller's business or the
Seller's contractual relations with any such agents, contractors or
subcontractors, including, but not limited to, real property formerly owned by
the Seller (collectively, the "Seller Real Property") and the facilities now or
formerly leased or operated by the Seller (collectively, the "Seller
Facilities"). Additionally, except as indicated on Schedule 2.27, neither the
Seller Facilities nor the Seller Real Property is being used or has ever
previously been used for the generation, use, processing, storage,
transportation, recycling, Release or handling of any Hazardous Materials,
except as such use may have been permitted by law. In addition, except as
indicated on Schedule 2.27, neither the Seller Facilities nor the Seller Real
Property has ever been affected by any Hazardous Materials Contamination or
Environmental Condition. The Seller, in the conduct of its business, is and has
been in compliance with all Environmental Laws. Notwithstanding any statement or
representation to the contrary in any affidavit or other document, the Seller
affirmatively represents that as of the date hereof, the Seller has made all
filings required by RCRA and that there have been no failures by the Seller to
timely report under CERCLA ss. 103 or RCRA ss. 304. The Seller has not received
any written notice from any governmental authority or any other person
respecting or related to any actual, threatened or potential Release or presence
of any Hazardous Materials or any non-compliance with any Environmental Laws as
to which any such claimed noncompliance presently exists. Notwithstanding the
preceding sentence, the Seller has not received any notice from any governmental
authority respecting noncompliance with RCRA. No investigation, administrative
proceeding, consent order or agreement, limitation or settlement with respect to
Hazardous Materials, Hazardous Materials Contamination or Environmental
Condition is, to the best of the Selling Parties' knowledge, proposed,
threatened, anticipated or in force with respect to its business, nor has such
property ever been on any Federal or state "Superfund" or "Super Lien" list.
As used in this Section 2.27, "due inquiry" shall mean that Selling
Parties have made inquiry of all of Seller's executives, corporate officers and
directors and any employee or agent of Seller with responsibility for
environmental matters.
As used herein "Hazardous Materials" include any (i) "Hazardous Waste"
as defined by The Resource Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901 et seq.), as amended from time to time ("RCRA"), and regulations
promulgated thereunder; and "Hazardous Substance" as defined by The
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. Section 9601 et seq.), as amended from time to time ("CERCLA"), and
regulations promulgated thereunder; (ii) asbestos; (iii) polychlorinated
biphenyls; (iv) any substance, the presence of which on the premises of the
Seller's business, is prohibited by applicable law; (v) oil, petroleum or any
petroleum products or by-products; (vi) any other substance which, according to
applicable law, requires special handling or notification of any Federal, state
or local governmental entity in its collection, processing, handling, storage,
transport, treatment or disposal or exposure thereto; (vii) any substance, which
if not properly disposed of, may pollute, contaminate, harm or have any
detrimental effect on the Environment; (viii) underground storage tanks, whether
empty, filled or partially filled with any substance; and (ix) any other
pollutant, toxic substance, hazardous substance, hazardous waste, hazardous
- 23 -
material or hazardous substance as regulated by or defined in or pursuant to any
Environmental law or any other Federal, state, or local environmental law,
regulation, ordinance, rule, or by-law, whether existing on or prior to the date
hereof.
As used herein, "Hazardous Materials Contamination" shall mean, with
respect to any premises, building or facilities or, the Environment,
contamination by a Release or the presence of Hazardous Materials.
As used herein, "Environmental Condition" shall mean any condition with
respect to the Environment on or off the Seller Real Property and Seller
Facilities, whether or not yet discovered, which could or does result in any
damage, loss, cost, expense, claim, demand, order, or liability to or against
the parties hereto by any third party (including, without limitation, any
government entity), including, without limitation, any condition resulting from
the operation of Seller's business and/or the operation of the business of any
other property owner or operator in the vicinity of the Seller Real Property and
Seller Facilities and/or any activity or operation formerly conducted by any
person or entity on or off the Seller Real Property and Seller Facilities.
As used herein, "Release" shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing.
As used herein, "Environmental Laws" shall mean any environmental or
health and/or safety-related law, regulation, rule, ordinance, or by-law at the
Federal, state, or local level, whether existing as of the date hereof,
previously enforced, or subsequently enacted, including but not limited to: (i)
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USCA
601 et seq.; (ii) Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid
Waste Amendments of 1984, 42 USCA 6901 et seq.; (iii) Federal Water Pollution
Control Act of 1972 as amended by the Clean Water Act of 1977, as amended, 33
USCA 1251 et seq.; (iv) Toxic Substances Control Act of 1976, as amended, 15
USCA 2601 et seq.; (v) Emergency Planning and Community Right-to-Know Act of
1986, 42 ▇▇▇▇ ▇▇▇▇▇ et seq.; (vi) Clean Air Act of 1966, as amended by the Clean
Air Act of 1986, as amended by the Clean Air Act Amendments of l990, 42 USCA
7401 et seq.; (vii) National Environmental Policy Act of 1970, as amended, 42
USCA 4321 et seq.; (viii) Rivers and Harbors Act of 1970, as amended, 33 USCA
401 et seq.; (ix) Endangered Species Act of 1973, as amended, 16 USCA 1531, et
seq; (x) Occupational Safety and Health Act of 1970, as amended, 29 USCA 651 et
seq.; (xi) Safe Drinking Water Act of 1974, as amended, 42 USCA 300 et seq., and
any other federal, state, or local law, regulation, rule, ordinance or order
currently in existence which governs:
(i) the existence, cleanup and/or remediation of toxic or
Hazardous Materials;
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(ii) the Release, emission, discharge or presence of
Hazardous Materials into or in the Environment;
(iii)the control of Hazardous Materials; or
(iv) the use, generation, transport, treatment, storage,
disposal, removal or recovery of Hazardous Materials.
