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EXHIBIT 10.18
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
PRINTCAFE, INC.,
AHP PRINTCAFE, INC.,
AHP SYSTEMS, INC.,
AND
XXXX XXXXXX
MARCH 7, 2000
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made and
entered into as of March 7, 2000, by and among (i) printCafe, Inc., a Delaware
corporation ("Acquiror"), (ii) AHP printCafe, Inc., a Delaware corporation
("Merger Sub") and wholly owned subsidiary of Acquiror, (iii) A.H.P. Systems,
Inc., an Illinois corporation ("Target"), and (iv) Xxxx Xxxxxx ("Target
Stockholder").
RECITALS
A. The Boards of Directors of Target, Acquiror and Merger Sub and Target
Stockholder believe it is in the best interests of their respective companies
and the stockholders of their respective companies that Target and Merger Sub
combine into a single company through the merger of Merger Sub and Target (the
"Merger") and, in furtherance thereof, have approved the Merger. Pursuant to the
Merger, among other things, the outstanding shares of capital stock of Target
(the "Target Capital Stock") shall be converted into shares of the Common Stock,
par value $.0001 per share, of Acquiror, (the "Acquiror Common Stock"), at the
rates set forth herein and the right to receive cash at the rates set forth
herein.
B. Target, Target Stockholder, Acquiror and Merger Sub desire to make
certain representations and warranties and other agreements in connection with
the Merger.
C. The parties hereto intend, by executing this Agreement, to adopt a
plan of reorganization within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended (the "Code"), and to cause the Merger to qualify as a
reorganization under the provisions of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Code.
AGREEMENT
In consideration of the premises and the mutual representations,
warranties and covenants set forth below, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION ONE
1. THE MERGER.
1.1 THE MERGER At the Effective Time (as defined in Section 1.2)
and subject to and upon the terms and conditions of this Agreement, the
certificate of merger to be filed with the Secretary of State of Delaware
attached hereto as Exhibit A (the "Certificate of Merger") and, the applicable
provisions of the Delaware General Corporation Law ("Delaware Law"), the
certificate of merger to be filed with the Secretary of State of Illinois
attached hereto as Exhibit B (the "Illinois Certificate of Merger"), the
applicable provisions of the Illinois Business Corporation Law ("Illinois Law"),
Merger Sub shall be merged with and into Target, the separate corporate
existence of Merger Sub shall cease and Target shall continue as the surviving
corporation of the Merger. Target as the surviving corporation after the Merger
is hereinafter sometimes referred to as the "Surviving Corporation."
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1.2 CLOSING; EFFECTIVE TIME. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place as soon as
practicable, (and in no event later than five (5) business days after the
satisfaction or waiver of each of the conditions set forth in Section 6 below)
or at such other time as the parties hereto agree (the "Closing Date"). In
connection with the Closing, the parties hereto shall cause the Merger to be
consummated by filing the Certificate of Merger, with the Secretary of State of
the State of Delaware, in accordance with the relevant provisions of Delaware
Law (the time of such filing being the "Effective Time") and shall file the
Illinois Certificate of Merger with the Secretary of State of Illinois, in
accordance with the relevant provisions of Illinois Law. The Closing shall take
place at the offices of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, or at such other location as the parties hereto agree.
1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement, the Delaware Certificate of
Merger, the applicable provisions of Delaware Law, the Illinois Certificate of
Merger and the applicable provisions of Illinois Law. At the Effective Time, all
the property, rights, privileges, powers and franchises of Target and Merger Sub
shall vest in the Surviving Corporation, and all debts, liabilities, obligations
and duties of Target and Merger Sub shall become the debts, liabilities,
obligations and duties of the Surviving Corporation.
1.4 CERTIFICATE OF INCORPORATION; BYLAWS.
(a) At the Effective Time, the Certificate of
Incorporation of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter amended as provided by Delaware Law and such Certificate of
Incorporation.
(b) At the Effective time, the Bylaws of Merger Sub, as
in effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such Bylaws.
1.5 DIRECTORS AND OFFICERS. At the Effective Time, the directors
of Merger Sub immediately prior to the Effective Time shall be the directors of
the Surviving Corporation, and the officers of Merger Sub immediately prior to
the Effective Time, shall be the officers of the Surviving Corporation, in each
case until their respective successors are duly elected or appointed and
qualified.
1.6 EFFECT ON CAPITAL STOCK. By virtue of the Merger and without
any action on the part of Merger Sub, Target or any of their respective
stockholders, the following shall occur at the Effective Time:
(a) CONVERSION OF TARGET CAPITAL STOCK. All of the
issued and outstanding shares of Common Stock, par value $.01 per share, of
Target (the "Target Common Stock") issued and outstanding immediately prior to
the Effective Time shall be converted and exchanged for (i) three hundred ninety
six thousand five hundred fifty two (396,552) shares of Acquiror Common Stock
(subject to equitable adjustment to reflect any stock split, reverse split,
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stock dividend (including any dividend or distribution of securities convertible
into Acquiror Common Stock), reorganization, recapitalization or other like
change with respect to Acquiror Common Stock occurring after the date of this
Agreement and prior to the Effective Time) and (ii) eight hundred thousand
dollars ($800,000) in cash (the "Cash Consideration" and, together with the
shares to be received under clause (i), the "Merger Consideration"). All shares
of Target Common Stock, when so converted, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such shares of Target Common Stock
shall cease to have any rights with respect thereto, except the right to receive
the Merger Consideration therefor upon the surrender of such certificate in
accordance with Section 1.7, without interest.
(b) CANCELLATION OF TARGET CAPITAL STOCK OWNED BY
ACQUIROR OR TARGET. At the Effective Time, all shares of Target Capital Stock
that are owned by Target as treasury stock, each share of Target Capital Stock
owned by Acquiror or any direct or indirect wholly owned subsidiary of Acquiror
or of Target immediately prior to the Effective Time, in each case, if any,
shall be cancelled and extinguished without any conversion thereof.
(c) CAPITAL STOCK OF MERGER SUB. At the Effective Time,
each issued and outstanding share of common stock of the Merger Sub shall be
converted into one share of common stock of the Surviving corporation.
(d) MAXIMUM CONSIDERATION. In exchange for the
acquisition by Acquiror of all outstanding Target Capital Stock, the maximum
number of shares of Acquiror Common Stock to be issued shall be 396,552 shares
and the maximum aggregate Cash Consideration shall be $800,000. No adjustment
shall be made in the Merger Consideration as a result of any increase or
decrease in the market price of Acquiror Common Stock prior to the Effective
Time.
1.7 SURRENDER OF CERTIFICATES.
(a) EXCHANGE AGENT. Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
shall act as exchange agent (the "Exchange Agent") in the Merger.
(b) ACQUIROR TO PROVIDE COMMON STOCK AND CASH. Promptly
after the Effective Time, Acquiror shall make available to the Exchange Agent
for exchange in accordance with this Section 1, through such reasonable
procedures as Acquiror may adopt, (i) the shares of Acquiror Common Stock
issuable pursuant to Section 1.6(a) less the number of shares of Acquiror Common
Stock to be deposited into an escrow fund (the "Escrow Fund") pursuant to the
requirements of Section 8 and (ii) cash in an amount sufficient to permit
payment of the Cash Consideration.
(c) EXCHANGE PROCEDURES. Promptly after the Effective
Time, the Exchange Agent shall, subject to the satisfaction of the conditions
set forth in Section 6.3, deliver or cause to be delivered to the Target
Stockholder in exchange for all of the shares of Target Capital Stock (A) a
certificate or certificates (the "Certificates") representing the number of
whole shares of Acquiror Common Stock to which such holder is entitled pursuant
to Section 1.6(a) hereof, less the number of shares of Acquiror Common Stock to
be deposited in the
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Escrow Fund on such holder's behalf pursuant to Section 8 and (B) cash in the
amount of the Cash Consideration to which such holder is entitled as provided in
Section 1.6(a), less the amount of cash paid to accountants, legal counsel or
other consultants or advisors in connection with Accrued Fees, and the
certificate(s) for Target Capital Stock so surrendered shall forthwith be
cancelled. Until so surrendered, each certificate of Target Capital Stock will
be deemed from and after the Effective Time, for all corporate purposes, to
evidence the right to receive the Merger Consideration.
(d) NO LIABILITY. Notwithstanding anything to the
contrary in this Section 1.7, none of the Exchange Agent, the Surviving
Corporation or any party hereto shall be liable to any person for any amount
properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(f) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions with respect to Acquiror Common Stock with a
record date after the Effective Time will be paid to the holder of any
unsurrendered Certificate with respect to the shares of Acquiror Common Stock
represented thereby until the holder of record of such Certificate shall
surrender such Certificate. Subject to applicable law, following surrender of
any such Certificate, there shall be paid to the record holder of the
certificates representing whole shares of Acquiror Common Stock issued in
exchange therefor, without interest, at the time of such surrender, the amount
of any such dividends or other distributions with a record date after the
Effective Time payable (but for the provisions of this Section 1.7(f)) with
respect to such shares of Acquiror Common Stock.
(g) TRANSFERS OF OWNERSHIP. If any certificate for
shares of Acquiror Common Stock is to be issued in a name other than that in
which the Certificate surrendered in exchange therefor is registered, it will be
a condition of such issuance that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange will have paid to Acquiror or any agent designated by
it any transfer or other taxes required by reason of the issuance of a
certificate for shares of Acquiror Common Stock in any name other than that of
the registered holder of the Certificate surrendered, or established to the
satisfaction of Acquiror or any agent designated by it that such tax has been
paid or is not payable.
