ASSET PURCHASE AGREEMENT
by and among
ACCESS CORPORATION
as Seller
and
UNIVERSAL DOCUMENT MANAGEMENT SYSTEMS, INC.
as Purchaser
TABLE OF CONTENTS
ARTICLE I
Definitions .................................................1
Section 1.1 Certain General Definitions .................1
ARTICLE II
Terms of Sale and Payment....................................4
Section 2.1 Sale of Assets .............................4
2.1.1 The Assets ..........................4
2.1.2 Excluded Assets......................5
2.1.3 Assumed Liabilities .................5
Section 2.2 Purchase Price ..............................6
Section 2.4 The Closing .................................6
ARTICLE III
Representations and Warranties of the Company and the
Stockholders ................................................6
Section 3.1 Organization and Good Standing; Qualification....6
Section 3.2 Corporate Records ...........................7
Section 3.3 Authorization and Validity ..................7
Section 3.4 No Violation ................................7
Section 3.5 Consents ....................................7
Section 3.6 Financial Statements ........................8
Section 3.7 Liabilities and Obligations .................8
Section 3.8 Employee Matters ............................8
3.8.1 Cash Compensation ...................8
3.8.2 Compensation Plans ..................8
3.8.3 Employment Agreements ...............9
3.8.4 Employee Policies and Procedures ....9
3.8.5 Unwritten Amendments ................9
3.8.6 Labor Compliance ....................9
3.8.7 Unions ..............................9
3.8.8 Aliens ..............................9
Section 3.9 Employee Benefit Plans .....................10
3.9.1 Identification .....................10
3.9.2 Administration .....................10
3.9.3 Examinations .......................10
3.9.4 Prohibited Transactions ............10
3.9.5 Claims and Litigation ..............10
3.9.6 Qualification .....................10
3.9.7 Funding Status .....................11
3.9.8 Excise Taxes .....................11
3.9.9 Multiemployer Plans ................11
3.9.10 PBGC ...............................11
3.9.11 Retirees ...........................11
Section 3.10 Absence of Certain Changes ................13
Section 3.11 Title; Leased Assets ......................13
3.11.1 Real Property ......................13
3.11.2 Personal Property ..................13
3.11.3 Leases .............................13
Section 3.12 Commitments ................................13
3.12.1 Commitments; Defaults ..............13
3.12.2 No Cancellation or Termination of
Commitment .........................15
Section 3.13 Insurance ..................................15
Section 3.14 Proprietary Rights and Information .........15
Section 3.15 Taxes ......................................15
3.15.1 Filing of Tax Returns ..............15
3.15.2 Payment of Taxes ...................16
3.15.3 No Pending Deficiencies,
Delinquencies,Assessments or Audits 16
3.15.4 No Extension of Limitation Period ..16
3.15.5 Withholding Requirements Satisfied..16
3.15.6 Foreign Person .....................16
3.15.7 Safe Harbor Lease ..................16
3.15.8 Tax Exempt Entity ..................16
3.15.9 Collapsible Corporation ............17
3.15.10 Boycotts ...........................17
3.15.11 Parachute Payments .................17
3.15.12 S Corporation ......................17
3.15.13 Personal Service Corporation .......17
3.15.14 Personal Holding Company ...........17
Section 3.16 Compliance with Laws .......................17
Section 3.17 Finder's Fee ..............................17
Section 3.18 Litigation .................................17
Section 3.19 Condition of Fixed Assets ..................18
Section 3.20 Distributions and Repurchases ..............18
Section 3.21 Banking Relations .........................18
Section 3.22 Ownership Interests of Interested Persons;
Affiliations ...............................18
Section 3.23 Environmental Matters ......................18
Section 3.24 Certain Payments ...........................18
ARTICLE IV
Representations and Warranties of Purchaser ................19
Section 4.1 Organization and Good Standing ............19
Section 4.2 Authorization and Validity .................19
Section 4.3 Finder's Fee ...............................19
Section 4.4 Reserved. ..................................19
Section 4.5 Filings ....................................19
ARTICLE V
Covenants of the Company ...................................20
Section 5.1 Consummation of Agreement ..................20
Section 5.2 Business Operations ........................20
Section 5.3 Access .....................................20
Section 5.4 Notification of Certain Matters ............20
Section 5.5 Approvals of Third Parties .................21
Section 5.6 Employee Matters ...........................21
Section 5.7 Contracts ..................................21
Section 5.8 Capital Assets; Payments of Liabilities ....22
Section 5.9 Mortgages, Liens and Guaranties ............22
Section 5.10 Acquisition Proposals ......................22
5.10.1 Solicited Proposals ................22
5.10.2 Other Potential Bidders ............22
Section 5.11 Distributions and Repurchases ..............23
ARTICLE VI
Covenants of Purchaser .....................................23
Section 6.1 Consummation of Agreement ..................23
Section 6.2 Requirements to Effect Acquisition .........23
Section 6.3 Access .....................................23
Section 6.4 Notification of Certain Matters.............24
Section 6.5 Approvals of Third Parties .................24
ARTICLE VII
Covenants of all Parties ...................................24
Section 7.1 Filings; Other Action ......................24
Section 7.2 Amendment of Schedules .....................25
Section 7.3 Executive Retention Agreements .............25
ARTICLE VIII
Conditions Precedent of Purchaser ..........................26
Section 8.1 Due Diligence ..............................26
Section 8.2 Representations and Warranties .............26
Section 8.3 Covenants .................................26
Section 8.4 Legal Opinion .............................26
Section 8.5 Proceedings ................................26
Section 8.6 No Material Adverse Change ................26
Section 8.7 Securities Approvals ....................26
Section 8.8 Simultaneous Closings ....................26
Section 8.9 Closing Deliveries .........................27
ARTICLE IX
Conditions Precedent of the Company ........................27
Section 9.1 Representations and Warranties .............27
Section 9.2 Covenants ..................................27
Section 9.3 Legal Opinions .............................27
Section 9.4 Proceedings ................................27
Section 9.5 Government Approvals and Required Consents .27
Section 9.6 Securities Approvals .......................27
Section 9.7 Closing Deliveries .........................28
Section 9.8 Stockholder Approval .......................28
Section 9.9 Oce Transaction ............................28
ARTICLE X
Closing Deliveries .........................................28
Section 10.1 Deliveries of the Company ..................28
Section 10.2 Deliveries of Purchaser ....................29
ARTICLE XI
Post Closing Matters .......................................30
Section 11.1 Further Instruments of Transfer ............30
ARTICLE XIV
Termination ............................................30
Section 12.1 Termination ................................30
Section 12.2 Effect of Termination ......................31
ARTICLE XIII
Nondisclosure of Confidential Information ..................31
Section 13.1 Nondisclosure ..............................31
Section 13.2 Damages ....................................32
Section 13.3 Survival ...................................32
ARTICLE XIV
Miscellaneous .............................................32
Section 14.1 Amendment; Waivers .........................32
Section 14.2 Assignment .................................32
Section 14.3 Parties In Interest; No Third Party
Beneficiaries ..............................32
Section 14.4 Entire Agreement ...........................32
Section 14.5 Severability ...............................33
Section 14.6 Survival of Representations, Warranties
and Covenants ..............................33
Section 14.7 Governing Law ..............................33
Section 14.8 Captions ...................................33
Section 14.9 Gender and Number ..........................33
Section 14.10 Reference to Agreement .....................33
Section 14.11 Confidentiality; Publicity and Disclosures .33
Section 14.12 Notice .....................................34
Section 14.13 Choice of Forum ............................35
Section 14.14 No Waiver; Remedies ........................35
Section 14.15 Counterparts ...............................35
Section 14.16 Costs, Expenses and Legal Fees .............35
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), dated as of August 19,
1997, is by and between ACCESS Corporation, an Ohio corporation (including any
trust successor thereto as contemplated by Section 14.2, the "Company"), and
Universal Document Management Systems, Inc., an Ohio corporation
("Purchaser").
WITNESSETH:
WHEREAS, the Company is engaged in the business of servicing hardware
and software for its installed base of customers and third parties, and
marketing software for the electronic storage, control and processing of
technical documentation, and
WHEREAS, the Company desires to sell to Purchaser and Purchaser desires
to purchase from the Company substantially all of the Company's assets (except
the Excluded Assets as defined below) and assume all of the Company's
liabilities as of the Closing Date (as defined herein) upon the terms and
conditions hereinafter set forth,
NOW, THEREFORE, and in consideration of the mutual representations,
warranties and covenants herein contained, and on the terms and subject to the
conditions herein set forth, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION CERTAIN GENERAL DEFINITIONS. As used in this
Agreement, the following terms shall have the meanings set forth below:
1.1.1 "actual knowledge", "have no actual knowledge of, "do
not actually know of" and similar phrases shall mean (i) in the case of a
natural person, the actual conscious awareness, or not, as the context
requires, of the particular fact by such person, and (ii) in the case of an
entity, the actual conscious awareness, or not, as the context requires, of
the particular fact by any director or executive officer of such entity.
1.1.2 "Affiliate" with respect to any person shall mean a
person that directly or indirectly through one or more intermediaries,
controls, or is controlled by or is under common control with, such person.
1.1.3 "best knowledge", "have no knowledge of", "do not know
of" or "to the knowledge of" and similar phrases shall mean (i) in the case of
a natural person, the particular fact was known, or not known, as the context
requires, to such person after reasonable investigation and inquiry by such
person, and (ii) in the case of an entity, the particular fact was known, or
not known, as the context requires, to any stockholder, director or executive
officer of such entity after reasonable investigation and inquiry.
1.1.4 "Company Capital Stock" shall mean the shares of
capital stock of the Company, as set forth in the Company Disclosure
Schedules, which are authorized, issued and outstanding at any time on or
after the date of this Agreement to and including the Closing Date.
1.1.5 "Company Disclosure Schedules" shall mean the schedules
of exceptions and other disclosures attached hereto as of the date hereof or
otherwise delivered by the Company to Purchaser, as such may be amended or
supplemented from time to time pursuant to the provisions hereof. The
information contained in the Company Disclosure Schedules is labeled to
correspond with the principal Section numbers of this Agreement to which the
disclosure relates.
1.1.6 "Confidential Information" shall mean all trade secrets
and other confidential and/or proprietary information of the particular
person, including information derived from reports, investigations, research,
work in progress, codes, marketing and sales programs, financial projections,
cost summaries, pricing formulae, contract analyses, financial information,
projections, confidential filings with any state or federal agency, and all
other confidential concepts, methods of doing business, ideas, materials or
information prepared or performed for, by or on behalf of such person by its
employees, officers, directors, agents, representatives, or consultants.
1.1.7 "Environmental Laws" shall mean any laws or regulations
pertaining to the environment, as in effect on the date hereof and the Closing
Date, including without limitation (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. 9601 et seq.),
as amended (including without limitation as amended pursuant to the Superfund
Amendments and Reauthorization Act of 1986), and regulations promulgated
thereunder, (ii) the Resource Conservation and Recovery Act of 1976 (42 U.S.C.
6901 et seq., as amended), and regulations promulgated thereunder, (iii)
statutes, rules or regulations, whether federal, state or local, applicable to
the Company's assets or operations that relate to asbestos or polychlorinated
biphenyls, and (iv) the provisions contained in any similar state statutes or
regulations relating to environmental matters applicable to the Company's
assets or operations.
