EXHIBIT 2.4
STOCK PURCHASE AGREEMENT
AMONG
XXXXXX INTERNATIONAL INC.,
TZUO-XXX XXX,
XXXX X. XXX,
XXXXXXX XXXXX,
XXXXXX XXX,
XXXXXX XXX,
XXXX X. XXX AS TRUSTEE
UNDER TRUST DATED MARCH 8, 1991
FBO XXXXXXXX XXX
AND
CITICORP TRUST - SOUTH DAKOTA
AS TRUSTEE U/A MAY 15, 1997 M/B
TZUO XXX XXX
February 11, 1998
TABLE OF CONTENTS
Page
1. Definitions............................................................1
2. Purchase and Sale of ACER Shares.......................................6
(a) Basic Transaction. .............................................6
(b) Purchase Price.................................................6
(c) The Closing. ..................................................8
(d) Deliveries at the Closing.......................................8
3. Representations and Warranties Concerning the Transaction..............8
(a) Representations and Warranties of the Sellers..................8
(i) Organization of Certain Sellers..........................8
(ii) Authorization of Transaction.............................8
(iii) Noncontravention.........................................8
(iv) Brokers' Fees. ..........................................9
(v) Investment...............................................9
(vi) ACER Shares..............................................9
(b) Representations and Warranties of Xxxxxx........................9
(i) Organization of Xxxxxx...................................9
(ii) Authorization of Transaction............................10
(iii) Noncontravention........................................10
(iv) Capitalization..........................................10
(v) SEC Reports.............................................10
(vi) Brokers' Fees...........................................11
(vii) Investment..............................................11
4. Representations and Warranties Concerning ACER........................11
(a) Organization, Qualification, and Corporate Power...............11
(b) Capitalization.................................................11
(c) Noncontravention...............................................12
(d) Brokers' Fees..................................................12
(e) Title to Assets................................................12
(f) Subsidiaries...................................................12
(g) Financial Statements...........................................13
(h) Events Subsequent to Most Recent Fiscal Year End...............13
(i) Undisclosed Liabilities........................................15
(j) Legal Compliance...............................................15
(k) Tax Matters....................................................15
(l) Real Property..................................................17
(m) Intellectual Property..........................................18
(n) Tangible Assets................................................20
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(o) Contracts......................................................20
(p) Notes and Accounts Receivable..................................21
(q) Powers of Attorney.............................................22
(r) Insurance......................................................22
(s) Litigation.....................................................22
(t) Employee Benefits..............................................23
(u) Guaranties.....................................................25
(v) Environmental, Health, and Safety Matters......................25
(w) Certain Business Relationships with ACER.......................25
(x) Disclosure.....................................................26
5. Pre-Closing Covenants.................................................26
(a) General........................................................26
(b) Notices and Consents...........................................26
(c) Operation of Business..........................................26
(e) Full Access....................................................26
(f) Notice of Developments.........................................26
(g) Exclusivity....................................................27
6. Post-Closing Covenants................................................27
(a) General........................................................27
(b) Litigation Support.............................................27
(d) Confidentiality................................................28
(e) Xxxxxx Shares..................................................28
7. Conditions to Obligation to Close.....................................29
(a) Conditions to Obligation of Xxxxxx.............................29
(b) Conditions to Obligation of the Sellers........................31
8. Remedies for Breaches of This Agreement...............................32
(a) Survival of Representations and Warranties.....................32
(b) Indemnification Provisions for Benefit of Xxxxxx...............33
(c) Indemnification Provisions for Benefit of the Sellers..........34
(d) Matters Involving Third Parties................................34
(e) Determination of Adverse Consequences.........................35
(f) Other Indemnification Provisions...............................35
9. Tax Covenants.........................................................35
(a) Allocation of Purchase Price...................................35
(b) Payment of Taxes and Fees......................................36
(c) Taxes - Sellers................................................36
(d) Section 338(h)(10) Election....................................36
(e) FICA Tax Issue.................................................36
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10. Termination...........................................................36
(a) Termination of Agreement.......................................36
(b) Effect of Termination..........................................37
11. Miscellaneous.........................................................37
(a) Nature of Certain Obligations..................................37
(b) Press Releases and Public Announcements........................38
(c) No Third-Party Beneficiaries...................................38
(d) Entire Agreement...............................................38
(e) Succession and Assignment......................................38
(f) Counterparts...................................................38
(g) Headings.......................................................38
(h) Notices........................................................38
(i) Governing Law..................................................39
(j) Amendments and Waivers.........................................39
(k) Severability...................................................39
(l) Expenses.......................................................40
(m) Construction...................................................40
(n) Incorporation of Exhibits, Annexes, and Schedules..............40
(o) Specific Performance...........................................40
(p) Fourth Quarter 1997 Audited Financial Statements...............40
Annex I -- Each Seller's Qualifications as an Accredited Investor
Annex II -- Exceptions to Xxxxxx'x Representations and Warranties
Concerning the Transaction
Disclosure Schedule -- Exceptions to Representations and Warranties
EXHIBITS
Exhibit 2(b) -- Escrow Agreement
Exhibit 4(g) -- ACER Financial Statements
Exhibit 7(a)(vii) -- Employment Agreements
Exhibit 7(a)(viii) -- Releases
Exhibit 7(a)(ix) -- Covenants
Exhibit 7(a)(xiii) -- Form of Legal Opinion of Counsel to the Sellers
Exhibit 7(b)(vi) -- Registration Rights Agreement
Exhibit 7(b)(x) -- Form of Legal Opinion of Counsel to Xxxxxx
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into this
11TH day of February 1998 among XXXXXX INTERNATIONAL INC., an Ohio corporation
("Xxxxxx"), TZUO-XXX XXX ("TYL"), XXXX X. XXX ("JCL"), XXXXXXX XXXXX ("Minor"),
XXXXXX XXX ("CL"), XXXXXX XXX ("SL"), JCL, as Trustee under a Trust dated March
8, 1991 fbo XXXXXXXX XXX ("JL") and CITICORP TRUST-SOUTH DAKOTA, as Trustee
under an agreement dated May 15, 1997 made by TYL (the "Trust") (TYL, JCL,
Minor, CL, SL, JL and the Trust collectively, the "Sellers"). Xxxxxx and the
Sellers are referred to herein collectively as the "Parties".
RECITALS
A. The Sellers, in the aggregate, own all of the issued and outstanding
capital stock of ACER/EXCEL INC., a New Jersey corporation ("ACER").
B. This Agreement contemplates a transaction in which Xxxxxx will purchase
from the Sellers, and the Sellers will sell to Xxxxxx, all of the issued and
outstanding capital stock of ACER in return for cash and Xxxxxx Shares.
C. The Sellers and Xxxxxx acknowledge their intention to make an election
under Code ss.338(h)(10) with respect to the ACER stock purchase transaction.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings and agreements herein made, the Parties agree as follows:
1. Definitions.
"ACER" has the meaning set forth in the first recital above and shall
include all predecessor entities, including Advanced Clinical Epidemiological
Research Inc. and Excel Scientific Protocols, Inc.
"ACER Material Adverse Change" has the meaning set forth in ss.7(a)(xi)
below.
"ACER Share" means any share of the common stock, no par value, of ACER.
"Accredited Investor" has the meaning set forth in Regulation D promulgated
under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses and
fees, including (without limitation) court costs and reasonable attorneys' fees
and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
ss.1504(a) or any similar group defined under a similar provision of state,
local or foreign law.
"Basis" means any known past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction that forms or could form the basis for any
specified consequence.
"Cash Closing Payment" has the meaning set forth in ss.2(b) below.
"Cash Escrow Amount" has the meaning set forth in ss.2(b) below.
"Closing" has the meaning set forth in ss.2(c) below.
"Closing Date" has the meaning set forth in ss.2(c) below.
"Closing Shares" has the meaning set forth in ss.2(b) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"COBRA" means the requirements of Part 6 of Subtitle B of Title I of ERISA
and Code ss.4980B.
"Confidential Information" has the meaning set forth in Exhibit 7(a)(ix).
"Controlled Group" has the meaning set forth in Code ss.1563.
"Deferred Intercompany Transaction" has the meaning set forth in
ss.4(k)(vi) below.
"Disclosure Schedule" means the disclosure schedule delivered by the
Parties hereto pursuant to ss.ss.3 and 4 below. Nothing contained in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made in this Agreement unless the exception is
identified in the Disclosure Schedule with reasonable particularity, describing
the relevant facts in reasonable detail.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation or
retirement plan or arrangement, (b) qualified defined contribution retirement
plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified
defined benefit retirement plan or arrangement which is an Employee Pension
Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit
Plan or material fringe benefit or other retirement, bonus, or incentive plan or
program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA ss.3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA ss.3(1).
"Employment Agreements" has the meaning set forth in ss.7(b)(v) below.
"Encumbrance" means any Security Interest, warrant, option, purchase right,
preemptive right, or other right or claim of any character that restricts the
transfer of capital stock.
"Environmental Law" means any federal, state or local statute, law, rule,
regulation, ordinance, code, policy or rule of common law now or hereafter in
effect and in each case as amended, and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, relating to the environment, health, safety or Hazardous
Materials, including without limitation the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA") 42
U.S.C. ss.9601 et seq.; the Hazardous Materials Transportation Act, as amended,
49 U.S.C. ss.1801 et. seq.; the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. ss.6901 et seq.; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. ss.1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
ss.2601 et seq.; the Clean Air Act, 42 U.S.C. ss.7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. ss.3808 et seq.; and their counterparts under any state or
local laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means each entity which is treated as a single employer
with Seller for purposes of Code ss.414.
"Escrow Agreement" has the meaning set forth in ss.2(b) below.
"Exchange Act" has the meaning set forth in ss.3(b)(v) below.
"Fiduciary" has the meaning set forth in ERISA ss.3(21).
"Financial Statements" has the meaning set forth in ss.4(g) below.
"GAAP" means United States generally accepted accounting principles, as in
effect from time to time.
"General Escrow Shares" has the meaning set forth in ss.2(b) below.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar import, under
any applicable Environmental Law; and (c) any other chemical, material or
substance exposure to which is prohibited, limited or regulated by any
governmental authority.
"Indemnified Party" has the meaning set forth in ss.8(d) below.