1.8 NO FURTHER OWNERSHIP RIGHTS IN TARGET CAPITAL STOCK. All
shares of Acquiror Common Stock issued upon the surrender for exchange of shares
of Target Capital Stock in accordance with the terms hereof (including any cash
paid in lieu of fractional shares) shall be deemed to have been issued, and all
cash in the amount of the Cash Consideration shall be deemed to have been paid,
in full satisfaction of all rights pertaining to such shares of Target Capital
Stock, and there shall be no further registration of transfers on the records of
the Surviving Corporation of shares of Target Capital Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be cancelled and exchanged as provided in this Section 1.
1.9 TAX AND ACCOUNTING CONSEQUENCES. It is intended by the
parties hereto that the Merger shall constitute a reorganization within the
meaning of Section 368 of the Code.
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1.10 TAKING OF NECESSARY ACTION; FURTHER ACTION. If at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of Target and Merger Sub, the officers and directors of
Target and Merger Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action, so long as such action is not inconsistent with this Agreement.
1.11 WITHHOLDING. Each of the Exchange Agent, Acquiror, and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Target Common Stock such amounts as may be required
to be deducted or withheld therefrom under the Code or any provision of state,
local or foreign tax law or under any other applicable legal requirement. To the
extent such amounts are so deducted or withheld, such amounts shall be treated
for all purposes under this Agreement as having been paid to the person to whom
such amounts would otherwise have been paid.
1.12 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
exchange for such lost, stolen or destroyed Certificates, upon the making of an
affidavit of that fact by the holder thereof, such Merger Consideration as may
be required pursuant to Section 1.6; provided, however, that Acquiror may, in
its discretion and as a condition precedent to such exchange, require the owner
of such lost, stolen or destroyed Certificates to deliver a bond in such sum as
Acquiror may reasonably direct as indemnity against any claim that may be made
against Acquiror, the Surviving Corporation or the Exchange Agent with respect
to the Certificates alleged to have been lost, stolen or destroyed.
SECTION TWO
2. REPRESENTATIONS AND WARRANTIES OF TARGET AND TARGET STOCKHOLDER.
In this Agreement, any reference to a "Material Adverse Effect"
with respect to any entity or group of entities means any event, change or
effect that, when taken individually or together with all other adverse changes
and effects, is or is reasonably likely to be materially adverse to the
condition (financial or otherwise), properties, assets, liabilities, business as
currently conducted and as proposed to be conducted, operations, results of
operations or prospects of such entity and its subsidiaries, taken as a whole,
or to prevent or materially delay consummation of the Merger or otherwise to
prevent such entity and its subsidiaries from performing their obligations under
this Agreement.
In this Agreement, any reference to a party's "knowledge" means
such party's actual knowledge after due and diligent inquiry of officers,
directors and other employees of such party reasonably believed to have
knowledge of the matter in questions.
Except as disclosed in a document dated as of the date of this
Agreement and delivered by Target and Target Stockholder to Acquiror prior to
the execution and delivery of this Agreement and referring to the
representations and warranties in this Agreement (the
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"Target Disclosure Schedule"), Target and Target Stockholder represent and
warrant to Acquiror and Merger Sub as follows:
2.1 ORGANIZATION; SUBSIDIARIES. Target is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Target has the requisite corporate power and
authority and all necessary government approvals to own, lease and operate its
properties and to carry on its business as now being conducted and as proposed
to be conducted, except where the failure to have such power, authority and
governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect on Target. Target is duly qualified or licensed as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, have a Material
Adverse Effect on Target. Section 2.1 of Target Disclosure Schedule sets forth
each jurisdiction where Target is qualified to do business. There are no
outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable
or convertible securities or other commitments or agreements of any character
relating to the issued or unissued capital stock or other securities of Target,
or otherwise obligating Target to issue, transfer, sell, purchase, redeem or
otherwise acquire any such securities. Target has never had, nor does it
currently have, any subsidiaries, nor has it ever owned, nor does it currently
own, directly or indirectly, any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, any equity or similar
interest in, any corporation, partnership, limited liability company, joint
venture or other business association or entity
2.2 ARTICLES OF INCORPORATION AND BYLAWS. Target has delivered
to Acquiror a true and correct copy of the Articles of Incorporation and Bylaws
or other charter documents, as applicable, of Target, each as amended to date.
Target is not in violation of any of the provisions of its Articles of
Incorporation or Bylaws or equivalent organizational documents.
2.3 CAPITAL STRUCTURE. The authorized capital stock of Target
consists of 10,000 shares of voting Common Stock and no shares of Preferred
Stock, of which there were issued and outstanding as of the date hereof 1,000
shares of voting Common Stock. There are no other outstanding shares of capital
stock or voting securities or nonvoting securities and no outstanding
commitments to issue any shares of capital stock or voting or nonvoting
securities after the date hereof. There is not now, and since the inception of
Target there has not been, any stock option plan or other securities based
employee incentive program for Target employees, officers, directors or
consultants. All outstanding shares of Target Capital Stock are duly authorized,
validly issued, fully paid and non-assessable and are free of any liens or
encumbrances other than any liens or encumbrances created by or imposed upon the
holders thereof, and are not subject to preemptive rights or rights of first
refusal created by statute, the Articles of Incorporation or Bylaws of Target or
any agreement to which Target is a party or by which it is bound. All
outstanding shares of Target Common Stock were issued in compliance with all
applicable federal and state securities laws. Except (i) for the rights created
pursuant to this Agreement, (ii) as set forth in this Section 2.3, there are no
options, warrants, calls, rights, commitments, agreements or arrangements of any
character to which Target is a party or by which Target is bound relating to the
issued or unissued capital stock of Target or obligating Target to issue,
deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold,
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repurchased or redeemed, any shares of capital stock of Target or obligating
Target to grant, extend, accelerate the vesting of, change the price of, or
otherwise amend or enter into any such option, warrant, call, right, commitment
or agreement. There are no contracts, commitments or agreements relating to
voting, purchase or sale of Target's capital stock (i) between or among Target
and any of its stockholders and (ii) to the best of Target's knowledge, between
or among any of Target's stockholders, except for the stockholders delivering
Irrevocable Proxies (as defined below).
2.4 AUTHORITY. Target has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Target, subject only to the
approval of the Merger by Target's stockholders as contemplated by Section
6.1(a). Target's Board of Directors has unanimously approved the Merger and this
Agreement. This Agreement has been duly executed and delivered by Target and
assuming due authorization, execution and delivery by Acquiror and Merger Sub,
constitutes the valid and binding obligation of Target enforceable against
Target in accordance with its terms. Target Stockholder has the requisite
capacity to enter into this Agreement and to consummate the transaction
contemplated hereby. This Agreement has been duly executed and delivered by
Target Stockholder and constitutes a valid and binding obligation enforceable
against him in accordance with its terms.
2.5 NO CONFLICTS; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by
Target does not, and the consummation of the transactions contemplated hereby
will not, conflict with, or result in any violation of, or default under (with
or without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of any
benefit under (i) any provision of the Articles of Incorporation or Bylaws of
Target, as amended, or (ii) any material mortgage, indenture, lease, contract or
other agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Target
or any of its properties or assets.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality ("Governmental
Entity") is required by or with respect to Target, or the Target Stockholder in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby, except for (i) the filing of the
Certificate of Merger, together with the required officers' certificates, as
provided in Section 1.2, (ii) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Securities Act of
1933, as amended (the "Securities Act"), applicable state securities laws and
the securities laws of any foreign country; and (iii) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not have a Material Adverse Effect on Target and would not prevent,
or materially alter or delay any of the transactions contemplated by this
Agreement.
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2.6 FINANCIAL STATEMENTS. Section 2.6 of the Target Disclosure
Schedule includes a true, correct and complete copy of Target's unaudited
financial statements (balance sheet, statement of operations and statement of
cash flows) as at, and for each of the nine months ended December 31, 1999, and
the accounting work papers of the Target attached to the Target Disclosure
Schedule for the month ended February, 29, 2000, respectively, prepared by
Xxxxxxx X. Xxxxx and Company (collectively, the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles (except that the unaudited financial statements do not
have notes thereto) applied on a consistent basis throughout the periods
indicated and with each other. The Financial Statements accurately set out and
describe the financial condition and operating results of Target as of the
dates, and for the periods, indicated therein, subject to normal year-end audit
adjustments. Target maintains and will continue to maintain a standard system of
accounting established and administered in accordance with generally accepted
accounting principles.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES; . Set forth on Annex I
hereto are the material obligations and liabilities of Target of any nature
(matured or unmatured, fixed or contingent) other than (i) those set forth or
adequately provided for in the balance sheet for the nine-month period ended
December 31, 1999 (the "Target Balance Sheet"), (ii) those incurred in the
ordinary course of business and (iii) those incurred in connection with the
execution of this Agreement. Section 2.7 of the Target Disclosure Schedule sets
forth a list of all personal guarantees of Target Stockholder in connection with
obligations and liabilities of Target (the "Personal Guarantees").