1.1.8 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.1.9 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1.1.10 "Initial Public Offering" shall mean the initial
underwritten public offering of Purchaser Common Stock contemplated by the
Registration Statement (as hereinafter defined).
1.1.11 [Reserved]
1.1.12 "Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended.
1.1.13 "IRS" shall mean the Internal Revenue Service of the
United States Department of the Treasury.
1.1.14 "Material Adverse Effect" shall mean a material
adverse effect on the Company's business, operations, condition (financial or
otherwise) or results of operations, taken as a whole, in consideration of all
relevant facts and circumstances.
1.1.15 "ordinary course of business" shall mean the usual and
customary way in which the Company has conducted its business in the past.
1.1.16 "person" shall mean any natural person, corporation,
partnership, joint venture, limited liability company, association, group,
organization or other entity.
1.1.17 "Related Acquisitions" shall mean, collectively, the
transactions contemplated hereby, and the mergers and acquisitions of entities
and assets contemplated by the definitive acquisition agreements between
Purchaser and the other Target Companies.
1.1.18 "Schedules" shall mean the Company Disclosure
Schedules and the Purchaser Disclosure Schedules.
1.1.19 "SEC" shall mean the United States Securities and
Exchange Commission.
1.1.20 "Securities Act" shall mean the Securities Act of
1933, as amended.
1.1.21 "Target Companies" shall mean the companies listed on
Exhibit 1.1.21 which Purchaser intends to acquire simultaneously with its
acquisition of the Company.
1.1.22 "Tax Returns" shall include all federal, state, local
or foreign income, excise, corporate, franchise, property, sales, use,
payroll, withholding, provider, environmental, duties, value added and other
tax returns (including information returns).
1.1.23 "Underwriter Representative" shall mean any
underwriter in the Initial Public Offering who acts as a managing underwriter
in the Initial Public Offering.
1.1.24 "Purchaser Common Stock" shall mean the Common Stock,
par value $0.01 per share, of Purchaser.
1.1.25 "Purchaser Disclosure Schedules" shall mean the
schedules of exceptions and other disclosures attached hereto or otherwise
delivered by Purchaser to the Company, as such may be amended or supplemented
from time to time pursuant to the provisions hereof. The information
contained in the Purchaser Disclosure Schedules is labeled to correspond with
the Section numbers of this Agreement to which the disclosure relates, if
applicable.
1.1.26 "Accountable Earnings" shall mean with respect to the
12-month period ending April 30, 1998 for which Accountable Earnings are to be
determined for the purposes hereof, the amount of the gross profit
attributable to the Company's hardware services business (and specifically
excluding the Company's EDMS software and professional services business), as
an independent company prior to the Closing and as a separate unit of the
Purchaser after the Closing on a combined basis (the "Hardware Services
Business"), for such year, with all expenses classified consistently between
measurement periods, as reported in the Company's and Purchaser's consolidated
statements of income for such 12-month period, determined in accordance with
generally accepted accounting principles, consistently applied and as reviewed
by KPMG Peat Marwick LLP.
1.1.27 "Stockholders(s)" shall mean the holder(s) of any
Company Capital Stock.
1.1.28 "Option Proceeds" shall mean any proceeds received by
the Company as a result of the exercise of stock options and/or stock
appreciation rights ("SARs") with respect to Company Capital Stock after the
Company Balance Sheet Date.
1.1.29 "Oce Agreement" shall mean the Agreement of even date
herewith between the Company and Oce N.V. providing, inter alia, for the
payment of $1,500,000 (plus accrued dividends if any) in cash to Oce upon the
liquidation of the Company.
1.1.30 "Oce Reserve Fund" shall mean $1,500,000 in cash to be
paid to Oce N.V. pursuant to the Oce Agreement.
1.1.31 "Oce Transaction" shall mean the payment of $1,500,000
(plus accrued dividends if any) to Oce pursuant to the Company's Plan of
Complete Liquidation and Dissolution in full satisfaction of Oce's equity
interest in the Company, all as contemplated by the Oce Agreement.
ARTICLE II
TERMS OF SALE AND PAYMENT
SECTION 2.1 SALE OF ASSETS.
2.1.1 THE ASSETS. The Company shall sell, assign, convey,
transfer and deliver to Purchaser and Purchaser shall purchase and pay for, on
the Closing Date, free and clear of all liens and encumbrances, all of the
assets, rights, properties, claims, contracts and business of the Company at
the Closing Date of every kind, nature, character and description, tangible
and intangible, real, personal or mixed, wherever located (excluding the
Excluded Assets, the "Assets"), including but not limited to, the following:
(i) Inventory. The Company's entire inventory of
finished goods, purchased parts, operating supplies, work-in-progress and
unshipped finished goods of the Company, including products or supplies on
hand or in transit ("Inventory");
(ii) Equipment. All vehicles, equipment, furniture,
fixtures, supplies, computers and computer equipment and other tangible
personal property, all material items of which are listed on Schedule
2.1.1(ii) ("Equipment");
(iii) Records. All pertinent records, financial and non-
financial, relating to the present and past operating history of the Company's
business;
(iv) Contracts. All outstanding contracts, leases,
licenses, obligations, commitments, agreements, customer orders, contracts for
goods, supplies, materials, equipment, machinery, for other items used in the
operation of the Company's business that are disclosed in writing to Purchaser
and are in existence on the Closing Date (the "Contracts");
(v) Leases of Real Property. The leasehold interests in
all of the real property leased by the Company, all of which are listed on
Schedule 2.1.1(v) hereto;
(vi) Intangible Assets. All intangible assets of the
Company relating to past, current and presently contemplated future products
including trademarks, trademark registrations, patents, patent registrations,
copyrights, copyright registrations, tradenames, other trade designations,
trademark applications, patent applications, copyright applications,
inventions, service marks, trade secrets, permits, licenses, royalties
(including any rights to ▇▇▇ for breach or past infringement) relating to such
business, and agreements relating to technology, know-how or processes the
Company is licensed or authorized to use by others, or which it licenses or
authorizes others to use, all of which, to the extent material to the business
of the Company, are listed on Schedule 2.1.1(vi) (the "Proprietary Rights")
hereto;
(vii) Accounts Receivable. All accounts receivable of the
Company in existence on the Closing Date, including all notes, bonds and other
evidences of such receivables;
(viii) Cash/Prepaid Expenses. All cash on hand, cash
equivalents, deposits in transit and prepaid expenses as of the Closing Date,
excluding any Option Proceeds and the Class II Preferred Stock Reserve Fund;
and
(ix) Permits and Licenses. All permits, licenses,
consents and any other forms of government approval as will be required for
the operation of the Company's business as of the Closing Date.
2.1.2 Excluded Assets. The Excluded Assets shall consist of:
(i) The Option Proceeds;
(ii) The Oce Reserve Fund; and
(iii) The personal property, including office furn-
ture, owned by Company employees and listed on Schedule 2.1.2(iii) of the
Company Disclosure Schedules.
2.1.3 Assumed Liabilities. On the Closing Date, Purchaser will
assume and agree to pay and discharge all of the obligations and liabilities
of the Company in existence as of the Closing Date, whether or not accrued,
absolute, contingent, unasserted, unassessed or otherwise, including but not
limited to liabilities arising under any Environmental Laws with respect to
any of the Assets.
SECTION 2.2 PURCHASE PRICE. Purchaser shall pay the Company a
purchase price for the Assets as follows
(i) At the Closing, $3 million in cash,
(ii) Any amounts payable pursuant to Section 2.4 (ii)(c);
and
(iii) Additional consideration of up to $1 million which
shall be payable in cash. The additional consideration shall be based upon
Accountable Earnings as follows:
If Accountable Earnings are: Additional Consideration will
be:
$2,000,000 or greater $1,000,000
$1,950,000 to $1,999,999.99 $800,000
$1,900,000 to $1,949,999.99 $600,000
$1,850,000 to $1,899,999.99 $400,000
$1,800,000 to $1,849,999.99 $200,000
Less than $1,800,000 -0-
(iv) Within 90 days after April 30, 1998, Purchaser shall
deliver to the Company its calculation of the additional consideration
determined pursuant to Section 2.2(ii), showing in reasonable detail the
calculation thereof. The Company shall be entitled to access to the books,
records and personnel of Purchaser to review such calculation. If the Company
notifies Purchaser of its agreement with such calculation or does not object
to Purchaser's calculation of such additional consideration within 45 days
after the receipt thereof, such calculation shall be final, binding and
conclusive for all purposes. If the Company objects to such calculation, it
shall notify Purchaser within such 45-day period, setting forth in reasonable
detail the basis for its objection and its proposed adjustments to the
calculation of such additional consideration. Purchaser and the Company shall
seek in good faith to resolve any such dispute within 30 days following
receipt of notice of the Company's objection. If they are unable to reach
agreement within such 30-day period, then such accounting firm as shall be
agreed upon by the parties shall be engaged to review the calculations of
additional consideration prepared by Purchaser and the Company and shall make
a final, binding and conclusive determination of any matters in dispute. The
fees and expenses of such accounting firm shall be paid jointly by Purchaser
and the Company.
(v) Purchaser shall pay the additional consideration
calculated pursuant to Section 2.2.(ii) to the Company in cash within 30 days
after the final calculation thereof pursuant to Section 2.2(iii).
(vi) From the Closing until April 30, 1998, Purchaser shall
operate the Hardware Services Business in the ordinary course, consistent with
the Company's prior practice.
SECTION 2.3 ALLOCATION. Exhibit 2.3, to be agreed upon prior the
Closing and attached hereto, shall set forth an allocation of the Purchase
Price.
SECTION 2.4 ADJUSTMENT.
(a) If as of the Closing Date,
(i) the Company has at least $1,500,000 in cash, then the Company
shall consummate the Oce Transaction and pay to Oce all amounts payable to it
pursuant thereto out of the Company's cash on hand as of the Closing Date;
(ii) the Company has less than $1,500,000 in cash and the sum of
the Company's cash and accounts receivable equals or exceeds $3,200,000, then
(a) the Company will calculate its accounts receivable as of the Closing Date,
provided that at Purchaser's request, such calculation shall be subject to
review by and approval of Purchaser's accountants within five business days of
the Closing Date; (b) the Company shall consummate the Oce Transaction and pay
to Oce all amounts payable to it pursuant thereto first out of the Company's
cash on hand as of the Closing Date, with any remaining amount to be paid out
of the purchase price paid to the Company pursuant to Section 2.2(i); and (c)
Purchaser shall pay the Company (or its shareholders), as soon as practicable
after receipt by Purchaser, 50% of any payments actually received by Purchaser
thereafter with respect to the Company's accounts receivable identified in
clause (a) above until the total amount paid to the Company (or its
shareholders) from such accounts receivable equals the amount which the
Company deducted from the purchase price in connection with payment to Oce
pursuant to clause (b) above; or
(iii) the Company has less than $1,500,00 and the sum of the
Company's cash and accounts receivable is less than $3,200,000, then Purchaser
may, at its sole discretion, terminate this Agreement, which termination shall
have the effect described in Section 12.2.