"Indemnifying Party" has the meaning set forth in ss.8(d) below.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) all computer software (including related technical
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Xxxxxx" has the meaning set forth in the preface above.
"Xxxxxx Material Adverse Change" has the meaning set forth in ss.7(b)(vii)
below.
"Xxxxxx Shares" has the meaning set forth in ss.2(b) below.
"Knowledge" means knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether asserted
or unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
(without limitation) any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet contained within the
Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in ss.4(g)
below.
"Most Recent Fiscal Month End" has the meaning set forth in ss.4(g) below.
"Most Recent Fiscal Year End" has the meaning set forth in ss.4(g) below.
"Multiemployer Plan" has the meaning set forth in ERISA ss.3(37).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Pre-Closing Bonuses" means bonuses paid by ACER prior to the
Closing in accordance with ACER's existing bonus plan and prior practices (both
as to procedures and as to amounts). Permitted Pre-Closing Bonuses shall also
include Special Bonuses.
"Permitted Pre-Closing Distribution" has the meaning set forth in
ss.4(h)(xiii) below.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Process Agent" has the meaning set forth in ss.11(p) below.
"Prohibited Transaction" has the meaning set forth in ERISA ss.406 and Code
ss.4975.
"Purchase Price" has the meaning set forth in ss.2(b) below.
"Registration Rights Agreement" has the meaning set forth in ss.3(a)(v)
below.
"Release" has the meaning set forth in ss.7(a)(viii) below.
"Reportable Event" has the meaning set forth in ERISA ss.4043.
"Requisite Sellers" means TYL, JCL and Minor.
"SEC" has the meaning set forth in ss.3(b)(v) below.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Special Bonuses" means special cash bonuses up to an aggregate Eight
Hundred Fifty Thousand Dollars ($850,000) to certain key ACER employees and in
amounts identified by ACER (and reasonably acceptable to Xxxxxx, approval not to
be unreasonably withheld or delayed); provided, however, that Seller shall
either contribute additional capital to ACER prior to the Closing in an amount,
or reduce the Permitted Pre-Closing Distribution by an amount, equal to the
amount of the Special Bonuses plus all payroll and other taxes or expenses ACER
will incur as a result or in connection with the payment of the Special
Bonuses..
"Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.
"Survey" has the meaning set forth in ss.5(i) below.
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code ss.59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Escrow Fund" has the meaning set forth in ss.2(b) below.
"Tax Escrow Shares" has the meaning set forth in ss.2(b) below.
"Tax Liability" has the meaning set forth in ss.4(k)(vii).
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in ss.8(d) below.
2. Purchase and Sale of ACER Shares.
(a) Basic Transaction. On and subject to the terms and conditions
of this Agreement, Xxxxxx agrees to purchase from each of the Sellers, and each
of the Sellers agrees to sell to Xxxxxx, all of his, her or its ACER Shares for
the consideration specified below in this ss.2.
(b) Purchase Price. At the Closing, the Buyer shall pay the
Sellers a purchase price of Thirty Million Dollars ($30,000,000.00) (the
"Purchase Price"), Eleven Million Two Hundred Eighty Thousand Dollars
($11,280,000) of which shall be paid in cash at the Closing (the "Cash Closing
Payment"), Two Million Eight Hundred Twenty Thousand Dollars ($2,820,000) of
which shall be paid in cash to The Fifth Third Bank, as escrow agent under the
Escrow Agreement (which shall be in the form of Exhibit 2(b) hereto) (the "Cash
Escrow Amount"), Ten Million Seven Hundred Twenty Thousand Dollars ($10,720,000)
of which shall be paid to Sellers in shares of Xxxxxx common stock, no par value
("Xxxxxx Shares"), valued at Sixteen and 10/100 Dollars ($16.10) per share (the
"Market Value") ("Closing Shares"), Two Million Dollars ($2,000,000) of which
shall be paid to The Fifth Third Bank, as escrow agent under the Escrow
Agreement, in Xxxxxx Shares valued at the Market Value ("General Escrow
Shares"), and Three Million One Hundred Eighty Thousand Dollars ($3,180,000) of
which shall be paid to The Fifth Third Bank, as escrow agent under the Escrow
Agreement, in Xxxxxx Shares valued at the Market Value ("Tax Escrow Shares")
(the Closing Shares, the General Escrow Shares and the Tax Escrow Shares
collectively, the "Xxxxxx Share Consideration"). Pursuant to the Escrow
Agreement, a portion of the Tax Escrow Shares may become General Escrow Shares.
The Purchase Price paid to each Seller shall be as set forth in Schedule I
hereto.
(c) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Xxxxxxx,
Muething & Xxxxxxx, XXX, 0000 Provident Tower, Xxx Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000, commencing at 9:00 a.m., local time, on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or such other date as Xxxxxx and the Requisite Sellers
may mutually determine (the "Closing Date").
(d) Deliveries at the Closing. At the Closing, (i) the Sellers
will deliver to Xxxxxx the various certificates, instruments and documents
referred to in ss.7(a) below, (ii) Xxxxxx will deliver to the Sellers the
various certificates, instruments and documents referred to in ss.7(b) below,
(iii) each of the Sellers will deliver to Xxxxxx stock certificates representing
all of his, hers or its ACER Shares, endorsed in blank or accompanied by duly
executed assignment documents, and (iv) Xxxxxx will deliver to the Sellers the
consideration specified in ss.2(b) above.
3. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of the Sellers. Each of the
Sellers represents and warrants to Xxxxxx that the statements contained in this
ss.3(a) are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
ss.3(a)) with respect to himself, herself or itself (but not with respect to any
other Seller).
(i) Organization of Certain Sellers. If the Seller is a
trust, the Seller is organized, validly existing and in good standing
under the laws of the jurisdiction of its organization.
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(ii) Authorization of Transaction. The Seller has full
power and authority (including, if the Seller is a trust, full trust
power and authority) to execute and deliver this Agreement and to
perform his, her or its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Seller,
enforceable in accordance with its terms and conditions. The Seller need
not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this
Agreement.
(iii) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to
which the Seller is subject or, if the Seller is a trust, any provision
of its organizational documents or (B) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Seller is a party or by
which he, she or it is bound or to which any of his, her or its assets
is subject.
(iv) Brokers' Fees. Other than liability or obligation to
KPMG/Century Capital Associates (which shall be the liability of the
Sellers and not of ACER or of Xxxxxx), the Seller has no Liability or
obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement
for which Xxxxxx could become liable or obligated.
(v) Investment. Each Seller receiving Xxxxxx Share
Consideration (A) understands that Xxxxxx Share Consideration has not
been, and will not be, registered under the Securities Act, or under any
state securities laws, other than subsequent to the Closing pursuant to
the terms and conditions set forth in the Registration Rights Agreement
among Xxxxxx and certain Sellers to be executed and delivered at Closing
in the form of Exhibit 7(b)(vi) hereto (the "Registration Rights
Agreement"), and are being offered and sold in reliance upon federal and
state exemptions for transactions not involving any public offering, (B)
is acquiring Xxxxxx Shares solely for his or her own account for
investment purposes, and not with a view to the distribution thereof,
(C) is a sophisticated investor with knowledge and experience in
business and financial matters, (D) has received certain information
concerning Xxxxxx and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks
inherent in holding Xxxxxx Shares, (E) is able to bear the economic risk
and lack of liquidity inherent in holding Xxxxxx Shares, and (F) with
respect to TYL and JCL only, is an Accredited Investor for the reasons
set forth on Annex I.
(vi) ACER Shares. The Seller holds of record and owns
beneficially the number of ACER Shares set forth next to his, her or its
name in ss.4(b) of the Disclosure Schedule, free and clear of any
Encumbrances other than restrictions on transfer imposed by federal and
state securities laws and regulations). The Seller is not a party to
any voting trust, proxy, or other agreement or understanding with
respect to the voting of any capital stock of ACER.
(b) Representations and Warranties of Xxxxxx. Xxxxxx represents
and warrants to the Sellers that the statements contained in this ss.3(b) are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this ss.3(b)).
(i) Organization of Xxxxxx. Xxxxxx is a corporation
organized, validly existing and in good standing under the laws of the
State of Ohio.
(ii) Authorization of Transaction. Xxxxxx has full power
and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of
Xxxxxx, enforceable in accordance with its terms and conditions.
Assuming the truth and correctness of the Seller's statements in
ss.3(a)(v) of this Agreement, Xxxxxx need not give any notice to, make
any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(iii) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to
which Xxxxxx is subject or any provision of its charter or bylaws or (B)
conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any material
agreement, contract, lease, license, instrument, or other arrangement to
which Xxxxxx is a party or by which it is bound or to which any of its
assets is subject.
(iv) Capitalization. Xxxxxx'x authorized equity securities
consist of Fifteen Million (15,000,000) shares of common stock, no par
value per share, and One Hundred Thousand (100,000) shares of
undesignated preferred stock, no par value per share. As of September
30, 1997, Seven Million Five Hundred Fifty Two Thousand Five Hundred
Sixty Seven (7,552,567) shares of common stock were issued and
outstanding and no shares of undesignated preferred stock were issued
and outstanding. The Xxxxxx Shares to be received by certain Sellers in
connection with the transactions contemplated hereby will be duly
authorized, validly issued, fully paid and non-assessable shares of
common stock free and clear of any and all Encumbrances other than
restrictions on transfer imposed by federal and state securities laws
and regulations.
(v) SEC Reports. Xxxxxx has timely filed with the
Securities and Exchange Commission ("SEC") all materials and documents
required to be filed by it under the Securities Exchange Act of 0000
(xxx "Xxxxxxxx Xxx"). All the materials and documents filed with the
SEC by Buyer since July 2, 1997, including its initial Registration
Statement on Form S-1, are hereinafter referred to as the "Xxxxxx SEC
Reports." Section 3(b) of the Disclosure Schedule lists all the Xxxxxx
SEC Reports filed on or prior to the date of this Agreement. The
Xxxxxx SEC Reports, copies of which have been delivered to the
Sellers, are true and correct in all material respects, including the
financial statements and other financial information contained
therein, and do not omit to state any material fact necessary to make
the statements in such Xxxxxx SEC Reports, in light of the
circumstances in which they were made, not misleading. The financial
statements included in the Xxxxxx SEC Reports fairly present in all
material respects the financial condition and the results of
operations, changes in stockholders' equity and cash flow of Xxxxxx
and its subsidiaries as at the respective dates of and for the periods
referred to in such financial statements, all in accordance with GAAP.