2.28 Purchase for Investment. The Shareholder represents that he is an
"accredited investor", within the meaning of Regulation D under the Securities
Act of 1933, as amended (the "1933 Act"), and is acquiring the Unidigital Stock
and the Note (collectively, the "Securities") for his own account, for
investment purposes only, and not with a view to the resale or distribution of
all or any part thereof. The Shareholder has not offered or sold any portion of
the Securities and has no present plan or intention of dividing such Securities
with others or reselling or otherwise disposing of any portion of the
Securities, either currently or after the passage of a fixed or determinable
period of time, or upon the occurrence or nonoccurrence of any predetermined
event or circumstance. The Shareholder agrees not to distribute or to transfer
any of the Securities in the United States except in compliance with all
applicable United States federal and state securities laws. The Shareholder
further recognizes that the Securities will not be registered under the 1933 Act
or the securities laws of any state, and the transfer of the same will be
restricted under such laws, and the Securities cannot be sold except pursuant to
an effective registration statement under such laws or an available exemption
from such registration, and the certificates or instruments representing the
Securities will bear a legend to such effect. The Shareholder acknowledges and
understands that Unidigital is under no obligation to register the Securities;
provided, however, that, subject to the approval of the lead managing
underwriter, the Company agrees to use its reasonable and commercial efforts to
register a portion of the Shareholder's Unidigital Stock on a pro-rata basis
(based on the total number of shares of Common Stock to be sold by the
Shareholder and any other selling shareholders compared to the total number of
shares of Common Stock owned by such selling shareholders) in any underwritten
public offering which includes other selling shareholders of the Company. Except
as otherwise provided herein, the Shareholder agrees not to distribute or to
transfer any of the Unidigital Stock within two years after the date hereof. The
Shareholder is aware of Unidigital's business affairs and financial condition,
has had the opportunity to ask questions of Unidigital's management with respect
to its business affairs and financial condition and has acquired sufficient
information (including, but not limited to, Unidigital's Form 10-KSB for the
fiscal year ended August 31, 1997, Unidigital's 1997 annual report, Unidigital's
1997 proxy statement and Unidigital's Form 10-QSB for the quarter ended November
30, 1997) about Unidigital to reach an informed and knowledgeable decision to
acquire the Securities. The Shareholder acknowledges that, upon consummation of
the transactions contemplated hereby, he will be deemed an "affiliate" of
Unidigital as such term is defined under the 1933 Act and, as an affiliate of
Unidigital, he will be subject to the reporting and legal requirements under
Sections 13 and 16 of the Securities Exchange Agreement of 1934, as amended (the
"1934 Act").
- 25 -
2.29 Solvency. The Seller is not now insolvent, and will not be
rendered insolvent by any of the transactions contemplated by this Agreement. In
addition, immediately after giving effect to the consummation of the
transactions contemplated by this Agreement, (i) the Seller will be able to pay
its debts as they become due, (ii) the property of the Seller does not and will
not constitute unreasonably small assets, and the Seller will not have
unreasonably small assets and will not have insufficient assets with which to
conduct its present or proposed business, and (iii) taking into account all
pending and threatened litigation, final judgments against the Seller in actions
for money damages are not reasonably anticipated to be rendered at a time when,
or in amounts such that, the Seller will be unable to satisfy any such judgments
promptly in accordance with their terms (taking into account the maximum
probable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered) as well as all other
obligations of the Seller. The cash available to the Seller, after taking into
account all other anticipated uses of the cash of the Seller, will be sufficient
to pay all such judgments promptly in accordance with their terms. As used in
this Section 2.29, (x) "insolvent" means that the sum of the present fair
saleable value of the Seller's assets does not and will not exceed the Seller's
debts and other probable liabilities, and (ii) the term "debts" includes any
legal liability, whether matured or unmatured, liquidated or unliquidated,
absolute, fixed or contingent, disputed or undisputed or secured or unsecured.
3. Representations of the Buyer and Unidigital
Representations and warranties made by the Buyer and Unidigital
herein or in any instrument or document furnished in connection herewith shall
survive the Closing until (and including) the second anniversary of the date
hereof. The Buyer and Unidigital represent and warrant to the Seller as follows:
3.1 Organization and Authority. Each of the Buyer and Unidigital is
duly organized and validly existing and in good standing under the laws of the
state of Delaware, and has requisite power and authority to own its properties
and to carry on its business as now being conducted. Each of the Buyer and
Unidigital has full power to execute and deliver this Agreement, and the
Assumption Agreement and to consummate the transactions contemplated hereby and
thereby.
3.2 Authorization. The execution and delivery of this Agreement by the
Buyer and Unidigital and the agreements provided for herein to which each is a
party, and the consummation by the Buyer and Unidigital of all transactions
contemplated hereby, have been duly authorized by all requisite corporate
action. This Agreement and all such other agreements and written obligations
entered into and undertaken in connection with the transactions contemplated
hereby constitute the respective valid and legally binding obligations of the
Buyer and Unidigital, enforceable against them in accordance with their
respective terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors rights generally.
The execution, delivery and performance of this Agreement and the agreements
provided for herein, and the consummation by the Buyer and Unidigital of the
- 26 -
transactions contemplated hereby and thereby, will not, with or without the
giving of notice or the passage of time or both, (a) violate the provisions of
any law, rule or regulation applicable to the Buyer or Unidigital; (b) violate
the provisions of the organizational documents of the Buyer or Unidigital; (c)
violate any judgment, decree, order or award of any court, governmental body or
arbitrator applicable to the Buyer or Unidigital; or (d) conflict with or result
in the breach or termination of any term or provision of, or constitute a
default under, or cause any acceleration under, or cause the creation of any
lien, charge or encumbrance upon the properties or assets of the Buyer or
Unidigital pursuant to, any indenture, mortgage, deed of trust or other
agreement or instrument to which it or its properties is a party or by which the
Buyer or Unidigital is or may be bound. Schedule 3.2 attached hereto sets forth
a true, correct and complete list of all consents and approvals of third parties
that are required of the Buyer and Unidigital in connection with the
consummation by the Buyer and Unidigital of the transactions contemplated by
this Agreement.
