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EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇ ▇▇▇▇▇▇,
MICROBIZ CORP.
AND
CAM COMMERCE SOLUTIONS, INC.
AUGUST 4, 2000
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of the 4th day of August 2000
(this "Agreement"), is entered into by and between CAM Commerce Solutions, Inc.,
a Delaware corporation (the "Purchaser"), MicroBiz Corp. , a New York
corporation (the "Company") and ▇▇▇▇▇ ▇▇▇▇▇▇ (the "Seller") who is the record
and beneficial owner of 100% of the issued and outstanding shares of capital
stock of the Company.
SECTION 1. Sale and Purchase of Shares; Purchase Price. Subject to the
terms and conditions of this Agreement, the Seller agrees to sell to the
Purchaser, and the Purchaser agrees to purchase from the Sellers all of the
issued and outstanding shares of capital stock of the Company (the "Shares") for
an aggregate cash purchase price of $2 million, payable as set forth on Schedule
1 hereto (the "Purchase Price").
SECTION 2. The Closing. The closing of the purchase and sale of the
Shares shall take place at 10:00 a.m. (Pacific Daylight time) on or before
August 31, 2000 at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or (a) on such other date upon which all of the
conditions precedent set forth in Section 5 shall have been satisfied or waived
or (b) at such other time, date and place as the Purchaser and the Seller may
otherwise mutually agree (the "Closing," and such date, the "Closing Date").
Upon satisfaction of all conditions set forth in Section 5, at the Closing, and
against payment of the Purchase Price by transfer of immediately available funds
to the account of the Seller, as designated by him to the Purchaser at least two
(2) days in advance of the Closing Date and delivery of stock certificates
evidencing the Shares, the Seller shall sell, transfer and deliver to the
Purchaser, as applicable, free and clear of all Liens, certificates evidencing
the Shares at the Closing.
SECTION 3. Representations and Warranties of the Seller. As of the date
hereof, and as of the Closing Date, the Seller hereby represents and warrants to
the Purchaser as follows:
3.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the state of New York and has all requisite power and authority and has
all Licenses and other governmental authorizations necessary to (a) enter into
this Agreement and each of the Related Documents to which it is a party, (b)
perform all of its obligations hereunder and thereunder and (c) own, operate and
lease its Properties and carry on its business as now conducted and as proposed
to be conducted. The Company is duly qualified or duly licensed to transact
business and is in good standing (including in good tax standing) in each
jurisdiction set forth on Schedule 3.1, which are all of the jurisdictions in
which the nature of the business conducted by it or its ownership or leasing of
any Property makes such qualification necessary. True and complete copies of the
Articles or Certificate of Incorporation and Bylaws of the Company have been
delivered to the Purchaser. Schedule 3.1 lists the directors and officers of the
Company.
3.2 Subsidiaries. The Company does not own, directly or
indirectly, any stock, partnership interest, membership interest, joint venture
interest, ownership interest or other
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security, investment or interest in any corporation, partnership, limited
liability company, joint venture, organization or other entity.
3.3 Authorization and Enforceability. All action on the part
of the Seller and the Company, and its officers, directors and stockholders
necessary for the authorization, execution and delivery of this Agreement and
the Related Documents and the performance of all obligations of the Sellers and
the Company hereunder and thereunder, including the sale of the Common Stock
contemplated hereunder, has been taken or will be taken on or prior to the
Closing. This Agreement has been, and each Related Document to which the Seller
and the Company is or will be a party will be prior to the Closing Date, duly
executed and delivered by the Seller and the Company, as the case may be, and
constitutes, and with respect to each such Related Document will constitute at
the Closing, the valid and legally binding obligation of the Seller and the
Company to the extent it is a party thereto, enforceable against the Seller and
the Company in accordance with its terms, subject to applicable bankruptcy,
insolvency reorganization, moratorium and similar laws affecting creditor's
rights and remedies generally.
3.4 Capitalization. The authorized capital of the Company
consists in its entirety of 20,000,000 shares of common stock, $0.01 par value,
of which 8,000,000 are issued and outstanding as of the date hereof and will be
outstanding as of the Closing Date. The Shares constitute all of the issued and
outstanding capital stock of the Company. There are no shares of capital stock
of the Company reserved for issuance nor are there any preemptive rights or any
outstanding subscriptions, options, warrants, rights, convertible securities,
calls, commitments, or other agreements, arrangements or commitments relating to
the issued or unissued capital stock or other securities of the Company. Other
than this Agreement and the Related Documents, no share of common stock is
subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding to which the Seller is a party, including any such
agreement, arrangement, commitment or understanding restricting or otherwise
relating to the voting or disposition of any share of common stock. There are
not any outstanding bonds, debentures, notes or other Indebtedness of the
Company having the right to vote (or convertible into, or exchangeable for
securities having the right to vote) on any matters on which stockholders of the
Company may vote. As of the Closing Date, there will not be any outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any capital stock or equity securities of such Company or any other
Person. The Company's Stock Appreciation Rights Plan shall be terminated as of
the Closing Date at no cost to the Company. All appreciation units, shares,
payment rights and any other benefits issued to plan participants shall be
terminated concurrently with the termination of the Stock Appreciation Rights
Plan. No participant in such plan shall be entitled to any payments or benefits
under such plan, or otherwise, as a result of the termination of the plan and
plan benefits.
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3.5 Valid Issuance; Share Ownership. All the Shares have been
duly authorized and validly issued and are fully paid and nonassessable, and
have been issued in compliance with all applicable federal and state securities
laws and, subject to the accuracy of the representations and warranties made by
the Purchaser in Section 4, when sold under the terms and conditions of this
Agreement, will be sold to the Purchaser in compliance with all applicable
federal and state securities laws. The Seller is the record and beneficial
owners of all Shares as of the date hereof free and clear of any and all Liens.
At the Closing, the Seller will deliver to the Purchaser good title to the
Shares, free and clear of any and all Liens.
3.6 Consents. No material Consent is required to be obtained
by the Seller, the Company or any of their Affiliates in connection with the
execution, delivery or performance by the Sellers and the Company of this
Agreement and the Related Documents to which it is a party or the consummation
by the Seller and the Company of the transactions contemplated hereby or
thereby.
3.7 No Conflicts. Neither the execution and delivery of this
Agreement or any Related Document to which the Seller or the Company is or will
be a party, nor the consummation of the transactions contemplated hereby or
thereby, will (a) violate any provision of the Articles or Certificate or
Incorporation or the Bylaws of the Company, as amended through the date hereof,
(b) subject to obtaining the Consents listed on the Disclosure Schedule,
violate, breach, conflict with, or constitute a default (or constitute an event
which, with the giving of notice or lapse of time or both, would constitute a
default) under, or give rise to any right of termination, cancellation or
acceleration under, any Contract or other contract, agreement, lease, License or
document to which they Seller or the Company is a party, (c) violate any order,
writ, injunction, decree, law, statute, rule or regulation of any Governmental
Authority applicable to the Seller or the Company or pertaining or relating to
the Business or any Property of the Company or (d) give rise to a declaration or
imposition of any Lien upon any share of Common Stock or any Property of the
Company.
3.8 Financial Statements.
(a) The Seller has delivered to the Purchaser
unaudited financial statements of the Company, including a balance sheet as of
June 30, 2000 (the "Latest Balance Sheet") and statements of operations and
statements of stockholder's equity and cash flows for the fiscal year ended June
30, 1999 and June 30, 1998, and the related notes thereto (collectively, the
"Financial Statements"). The Financial Statements (i) have been prepared from
the books and records kept by the Company, in conformity with GAAP consistently
applied with prior periods, and (ii) are complete and correct and fairly present
the financial condition and results of operations of the Company, as of the
dates and for the periods indicated therein. The Financial Statements reflect
the conduct of the business of the Company in the ordinary course.
(b) The Company has no liabilities, obligations or
commitments of any nature (whether absolute, accrued, contingent or otherwise
and whether matured or unmatured), including without limitation any liabilities
due or to become due to any taxing authority having
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jurisdiction over the Company, except (a) liabilities reflected in, reserved
against or disclosed in the footnotes of the Financial Statements, (b)
liabilities, obligations or commitments incurred since the Latest Balance Sheet
in the ordinary course of business of the Company and consistent with past
practice (none of which relates to any breach of contract, breach of warranty,
tort, infringement or known violation of law or arose out of any action,
proceeding, claim, complaint, grievance, investigation or unfair labor practice
complaint, grievance or investigation) pursuant to Contracts listed on Schedule
3.13 or (c) other liabilities or obligations not required to be shown on a
balance sheet prepared in accordance with GAAP, but that are incurred in the
ordinary course of business consistent with past practice and which are not
material in nature or amount individually or in the aggregate.
3.9 Absence of Certain Changes or Events. Since the Latest
Balance Sheet, the Company has conducted its business in the ordinary course
consistent with past practice and there has not been any:
(a) Material Adverse Effect, and no event, fact or
circumstances has occurred that, individually or in the aggregate, is reasonably
likely to result in a Material Adverse Effect;
(b) in a single transaction or a series of related
transactions, sale (including by sale-leaseback), lease, license, pledge,
transfer, disposition of or other imposition of any Lien on any assets which,
individually or in the aggregate, have a fair market value in excess of $25,000,
other than sales of inventory in the ordinary course of business and consistent
with past practice;
(c) acquisition of or agreement to acquire by merging
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
partnership, limited liability company, association or other business entity, in
a transaction or series of related transactions;
(d) change in accounting methods, principles or
practices by the Company affecting any of its liabilities, results of operations
or business;
(e) revaluation by the Company of any of its
Properties, including without limitation, any write-offs, increases or decreases
in any reserves or any write-up or write-down of the value of inventory,
property, plant, equipment or any other Property or any change in any
assumptions underlying, or facts relating to, or methods of calculating, any bad
debt, contingency or other reserves other than listed on Schedule 3.9;
(f) issuance by the Company of, or commitment to
issue, any common stock or other equity securities or obligations or any
securities convertible into or exchangeable or exercisable for equity
securities;
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(g) Indebtedness incurred, assumed or guaranteed by
the Company or any commitment to incur Indebtedness entered into by the Company,
or any loans made or agreed to be made by the Company;
(h) increase in the compensation of officers or
employees (including any such increase pursuant to any bonus, pension, profit
sharing or other plan or commitment) or any increase in the compensation payable
or to become payable to any officer or employee or any severance or termination
pay, except for increases in the ordinary course of business, consistent with
past practice or as required by law or any existing agreement and except for
cost of living adjustments and other increases consistent with past practice
other than as set forth on the Disclosure Schedules;
(i) granting of any bonus, incentive compensation,
service, award or other like benefit to any officer or employee except in
accordance with plans or arrangements disclosed on the Disclosure Schedules;
(j) incurrence or imposition of a Lien on any of the
assets or other Properties of the Company;
(k) damage, destruction or loss (whether or not
covered by insurance) in an aggregate amount exceeding $25,000 and adversely
affecting the financial condition, assets, liabilities, Properties, business,
results of operation or prospects of the Company;
(l) delay or failure to pay or perform any obligation
(including accounts payable) of the Company when due;
(m) acceleration, prepayment or performance of any
account receivable or any Indebtedness or other material obligation owed to the
Company before it is due or otherwise owed;
(n) termination, amendment, modification or waiver
of, or any breach, violation or default by any party under, any Contract;
(o) forgiveness, waiver or agreement to extend
repayment of any Indebtedness or other material obligation owed by or to the
Company;
(p) disposition or lapse of any rights to use any of
the Proprietary Rights of the Company;
(q) contract, agreement or transaction with any
Affiliate of the Company, any officer, director, stockholder or employee of the
Company or any family member of any such person;
(r) declaration, setting aside or payment of any
dividend or other distribution or payment (whether in cash, property or equity
interests) with respect to the capital
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stock of the Company, or any redemption, purchase or acquisition of any of the
securities of the Company;
(s) material change in the federal, state or local
tax liability of the Company;
(t) capital expenditures or commitments for additions
to any Property of the Company constituting capital assets in an aggregate
amount exceeding $50,000 and not previously contained in a capital budget
furnished to the Purchaser; or
(u) agreement to take or agree to take any of the
actions described in subsections (a) through (t) above.