2.8 ABSENCE OF CERTAIN CHANGES. Except as set forth in Section
2.8 of the Target Disclosure Schedule, since the date of the Target Balance
Sheet (the "Target Balance Sheet Date") there has not been, occurred or arisen
any:
(a) transaction by Target except in the ordinary course
of business as conducted on that date and consistent with past practices;
(b) amendments or changes to the Articles of
Incorporation or Bylaws of Target;
(c) capital expenditure or commitment by Target in any
individual amount exceeding $5,000, or in the aggregate, exceeding $20,000;
(d) destruction of, damage to, or loss of any assets
(including, without limitation, intangible assets), business or customer of
Target (whether or not covered by insurance) which would constitute a Material
Adverse Effect;
(e) labor trouble or claim of wrongful discharge or
other unlawful labor practice or action;
(f) change in accounting methods or practices (including
any change in depreciation or amortization policies or rates, any change in
policies in making or reversing accruals, or any change in capitalization of
software development costs) by Target or any revaluation by Target of any of its
assets;
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(g) revaluation by Target of its assets;
(h) declaration, setting aside, or payment of a dividend
or other distribution in respect to the capital stock of Target, or any direct
or indirect redemption, purchase or other acquisition by Target of any of its
capital stock, except repurchases of Target Common Stock from terminated Target
employees at the original per share purchase price of such shares;
(i) increase in the salary or other compensation payable
or to become payable by Target to any officers, directors, employees or advisors
of Target, except in the ordinary course of business consistent with past
practice, or the declaration, payment, or commitment or obligation of any kind
for the payment by Target of a bonus or other additional salary or compensation
to any such person except as otherwise contemplated by this Agreement, or other
than as set forth in Section 2.16 below, the establishment of any bonus,
insurance, deferred compensation, pension, retirement, profit sharing, stock
option (including without limitation, the granting of stock options, stock
appreciation rights, performance awards), stock purchase or other employee
benefit plan;
(j) sale, lease, license of other disposition of any of
the assets or properties of Target, except in the ordinary course of business
and not in excess of $20,000 in the aggregate;
(k) termination or material amendment of any material
contract, agreement or license (including any distribution agreement) to which
Target is a party or by which it is bound;
(l) loan by Target to any person or entity, or guaranty
by Target of any loan, except for (x) travel or similar advances made to
employees in connection with their employment duties in the ordinary course of
business, consistent with past practices and (y) trade payables not in excess of
$20,000 in the aggregate and in the ordinary course of business, consistent with
past practices;
(m) waiver or release of any right or claim of Target,
including any write-off or other compromise of any account receivable of Target,
in excess of $20,000 in the aggregate;
(n) the commencement or notice or threat of commencement
of any lawsuit or proceeding against or, to the Target's or Target's officers'
or directors' knowledge, investigation of Target or its affairs;
(o) notice of any claim of ownership by a third party of
Target's Intellectual Property (as defined in Section 2.13 below) or of
infringement by Target of any third party's Intellectual Property rights;
(p) issuance or sale by Target of any of its shares of
capital stock, or securities exchangeable, convertible or exercisable therefor,
or of any other of its securities;
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(q) change in pricing or royalties set or charged by
Target to its customers or licensees or in pricing or royalties set or charged
by persons who have licensed Intellectual Property to Target;
(r) to the knowledge of Target and the Target
Stockholder, event or condition of any character that has or could reasonably be
expected to have a Material Adverse Effect on the Company; or
(s) agreement by Target, or any officer or employee of
Target on behalf of Target to do any of the things described in the preceding
clauses (a) through (r) (other than negotiations with Acquiror and its
representatives regarding the transactions contemplated by this Agreement).
2.9 LITIGATION. There is no private or governmental action,
suit, proceeding, claim, arbitration or investigation pending before any agency,
court or tribunal, foreign or domestic, or, to the knowledge of Target,
threatened against Target or any of its properties or any of its officers or
directors (in their capacities as such) that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on Target. There
is no judgment, decree or order against Target or, to the best knowledge of
Target, any of its directors or officers (in their capacities as such), that
could prevent, enjoin, or materially alter or delay any of the transactions
contemplated by this Agreement, or that could reasonably be expected to have a
Material Adverse Effect on Target. All litigation to which Target is a party
(or, to the knowledge of Target, threatened to become a party) is disclosed in
the Target Disclosure Schedule.
2.10 RESTRICTIONS ON BUSINESS ACTIVITIES. Except as set forth on
Schedule 2.10, there is no agreement, judgment, injunction, order or decree
binding upon Target which has or could reasonably be expected to have the effect
of prohibiting or materially impairing any current or future business practice
of Target, any acquisition of property by Target or the overall conduct of
business by Target as currently conducted or as proposed to be conducted by
Target. Except as set forth on Schedule 2.10, Target has not entered into any
agreement under which Target is restricted from selling, licensing or otherwise
distributing any of its products to any class of customers, in any geographic
area, during any period of time or in any segment of the market.
2.11 PERMITS; COMPANY PRODUCTS; REGULATION.
(a) Target is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders necessary for Target, to own, lease and
operate its properties or to carry on its business as it is now being conducted
(the "Target Authorizations") and no suspension or cancellation of any Target
Authorization is pending or, to the best of Target's knowledge, threatened,
except where the failure to have, or the suspension or cancellation of, any
Target Authorization would not have a Material Adverse Effect on Target. Target
is not in conflict with, or in default or violation of, (i) any laws applicable
to Target or by which any property or asset of Target is bound or affected, (ii)
any Target Authorization, or (iii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Target is a party or by which Target or any property or
asset of Target is bound or affected, except for any
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such conflict, default or violation that would not, individually or in the
aggregate, have a Material Adverse Effect on Target.
(b) Except as would not have a Material Adverse Effect
on Target, there have been no written notices, citations or decisions by any
governmental or regulatory body that any product produced, manufactured,
marketed or distributed at any time by Target (the "Products") is defective or
fails to meet any applicable standards promulgated by any such governmental or
regulatory body. To the best knowledge of Target, Target has complied in all
material respects with the laws, regulations, policies, procedures and
specifications with respect to the design, manufacture, labeling, testing and
inspection of the Products. Except as disclosed in Section 2.11(b) of the Target
Disclosure Schedule, there have been no recalls, field notifications or seizures
ordered or, to Target's knowledge, threatened by any such governmental or
regulatory body with respect to any of the Products.
(c) Target has obtained, in all countries where Target
is marketing or has marketed its Products, all applicable licenses,
registrations, approvals, clearances and authorizations required by local, state
or federal agencies in such countries regulating the safety, effectiveness and
market clearance of the Products currently or previously marketed by Target in
such countries, except for any such failures as would not, individually or in
the aggregate, have a Material Adverse Effect on Target. Target has identified
and made available for examination by Acquiror all information relating to
regulation of its Products, including licenses, registrations, approvals and
permits. Target does not keep regulatory information or documents in any
location outside of the United States.
2.12 TITLE TO PROPERTY.
(a) Target has good and marketable title to all of its
properties, interests in properties and assets, real and personal, reflected in
the Target Balance Sheet or acquired after the Target Balance Sheet Date (except
properties, interests in properties and assets sold or otherwise disposed of
since the Target Balance Sheet Date in the ordinary course of business), or with
respect to leased properties and assets, valid leasehold interests in, free and
clear of all mortgages, liens, pledges, charges or encumbrances of any kind or
character, except (i) the lien of current taxes not yet due and payable, (ii)
such imperfections of title, liens and easements as do not and will not
materially detract from or interfere with the use of the properties subject
thereto or affected thereby, or otherwise materially impair business operations
involving such properties, and (iii) liens securing debt which is reflected on
the Target Balance Sheet. The plants, property and equipment of Target that are
used in the operations of its business are in good operating condition and
repair. All properties used in the operations of Target are reflected in the
Target Balance Sheet to the extent United States generally accepted accounting
principles require the same to be reflected. Section 2.12(a) of the Target
Disclosure Schedule sets forth a true, correct and complete list of all real
property owned or leased by Target, the name of the lessor, the date of the
lease and each amendment thereto and the aggregate annual rental and other fees
payable under such lease. Such leases are in good standing, are valid and
effective in accordance with their respective terms, and there is not under any
such leases any existing default or event of default (or event which with notice
or lapse of time, or both, would constitute a default).
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(b) Section 2.12(b) of the Target Disclosure Schedule
also sets forth a true, correct and complete list of all equipment (the
"Equipment") owned or leased by Target, and such Equipment is, taken as a whole,
(i) adequate for the conduct of Target's business, consistent with its past
practice, and (ii) in good operating condition (except for ordinary wear and
tear).
2.13 INTELLECTUAL PROPERTY.
(a) Target owns, or is licensed or otherwise possesses
legally enforceable rights to use all patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, service marks, copyrights, and
any applications for any of the foregoing, maskworks, net lists, schematics,
industrial models, inventions, technology, know-how, trade secrets, inventory,
ideas, algorithms, processes, computer software programs or applications (in
both source code and object code form), and tangible or intangible proprietary
information or material, including, without limitation, the eSchedule Software
(as defined below in Schedule 2.29 hereof) in development and the Other Keren
Software (as defined below in Schedule 2.29 hereof), (collectively, the
"Intellectual Property") that are used or proposed to be used in the business of
Target as currently conducted or as proposed to be conducted by Target, except
to the extent that the failure to have such rights have not had and could not
reasonably be expected to have a Material Adverse Effect on Target.