(b) If Section 2.4(a)(ii) above is applicable, Purchaser shall attempt
to collect such accounts receivable in the ordinary course, using efforts
consistent with Purchaser's collection of other accounts receivable of
Purchaser, and within 15 days of Purchaser's receipt of a request from the
Company, shall provide the Company with a report on Purchaser's collection of
such accounts receivable.
SECTION 2.5 THE CLOSING. The Closing shall take place at 10:00
a.m., Cincinnati time, at the offices of ▇▇▇▇▇▇▇▇ & Shohl LLP simultaneously
with the closings of the Initial Public Offering and Purchaser's acquisitions
of the Target Companies. The date on which the Closing occurs is hereinafter
referred to as the "Closing Date."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser that, except as may
be set forth in the Company Disclosure Schedules, the following are true and
correct as of the date hereof:
SECTION 3.1 ORGANIZATION AND GOOD STANDING;QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of its state of organization, with all requisite corporate
power and authority to carry on the business in which it is engaged, to own
the properties it owns, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The Company is qualified and
licensed to do business in every jurisdiction in which such qualification and
licensing is required, except where the failure to be so licensed or qualified
would not have a Material Adverse Effect. Except for an office in Irvine,
California and warehouse facilities in Hebron, Kentucky, each of which is
leased, the Company does not have any offices in any state other than the
state of its organization.
SECTION 3.2 CORPORATE RECORDS. The copies of the Articles of
Incorporation and Code of Regulations, and all amendments thereto, of the
Company that have been delivered or made available to Purchaser are true,
correct and complete copies thereof, as in effect on the date hereof. The
minute books of the Company, which have been made available to Purchaser,
contain accurate minutes of all meetings of, and accurate consents to all
actions taken without meetings by, the Board of Directors (and any committees
thereof) and the Stockholders since April 30, 1994.
SECTION 3.3 AUTHORIZATION AND VALIDITY. The execution, delivery
and performance by the Company of this Agreement, and the consummation of the
transactions contemplated hereby, have been or will be as of the Closing Date
duly authorized by the Board of Directors of the Company, but such
consummation is subject to the approval of the Stockholders. This Agreement
has been duly executed and delivered by the Company and constitutes and will
as of the Closing Date constitute the legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally or the availability of equitable
remedies.
SECTION 3.4 NO VIOLATION. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transactions
contemplated hereby will (a) conflict with, or result in a violation or breach
of the terms, conditions or provisions of, or constitute a default under, the
Articles of Incorporation or Code of Regulations of the Company, (b) except as
would not, individually or in the aggregate, result in a Material Adverse
Effect, conflict with, or result in a violation or breach of the terms,
conditions or provisions of, or constitute a default under, any agreement,
indenture or other instrument under which the Company is bound or to which any
of the assets of the Company are subject, or result in the creation or
imposition of any security interest, lien, charge or encumbrance upon any of
the assets of the Company or (c) except as would not, individually or in the
aggregate, result in a Material Adverse Effect, violate or conflict with any
judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body.
SECTION 3.5 CONSENTS. Except as may have been obtained or as may
be required under the Exchange Act, the Securities Act, the Ohio General
Corporation Law and state securities laws, no consent, authorization,
approval, permit or license of, or filing with, any governmental or public
body or authority, any lender or lessor or any other person or entity is
required to be obtained by the Company to authorize, or is required to be
obtained by the Company in connection with, the execution, delivery and
performance of this Agreement or the agreements contemplated hereby on the
part of the Company, other than the approval of the Stockholders and such
consents as to which the failure to obtain would not, individually or in the
aggregate, result in a Material Adverse Effect.
SECTION 3.6 FINANCIAL STATEMENTS. The Company has furnished to
Purchaser its audited balance sheet dated as of April 30, 1997 (the "Company
Balance Sheet" and the date thereof shall be referred to as the "Company
Balance Sheet Date") and audited related statements of income, retained
earnings and cash flows for the two full fiscal years then ended
(collectively, with the related notes thereto, the "Financial Statements"),
copies of which are included in the Company Disclosure Schedules. The
Financial Statements fairly present the financial condition and results of
operations of the Company as of the dates and for the periods indicated and
have been prepared in conformity with generally accepted accounting principles
(subject to normal year-end adjustments and the absence of notes for any
unaudited interim financial statement for any interim periods presented)
applied on a consistent basis with prior periods, except as otherwise
indicated in the Financial Statements.
SECTION 3.7 LIABILITIES AND OBLIGATIONS. The Financial Statements
reflect all material liabilities of the Company, accrued, contingent or
otherwise that would be required to be reflected on a balance sheet, or in the
notes thereto, prepared in accordance with generally accepted accounting
principles, except for liabilities and obligations incurred in the ordinary
course of business since the Company Balance Sheet Date. Except as set forth
in the Financial Statements, the Company is not liable upon or with respect
to, or obligated in any other way to provide funds in respect of or to
guarantee or assume in any manner, any debt, obligation or dividend of any
person, corporation, association, partnership, joint venture, trust or other
entity, and the Company does not know of any valid basis for the assertion of
any other material claims or liabilities.
SECTION 3.8 EMPLOYEE MATTERS.
3.8.1 CASH COMPENSATION. The Company Disclosure Schedules contain
a complete and accurate list of the names, titles and annual cash compensation
as of the Company Balance Sheet Date, including without limitation wages,
salaries, bonuses (discretionary and formula) and other cash compensation (the
"Cash Compensation") of all employees of the Company. In addition, the
Company Disclosure Schedules contain a complete and accurate description of
(i) all increases in Cash Compensation of employees of the Company during the
current fiscal year and the immediately preceding fiscal year and (ii) any
promised increases in Cash Compensation of employees of the Company that have
not yet been effected.
3.8.2 COMPENSATION PLANS. The Company Disclosure Schedules
contain a complete and accurate list of all compensation plans, arrangements
or practices (the "Compensation Plans") sponsored by the Company or to which
the Company contributes on behalf of its employees. The Compensation Plans
include without limitation plans, arrangements or practices that provide for
severance pay, deferred compensation, incentive, bonus or performance awards,
and stock ownership or stock options. The Company has provided or made
available to Purchaser a copy of each written Compensation Plan and a written
description of each unwritten Compensation Plan. Each of the Compensation
Plans can be terminated or amended at will by the Company.
3.8.3 EMPLOYMENT AGREEMENTS. The Company is not a party to any
employment agreement ("Employment Agreements") with respect to any of its
employees. Employment Agreements include without limitation employee leasing
agreements, employee services agreements and noncompetition agreements.
3.8.4 EMPLOYEE POLICIES AND PROCEDURES. The Company has provided
to Purchaser a complete and accurate list of all employee manuals and all
material policies, procedures and work-related rules (the "Employee Policies
and Procedures") that apply to employees of the Company. The Company has
maintained and shall continue to maintain, and has given and shall continue to
give Purchaser reasonable access to, a copy of all written Employee Policies
and Procedures and a written description of all material unwritten Employee
Policies and Procedures.
3.8.5 UNWRITTEN AMENDMENTS. No material unwritten amendments
have been made, whether by oral communication, pattern of conduct or
otherwise, with respect to any Compensation Plans or Employee Policies and
Procedures.
3.8.6 LABOR COMPLIEANC. The Company has been and is in
compliance with all applicable laws, rules, regulations and ordinances
respecting employment and employment practices, terms and conditions of
employment and wages and hours, except for any such failures to be in
compliance that, individually or in the aggregate, would not result in a
Material Adverse Effect, and the Company is not liable for any arrears of
wages or penalties for failure to comply with any of the foregoing. The
Company has not engaged in any unfair labor practice or discriminated on the
basis of race, color, religion, sex, national origin, age, disability or
handicap in its employment conditions or practices that would, individually or
in the aggregate, result in a Material Adverse Effect. There are no (i)
unfair labor practice charges or complaints or racial, color, religious, sex,
national origin, age, disability or handicap discrimination charges or
complaints pending or, to the actual knowledge of the Company, threatened
against the Company before any federal, state or local court, board,
department, commission or agency (nor, to the knowledge of the Company, does
any valid basis therefor exist) or (ii) existing or, to the actual knowledge
of the Company, threatened labor strikes, disputes, grievances, controversies
or other labor troubles affecting the Company (nor, to the knowledge of the
Company, does any valid basis therefor exist).
3.8.7 UNIONS. The Company has never been a party to any
agreement with any union, labor organization or collective bargaining unit.
No employees of the Company are represented by any union, labor organization
or collective bargaining unit. To the actual knowledge of the Company, none
of the employees of the Company has threatened to organize or join a union,
labor organization or collective bargaining unit.
3.8.8 ALIENS. To the best knowledge of the Company, all
employees of the Company are citizens of, or are authorized in accordance with
federal immigration laws to be employed in, the United States.
SECTION 3.9 EMPLOYEE BENEFIT PLANS.
3.9.1 IDENTIFICATION. The Company Disclosure Schedules contain a
complete and accurate list of all employee benefit plans (within the meaning
of Section 3(3) of ERISA) sponsored by the Company, or to which the Company
has contributed on behalf of its employees, within the three years preceding
the date hereof (the "Employee Benefit Plans"). The Company has provided or
made available to Purchaser copies of all plan documents, determination
letters, pending determination letter applications, trust instruments,
insurance contracts, administrative services contracts, annual reports,
actuarial valuations, summary plan descriptions, summaries of material
modifications and administrative forms that constitute a part of or are
incident to the administration of the Employee Benefit Plans. In addition,
the Company has provided or made available to Purchaser a written description
of any other existing practice engaged in by the Company that constitutes an
Employee Benefit Plan. Subject to the requirements of the Internal Revenue
Code and ERISA, each of the Employee Benefit Plans can be terminated or
amended at will by the Company. No unwritten amendment exists with respect to
any Employee Benefit Plan.
3.9.2 ADMINISTRATION. Each Employee Benefit Plan has been
administered and maintained in compliance with all applicable laws, rules and
regulations, except where the failure to be in compliance would not,
individually or in the aggregate, result in a Material Adverse Effect. The
Company and the Stockholders have made all necessary filings, reports and
disclosures pursuant to and have complied with all requirements of the IRS
Voluntary Compliance Resolution Program with respect to all applicable
Employee Benefit Plans.
3.9.3 EXAMINATIONS.The Company has not received any notice that
any Employee Benefit Plan is currently the subject of an audit, investigation,
enforcement action or other similar proceeding conducted by any state or
federal agency.
3.9.4 PROHIBITED TRANSACTIONS. No prohibited transactions
(within the meaning of Section 4975 of the Internal Revenue Code or Sections
406 and 407 of ERISA) have occurred with respect to any Employee Benefit Plan.
3.9.5 CLAIMS AND LITIGATION. No pending or, to the actual
knowledge of the Company, threatened, claims, suits or other proceedings exist
with respect to any Employee Benefit Plan other than normal benefit claims
filed by participants or beneficiaries.
3.9.6 QUALIFICATION. The Company has received a favorable
determination letter or ruling from the IRS for each of the Employee Benefit
Plans intended to be qualified within the meaning of Section 401(a) of the
Internal Revenue Code (and for which the related trust is intended to be tax-
exempt within the meaning of Section 501 (a) of the Internal Revenue Code).