3.10 Insurance. There is in full force and effect one or more
policies of insurance issued by insurers of recognized national standing
insuring the Properties and business of the Company against such losses and
risks and in such amounts as are usual and customary in the fire protection
industry and any other industry, business or segment thereof in which the
Company operates or conducts business. Neither the Company nor any other
additional named insured is in default with respect to its obligations under any
of such outstanding insurance policies and all premiums with respect thereto are
current. Neither the Company nor any other additional named insured has failed
to give any notice or to present any material claim under any such policy in a
due and timely fashion. Such policies are in full force and effect on the date
hereof and will continue to be kept in full force and effect on substantially
equivalent terms until the consummation of the transactions contemplated hereby
and in the Related Documents, except to the extent policies expire and are
replaced in the ordinary course of business with policies on substantially
equivalent terms which shall continue to be kept in full force and effect from
the date hereof on identical terms through the consummation of the transactions
contemplated by this Agreement. All premiums due under the policies have been
paid and neither the Company nor any such insured has been issued or has
received any notice of cancellation, material modification or termination in
respect of any such policy or is in default thereunder. Neither the Company nor
any such insured has been issued or has received notice that any insurer under
any policy is denying liability with respect to a claim in excess of $25,000
thereunder or defending under a reservation of rights clause.
3.11 Employee Benefits. The Company does not directly employ
any personnel. All employees are provided to the Company on a contract basis by
EPIX, which makes all payroll, provides all benefits and withholds all payroll
and related taxes. For purposes of this Section 3.11, the term "Company" shall
mean MicroBiz Corp. and shall include EPIX to the extent it provides employees
to the Company. The term "employee" shall include all employees provided by EPIX
to the Company.
(a) Schedule 3.11 sets forth a true and complete list
of:
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(i) Each individual employment, termination,
or severance agreement with employees or former
employees of the Company whose annual compensation is
at a base rate equal to or exceeding $50,000;
(ii) All employee benefit plans, as defined
in ERISA Section 3(3); and
(iii) All other profit-sharing, bonus, stock
option, stock purchase, stock bonus, restricted
stock, stock appreciation right, phantom stock,
vacation pay, holiday pay, tuition reimbursement,
scholarship, severance, dependent care assistance,
excess benefit, incentive compensation, salary
continuation, supplemental retirement, employee loan
or loan guarantee program, split dollar, cafeteria
plan, and other compensation arrangements;
maintained or contributed to by the Company or EPIX for the benefit of the
Company's employees (or former employees) and/or their beneficiaries (or
employees provided to the Company by EPIX. All of these types of arrangements
shall be collectively referred to as "Benefit Plans." An arrangement will not
fail to be a Benefit Plan simply because it only covers one individual, or
because the Company's obligations under the plan arise by reason of its being a
"successor employer" under applicable law. Furthermore, a Voluntary Employees'
Beneficiary Association under Section 501(c)(9) of the Code will be considered a
Benefit Plan for this purpose.
(b) The Company has delivered to the Purchaser a true
and complete copy of the following documents, to the extent that they are
applicable:
(i) Each Benefit Plan and any related
funding agreements (e.g., trust agreements or
insurance contracts), including all amendments (and
the schedule to this Section 3.11 includes a
description of any such amendment that is not in
writing);
(ii) The current draft of the Summary Plan
Description and all subsequent Summaries of Material
Modifications of each Benefit Plan;
(iii) The most recent Internal Revenue
Service determination letter for each Benefit Plan
that is intended to qualify for favorable income tax
treatment under Code Section 401(a) or 501(c)(9),
which determination letter reflects all amendments
that have been made to the plan (except as set forth
in Schedule 3.11); and
(iv) The two (2) most recent Form 5500s
(including all applicable schedules and the opinions
of the independent accountants) that were filed on
behalf of the Benefit Plan.
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(c) All costs of administering and contributions
required to be made to each Benefit Plan under the terms of that Benefit Plan,
ERISA, the Code, or any other applicable law have been timely made, and are
fully deductible in the year for which they were paid. All other amounts that
should be accrued to date as liabilities of the Company under or with respect to
each Benefit Plan (including administrative expenses and incurred but not
reported claims) for the current plan year of the plan have been recorded on the
books of the Company. There will be no liability of the Company (i) with respect
to any Benefit Plan that has previously been terminated or (ii) under any
insurance policy or similar arrangement procured in connection with any Benefit
Plan in the nature of a retroactive rate adjustment, loss sharing arrangement,
or other liability arising wholly or partially out of events occurring before
the Closing.
(d) Each Benefit Plan at all times has been operated
in accordance with its terms, and complies currently, and has complied in the
past, both in form and in operation, with all applicable law, including ERISA
and the Code. The Internal Revenue Service has issued a favorable determination
letter with respect to each Benefit Plan that is intended to qualify under Code
Section 401(a) or Section 501(c)(9), and no event has occurred (either before or
after the date of the letter) that would disqualify the plan.
(e) There are no investigations, proceedings, or
lawsuits, either currently in progress or expected to be instituted in the
future, relating to any Benefit Plan, by any administrative agency, whether
local, state, or federal.
(f) Other than routine claims for benefits under the
Benefit Plan and those relating to qualified domestic relations orders, there
are no (i) pending or (ii) to the knowledge of the Company or any Seller
threatened lawsuits or other claims against or involving any Benefit Plan, or
any Fiduciary of such plan (within the meaning of Section 3(21)(A) of ERISA)
brought on behalf of any participant, beneficiary, or Fiduciary thereunder, nor
is there any reasonable basis for any such claim.
(g) The Company has no intention or commitment,
whether legally binding or not, to create any additional Benefit Plan, or to
modify any existing Benefit Plan so as to increase benefits to participants or
the cost of maintaining the plan. The benefits under all Benefit Plans are as
represented, and have not been, and will not be increased subsequent to the date
documents are provided to either Purchaser. No statement, either oral or
written, has been made by the Company (or any agent of the Company) to any
Person regarding any Benefit Plan that is not in accordance with the Plan that
could have adverse economic consequences to either Purchaser.
(h) None of the persons performing services for the
Company have been improperly classified as being independent contractors, leased
employees, or as being exempt from the payment of wages for overtime.
(i) None of the Benefit Plans provide any benefits
that (i) become payable or become vested solely as a result of the consummation
of this transaction or (ii) would result in excess parachute payments (within
the meaning of Code Section 280G), either
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(A) solely as a result of the consummation of this transaction or (B) as a
result of the consummation of this transaction and any actions taken by the
Purchaser after the Closing Date. Furthermore, the consummation of this
transaction will not require the funding (whether on a formal or informal basis)
of the benefits under any Benefit Plan (e.g., contributions to a "Rabbi Trust").
(j) None of the assets of any Benefit Plan that is a
"pension plan" within the meaning of Section 3(2) of ERISA are invested in a
group annuity contract or other insurance contract that is subject to any
surrender charge, interest rate adjustment, or other similar expense upon its
premature termination.
(k) With respect to each Benefit Plan that is subject
to Title IV of ERISA:
(i) No amount is due or owing from the
Company to the Pension Benefit Guaranty Corporation
("PBGC"), other than a liability for premiums under
ERISA Section 4007;
(ii) All premiums have been paid to the PBGC
on a timely basis;
(iii) The value, determined on a termination
basis using the actuarial assumptions stated in the
plan, of all accrued and ancillary benefits (whether
or not vested) under each such plan did not exceed,
as of the most recent valuation date, and will not
exceed as of the Closing Date, the then current fair
market value of the assets of the plan; and
(iv) No reportable events (within the
meaning of ERISA Section 4043) have occurred.
(l) The Company is not a party to any Multiemployer
Plan (as defined in section 4001(a)(3) of ERISA).
(m) In the case of each Benefit Plan that is subject
to Code Section 412, there is no accumulated funding deficiency (within the
meaning of Code Section 4971), whether or not such deficiency has been waived.
(n) No Benefit Plan has any interest in any annuity
contract or other investment or insurance contract issued by an insurance
company that is the subject of bankruptcy, conservatorship, rehabilitation, or
similar proceeding.
(o) Each Benefit Plan that is intended to meet
currently applicable requirements for tax-favored treatment under Subchapter B
of Chapter 1 of the Code is in compliance with such requirements and, if
applicable, with the requirements of Code
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Sections 419 and 419A, and no "disqualified benefits" (within the meaning of
Section 4976(a) of the Code) have been paid that would subject the Company to a
tax under Code Section 4976.
(p) None of the Benefit Plans have unrelated business
taxable income or unrelated debt-financed income under Code Section 511.
(q) The Company has complied with all reporting and
disclosure obligations imposed upon it under all applicable federal and state
securities laws by reason of the operation of the Benefit Plans.
(r) None of the Benefit Plans are part of a Multiple
Employer Welfare Arrangement, as that term is defined in ERISA Section 3(40).