Since the date of the most recent Xxxxxx SEC Report, there has been no
Xxxxxx Material Adverse Change.
(vi) Brokers' Fees. Xxxxxx has no Liability or obligation
to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which any
Seller could become liable or obligated.
(vii) Investment. Xxxxxx is not acquiring ACER Shares with
a view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act.
4. Representations and Warranties Concerning ACER. The Requisite Sellers,
jointly and severally, represent and warrant to Xxxxxx that the statements
contained in this ss.4 are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement
throughout this ss.4), except as set forth in the Disclosure Schedule.
(a) Organization, Qualification, and Corporate Power. ACER is a
corporation organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation. ACER is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction set forth
in ss.4(a) of the Disclosure Schedule and the failure to so qualify in any other
jurisdiction will not result in an ACER Material Adverse Change. ACER has full
corporate power and authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is engaged and in which it
presently proposes to engage and to own and use the properties owned and used by
it. Section 4(a) of the Disclosure Schedule lists the directors and officers of
ACER. The Sellers have delivered to Xxxxxx correct and complete copies of the
charter and bylaws of ACER (as amended to date). The minute books (containing
the records of meetings of the stockholders, the board of directors and any
committees of the board of directors), the stock certificate books and the stock
record books of ACER are correct and complete. ACER is not in default under or
in violation of any provision of its charter or bylaws.
(b) Capitalization. The authorized capital stock of ACER consists
of Five Thousand (5,000) ACER Shares, of which Four Thousand Four Hundred
Forty-Four (4,444)ACER Shares are issued and outstanding and no (0) ACER Shares
are held in treasury. All of the issued and outstanding ACER Shares have been
duly authorized, are validly issued, fully paid and nonassessable, and are held
of record and beneficially by the respective Sellers as set forth in ss.4(b) of
the Disclosure Schedule. Except as set forth in ss.4(b) of the Disclosure
Schedule, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require ACER to issue, sell, or otherwise
cause to become outstanding any of its capital stock. There are no outstanding
or authorized stock appreciation, phantom stock, profit participation, or
similar rights with respect to ACER. ACER is not a party to any voting trusts,
proxies, or other agreements or understandings with respect to the voting of the
capital stock of ACER.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which ACER is subject or any provision of the
charter or bylaws of ACER or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license instrument to which ACER is a
party or by which it is bound or to which any of its assets is subject; or (iii)
result in the imposition of any Security Interest upon any of its assets. ACER
does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement.
(d) Brokers' Fees. ACER has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) Title to Assets. ACER has good and marketable title to, or a
valid leasehold interest in, the properties and assets used by it, or shown on
the Most Recent Balance Sheet or acquired after the date thereof, free and clear
of all Security Interests, excepting only properties and assets disposed of in
the Ordinary Course of Business since the date of the Most Recent Balance Sheet
and certain other properties and assets involving in the aggregate more than
Twenty Five Thousand Dollars ($25,000.00) disposed of other than in the Ordinary
Course of Business as disclosed on the Disclosure Schedule.
(f) Subsidiaries. ACER has no Subsidiaries. Section 4(f) of the
Disclosure Schedule sets forth the name and jurisdiction of incorporation or
organization of each corporation or other entity in which ACER has a direct or
indirect equity or ownership interest in any business and the number of (and
percentage of outstanding) shares or other interests owned by ACER. All of such
shares or other interests are owned free and clear of any Encumbrances other
than restrictions on transfer imposed by foreign, federal and state securities
laws and regulations and such shares or other interests are duly authorized,
validly issued, fully paid and non-assessable and do not subject the holder
thereof to further liability for capital contributions. Each corporation or
other entity listed on ss.4(f) of the Disclosure Schedule validly exists, has
been duly incorporated or organized under applicable law and is in good standing
(or the local law equivalent). To the knowledge of the Requisite Sellers, each
such corporation or other entity has full corporate or other power and authority
and possesses all licenses, permits and authorizations necessary for it to carry
on the business in which it is engaged and in which it presently proposes to
engage and to own and use the properties owned and used by it. ACER is not party
to any voting trusts, proxies or other agreements or understandings with respect
to the voting trusts, proxies, or other agreements or understandings with
respect to the voting or capital stock of any such corporation or entity. Prior
to Closing, the Requisite Sellers shall deliver to Xxxxxx: (A) true, complete
and correct copies of the charter or other organizational documents of each
corporation or other entity listed on ss.4(f) of the Disclosure Schedule; and
(B) copies of all material financial information with respect to such
corporations or other entities in the possession of or under the control of the
Requisite Sellers.
(g) Financial Statements. Attached hereto as Exhibit 4(g) are the
following financial statements (collectively the "Financial Statements"): (i)
unaudited balance sheets and statements of income, changes in stockholders'
equity and cash flow for ACER as of and for the fiscal years ended December 31,
1994 and December 31, 1995; (ii) audited balance sheets and statements of
income, changes in stockholders' equity and cash flow for ACER for the fiscal
year ended December 31, 1996 (the "Most Recent Fiscal Year End"); and (iii)
audited balance sheets and statements of income, changes in stockholders' equity
and cash flow (the "Most Recent Financial Statements") as of and for the nine
(9) months ended September 30, 1997 (the "Most Recent Fiscal Month End") for
ACER. The Financial Statements for the fiscal year ended December 31, 1996 and
the Most Recent Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, present fairly in all material respects the financial
condition of ACER as of such dates and the results of operations of ACER for
such periods and are consistent with the books and records of ACER; provided,
however, that the Most Recent Financial Statements are subject to normal
year-end adjustments (which will not be material individually or in the
aggregate) and lack footnotes and other presentation items. The work in progress
line items reflected on the Financial Statements for the fiscal year ended
December 31, 1996 and on the Most Recent Financial Statements or on the
accounting records of ACER as of the Closing accurately allocate or will
accurately allocate income and costs, at historical cost, to bona fide projects
conducted for unaffiliated parties for the periods to which such Financial
Statements or accounting records pertain and make adequate provision for any
expected losses on such projects.
(h) Events Subsequent to Most Recent Fiscal Year End. Except as
set forth in ss.4(h) of the Disclosure Schedule, since September 30, 1997, there
has not been any ACER Material Adverse Change. Without limiting the generality
of the foregoing, since that date:
(i) ACER has not sold, leased, transferred, or assigned
any of its assets, tangible or intangible, involving in the aggregate
more than Twenty Five Thousand Dollars ($25,000.00) other than for a
fair consideration in the Ordinary Course of Business;
(ii) other than agreements and contracts with customers,
as to which Five Hundred Thousand Dollars ($500,000) shall be the
disclosure threshold for ss.4(h) of the Disclosure Schedule, ACER has not
entered into any agreement, contract, lease, or license (or series of
related agreements, contracts, leases, and licenses) either involving more
than Twenty Five Thousand Dollars ($25,000) or outside the Ordinary Course
of Business;
(iii) no party (including ACER) has accelerated,
terminated, modified, or canceled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) involving more than Twenty Five Thousand Dollars ($25,000) to
which ACER is a party or by which it is bound;
(iv) ACER has not imposed or permitted to be imposed any
Security Interest upon any of its assets, tangible or intangible;
(v) ACER has not made any capital expenditure (or series
of related capital expenditures) either involving more than Twenty Five
Thousand Dollars ($25,000) or outside the Ordinary Course of Business;
(vi) ACER has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any other Person
(or series of related capital investments, loans, and acquisitions)
either involving more than Twenty Five Thousand Dollars ($25,000) or
outside the Ordinary Course of Business;
(vii) ACER has not issued any Share, bond, or other debt
security or created, incurred, assumed, or guaranteed any indebtedness
for borrowed money or capitalized lease obligation either involving more
than Twenty Five Thousand Dollars ($25,000) singly or Twenty Five
Thousand Dollars ($25,000) in the aggregate;
(viii) ACER has not delayed or postponed the payment of
accounts payable and other Liabilities outside the Ordinary Course of
Business;
(ix) ACER has not canceled, compromised, waived, or
released any right or claim (or series of related rights and claims)
either involving more than Twenty Five Thousand Dollars ($25,000) or
outside the Ordinary Course of Business;
(x) ACER has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(xi) there has been no change made or authorized in the
charter or bylaws of ACER;
(xii) other than distributions to the Sellers, or any of
them, however characterized (excluding equalizing distributions in the
aggregate amount of Forty-Five Thousand Five Hundred Ninety-Two and
00/100 Dollars ($45,592.00) and distributions in the form of customary
compensation, but including the sum of approximately Two Hundred
Seventy Five Thousand Dollars ($275,000) paid to TYL) prior to the
Closing not to exceed Two Million Eight Hundred Fifty Thousand Dollars
($2,850,000), hereby expressly permitted (the "Permitted Pre-Closing
Distribution"), ACER has not declared, set aside, or paid any dividend
or made any distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of
its capital stock;
(xiii) ACER has not experienced any damage, destruction,
or loss (whether or not covered by insurance) to its property in excess
of Twenty Five Thousand Dollars ($25,000);
(xiv) ACER has not made any loan (that will remain
outstanding on the Closing Date) to or with any of its directors,
officers, and employees outside the Ordinary Course of Business;
(xv) ACER has not entered into any employment contract or
collective bargaining agreement, written or oral, or changed or modified
the terms of any existing such contract or agreement;
(xvi) other than the Permitted Pre-Closing Bonuses and the
Permitted Pre-Closing Distribution, ACER has not granted any increase in
the base compensation of any of its directors, officers, and employees
outside the Ordinary Course of Business;
(xvii) ACER has not adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of any of its directors,
officers, and employees (or taken any such action with respect to any
other Employee Benefit Plan);
(xviii)ACER has not made or pledged to make any charitable
or other capital contribution outside the Ordinary Course of Business;
(xix) there has not been any other material occurrence,
event or transaction outside the Ordinary Course of Business; and,
(xx) ACER has not committed to any of the foregoing.