3.3 Regulatory Approvals. All consents, approvals, authorizations and
other requirements prescribed by any law, rule or regulation which must be
obtained or satisfied by the Buyer and Unidigital and which are necessary for
its consummation by the Buyer and Unidigital of the transactions contemplated by
this Agreement have been obtained and satisfied.
3.4 Brokers. Except for the fees owed by Unidigital to CIBC
▇▇▇▇▇▇▇▇▇▇▇ Corp., all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Buyer and
Unidigital without the intervention of any other person in such manner as to
give rise to any valid claim for a finder's fee, brokerage commission or other
like payment.
4. Access to Information; Public Announcements
-------------------------------------------
4.1 Confidentiality. All information not previously disclosed to the
public or not generally known to persons engaged in the business of the Seller
or the Buyer which shall have been furnished by the Buyer or the Seller to the
other party in connection with the transactions contemplated hereby shall not be
disclosed by such receiving party to any person other than their respective
employees, directors, attorneys, accountants or financial advisors or other than
as contemplated herein. In the event that the transactions contemplated by this
Agreement shall not be consummated, all such information which shall be in
writing shall be returned to the party furnishing the same, including, to the
extent reasonably practicable, all copies or reproductions thereof which may
have been prepared, and neither party shall at any time thereafter disclose to
third parties, or use, directly or indirectly, for its own benefit, any such
information, written or oral, about the business of the other party hereto.
4.2 Public Announcements. Except as otherwise required by law or
government regulation, any public announcement, press release or similar
publicity with respect to this Agreement or the transactions contemplated hereby
shall be issued, if at all, at such time and in such manner as the Buyer and the
Seller mutually determine. Unless consented to by the Buyer in advance or
required by applicable law, the Selling Parties shall keep this Agreement
strictly
- 27 -
confidential and may not make any disclosure related to this Agreement to any
person. The Selling Parties and the Buyer shall consult with each other
concerning the means by which the Seller's Employees, customers, suppliers and
others having a business relationship with the Selling Parties will be informed
of the transactions contemplated hereby, and the Buyer shall have the right to
be present for any such communication. The Seller hereby acknowledges that this
Agreement may be filed by Unidigital as an exhibit to certain registration
statements and/or reports filed by it pursuant to the 1933 Act or the ▇▇▇▇ ▇▇▇.
5. Employee Matters
5.1 Seller's Employees. The Seller has furnished to the Buyer a list
containing the names of Seller's Employees, including each such employee's
status, social security number and current compensation.
5.2 Future Changes. Nothing in this Section 5 shall require the Buyer
to retain any of Seller's Employees for any period of time after the date
hereof. Subject to requirements of applicable law, the Buyer reserves the right
at any time after the date hereof to terminate such employment and amend, modify
or terminate any term or condition of employment, including without limitation,
any employee benefit plan, program, policy, practice or arrangement.
5.3 Plant Closing. None of the Selling Parties has, directly or
indirectly, taken or omitted to take any action which may result in the Seller's
or the Buyer's liability to any person or entity under the WARN Act. The term
"any action" does not include the sale and acquisition contemplated by this
Agreement. The liability under the WARN Act, if any, which results from the
Seller's termination of employees in connection with such sale and acquisition
is the sole responsibility of the Seller.
5.4 Reporting of Data. The Buyer and the Seller shall compile and
furnish to each other such actuarial and employee data as shall be required from
time to time for each party to perform and fulfill its obligations under this
Section 5.
5.5 Pending Litigation. With respect to any litigation pending, or to
the knowledge of the Selling Parties threatened, as set forth in Schedule 2.15
hereto, which claim alleges violation of any nondiscrimination laws, collective
bargaining agreements, employment contract and termination thereof or wage and
hour laws, the Seller shall fully defend such claim. The Seller shall be
responsible for any monetary damages awarded in connection therewith. It is
understood by the parties that if the Seller chooses to settle any matter
relating to any of the foregoing, including the terms and conditions thereof of
any back pay claims, such settlement shall be at the sole discretion of the
Seller and the Seller shall be solely responsible for the payment or performance
of any such settlement terms.
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6. Best Efforts to Obtain Satisfaction of Conditions
-------------------------------------------------
The Selling Parties and the Buyer covenant and agree to use their
best efforts to obtain the satisfaction of the conditions specified in this
Agreement.
7. Conditions to Obligations of the Buyer
--------------------------------------
The obligations of the Buyer under this Agreement are subject to
the fulfillment, at the Closing, of the following conditions precedent, each of
which may be waived in writing in the sole discretion of the Buyer:
7.1 Continued Truth of Representations and Warranties of the Selling
Parties: Compliance with Covenants and Obligations. The representations and
warranties of the Selling Parties shall be true in all material respects on and
as of the date hereof. The Seller shall have performed and complied in all
material respects with all covenants required by this Agreement to be performed
or complied with by it prior to or at the date hereof.
7.2 Corporate and Shareholder Proceedings. All corporate and other
proceedings required to be taken on the part of the Seller to authorize or carry
out this Agreement and to convey, assign, transfer and deliver the Assets shall
have been taken.
7.3 Other Governmental Approvals. All courts of law, governmental
agencies, departments, bureaus, commissions and similar bodies, the consent,
authorization or approval of which is necessary under any applicable law, rule,
order or regulation for the consummation by the Seller of the transactions
contemplated by this Agreement and the operation of the Seller's business by the
Buyer, shall have consented to, authorized, permitted or approved such
transactions including but not limited to, all clearance certificates required
pursuant to any applicable retail sales tax legislation required in connection
with the completion of the transactions contemplated herein.