3.12 Litigation; No Orders. There are no actions, claims,
suits, proceedings, arbitrations, complaints, grievances, unfair labor practice
or employment discrimination charges or complaints, or investigations pending
or, to the knowledge of the Seller or the Company, threatened (a) against,
relating to or affecting the Company, its business or any Property before any
court, administrative, governmental or regulatory body or arbitrator or mediator
or (b) that challenge the validity or propriety of any of the transactions
contemplated by this Agreement or any of the Related Documents. There are no (i)
facts or circumstances known to the Company or the Seller that could give rise
to, or provide the basis for, any action which would be required to be disclosed
pursuant to this Section 3.12 or (ii) outstanding judgments, orders, decrees,
awards or citations of any Governmental Authority affecting the Company or the
Seller or the Company's business (including any assets, Property, right,
obligation or liability of such business). The Seller has delivered to the
Purchaser true and correct copies of each attorney confirmation letter or "audit
letter" prepared since January 1, 1998 and delivered to the Company or the
Seller or Affiliate thereof that mentions any action, claim, suit, charge,
complaint, investigation or proceeding that could reasonably be expected to
involve or affect the Company or its business or Properties. The Company filed a
Chapter 11 voluntary bankruptcy petition in March 1996 and was discharged from
bankruptcy in September of 1996.
3.13 Material Contracts and Other Agreements. Schedule 3.13
sets forth, as of the date hereof, and will set forth as of the Closing Date,
whether written or oral, together with all amendments and modifications thereto,
(a) all contracts, agreements and commitments whether or not fully performed
pursuant to which the Company has since June 30, 1998, acquired, sold or
transferred all or any portion of the business, assets (other than inventory in
the ordinary course of business), properties or equity interests of any Person
(including the Company) (whether through purchase, merger, consolidation or
otherwise) (the "Acquired Businesses") which provided for an aggregate purchase
price in excess of $25,000; (b) all agreements containing covenants not to
compete on the part of the Company or otherwise restricting the ability of the
Company in any way to engage in its business; (c) all notes, mortgages,
indentures, letters of credit, guarantees, performance bonds and other
obligations and agreements and other instruments for or relating to any lending
or Indebtedness (including assumed Indebtedness) entered into by the Company or
pursuant to which any Properties are pledged or mortgaged as collateral; (d) any
employment or consulting agreement with any present or former director or
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officer of the Company; (e) all contracts, agreements, commitments or other
arrangements with any Affiliate of the Company or the Seller; (f) all contracts,
agreements, commitments or other arrangements for the purchase or sale of goods
or services by or from the Company, each of which requires a payment or payments
by or to the Company, in the aggregate, of more than $25,000 in any given year
(other than purchase orders or similar such commitments and agreements relating
to the purchase of inventory in the ordinary course of business, consistent with
past practice, or which have been fully performed in all material respects by
the parties thereto); (g) all contracts, agreements or commitments involving
aggregate payments of more $25,000 during the term thereof and with a term of
more than two (2) years, including all extensions thereof, at the option of any
party other than either Company; and (h) all other contracts, agreements and
commitments which, are material to the Company, including, without limitation
its Contract with EPIX and its technical support contracts with its existing
customers, each of the foregoing described under clauses (a) through (h),
including each of the same listed on Schedule 3.13, collectively referred to as
the "Contracts". With respect to each Contract, (i) such Contract is valid,
binding and enforceable against the Company and each other party thereto, and is
in full force and effect and will remain enforceable in such manner and be in
full force and effect after the consummation of the transactions contemplated by
this Agreement and the Related Documents, (ii) the Company is not and any other
party to such Contract is not in material breach thereof or material default
thereunder, (iii) there does not exist any event that, with the giving of notice
or the lapse of time or both, would constitute a material breach of or a
material default by either the Seller or the Company or any other party to such
Contract under such Contract, and none of the Company and Sellers or any
Affiliate thereof has received or given notice of any such breach, default or
event, (iv) true, complete and correct copies of each Contract have been
delivered or made available to the Purchaser or its representatives, (v) the
Company has not waived any material rights under any Contract, (vi) neither the
Company or the Seller know of any material defense to the validity or
enforceability of any Contract, (vii) neither the Company or the Seller have
received or given notice of any breach or default in connection with any
Contract and (viii) the Company has no any existing liability or obligation
(contingent or otherwise), including with respect to any indemnification of
guarantee obligation, with respect to any Acquired Business. The Company has
been prepaid $80,000 for 600 hours of support pursuant to its technical support
Contracts. Such support must be provided under such Contracts over the next 12
months. Each existing technical support Contract will expire within 12 months
following the Closing. The Contract with EPIX can be terminated by the Company
without cost upon 30 days notice.
3.14 Compliance with Laws. The Company is, and all of its
assets and Properties are, in compliance in all material respects with, and
immediately following the consummation of the transactions contemplated by this
Agreement and the Related Documents, will be in compliance in all material
respects with, and the Company has no material liability under, any and all
applicable federal, state or local statutes, laws, ordinances and regulations,
including, without limitation, any applicable franchise, building, zoning,
health, Environmental Protection Laws, safety, employment, labor relations or
other statute, law, ordinance or regulation.
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3.15 Licenses and Permits. The Company and each Company
Employee has all contractor and similar such Licenses and all other material
Licenses necessary to conduct the Company's business as it is now being
conducted and as is proposed to be conducted, and each such License is in full
force and effect and none of such Licenses of the Company or any Company
Employee will require any Consents or be impaired as a result of the
transactions contemplated by this Agreement or the Related Documents. The
Company solely possesses all such Licenses and the validity and duration of such
Licenses shall not be affected by the loss of any one or more Company Employees.
Neither the Company, the Seller nor any Affiliate thereof has received any
notice to the effect that, or otherwise been advised that, either Company or any
Company Employee is not in compliance with, or that it, he or her is in
violation of, any such License, and the Company and, to the knowledge of the
Seller and the Company, each Company Employee is in compliance in all material
respects with the terms of each such License and, to the knowledge of the Seller
and the Company, there are not currently existing circumstances that are likely
to result in a failure of the Company or any Company Employee to comply in any
material respect with, or in a material violation by the Company or any Company
Employee of, any such License.
3.16 Leased Real Properties; No Real Properties. Schedule 3.16
contains a complete and correct list of (a) all real property leases, subleases,
licenses and occupancy agreements pursuant to which the Company is a lessor,
lessee, sublessor, sublessee, licensor or licensee of real property, setting
forth the address, landlord and tenant for each (the "Leased Real Property").
The Seller has delivered to the Purchaser correct and complete copies of each of
the agreements set forth in Schedule 3.16, including all amendments thereto and
all nondisturbance agreements in connection therewith. Each lease, sublease,
license or other agreement set forth in Schedule 3.16 is legal, valid, binding,
enforceable and in full force and effect. No party is in default, violation or
breach in any material respect under any of the same, and no event has occurred
and is continuing thereunder that constitutes or, with notice or the passage of
time or both, would constitute a default, violation or breach in any material
respect thereunder. The Company has good and valid title to the leasehold estate
under each lease, sublease, license or other agreement set forth in Schedule
3.16, free and clear of all Liens. The Company enjoys peaceful and undisturbed
possession under the same. All of the improvements situated in whole or in part
at any Leased Real Property are in good operating condition, in a state of good
maintenance and repair and are adequate and suitable for the numbers of which
they are presently being used. The Company does not own in whole or in part, or
have a fee interest in, any real property.
3.17 Tangible Assets. The Company owns or leases all tangible
personal property, including all vehicles, machinery, equipment, tools, computer
hardware and software, furniture, fixtures (both real and personal), furnishings
and other similar property necessary for the conduct of its business as
presently conducted and as proposed to be conducted, and on and immediately
following the Closing Date the Company shall own and lease such assets and other
Properties to the same degree and in the same manner as it does on the date
hereof and Schedule 3.17 sets forth a complete and correct list, in all material
respects, of such assets and other Properties. Each such asset or property has
been maintained in accordance with ordinary industry practice, is in good
operating condition and repair, subject to normal wear and tear, and
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is usable and adequate in the ordinary course of business and for the use or
uses to which it is being put. None of such assets or properties is in need of
maintenance or repairs, except for ordinary, routine maintenance and repairs.
Except as set forth on Schedule 3.17, all equipment, vehicles, machinery, tools
and other similar Properties owned, leased or used by the Company since January
1, 1998, have been maintained and operated in accordance with all applicable
laws, statutes, ordinances and regulations, including any relating to health,
safety, employment or Environmental Protection Laws, and all necessary Licenses
have been obtained and maintained with respect to such equipment since such
date. Except for Liens arising under documents set forth on Schedule 3.17 and
except for leased or licensed assets, the Company has, and on and immediately
following the Closing Date will have, good, valid and marketable title to all of
the owned tangible personal property used in the conduct of its business as
presently conducted and as proposed to be conducted. The Company has, and on and
immediately following the Closing Date will have, good and valid leasehold title
to all leased tangible personal property leased by it from third parties, free
and clear of all Liens, and all such leased tangible personal property is listed
on Schedule 3.17. All of the Property and other assets, owned, leased or used by
the Company in the conduct of its business as now being conducted is, and on and
immediately following the Closing will be, located at one of the Leased Real
Properties.
3.18 Accounts Receivable. A complete and correct list of all
accounts receivable and costs and estimated earnings in excess of ▇▇▇▇▇▇▇▇ on
uncompleted contracts of the Company as of June 30, 2000 ("Accounts Receivable")
has been delivered to the Purchaser prior to the date hereof, and sets forth the
aging of such Accounts Receivable. The Accounts Receivable represent bona fide
sales actually made or services actually performed on or prior to such date in
the ordinary course of business of the Company and consistent with past
practices. Except as set forth in Schedule 3.18, there is no contest, claim or
right of set-off contained in any oral or written agreement with any account
debtor relating to the amount or validity of any Account Receivable, or any
other account receivable created after June 30, 2000. The Accounts Receivable
(net of any reserves reflected in the Financial Statements) are valid and
collectible at the recorded amounts thereof in the ordinary course of business
of the Company. The reserves reflected in the Financial Statements have been
established in the ordinary course of business, in accordance with GAAP, and are
consistent with past practices.
3.19 Taxes.
(a) The Company has timely filed or been included in
all Tax Returns that are required to be filed by it with respect to its
activities or in which it is required to be included for any period ending on or
before the Closing Date, which Tax Returns are true, correct and complete in all
material respects, and the Company has paid all Taxes shown thereon to be due.
All Tax Returns with respect to Company Employees to be filed by EPIX have been
timely filed, are true correct and complete in all material respects, and all
Taxes shown thereon to be due have been paid.