No proceedings exist or, to the actual knowledge of the Company, have been
threatened that could result in the revocation of any such favorable
determination letter or ruling.
3.9.7 FUNDING STATUS. No accumulated funding deficiency (within
the meaning of Section 412 of the Internal Revenue Code), whether or not
waived, exists with respect to any Employee Benefit Plan or any plan sponsored
by any member of a controlled group (within the meaning of Section
412(n)(6)(B) of the Internal Revenue Code) in which the Company is a member (a
"Controlled Group"). With respect to each Employee Benefit Plan subject to
Title IV of ERISA, the assets of each such plan are at least equal in value to
the present value of accrued benefits determined on an ongoing basis as of the
date hereof. The Company does not sponsor any Employee Benefit Plan described
in Section 501(c)(9) of the Internal Revenue Code. None of the Employee
Benefit Plans are subject to actuarial assumptions.
3.9.8 EXCISE TAXES. Neither the Company nor any member of a
Controlled Group has any liability to pay excise taxes with respect to any
Employee Benefit Plan under applicable provisions of the Code or ERISA.
3.9.9 MULTIEMPLOYER PLANS. Neither the Company nor any member
of a Controlled Group is or ever has been obligated to contribute to a
multiemployer plan within the meaning of Section 3(37) of ERISA.
3.9.10 PBGC. None of the Employee Benefit Plans is subject to
the requirements of Title IV of ERISA.
3.9.11 RETIREES. The Company has no obligation or commitment
to provide medical, dental or life insurance benefits to or on behalf of any of
its employees after they retire or any of its former employees who have
retired except as may be required pursuant to the continuation of coverage
provisions of Section 4980B of the Internal Revenue Code and Sections 601
through 608 of ERISA.
SECTION 3.10 ABSENCE OF CERTAIN CHANGES. Since the Company Balance
Sheet Date, the Company has not
3.10.1 suffered a Material Adverse Effect, whether or not caused
by any deliberate act or omission of the Company or a Stockholder;
3.10.2 contracted for the purchase of any capital asset having a
cost in excess of $35,000 or made any single capital expenditure in excess of
$35,000;
3.10.3 incurred any indebtedness for borrowed money (other the
short-term borrowing in the ordinary course of business), or issued or sold
any debt securities;
3.10.4 incurred or discharged any material liabilities or
obligations except in the ordinary course of business;
3.10.5 paid any amount on any indebtedness prior to the due date,
forgiven or cancelled any claims or any debt in excess of $35,000, or released
or waived any rights or claims except in the ordinary course of business;
3.10.6 mortgaged, pledged or subjected to any security interest,
lien, lease or other charge or encumbrance any of its properties or assets
(other than statutory liens arising in the ordinary course of business or
other liens that do not materially detract from the value or interfere with
the use of such properties or assets);
3.10.7 suffered any damage or destruction to or loss of any
assets (whether or not covered by insurance) that has, individually or in the
aggregate, resulted in a Material Adverse Effect;
3.10.8 acquired or disposed of any assets having an aggregate
value in excess of $35,000, except in the ordinary course of business;
3.10.9 written up or written down the carrying value of any
material assets, other than accounts receivable in the ordinary course of
business;
3.10.10 changed the costing system or depreciation methods of
accounting for its assets in any material respect;
3.10.11 lost or terminated any employee, customer or supplier
that has, individually or in the aggregate, resulted in a Material Adverse
Effect;
3.10.12 increased the compensation of any director, officer or
consultant;
3.10.13 increased the compensation of any employee (except for
increases in the ordinary course of business consistent with past practice) or
hired any new employee who is expected to receive annualized compensation of
at least $60,000;
3.10.14 made any payments(other than compensation) to or loaned
any money to any employee, officer, director or Stockholder, except as
contemplated by the Oce Transaction;
3.10.15 formed or acquired or disposed of any interest in any
corporation, partnership, joint venture or other entity;
3.10.16 redeemed, purchased or otherwise acquired, or sold,
granted or otherwise disposed of, directly or indirectly, any Company Capital
Stock or securities or any rights to acquire such Company Capital Stock or
securities, or agreed to change the terms and conditions of any such Company
Capital Stock, securities or rights except in connection with the exercise of
stock options or SARs granted prior to the date hereof;
3.10.17 entered into any agreement providing for total payments
by the Company in excess of $35,000 in any 12 month period with any person or
group, or modified or amended in any material respect the terms of any such
existing agreement, except in the ordinary course of business and except for
the Oce Transaction;
3.10.18 entered into, adopted or amended any Employee Benefit
Plan, except as contemplated hereby or as required by law; or
3.10.19 entered into any other commitment or transaction or
experienced any other event that would materially interfere with its
performance under this Agreement, or otherwise has, individually or in the
aggregate, resulted in a Material Adverse Effect.
Section 3.11 TITLE; LEASED ASSETS.
3.11.1 REAL PROPERTY. The Company does not own any interest
(other than leasehold interests described in the Company Disclosure Schedules)
in real property. The leased real property described in the Company
Disclosure Schedules constitutes the only real property necessary for the
conduct of the Company's business as currently conducted.
3.11.2 PERSONAL PROPERTY. The Company has good, valid and
marketable title to all the personal property owned by the Company, all of
which is reflected in the Financial Statements (collectively, the "Personal
Property"). The Personal Property and the leased personal property referred
to in Section 3.11.3 constitute the only tangible personal property necessary
for the conduct of the Company's business as currently conducted. Upon
consummation of the transactions contemplated hereby, such interest in the
Personal Property shall be free and clear of all security interests, liens,
claims and encumbrances, other than statutory liens arising in the ordinary
course of business or other liens that do not materially detract from the
value or interfere with the use of such properties or assets.
3.11.3 LEASES. All of the Company's leases which are listed and
described in the Company Disclosure Schedules are valid and, to the best
knowledge of the Company, enforceable in accordance with their respective
terms except as may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally or the availability of equitable
remedies.
SECTION 3.12 COMMITMENTS.
3.12.1 COMMITMENTS; DEFAULTS. Any of the following as to which
the Company is a party or is bound by, or which the assets or the business of
the Company are bound by, whether or not in writing, are listed in the Company
Disclosure Schedules (collectively "Commitments"):
3.12.1.1 any partnership or joint venture agreement;
3.12.1.2 any guaranty or suretyship, indemnification
or contribution agreement or performance bond;
3.12.1.3 any debt instrument, loan agreement or other
obligation relating to indebtedness for borrowed money or money lent or to be
lent to another;
3.12.1.4 any contract to purchase real property;
3.12.1.5 any agreement with dealers or sales or
commission agents, public relations or advertising agencies, accountants or
attorneys (other than in connection with this Agreement and the transactions
contemplated hereby) involving total payments by the Company within any 12
month period in excess of $35,000 and which is not terminable on 30 days'
notice or without penalty;
3.12.1.6 any agreement relating to any material matter
or transaction in which an interest is held by a person or entity that is an
Affiliate of the Company or, to the best knowledge of the Company, any
Stockholder;
3.12.1.7 any agreement for the acquisition of services,
supplies, equipment, inventory (other than in the ordinary course), fixtures
or other property involving more than $35,000 in the aggregate;
3.12.1.8 any powers of attorney;
3.12.1.9 any contracts containing noncompetition
covenants material to the business of the Company;
3.12.1.10 any agreement providing for the purchase from
a supplier of all or substantially all of the requirements of the Company of a
particular product or service; or
3.12.1.11 any other agreement or commitment not made in
the ordinary course of business or that is material to the business,
operations, condition (financial or otherwise) or results of operations of the
Company.
True, correct and complete copies of the written Commitments, and true,
correct and complete written descriptions of the oral Commitments, have
heretofore been delivered or made available to Purchaser. There are no
existing or asserted defaults, events of default or events, occurrences, acts
or omissions that would have a Material Adverse Effect and, with the giving of
notice or lapse of time or both, would constitute defaults by the Company or,
to the best knowledge of the Company, any other party to a material
Commitment, and no penalties have been incurred nor are amendments pending,
with respect to the material Commitments. The Commitments are in full force
and effect and are valid and enforceable obligations of the Company and, to
the best knowledge of the Company, the other parties thereto in accordance
with their respective terms, and no defenses, off-sets or counterclaims have
been asserted or, to the best knowledge of the Company, may be made by any
party thereto (other than the Company), nor has the Company waived any rights
thereunder.
3.12.2 NO CANCELLATION OR TERMINATION OF COMMITMENT. The Company
has not received notice of any plan or intention of any other party to any
Commitment to exercise any right to cancel or terminate any Commitment, and
the Company does not have actual knowledge of any fact that would justify the
exercise of such a right; and the Company does not currently contemplate, or
have reason to believe any other person currently contemplates, any amendment
or change to any Commitment.
Section 3.13 INSURANCE. The Company carries property, liability,
workers' compensation and other types of insurance pursuant to the insurance
policies listed and briefly described in the Company Disclosure Schedules (the
"Insurance Policies"). The Insurance Policies are all insurance polices
relating to the business of the Company. All of the Insurance Policies are,
to the best knowledge of the Company, valid and enforceable policies, except
as may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally or the availability of equitable
remedies. All Insurance Policies, or comparable replacement policies, shall
be maintained in force without interruption up to and including the Closing
Date. True, complete and correct copies of all Insurance Policies have been
provided or made available to Purchaser. The Company has not received any
notice or other communication from any issuer of any Insurance Policy
canceling such policy, materially increasing any deductibles or retained
amounts thereunder, or materially increasing the annual or other premiums
payable thereunder, and to the actual knowledge of the Company, no such
cancellation or increase of deductibles, retainages or premiums is threatened.
There are no outstanding claims, settlements or premiums owed against any
Insurance Policy, or the Company has given all notices or has presented all
potential or actual claims under any Insurance Policy in due and timely
fashion. The Company Disclosure Schedules also set forth a list of all claims
under any Insurance Policy in excess of $25,000 per occurrence filed by the
Company during the immediately preceding one-year period.
Section 3.14 PROPRIETARY RIGHTS AND INFORMATION. The Company owns
or has the legal right to use the Proprietary Rights, to the actual knowledge
of the Company, without conflicting, infringing or violating the rights of any
other person. No consent of any person will be required for the use thereof
by Purchaser upon consummation of the transactions contemplated hereby and the
Proprietary Rights are freely transferable. No claim has been asserted by any
person to the ownership of or for infringement by the Company of the
proprietary right of any other person, and the Company does not have actual
knowledge of any valid basis for any such claim. The Company has the right to
use, to the actual knowledge of the Company, free and clear of any adverse
claims or rights of others all trade secrets, customer lists and proprietary
information required for the marketing of all merchandise and services
formerly or presently sold or marketed by it.
SECTION 3.15 TAXES.
3.15.1 FILING OF TAX RETURNS. The Company has duly and timely
filed (in accordance with any extensions duly granted by the appropriate
governmental agency, if applicable) with the appropriate governmental agencies
all Tax Returns and reports required to be filed by the United States or any
state or any political subdivision thereof or any foreign jurisdiction, except
for any such subdivision or jurisdiction with respect to which the failure to
so file would not have a Material Adverse Effect. All such Tax Returns or
reports are complete and accurate in all material respects and properly
reflect the taxes of the Company for the periods covered thereby. True and
correct copies of such Tax Returns for the past five taxable years have
heretofore been delivered to Purchaser.