7.4 Consents of Lenders, Lessors and Other Third Parties. The Seller
shall have received the consents and approvals of all lenders, lessors and other
third parties whose consent or approval is required in order for the Seller to
consummate the transactions contemplated by this Agreement.
7.5 Adverse Proceedings. No action or proceeding by or before any
court or other governmental body shall have been instituted by any governmental
body or person whatsoever which shall seek to restrain, prohibit or invalidate
the transactions contemplated by this Agreement or which might affect the right
of the Buyer to own or use the Assets after the Closing.
- 29 -
7.6 Opinion of Counsel. The Buyer shall have received an opinion of
▇▇▇▇▇▇ Davidoff ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Kass, counsel to the Seller, dated as of the
date hereof, substantially in the form attached hereto as Exhibit E (the
"Opinion of Seller's Counsel").
7.7 Board of Directors and Shareholder Approval. The directors and
shareholders of the Seller shall have duly authorized the transactions
contemplated by this Agreement.
7.8 Title to Assets. At the Closing, the Buyer shall receive good and
marketable title to all Assets, free and clear of all liens, mortgages, pledges,
security interests, restrictions, prior assignments, encumbrances and claims of
any kind or nature whatsoever.
7.9 Environmental Reports; Compliance with Laws. The Buyer shall not
have received unsatisfactory environmental reports from its environmental
consultants and at any time prior to the Closing shall not have discovered that
any Leased Premises fails to comply in any material respect with all applicable
federal, foreign, state or local environmental, zoning, land use, and wetlands
laws, rules and regulations.
7.10 Fire, Casualty or Eminent Domain. If any of the Assets are, prior
to the Closing, either damaged by fire or other casualty insured against or
taken, in whole or in part, by eminent domain proceedings, then the Buyer shall
have the right to accept said Assets in their damaged or diminished condition
together with an assignment to Buyer of all insurance and/or condemnation
proceeds payable with respect to such fire, casualty or loss or terminate this
Agreement.
7.11 Due Diligence Review. The Buyer shall have completed a due
diligence review of the Business, the results of which review are satisfactory
to the Buyer.
7.12 Employment Agreement. The Shareholder shall have entered into the
Employment Agreement with Unidigital substantially in the form attached hereto
as Exhibit F (the "Employment Agreement"), which shall include, without
limitation, confidentiality, invention assignment, non-solicitation and
non-competition provisions.
7.13 Stockholders Agreement. The Shareholder and Unidigital shall have
entered into the Stockholders Agreement substantially in the form attached
hereto as Exhibit G (the "Stockholders Agreement").
7.14 Closing Deliveries. The Buyer shall have received at or prior to
the Closing each of the following documents:
(a) the ▇▇▇▇ of Sale, executed by the Seller;
(b) such instruments of conveyance, assignment and transfer, and
motor vehicle transfers and safety inspection certificates, if any, in form and
substance satisfactory to the Buyer, as shall be appropriate to convey, transfer
and assign to, and to vest in, the Buyer, good and marketable title to the
Assets other than the Intangible Property;
- 30 -
(c) such instruments of conveyance, assignment and transfer in
form and substance satisfactory to the Buyer and in a form appropriate to file,
if required, with the United States Office of Patents and Trademarks, sufficient
to convey, transfer and assign to, and to vest in, the Buyer, good and
marketable title to the Intangible Property;
(d) all technical data, formulations, product literature and
other documentation relating to the Seller's business, all in form and substance
satisfactory to the Buyer;
(e) such contracts, files and other data and documents pertaining
to the Assets or the Business as the Buyer may reasonably request;
(f) copies of the general ledgers and books of account of the
Seller related to the Business, and all federal, state, local and foreign
income, franchise, capital, property and other tax returns filed by the Seller
with respect to the Assets since January 1, 1996.
(g) such certificates of the Seller's officers and such other
documents evidencing satisfaction of the conditions specified in this Section 7
as the Buyer shall reasonably request; certificate of the Secretary or Assistant
Secretary of the Seller attesting to the incumbency of the Seller's officers,
and the authenticity of the resolutions authorizing the transactions
contemplated by the Agreement and the organizational documents of the Seller;
(h) estoppel certificates from each lessor under the Leases set
forth in Schedule 2.9(b) attached hereto (i) consenting to the assignment of
such Lease to the Buyer; (ii) representing that there are no outstanding claims
against the Seller under any such Lease, and no outstanding defaults or events
which, with the passage of time, may become defaults; (iii) specifying the
commencement and termination dates under the Lease; and (iv) providing that any
purchase right, purchase option, right of first refusal, renewal right or other
similar provision is enforceable by the Buyer and specifying the rental rates
under the Lease and any other matters that Buyer may reasonably require;
(i) the originals, if in the Seller's possession, of all building
permits, certificates of occupancy, and other governmental licenses, permits and
approvals, and all plans and specifications relating to the Leased Premises not
previously delivered to the Buyer;
(j) the Employment Agreement, executed by the Shareholder;
(k) the Stockholders Agreement, executed by the Shareholder;
(l) the Opinion of Seller's Counsel;
(m) the Amendment of the Certificate of Incorporation of the
Seller to discontinue the use of the name "Kwik International Color, Ltd." and
to file any instruments as
- 31 -
may be necessary with any governmental authority to change their corporate names
and foreign qualifications; and
(o) such other documents, instruments or certificates as the
Buyer may reasonably request in order to evidence the accuracy of the Selling
Parties' representations or compliance by Seller with its covenants hereunder.
8. Conditions to Obligations of the Seller
---------------------------------------
The obligations of the Seller under this Agreement are subject to
the fulfillment, at the Closing, of the following conditions precedent, each of
which may be waived in writing at the sole discretion of the Seller:
8.1 Continued Truth of Representations and Warranties of the Buyer and
Unidigital; Compliance with Covenants and Obligations. The representations and
warranties of the Buyer and Unidigital in this Agreement shall be true on and as
of the date hereof. The Buyer and Unidigital shall have performed and complied
in all material respects with all covenants required by this Agreement to be
performed or complied with by each of them prior to or at the date hereof.