(b) The Company has paid or caused to be paid (by
EPIX or otherwise) within the time and in the manner prescribed by law all Taxes
payable or owed by it for all periods ending on or prior to the date hereof and
all payments of estimated Taxes required to be
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made prior to the date hereof by or on behalf of the Company under Section 6655
of the Code or comparable provisions of state, local or foreign law, have been
paid in full on a timely basis or have been accrued on the Financial Statements,
and no other Taxes are payable by the Company with respect to items or periods
covered by such Returns (whether or not shown on or reportable on such Returns).
All Taxes attributable to all taxable periods ending on or before the Closing
Date, to the extent not required to be previously paid, have been fully and
adequately reserved for (as taxes payable or as accrued taxes) on the Financial
Statements and the Company will not accrue a Tax liability from the date of the
Financial Statements up to and including the Closing Date other than a Tax
liability accrued in the ordinary course of business.
(c) The Company has not taken any action that would
require an adjustment pursuant to Section 481 of the Code, by reason of a change
in accounting method or otherwise. The Company has not filed a Consent under
Section 341(f)(1) of the Internal Revenue Code of 1986, as amended (the "Code")
or agreed to have the provisions of Section 341(f)(2) of the Code apply to any
disposition of "subsection (f) assets" as such term is defined in Section
341(f)(4) of the Code.
(d) No Tax assessment or deficiency which has not
been paid or for which an adequate reserve has not been set aside, has been made
or proposed against the Company, nor are any of the Tax Returns now being or, to
the knowledge of the Company or any Seller, threatened to be examined or
audited, and no consents waiving or extending any applicable statutes of
limitations for the Tax Returns, or any Taxes required to be paid thereunder,
have been filed. The Company has disclosed on its federal and state income and
franchise tax Returns all positions taken therein that could give rise to a
substantial understatement penalty within the meaning of Code Section 6662 or
comparable provisions of applicable state, local, foreign or other tax laws.
Sellers and the Company, as applicable, shall promptly notify Purchaser of any
notice of pending action or proceeding involving Taxes relating to the Company
between the date of this Agreement and the Closing Date. All Tax deficiencies
determined as a result of any past completed audit have been satisfied. Sellers
and the Company have delivered to Purchaser complete and correct copies of all
audit reports and statements of deficiencies with respect to any tax assessed
against or agreed to by the Company for the five most recent taxable periods for
which such audit reports and statements of deficiencies have been received by
the Company.
(e) Without limiting the foregoing representations in
any way,
(i) The Company has collected all sales, use
and value added Taxes required to be collected, and
have remitted, or will remit on a timely basis, such
amounts to the appropriate governmental authorities
and have furnished properly completed exemption
certificates for all exempt transactions.
(ii) The Company has properly withheld income
and social security or other similar Taxes and paid
payroll Taxes with respect to all persons properly
characterized as employees for federal, state or
local Tax purposes.
(f) To the knowledge of the Company or any Seller,
there is no proposal for increasing the assessed value of any of the Company's
properties for tax purposes, and there are no pending proceedings or public
improvements which would result in the levy of any special tax or assessment
against any of the Company's properties.
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(g) None of the assets of the Company are subject to
any liens in respect of Taxes (other than for current taxes not yet due and
payable).
(h) The Company is not a party to or bound by any Tax
sharing, Tax indemnity or Tax allocation agreement or other similar arrangement
with the Sellers or any other party, except as provided for herein.
(i) The Company has not made any payments, is
obligated to make any payments and is a party to any agreement that under
certain circumstances could obligate it to make any payments that will not be
deductible under Section 280G of the Code.
(j) The Company has delivered to Purchaser complete
and correct copies of all state, local and foreign income or franchise Tax
Returns filed by the Company for the three most recent taxable years for which
such Tax Returns have been filed immediately preceding the date of this
Agreement. Other than with respect to Taxes shown on Tax Returns described in
this subsection, the Company is not subject to any Tax imposed on net income in
any jurisdiction or by any Taxing Authority.
(k) The Company has not executed or entered into any
closing agreement pursuant to Section 7121 of the Code, or any predecessor
provisions thereof or any similar provision of state or other law.
(l) None of the assets of the Company are subject to,
or constitute, a safe harbor lease within the meaning of Section 168(f)(8) of
the Code prior to its repeal.
(m) None of the assets of the Company constitute a
partnership, joint venture, or other arrangement or contract that could be
treated as a partnership for federal income Tax purposes. The Company has not at
any time been (i) a member of an affiliated group of corporations filing
consolidated, combined or unitary income or franchise tax returns, or (ii) a
member of any partnership or joint venture for a period for which the statute of
limitations for any Tax potentially applicable as a result of such membership
has not expired.
(n) None of the assets of the Company are tax-exempt
use property within the meaning of Section 168(h) of the Code.
(o) No powers of attorney or other authorizations are
in effect that grant to any person the authority to represent the Company in
connection with any Tax matter or proceeding, and any such powers of attorney or
other authorizations shall be revoked as of the Closing Date.
(p) The Company has not waived any statute of
limitations with respect to the assignment of any Tax applicable to it.
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(q) The Company has not participated in, or
cooperated with, any international boycott within the meaning of Section 999 of
the Code.
(r) The Company is not a "foreign person" within the
meaning of Section 1445 of the Code.
(s) There is no litigation or other proceeding
pending or, to the knowledge of the Company or any Seller, threatened against or
relating to the Companies with respect to Taxes.
(t) The Company does not own assets that have been
financed with, or directly or indirectly secure, any industrial revenue bonds or
debt, the interest on which is tax exempt under Section 103(a) of the Code.
(u) The Company is not, nor has it been, a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code. The Company is not, nor has it been, a "reporting corporation"
subject to the information reporting and record maintenance requirements of
Section 6038A and the regulations thereunder.
3.20 Hazardous Substances.
(a) Each of the Company, the Properties and the
Business is, and at all times has been, in compliance with all, and has no
liability under any, Environmental Protection Laws;
(b) There has been no contamination, whether of soil,
groundwater or otherwise, at, upon, above, about or beneath any real property;
(c) There has been no spill, discharge, disposal,
leak, emission, injection, storage, escape, dumping, release or threatened
release of any kind of any Hazardous Substance on, in, under or about any real
property;
3.21 Related-Party Transactions. No stockholder, officer,
director or Affiliate of the Company or the Seller has any (i) interest,
directly or indirectly, in any lease, Lien, contract, license, loan or other
agreement or arrangement to which the Company is a party or that relates in any
way to any Property or any aspect of the Business, (ii) interest in any
Properties, liabilities or other obligations of the Company or (iii) employment
relationship or other relationship as a director, manager or similar such
position with, or any interest (other than a passive investment in equity
securities of any Person if such equity securities are registered under the
Securities Act of 1933, as amended, provided that such equity investment does
not exceed five percent (5%) of the outstanding equity securities of such
Person), direct or indirect, in any competitor, supplier, vendor or customer of,
or other Person having any business dealings or a business relationship with the
Company. Neither the Seller nor any Affiliate thereof will
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own, hold, possess or have any other right or obligation with respect to any
Property or other asset on or after the Closing that is currently used in the
business of the Company.
3.22 Labor Matters.
(a) Schedule 3.22 sets forth the following
information for each Company Employee as of the date hereof: name, identifying
code, job title, rate of pay, date of hire and company employing such Company
Employee, together with a description of each License, if any, held by each such
Person that is material to the business of the Company, as applicable.
(b) Except as set forth on Schedule 3.22, no
independent contractor or other Person that is not a Company Employee performs
or provides services on behalf of the Company directly to third party customers
or clients of the Company or contractors with whom the Company has contracted in
connection with their respective businesses.
(c) Except as set forth on Schedule 3.22, the Company
is not a party to or bound by any collective bargaining agreements or other
agreements with labor organizations. The Company has not violated in any
material respect any laws, regulations, orders or contract terms, affecting the
collective bargaining rights of employees, labor organizations or any laws,
regulations or orders affecting employment discrimination, equal opportunity
employment, or employees' health, safety, welfare, wages and hours.
(d) (i) There are no labor disputes existing, or to
the knowledge of the Company or any Seller, threatened, involving strikes,
slow-downs, work stoppages, job actions, disputes, lockouts or any other
disruptions of or by any Company Employees, (ii) there are no unfair labor
practices or petitions for election pending or, to the knowledge of the Company
or the Seller, threatened before the National Labor Relations Board or any other
federal, state or local labor commission relating to the Company Employees,
(iii) no demand for recognition or certification heretofore made by any labor
organization or group of employees is pending with respect to the Company and
(iv) to the knowledge of the Seller and the Company, the Company enjoys good
labor and employee relations with its employees and labor organizations and
neither Company , the Seller nor any Affiliate thereof has any reason to believe
that the consummation of the transactions contemplated hereby or under the
Related Documents will adversely affect such relations.
(e) The Company (and EPIX with respect to the Company
Employee's leased to the Company) is, and at all times prior to the Closing will
be, in full compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours, and immigration and naturalization. No claims are
pending against the Company (or EPIX with respect to Company Employees) before
the Equal Employment Opportunity Commission ("EEOC") or any other administrative
body or in any court asserting any violation of Title VII of the Civil Rights
Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. ▇▇.▇▇. 1981 or 9183
or any other federal, state or local law, statute or ordinance barring
discrimination in employment.
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(f) The Company is not, and immediately prior to the
Closing will not be, a party to, or bound by, any employment or other contract
or agreement that contains any material severance or termination pay liability
or obligation, including, without limitation, any "excess parachute payment," as
defined in Section 2806(b) of the Code.
(g) All salaries and benefits due and owing to
Company Employee by EPIX have been paid or properly recorded in the Company's
financial books and records.
3.23 Proprietary Rights. The Company owns or has the right to
use, free and clear of any Liens, every material federal, state, local or
foreign patent, patent application and registration, trademark, service ▇▇▇▇,
trademark and service ▇▇▇▇ application and registration, copyright and copyright
application and registration, trademark and other ▇▇▇▇, trade name and other
trade right, and all other material inventions, processes, know-how, trade
secrets, designs, plans, specifications, and technical, confidential or
proprietary information or rights, whether or not registered, which are used in
the conduct of the business of the Company (collectively, "Proprietary Rights").
The Proprietary Rights are adequate for the conduct of the business of the
Company as conducted on the date hereof and as proposed to be conducted. No
Person has a right to receive from the Company a royalty or similar payment in
respect of any Proprietary Rights whether or not pursuant to any contractual
arrangements entered into by the Company. Neither the Company nor the Seller has
received any notice of invalidity or infringement of any rights of others with
respect to Proprietary Rights. To the knowledge of the Seller and the Company,
no proceedings have been instituted against or notices received by the Company
or the Seller that are presently outstanding alleging that the Company's use of
any Proprietary Rights infringes upon or otherwise violates any rights of a
third party in or to such Proprietary Rights. All of the respective Proprietary
Rights are valid and enforceable rights of the Company and will not cease to be
valid and in full force and effect by reason of the execution, delivery and
performance of this Agreement or any Related Document or the consummation of the
transactions contemplated hereby and thereby. The Company has taken all
reasonable and appropriate steps to protect and preserve the confidentiality of
all Proprietary Rights not otherwise protected by patents or patent
applications. All use, disclosure or appropriation of any Proprietary Rights
licensed by the Company to a third party or to the Company by a third party has
been pursuant to the terms of a written agreement between the Company and such
third party. Schedule 3.23 sets forth each federal, state, local or foreign
trademark, servicemark, trade name and patent registered by either Company or
for which registration is pending.