(i) Undisclosed Liabilities. ACER has no Liability (and there is
no Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability), that individually or in the aggregate is material to the
results of operations or the financial or other condition of ACER except for (i)
Liabilities reflected or reserved against on the Most Recent Balance Sheet or
described on ss.4(i) of the Disclosure Schedule or in the notes to the Most
Recent Financial Statements; or (ii) Liabilities which have arisen after the
Most Recent Fiscal Month End in the Ordinary Course of Business (none of which
results from, arises out of or was caused by any breach by ACER of any contract
or warranty, by any ACER tort or infringement or by any violation of law by
ACER).
(j) Legal Compliance. ACER has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), except where such failure to comply
would not, individually or in the aggregate, have an ACER Material Adverse
Effect; and to the Knowledge of the Requisite Sellers, and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against any of them alleging any such failure to
comply.
(k) Tax Matters.
(i) ACER has filed all Tax Returns that it was required to
file. All such Tax Returns were correct and complete in all respects.
All Taxes owed by ACER (whether or not shown on any Tax Return) have
been paid. ACER is not currently the beneficiary of any extension of
time within which to file any Tax Return. No claim has ever been made by
an authority in a jurisdiction where ACER does not file Tax Returns that
it is or may be subject to taxation by that jurisdiction. There are no
Security Interests on any of the assets of ACER that arose in connection
with any failure (or alleged failure) to pay any Tax.
(ii) ACER has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third
party.
(iii) No Seller or director or officer (or employee
responsible for Tax matters) of ACER expects any authority to assess any
additional Taxes for any period for which Tax Returns have been filed.
There is no dispute or claim concerning any Tax Liability of ACER either
(A) claimed or raised by any authority in writing or (B) as to which any
of the Sellers and the directors and officers (and employees responsible
for Tax matters) of ACER has Knowledge based upon personal contact with
any agent of such authority. ss.4(k) of the Disclosure Schedule lists
all federal, state, local, and foreign income Tax Returns filed with
respect to ACER (including Tax Returns filed by a Seller relating to
ACER activities) for taxable periods ended on or after December 31,
1995, indicates those Tax Returns that have been audited, and indicates
those Tax Returns that currently are the subject of audit. The Sellers
have delivered to Xxxxxx correct and complete copies of all federal
income Tax Returns, examination reports, and statements of deficiencies
assessed against or agreed to by ACER since December 31, 1995.
(iv) ACER has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency.
(v) ACER has not filed a consent under Code ss.341(f)
concerning collapsible corporations. ACER has not made any payments, is
obligated to make any payments, or is a party to any agreement that
under certain circumstances could obligate it to make any payments that
will not be deductible under Code ss.280G. ACER has not been a United
States real property holding corporation within the meaning of Code
ss.897(c)(2)
during the applicable period specified in Code ss.897(c)(1)(A)(ii). ACER
has disclosed on its federal income Tax Returns all positions taken
therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Code ss.6662. ACER is not a party to
any Tax allocation or sharing agreement. ACER (A) has not been a member
of an Affiliated Group filing a consolidated federal income Tax Return
(other than a group the common parent of which was ACER) or (B) does not
have any Liability for the Taxes of any Person (other than of ACER)
under Reg. ss.1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.
(vi) ACER has maintained its status as a "small business
corporation" within the meaning of Code ss. 1361(b) and any comparable
provisions of state or local law at all times since the effective date
of the election of such status, January 3, 1989. The validity of the
election of "S Corporation" status has not been challenged by the
Internal Revenue Service nor is there any Basis for such a challenge.
Since January 3, 1989, except as set forth in ss. 4(k) of the Disclosure
Schedule, ACER has not been taxed other than as a "small business
corporation."
(vii) No tax authority in any jurisdiction in which ACER
do not file Tax Returns has made or asserted a claim that ACER (or any
Seller) is subject to taxation in that jurisdiction based on the
activities of ACER.
(viii) ACER has not agreed to, and is not required to
include in its income, any adjustment pursuant to Code ss. 481(c) (or
comparable provisions of any state or local law) by reason of a change
in accounting method or otherwise.
(ix) The unpaid Taxes of ACER (A) did not, as of the Most
Recent Fiscal Month End, exceed the reserve for Tax Liability (including
any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the face of the Most Recent
Balance Sheet (including any notes thereto) and (B) do not exceed that
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of ACER in filing their Tax
Returns.
(x) The facts stated in the private letter ruling request
(the "Ruling Request") filed by Sellers with the Internal Revenue
Service ("IRS") with respect to the possible inadvertent termination of
ACER's "small business corporation" or Subchapter S status are true,
complete and correct in all material respects and the Ruling Request was
duly filed with the IRS on February 11, 1998.
(l) Real Property.
(i) ACER owns no real property.
(ii) ss.4(l)(ii) of the Disclosure Schedule lists all real
property leased or subleased to any of ACER. The Sellers have delivered
to Xxxxxx correct and complete copies of the leases and subleases
listed in ss.4(l)(ii) of the Disclosure Schedule (as amended to date).
With respect to each lease and sublease listed in ss.4(l)(ii) of the
Disclosure Schedule:
(A) to the Knowledge of the Requisite Sellers, the
lease or sublease is in full force and effect and will continue
to be in full force and effect on identical terms following the
consummation of the transactions contemplated hereby;
(B) no party to the lease or sublease is in
material breach or material default or has repudiated such lease
or sublease, and no event has occurred which, with notice or
lapse of time, would constitute a material breach or material
default or permit termination, modification, or acceleration
thereunder;
(C) ACER has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold;
(D) all facilities leased or subleased thereunder
are supplied with utilities and other services and have all
licenses and permits that are material for the operation of
ACER's business as presently conducted thereat and as presently
proposed to be conducted thereat; and
(E) to the Knowledge of the Requisite Sellers, the
owner of each facility leased or subleased to ACER has good and
marketable title to the parcel of real property free and clear of
any Security Interest other than Security Interests that do not
materially impair ACER's use of such facility.
(m) Intellectual Property.
(i) ACER owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property that is
material to the operation of the businesses of ACER as presently
conducted and as presently proposed to be conducted. Except as set forth
on ss.4(m) of the Disclosure Schedule, each such material item of
Intellectual Property will be owned or available for use by ACER on
identical terms and conditions immediately subsequent to the Closing
hereunder.
(ii) None of the Requisite Sellers and the directors and
officers (and employees with responsibility for Intellectual Property
matters) of ACER has ever received any charge, complaint, claim, demand,
or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that any of ACER
must license or refrain from using any Intellectual Property rights of
any third party). To the Knowledge of any of the Requisite Sellers and
the directors and officers (and employees with responsibility for
Intellectual Property matters) of ACER, no third party has interfered
with, infringed upon, misappropriated, or otherwise come into conflict
with any Intellectual Property rights of any of ACER.
(iii) ss.4(m)(iii) of the Disclosure Schedule identifies
each patent or registration which has been issued to ACER with respect
to any of its Intellectual Property, identifies each pending patent
application or application for registration which ACER has made with
respect to any of its Intellectual Property, and identifies each
license, agreement, or other permission which ACER has granted to any
third party with respect to any of its Intellectual Property (together
with any exceptions). The Requisite Sellers have delivered to Xxxxxx
correct and complete copies of all such patents, registrations,
applications, licenses, agreements, and permissions (as amended to date)
and have made available to Xxxxxx correct and complete copies of all
other written documentation evidencing ownership and prosecution (if
applicable) of each such item. ss.4(m)(iii) of the Disclosure Schedule
also identifies each trade name or unregistered trademark used by ACER
in connection with any of its businesses. With respect to each item of
Intellectual Property required to be identified in ss.4(m)(iii) of the
Disclosure Schedule:
(A) ACER has all right, title, and interest in and
to the item, free and clear of any Security Interest, license, or
other restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or,
to the Knowledge of any of the Requisite Sellers and the
directors and officers (and employees with responsibility for
Intellectual Property matters) of ACER, is threatened which
challenges the legality, validity, enforceability, use, or
ownership of the item; and
(D) ACER has not agreed to indemnify any Person for
or against any interference, infringement, misappropriation, or
other conflict with respect to the item.
(iv) ss.4(m)(iv) of the Disclosure Schedule identifies
each item of Intellectual Property that any third party owns and that
ACER uses pursuant to license, sublicense, agreement, or permission. The
Requisite Sellers have delivered to Xxxxxx correct and complete copies
of all such licenses, sublicenses, agreements, and permissions (as
amended to date). With respect to each item of Intellectual Property
required to be identified in ss.4(m)(iv) of the Disclosure Schedule:
(A) to the Knowledge of the Requisite Sellers, the
license, sublicense, agreement, or permission covering the item
is in full force and effect and will continue to be in full force
and effect on identical terms following the consummation of the
transactions contemplated hereby (including the assignments and
assumptions referred to in ss.2 above);
(B) to the Knowledge of the Requisite Sellers, no
party to the license, sublicense, agreement, or permission is in
material breach or material default or has repudiated such
license, sublicense, agreement or permission, and no event has
occurred which with notice or lapse of time would constitute a
material breach or material default or permit termination,
modification, or acceleration thereunder;
(C) the underlying item of Intellectual Property is
not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;
(D) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or,
to the Knowledge of any of the Requisite Sellers and the
directors and officers (and employees with responsibility for
Intellectual Property matters) of ACER, is threatened which
challenges the legality, validity, or enforceability of the
underlying item of Intellectual Property; and
(E) ACER has not granted any sublicense or similar
right with respect to the license, sublicense, agreement, or
permission.
(v) To the Knowledge of any of the Requisite Sellers and
the directors and officers (and employees with responsibility for
Intellectual Property matters) of ACER, ACER will not interfere with,
infringe upon, misappropriate, or otherwise come into conflict with, any
Intellectual Property rights of third parties as a result of the
continued operation of its businesses as presently conducted and as
presently proposed to be conducted.
(vi) To the Knowledge of the Requisite Sellers, the
information contained in memorandum on "Year 2000" issues previously
delivered to Xxxxxx, is true, complete and correct in all material
respects.
(n) Tangible Assets. ACER owns or leases all facilities,
machinery, equipment, and other tangible assets necessary for the conduct of its
businesses as presently conducted and as presently proposed to be conducted.
Each such tangible asset has been maintained in accordance with normal industry
practice, is in good operating condition and repair (subject to normal wear and
tear), and is suitable for the purposes for which it presently is used and
presently is proposed to be used.