3.15.2 PAYMENT OF TAXES. Except for such items as the Company
may be disputing in good faith by proceedings in compliance with applicable
law, which are described in the Company Disclosure Schedules, or which will
not have a Material Adverse Effect, (i) the Company has paid all taxes,
penalties, assessments and interest that have become due with respect to any
Tax Returns that it has filed and has properly accrued on its books and
records for all of the same that have not yet become due and (ii) to its best
knowledge, the Company is not delinquent in the payment of any tax, assessment
or governmental charge.
3.15.3 NO PENDING DEFICIENCIES, DELINQUENCIES, ASSESSMENTS OR
AUDITS. The Company has not received any notice that any tax deficiency or
delinquency has been asserted against the Company. To the best knowledge of
the Company, there is no unpaid assessment, proposal for additional taxes,
deficiency or delinquency in the payment of any of the taxes of the Company
that could be asserted by any taxing authority. There is no taxing authority
audit of the Company pending, or to the actual knowledge of the Company,
threatened, and the results of any completed audits are properly reflected in
the Financial Statements. The Company has not violated any federal, state,
local or foreign tax law.
3.15.4 NO EXTENSION OF LIMITATION PERIOD. The Company has not
granted an extension to any taxing authority of the limitation period during
which any tax liability may be assessed or collected.
3.15.5 WITHHOLDING REQUIREMENTS SATISFIED. All monies required
to be withheld by the Company and paid to governmental agencies for all
income, social security, unemployment insurance, sales, excise, use, and other
taxes have been collected or withheld and paid to the respective governmental
agencies.
3.15.6 FOREIGN PERSON. The Company is not a foreign person, as
such term is referred to in Section 1445(f)(3) of the Internal Revenue Code.
3.15.7 SAFE HARBOR LEASE. To the best knowledge of the Company,
none of the assets of the Company constitutes property that the Company,
Purchaser, or any Affiliate of Purchaser, will be required to treat as being
owned by another person pursuant to the "Safe Harbor Lease" provisions of
Section 168(f)(8) of the Internal Revenue Code prior to repeal by the Tax
Equity and Fiscal Responsibility Act of 1982.
3.15.8 TAX EXEMPT ENTITY. None of the assets of the Company and
none of the Assets are subject to a lease to a "tax exempt entity" as such
term is defined in Section 168(h)(2) of the Internal Revenue Code.
3.15.9 COLLAPSIBLE CORPORATION. The Company has not at any time
consented to have the provisions of Section 341(f)(2) of the Internal Revenue
Code apply to it.
3.15.10 BOYCOTTS. The Company has not at any time participated
in or cooperated with any international boycott as defined in Section 999 of
the Internal Revenue Code.
3.15.11 PARACHUTE PAYMENTS. No payment required or contemplated
to be made by the Company will be characterized as an "excess parachute
payment" within the meaning of Section 28OG(b)(1) of the Internal Revenue
Code.
3.15.12 S CORPORATION. The Company has not made an election to
be taxed as an "S" corporation under Section 1362(a) of the Internal Revenue
Code.
3.15.13 PERSONAL SERVICE CORPORATION. The Company is not a
personal service corporation subject to the provisions of Section 269A of the
Internal Revenue Code.
3.15.14 PERSONAL HOLDING COMPANY. The Company is not or has not
been a personal holding company within the meaning of Section 542 of the
Internal Revenue Code.
Section 3.16 COMPLIANCE WITH LAWS. The Company has complied with
all applicable laws, and regulations and has filed with the proper authorities
all necessary statements and reports except where the failure to so comply or
file would not, individually or in the aggregate, result in a Material Adverse
Effect. There are no existing violations by the Company of any federal, state
or local law or regulation that is reasonably likely, individually or in the
aggregate, to result in a Material Adverse Effect. The Company possesses all
necessary licenses, franchises, permits and governmental authorizations for
the conduct of the Company's business as now conducted, all of which are
listed (with expiration dates, if applicable) in the Company Disclosure
Schedules. The transactions contemplated by this Agreement will not result in
a default under or a breach or violation of, or adversely affect the rights
and benefits afforded by any such licenses, franchises, permits or government
authorizations, except for any such default, breach or violation that would
not, individually or in the aggregate, have a Material Adverse Effect. Since
April 30, 1994, the Company has not received any notice from any federal,
state or other governmental authority or agency having jurisdiction over its
properties or activities, or any insurance or inspection body, that its
operations or any of its properties, facilities, equipment, or business
practices fail to comply with any applicable law, ordinance, regulation,
building or zoning law, or requirement of any public or quasi-public authority
or body, except where failure to so comply would not, individually or in the
aggregate, have a Material Adverse Effect.
SECTION 3.17 FINDER'S FEE. The Company has not incurred any
obligation for any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
SECTION 3.18 LITIGATION. There are no legal actions or
administrative proceedings or investigations instituted, or to the actual
knowledge of the Company threatened, against the Company which (i) if
successful are reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect or (ii) could adversely affect the ability of the
Company to effect the transactions contemplated hereby. The Company is not
(a) subject to any continuing court or administrative order, judgment, writ,
injunction or decree applicable specifically to the Company or to its
business, assets, operations or employees or (b) in default with respect to
any such order, judgment, writ, injunction or decree. The Company has no
actual knowledge of any valid basis for any such action, proceeding or
investigation. All claims made or threatened against the Company in excess of
its deductible are covered under its Insurance Policies.
SECTION 3.19 CONDITION OF FIXED ASSETS. All of the material
structures and equipment reflected in the Financial Statements and used by the
Company in its business are in good condition and repair, subject to normal
wear and tear, and conform in all material respects with all applicable
ordinances, regulations and other laws, and the Company has no actual
knowledge of any latent defects therein.
SECTION 3.20 DISTRIBUTIONS AND REPURCHASES. No distribution,
payment or dividend of any kind has been declared or paid by the Company on
any Company Capital Stock since the Company Balance Sheet Date. No repurchase
of any Company Capital Stock has been approved, effected or is pending, or is
contemplated by the Board of Directors of the Company.
SECTION 3.21 BANKING RELATIONS. Set forth in the Company
Disclosure Schedules is a complete and accurate list of all borrowing and
investing arrangements that the Company has with any bank or other financial
institution, indicating with respect to each relationship the type of
arrangement maintained (such as checking account, borrowing arrangements, safe
deposit box, etc.) and the person or persons authorized in respect thereof.
SECTION 3.22 OWNERSHIP INTERESTS OF INTERESTED PERSONS;
Affiliations. To the best knowledge of the Company, no officer, supervisory
employee or director of the Company, or their respective spouses, children or
Affiliates, owns directly or indirectly, on an individual or joint basis, any
interest in, has a compensation or other financial arrangement with, or serves
as an officer or director of, any customer or supplier of the Company or any
organization that has a material contract or arrangement with the Company,
except for ownership of less than 5% of the stock of any public corporation.
SECTION 3.23 ENVIRONMENTAL MATTERS. To the best knowledge of the
Company, the Company is not currently in violation of, or subject to any
existing, pending or, to the actual knowledge of the Company, threatened
investigation or inquiry by any governmental authority or to any remedial
obligations under, any Environmental Laws, except for any such violations,
investigations or inquiries that would not, individually or in the aggregate,
result in a Material Adverse Effect.
SECTION 3.24 CERTAIN PAYMENTS. Neither the Company nor any
director, officer or employee of the Company acting for or on behalf of the
Company, has paid or caused to be paid, directly or indirectly, in connection
with the business of the Company:
3.24.1 to any government or agency thereof or any agent of any
supplier or customer any bribe, kick-back or other similar payment; or
3.24.2 any contribution to any political party or candidate
(other than from personal funds of directors, officers or employees not
reimbursed by their respective employers or as otherwise permitted by
applicable law).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Company that, except as set
forth in the Purchaser Disclosure Schedules, the following are true and
correct as of the date hereof:
SECTION 4.1 ORGANIZATION AND GOOD STANDING. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Ohio, with all requisite corporate power and authority to
carry on the business in which it is engaged, to own the properties it owns,
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
SECTION 4.2 AUTHORIZATION AND VALIDITY. The execution, delivery
and performance by Purchaser of this Agreement and the other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by Purchaser. This Agreement
and each other agreement contemplated hereby to be executed by Purchaser have
been or will be as of the Closing Date duly executed and delivered by
Purchaser and constitute or will constitute legal, valid and binding
obligations of Purchaser, enforceable against Purchaser in accordance with
their respective terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies.
SECTION 4.3 FINDER'S FEE. Purchaser has not incurred any
obligation for any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
SECTION 4.4 RESERVED.
SECTION 4.5 FILINGS. To the best knowledge of Purchaser, the
information or documents to be included in the Registration Statement, by
exhibit or otherwise, except for such portions thereof as are based on the
information or documents supplied by the Company, shall not, at the time the
Registration Statement and each amendment and supplement thereto, if any,
becomes effective under the Securities Act, to the best knowledge of
Purchaser, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
ARTICLE V
COVENANTS OF THE COMPANY
The Company agrees that between the date hereof and the Closing:
SECTION 5.1 CONSUMMATION OF AGREEMENT. The Company shall use its
best efforts to cause the consummation of the transactions contemplated hereby
in accordance with their terms and conditions; provided, however, that this
covenant shall not require the Company to make any expenditures that are not
expressly set forth in this Agreement or otherwise contemplated herein.
Accordingly, the Company shall call a meeting of the Stockholders, to be held
prior to the anticipated Closing Date, to consider the transactions
contemplated hereby and, subject to the limitations of fiduciary duty, shall
make reasonable efforts to solicit Stockholder approval of such transactions
in accordance with applicable law and the Company's Articles of Incorporation
and Code of Regulations.
SECTION 5.2 BUSINESS OPERATIONS. The Company shall operate its
business in the ordinary course. The Company shall use reasonable efforts to
preserve the business of the Company intact. The Company shall use reasonable
efforts to preserve intact its relationships with customers, suppliers,
employees and others having significant business relations with it, unless
doing so would impair its goodwill or result, individually or in the
aggregate, in a Material Adverse Effect. The Company shall collect its
receivables and pay its trade payables in the ordinary course of business
consistent with past practice.
SECTION 5.3 ACCESS. The Company shall, at reasonable times during
normal business hours and on reasonable notice, permit Purchaser and its
authorized representatives reasonable access to, and make available for
inspection, all of the assets and business of the Company, including its
employees, customers and suppliers, and permit Purchaser and its authorized
representatives to inspect and, at Purchaser's sole cost and expense, make
copies of all documents, records and information with respect to the affairs
of the Company as Purchaser and its representatives may request, all for the
sole purpose of permitting Purchaser to become familiar with the business and
assets and liabilities of the Company. In the event this Agreement is
terminated prior to the Closing Date, Purchaser shall promptly return any such
documents, records and information or copies thereof in its possession and
thereafter shall not use such documents, records, information or copies for
any purpose whatsoever.