3.24 Bank Accounts. Schedule 3.24 sets forth the name, address
and contact person of each bank or other financial institution in which the
Company or the Seller or any other Person with respect to the respective
businesses of the Company has an account or safe deposit box, the account
number, account name and type of account, the names of all Persons authorized to
draw thereon or have access thereto.
3.25 Corporate Records. The minute books of the Company
reflect all material actions taken since January 1, 1998 by the stockholders,
board of directors and committees of the board of directors of the Company, and
contain true and complete copies of their respective
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charters, Bylaws and all amendments thereto. True and complete copies of such
minute books have been provided to the Purchaser or its counsel.
3.26 Accounting Records. The Company maintains accounting
records which fairly and validly reflect, in all material respects, its
transactions and maintains accounting controls sufficient to provide reasonable
assurances that such transactions are and were (i) executed in accordance with
management's general or specific authorization and (ii) recorded as necessary to
permit the preparation of financial statements in conformity with GAAP.
3.27 Software Products.
(a) All Software Products licensed or distributed by
the Company are described in Schedule 3.27. The Company is the sole and
exclusive owner of its Software Products. All employees, programmers,
independent contractors and consultants engaged by the Company or any
predecessor that have worked on the development of the Company's Software
Products have assigned to the Company all of their right, title and interest in
and to the work or works produced by them including, without limitation, all
copyright and other intellectual property rights therein. The programs which are
a part of the Software Products perform in accordance with the documentation and
all technical and other written materials provided by Seller to any user of the
Software Products. No part of any Software Products is an imitation or copy of,
or infringes upon, the software of any other person or entity, or violates or
infringes upon any common law or statutory rights of any other person or entity,
including, without limitation, rights relating to defamation, contractual
rights, copyrights, trade secrets, and rights of privacy or publicity.
(b) All databases, compilers, operating systems and
other items that operate with the Software Products which the Company does not
own are properly licensed by the Company.
(c) The Software Products are original and capable of
copyright protection in the United States, and the Company has complete rights
to and ownership of such Software Products, including possession of, or ready
access to, the source code for such Software Products in their most recent
version. The Software Products do not infringe, violate or misappropriate any
patent, trademark, trade secret, copyright, software or other intellectual
property rights of any third party. Neither the Seller nor the Company is aware
of any third party infringing on the Company's rights in its Software Products.
The Company has not sold, assigned, licensed, distributed or in any other way
disposed of or encumbered any of the Software Products.
3.28 Other Software.
(a) Each software system that is not a Software
Product and that is currently used by the Company in the operation of its
business is set forth and described on Schedule 3.28 (the "Other Software"). To
the extent that any of the Other Software has been designed or developed by the
Company's management information or development staff or by consultants on the
Company's behalf, such Other Software is original and capable of copyright
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protection in the United States, and the Company has complete rights to and
ownership of such Other Software, including possession of, or ready access to,
the source code for such Other Software in its most recent version. To the
knowledge of the Seller and the Company, no part of any such Other Software is
an imitation or copy of, or infringes upon, the software of any other person or
entity, or violates or infringes upon any common law or statutory rights of any
other person or entity, including, without limitation, rights relating to
defamation, contractual rights, copyrights, trade secrets, and rights of privacy
or publicity. The Company has not sold, assigned, licensed, distributed or in
any other way disposed of or encumbered any of the Other Software.
(b) The Other Software, to the extent it is licensed
from any third party licensor or constitutes "off-the-shelf" software, is held
by the Company, as applicable, legitimately. All of the computer hardware of the
Company has legitimately licensed software installed therein. To the knowledge
of the Company or the Seller, the Other Software is free from any significant
defect or programming or documentation error. The Other Software operates and
runs in a reasonable and efficient manner, conforms to the stated specifications
thereof, and, with respect to owned Software, the applications can be recreated
from their associated source codes.
(c) The Company has not knowingly altered its data,
or any Other Software or supporting software which may, in turn, damage the
integrity of the data, stored in electronic, optical, or magnetic or other form.
Neither the Company nor the Seller has any knowledge of the existence of any
bugs or viruses with respect to the Other Software.
(d) The Company will possess on the Closing Date true
and correct copies of all documentation (end user or otherwise) relating to the
use, maintenance and operation of the Other Software.
3.29 Year 2000 Compliance. The Software Products and the Other
Software will be able to accurately process date data, including, but not
limited to, calculating, comparing and sequencing from, into and between the
twentieth century (through year 1999), the year 2000 and the twenty-first
century, including leap year calculations ("Year 2000 Compliant"). The Company
will not incur any expenses arising from or relating to the failure of any of
its Software Products or Systems to be Year 2000 Compliant in excess of $10,000.
3.30 Software Products Warranty and Liability.
(a) With respect to each Software Product, the
Company has obtained all applicable Licenses which regulate such Software
Product and that are necessary for such Software Product to be sold or otherwise
provided in the jurisdictions in which it is sold or otherwise provided.
(b) Each Software Product developed, produced,
licensed or distributed by the Company has been developed, produced, licensed or
distributed in compliance with all applicable laws and all applicable
contractual commitments and warranties (whether express or implied) and each
Software Product has been distributed, installed, licensed, and provided in
conformity with all applicable laws and all applicable contractual commitments
and
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warranties (whether express or implied), and there is no basis for any present
or future action, suit or other proceeding giving rise, individually or in the
aggregate, to any material liability or other material obligation with respect
to such Software Product(s), including for the replacement or repair thereof or
for damages in connection therewith or resulting therefrom. Neither the Company
nor the Seller has received any notice that any action, suit or other proceeding
has been, or in the future may be, made alleging that any Software Product is or
was defective in any way.
(c) The Company warrants the Software Products for a
period of 30 days from date of sale. There have been no recalls with respect to
Software Products during the past five years. There are no outstanding Software
Product recalls or Software Product claims with respect to the Products, and to
the knowledge of the Company or the Seller, there is no basis for any present or
future Software Product recall or Software Product claims with respect to any
Software Products that could reasonably be expected to give rise to any
liability or other obligation in excess of $25,000 in the aggregate.
3.31 Distributors. No distributor, contractor, broker, dealer,
agent or representative, other than any Company Employees, has an oral or
written agreement or understanding to sell or otherwise provide Products, which
is not cancelable at no cost by the Company upon 30 days notice at no cost to
the Company.
3.32 Customers. At least 5,000 active customers use the
Company's Software Products, not counting customers who use the Software
Products in the automobile repair, liquor and dry cleaning industries. Seller
has provided Buyer with copies of the license or other agreements pursuant to
which such parties use the Software Products. The rights of such users in the
Software Products will not conflict with Buyer's subsequent marketing, sale or
licensing of the Software to additional parties. Neither the Company nor the
Seller has received any notice, nor does the Company nor the Seller have any
reason to believe, that any active customer has ceased, or will cease, to
purchase or use the Software Products, or has substantially reduced, or will
substantially reduce, the purchase or use of the Software Products at any time.
The Company is current and in full compliance with respect to all of its
material obligations to all of its customers, contractors and each other Person
from whom it derives revenues. Seller shall deliver to the Purchaser at the
closing a list of all current users of the Software Products.
3.33 Suppliers. Schedule 3.33sets forth the name and address
of each supplier, vendor or other provider of services of the Company from which
the Company ordered raw materials, supplies and other goods and services in the
aggregate amount of $25,000 or more in each of the twelve (12) month periods
ended June 30, 2000 and 1999. Neither the Company nor the Seller have received
any notice, nor does the Company or the Seller have any reason to believe, that
any such supplier, vendor or other provider of services has ceased, or will
cease, to supply such raw materials, supplies or other goods or services to the
Company on or after the Closing Date, or has substantially reduced, or will
substantially reduce, the supply of such items or services to the Company on or
after the Closing Date. The Company is current and in full compliance with
respect to all of its material obligations to its suppliers, vendors and other
providers of services.
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3.34 Inventory. All Inventory reflected on the Financial
Statements is of good, usable and merchantable quality and does not include any
obsolete or discontinued items. All Inventory is of such quality as to meet
applicable governmental quality control standards and is recorded on the books
of the Company at the lower of cost or market value determined in accordance
with GAAP. All Inventory is located at facilities leased by the Company or at
such other locations at which the Company is conducting business in the ordinary
course consistent with past practice and all Inventory located at such other
locations is reasonably expected to be sold in connection with the conducting of
such business. All finished goods Inventory is saleable in the ordinary course
of business. Purchase commitments for raw materials and parts are not in excess
of normal requirements and are consistent with past practice and none were at a
price materially in excess of market prices existing on the date such
commitments were made.
3.35 No Powers of Attorney or Suretyships. None of the
Company, the Seller or any other Person has granted any general or special
powers of attorney with respect to the Company or the Business that shall exist
on and after the Closing Date and, the Company has no liability or obligation as
a guarantor, surety, co-signer, endorser, co-maker, indemnitor or obligor in
respect of any obligation of any other Person and none of the foregoing shall
exist or otherwise be in effect on and after the Closing Date.
3.36 Brokers; Certain Expenses. Neither the Company nor the
Seller has paid or become obligated to pay any fee or commission to any broker,
finder, investment banker or other intermediary in connection with this
Agreement or any of the Related Documents.
3.37 Disclosure. No representation or warranty made by the
Seller in this Agreement, any Schedule hereto, any Related Document, or any
document or certificate furnished or to be furnished by or on behalf of the
Company or the Seller to the Purchaser or its Affiliates, agents and
representatives in connection with this Agreement and the Related Document or
the transactions contemplated hereby or thereby contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact necessary to make the statements contained herein or therein, in light of
the circumstances in which they are made, not misleading. To the knowledge of
the Seller, there is no fact that has not been disclosed in this Agreement or
the Related Documents which could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
SECTION 4. Representations and Warranties of the Purchaser. The
Purchaser represents to the Seller as follows:
4.1 Authorization and Enforceability. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of state of its incorporation and has all requisite power and authority to enter
into this Agreement and each Related Document to which it is a party and to
consummate the transactions contemplated hereunder and thereunder. The execution
and delivery of this Agreement and the Related Documents to which it is a party
and the consummation of the transactions contemplated herein and therein has
been authorized by all necessary corporate action on the part of the Purchaser.