(o) Contracts. ss.4(o) of the Disclosure Schedule lists the
following contracts and other agreements to which ACER is a party:
(i) any agreement (or group of related agreements) for the
lease of personal property (other than capitalized lease obligations) to
or from any Person providing for lease payments in excess of Twenty Five
Thousand Dollars ($25,000) per annum;
(ii) other than agreements and contracts with customers,
as to which One Million Dollars ($1,000,000) shall be the disclosure
threshold for ss. 4(o) of the Disclosure Schedule, any agreement (or
group of related agreements) for the purchase or sale of raw materials,
commodities, supplies, products, or other personal property, or for
the furnishing or receipt of services, the performance of which will
extend over a period of more than one year, result in a material loss
to ACER, or involve consideration in excess of Twenty Five Thousand
Dollars ($25,000);
(iii) any agreement concerning a partnership or joint
venture;
(iv) any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation, in excess of
Twenty Five Thousand Dollars ($25,000);
(v) any agreement concerning confidentiality or
noncompetition other than standard provisions in contracts with ACER's
customers;
(vi) any agreement with any of the Sellers and their
Affiliates (other than ACER);
(vii) any profit sharing, stock option, stock purchase,
phantom stock, stock appreciation, deferred compensation, severance, or
other material plan or arrangement for the benefit of its current or
former directors, officers, and employees;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on
a full-time, part-time, consulting, or other basis providing annual
compensation in excess of Twenty Five Thousand Dollars ($25,000) or
providing severance benefits in excess of Twenty Five Thousand Dollars
($25,000);
(x) any agreement under which it has advanced or loaned
any amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xi) any agreement under which the consequences of a
default or termination could have a material adverse effect on the
business, financial condition, operations, results of operations, or
future prospects of ACER; or
(xii) other than agreements or contracts with customers,
any other agreement (or group of related agreements) the performance of
which involves consideration in excess of Twenty Five Thousand Dollars
($25,000).
The Requisite Sellers have delivered to Xxxxxx a correct and complete copy of
each written agreement listed in ss.4(o) of the Disclosure Schedule (as amended
to date) and a written summary setting forth the terms and conditions of each
oral agreement referred to in ss.4(o) of the Disclosure Schedule. With respect
to each such agreement: (A) to the Knowledge of the Requisite Sellers, the
agreement is in full force and effect; (B) to the Knowledge of the Requisite
Sellers, the agreement will continue to be in full force and effect on identical
terms following the consummation of the transactions contemplated hereby; (C) to
the Knowledge of the Requisite Sellers, no party is in material breach or
material default, and no event has occurred which with notice or lapse of time
would constitute a material breach or material default, or permit termination,
modification, or acceleration, under the agreement; and (D) no party has
repudiated any provision of the agreement. Except as listed on ss.4(o) of the
Disclosure Schedule, ACER is not a party to any contract or agreement, relating
to provision by ACER of services, with any federal, state or local government,
governmental agency or other governmental authority.
(p) Notes and Accounts Receivable. All notes and all accounts
receivable of ACER are reflected properly on their books and records, are valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded amounts,
subject only to the reserve for bad debts set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of ACER.
(q) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of ACER.
(r) Insurance. ss.4(r) of the Disclosure Schedule sets forth the
following information with respect to each insurance policy (including policies
providing property, casualty, liability, and workers' compensation coverage and
bond and surety arrangements) to which ACER has been a party, a named insured,
or otherwise the beneficiary of coverage at any time within the past five (5)
years:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and amount
(including a description of how deductibles and ceilings are calculated
and operate) of coverage; and
(v) a description of any retroactive premium adjustments
or other loss-sharing arrangements.
With respect to each such insurance policy: (A) to the Knowledge of the
Requisite Sellers, the policy is in full force and effect; (B) to the Knowledge
of the Requisite Sellers, the policy will continue to be in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby; (C) to the Knowledge of the Requisite Sellers, neither ACER
nor any other party to the policy is in material breach or material default
(including with respect to the payment of premiums or the giving of notices),
and no event has occurred which, with notice or the lapse of time, would
constitute such a material breach or material default, or permit termination,
modification, or acceleration, under the policy; and (D) no party to the policy
has repudiated any provision thereof. ACER has been covered during the past five
(5) years by insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned period. Section
4(r) of the Disclosure Schedule describes any self-insurance arrangements
affecting ACER.
(s) Litigation. Section 4(s) of the Disclosure Schedule sets
forth each instance in which ACER, or, to the Knowledge of the Requisite
Sellers, ACERWITS or TMP (i) is subject to any outstanding injunction, judgment,
order, decree, ruling, or charge or (ii) is a party or , to the Knowledge of any
of the Requisite Sellers and the directors and officers (and employees with
responsibility for litigation matters) of ACER, is threatened to be made a party
to any action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator. None of the actions, suits,
proceedings, hearings, and investigations set forth in ss.4(s) of the Disclosure
Schedule is likely, if adversely determined, to result in any ACER Material
Adverse Change. None of the Requisite Sellers and the directors and officers
(and employees with responsibility for litigation matters) of ACER has any
reason to believe that any such action, suit, proceeding, hearing, or
investigation may be brought or threatened against any of ACER, ACERWITS or TMP.
(t) Employee Benefits.
(i) ss.4(t) of the Disclosure Schedule lists each Employee
Benefit Plan that ACER maintains or to which ACER contributes or has any
obligation to contribute.
(A) Each such Employee Benefit Plan (and each
related trust, insurance contract, or fund) complies in form and
in operation in all respects with the applicable requirements of
ERISA, the Code, and other applicable laws.
(B) All required reports and descriptions
(including Form 5500 Annual Reports, summary annual reports,
PBGC-1's, and summary plan descriptions) have been timely filed
and distributed appropriately with respect to each such Employee
Benefit Plan. The requirements of COBRA have been met with
respect to each such Employee Benefit Plan which is an Employee
Welfare Benefit Plan.
(C) All contributions (including all employer
contributions and employee salary reduction contributions) which
are due have been paid to each such Employee Benefit Plan which
is an Employee Pension Benefit Plan and all contributions for any
period ending on or before the Closing Date which are not yet due
have been paid to each such Employee Pension Benefit Plan or
accrued in accordance with the past custom and practice of ACER.
All premiums or other payments for all periods ending on or
before the Closing Date have been paid with respect to each such
Employee Benefit Plan which is an Employee Welfare Benefit Plan.
(D) Each such Employee Benefit Plan which is an
Employee Pension Benefit Plan meets the requirements of a
"qualified plan" under Code ss.401(a), has received, within the
last two years, a favorable determination letter from the
Internal Revenue Service that it is a "qualified plan," and
Seller is not aware of any facts or circumstances that could
result in the revocation of such determination letter.
(E) The market value of assets under each such
Employee Benefit Plan which is an Employee Pension Benefit Plan
(other than any Multiemployer Plan) equals or exceeds the present
value of all vested and nonvested Liabilities thereunder
determined in accordance with PBGC methods, factors, and
assumptions applicable to an Employee Pension Benefit Plan
terminating on the date for determination.
(F) The Requisite Sellers have delivered to Xxxxxx
correct and complete copies of the plan documents and summary
plan descriptions, the most recent determination letter received
from the Internal Revenue Service, the most recent Form 5500
Annual Report, and all related trust agreements, insurance
contracts, and other funding agreements which implement each such
Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that any
of ACER and any ERISA Affiliate maintains or ever has maintained or to
which any of them contributes, ever has contributed, or ever has been
required to contribute:
(A) No such Employee Benefit Plan which is an
Employee Pension Benefit Plan (other than any Multiemployer Plan)
has been completely or partially terminated or been the subject
of a Reportable Event as to which notices would be required to be
filed with the PBGC. No proceeding by the PBGC to terminate any
such Employee Pension Benefit Plan (other than any Multiemployer
Plan) has been instituted or , to the Knowledge of any of the
Requisite Sellers and the directors and officers (and employees
with responsibility for employee benefits matters) of ACER,
threatened.
(B) There have been no Prohibited Transactions with
respect to any such Employee Benefit Plan. No Fiduciary has any
Liability for breach of fiduciary duty or any other failure to
act or comply in connection with the administration or investment
of the assets of any such Employee Benefit Plan. No action, suit,
proceeding, hearing, or investigation with respect to the
administration or the investment of the assets of any such
Employee Benefit Plan (other than routine claims for benefits) is
pending or , to the Knowledge of any of the Requisite Sellers and
the directors and officers (and employees with responsibility for
employee benefits matters) of ACER, threatened. None of the
Requisite Sellers and the directors and officers (and employees
with responsibility for employee benefits matters) of ACER has
any Knowledge of any Basis for any such action, suit, proceeding,
hearing, or investigation.
(C) ACER has not incurred, and none of the
Requisite Sellers and the directors and officers (and employees
with responsibility for employee benefits matters) of ACER has
any reason to expect that ACER will incur, any Liability to the
PBGC (other than PBGC premium payments) or otherwise under Title
IV of ERISA (including any withdrawal liability as defined in
ERISA ss.4201) or under the Code with respect to any such
Employee Benefit Plan which is an Employee Pension Benefit Plan.
(iii) None of ACER and the other members of the Controlled
Group that includes ACER contributes to, ever has contributed to, or
ever has been required to contribute to any Multiemployer Plan or has
any Liability (including withdrawal liability as defined in ERISA
ss.4201) under any Multiemployer Plan.
(iv) ACER does not maintain or ever has maintained and
does not contribute, ever has contributed, or ever has been required to
contribute to any Employee Welfare Benefit Plan providing medical,
health, or life insurance or other welfare-type benefits for current or
future retired or terminated employees, their spouses, or their
dependents (other than in accordance with COBRA).
(u) Guaranties. ACER is not a guarantor or otherwise is liable
for any Liability or obligation (including indebtedness) of any other Person.
(v) Environmental, Health, and Safety Matters.