(b) Section 2.13 of the Target Disclosure Schedule lists
(i) all patents and patent applications and all registered and unregistered
trademarks, trade names and service marks, registered and unregistered
copyrights, and maskworks, included in the Intellectual Property, including the
jurisdictions in which each such Intellectual Property right has been issued or
registered or in which any application for such issuance and registration has
been filed, (ii) all licenses, sublicenses and other agreements as to which
Target is a party and pursuant to which any person is authorized to use any
Intellectual Property, and (iii) all licenses, sublicenses and other agreements
as to which Target is a party and pursuant to which Target is authorized to use
any third party patents, trademarks or copyrights, including software ("Third
Party Intellectual Property Rights") which are incorporated in, are, or form a
part of any Target product that is material to its business. Target is not in
violation of any license, sublicense or agreement described in Section 2.13 of
the Target Disclosure Schedule. The execution and delivery of this Agreement by
Target and the consummation of the transactions contemplated hereby, will
neither cause Target to be in violation or default under any such license,
sublicense or agreement, nor entitle any other party to any such license,
sublicense or agreement to terminate or modify such license, sublicense or
agreement. Except as set forth in Section 2.13 of the Target Disclosure
Schedule, Target is the sole and exclusive owner or licensee of, with all right,
title and interest in and to (free and clear of any liens), the Intellectual
Property, and has sole and exclusive rights (and is not contractually obligated
to pay any compensation to any third party in respect thereof) to the use
thereof or the material covered thereby in connection with the services or
products in respect of which Intellectual Property is being used.
(c) There is no material unauthorized use, disclosure,
infringement or misappropriation of any Intellectual Property rights of Target,
any trade secret material to Target or any Intellectual Property right of any
third party to the extent licensed by or through Target, by any third party,
including any employee or former employee of Target. Target has not
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entered into any agreement to indemnify any other person against any charge of
infringement of any Intellectual Property, other than indemnification provisions
contained in purchase orders arising in the ordinary course of business.
(d) Target is not nor will be as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, in breach of any license, sublicense or other agreement
relating to the Intellectual Property or Third Party Intellectual Property
Rights, the breach of which would have a Material Adverse Effect on Target.
(e) All patents, registered trademarks, service marks
and copyrights held by Target are valid and existing and there is no assertion
or claim (or basis therefor) challenging the validity of any Intellectual
Property of Target. Target has not been sued in any suit, action or proceeding
which involves a claim of infringement of any patents, trademarks, service
marks, copyrights or violation of any trade secret or other proprietary right of
any third party. Neither the conduct of the business of Target as currently
conducted or contemplated nor the manufacture, sale, licensing or use of any of
the products of Target as now manufactured, sold or licensed or used, nor the
use in any way of the Intellectual Property in the manufacture, use, sale or
licensing by Target of any products currently proposed, infringes on or will
infringe or conflict with, in any way, any license, trademark, trademark right,
trade name, trade name right, industrial model, invention, service xxxx or
copyright (except for patents and patent rights, which shall be to the best
knowledge of the Target) of any third party that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect on Target. All
registered trademarks, service marks and copyrights held by Target are valid and
existing. To Target's knowledge, no third party is challenging the ownership by
Target, or the validity or effectiveness of, any of the Intellectual Property.
Target has not brought any action, suit or proceeding for infringement of
Intellectual Property or breach of any license or agreement involving
Intellectual Property against any third party. There are no pending, or to the
best of Target's knowledge, threatened interference, re-examinations,
oppositions or nullities involving any patents, patent rights or applications
therefor of Target, except such as may have been commenced by Target. There is
no breach or violation of or threatened or actual loss of rights under any
license agreement to which Target is a party.
(f) Target owns all Intellectual Property developed by
consultants, if any, and employees, if any, who contributed to the creation or
development of the Intellectual Property by operation of law.
(g) All Intellectual Property not otherwise protected by
patents, patent applications or copyright ("Confidential Information") has had
its confidentiality protected and preserved.
2.14 ENVIRONMENTAL MATTERS.
(a) The following terms shall be defined as follows:
(i) "Environmental and Safety Laws" shall mean
any federal, state or local laws, ordinances, codes, regulations, rules,
policies and orders, as each may be
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amended from time to time, that are intended to assure the protection of the
environment, or that classify, regulate, call for the remediation of, require
reporting with respect to, or list or define air, water, groundwater, solid
waste, hazardous or toxic substances, materials, wastes, pollutants or
contaminants; which regulate the manufacture, handling, transport, use,
treatment, storage or disposal of Hazardous Materials or materials containing
Hazardous Materials; or which are intended to assure the protection, safety and
good health of employees, workers or other persons, including the public.
(ii) "Hazardous Materials" shall mean any toxic
or hazardous substance, material or waste or any pollutant or contaminant, or
infectious or radioactive substance or material, including without limitation,
those substances, materials and wastes defined in or regulated under any
Environmental and Safety Laws; petroleum and petroleum products including crude
oil and any fractions thereof; natural gas, synthetic gas, and any mixtures
thereof; radon; asbestos; and any other pollutant or contaminant
(iii) "Property" shall mean all real property
leased or owned by Target either currently or in the past.
(iv) "Facilities" shall mean all buildings and
improvements on the Property of Target.
(b) Target represents and warrants as follows: (i) no
methylene chloride or asbestos is contained in or has been used at or released
from the Facilities; (ii) all Hazardous Materials and wastes have been disposed
of in accordance with all Environmental and Safety Laws; (iii) Target has
received no notice (verbal or written) of any noncompliance of the Facilities or
of its past or present operations with Environmental and Safety Laws; (iv) no
notices, administrative actions or suits are pending or threatened relating to
Hazardous Materials or a violation of any Environmental and Safety Laws; (v)
Target is not a potentially responsible party under the federal Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), or any state
analog statute, arising out of events occurring prior to the Closing Date; (vi)
there has not been in the past, and are not now, any contamination, disposal,
spilling, dumping, incineration, discharge, storage, treatment or handling of
Hazardous Materials on, under or migrating to or from the Facilities or Property
(including without limitation, soils and surface and ground waters); (vii) there
have not been in the past, and are not now, any underground tanks or underground
improvements at, on or under the Property including without limitation,
treatment or storage tanks, sumps, or water, gas or oil xxxxx; (viii) there are
no polychlorinated biphenyls ("PCBs") deposited, stored, disposed of or located
on the Property or Facilities or any equipment on the Property containing PCBs
at levels in excess of 50 parts per million; (ix) there is no formaldehyde on
the Property or in the Facilities, nor any insulating material containing urea
formaldehyde in the Facilities; (x) the Facilities and Target's uses and
activities therein have at all times complied with all Environmental and Safety
Laws; (xi) Target has all the permits and licenses required to be issued and are
in full compliance with the terms and conditions of those permits; and (xii)
Target is not liable for any off-site contamination nor under any Environmental
and Safety Laws.
2.15 TAXES.
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(a) For purposes of this Section 2.15 and other
provisions of this Agreement relating to Taxes, the following definitions shall
apply:
(i) The term "Taxes" shall mean all taxes,
however denominated, including any interest, penalties or other additions to tax
that may become payable in respect thereof, (A) imposed by any federal,
territorial, state, local or foreign government or any agency or political
subdivision of any such government, which taxes shall include, without limiting
the generality of the foregoing, all income or profits taxes (including but not
limited to, federal, state and foreign income taxes), payroll and employee
withholding taxes, unemployment insurance contributions, social security taxes,
sales and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross
receipts taxes, withholding taxes, business license taxes, occupation taxes,
real and personal property taxes, stamp taxes, environmental taxes, transfer
taxes, workers' compensation, Pension Benefit Guaranty Corporation premiums and
other governmental charges, and other obligations of the same or of a similar
nature to any of the foregoing, which are required to be paid, withheld or
collected, (B) any liability for the payment of amounts referred to in (A) as a
result of being a member of any affiliated, consolidated, combined or unitary
group, or (C) any liability for amounts referred to in (A) or (B) as a result of
any obligations to indemnify another person.
(ii) The term "Returns" shall mean all reports,
estimates, declarations of estimated tax, information statements and returns
required to be filed in connection with any Taxes, including information returns
with respect to backup withholding and other payments to third parties.
(b) All Returns required to be filed by or on behalf of
Target have been duly filed on a timely basis and such Returns are true,
complete and correct. All Taxes shown to be payable on such Returns or on
subsequent assessments with respect thereto, and all payments of estimated Taxes
required to be made by or on behalf of Target under Section 6655 of the Code or
comparable provisions of state, local or foreign law, have been paid in full on
a timely basis, and no other Taxes are payable by Target with respect to items
or periods covered by such Returns (whether or not shown on or reportable on
such Returns). Target has withheld and paid over all Taxes required to have been
withheld and paid over, and complied with all information reporting and backup
withholding in connection with amounts paid or owing to any employee, creditor,
independent contractor, or other third party. There are no liens on any of the
assets of Target with respect to Taxes, other than liens for Taxes not yet due
and payable or for Taxes that Target is contesting in good faith through
appropriate proceedings. Target has not been at any time a member of an
affiliated group of corporations filing consolidated, combined or unitary income
or franchise tax returns for a period for which the statute of limitations for
any Tax potentially applicable as a result of such membership has not expired.
(c) The amount of Target's liabilities for unpaid Taxes
for all periods through the date of the Financial Statements do not, in the
aggregate, exceed the amount of the current liability accruals for Taxes
reflected on the Financial Statements, and the Financial Statements properly
accrue in accordance with generally accepted accounting principles ("GAAP") all
liabilities for Taxes of Target payable after the date of the Financial
Statements attributable to transactions and events occurring prior to such date.
No liability for Taxes of
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Target has been incurred (or prior to Closing will be incurred) since such date
other than in the ordinary course of business.
(d) Acquiror has been furnished by Target true and
complete copies of (i) relevant portions of income tax audit reports, statements
of deficiencies, closing or other agreements received by or on behalf of Target
relating to Taxes, and (ii) all federal, state and foreign income or franchise
tax returns and state sales and use tax Returns for or including Target for all
periods since later of Target's inception, or five full years preceding date of
agreement.