8.2 Corporate Proceedings. All corporate, legal and other proceedings
required to be taken on the part of the Buyer and Unidigital to authorize or
carry out this Agreement shall have been taken.
8.3 Approvals. All other governmental agencies, departments, bureaus,
commissions and similar bodies, the consent, authorization or approval of which
is necessary under any applicable law, rule, order or regulation for the
consummation by the Buyer and Unidigital of the transactions contemplated by
this Agreement shall have consented to, authorized, permitted or approved such
transactions.
8.4 Consents of Lenders, Lessors and Other Third Parties. The Buyer
and Unidigital shall have received all requisite and material consents and
approvals of all lenders, lessors and other third parties whose consent or
approval is required in order for the Buyer and Unidigital to consummate the
transactions contemplated by this Agreement, including but not limited to those
set forth on Schedule 3.2 attached hereto.
8.5 Adverse Proceedings. No action or proceeding by or before any
court or other governmental body shall have been instituted by any governmental
body or person whatsoever which shall seek to restrain, prohibit or invalidate
the transactions contemplated by this Agreement or which might affect the right
of the Seller to transfer the Assets or would affect the right of the Buyer to
acquire the Assets.
- 32 -
8.6 Opinion of Counsel. The Seller shall have received an opinion of
▇▇▇▇▇▇▇▇ Ingersoll, counsel to the Buyer and Unidigital, dated as of the date
hereof, substantially in the form attached hereto as Exhibit H (the "Opinion of
Buyer's Counsel").
8.7 Material Adverse Change. Neither the Buyer nor Unidigital have
suffered a material adverse change (financial or otherwise) since the date of
Unidigital's last quarterly report filed with the Securities and Exchange
Commission pursuant to the ▇▇▇▇ ▇▇▇.
8.8 Closing Deliveries. The Seller shall have received at or prior to
the Closing each of the following documents:
(a) such certificates of the Buyer's officers and such other
documents evidencing satisfaction of the conditions specified in this Section 8
as the Seller shall reasonably request;
(b) a certificate of the Secretary or Assistant Secretary of the
Buyer attesting to the incumbency of the Buyer's officers, and the authenticity
of the resolutions authorizing the transactions contemplated by this Agreement
and the organizational documents of the Buyer;
(c) such certificates of Unidigital's officers and such other
documents evidencing satisfaction of the conditions specified in this Section 8
as the Seller may reasonably request;
(d) a certificate of the Secretary of Unidigital attesting to the
incumbency of Unidigital's officers, and the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement and the
organizational documents of Unidigital;
(e) the Assumption Agreement, executed by the Buyer and accepted
by the Seller;
(f) payment of the portion of Purchase Price due at the Closing,
including the Cash Consideration, the Note, the Stock Consideration and the
Additional Cash Consideration, if any;
(g) the Employment Agreement, executed by Unidigital;
(h) the Stockholders Agreement, executed by Unidigital and
▇▇▇▇▇▇▇ ▇. ▇▇▇;
(i) the Opinion of Buyer's Counsel; and
(j) such other documents, instruments or certificates as the
Seller may reasonably request.
- 33 -
9. Post-Closing Agreements
-----------------------
9.1 Proprietary Information.
-----------------------
(a) The Seller shall hold in confidence, and use its best efforts
to have all officers, shareholders, directors and personnel hold in confidence,
all knowledge and information of a secret or confidential nature with respect to
the Business, and shall not disclose, publish or make use of the same without
the consent of the Buyer, except to the extent that such information shall have
become public knowledge other than by breach of this Agreement by the Seller or
by any other persons who have agreed not to disclose, publish or make use of
such information.
(b) The Seller agrees that the remedy at law for any breach of
this Section 9.1 would be inadequate and that the Buyer and/or Unidigital shall
be entitled to injunctive relief in addition to any other remedy it may have
upon breach of any provision of this Section 9.1.
(c) The foregoing to the contrary notwithstanding, no
information, written or oral, shall be construed or considered confidential
information and thereby subject to the restrictions of this Section 9.1 if such
information was (i) generally available to the public other than as a result of
a disclosure by the Seller or anyone to whom the Seller transmits the
information in violation hereof, (ii) in the possession of the Seller or known
to the Seller on a non-confidential basis prior to its disclosure to the Seller,
(iii) available to the Seller on a non-confidential basis from a source other
than the Buyer or Unidigital who is not bound by a confidentiality agreement
with the Buyer or Unidigital, as the case may be, or (iv) available in trade
publications, reference books or other resources and which may be compiled by
any person's decisions of preparing a report or memorandum containing such
information.
9.2 Solicitation or Hiring of Former Employees. Except as provided by
law or with the written consent of the Buyer, for a period of three years after
the date hereof, the Seller and any persons or entities that are not natural
persons, that directly or indirectly, through one or more intermediaries,
control, are controlled by, or are under common control with, the Seller (the
"Corporate Affiliates"), shall not solicit any person who was a Seller's
Employee on the date hereof, and has been employed, and not terminated without
cause, by the Buyer, to terminate his employment with the Buyer or to become an
employee of the Seller or its Corporate Affiliates or hire any person who was
such an employee on the date hereof.