SECTION 5.4 NOTIFICAITON OF CERTAIN MATTERS. The Company shall
promptly inform Purchaser in writing of (a) any notice of or other
communication relating to, a default or event that, with notice or lapse of
time or both, would become a default, received by the Company subsequent to
the date of this Agreement and prior to the Closing Date under any Commitment
material to the Company's condition (financial or otherwise), operations,
assets, liabilities or business and to which it is subject; or (b) any
material adverse change in the Company's condition (financial or otherwise),
operations, assets, liabilities or business.
SECTION 5.5 APPROVALS OF THIRD PARTIES. The Company shall use its
best efforts to secure, as soon as practicable after the date hereof, all
necessary approvals and consents of third parties to the consummation of the
transactions contemplated hereby, including, without limitation, all necessary
approvals and consents required under any real property and personal property
leases; provided, however, that this covenant shall not require the Company to
make any material expenditures that are not expressly set forth in this
Agreement or otherwise contemplated herein.
SECTION 5.6 EMPLOYEE MATTERS. The Company shall not, without the
prior written approval of Purchaser, except in the ordinary course of
business, or as required by law or as would not have a Material Adverse
Effect:
5.6.1 increase the Cash Compensation of any Stockholder or other
employee of the Company (other than in the ordinary course of business and
consistent with past practice);
5.6.2 adopt, amend or terminate any Compensation Plan;
5.6.3 adopt, amend or terminate any Employment Agreement;
5.6.4 adopt, amend or terminate any Employee Policies and
Procedures;
5.6.5 adopt, amend or terminate any Employee Benefit Plan;
5.6.6 take any action that could deplete the assets of any
Employee Benefit Plan, other than payment of benefits in the ordinary course
to participants and beneficiaries;
5.6.7 fail to pay any premium or contribution due or with
respect to any Employee Benefit Plan;
5.6.8 fail to file any return or report with respect to any
Employee Benefit Plan;
5.6.9 institute, settle or dismiss any employment litigation
except as could not, individually or in the aggregate, result in a Material
Adverse Effect;
5.6.10 enter into, modify, amend or terminate any agreement with
any union, labor organization or collective bargaining unit; or
5.6.11 take or fail to take any action with respect to any past
or present employee of the Company that would, individually or in the
aggregate, result in a Material Adverse Effect.
SECTION 5.7 CONTRACTS. Except with Purchaser's prior written
consent (not to be withheld unreasonably) or in the ordinary course of
business, the Company shall not assume or enter into any contract, lease,
license, obligation, indebtedness, commitment, purchase or sale that is
material to the Company's business, nor will it waive any material right or
cancel any material contract, debt or claim.
SECTION 5.8 CAPITAL ASSETS; PAYMENTS OF LIABILITIES. The Company
shall not, without the prior written approval of Purchaser (not to be withheld
unreasonably) (a) acquire or dispose of any capital asset having a fair market
value of $35,000 or more, or acquire or dispose of any capital asset outside
of the ordinary course of business or (b) discharge or satisfy any lien or
encumbrance or pay or perform any obligation or liability other than (i)
liabilities and obligations reflected in the Financial Statements or (ii)
current liabilities and obligations incurred in the usual and ordinary course
of business since the Company Balance Sheet Date and, in either case (i) or
(ii) above, only as required by the express terms of the agreement or other
instrument pursuant to which the liability or obligation was incurred.
SECTION 5.9 MORTGATES, LIENS AND GUARANTIES. The Company shall
not, without the prior written approval of Purchaser (not to be withheld
unreasonably), enter into or assume any mortgage, pledge, conditional sale or
other title retention agreement, permit any security interest, lien,
encumbrance or claim of any kind to attach to any of its assets (other than
statutory liens arising in the ordinary course of business and other liens
that do not materially detract from the value or interfere with the use of
such assets), whether now owned or hereafter acquired, or guarantee or
otherwise become contingently liable for any obligation of another, except
obligations arising by reason of endorsement for collection and other similar
transactions in the ordinary course of business, or make any capital
contribution or investment in any person.
SECTION 5.10 ACQUISITION PROPOSALS.
5.10.1 SOLICITED PROPOSALS. The Company agrees that from and
after the date of this Agreement (a) neither the Company nor any of its
officers and directors shall, and the Company shall direct and use its best
efforts to cause the Company's employees, agents and representatives not to,
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to its Stockholders) with respect to a
merger, acquisition, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of, the Company (any such proposal or offer being hereinafter
referred to as an "Acquisition Proposal") or engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal;
(b) that the Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing and each will take the
necessary steps to inform the individuals or entities referred to in the first
sentence hereof of the obligations undertaken in this Section 6.10; and (c)
that the Company will notify Purchaser immediately if any material inquiries
or proposals are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated or continued with,
the Company.
5.10.2 OTHER POTENTIAL BIDDERS. Notwithstanding anything to the
contrary in Section 5.10.1 above, the Company may, directly or indirectly,
furnish information and access, in each case in response to requests therefor
which are not solicited by the Company nor any of its officers or directors
or, to the actual knowledge of the Company, the Company's employees, agents or
representatives (collectively for purposes of this Section 5.10.2, "Company
Contacts") after the date hereof (including any such request from any
corporation, partnership, person, or other entity or group contacted by the
Company Contacts prior to the date hereof), to any corporation, partnership,
person, or other entity or group pursuant to appropriate confidentiality
agreements, and may participate in discussions and negotiate with such entity
or group concerning any merger, sale of assets, sale of shares of Company
Capital Stock or similar transaction, if the Company's Board of Directors
determines in its good faith judgment that such action is appropriate in
furtherance of the best interests of the Stockholders. In addition, the
Company shall direct its officers and other appropriate personnel to cooperate
with and be reasonably available to consult with any such entity or group.
SECTION 5.11 DISTRIBUTIONS AND REPURCHASES. No distribution,
payment or dividend of any kind will be declared or paid by the Company in
respect of Company Capital Stock, nor will any repurchase of any Company
Capital Stock be approved or effected.
ARTICLE VI
COVENANTS OF PURCHASER
Purchaser agrees that between the date hereof and the Closing:
SECTION 6.1 CONSUMMATION OF AGREEMENT. Purchaser shall use its
best efforts to cause the consummation of the transactions contemplated hereby
in accordance with their terms and conditions and take all corporate and other
action necessary to approve the transactions contemplated hereby, including,
without limitation, the consummation of the Initial Public Offering and the
acquisition of all of the Target Companies; provided, however, that this
covenant shall not require Purchaser to make any expenditures that are not
expressly set forth in this Agreement or otherwise contemplated herein.
Purchaser will provide the Company copies of all documents filed with the SEC
in connection with the Initial Public Offering when filed and copies of all
comments and other correspondence received from the SEC with respect thereto.
SECTION 6.2 REQUIREMENTS TO EFFECT ACQUISITION. Purchaser will
use its best efforts to take, or cause to be taken, all actions necessary to
effect the transactions contemplated hereby under applicable law, including,
without limitation, the consummation of the Initial Public Offering, the
acquisition of all of the Target Companies, the filing with the appropriate
government officials of the Registration Statement and responses to SEC
comments thereon, and all other documents necessary in connection with any of
the foregoing in the form approved by counsel for the parties to this
Agreement.
SECTION 6.3 ACCESS. Purchaser shall, at reasonable times during
normal business hours and on reasonable notice, permit the Company, and its
authorized representatives reasonable access to, and make available for
inspection, all of the assets and business of Purchaser, including its
employees, and permit the Company, and its authorized representatives to
inspect and, at the Company's sole expense, make copies of all documents,
records and information with respect to the affairs of Purchaser as the
Company and its representatives may request (including documents, records and
information pertaining to or generated in connection with any Target Company,
except as may be prohibited by confidentiality agreements to which Purchaser
is a party), all for the sole purpose of permitting the Company to become
familiar with the business and assets and liabilities of Purchaser.
SECTION 6.4 NOTIFACATION OF CERTAIN MATTERS. Purchaser shall
promptly inform the Company in writing of (a) any notice of, or other
communication relating to, a default or event that, with notice or lapse of
time or both, would become a default, received by Purchaser subsequent to the
date of this Agreement and prior to the Closing Date under any Purchaser
Commitment material to Purchaser's condition (financial or otherwise),
operations, assets, liabilities or business and to which it is subject; or (b)
any material adverse change in Purchaser's condition (financial or otherwise),
operations, assets, liabilities or business.
SECTION 6.5 APPROVALS OF THIRD PARTIES. Purchaser shall use its
best efforts to secure, as soon as practicable after the date hereof, all
necessary approvals and consents of third parties to the consummation of the
transactions contemplated hereby.
SECTION 6.6 OFFERS OF EMPLOYMENT. The Purchaser shall make offers
of employment to all or substantially all of the employees on the Company's
payroll as of the Closing Date on terms and conditions substantially similar
to the then current terms and conditions of their employment with the Company,
provided however, that nothing herein shall be construed so as to provide any
employee of the Company any guaranty of continued employment or to impose any
additional obligation on the Purchaser with respect thereto.
SECTION 6.7 EXECUTIVE RETENTION AGREEMENTS. The Company has
entered into separate Executive Retention Agreements, each dated August 24,
1994 (the "Company Retention Agreements"), with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ (each a "Designated Employee"), which Company Retention Agreements are
appended hereto as Exhibit 7.3. At Closing, Purchaser shall assume all
obligations of the Company under the Company Retention Agreements, except as
otherwise set forth in those certain Employment Agreements between Purchaser
and each of the Designated Employees, and delivered pursuant to Section
10.1.10 hereof.
ARTICLE VII
COVENANTS OF ALL PARTIES
Purchaser and the Company agree as follows:
SECTION 7.1 FILINGS; OTHER ACTION.
7.1.1 The Company shall cooperate with Purchaser by promptly
providing information reasonably requested and required by Purchaser in
connection with the preparation and filing by Purchaser with the SEC of the
Registration Statement on Form S-1 (or other appropriate Form) in connection
with its Initial Public Offering (including the prospectus constituting a part
thereof, the "Registration Statement"). Purchaser shall obtain all necessary
state securities law or "Blue Sky" permits and approvals required to carry out
the transactions contemplated by this Agreement, and the Company shall furnish
all information concerning the Company as may be reasonably requested in
connection with any such action.
7.1.2 None of the information or documents supplied or to be
supplied by each of the Company and Purchaser specifically for inclusion in
the Registration Statement, by exhibit or otherwise, will, at the time the
Registration Statement and each amendment and supplement thereto, if any,
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Company and Purchaser shall
agree as to the information and documents supplied by the Company for
inclusion in the Registration Statement and shall indicate such information
and documents in a letter to be delivered at Closing (the "Information
Letter"). The Company shall be entitled to review the Registration Statement
and each amendment thereto, if any, and any SEC comments thereon and
Purchaser's responses thereto prior to the time each becomes effective under
the Securities Act.
7.1.3 The Company shall, upon request, furnish Purchaser with all
information concerning the Company, its subsidiaries, directors, officers,
partners and Stockholders and such other matters as may be reasonably
requested by Purchaser in connection with the preparation of the Registration
Statement and each amendment or supplement thereto, or any other statement,
filing, notice or application made by or on behalf of each such party or any
of its subsidiaries to any governmental entity in connection with the
transactions contemplated by this Agreement.