(e) No audit of the Returns of or including Target by a
government or taxing authority is in process, threatened or, to Target's
knowledge, pending (either in writing or orally, formally or informally). No
deficiencies exist or have been asserted (either in writing or orally, formally
or informally) or are expected to be asserted with respect to Taxes of Target,
and Target has not received notice (either in writing or orally, formally or
informally) nor does it expect to receive notice that it has not filed a Return
or paid Taxes required to be filed or paid. Target is not a party to any action
or proceeding for assessment or collection of Taxes, nor has such event been
asserted or threatened (either in writing or orally, formally or informally)
against Target or any of its assets. No waiver or extension of any statute of
limitations is in effect with respect to Taxes or Returns of Target. Target has
disclosed on its federal and state income and franchise tax returns all
positions taken therein that could give rise to a substantial understatement
penalty within the meaning of Code Section 6662 or comparable provisions of
applicable state tax laws.
(f) Target is not (nor have it ever been) party to any
tax sharing agreement. Since the date of its inception, Target has not been a
distributing corporation or a controlled corporation in a transaction described
in Section 355(a) of the Code.
(g) Target is not, nor has it been, a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
Target is not a "consenting corporation" under Section 341(f) of the Code.
Target has not entered into any compensatory agreements with respect to the
performance of services which payment thereunder would result in a nondeductible
expense to Target pursuant to Section 280G of the Code or an excise tax to the
recipient of such payment pursuant to Section 4999 of the Code. Target has not
agreed to, nor is it required to make, other than by reason of the Merger, any
adjustment under Code Section 481(a) by reason of, a change in accounting
method, and Target will not otherwise have any income reportable for a period
ending after the Closing Date attributable to a transaction or other event
(e.g., an installment sale) occurring prior to the Closing Date with respect to
which Target received the economic benefit prior to the Closing Date. Target is
not, nor has it been, a "reporting corporation" subject to the information
reporting and record maintenance requirements of Section 6038A and the
regulations thereunder.
(h) The Target Disclosure Schedule contains accurate and
complete information regarding Target's net operating losses for federal and
each state tax purposes. Target has no net operating losses and credit
carryovers or other tax attributes currently subject to limitation under
Sections 382, 383, or 384 of the Code.
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2.16 EMPLOYEE BENEFIT PLANS.
(a) Schedule 2.16 lists, with respect to Target, and any
trade or business (whether or not incorporated) which is treated as a single
employer with Target (an "ERISA Affiliate") within the meaning of Section
414(b), (c), (m) or (o) of the Code, (i) all employee benefit plans (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), (ii) each loan to a non-officer employee, loans to officers
and directors and any stock option, stock purchase, phantom stock, stock
appreciation right, supplemental retirement, severance, sabbatical, medical,
dental, vision care, disability, employee relocation, cafeteria benefit (Code
Section 125) or dependent care (Code Section 129), life insurance or accident
insurance plans, programs or arrangements, (iii) all contracts and agreements
relating to employment and all severance agreements, with any of the directors,
officers or employees of Target (other than, in each case, any such contract or
agreement that is terminable by Target at will or without penalty or other
adverse consequence), (iv) all bonus, pension, profit sharing, savings, deferred
compensation or incentive plans, programs or arrangements, (v) other fringe or
employee benefit plans, programs or arrangements that apply to senior management
of Target and that do not generally apply to all employees, and (vi) any current
or former employment or executive compensation or severance agreements, written
or otherwise, as to which unsatisfied obligations of Target remain for the
benefit of, or relating to, any present or former employee, consultant or
director of Target (together, the "Target Employee Plans").
(b) Target has furnished to Acquiror a copy of each of
the Target Employee Plans and related plan documents (including trust documents,
insurance policies or contracts, employee booklets, summary plan descriptions
and other authorizing documents, and, to the extent still in its possession, any
material employee communications relating thereto) and has, with respect to each
Target Employee Plan which is subject to ERISA reporting requirements, provided
copies of the Form 5500 reports filed for the last three plan years. Any Target
Employee Plan intended to be qualified under Section 401(a) of the Code has
either obtained from the Internal Revenue Service a favorable determination
letter as to its qualified status under the Code, including all amendments to
the Code effected by the Tax Reform Act of 1986 and subsequent legislation, or
has applied to the Internal Revenue Service for such a determination letter
prior to the expiration of the requisite period under applicable Treasury
Regulations or Internal Revenue Service pronouncements in which to apply for
such determination letter and to make any amendments necessary to obtain a
favorable determination. Target has also furnished Acquiror with the most recent
Internal Revenue Service determination letter issued with respect to each such
Target Employee Plan, and nothing has occurred since the issuance of each such
letter which could reasonably be expected to cause the loss of the tax-qualified
status of any Target Employee Plan subject to Code Section 401(a).
(c) Except as set forth in Section 2.16(c) of the Target
Disclosure Schedule, (i) none of the Target Employee Plans promises or provides
retiree medical or other retiree welfare or life insurance benefits to any
person; (ii) there has been no "prohibited transaction," as such term is defined
in Section 406 of ERISA and Section 4975 of the Code, with respect to any Target
Employee Plan, which could reasonably be expected to have, in the aggregate, a
Material Adverse Effect; (iii) each Target Employee Plan has been administered
in accordance with its terms and in compliance with the requirements prescribed
by any and all
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statutes, rules and regulations (including ERISA and the Code), except as would
not have, in the aggregate, a Material Adverse Effect, and Target and each ERISA
Affiliate have performed all obligations required to be performed by them under,
are not in any material respect in default under or violation of, and have no
knowledge of any material default or violation by any other party to, any of the
Target Employee Plans; (iv) neither Target nor any ERISA Affiliate is subject to
any liability or penalty under Sections 4976 through 4980 of the Code or Title I
of ERISA with respect to any of the Target Employee Plans; (v) all material
contributions required to be made by Target or ERISA Affiliate to any Target
Employee Plan have been made on or before their due dates and a reasonable
amount has been accrued for contributions to each Target Employee Plan for the
current plan years; (vi) with respect to each Target Employee Plan, no
"reportable event" within the meaning of Section 4043 of ERISA (excluding any
such event for which the thirty (30) day notice requirement has been waived
under the regulations to Section 4043 of ERISA) nor any event described in
Section 4062, 4063 or 4041 or ERISA has occurred; (vii) no Target Employee Plan
is covered by, and neither Target nor any ERISA Affiliate has incurred or
expects to incur any direct or indirect liability under, arising out of or by
operation of Title IV of ERISA in connection with the termination of, or an
employee's withdrawal from, any Target Employee Plan or other retirement plan or
arrangement, and no fact or event exists that could give rise to any such
liability, or under Section 412 of the Code; (viii) Target has not incurred any
liability under, and have complied in all respects with, the Worker Adjustment
Retraining Notification Act, (the "WARN Act")and no fact or event exists that
could give rise to liability under such act; and (ix) no compensation paid or
payable to any employee of Target has been, or will be, non-deductible by reason
of application of Section 162(m) of the Code. With respect to each Target
Employee Plan subject to ERISA as either an employee pension plan within the
meaning of Section 3(2) of ERISA or an employee welfare benefit plan within the
meaning of Section 3(1) of ERISA, Target has prepared in good faith and timely
filed all requisite governmental reports (which were true and correct as of the
date filed) and has properly and timely filed and distributed or posted all
notices and reports to employees required to be filed, distributed or posted
with respect to each such Target Employee Plan. No suit, administrative
proceeding, action or other litigation has been brought, or to the best
knowledge of Target is threatened, against or with respect to any such Target
Employee Plan, including any audit or inquiry by the IRS or United States
Department of Labor. Neither Target nor any ERISA Affiliate is a party to, or
has made any contribution to or otherwise incurred any obligation under, any
"multiemployer plan" as defined in Section 3(37) of ERISA.
(d) With respect to each Target Employee Plan, Target
and each of its United States subsidiaries have complied with (i) the applicable
health care continuation and notice provisions of the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA") and the proposed regulations
thereunder and (ii) the applicable requirements of the Family Leave Act of 1993
and the regulations thereunder, except to the extent that such failure to comply
would not, in the aggregate, have a Material Adverse Effect.
(e) The consummation of the transactions contemplated by
this Agreement will not (i) entitle any current or former employee or other
service provider of Target, or any other ERISA Affiliate to severance benefits
or any other payment (including, without limitation, unemployment compensation,
golden parachute or bonus), except as expressly
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provided in this Agreement, or (ii) accelerate the time of payment or vesting of
any such benefits, or increase the amount of compensation due any such employee
or service provider.
(f) There has been no amendment to, written
interpretation or announcement (whether or not written) by Target, any ERISA
Affiliate relating to, or change in participation or coverage under, any Target
Employee Plan which would materially increase the expense of maintaining such
Plan above the level of expense incurred with respect to that Plan for the most
recent fiscal year included in Target's financial statements.
2.17 CERTAIN AGREEMENTS AFFECTED BY THE MERGER. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute,
bonus or otherwise) becoming due to any director or employee of Target, (ii)
materially increase any benefits otherwise payable by Target, or (iii) result in
the acceleration of the time of payment or vesting of any such benefits.
2.18 EMPLOYEE MATTERS. Target is in compliance in all material
respects with all currently applicable federal, state, local and foreign laws
and regulations respecting employment, discrimination in employment, terms and
conditions of employment, wages, hours and occupational safety and health and
employment practices, and is not engaged in any unfair labor practice. There are
no pending claims against Target under any workers compensation plan or policy
or for long term disability. Target does not have any material obligations under
COBRA with respect to any former employees or qualifying beneficiaries
thereunder. There are no controversies pending or, to the knowledge of Target,
threatened, between Target and any of its employees, which controversies have or
could reasonably be expected to have a Material Adverse Effect on Target. Target
is not a party to any collective bargaining agreement or other labor unions
contract nor does Target know of any activities or proceedings of any labor
union or other group to organize any such employees.