9.3 Non-Competition Agreement.
-------------------------
(a) For a period of five (5) years after the date hereof, neither
the Seller nor any Corporate Affiliate (except for the Shareholder) thereof
shall directly or indirectly (i) manufacture, market or sell any product or
service which has the same or substantially the same function and primary
application as any existing or proposed product or service manufactured,
marketed or sold by the Seller on or prior to the date hereof or (ii) engage in,
manage, operate, be connected with or acquire any interest in, as an employee,
consultant, advisor, agent, owner, partner, co-venturer, principal, director,
shareholder, lender or otherwise, any business
- 34 -
competitive with the business of the Seller, Unidigital or the Buyer as
conducted on the date hereof (a "Competitive Business"), in any country in the
world, except that the Seller and its Corporate Affiliates may own, in the
aggregate, not more than 1% of the outstanding shares of any publicly held
corporation which is a Competitive Business which has shares listed for trading
on a securities exchange registered with the Securities and Exchange Commission
or through the automatic quotation system of a registered securities
association.
(b) The parties hereto agree that the duration and geographic
scope of the non-competition provision set forth in this Section 9.3 are
reasonable. In the event that any court determines that the duration or the
geographic scope, or both, are unreasonable and that such provision is to that
extent unenforceable, the parties hereto agree that the provision shall remain
in full force and effect for the greatest time period and in the greatest area
that would not render it unenforceable. The parties intend that this
non-competition provision shall be deemed to be a series of separate covenants,
one for each and every county of each and every state of the United States of
America and each and every political subdivision of each and every country
outside the United States of America where this provision is intended to be
effective. The Seller agrees that damages are an inadequate remedy for any
breach of this provision and that the Buyer shall, whether or not it is pursuing
any potential remedies at law, be entitled to equitable relief in the form of
preliminary and permanent injunctions without bond or other security upon any
actual or threatened breach of this non-competition provision. If the Seller or
any Corporate Affiliate shall violate this Section 9.3, the duration of this
Section 9.3 automatically shall be extended as against such violating party for
a period equal to the period during which such party shall have been in
violation of this Section 9.3. The covenants contained in this Section 9.3 are
deemed to be material and the Buyer is entering into this Agreement relying on
such covenants.
9.4 Sharing of Data. The Seller shall have the right for a period of
seven years following the date hereof to have reasonable access to such books,
records and accounts, including financial and tax information, correspondence,
production records, employment records and other similar information as are
transferred to the Buyer pursuant to the terms of this Agreement for the limited
purposes of concluding its involvement in the business of the Seller prior to
the date hereof and for complying with its obligations under applicable
securities, tax, environmental, employment or other laws and regulations. The
Buyer and/or Unidigital shall have the right for a period of seven years
following the date hereof to have reasonable access to those books, records and
accounts, including financial and tax information, correspondence, production
records, employment records and other records which are retained by the Seller
pursuant to the terms of this Agreement to the extent that any of the foregoing
relates to the Business transferred to the Buyer hereunder or is otherwise
needed by the Buyer and/or Unidigital in order to comply with its obligations
under applicable securities, tax, environmental, employment or other laws and
regulations.
9.5 Cooperation in Litigation. Each party hereto will fully cooperate
with the other in the defense or prosecution of any litigation or proceeding
already instituted or which may be instituted hereafter against or by such party
relating to or arising out of the conduct of the
- 35 -
Business prior to or after the date hereof (other than litigation arising out of
the transactions contemplated by this Agreement and except as otherwise
expressly provided herein). The party requesting such cooperation shall pay the
out-of-pocket expenses (including legal fees and disbursements) of the party
providing such cooperation and of its officers, directors, employees and agents
reasonably incurred in connection with providing such cooperation, but shall not
be responsible to reimburse the party providing such cooperation for such
party's time spent in such cooperation or the salaries or costs of fringe
benefits or similar expenses paid by the party providing such cooperation to its
officers, directors, employees and agents while assisting in the defense or
prosecution of any such litigation or proceeding.
9.6 Guaranty. In the event that the Buyer fails to duly and properly
perform and satisfy its obligations under this Agreement in accordance with the
terms and conditions hereof, Unidigital will, upon written demand of the Selling
Parties setting forth the specific failure of the Buyer, perform and satisfy
those obligations of the Buyer set forth in such written demand in accordance
with the terms and conditions of this Agreement.
9.7 Customer and Other Business Relationships. The Selling Parties
will cooperate with the Buyer in its efforts to continue and maintain, with
lessors, licensors, customers, suppliers and other business associates of any of
the Selling Parties, the same business relationships with the Buyer after the
Closing as maintained with such Selling Party before the Closing, with respect
to the business to be carried on by the Buyer utilizing the Assets. The Selling
Parties will refer to the Buyer all inquiries relating to the Business from
customers and all such other persons. The Selling Parties will not take any
action designed or intended to have the effect of discouraging any customer or
such other person from continuing or maintaining the same such business with the
Buyer after the Closing. The Selling Parties shall use their best efforts to
satisfy any liability or obligation not assumed by the Buyer hereunder in a
manner which is not detrimental to the Buyer's relationships with suppliers and
vendors.
9.8 Subrogation. If the Buyer or Unidigital becomes liable for or
suffers any damage with respect to any matter that was covered by insurance
maintained by the Selling Parties at or before the Closing, the Buyer and
Unidigital, as the case may be, shall be and hereby are subrogated to any rights
of the Selling Parties under such insurance coverage. The Selling Parties shall
promptly remit to the Buyer or Unidigital, as the case may be, any insurance
proceeds any of them may receive on account of any such liability or damage.