Except as disclosed in ss.4(v) of the Disclosure Schedule:
(i) Hazardous Materials have not at any time been generated,
used, treated or stored by ACER in violation in any material respect of
any applicable Environmental Law, or in any way which will hereafter
require material remedial action under any applicable Environmental law,
and ACER has not received any notice of any such violation with respect
to Hazardous Materials;
(ii) to the Knowledge of the Requisite Sellers, there has been no
spill, discharge, leak, emission, injection, escape, dumping or release
of any kind onto any property owned or leased by ACER, or into the
environment surrounding any such property, of Hazardous materials, other
than releases permissible under applicable Law or allowable under
applicable permits;
(iii) ACER, its operations and any property owned by it are in
compliance in all material respects with (i) all applicable
Environmental Laws, and (ii) the requirements of any permits issued
under such laws; and
(iv) there are no pending or threatened claims against ACER or
any property owned or leased by it relating to Hazardous Materials or
environmental matters.
None of the circumstances, conditions or occurrences disclosed in ss.4(v) of the
Disclosure Schedule or reflected in the Financial Statements involves or will
result in any material liability on the part of ACER.
(w) Certain Business Relationships with ACER. Except as
contemplated or permitted by this Agreement, disclosed in ss.4(w) of the
Disclosure Statement or reflected in the Financial Statements, none of the
Sellers is involved in any business arrangement or relationship with ACER and
none of the Sellers owns any material asset, tangible or intangible, which is
used in the business of ACER.
(x) Disclosure. The representations and warranties contained in
this ss.4 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this ss.4, in light of the circumstances under which
they were made, not misleading.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use his or its reasonable
best efforts to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in ss.7 below).
(b) Notices and Consents. The Requisite Sellers will cause each
of ACER to give any notices to third parties, and will cause ACER to use its
reasonable best efforts to obtain any third party consents, that Xxxxxx
reasonably may request in connection with the matters referred to in ss.4(c)
above. Each of the Parties will (and the Requisite Sellers will cause ACER to)
give any notices to, make any filings with, and use its reasonable best efforts
to obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in ss.3(a)(ii),
ss.3(b)(ii), and ss.4(c) above.
(c) Operation of Business. The Requisite Sellers will not cause
or permit ACER to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business without prior notification
to and the consent of Xxxxxx (which consent shall not be unreasonably withheld
or delayed). Without limiting the generality of the foregoing, the Sellers will
not cause or permit ACER to (i) declare, set aside, or pay any dividend or make
any distribution with respect to its capital stock or redeem, purchase, or
otherwise acquire any of its capital stock other than the Permitted Pre-Closing
Distribution, or (ii) otherwise engage in any practice, take any action, or
enter into any transaction of the sort described in ss.4(h) above.
(d) Preservation of Business. The Requisite Sellers shall use
their best efforts to cause ACER to keep its business and properties
substantially intact, including its present operations, physical facilities,
working conditions and relationships with lessors, licensors, suppliers,
customers and employees.
(e) Full Access. Each of the Requisite Sellers will permit, and
the Requisite Sellers will cause ACER to permit, representatives of Xxxxxx to
have full access at all reasonable times, and in a manner so as not to interfere
with the normal business operations of ACER, to all premises, properties,
personnel, books, records (including Tax records), contracts, and documents of
or pertaining to ACER.
(f) Notice of Developments. The Requisite Sellers will give
prompt written notice to Xxxxxx of any material adverse development causing a
breach of any of the representations and warranties in ss.4 above. Each Party
will give prompt written notice to the others of any material adverse
development causing a breach of any of his, her or its own representations and
warranties in ss.3 above.
(g) Exclusivity. Xxxxx Xxxxx 00, 0000, xxxx of the Sellers will
(and the Sellers will not cause or permit ACER or any of the Seller's agents or
representatives to) (i) solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of any capital
stock or other voting securities, or any substantial portion of the assets, of
ACER (including any acquisition structured as a merger, consolidation or share
exchange) or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of the
foregoing. None of the Sellers will vote their ACER Shares in favor of any such
acquisition structured as a merger, consolidation or share exchange. The Sellers
will notify Xxxxxx immediately if any Person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing. If any of the Sellers or ACER
violate the covenants set forth in this ss. 5(g), or if, after this Agreement
has been executed, the Sellers are obligated to consummate the transactions
contemplated and Sellers fail to do so, in either event, ACER and the Requisite
Sellers, jointly and severally, shall: (i) pay Xxxxxx, as liquidated damages, an
amount equal to Four Percent (4%) of the Purchase Price; and (ii) reimburse
Xxxxxx for all out-of-pocket expenses (including attorneys' and accountants'
fees) Xxxxxx incurs in connection with the transaction contemplated hereby;
provided, however, that this reimbursement amount shall not exceed Two Hundred
Fifty Thousand Dollars ($250,000).
6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under ss.8
below). The Sellers acknowledge and agree that, from and after the Closing,
Xxxxxx will be entitled to possession of all documents, books, records
(including Tax records), agreements, and financial data of any sort within the
possession of, or under the control of, any Seller or ACER, relating to ACER
(other than such documents, books, records (including Tax records), agreements
and financial data that solely relate to one or more Sellers personally).
(b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving ACER, each of the other Parties will cooperate
with him, her or it and his, her or its counsel in the contest or defense, make
available their personnel, and provide such testimony and access to their books
and records as shall be reasonably necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under ss.8 below).
(c) Transition. None of the Sellers will take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of ACER from maintaining the
same business relationships with ACER after the Closing as it maintained with
ACER prior to the Closing. Each of the Sellers will refer all customer inquiries
relating to the businesses of ACER to Xxxxxx from and after the Closing.
(d) Confidentiality. Each of the Sellers will treat and hold as
such all of the Confidential Information, refrain from using any of the
Confidential Information (other than Confidential Information that solely
relates to the Seller personally) except in connection with this Agreement or
the business of ACER and will deliver promptly to Xxxxxx or destroy, at the
request of Xxxxxx, all copies of the Confidential Information which are in his,
her or its possession. In the event that any of the Sellers is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, that Seller will notify
Xxxxxx promptly of the request or requirement so that Xxxxxx may seek an
appropriate protective order or waive compliance with the provisions of this
ss.6(d). If, in the absence of a protective order or the receipt of a waiver
hereunder, Seller is compelled to disclose such Confidential Information, Seller
may disclose the Confidential Information to the tribunal; provided, however,
that the disclosing Seller shall use his, her or its reasonable best efforts to
obtain, at the reasonable request of Xxxxxx, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as Xxxxxx shall designate.
(e) Xxxxxx Shares. Each Requisite Seller hereby covenants and
agrees that, without the prior written consent of Xxxxxx, he, she or it may not
sell, assign, convey or otherwise transfer any of the Xxxxxx Shares received
hereunder during a period of one hundred eighty (180) days beginning on the
Closing Date ("Lockout Period"); provided, however, that if registration rights
under the Registration Rights Agreement are available during the Lockout Period,
TYL, JCL and Minor may each sell up to five percent (5%) of the Xxxxxx Shares
respectively received by TYL, JCL and Minor pursuant to the Registration Rights
Agreement. Each Xxxxxx Share will be imprinted with a legend substantially in
the following form:
The shares evidenced by this certificate were originally issued on
February 11, 1998, and has not been registered under the Securities Act
of 1933, as amended. The transfer of the shares evidenced by this
certificate is subject to the restrictions set forth in Section 6(c) of
the Stock Purchase Agreement dated February 11, 1998. The issuer of the
shares evidenced by this certificate will furnish a copy of these
provisions to the holder hereof without charge upon written request.
Each holder desiring to transfer a Xxxxxx Share first must furnish Kendle with
(i) a written opinion reasonably satisfactory to Xxxxxx in form and substance
from counsel reasonably satisfactory to Xxxxxx by reason of experience to the
effect that the holder may transfer Xxxxxx Share as desired without registration
under the Securities Act and (ii) a written undertaking executed by the desired
transferee reasonably satisfactory to Xxxxxx in form and substance agreeing to
be bound by the restrictions on transfer contained herein.
(f) Operational Issues. Following the Closing, Xxxxxx will not implement
"hoteling" in the ACER offices until it has evaluated the effectiveness of such
program in its domestic non-ACER offices for at least six (6) months following
the Closing.
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of Xxxxxx. The obligation of Xxxxxx
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
ss.3(a) and ss.4 above shall be true and correct in all material
respects (other than representations and warranties having materiality
qualifiers, which shall be true and correct in all respects) at and as
of the Closing Date;
(ii) the Sellers shall have performed and complied with
all of their covenants hereunder in all material respects through the
Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (C) affect adversely the right of Xxxxxx to own ACER
Shares Shares and to control ACER, or (D) affect adversely the right
of ACER to own its assets and to operate its businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(iv) the Sellers shall have delivered to Xxxxxx a
certificate to the effect that each of the conditions specified above
in ss.7(a)(i)-(iv) is satisfied in all respects;
(v) Xxxxxx shall have determined that the lives of TYL and
Minor are insurable on a term policy basis at standard rates for Twenty
Million Dollars ($20,000,000), for TYL, and for Five Million Dollars
($5,000,000), for Minor, and TYL and Minor shall have cooperated with
Xxxxxx in applying for such insurance coverages;
(vi) Xxxxxx'x bank creditors shall have given their
written consent to the transaction contemplated by this Agreement;
(vii) TYL, Minor, Xxxxxxxx Xxxxxxxxx ("KM") and such other
employees of ACER as Xxxxxx determines to be necessary and advisable
shall have entered into Employment Agreements substantially in the form
of Exhibit 7(a)(vii) hereto (the "Employment Agreements");
(viii) each of the Sellers, other than the Trust, shall
have executed and delivered releases in the form of Exhibit 7(a)(viii)
hereto (the "Releases");
(ix) each of the Requisite Sellers shall have executed and
delivered Non-Competition and Non-Disclosure Covenants in the form of
Exhibit 7(a)(ix) hereto (the "Covenants");
(x) Xxxxxx shall have determined that the costs associated
with pursuing or discontinuing ACER's business opportunities in the
Peoples Republic of China or Taiwan will not adversely affect the
financial condition of Xxxxxx or ACER;
(xi) no material adverse change in the business, assets,
liabilities, income, financial condition, operations, results of
operations or business prospects of ACER ("ACER Material Adverse
Change") shall have occurred; provided, however, if an ACER Material
Adverse Change shall have occurred, Xxxxxx and the Sellers shall
negotiate in good faith with respect to a reasonable adjustment of the
Purchase Price. If agreement is not reached with respect to such an
adjustment, Xxxxxx may terminate this Agreement for failure of a
condition precedent. Notwithstanding the foregoing, ACER Material
Adverse Change shall not include the Permitted Pre-Closing Distribution,
the Permitted Pre-Closing Bonuses or any other items set forth expressly
in this Agreement;
(xii) the Parties and ACER shall have received all
authorizations, consents, and approvals of governments and governmental
agencies referred to in ss.3(a)(ii), ss.3(b)(ii), and ss.4(c) above;
(xiii) Xxxxxx shall have received from counsel to the
Sellers an opinion in form and substance as set forth in Exhibit
7(a)(xiii) attached hereto, addressed to Xxxxxx, and dated as of the
Closing Date;
(xiv) Xxxxxx shall have received the resignations,
effective as of the Closing, of each director and officer of ACER other
than those whom Xxxxxx shall have specified in writing at least five
business days prior to the Closing;
(xv) each of the Sellers shall have completed, executed
and delivered to Xxxxxx copies of Internal Revenue Code Form 8023-A;
(xvi) each of the Sellers shall have executed and
delivered to Xxxxxx an affidavit pursuant to ss. 1.1445-2(b)(2) of the
Treasury Regulations: (A) stating that such Seller is not a
"non-resident alien" for United States income tax purposes; and (B)
setting forth that Seller's tax identification number and address;
(xvii) each of the Requisite Sellers shall have executed
and delivered the Escrow Agreement; and,
(xviii)all actions to be taken by the Sellers in
connection with consummation of the transactions contemplated hereby and
all certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to Xxxxxx.