This Agreement has
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been, and each Related Document will be prior to the Closing Date, duly executed
and delivered by the Purchaser, to the extent it is a party thereto, and
constitutes, or with respect to such Related Documents will constitute at the
Closing, the valid and legally binding obligation of the Purchaser, enforceable
against the Purchaser, as applicable, in accordance with its terms subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally.
4.2 No Violation. The execution and delivery of this Agreement
and the consummation of the transactions contemplated herein by the Purchaser
will not result in any violation pursuant to any provision of (i) the
Certificate of Incorporation or Bylaws (or comparable governing instruments) of
the Purchaser or (ii) result in any violation of any loan or credit agreement,
note, mortgage, indenture, lease, employee benefit plan or other agreement,
obligation, instrument, permit, concession, franchise or license to which the
Purchaser is party or which is held by or been granted to either Purchaser or
the Purchaser's properties or assets or any laws applicable to the Purchaser or
its respective properties or assets, which in the case of any such violation
under this clause (ii) would prevent the Purchaser from consummating the
material transactions contemplated herein.
4.3 Purchase Entirely for Own Account. The Shares to be sold
to the Purchaser are being acquired for investment purposes only, for the
Purchaser's own account and not with a view to the resale or distribution of any
part thereof in violation of the securities laws, and the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing any of such Shares, provided that this representation shall not be
deemed to prejudice the right of the Purchaser to (a) sell or otherwise dispose
of all or any part of the Shares in compliance with the Securities Act or the
rules and regulations thereunder (or pursuant to an available exemption from the
requirements thereof) and (b) have control over the disposition of all of its
assets to the fullest extent permitted or required by any applicable law and
provided, further, that this representation shall not prohibit the Purchaser
from transferring all or any portion of such shares of Common Stock to any
Affiliate thereof.
4.4 Restricted Securities. The Purchaser understands that the
Shares it is purchasing are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Sellers in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this connection the
Purchaser represents that it is familiar with Rule 144 under the Securities Act,
as presently in effect, and understands the resale limitations imposed thereby
and by the Securities Act.
4.5 Technical Contracts. Purchaser shall cause the Company to
fulfill its obligations under existing technical support contracts that have
been disclosed to Purchaser by Seller.
4.6 Brokers. Purchaser has not paid or become obligated to pay
any fee or commission to any broker, finder, investment banker or other
intermediary in connection with this Agreement or any of the Related Documents.
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SECTION 5. Conditions to the Closing. The obligations of the parties to
this Agreement are subject to the following conditions:
5.1 Conditions to the Obligations of the Parties. The
obligations of the parties to consummate the transactions contemplated hereby
shall be subject to the condition that (a) no injunction or order shall have
been issued by any court of competent jurisdiction or any other Governmental
Authority that would restrain or prohibit any of the transactions contemplated
by this Agreement or any of the Related Documents or that would impose damages
as a result thereof, (b) no action or proceeding shall be pending before any
court or administrative agency or instrumentality of competent jurisdiction in
which any Person seeks such a remedy (if, in the opinion of counsel to any
party, there exists a reasonable risk of a materially adverse result in such
pending action or proceeding) and (c) any waiting period prescribed by the HSR
Act (as defined below) shall have expired or been terminated early.
5.2 Conditions to the Obligations of Purchaser. The
obligations of the Purchaser to purchase the Shares as contemplated hereby shall
be subject to the fulfillment or satisfaction at or prior to the Closing of each
of the following conditions (any one or more of which may be waived by the
Purchaser in writing):
(a) Representations; Performance by the Company and
the Sellers. Each of the representations and warranties made by the Seller in
this Agreement and in each Related Document shall be true and correct as of the
date made and as of the Closing, with the same effect as though such
representations and warranties were made at and as of the Closing, and the
Seller and the Company shall have performed and satisfied their respective
obligations required or contemplated by this Agreement and the Related Documents
to be performed and satisfied prior to the Closing.
(b) No Material Adverse Change. Since the Latest
Balance Sheet no Material Adverse Effect shall have occurred, and no event, fact
or circumstance shall have occurred or become known that is reasonably likely to
result in a Material Adverse Effect.
(c) Corporate Proceedings. All corporate and other
proceedings of the Company in connection with this Agreement and the Related
Documents and the transactions contemplated hereby and thereby shall have been
taken and shall be reasonably satisfactory in form and substance to the
Purchaser.
(d) Consents. The Seller shall have obtained and
delivered to the Purchaser copies of all Consents required to be obtained by the
Seller in connection with the execution and delivery of this Agreement and the
Related Documents and the consummation of the transactions contemplated hereby
and thereby.
(e) Additional Closing Documents. The Seller shall
have delivered, or caused to be delivered, to the Purchaser the following
documents:
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(i) The stock certificates representing all
shares of the Common Stock, endorsed in blank or
accompanied by duly executed assignment documents;
(ii) Non-Competition Agreements duly
executed by the Seller
(iii) Consulting Agreement duly executed by
the Seller;
(iv) Good standing certificates (including
tax good standing certificates, if available from
such state) dated as of a date within one week of the
Closing Date for the Company certified by the
Secretary of State and relevant taxing authority of
the state of its incorporation and each of the states
set forth opposite its name on Schedule 3.1;
(v) Such other documents as may be
reasonably requested by the Purchaser.
(f) Opinion of Counsel. The Sellers shall have
delivered to the Purchaser an opinion of Brach, Eichler, ▇▇▇▇▇▇▇▇▇, Silver,
▇▇▇▇▇▇▇▇▇, Hammer & Gladstone, dated the Closing Date and addressed to the
Purchaser, in form and substance reasonably satisfactory to the Purchaser.
(g) Contracts. The consummation of the transactions
contemplated by this Agreement and the Related Documents shall not result in a
breach, default or adverse change of the rights of the parties under any
Contract or under any applicable law or regulation.
(h) Due Diligence. The Purchaser shall have conducted
a due diligence investigation of the Company and the Seller and shall be
satisfied with the results thereof in its absolute discretion.
(i) Governmental and Other Third Party Consents. All
necessary governmental or other third party consents to the consummation of the
transactions contemplated by this Agreement and the Related Documents, including
any approval required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act"), if applicable, shall have been received.
(j) Assignment of Existing Leases. The landlord for
the Leased Real Property shall have executed Consents as required by the lease,
if any.
5.3 Conditions to the Obligations of the Seller. The
obligations of the Seller to sell the Shares to the Purchaser as contemplated
hereby shall be subject to the fulfillment or satisfaction at or prior to the
Closing of each of the following conditions (any one or more of which may be
waived by the Sellers in writing):
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(a) Representations; Performance of the Purchaser.
Each of the representations and warranties made by the Purchaser in this
Agreement shall be true and correct as of the date made and as of the Closing,
with the same effect as though such representations and warranties were made at
and as of the Closing, and the Purchaser shall have performed and satisfied in
all material respects each of its obligations required or contemplated by this
Agreement and in each Related Agreement to be performed prior to the Closing and
at the Closing, the Purchaser shall have delivered to the Sellers an officers'
certificate to such effect, signed by the President and the Chief Financial
Officer of the Purchaser.
(b) Corporate Proceedings. All corporate and other
proceedings of the Purchaser in connection with this Agreement, the Related
Documents and the transactions contemplated hereby and thereby, including,
without limitation, the approval of the board of directors of the Purchaser,
shall have been taken and shall be reasonably satisfactory in form and substance
to the Seller.
(c) Purchase Price. The Purchase Price shall have
been paid as provided in Section 1.
(d) Additional Closing Documents. The Purchaser shall
have delivered to the Seller the following documents;
(i) Non-Competition Agreement;
(ii) Consulting Agreement; and
(e) Title to the Auto Repair Shop Controller Software
shall have been conveyed by the Company to Seller.
SECTION 6. Covenants. Each party hereto agrees and covenants to the
following:
6.1 Covenants Pending Closing. From the date hereof through
the Closing, the Seller and the Company agree that the Company will carry on its
business only in the ordinary course and in accordance with past practices and
shall not take any actions, individually or in the aggregate, inconsistent
therewith in any material respect or with the transactions contemplated hereby
or in the Related Documents, and will (i) use commercially reasonable efforts to
preserve intact the present business organization and preserve and maintain the
relationships and goodwill with suppliers, vendors, service providers, clients,
lenders, customers, contractors, employees and other Persons having any business
dealings with the Company in connection with its business and keep available the
service of its operating personnel, (ii) operate the Company's business in
compliance with all applicable laws, including Environmental Protection Laws,
and maintain in full force and effect and to protect and enforce, each in
accordance with past practices, all Licenses and Proprietary Rights of the
Company.
Without the prior written consent of the Purchaser, the
Company will not:
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(a) in a single transaction or a series of related
transactions to, sell (including by sale-leaseback), lease, license, pledge,
transfer, dispose of or encumber any assets which, individually or in the
aggregate, have a fair market value in excess of $25,000, other than sales of
inventory in the ordinary course of business and consistent with past practice;
(b) acquire or agree to acquire by merging with, or
by purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
limited liability company, association or other business entity, in a
transaction or series of related transactions;
(c) enter into or amend any written or oral contract,
agreement or arrangement with any Seller or any officer, director, stockholder
or other Affiliate of the Company;
(d) enter into or consummate any transaction outside
the ordinary course of such Company's business that is inconsistent with past
practice, except as contemplated by this Agreement or the Related Documents;
(e) enter into, amend or become obligated under any
extraordinary employment, severance, bonus, profit-sharing or other employee
benefit or compensation arrangement;
(f) declare, set aside or pay any dividend or
distribution in respect of any capital stock, or purchase or redeem any shares
of capital stock of such Company (including any security convertible or
exchangeable into such capital stock) or issue, grant or otherwise create any
option or right to acquire any such capital stock;
(g) prepay or pay other than when due any liability
or obligation;
(h) settle any litigation or waive, release, grant,
transfer or relinquish any rights or benefits of value, except in the ordinary
course of business consistent with past practice;
(i) directly or indirectly, (i) increase the
compensation payable or to become payable by the Company to any of its
independent contractors, employees, officers or directors (except in accordance
with employment agreements and welfare and benefit plans set forth on the
Disclosure Schedule hereto), (ii) adopt additional, or make any payment or
provision, or otherwise amend, other than as required by existing plans or
agreements set forth on the Schedules hereto in the ordinary course of business
and consistent with prior practice, to any option, bonus, profit sharing,
pension, group insurance, severance pay, deferred compensation or other payment
or employee compensation plan for the benefit of any Company Employee or
director, (iii) enter into any new, or alter or amend any employment, severance,
consulting or other compensation agreement with any director, officer, employee
or Affiliate of the Company or (iv) make any loan or advance to, or enter into
any transaction or written contract, lease or commitment with, any officer,
employee or director of the Company or any of their Affiliates
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except in the case of travel, entertainment or other similar advances in the
ordinary course of business, consistent with past practice;
(j) capital expenditures not previously contained or
described in a capital budget furnished to the Purchaser (or commitments to make
such expenditures which are not terminable without penalty or any other
obligation at the option of the Company in its sole discretion) shall in no
event exceed $25,000, nor shall the Company make any investment of a capital
nature either by purchase of stock or securities, contributions to capital,
property transfers or otherwise or by the purchase of any property or assets of
any other individual, firm, corporation or other entity;
(k) amend, modify or terminate any Contract;
(l) alter in any respect the manner of keeping its
books of account or records or the accounting practices reflected therein in
connection with the conduct of its business, make or change any Tax or
accounting election, change any annual accounting period, adopt or change any
accounting method, file any amended Return, enter into any closing agreement,
settle any Tax claim or assessment relating to the Company, surrender any right
to claim refund of Taxes, consent to any extension or waiver of the limitation
period applicable to any Tax claim or assessment relating to the Company, or
take any other action or omit to take any action that would have the effect of
increasing the Tax liability of the Company or the Purchaser;;
(m) cause or allow to occur any material change in
the manner in which the Company conducts its business;
(n) take any action not consistent in all material
respects with the past practices of the Company or its business in the ordinary
course consistent with past practice; or
(o) enter into an agreement to do any of the things
described in clauses (a) through (n).