10. Indemnification and Reimbursement
---------------------------------
10.1 Indemnification.
---------------
(a) The Selling Parties shall indemnify, defend and hold harmless
the Buyer and any parent, subsidiary or affiliate thereof and all directors,
officers, employees, agents and consultants of each of the foregoing
(collectively, the "Buyer Group") from and against all demands, claims, actions
or causes of action, assessments, losses, damages, liabilities (whether
- 36 -
absolute, accrued, contingent or otherwise), costs and expenses, including but
not limited to, interest, penalties and attorneys' fees and expenses
(collectively, "Damages"), asserted against, imposed upon or incurred by the
Buyer Group or any member thereof, directly or indirectly, by reason of or
resulting from or relating to any of the following (but in any event excluding
the Assumed Liabilities) at such time as the Damages (except for Damages
incurred pursuant to clause (vi) of this Section 10.1(a)), whether actual or
alleged, exceed $100,000, and only to the excess thereof:
(i) liability and obligation of the Selling Parties;
(ii) misrepresentation or breach of warranty or covenant or
agreement by the Selling Parties made or contained in this Agreement or in any
certificate, document, writing or instrument furnished or to be furnished to the
Buyer under this Agreement;
(iii)failure to comply with any bulk sales or similar laws
applicable to the transactions contemplated hereby;
(iv) litigation or other claim arising from acts, failures
to act or events which occurred prior to the date hereof including, without
limitation, the remediation of environmental conditions attributable to the
conduct of the Business at the manufacturing facility in New York, New York
prior to the date hereof and claims for product failure or defect (including but
not limited to claims for personal injury, property damages and breach of
warranty) which relate to any product manufactured or sold prior to the date
hereof;
(v) litigation or other claim arising out of the transfer of
shares of the Seller's common stock pursuant to that certain Redemption
Agreement dated as of January 15, 1998 between the Seller and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
(vi) failure to comply with any provisions set forth in any
collective bargaining agreement between the Seller and any of the Seller's
Employees (it being understood that the Selling Parties' indemnification
obligation under this clause (vi) shall be limited to one-half of any Damages in
excess of $500,000 arising hereunder); and
(vii)in addition to the foregoing, the Seller shall also
indemnify the Buyer for the face value of all Accounts Receivable which existed
as of the Closing, but are not collected within one hundred twenty (120) days
after Closing, upon the Buyer's request therefor, provided that the Buyer has
used commercially reasonable efforts to collect such receivables. If the Buyer
shall thereafter collect any Account Receivable for which it has received an
indemnification payment from the Seller pursuant to the immediately preceding
sentence, the Buyer shall promptly remit the amount so collected to the Seller.
(b) The Buyer and Unidigital shall indemnify, defend and hold
harmless the Seller and any parent, subsidiary or affiliate thereof and all
directors, officers, employees, agents and consultants of the foregoing
(collectively, the "Seller Group") from and against all Damages
- 37 -
asserted against, imposed upon or incurred by the Seller Group or any member
thereof, directly or indirectly, by reason of or resulting from or relating to
the Assumed Liabilities.
10.2 CERCLA. Nothing contained in this Agreement shall be deemed a
waiver of the right of the Buyer to maintain a private party cost recovery
action under the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq.
10.3 Notice and Defense of Claims. The parties' obligations and
liabilities hereunder with respect to claims resulting from the assertion of
liability by the Buyer Group, the Seller Group or third parties shall be subject
to the following terms and conditions:
(a) Notice. The party seeking indemnification hereunder (each, an
"Indemnified Party") shall give prompt written notice to the party from whom
indemnification is being sought (each, an "Indemnifying Party") of any claim or
event known to it which does or may give rise to a claim by the Indemnified
Party against the Indemnifying Party for which the Indemnified Party believes it
is entitled to indemnification pursuant to this Section 10 of this Agreement,
stating the nature and basis of said claims or events and the amounts thereof,
to the extent known, and in the case of any claim, action, suit or proceeding
brought by any third party, a copy of any claim, process or legal pleadings with
respect thereto promptly after any such documents are received by the
Indemnified Party. Such notice shall be given in accordance with Section 12
hereof.
(b) Third Party Claims or Actions.
-----------------------------
(i) In the event any claim, action, suit or proceeding is
made or brought by any third party against the Indemnified Party, with respect
to which the Indemnifying Party may have liability for Damages under this
Section 10 of this Agreement, the Indemnifying Party shall, at its own expense,
be entitled to participate in and, to the extent that it shall wish, jointly and
with any other Indemnifying Party, to assume the defense, with independent
counsel reasonably satisfactory to the Indemnified Party, provided that in
assuming the defense of any such third party claim, action, suit or proceeding,
the Indemnifying Party acknowledges in writing to the Indemnified Party that the
Indemnifying Party shall thereafter be liable for any Damage with respect to
such claim, action, suit or proceeding.
(ii) If the Indemnifying Party elects to assume control of
such defense or settlement, it shall conduct such defense or settlement in a
manner reasonably satisfactory and effective to protect the Indemnified Party
fully; such company and its counsel will keep the Indemnified Party fully
advised as to its conduct of such defense or settlement, and no compromise or
settlement shall be agreed or made without the written consent of the
Indemnified Party. In any case, the Indemnified Party shall have the right to
employ its own counsel and such counsel may participate in such action, but the
reasonable fees and expenses of such counsel shall be at the expense of the
Indemnified Party, when and as incurred, unless (A) the employment of counsel by
the Indemnified Party has been authorized in writing by the Indemnifying Party,
(B) the Indemnified Party shall have reasonably concluded that there may be
- 38 -
a conflict of interest between the Indemnifying Party and the Indemnified Party
in the conduct of the defense of such action, (C) the Indemnifying Party shall
not in fact have employed independent counsel reasonably satisfactory to the
Indemnified Party to assume the defense of such action and shall have been so
notified by the Indemnified Party, (D) the Indemnified Party shall have
reasonably concluded and specifically notified the Indemnifying Party either
that there may be specific defenses available to it which are different from or
additional to those available to it or that such claim, action, suit or
proceeding involves or could have a material adverse effect upon it beyond the
financial resources of the Indemnifying Party or the scope of this Agreement, or
(E) the Indemnifying Party fails to conduct such defense or settlement in a
manner reasonably satisfactory to protect the Indemnified Party fully. If clause
(B), (C), (D) or (E) of the preceding sentence shall be applicable, then counsel
for the Indemnified Party shall have the right to direct the defense of such
claim, action, suit or proceeding on behalf of the Indemnified Party and the
reasonable fees and disbursements of such counsel shall constitute Damages
hereunder.