Xxxxxx may waive any condition specified in this ss.7(a) if it executes a
writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Sellers. The obligation of
the Sellers to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
ss.3(b) above shall be true and correct in all material respects (other
than representations and warranties having materiality qualifiers, which
shall be true and correct in all respects) at and as of the Closing
Date;
(ii) Xxxxxx shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(iv) Xxxxxx shall have delivered to the Sellers a
certificate to the effect that each of the conditions specified above in
ss.7(b)(i)-(iii) is satisfied in all respects;
(v) TYL, Minor and KM shall have entered into Employment
Agreements with Xxxxxx;
(vi) Xxxxxx shall have executed and delivered the
Registration Rights Agreement in the form of Exhibit 7(b)(vi) hereto;
(vii) no material adverse change in the business, assets,
liabilities, income, financial condition or business prospects of Xxxxxx
("Xxxxxx Material Adverse Change") shall have occurred since the date of
the latest Xxxxxx SEC Report; provided, however, that if a Xxxxxx
Material Adverse Change shall have occurred, the Seller and Xxxxxx shall
negotiate in good faith with respect to a reasonable adjustment to the
Purchase Price. If agreement is not reached with respect to such an
adjustment, the Sellers may terminate this Agreement for failure of a
condition precedent;
(viii) Xxxxxx shall have used its commercially reasonable
best efforts to obtain releases of any personal guarantees the Sellers
may have given for ACER Liabilities;
(ix) the Parties and ACER shall have received all
authorizations, consents, and approvals of governments and governmental
agencies referred to in ss.3(a)(ii), ss.3(b)(ii), and ss.4(c) above;
(x) the Sellers shall have received from counsel to Xxxxxx
an opinion in form and substance as set forth in Exhibit 7(b)(x)
attached hereto, addressed to the Sellers, and dated as of the Closing
Date;
(xi) Xxxxxx and The Fifth Third Bank shall have executed
and delivered the Escrow Agreement;
(xii) TYL shall have received the letter agreement
relating to his nomination and recommendation for membership on Xxxxxx'x
Board of Directors; and,
(xiii) all actions to be taken by Xxxxxx in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Requisite Sellers.
The Requisite Sellers may waive any condition specified in this ss.7(b) if they
execute a writing so stating at or prior to the Closing.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Sellers contained in ss.4(a)-(j),
ss.4(l)-(u) and ss.4(w)-(x) above shall survive the Closing hereunder and
continue in full force and effect through and until April 30, 2000. All of the
other representations and warranties of the Parties contained in this Agreement
(including the representations and warranties of the Sellers contained in
ss.3(a), ss.4(k) and ss.4(v) above) shall survive the Closing and continue in
full force and effect forever thereafter (subject to any applicable statutes of
limitations).
(b) Indemnification Provisions for Benefit of Xxxxxx.
(i) In the event any of the Sellers breaches (or in the
event any third party alleges facts that, if true, would mean any of the
Sellers has breached) any of their representations, warranties, and
covenants contained herein (other than the covenants in ss.2(a) above
and the representations and warranties in ss.3(a) above), and, if there
is an applicable survival period pursuant to ss.8(a) above, provided
that Xxxxxx makes a written claim for indemnification against any of the
Sellers pursuant to ss.11(h) below within such survival period, then
each of the Requisite Sellers agrees, on a joint and several basis, to
indemnify Xxxxxx from and against the entirety of any Adverse
Consequences Xxxxxx may suffer through and after the date of the claim
for indemnification (including any Adverse Consequences Xxxxxx may
suffer after the end of any applicable survival period) resulting from,
arising out of, relating to, in the nature of, or caused by the breach
(or the alleged breach).
(ii) In the event any of the Sellers breaches (or in the
event any third party alleges facts that, if true, would mean any of the
Sellers has breached) any of his, her or its covenants in ss.2(a) above
or any of his, her or its representations and warranties in ss.3(a)
above, and, if there is an applicable survival period pursuant to
ss.8(a) above, provided that Xxxxxx makes a written claim for
indemnification against the Seller pursuant to ss.11(h) below within
such survival period, then the Seller agrees to indemnify Xxxxxx from
and against the entirety of any Adverse Consequences Xxxxxx may suffer
through and after the date of the claim for indemnification (including
any Adverse Consequences Xxxxxx may suffer after the end of any
applicable survival period) resulting from, arising out of, relating to,
in the nature of, or caused by the breach (or the alleged breach).
(iii) Each of the Requisite Sellers agrees, on a joint and
several basis, to indemnify Xxxxxx, on a dollar for dollar basis, from
and against the entirety of any Adverse Consequences Xxxxxx and/or ACER
may suffer resulting from, arising out of, relating to, in the nature
of, or caused by the payment of the Special Bonuses prior to the Closing
(excepting only any compensatory charges to ACER's financial statements
relating to the payment of the Special Bonuses), including (without
limitation) any employment, payroll or withholding Taxes arising as a
result of payment of the Special Bonuses.
(iv) Subject to the limitations set forth in the next
following sentence, each of the Requisite Sellers, on a joint and
several basis, agrees to indemnify Xxxxxx, on a dollar for dollar basis,
from and against the entirety of any Adverse Consequences Xxxxxx and/or
ACER may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the invalidity of the election by Sellers to
have ACER taxed as a "small business corporation" or "S Corporation."
Notwithstanding the foregoing or any other provisions of this Agreement
to the contrary, the maximum aggregate liability with respect to
Xxxxxx'x inability to make an advantageous election with respect to the
transactions contemplated hereby under Section 338(h)(10) of the Code or
for one-half (1/2) of the costs of adjustments under Section 481(a) of
the Code shall be limited (as liquidated damages and not as a penalty)
to Six Million Dollars ($6,000,000.00).
(v) Xxxxxx may satisfy Seller's indemnification
obligations by recourse to the escrow fund held by The Fifth Third Bank,
as escrow agent, pursuant to the Escrow Agreement but recourse to that
escrow fund shall not constitute Xxxxxx'x sole remedy or source for
satisfaction of indemnification claims under this Agreement.
(c) Indemnification Provisions for Benefit of the Sellers. In the
event Xxxxxx breaches any of its representations, warranties, and covenants
contained herein (or in the event any third party alleges facts that, if true,
would mean Xxxxxx has breached), and, if there is an applicable survival period
pursuant to ss.8(a) above, provided that any of the Sellers makes a written
claim for indemnification against Xxxxxx pursuant to ss.11(h) below within such
survival period, then Xxxxxx agrees to indemnify each of the Sellers from and
against the entirety of any Adverse Consequences the Seller may suffer through
and after the date of the claim for indemnification (including any Adverse
Consequences the Seller may suffer after the end of any applicable survival
period) resulting from, arising out of, relating to, in the nature of, or caused
by the breach (or the alleged breach). Xxxxxx shall also indemnify any Seller
from and against the entirety of any Adverse Consequences such Seller may suffer
as a result of any obligations or liability of ACER or any ACER Subsidiary
(other than this Agreement) guaranteed by such Seller.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party
Claim") which may give rise to a claim for indemnification against any
other Party (the "Indemnifying Party") under this ss.8, then the
Indemnified Party shall promptly notify each Indemnifying Party
thereof in writing; provided, however, that no delay on the part of
the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is
prejudiced.
(ii) Any Indemnifying Party will have the right to defend
the Indemnified Party against the Third Party Claim with counsel of
its choice reasonably satisfactory to the Indemnified Party so long as
(A) the Indemnifying Party notifies the Indemnified Party in writing
within 15 days after the Indemnified Party has given notice of the
Third Party Claim that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party
Claim, (B) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the
Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations
hereunder, (C) the Third Party Claim involves only money damages and
does not seek an injunction or other equitable relief, (D) settlement
of, or an adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice materially adverse to the
continuing business interests of the Indemnified Party, and (E) the
Indemnifying Party conducts the defense of the Third Party Claim
actively and diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with ss.8(d)(ii) above,
(A) the Indemnified Party may retain separate co-counsel at its sole
cost and expense and participate in the defense of the Third Party
Claim, (B) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (not
to be withheld unreasonably), and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of
the Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in ss.8(d)(ii)
above is or becomes unsatisfied, however, (A) the Indemnified Party
may defend against, and consent to the entry of any judgment or enter
into any settlement with respect to, the Third Party Claim in any
manner it reasonably may deem appropriate (and the Indemnified Party
need not consult with, or obtain any consent from, any Indemnifying
Party in connection therewith), (B) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically for the
costs of defending against the Third Party Claim (including reasonable
attorneys' fees and expenses), and (C) the Indemnifying Parties will
remain responsible for any Adverse Consequences the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim to the fullest extent provided
in this ss.8.
(e) Determination of Adverse Consequences. The Parties shall take
into account the time cost of money (using the Applicable Rate as the discount
rate) in determining Adverse Consequences for purposes of this ss.8. All
indemnification payments under this ss.8 shall be deemed adjustments to the
Purchase Price.