2.19 MATERIAL CONTRACTS.
(a) Subsections (i) through (ix) of Section 2.19(a) of
the Target Disclosure Schedule contain a list of all contracts and agreements to
which Target is a party and that are material to the business, results of
operations, or condition (financial or otherwise), of Target (such contracts,
agreements and arrangements as are required to be set forth in Section 2.19(a)
of the Target Disclosure Schedule being referred to herein collectively as the
"Material Contracts"). Material Contracts shall include, without limitation, the
following and shall be categorized in the Target Disclosure Schedule as follows:
(i) each contract and agreement (other than
routine purchase orders and pricing quotes in the ordinary course of business
covering a period of less than 1 year) for the purchase of inventory, spare
parts, other materials or personal property with any supplier or for the
furnishing of services to Target under the terms of which Target: (A) paid or
otherwise gave consideration of more than $10,000 in the aggregate during the
calendar year ended December 31, 1999 , (B) is likely to pay or otherwise give
consideration of more than $10,000 in the aggregate during the calendar year
ended December 31, 2000, (C) is likely to pay or otherwise give consideration of
more than $10,000 in the aggregate over the remaining term of
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such contract, or (D) cannot be cancelled by Target without penalty or further
payment of less than $10,000;
(ii) each customer contract and agreement (other
than routine purchase orders, pricing quotes with open acceptance and other
tender bids, in each case, entered into in the ordinary course of business and
covering a period of less than one year) to which Target is a party which (A)
involved consideration of more than $10,000 in the aggregate during the calendar
year ended December 31, 1999, (B) is likely to involve consideration of more
than $10,000 in the aggregate during the calendar year ended December 31, 2000,
(C) is likely to involve consideration of more than $10,000 in the aggregate
over the remaining term of the contract, or (D) cannot be cancelled by Target
without penalty or further payment of less than $10,000;
(iii) (A) all distributor, manufacturer's
representative, broker, franchise, agency and dealer contracts and agreements to
which Target is a party (specifying on a matrix, in the case of distributor
agreements, the name of the distributor, product, territory, termination date
and exclusivity provisions) and (B) all sales promotion, market research,
marketing and advertising contracts and agreements to which Target is a party
which: (1) involved consideration of more than $10,000 in the aggregate during
the calendar year ended December 31, 1999, (2) are likely to involve
consideration of more than $10,000 in the aggregate during the calendar year
ended December 31, 2000, or (3) are likely to involve consideration of more than
$10,000 in the aggregate over the remaining term of the contract;
(iv) all management contracts with independent
contractors or consultants (or similar arrangements) to which Target is a party
and which (A) involved consideration or more than $10,000 in the aggregate
during the calendar year ended December 31, 1999, (B) are likely to involve
consideration of more than $10,000 in the aggregate during the calendar year
ended December 31, 2000, or (C) are likely to involve consideration of more than
$10,000 in the aggregate over the remaining term of the contract;
(v) all contracts and agreements (excluding
routine checking account overdraft agreements involving xxxxx cash amounts)
under which Target has created, incurred, assumed or guaranteed (or may create,
incur, assume or guarantee) indebtedness or under which Target has imposed (or
may impose) a security interest or lien on any of their respective assets,
whether tangible or intangible, to secure indebtedness;
(vi) all contracts and agreements that limit the
ability of Target or, after the Effective Time, Acquiror or any of its
affiliates, to compete in any line of business or with any person or in any
geographic area or during any period of time, or to solicit any customer or
client;
(vii) all contracts and agreements between or
among Target, on the one hand, and any affiliate of Target (other than a wholly
owned subsidiary), on the other hand:
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(viii) all contracts and agreements to which
Target is a party under which it has agreed to supply products to a customer at
specified prices, whether directly or through a specific distributor,
manufacturer's representative or dealer; and
(ix) all other contracts or agreements (A) which
are material to Target or the conduct of its business, (B) the absence of which
would have a Material Adverse Effect on Target, or (C) which are believed by
Target to be of unique value even though not material to the business of Target.
(b) Except as would not, individually or in the
aggregate, have a Material Adverse Effect on Target, each Target license, each
Material Contract and each other material contract or agreement of Target which
would not have been required to be disclosed in Section 2.19(a) of the Target
Disclosure Schedule had such contract or agreement been entered into prior to
the date of this Agreement, is a legal, valid and binding agreement, and none of
the Target licenses or Material Contracts is in default by its terms or has been
cancelled by the other party; Target is not in receipt of any claim of default
under any such agreement; and Target does not anticipate any termination or
change to, or receipt of a proposal with respect to, any such agreement as a
result of the Merger or otherwise. Target has furnished Acquiror with true and
complete copies of all such agreements together with all amendments, waivers or
other changes thereto.
2.20 INTERESTED PARTY TRANSACTIONS. Target is not indebted to
any director, officer, employee or agent of Target (except for amounts due as
normal salaries and bonuses and in reimbursement of ordinary expenses), and no
such person is indebted to Target.
2.21 INSURANCE. Target has policies of insurance and bonds of
the type and in amounts customarily carried by persons conducting businesses or
owning assets similar to those of Target. There is no material claim pending
under any of such policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds. All premiums
due and payable under all such policies and bonds have been paid and Target are
otherwise in compliance with the terms of such policies and bonds. Target has no
knowledge of any threatened termination of, or material premium increase with
respect to, any of such policies.
2.22 COMPLIANCE WITH LAWS. Target has complied with, are not in
violation of, and have not received any notices of violation with respect to,
any federal, state, local or foreign statute, law or regulation with respect to
the conduct of its business, or the ownership or operation of its business,
except for such violations or failures to comply as could not reasonably be
expected to have a Material Adverse Effect on Target.
2.23 MINUTE BOOKS. The minute books of Target made available to
Acquiror contain a complete summary of all meetings of directors and
stockholders or actions by written consent since the time of incorporation of
Target through the date of this Agreement, and reflect all transactions referred
to in such minutes accurately in all material respects.
2.24 BROKERS' AND FINDERS' FEES. Target has not incurred, nor
will it incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or
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investment bankers' fees or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
2.25 VOTE REQUIRED. Except for any stockholder approval that has
been duly obtained, the signature by Target Stockholder on this Agreement is the
only action of the holders of any of Target's capital stock necessary to approve
this Agreement and the transactions contemplated hereby.
2.26 BOARD APPROVAL. The Board of Directors of Target has
unanimously (i) approved this Agreement and the Merger, (ii) determined that the
Merger is in the best interests of the stockholders of Target and is on terms
that are fair to such stockholders and (iii) recommended that the stockholders
of Target approve this Agreement and the Merger.
2.27 ACCOUNTS RECEIVABLE.
(a) Target has made available to Acquiror a list of all
accounts receivable of Target and each Subsidiary reflected on the Financial
Statements ("Accounts Receivable") along with a range of days elapsed since
invoice.
(b) All Accounts Receivable of Target arose in the
ordinary course of business and are carried at values determined in accordance
with GAAP consistently applied. No person has any lien on any of such Accounts
Receivable and no request or agreement for deduction or discount has been made
with respect to any of such Accounts Receivable.
(c) There is no inventory of Target on the date hereof.
2.28 CUSTOMERS AND SUPPLIERS. Except as set forth on Schedule
2.28, as of the date hereof, no customer during the 12-month period preceding
the date hereof, and no supplier of Target, has cancelled or otherwise
terminated, or made any written threat to Target to cancel or otherwise
terminate its relationship with Target, or has at any time on or after the
Target Balance Sheet Date decreased materially its services or supplies to
Target in the case of any such supplier, or its usage of the services or
products of Target in the case of such customer, and to Target's knowledge, no
such supplier or customer intends to cancel or otherwise terminate its
relationship with Target or to decrease materially its services or supplies to
Target or its usage of the services or products of Target, as the case may be.
From and after the date hereof, no customer during the twelve (12) month period
preceding the Closing Date, has cancelled or otherwise terminated, or made any
written threat to Target to cancel or otherwise terminate, for any reason,
including without limitation the consummation of the transactions contemplated
hereby, its relationship with Target, and to Target's knowledge, no such
customer intends to cancel or otherwise terminate its relationship with Target
or to decrease materially its usage of the services or products of Target.
Target has not knowingly breached, so as to provide a benefit to Target that was
not intended by the parties hereto, any agreement with, or engaged in any
fraudulent conduct with respect to, any customer or supplier of Target.
2.29 ESCHEDULE; OTHER KEREN SOFTWARE. Except for liens securing
debt which is reflected on the Target Balance Sheet, Target owns, free and clear
of all liens and encumbrances, the software programs, systems and applications
developed and/or in
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development by Target for the scheduling of production of printing companies in
the graphic arts industry (the "eSchedule Software"). Schedule 2.29 of the
Target Disclosure Schedule, describes the rights and limitations associated with
the software programs, systems and applications developed by Isys (the "Other
Keren Software") and Greycon (the "Keren Scheduling Software").
2.30 THIRD PARTY CONSENTS. Except as set forth in Section 2.30
of the Target Disclosure Schedule, no consent or approval is needed from any
third party in order to effect the Merger, this Agreement or any of the
transactions contemplated hereby.