6.2 Consents and Approvals. The Seller and the Company will
use commercially reasonable efforts to obtain prior to the Closing, at the
Seller's sole cost and expense, all Consents reasonably necessary or advisable
to execute and deliver this Agreement and the Related Documents to which the
Seller or the Company is or will be a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the Consents or
other consents necessary to keep in full force and effect, the Contracts and the
Licenses described on Schedule 3.13 and 3.15. The Purchaser agrees to cooperate
with the Seller and the Company in their efforts to obtain such Consents.
Without the Purchaser' approval, neither the Seller nor the Company shall agree
to amend or modify any Contract or License in order to obtain any such Consent
or other consent to the transactions hereunder or under the Related Agreements.
6.3 Notice. Each party hereto will give prompt written notice
to the other parties hereto of its failure to perform in all material respects
any of its covenants or other
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obligations hereunder or under any Related Document or of the occurrence, or
failure to occur, of any event of which it has knowledge and which would cause
any representation or warranty contained in this Agreement or in any Related
Document to be materially untrue or inaccurate in any respect at any time from
the date hereof to and including the Closing Date.
6.4 Access. From and after the date hereof through the Closing
Date, the Purchaser and its Affiliates may, through its employees, officers,
agents and representatives (including its accountants and attorneys), continue
to make or cause to be made such reasonable investigation of the Company, the
Seller, the Leased Real Property, the Properties and the Business as it deems
necessary or advisable, and the Seller, the Company and their Affiliates shall
cooperate with such investigation and grant such representatives reasonable
access to their personnel, Properties, assets, books and records, contracts and
other documents and information relating to the Company, the Business, the
Leased Real Properties, the Properties and to the extent applicable, any
Affiliate of the Company, including, without limitation, such access as may be
requested to allow the Purchaser, any Affiliate thereof, any such financing
source and all employees, officers, agents and representatives thereof to
satisfy themselves that the conditions to the Closing set forth herein have been
satisfied and complied with and in so doing, may also, with advance notice and
approval of the Company, which approval shall not be unreasonably withheld,
contact the current and prospective customers, contractors, clients, suppliers,
vendors and other service providers of the Company.
6.5 No Solicitation. From the date hereof through the Closing
Date, the Seller, and the Company will not, and will not cause or permit their
Affiliates, including their stockholders, officers, directors, employees, agents
or other representatives (collectively, "Representatives") to, directly or
indirectly, solicit, initiate or encourage the submission of inquiries,
proposals or offers from, engage in any discussions or negotiations with, or
provide any non-public information to any Person with respect to any Alternative
Transaction without the prior written consent of the Purchaser. The term
"Alternative Transaction" means any proposal for a transaction involving an
investment in or sale of any outstanding or newly issued equity interests in or
voting securities of the Company, the acquisition of all or a substantial
portion of the stock or Properties or Business of the Company, or for a merger,
consolidation or other business combination, pursuant to which such Person would
acquire any interest in either Company or the Business. In the event that the
Seller, the Company or any Affiliate or Representative thereof receives any
unsolicited proposal or inquiry regarding an Acquisition Proposal, the Seller,
the Company, Affiliate or Representative, as applicable, will promptly
communicate to the Purchaser in writing the fact that it has received such
proposal or inquiry and its terms and will provide the Purchaser with a complete
copy of any written material relating to such transaction.
6.6 Transactions, Agreements, etc. Neither the Company nor the
Seller shall enter into any transaction or contract or take (or omit to take)
any action which would, or is reasonably likely to, (i) result in any of the
Company's or Seller's representations or warranties contained in this Agreement
or in any Related Document not being true and correct as of the date hereof or
the Closing Date or (ii) prevent the Seller or the Company from performing,
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satisfying and/or complying with all of its covenants and agreements contained
in this Agreement or in any Related Document.
6.7 Insurance. The Seller and the Company shall use
commercially reasonable efforts to maintain or cause to be maintained, in full
force and effect through the Closing Date, all of the insurance policies of or
covering the Business, Properties, Company Employees and directors of the
Company, unless replaced by comparable coverage. The Seller and the Company
shall promptly advise the Purchaser in writing of any fire, accident or other
casualty involving or relating to the Company, the Business or any of the
Properties that occurs on or before the Closing Date (whether or not covered by
insurance) which individually or in the aggregate involves, or adversely affects
the value of any Property, in an amount in excess of $10,000.
6.8 Cooperation. Each party shall cooperate with the other
parties and use its reasonable best efforts to consummate the transactions
contemplated by this Agreement and the Related Documents in accordance with the
terms hereof and thereof.
6.9 Publicity. No party (nor any of its Affiliates) shall,
directly or indirectly, make any press release or other public announcement with
respect to the transactions contemplated hereby or under the Related Documents
without the prior written consent of the other parties, which consent shall not
be unreasonably withheld, unless any such party is required by applicable law to
make such a press release or announcement.
6.10 Distribution of Software. Ownership of the Auto Repair
Shop Controller Software shall be conveyed by the Company to Seller prior to the
Closing.
SECTION 7. Definitions. For purposes of this Agreement, the following
terms shall have the following definitions:
"Affiliate" shall mean (a) an "affiliate" as defined under
Rule 12b-2 of the Securities Exchange Act of 1934, as amended, (b) a Person who
directly or indirectly controls, is controlled by or is under common control
with the Person specified and (c) any Person owning directly or indirectly at
least five percent (5%) of the outstanding equity interests of any other Person.
All Related Persons shall be deemed Affiliates of one another. "Related Person"
shall mean any Person in which the specified Person owns any material economic
interest, and any other Affiliate or Family Member of such specified Person.
"Family Member" shall mean a spouse, any natural or adoptive sibling or any
spouse thereof, and any direct lineal descendant (natural or adoptive) of any of
the foregoing.
"Applicable law or laws" means all applicable provisions of
all (i) constitutions, treaties, statues, laws (including the common law),
rules, regulations, ordinances, codes or orders of any Governmental Authority,
(ii) Consents of any Governmental Authority and (iii) orders, decisions,
injunctions, judgments, awards and decrees of or agreements with any
Governmental Authority.]
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"Auto Repair Shop Controller Software" means that software
module of the Company, including source code and related documentation,
specifically designed for and marketed to the auto repair shop industry.
"Benefit Plans" shall have the meaning given to such term in
Section 3.11.
"Business" means the business conducted by the Company on the
date hereof, as of the Closing Date and as proposed to be conducted, including,
but not limited to, the licensing and distributing of proprietary software
systems for use in inventory control, point of sale and other business
applications in traditional and electronic commerce.
"Closing" or "Closing Date" shall have the meaning given to
such term under Section 2.
"Code" shall mean the Internal Revenue Code of 1986, together
with all rules and regulations promulgated pursuant thereto, as amended from
time to time.
"Common Stock" shall have the meaning given to such term under
Section 1.
"Company Employees" means collectively, any and all current,
former and retired employees of the Company, including, without limitation,
those leased to the Company by EPIX.
"Consent" means any consent, approval, authorization, waiver,
permit, grant, franchise, license, exemption or order of, any registration,
certificate, qualification, declaration or filing with, or any notice to, any
Person, including, without limitation, any Governmental Authority.
"Consulting Agreement" means a consulting agreement in
substantially the form of Exhibit A hereto.
"Contracts" shall have the meaning given to such term in
Section 3.13.
"Environmental Protection Laws" means all applicable laws,
statutes, regulations decrees, judgments and orders now or hereafter in effect
relating to the protection or regulation of the environment, to human health and
safety or to any emission, discharge, generation, processing, storage, holding,
treatment, spill, use, abatement, existence, release, threatened release,
disposal, removal, handling, remediation or transportation of any Hazardous
Substances, including, without limitation, (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. ss.9601
et seq.; (ii) the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
ss.6901 et seq; (iii) the Hazardous Materials Transportation Act, 49 U.S.C.
ss.1801 et seq.; (iv) the Clean Water Act, 33 U.S.C. ss.1251 et seq.;(v) the
Occupational Safety and Health Act ("OSHA"), 29 U.S.C. ss.651 et seq.; and (vi)
all other applicable laws, statutes, regulations, decrees, judgments and orders
(whether foreign or domestic, or federal, state or local) which classify,
regulate, list or define hazardous substances, materials, wastes, contaminants,
pollutants and/or the Hazardous Substances.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any governmental authority,
agency, department, board, commission or instrumentality of the United States,
any State of the United States or any political subdivision thereof, and any
tribunal or arbitrator(s) of competent jurisdiction, and any self-regulatory
organization.
"Hazardous Substance" means any chemical, compound, pollutant,
contaminant, material or substance now or hereafter regulated under any
Environmental Protection Laws, including, without limitation, any "hazardous
substance" or "pollutant or contaminant," as those terms are defined in CERCLA,
any "hazardous waste" as such term is defined in RCRA and any other hazardous or
toxic wastes, substances or materials, the presence, existence or threat of
which may at any time give rise to any Environmental Liability, including,
without limitation, (i) trichloroethylene, tetrachloroethylene,
perchloroethylene and other chlorinated solvents, (ii) any petroleum products or
fractions thereof, (iii) asbestos in any form, (iv) polychlorniated biphenyls,
(v) flammable explosives, (vi) urea formaldehyde and (vii) radioactive materials
and wastes.