(f) Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy (including without limitation any
such remedy arising under Environmental, Health, and Safety Requirements) any
Party may have with respect to ACER or the transactions contemplated by this
Agreement.
9. Tax Covenants.
(a) Allocation of Purchase Price. The Purchase Price, liabilities
of ACER (including, without limitation, any assumed debt) and other relevant
items, shall be allocated among ACER's assets and the covenants in accordance
with Code ss.338 and the regulations thereunder. Such allocation shall be set
forth on a schedule which shall be prepared by Xxxxxx and provided to the
Sellers within one hundred twenty (120) days following the Closing. The
allocations set forth on such schedule shall be as reasonably determined by
Xxxxxx and reasonably acceptable to Sellers; provided however, that One Dollar
($1.00) of the Purchase Price shall be allocated to the Covenants. The
allocations provided in such schedule shall be used by each party and their
affiliates in preparing all Tax Returns, subject to adjustment to reflect (x)
the Seller's selling expenses as a reduction in sales proceeds and (y) Xxxxxx'x
acquisition expenses as an addition to the Purchase Price. Within thirty (30)
days after the Closing, each Seller shall provide Xxxxxx with all information
necessary to complete box 11(c) of Internal Revenue Form 8023. For purposes of
determining the Purchase Price under Code Section 338 and the regulations
thereunder, the fair market value of the Xxxxxx common stock transferred under
Section 2(b) shall be the mean between the highest and lowest selling price of
such shares on the Closing Date as determined by the NASDAQ National Market
System.
(b) Payment of Taxes and Fees. The Sellers shall pay or reserve
for payment when due out of the Purchase Price (a) any documentary, stamp,
sales, excise, transfer or other taxes (including income Taxes) payable in
respect of the transfer of the ACER shares and (b) all fees and charges that
were incurred by the Sellers in connection with the transactions contemplated
hereby. The Sellers shall cause to be prepared and filed any and all returns and
other filings relating to any such Taxes.
(c) Taxes - Sellers. The Sellers shall cause to be timely (giving
effect to any extensions timely filed) and properly prepared and executed, and
Xxxxxx shall cause to be timely filed (provided such income Tax Return has been
timely and properly prepared), all income Tax Returns of ACER relating to all
taxable periods of ACER ending on or before the Closing Date, and the Sellers
shall be responsible for the timely payment of all Taxes to which such Returns
relate. All such Returns shall be prepared, and all elections with respect to
such Returns shall be made, in a manner consistent with past practice with
respect to ACER and at the expense of the Sellers. Sellers shall cause Internal
Revenue Service Forms 8023-A to be attached to all appropriate Returns for the
taxable year of ACER ending on the Closing Date. The Sellers shall provide a
copy of any such Return to Xxxxxx at least ten (10) business days prior to the
filing thereof for its review and comment. The Sellers shall not amend any
previously filed Tax Return without the prior written consent of Xxxxxx, which
consent shall not be unreasonably withheld or delayed.
(d) Section 338(h)(10) Election. The Sellers join with Xxxxxx in
making an election under Code ss.338(h)(10) (and any corresponding elections
under state, local or foreign tax law) (collectively, a "ss.338(h)(10)
Election") with respect to the purchase and sale of the ACER Shares hereunder.
(e) FICA Tax Issue. Promptly after the end of calendar year 1998,
Xxxxxx and the Requisite Sellers shall jointly determine the amount of FICA
Taxes paid with respect to the Special Bonuses by ACER on behalf of the
recipients of those Special Bonuses. Xxxxxx shall reimburse the Sellers (other
than Minor) in the amount of such Special Bonus-related FICA Taxes paid by ACER
with respect to ACER employees other than those who would, without receipt of
the Special Bonuses, have received 1998 FICA wages in excess of Sixty-Eight
Thousand Four Hundred and 00/100 Dollars ($68,400.00).
10. Termination.
(a) Termination of Agreement. Certain of the Parties may
terminate this Agreement as provided below:
(i) Xxxxxx and the Requisite Sellers may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(ii) Xxxxxx may terminate this Agreement by giving written
notice to the Requisite Sellers at any time prior to the Closing (A) in
the event any of the Sellers has breached any material representation,
warranty, or covenant contained in this Agreement in any material
respect, Xxxxxx has notified the Requisite Sellers of the breach, and
the breach has continued without cure for a period of 30 days after the
notice of breach or (B) if the Closing shall not have occurred on or
before February 28,1998, by reason of the failure of any condition
precedent under ss.7(a) hereof (unless the failure results primarily
from Xxxxxx itself breaching any representation, warranty, or covenant
contained in this Agreement); and
(iii) the Requisite Sellers may terminate this Agreement
by giving written notice to Xxxxxx at any time prior to the Closing (A)
in the event Xxxxxx has breached any material representation, warranty,
or covenant contained in this Agreement in any material respect, any of
the Sellers has notified Xxxxxx of the breach, and the breach has
continued without cure for a period of 30 days after the notice of
breach or (B) if the Closing shall not have occurred on or before
February 28, 1998, by reason of the failure of any condition precedent
under ss.7(b) hereof (unless the failure results primarily from any of
the Sellers themselves breaching any representation, warranty, or
covenant contained in this Agreement).
(b) Effect of Termination. Except as set forth in ss. 5(g)
relating to breaches by any Seller of his, her or its exclusivity covenants or
failure to consummate the transactions hereby contemplated and as set forth in
the next sentence, if any Party terminates this Agreement pursuant to ss.10(a)
above, all rights and obligations of the Parties hereunder shall terminate
without any Liability of any Party to any other Party (except for any Liability
of any Party then in breach). Notwithstanding the foregoing, if after this
Agreement has been executed, Xxxxxx is obligated to consummate the transactions
contemplated hereby and Xxxxxx fails to do so, Xxxxxx shall (i) pay Sellers, as
liquidated damages, an amount equal to Four Percent (4%) of the Purchase Price
and (ii) reimburse Sellers for all out-of-pocket expenses (including attorneys'
and accountants' fees) ACER incurs in connection with the transaction
contemplated hereby; provided, however, that this reimbursement amount shall not
exceed Two Hundred Fifty Thousand Dollars ($250,000).
11. Miscellaneous.
(a) Nature of Certain Obligations.
(i) The covenants of each of the Sellers in ss.2(a) above
concerning the sale of his, her or its ACER Shares to Xxxxxx and the
representations and warranties of each of the Sellers in ss.3(a) above
concerning the transaction are several obligations. This means that the
particular Seller making the representation, warranty, or covenant will
be solely responsible to the extent provided in ss.8 above for any
Adverse Consequences Xxxxxx may suffer as a result of any breach
thereof.
(ii) The remainder of the representations, warranties, and
covenants in this Agreement are joint and several obligations. This
means that each Seller will be responsible to the extent provided in
ss.8 above for the entirety of any Adverse Consequences Xxxxxx may
suffer as a result of any breach thereof.
(b) Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior written approval of
Xxxxxx and the Requisite Sellers (which approval shall not be unreasonably
withheld or delayed); provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure).
(c) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of his, her or its rights, interests, or obligations hereunder without the
prior written approval of Xxxxxx and the Requisite Sellers; provided, however,
that Xxxxxx may (i) assign any or all of its rights and interests hereunder to
one or more of its Affiliates and (ii) designate one or more of its Affiliates
to perform its obligations hereunder (in any or all of which cases Xxxxxx
nonetheless shall remain responsible for the performance of all of its
obligations hereunder).
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Sellers: c/o ACER/ EXCEL INC.
0 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Copy to: XXXXX & XXX XXXXXX
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxxx Dorado, Esq.
If to Xxxxxx: XXXXXX INTERNATIONAL INC.
000 Xxxx Xxxxxx
000 Xxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Director of Legal Affairs
Copy to: XXXXXXX, XXXXXXXX & XXXXXXX, P.L.L.
Xxx Xxxx Xxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Ohio without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Ohio or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Ohio.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
Xxxxxx and the Requisite Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. Each of the Parties and ACER will bear his, her or
its own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby. The
Sellers agree that ACER shall not bear any of the Sellers' costs and expenses
(including any of their legal fees and expenses or any brokerage fees) in
connection with this Agreement or any of the transactions contemplated hereby.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty and covenant contained herein shall have
independent significance. If any Party has breached any representation, warranty
or covenant contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of relative levels of specificity) which the Party has not breached
shall not detract from or mitigate the fact that the Party is in breach of the
first representation, warranty or covenant.
(n) Incorporation of Exhibits, Annexes, and Schedules. The
Exhibits, Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
(o) Specific Performance. Each of the Parties acknowledges and
agrees that the other Parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each
of the Parties agrees that the other Parties shall be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter in addition to any other remedy to
which they may be entitled, at law or in equity.
(p) Fourth Quarter 1997 Audited Financial Statements. The Sellers
acknowledge that Xxxxxx will cause the fourth quarter 1997 financial statements
for ACER to be audited after the Closing, at Xxxxxx'x expense. The Requisite
Sellers agree to cooperate reasonably with Xxxxxx'x management in the conduct of
such audit and specifically shall execute and deliver such management consent
letters (consistent with management consent letters the Requisite Sellers have
previously delivered) as may be requested by Xxxxxx or Xxxxxx'x outside
auditors.
(remainder of page intentionally blank)
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
Xxxxxx:
XXXXXX INTERNATIONAL INC.,
By:/s/Xxxxxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title:
/s/Tzuo-Xxx Xxx
------------------------------------
TZUO-XXX XXX
/s/Xxxxxxx Xxxxx
------------------------------------
XXXXXXX XXXXX
/s/Xxxx X. Xxx
------------------------------------
XXXX X. XXX
/s/Xxxxxx Xxx
------------------------------------
XXXXXX XXX
/s/Xxxxxx Xxx
------------------------------------
XXXXXX XXX
/s/Xxxx X. Xxx, Trustee
------------------------------------
XXXX X. XXX, as Trustee under Trust
dated March 8, 1991 fbo XXXXXXXX XXX
CITICORP TRUST - SOUTH DAKOTA
AS TRUSTEE U/A MAY 15, 1997 m/b
TZUO XXX XXX
By:/s/Xxxxx Xxxx Xxxxxxxx, Trust Officer
---------------------------------
Name: Xxxxx Xxxx Xxxxxxxx