(iii)If the Indemnifying Party does not elect to assume the
defense of any such claim, or if they fail to conduct said defense or settlement
in a manner reasonably satisfactory to protect the Indemnified Party fully, the
Indemnified Party may engage independent counsel selected by the Indemnified
Party to assume the defense and may contest, pay, settle or compromise any such
claim on such terms and conditions as the indemnified party may determine. The
reasonable fees and disbursements of such counsel shall constitute Damages
hereunder.
(iv) The Buyer and the Selling Parties, as the case may be,
shall be kept fully informed of such claim, action, suit or proceeding at all
stages thereof whether or not such party is represented by its own counsel.
10.4 Cooperation. The parties hereto agree to render to each other
such assistance as they may reasonably require of each other and to cooperate in
good faith with each other in order to ensure the proper and adequate defense of
any claim, action, suit or proceeding brought by any third party. Where counsel
has been selected by the Selling Parties or by the Buyer pursuant to Section
10.4, the Selling Parties or the Buyer, as the case may be, shall be entitled to
rely upon the advice of such counsel in the conduct of the defense.
10.5 Confidentiality. The parties agree to cooperate in such a manner
as to preserve in full the confidentiality of all confidential business records
and the attorney-client and work-product privileges. In connection therewith,
each party agrees that (a) it will use its best efforts, in any action, suit or
proceeding in which it has assumed or participated in the defense, to avoid
production of confidential business records and (b) all communications between
any party hereto and counsel responsible for or participating in the defense of
any action, suit or proceeding shall, to the extent possible, be made so as to
preserve any applicable attorney-client or work-product privilege.
- 39 -
10.6 Escrow; Right of Offset. The Buyer may offset any and all Damages
owed by the Selling Parties to the Buyer Group pursuant to this Section 10
against any funds held in escrow pursuant to the Escrow Agreement. Neither the
exercise of nor the failure to exercise such right or to give notice of a claim
under the Escrow Agreement shall constitute an election of remedies or limit the
Buyer in any manner in the enforcement of any other legal or equitable remedies
that may be available to the Buyer.
11. Transfer and Sales Tax
----------------------
The Buyer shall be responsible for and pay all filing and
recording taxes and fees, and all sales, use and transfer taxes and fees, if
any, upon the sale and transfer of the Assets hereunder.
12. Notices
-------
Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing (including
telecommunications) and delivered personally or sent by telex, telecopy or other
wire transmission (with request for assurance in a manner typical with respect
to communications of that type), federal express or other overnight air courier
(postage prepaid), registered or certified mail (postage prepaid with return
receipt requested), addressed as follows or to such other address of which the
parties may have given notice:
To the Seller: Kwik International Color, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ Davidoff ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
To the Buyer: Unidigital Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇, President
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 40 -
With a copy to: ▇▇▇▇▇▇▇▇ Ingersoll
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered, if delivered personally or by wire
transmission; (b) on the next business day after mailing or deposit with an
overnight air courier; or (c) five business days after being sent, if sent by
registered or certified mail.
13. Successors and Assigns
----------------------
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Neither the
Seller nor the Buyer may assign all or a portion of its rights and obligations
hereunder without the prior written consent of the other party, except that the
Buyer may assign all or a portion of its rights and obligations hereunder to an
Affiliate of the Buyer, provided that the Buyer shall remain liable for the
performance of the Buyer's obligations under this Agreement. Any assignment in
contravention of this provision shall be void.
14. Entire Agreement; Amendments; Attachments
-----------------------------------------
(a) This Agreement, all Schedules and Exhibits hereto, and all
agreements and instruments to be delivered by the parties pursuant hereto
represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior oral and written
and all contemporaneous oral negotiations, commitments and understandings
between such parties except as expressly provided herein. The Buyer and the
Seller, by the consent of their respective Boards of Directors, or officers
authorized by such Boards, may amend or modify this Agreement, in such manner as
may be agreed upon, by a written instrument executed by the Buyer and the
Seller.
(b) If the provisions of any Schedule or Exhibit to this
Agreement are inconsistent with the provisions of this Agreement, the provisions
of the Agreement shall prevail. The Exhibits and Schedules attached hereto or to
be attached hereafter are hereby incorporated as integral parts of this
Agreement.
15. Expenses
--------
Except as otherwise expressly provided herein, the Buyer and the
Seller shall each pay their own expenses in connection with this Agreement and
the transactions contemplated hereby.
- 41 -
16. Governing Law
-------------
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without reference to conflicts of laws
rules or principles.
17. Section Headings
----------------
The section headings are for the convenience of the parties and
in no way alter, modify, amend, limit, or restrict the contractual obligations
of the parties.
18. Severability
------------
The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
19. Counterparts
------------
This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which shall be one and
the same document.
20. Currency
--------
Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in United States funds.
21. Waiver
------
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party, (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given, and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
- 42 -
22. Ambiguity in Drafting
---------------------
Each party shall have been deemed to have participated equally in
the drafting of this Agreement and the agreements contemplated hereby and any
ambiguity in any such contracts shall not be construed against any purported
author thereof.
[Signature page follows]
- 43 -
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of and on the date first above written.
(Corporate Seal) SELLER:
ATTEST: KWIK INTERNATIONAL COLOR, LTD.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------------
Assistant Secretary Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
SHAREHOLDER:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(Corporate Seal) BUYER:
ATTEST: UNISON (NY), INC.
/s/ ▇▇▇▇▇ ▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
----------------------------- -----------------------------
Secretary Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Chairman of the Board
(Corporate Seal)
ATTEST: UNIDIGITAL INC.
/s/ ▇▇▇▇▇ ▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
----------------------------- -----------------------------
Assistant Secretary Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: President