7.1.4 Purchaser hereby releases the Company from, agrees that the
Company shall not be liable for, and agrees to hold the Company harmless
against, any damages, costs, liability, expenses and claims that may be
occasioned by any cause whatsoever pertaining to and arising out of the
information or documents included in the Registration Statement, by exhibit or
otherwise, except for such portions thereof as are based on information or
documents supplied by the Company.
SECTION 7.2 AMENDMENT OF SCHEDULES. Each party hereto agrees
that, with respect to the representations and warranties of such party
contained in this Agreement, such party shall have the continuing obligation
until the Closing to supplement or amend promptly (i) in the case of
Purchaser, the Purchaser Disclosure Schedules and (ii) in the case of the
Company, the Company Disclosure Schedules with respect to any matter that
would have been or would be required to be set forth or described in the
Schedules in order to not materially breach any representation, warranty or
covenant of such party contained herein; provided that, no amendment or
supplement to a Schedule that constitutes or reflects a material adverse
change to the Company may be made unless Purchaser consents to such amendment
or supplement, and no amendment or supplement to a Schedule that constitutes
or reflects a material adverse change to Purchaser may be made unless the
Company consents to such amendment or supplement. For all purposes of this
Agreement, the Schedules hereto shall be deemed to be the Schedules as amended
or supplemented pursuant to this Section 7.2. In the event that the Company
seeks to amend or supplement a Schedule pursuant to this Section 7.2 and
Purchaser does not consent to such amendment or supplement, or Purchaser seeks
to amend or supplement a Schedule pursuant to this Section 7.2 and the Company
and the Stockholder do not consent, this Agreement shall be deemed terminated
by mutual consent as set forth in Section 12.1.1 hereof.
ARTICLE VIII
CONDITIONS PRECEDENT OF PURCHASER
Except as may be waived in writing by Purchaser, the obligations of
Purchaser hereunder are subject to the fulfillment at or prior to the Closing
Date of each of the following conditions:
SECTION 8.1 DUE DILIGENCE. Purchaser shall have completed its due
diligence review of the Company and shall be satisfied with the results
thereof.
SECTION 8.2 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company contained herein shall have been true and
correct in all respects when initially made and shall be true and correct in
all material respects as of the Closing Date (except for changes arising in
the ordinary course of business which are not prohibited by this Agreement and
which do not have a Material Adverse Effect.
SECTION 8.3 COVENANTS. The Company shall have performed and
complied in all material respects with all covenants required by this
Agreement to be performed and complied with by the Company or the Stockholders
prior to the Closing Date.
SECTION 8.4 LEGAL OPINION. Counsel to the Company shall have
delivered to Purchaser its opinion, dated as of the Closing Date, in form and
substance reasonably satisfactory to Purchaser, to the effect set forth in
Exhibit 8.4.
SECTION 8.5 PROCEEDINGS. No action, proceeding or order by any
court or governmental body or agency shall have been threatened orally or in
writing, asserted, instituted or entered to restrain or prohibit the carrying
out of the transactions contemplated hereby.
SECTION 8.6 NO MATERIAL ADVERSE CHANGE. No change with a Material
Adverse Effect shall have occurred since the Company Balance Sheet Date,
whether or not such change shall have been caused by the deliberate act or
omission of the Company.
SECTION 8.7 SECURITIES APPROVALS. The Registration Statement
shall have become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC. At or prior to the Closing Date, Purchaser shall have
received all state securities and "Blue Sky" permits necessary to consummate
the transactions contemplated hereby. The Purchaser Common Stock shall have
been approved for listing on the Nasdaq National Market, subject only to
official notification of issuance.
SECTION 8.8 SIMULTANEOUS CLOSINGS. The Initial Public Offering
and Purchaser's acquisition of all of the Target Companies (or such Target
Companies if less than all of them as Purchaser and the Underwriter
Representative shall agree will be sufficient for purposes of the Initial
Public Offering) shall all be closed and consummated simultaneously with the
Closing.
SECTION 8.9 CLOSING DELIVERIES. Purchaser shall have received all
documents and agreements, duly executed and delivered in form satisfactory to
Purchaser, referred to in Section 10.1.
ARTICLE IX
CONDITIONS PRECEDENT OF THE COMPANY
Except as may be waived in writing by the Company, the obligations of
the Company hereunder are subject to fulfillment at or prior to the Closing
Date of each of the following conditions:
SECTION 9.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Purchaser contained herein shall be true and correct in all
respects when initially made and shall be true and correct in all respects as
of the Closing Date.
SECTION 9.2 COVENANTS. Purchaser shall have performed and
complied in all material respects with all covenants and conditions required
by this Agreement to be performed and complied with by it prior to the Closing
Date.
SECTION 9.3 LEGAL OPINION.
9.3.1 Counsel to Purchaser shall have delivered to the Company
its opinion, dated as of the Closing Date, in form and substance reasonably
satisfactory to the Company, to the effect set forth in Exhibit 9.3.1.
SECTION 9.4 PROCCEDINGS. No action, proceeding or order by any
court or governmental body or agency shall have been threatened in writing,
asserted, instituted or entered to restrain or prohibit the carrying out of
the transactions contemplated hereby.
SECTION 9.5 GOVERNMENT APPROVALS AND REQUIRED CONSENTS. The
Company and Purchaser shall have obtained all necessary government and other
third party approvals and consents.
SECTION 9.6 SECURITIES APPROVALS. The Registration Statement
shall have become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC. At or prior to the Closing Date, Purchaser shall have
received all state securities and "Blue Sky" permits necessary to consummate
the transactions contemplated hereby. At or prior to the Closing Date, the
Purchaser Common Stock shall have been approved for listing on The Nasdaq
National Market, subject only to official notification of issuance.
SECTION 9.7 CLOSING DELIVERIES. The Company shall have received
all documents and agreements, duly executed and delivered in form satisfactory
to the Company, referred to in Section 10.2.
SECTION 9.8 STOCKHOLDER APPROVAL. The Stockholders shall have
approved all transactions contemplated under this Agreement to be carried out
by the Company.
SECTION 9.9 OCE TRANSACTION. The Oce Agreement shall be in full
force and effect and all actions shall have been taken so that the Oce
Transaction can be consummated promptly after the Closing.
ARTICLE X
CLOSING DELIVERIES
SECTION 10.1 DELIVERIES OF THE COMPANY. At or prior to the Closing
Date, the Company shall deliver to Purchaser c/o Dinsmore & Shohl LLP, counsel
to Purchaser, the following, all of which shall be in form and substance
satisfactory to Purchaser:
10.1.1 a copy of resolutions of the Board of Directors and
the Stockholders of the Company authorizing the execution, delivery and
performance of this Agreement and all related documents and agreements and
consummation of the transactions contemplated hereby, each certified by the
Secretary of the Company as being true and correct copies of the originals
thereof subject to no modifications or amendments;
10.1.2 a certificate of the President of the Company, dated
the Closing Date, as to the truth and correctness in all material respects of
the representations and warranties of the Company contained herein on and as
of the Closing Date;
10.1.3 a certificate of the President of the Company, dated
the Closing Date, (i) as to the performance of and compliance in all material
respects by the Company with all covenants contained herein on and as of the
Closing Date and (ii) certifying that all conditions precedent of the Company
to the Closing have been satisfied;
10.1.4 a certificate of the Secretary of the Company
certifying as to the incumbency of the directors and officers of such
corporation and as to the signatures of such directors and officers who have
executed documents delivered at the Closing on behalf of that corporation;
10.1.5 The Company shall execute, acknowledge and deliver the
following documents relating to title of the Assets:
(i) deeds, bills of sale and assignments sufficient to
convey to Purchaser good, valid and marketable fee simple to all Assets free
and clear of all liens, mortgages, pledges, encumbrances, security interests,
covenants, easements, right of way, equities, options, rights of first refusal
restrictions, special tax or governmental assessments, defects in title and
other burdens, except for exceptions permitted by Purchaser; and
(ii) an assignment and assumption agreement whereby the
Company shall convey and Purchaser shall assume and covenant to fully perform
and comply with the Assumed Liabilities, including but not limited to, the
assumption of the Retention Agreements.
10.1.6 an opinion of ▇▇▇▇, Stettinius & Hollister, counsel to
the Company, dated as of the Closing Date, pursuant to Section 8.4;
10.1.7 all necessary authorizations, consents, approvals,
permits and licenses, including without limitation, those necessary for the
assignment of the Company's real property leases and the Contracts;
10.1.8 the Information Letter required by Section 7.1.2;
10.1.9 such other instrument or instruments of transfer
prepared by Purchaser as shall be necessary or appropriate, as Purchaser or
its counsel shall reasonably request, to carry out and effect the purpose and
intent of this Agreement; and
10.1.10 Employment Agreements between the Designated
Employees and Purchaser in substantially the form attached hereto as Exhibit
10.1.10.
SECTION 10.2 DELIVERIES OF PURCHASER. At or prior to the Closing
Date, Purchaser shall deliver to the Company c/o Dinsmore & Shohl LLP, counsel
to Purchaser, the following, all of which shall be in a form satisfactory to
the Company;
10.2.1 a copy of the resolutions of the Board of Directors of
Purchaser authorizing the execution, delivery and performance of this
Agreement, and all related documents and agreements, certified by Purchaser's
Secretary as being true and correct copies of the originals thereof subject to
no modifications or amendments;
10.2.2 a certificate of an officer of Purchaser dated the
Closing Date as to the truth and correctness of the representations and
warranties of Purchaser contained herein on and as of the Closing Date;
10.2.3 a certificate of an officer of Purchaser dated the
Closing Date, (i) as to the performance and compliance by Purchaser with all
covenants contained herein on and as of the Closing Date and (ii) certifying
that all conditions precedent of Purchaser to the Closing have been satisfied;
10.2.4 a certificate of the Secretary of Purchaser certifying
as to the incumbency of the officers of Purchaser who have executed documents
delivered at the Closing on behalf of Purchaser;
10.2.5 an assignment and assumption agreement whereby
Purchaser shall assume and covenant to fully perform and comply with the
Assumed Liabilities, including but not limited to, the assumption of the
Retention Agreements;
10.2.6 an opinion of ▇▇▇▇▇▇▇▇ & Shohl LLP, counsel to
Purchaser, dated as of the Closing Date, pursuant to Section 9.3.1:
10.2.7 the Purchase Price payable at Closing; and
10.2.8 such other instrument or instruments of transfer,
prepared by the Company as shall be necessary or appropriate, as the Company
or their counsel shall reasonably request, to carry out and effect the purpose
and intent of this Agreement.
ARTICLE XI
POST CLOSING MATTERS
SECTION 11.1 FURTHER INSTRUMENTS OF TRANSFER. Following the
Closing, at the reasonable request of Purchaser or of the Company, and in each
case at Purchaser's sole cost and expense, the Company or Purchaser, as the
case may be, shall deliver any further instruments of transfer and take all
reasonable action as may be necessary or appropriate to carry out the purpose
and intent of this Agreement.