2.31 CONTINGENT SALES; MATERIAL COMPLAINTS; PRODUCTS IN
DEVELOPMENT. Target has made no sales to customers that are contingent upon
providing future enhancements of existing products, to add features not
presently available on existing products or to otherwise enhance the performance
of its existing products (other than beta or similar arrangements pursuant to
which Target's customers from time to time test or evaluate products). The
products Target has delivered to customers substantially comply with published
specifications for such products and Target has not received material complaints
from customers about its products that remain unresolved. Section 2.31 of the
Target Disclosure Schedule accurately sets forth a complete list of products in
development (exclusive of mere enhancements to and additional features for
existing products).
2.32 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by Target herein or in any Schedule hereto, including the Target
Disclosure Schedule, or certificate furnished by Target pursuant to this
Agreement, when all such documents are read together in their entirety, contains
or will contain at the Effective Time any untrue statement of a material fact,
or omits or will omit at the Effective Time to state any material fact necessary
in order to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
2.33 INVESTOR REPRESENTATION. (a) Target Stockholder, either
alone or together with its purchaser representative, has such knowledge and
experience in financial and business matters that Target Stockholder is capable
of evaluating the merits and risks of the acquisition of the shares of Acquiror
Common Stock to be issued to him pursuant to the terms and conditions of this
Agreement (the "Consideration Shares") and, by reason of his financial and
business experience (either alone or together with any purchaser
representative), Target Stockholder has the capacity to protect his interest in
connection with the acquisition of the Consideration Shares. Target Stockholder
is financially able to bear the economic risk of the investment, including the
total loss thereof.
(b) Target Stockholder has received and reviewed all
information he considers necessary or appropriate for deciding whether to
purchase the Consideration Shares. Target Stockholder further represents that he
has had an opportunity to ask questions and receive answers from the Acquiror
and its officers and employees regarding the terms and conditions of acquisition
of the Consideration Shares and regarding the business, financial affairs and
other aspects of the Acquiror and has further had the opportunity to obtain any
information (to the extent the Acquiror possesses or can acquire such
information without unreasonable effort or expense) which Target
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Stockholder deems necessary to evaluate the investment and to verify the
accuracy of information otherwise provided to Target Stockholder.
(c) Target Stockholder acknowledges that the
Consideration Shares have not been registered under the Securities Act, or
qualified under applicable blue sky laws or any other applicable blue sky laws
in reliance, in part, on the representations and warranties herein. Such shares
are being acquired by Target Stockholder for investment purposes for his own
account only and not for sale or with a view to distribution of all or any part
of such Acquired Shares; provided, however, that the disposition of the Target
Stockholder's property shall remain at all times within such Target
Stockholder's control.
(d) Target Stockholder understands that the
Consideration Shares are "restricted securities" under the federal securities
laws in that such securities will be acquired from the Acquiror in a transaction
not involving a public offering, and that under such laws and applicable
regulations such securities may be resold only upon registration or without
registration under the Securities Act only in certain limited circumstances in
each case in compliance with applicable securities laws and that otherwise such
securities must be held indefinitely. Target Stockholder understands that the
Consideration Shares will bear transfer restriction legends to such effect.
SECTION THREE
3. REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB.
Except as disclosed in a document dated as of the date of this
Agreement and delivered by Acquiror to Target prior to the execution and
delivery of this Agreement and referring to the representations and warranties
in this Agreement (the "Acquiror Disclosure Schedule"), Acquiror and Merger Sub
hereby jointly and severally represent and warrant to Target and Target
Stockholder as follows:
3.1 ORGANIZATION, STANDING AND POWER. Each of Acquiror and
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each of Acquiror
and Merger Sub has the corporate power to own its properties and to carry on its
business as now being conducted and as proposed to be conducted and is duly
qualified to do business and is in good standing in each jurisdiction in which
the failure to be so qualified and in good standing would have a Material
Adverse Effect on Acquiror. Acquiror has delivered a true and correct copy of
the Certificate of Incorporation and Bylaws or other charter documents, as
applicable, of Acquiror and Merger Sub, each as amended to date, to Target.
Neither Acquiror nor any of its subsidiaries is in violation of any material
provisions of its Certificate of Incorporation or Bylaws or equivalent
organizational documents.
3.2 CAPITAL STRUCTURE.
(a) Except as disclosed in Section 3.2 of the Acquiror
Disclosure Schedule, the authorized capital stock of Acquiror consists of (i)
150,000,000 shares of Common Stock, $0.0001 par value, of which (A) 118,750,000
have been designated Class A Common
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Stock, 5,886,656 shares of which were issued and outstanding as of the close of
business on the day immediately preceding the Closing Date (the "Capitalization
Date"), and (B) 31,250,000 have been designated Class B Common Stock, none of
which were issued and outstanding as of the close of business on the
Capitalization Date and (ii) 46,165,082 shares of Preferred Stock, $0.0001 par
value, of which (A) 2,500,000 shares have been designated Series A Preferred
Stock, 2,455,798 of which were issued and outstanding as of the closing of
business on the Capitalization Date, (B) 10,250,000 shares have been designated
Series A-1 Preferred Stock, 9,725,096 of which were issued and outstanding as of
the closing of business on the Capitalization Date, (C) 31,250,000 have been
designated Series B Preferred Stock, 31,186,312 of which were issued and
outstanding as of the closing of business on the Capitalization Date, (D)
2,015,082 have been designated Series C Preferred Stock, 1,765,082 which were
issued and outstanding as of the closing of business on the Capitalization Date,
and (E) 150,000 have been designated Series C-1 Preferred Stock, all of which
were issued and outstanding as of the closing of business on the Capitalization
Date. As of the close of business on the Capitalization Date, the Acquiror has
reserved 382,215 shares of Class A Common Stock and 516,976 shares of Series A-1
Preferred Stock (collectively, "Option Stock") for issuance to officers,
directors, employees and consultants of the Acquiror pursuant to its 1999
Revised Stock Plan duly adopted by the Board of Directors and approved by the
Acquiror's stockholders (the "1999 Revised Stock Plan"), and the Acquiror has
reserved 2,500,000 shares of Common Stock for issuance to officers, directors,
employees and consultants of the Acquiror pursuant to its 2000 Incentive Stock
Plan duly adopted by the Board of Directors and approved by the Acquiror's
stockholders (the "2000 Incentive Stock Plan" and, together with the 1999
Revised Stock Plan, the "Stock Plans"). Of such reserved shares of Option Stock
under the 1999 Revised Stock Plan, no shares have been issued pursuant to
restricted stock purchase agreements, options to purchase 382,215 shares of
Class A Common Stock and 516,976 shares of Series A-1 Preferred Stock have been
granted and are currently outstanding, and no shares of Class A Common Stock
remain available for issuance to officers, directors, employees and consultants
pursuant to the 1999 Revised Stock Plan. Of such reserved shares of Class A
Common Stock under the 2000 Incentive Stock Plan, no shares have been issued
pursuant to restricted stock purchase agreements, options to purchase 175,000
shares of Class A Common Stock have been granted and are currently outstanding,
and 2,325,000 shares of Class A Common Stock remain available for issuance to
officers, directors, employees and consultants pursuant to the 2000 Incentive
Stock Plan. Other than as contemplated under this Agreement or as set forth in
the Acquiror Disclosure Schedule, there are no other options, warrants, calls,
rights, commitments or agreements of any character to which Acquiror or Merger
Sub is a party or by which either of them is bound obligating Acquiror or Merger
Sub to issue, deliver, sell, repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any shares of the capital stock of
Acquiror or obligating Acquiror or Merger Sub to grant, extend or enter into any
such option, warrant, call, right, commitment or agreement. The shares of
Acquiror Common Stock to be issued pursuant to the Merger will be duly
authorized, validly issued, fully paid, and non-assessable.
(b) The authorized capital stock of Merger Sub consists
of 100 shares of Acquiror Common Stock all of which are issued and outstanding
and are held by Acquiror. All outstanding shares of Acquiror and Merger Sub have
been duly authorized, validly issued, fully paid and are nonassessable and free
of any liens or encumbrances other than any liens or encumbrances created by or
imposed upon the holders thereof. There are no options, warrants,
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calls, rights, commitments or agreements of any character to which Acquiror or
Merger Sub is a party or by which either of them is bound obligating Acquiror or
Merger Sub to issue, deliver, sell, repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any shares of the capital stock of
Merger Sub or obligating Acquiror or Merger Sub to grant, extend or enter into
any such option, warrant, call, right, commitment or agreement.
3.3 AUTHORITY. Acquiror and Merger Sub have all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Acquiror and Merger
Sub (other than, with respect to the Merger, the filing and recordation of
appropriate merger documents as required by Delaware Law). This Agreement has
been duly executed and delivered by Acquiror and Merger Sub and constitutes the
valid and binding obligations of Acquiror and Merger Sub.
3.4 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated hereby will not, conflict
with, or result in any violation of, or default under (with or without notice or
lapse of time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under (i) any provision of
the Certificate of Incorporation or Bylaws of Acquiror or Merger Sub, as
amended, or (ii) any material mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Acquiror or Merger Sub or their properties or assets.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity, is required
by or with respect to Acquiror or Merger Sub in connection with the execution
and delivery of this Agreement by Acquiror and Merger Sub or the consummation by
Acquiror and Merger Sub of the transactions contemplated hereby, except for (i)
the filing of appropriate merger documents as required by Delaware Law and
Illinois, (ii) any filings as may be required under applicable state securities
laws and the securities laws of any foreign country and (iii) such other
consents, authorizations, filings, approvals and registrations which, if not
obtained or made, would not have a Material Adverse Effect on Acquiror and would
not prevent, materially alter or delay any the transactions contemplated by this
Agreement.
