Papyrus Transactions. On September 10, 1998, the Company entered into an Agreement and Plan of Merger among the Company, Papyrus Acquisition Corporation, a Utah corporation and wholly-owned subsidiary of the Company, and Papyrus Associates, Inc., a Pennsylvania corporation. In a related transaction, on September 10, 1998, the Company entered into an Agreement and Plan of Merger among the Company, Papyrus Acquisition Corporation and Papyrus Development Corporation, a Massachusetts corporation. Pursuant to the merger agreements described above (the "Papyrus Agreements"), the Company agreed to acquire by merger the Papyrus entities, in return for which the Company issued a total of $3,111,114 shares of Class A Common Stock and promissory notes aggregating $1,710,000. Pursuant to the Papyrus Agreements, the shareholders of the Papyrus entities also obtained piggyback registration rights exercisable at any time 6 months after the effective time of the mergers. The piggyback rights do not apply to (i) a registration relating solely to employee benefit plans, (ii) a registration relating solely to a Rule 145 transaction or (iii) a registration pursuant to registration rights granted as of the date of the merger agreement. After the Papyrus acquisition closed in October 1998, the Company determined that certain of the representations made b y the Papyrus entities and their executive officers appeared to be inaccurate. On February 26, 1999, the Company filed an action against the former stockholders of the Papyrus entities alleging misrepresentation and breach of contract. In March and April 1999, five of the former stockholders of the Papyrus entities filed actions against the Company alleging default under the terms of the promissory notes issued to them in connection with the Papyrus acquisition and certain other claims. Subsequently, the Company entered into agreements with the five former stockholders of the Papyrus entities for dismissal of the actions and cancellation of the promissory notes upon payment to the former stockholders of $1,217,384 (the "Settlement Payment") and return of 970,586 shares of restricted common stock previously issued to the five former stockholders in connection with the acquisition of the Papyrus entities. The Company paid the Settlement Payment in September 1999 and the lawsuits described above have been dismissed. The 970,586 shares were effectively canceled in September 1999 in connection with the Settlement Payment.
Papyrus Transactions. On September 10, 1998, the Company entered into an -------------------- Agreement and Plan of Merger among the Company, Papyrus Acquisition Corporation, a Utah corporation and wholly-owned subsidiary of the Company, and Papyrus Associates, Inc., a Pennsylvania corporation. In a related transaction, on September 10, 1998, the Company entered into an Agreement and Plan of Merger among the Company, Papyrus Acquisition Corporation and Papyrus Development Corporation, a Massachusetts corporation. Pursuant to the Papyrus Agreements, the Company will acquire by merger the Papyrus entities, in return for which the Company will issue (in addition to the payment of cash consideration as specified in the agreements), a total of $3,640,000 in Common Stock, each share of which will be valued at the average of the closing bid prices for the Common Stock for the 30 trading day periods immediately preceding the closing dates for the Papyrus transactions. The Company presently believes the Papyrus transactions will close in October 1998, although there can be no assurance that the closings will occur.
Papyrus Transactions. On September 10, 1998, the Company entered into an -------------------- Agreement and Plan of Merger among the Company, Papyrus Acquisition Corporation, a Utah corporation and wholly-owned subsidiary of the Company, and Papyrus Associates, Inc., a Pennsylvania corporation. In a related transaction, on September 10, 1998, the Company entered into an Agreement and Plan of Merger among the Company, Papyrus Acquisition Corporation and Papyrus Development Corporation, a Massachusetts corporation. Pursuant to the Papyrus Agreements, the Company will acquire by merger the Papyrus entities, in return for which the Company will issue (in addition to the payment of cash consideration as specified in the agreements), a total of $3,640,000 in Common Stock, each share of which will be valued at the average of the closing bid prices for the Common Stock for the 30 trading day periods immediately preceding the closing dates for the Papyrus transactions. Pursuant to the Papyrus Agreements, the shareholders of the Papyrus entities who receive Common Stock will obtain piggyback registration rights that may be exercised at any time 6 months after the effective time of the mergers. The piggyback rights do not apply to (i) a registration relating solely to employee benefit plans, (ii) a registration relating solely to a Rule 145 transaction or (iii) a registration pursuant to registration rights granted as of the date of the merger agreement.