"HSR Act" has the meaning set forth in Section 5.2(k).
"Indebtedness" shall mean all (a) obligations for borrowed
money, (b) notes, bonds, debentures, mortgages and similar obligations, (c)
capital obligations and leases, and (d) guaranties and contingent obligations
for the debts of another Person.
"Inventory" means all quantities of inventory, including raw
materials, work-in-process, finished goods (whether or not in the possession of
the Company), spare parts, replacement and component parts, materials, supplies
and packaging items of the Company's business.
"Lien" shall mean any lien, pledge, mortgage, claim, covenant,
restriction, security interest, charge, title defect, transfer restriction,
easement, rights of first refusal, preemptive right or other restriction or
encumbrance of any kind.
"Leased Real Property" has the meaning set forth in Section
3.16.
"License" means any license, permit, franchise, authorization,
right, privilege, variance, exemption, order or approval issued or granted by
any Governmental Authority.
"Material Adverse Effect" means a material adverse effect on,
or any event, fact circumstance, condition or change that, individually or in
the aggregate, is likely to have a material adverse effect on, (i) the assets,
business, operations, condition (financial or otherwise),
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Properties, management, liabilities, obligations, earnings, results of
operations or prospects of the Company or its businesses, (ii) the validity or
enforceability of this Agreement and/or any or all of the Related Documents or
(iii) the right or ability of the Company, any Seller or any of their Affiliates
to consummate the transactions contemplated hereby and/or thereby.
"Non-Competition Agreement" means a Non-Competition Agreement
in substantially the form of Exhibit B hereto.
"Other Software" has the meaning set forth in Section 3.28.
"PBGC" shall mean the Pension Benefit Guaranty Corporation,
and any Person succeeding to the functions of the PBGC.
"Pension Plan" shall mean an "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA maintained by the Company or any
subsidiary.
"Person" shall mean any corporation, partnership, limited
liability company, trust, individual, unincorporated organization or a
governmental agency or political subdivision thereof, as the context may
require.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible of
the Company.
"Purchase Price" has the meaning set forth in Section 1.
"Purchaser" has the meaning set forth in the preamble.
"Related Documents" shall mean the Non-Competition Agreement,
the Consulting Agreement and all other agreements and documents contemplated
hereunder or thereunder, and any and all amendments or modifications thereto.
"Shares" has the meaning set forth in Section 1.
"Sofware Products" means any and all software systems
installed, serviced, distributed, or licensed by or on behalf of the Company to
its customers in the conduct of the Business.
"Tax Return" means any return, report, information return,
registration form or other document (including any related or supporting
information) related to the obligations of any Person filed or required to be
filed with any Taxing Authority in connection with the determination of any Tax
or the administration of any laws, regulations or administrative requirements
relating to any Tax.
"Taxes" means any income, alternative or add-on minimum tax,
gross income, gross receipts, sales, use, ad valorem, franchise, profits,
license, withholding, payroll, employment,
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excise, severance, stamp, occupation, premium, real property, personal property,
or windfall profit tax, custom duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, addition to tax or additional
amount related to the obligations of any Person, imposed by any Governmental
Authority responsible for the imposition of any such tax (domestic or foreign),
but only if and to the extent attributable to periods (or partial periods) prior
to and including the Closing Date, together with any interest and any penalty
thereon.
SECTION 8. Survival of Representations and Warranties. The
representations and warranties made by the Seller in this Agreement or any
Related Document shall survive the Closing and shall continue in effect for a
period of 18 months following the Closing, and shall in no way be affected by
any investigation by or on behalf of the Purchaser or any Affiliate thereof
SECTION 9. Termination.
9.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date, as follows, and in no other manner:
(a) By the mutual written agreement of the parties;
(b) By the Purchaser, by written notice to the
Seller, if (i) there shall have been a material breach of any representation or
warranty made by the Company and/or the Seller in this Agreement, or if the
representations and warranties of the Company and/or the Seller shall not have
been true and correct in all respects (in the case of any representation or
warranty containing any materiality qualification) or in all material respects
(in the case of any representation or warranty without any material
qualification) as of the date when made, or (ii) there shall have been a breach
by the Company and/or the Seller of any of its covenants or agreements hereunder
which would materially adversely affect (or materially delay) the consummation
of the purchase and sale of the Shares hereunder, and, in each of clauses (i)
and (ii), the Company and/or the Seller, as applicable, shall not have cured
such breach, if curable, within ten (10) days after written notice by the
Purchaser, provided that the Purchaser has not breached any of its material
obligations hereunder;
(c) By the Seller, by written notice to the
Purchaser, if (i) there shall have been a breach of any material representation
or warranty made by the Purchaser in this Agreement, or if the representations
and warranties of the Purchaser shall not have been true and correct in all
respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any material qualification) as of the date
when made, or (ii) there shall have been a breach by the Purchaser of any of its
material covenants or agreements hereunder which would materially adversely
affect (or materially delay) the consummation of the purchase and sale of the
Shares hereunder, and, in each of clauses (i) and (ii), the Purchaser shall not
have cured such breach, if curable, within ten (10) days after written notice by
the Sellers, provided that the Company or the Seller has not breached any of
their material obligations hereunder; or
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(d) by the Purchaser or the Seller, if (i) the
Closing shall not have occurred on or prior to August 31, 2000; provided,
however, that no party may terminate this Agreement pursuant to this clause (d)
if the failure of such party (including, in the case of the Company, the Seller)
to fulfill any of its obligations or conditions hereunder shall be the reason
that the Closing shall not have occurred on or prior to such date, or (ii) any
order, decree or judgment shall have been entered against the Company or the
Seller or the Purchaser enjoining, restraining or declaring illegal the material
transactions contemplated hereby or awarding damages in material amounts
connection with the transactions contemplated hereby.
9.2 Effect of Termination. Except as provided in Section 9.1,
in the event that this Agreement shall be terminated pursuant to Section 9.1,
this Agreement shall forthwith become void and have no effect, and all further
obligations of the parties under this Agreement shall terminate without further
liability or obligation of any party to another; provided, however, that each
party shall remain obligated for any breach by such party of this Agreement.
SECTION 10. Miscellaneous.
10.1 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties hereto, provided that no such
succession or assignment may occur without the express approval of the
Purchaser. Nothing in this Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
10.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey.
10.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.4 Notices. Any notices hereunder shall be deemed
sufficiently given by one party to another only if in writing and if and when
delivered or tendered by personal delivery or as of five (5) business days after
deposit in the United States mail in a sealed envelope, registered or certified,
with postage prepaid, twenty-four (24) hours after deposit with an overnight
courier, or five (5) hours after confirmation of delivery by facsimile on a
business day (unless arrangements have otherwise been made to receive such
notice by facsimile outside of normal business hours), addressed as follows (or
at such other address or facsimile number for a party as shall be specified by
like notice):
If to the Purchaser, CAM Commerce Solutions, Inc.
to: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
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If to the Seller,
to: ▇▇▇▇▇ ▇▇▇▇▇▇
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as the party addressed shall have previously designated
by written notice to the serving party, given in accordance with this Section
11.4. A notice not given as provided above shall, if it is in writing, be deemed
given if and when actually received by the party to whom it is given. Any party
may unilaterally change any one or more of the addresses to which a notice to
the party or its representative is to be delivered or mailed, by written notice
to the other party hereto given in the manner stated above.
10.5 Fees and Expenses. The Purchaser shall bear and pay all
of its own costs and expenses relating to the transactions contemplated hereby
and in the Related Documents; provided, however, that if such transactions are
not consummated and the reason therefor is that the information provided by or
on behalf of the Seller or the Company to the Purchaser contains an intentional
misstatement of a material fact or intentionally omits to state a material fact
necessary in order to make the statements contained therein not misleading and
which misstatement or omission is so significant as to change the transactions
contemplated herein and/or in the Related Documents, then the Seller shall,
promptly after submission of invoices therefor, reimburse the Purchaser for all
reasonable and necessary documented out-of-pocket expenses incurred by them in
connection with this Agreement and the Related Documents, or any other aspect of
the transactions contemplated herein or therein, including without limitation,
the reasonable and necessary documented fees and expenses of counsel and
auditors. The Seller shall bear and pay all costs and expenses of the Seller and
the Company relating to the transactions contemplated hereby and in the Related
Documents; provided, however, that if such transactions are not consummated and
the reason therefor is that the information provided by or on behalf of the
Purchaser to the Seller contains an intentional misstatement of a material fact
or intentionally omits to state a material fact necessary in order to make the
statements contained therein not misleading and which misstatement or omission
is so significant as to change the transactions contemplated herein and/or in
the Related Documents, then the Purchaser shall, promptly after submission of
invoices therefor, reimburse the Seller for all reasonable and necessary
documented out-of-pocket expenses incurred by them in connection with this
Agreement and the Related Documents, or any other aspect of the transactions
contemplated herein or therein, including without limitation, the reasonable and
necessary documented fees and expenses of counsel and auditors.
10.6 Transfer Taxes. The Seller shall be liable for and shall
pay all excise, sales, use, transfer (including real property transfer or
gains), stamp, documentary, filing, recordation and other similar Taxes which
may be imposed in connection with the transactions contemplated by this
Agreement, together with any interest, additions or penalties with respect
thereto ("Transfer Taxes"). Each party hereto hereby agrees to file all
necessary documentation in connection with the payment and reporting of Transfer
Taxes.
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10.7 Severability. If one or more provisions of this Agreement
is held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
10.8 Entire Agreement. This Agreement and the Related
Documents constitute the entire agreement among the parties hereto pertaining to
the subject matter hereof and thereof and supersede all prior agreements, term
sheets, letters, discussions and understandings of the parties in connection
therewith.
10.9 Assurances. Each party to this Agreement shall execute
all instruments and documents and take all actions as may be reasonably required
to effectuate this Agreement, whether before, concurrent with or after the
consummation of the transactions contemplated hereby.
10.10 Amendments and Waivers. This Agreement may be amended in
writing with the prior approval of the Seller and the Purchaser. Unless
otherwise provided herein, any waiver hereunder may be granted with the prior
approval of the Seller and the Purchaser.
10.11 Exhibits. The terms of all exhibits attached hereto are
incorporated herein by this reference.
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IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement as of the date first above written.
SELLER:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
COMPANY:
MicroBiz Corp.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
PURCHASER:
CAM Commerce Solutions, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