ARTICLE XIV
TERMINATION
SECTION 12.1 TERMINATION. This Agreement may be terminated and the
transaction contemplated by this Agreement may be abandoned:
12.1.1 at any time prior to the Closing Date by mutual agreement
of all parties;
12.1.2 at any time prior to the Closing Date by Purchaser if any
representation or warranty of the Company contained in this Agreement or in
any certificate or other document executed and delivered by the Company
pursuant to this Agreement is or becomes untrue or breached in any material
respect or if the Company fails to comply in any material respect with any
covenant or agreement contained herein, and any such misrepresentation,
noncompliance or breach is not cured, waived or eliminated within 20 days
after receipt of written notice thereof;
12.1.3 at any time prior to the Closing Date by the Company if
any representation or warranty of Purchaser contained in this Agreement or in
any certificate or other document executed and delivered by Purchaser pursuant
to this Agreement is or becomes untrue in any material respect or if Purchaser
fails to comply in any material respect with any covenant or agreement
contained herein, and any such misrepresentation, noncompliance or breach is
not cured, waived or eliminated within 20 days after receipt of written notice
thereof; and
12.1.4 by the Company if (i) its Board of Directors determines in
the exercise of its fiduciary duty that such action is appropriate in
furtherance of the best interests of the Stockholders in order to accept an
alternative proposal permitted by Section 5.10.2, and (ii) the Company pays
Purchaser a cash "break-up" fee of $250,000; and
12.1.5 by Purchaser or the Company if the Closing shall not have
been consummated by December 31, 1997.
SECTION 12.2 EFFECT OF TERMINATION. In the event this Agreement is
terminated pursuant to Section 2.4 by Purchaser at its election or due to the
intentional non-compliance with Sections 12.1.2 or 12.1.3 above, Purchaser or
the Company, as applicable, shall be entitled to pursue, exercise and enforce
any and all remedies, rights, powers and privileges available at law or in
equity against the non-complying party. In the event of a termination of this
Agreement under the provisions of this Article or Section 2.4, a party not
then in material breach of this Agreement shall stand fully released and
discharged of any and all obligations under this Agreement; provided, however,
that if a termination of this Agreement occurs pursuant to the last sentence
of Section 7.2, the parties hereto shall stand fully released and discharged
of any and all obligations under this Agreement.
ARTICLE XIII
NONDISCLOSURE OF CONFIDENTIAL INFORMATION
SECTION 13.1 NONDISCLOSURE. The Company recognizes and
acknowledges that it had in the past, currently has, and in the future may
possibly have, access to certain Confidential Information of Purchaser that is
valuable, special and unique assets of Purchaser's business. Purchaser
acknowledges that it has had in the past, currently has, and in the future may
possible have, access to certain Confidential Information of the Company that
is valuable, special and unique assets of the Company's business. The Company
and Purchaser agree that they will not disclose such Confidential Information
to any person, firm, corporation, association or other entity for any purpose
or reason whatsoever, except (a) to authorized representatives of Purchaser
and (b) to counsel and other advisers to Purchaser, respectively, provided
that such advisers (other than counsel) agree to the confidentiality
provisions of this Section 13.1, unless (i) such information becomes available
to or known by the public generally through no fault of the Company, or
Purchaser, as the case may be, (ii) disclosure is required by law or the order
of any governmental authority under color of law, provided, that prior to
disclosing any information pursuant to this clause (ii), the Company or
Purchaser, as the case may be, shall, if possible, give prior written notice
thereof to the Company and Purchaser and provide the Company or Purchaser
with the opportunity to contest such disclosure, (iii) the disclosing party
reasonably believes that such disclosure is required in connection with the
defense of a lawsuit against the disclosing party, or (iv) the disclosing
party is the sole and exclusive owner of such Confidential Information as a
result of the transaction or otherwise.
SECTION 13.2 DAMAGES. Because of the difficulty of measuring
economic losses as a result of the breach of the foregoing covenants, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, the parties agree that, in the event
of a breach by either of them of the foregoing covenant, the covenant may be
enforced against either of them by injunctions and restraining orders.
SECTION 13.3 SURVIVAL. The obligations of the parties under this
Article XIII shall survive the termination of this Agreement.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 AMENDMENT; WAIVERS. This Agreement may be amended,
modified or supplemented only by an instrument in writing executed by all the
parties hereto. Any waiver of any terms and conditions hereof must be in
writing, and signed by the parties hereto. The waiver of any of the terms and
conditions of this Agreement shall not be construed as a waiver of any other
terms and conditions hereof.
SECTION 14.2 ASSIGNMENT. Neither this Agreement nor any right
created hereby or in any agreement entered into in connection with the
transactions contemplated hereby shall be assignable by any party hereto,
except by Purchaser to a wholly owned subsidiary of Purchaser (provided that
any such assignment shall not relieve Purchaser of its obligations hereunder)
and except that after the Closing the Company may assign its rights hereunder
to its shareholders or a trust for their benefit pursuant to the Company's
Plan of Complete Liquidation and Dissolution.
SECTION 14.3 PARTIES IN INTEREST; No Third Party Beneficiaries.
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
heirs, legal representatives, successors and assigns of the parties hereto.
Neither this Agreement nor any other agreement contemplated hereby shall be
deemed to confer upon any person not a party hereto or thereto any rights or
remedies hereunder or thereunder.
SECTION 14.4 ENTIRE AGREEMENT. This Agreement and the agreements
contemplated hereby constitute the entire agreement of the parties regarding
the subject matter hereof, and supersede all prior agreements and
understandings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof.
SECTION 14.5 SEVERABILITY. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws
effective during the term hereof, such provision shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
SECTION 14.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations, warranties and covenants of the Company
contained herein shall not survive the Closing.
SECTION 14.7 GOVERNING LAW. This agreement and the rights and
obligations of the parties hereto shall be governed by and construed and
enforced in accordance with the substantive laws (but not the rules governing
conflicts of laws) of the State of Ohio.
SECTION 14.8 CAPTIONS. The captions in this Agreement are for
inconvenience of reference only and shall not limit or otherwise affect any of
the terms or provisions hereof.
SECTION 14.9 GENDER AND NUMBER. When the context requires, the
gender of all words used herein shall include the masculine, feminine and
neuter and the number of all words shall include the singular and plural.
SECTION 14.10 REFERENCE TO AGREEMENT. Use of the words "herein",
"hereof", "hereto" and the like in this Agreement shall be construed as
references to this Agreement as a whole and not to any particular Article,
Section or provision of this Agreement, unless otherwise noted.
SECTION 14.11 CONFIDENTIALITY; PUBLICITY AND DISCLOSURES. Each
party shall keep this Agreement and its terms confidential, and shall make no
press release or public disclosure, either written or oral, regarding the
transactions contemplated by this Agreement without the prior knowledge and
consent of the other parties hereto; provided that the foregoing shall not
prohibit any disclosure (a) by press release, filing or otherwise that
Purchaser or the Company has determined in its good faith judgment to be
required by federal securities laws or the rules of the National Association
of Securities Dealers, (b) to attorneys, accountants, investment bankers or
other agents of the parties assisting the parties in connection with the
transactions contemplated by this Agreement and (c) by Purchaser in connection
with the conduct of its Initial Public Offering and conducting an examination
of the operations and assets of the Company; provided that Purchaser or the
Company shall reasonably promptly provide notice to the other of any release
made under this Section 14.11. In the event that the transactions
contemplated hereby are not consummated for any reason whatsoever, the parties
hereto agree not to disclose or use any Confidential Information they may have
concerning the affairs of the other parties, except for information that is
required by law to be disclosed; provided that should the transactions
contemplated hereby not be consummated, nothing contained in this Section
shall be construed to prohibit the parties hereto from operating businesses in
competition with each other.
SECTION 14.12 NOTICE. Whenever this Agreement requires or permits
any notice, request, or demand from one party to another, the notice, request,
or demand must be in writing to be effective and shall be deemed to be
delivered and received (i) if personally delivered or if delivered by telex,
telegram, facsimile or courier service, when actually received by the party to
whom notice is sent or (ii) if delivered by mail (whether actually received or
not), at the close of business on the third business day next following the
day when placed in the mail, postage prepaid, certified or registered,
addressed to the appropriate party or parties, at the address of such party
set forth below (or at such other address as such party may designate by
written notice to all other parties in accordance herewith):
If to Purchaser: Universal Document Management Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ & Shohl LLP
1900 Chemed Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
If to the Company: ACCESS Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇, Stettinius & Hollister
1800 Star Bank Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
SECTION 14.13 CHOICE OF FORUM. Each of the parties hereto shall be
subject to the in personam jurisdiction of any state or federal court located
in ▇▇▇▇▇▇▇▇ County, State of Ohio.
SECTION 14.14 NO WAIVER; REMEDIES. No party hereto shall by any act
(except by written instrument pursuant to Section 14.1 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default in or breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any party hereto, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. No
remedy set forth in this Agreement or otherwise conferred upon or reserved to
any party shall be considered exclusive of any other remedy available to any
party, but the same shall be distinct, separate and cumulative and may be
exercised from time to time as often as occasion may arise or as may be deemed
expedient.
SECTION 14.15 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
SECTION 14.16 COSTS, EXPENSES AND LEGAL FEES. If the transactions
contemplated hereby are not consummated, each party hereto shall bear its own
costs and expenses (including attorneys' fees) incurred in connection with the
transactions contemplated herein. Provided that the transactions
contemplated hereby are consummated, the Purchaser shall bear the Company's
attorneys' fees, not to exceed $50,000.
[THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
Purchaser:
UNIVERSAL DOCUMENT
MANAGEMENT SYSTEMS, INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Company:
ACCESS CORPORATION
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
ATTACHMENTS
Exhibit 1.1.21 List of Target Companies
Exhibit 2.3 Allocation of the Purchase Price
Exhibit 7.3 Company Retention Agreements
Exhibit 8.4 Form of Opinion of Company Counsel
Exhibit 9.3.1 Form of Opinion of Purchaser Counsel
Exhibit 10.1.10 Form of Employment Agreements
***
Company Disclosure Schedules:
Schedule 2.1.1(v) Real Property and Leases
Schedule 2.1.1(vi) Intangible Assets
Schedule 3.1 Organization and Good Standing
Schedule 3.2 Corporate Records
Schedule 3.3 Authorization and Validity
Schedule 3.4 No Violation
Schedule 3.5 Consents
Schedule 3.6 Financial Statements
Schedule 3.7 Liabilities and Obligations
Schedule 3.8 Employee Matters
Schedule 3.9 Employee Benefit Plans
Schedule 3.10 Absence of Certain Changes
Schedule 3.11 Title; Leased Assets
Schedule 3.12 Commitments
Schedule 3.13 Insurance
Schedule 3.14 Proprietary Rights and Information
Schedule 3.15 Taxes
Schedule 3.16 Compliance with Laws
Schedule 3.17 Finder's Fee
Schedule 3.18 Litigation
Schedule 3.19 Condition of Fixed Assets
Schedule 3.20 Distributions and Repurchases
Schedule 3.21 Banking Relations
Schedule 3.22 Ownership Interests of Interested Persons;
Affiliations
Schedule 3.23 Environmental Matters
Schedule 3.24 Certain Payments
Purchaser Disclosure Schedules:
Schedule 4.1 Organization and Good Standing
Schedule 4.2 Authorization and Validity
Schedule 4.3 Finder's Fee
Exhibit 1.1.21
TARGET COMPANIES
ACCESS Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Applied Software Technology, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
CADD Microsystems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Computers for Design, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
DTI Technologies, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
Synergis Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Technical Software, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Mid-West CAD, Inc.
▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇'▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Devtron ▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