3.5 ABSENCE OF UNDISCLOSED LIABILITIES. Acquiror has no material
obligations or liabilities of any nature (matured or unmatured, fixed or
contingent) other than (i) those set forth or adequately provided for in the
Balance Sheet heretofore provided to Target for the period ended December 31,
1999 (the "Acquiror Balance Sheet"), (ii) those incurred in the ordinary course
of business and not required to be set forth in the Acquiror Balance Sheet under
United States generally accepted accounting principles, and (iii) those incurred
in the ordinary course of business since the Acquiror Balance Sheet Date and
consistent with past practice.
3.6 ABSENCE OF CERTAIN CHANGES. Since the date of the Acquiror
Balance Sheet (the "Acquiror Balance Sheet Date"), Acquiror has conducted its
business in the ordinary
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course in a manner consistent with past practice and there has not occurred: (i)
any change, event or condition (whether or not covered by insurance) that has
resulted in, or might reasonably be expected to result in, a Material Adverse
Effect to Acquiror; (ii) any declaration, setting aside, or payment of a
dividend or other distribution with respect to the shares of Acquiror, or any
direct or indirect redemption, purchase or other acquisition by Acquiror of any
of its shares of capital stock; (iii) any material amendment or change to
Acquiror's Certificate of Incorporation or Bylaws; or (iv) any negotiation or
agreement by Acquiror to do any of the things described in the preceding clauses
(i) through (iii) (other than negotiations with Target and its representatives
regarding the transactions contemplated by this Agreement).
3.7 LITIGATION. There is no private or governmental action,
suit, proceeding, claim, arbitration or investigation pending before any agency,
court or tribunal, foreign or domestic, or, to the knowledge of Acquiror or any
of its subsidiaries, threatened against Acquiror or any of its subsidiaries or
any of their respective properties or any of their respective officers or
directors (in their capacities as such) that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on Acquiror.
There is no judgment, decree or order against Acquiror or any of its
subsidiaries or, to the knowledge of Acquiror or any of its subsidiaries, any of
their respective directors or officers (in their capacities as such) that could
prevent, enjoin, or materially alter or delay any of the transactions
contemplated by this Agreement, or that could reasonably be expected to have a
Material Adverse Effect on Acquiror.
3.8 GOVERNMENTAL AUTHORIZATION. Each of Acquiror and its
subsidiaries has obtained each federal, state, county, local or foreign
governmental consent, license, permit, grant, or other authorization of a
Governmental Entity that is required for the operation of Acquiror's or any of
its subsidiaries' business ("Acquiror Authorizations"), and all of such Acquiror
Authorizations are in full force and effect, except where the failure to obtain
or have any of such Acquiror Authorizations could not reasonably be expected to
have a Material Adverse Effect on Acquiror.
3.9 COMPLIANCE WITH LAWS. Each of Acquiror and its subsidiaries
has complied with, are not in violation of, and have not received any notices of
violation with respect to, any federal, state, local or foreign statute, law or
regulation with respect to the conduct of its business, or the ownership or
operation of its business, except for such violations or failures to comply as
could not reasonably be expected to have a Material Adverse Effect on Acquiror.
3.10 BROKER'S AND FINDERS' FEES. Acquiror has not incurred, nor
will it incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or investment bankers' fees or any similar charges
in connection with this Agreement or any transaction contemplated hereby.
3.11 ACCOUNTING AND TAX MATTERS. Neither Acquiror nor any of its
subsidiaries nor, to the knowledge of Acquiror, any of their respective
affiliates or agents is aware of any agreement, plan or other circumstance that
would prevent the Merger from constituting a transaction under Section 368(a) of
the Code.
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SECTION FOUR
4. CONDUCT PRIOR TO THE EFFECTIVE TIME.
4.1 CONDUCT OF BUSINESS OF TARGET AND ACQUIROR. During the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, each of Target and Acquiror
agrees (except to the extent expressly contemplated by this Agreement or as
consented to in writing by the other), to carry on its and its subsidiaries'
business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted, to pay and to cause its subsidiaries to pay
debts and Taxes when due subject in the case of Taxes of Target or any of its
Subsidiaries, to Acquiror's consent to the filing of material Tax Returns if
applicable, to pay or perform other obligations when due, and to use all
reasonable efforts consistent with past practice and policies to preserve intact
its and its subsidiaries' present business organization, keep available the
services of its and its subsidiaries' present officers and key employees and
preserve its and its subsidiaries' relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings with it
or its subsidiaries, to the end that its and its subsidiaries' goodwill and
ongoing businesses shall be unimpaired at the Effective Time. Each of Target and
Acquiror agrees to promptly notify the other of any event or occurrence not in
the ordinary course of its or its subsidiaries' business, and of any event which
could have a Material Adverse Effect. Without limiting the foregoing, except as
expressly contemplated by this Agreement, Target shall not do, cause or permit
any of the following, or allow, cause or permit any of its Subsidiaries to do,
cause or permit any of the following, without the prior written consent of
Acquiror:
(a) CHARTER DOCUMENTS. Cause or permit any amendments to
its Articles of Incorporation or Bylaws;
(b) DIVIDENDS; CHANGES IN CAPITAL STOCK. Declare or pay
any dividends on or make any other distributions (whether in cash, stock or
property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock except from former employees, directors and
consultants in accordance with agreements providing for the repurchase of shares
in connection with any termination of service to it or its Subsidiaries;
(c) STOCK OPTION PLANS, ETC. Accelerate, amend or change
the period of exercisability or vesting of options or other rights granted under
its stock plans or authorize cash payments in exchange for any options or other
rights granted under any of such plans; or
(d) OTHER. Take, or agree in writing or otherwise to
take, any of the actions described in Sections 4.1(a) through (c) above, or any
action which would make any of its representations or warranties contained in
this Agreement untrue or incorrect or prevent it from performing or cause it not
to perform its covenants hereunder.
4.2 CONDUCT OF BUSINESS OF TARGET. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Effective
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Time, except as expressly contemplated by this Agreement, Target shall not do,
cause or permit any of the following, or allow, cause or permit any of its
Subsidiaries to do, cause or permit any of the following, without the prior
written consent of Acquiror:
(a) MATERIAL CONTRACTS. Enter into any material contract
or commitment, or violate, amend or otherwise modify or waive any of the terms
of any of its Material Contracts, other than in the ordinary course of business
consistent with past practice;
(b) ISSUANCE OF SECURITIES. Issue, deliver or sell or
authorize or propose the issuance, delivery or sale of, or purchase or propose
the purchase of, any shares of its capital stock or securities convertible into,
or subscriptions, rights, warrants or options to acquire, or other agreements or
commitments of any character obligating it to issue any such shares or other
convertible securities, other than the issuance of shares of its Common Stock
pursuant to the exercise of stock options, warrants or other rights therefor
outstanding as of the date of this Agreement; provided, however, that Target
may, in the ordinary course of business consistent with past practice, grant
options for the purchase of Target Common Stock under the Target Stock Option
Plan;
(c) INTELLECTUAL PROPERTY. Transfer to any person or
entity any rights to its Intellectual Property;
(d) EXCLUSIVE RIGHTS. Enter into or amend any agreements
pursuant to which any other party is granted exclusive marketing or other
exclusive rights of any type or scope with respect to any of its products or
technology;
(e) DISPOSITIONS. Sell, lease, license or otherwise
dispose of or encumber any of its properties or assets which are material,
individually or in the aggregate, to its and its Subsidiaries' business, taken
as a whole, except in the ordinary course of business consistent with past
practice;
(f) INDEBTEDNESS. Incur any indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others;
(g) LEASES. Enter into operating lease;
(h) PAYMENT OF OBLIGATIONS. Pay, discharge or satisfy in
an amount in excess of $5,000 in any one case or $20,000 in the aggregate, any
claim, liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) arising other than in the ordinary course of business,
other than the payment, discharge or satisfaction of liabilities reflected or
reserved against in the Target Financial Statements;
(i) CAPITAL EXPENDITURES. Make any capital expenditures,
capital additions or capital improvements except in the ordinary course of
business and consistent with past practice;
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(j) INSURANCE. Materially reduce the amount of any
material insurance coverage provided by existing insurance policies;
(k) TERMINATION OR WAIVER. Terminate or waive any right
of substantial value, other than in the ordinary course of business;
(l) EMPLOYEE BENEFIT PLANS; NEW HIRES; PAY INCREASES.
Adopt or amend any employee benefit or stock purchase or option plan, or hire
any new director level or officer level employee (except that it may hire a
replacement for any current director level or officer level employee if it first
provides Acquiror advance notice regarding such hiring decision), pay any
special bonus or special remuneration to any employee or director, or increase
the salaries or wage rates of its employees;
(m) SEVERANCE ARRANGEMENT. Grant any severance or
termination pay (i) to any director or officer or (ii) to any other employee
except payments made pursuant to standard written agreements outstanding on the
date of this Agreement;
(n) LAWSUITS. Commence a lawsuit other than (i) for the
routine collection of bills, (ii) in such cases where it in good faith
determines that failure to commence suit would result in the material impairment
of a valuable aspect of its business, provided that it consults with Acquiror
prior to the filing of such a suit, or (iii) for a breach of this Agreement;
(o) ACQUISITIONS. Acquire or agree to acquire by merging
or consolidating with, or by purchasing a substantial portion of the assets of,
or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets which are material, individually or in
the aggregate, to its and its Subsidiaries' business, taken as a whole;
(p) TAXES. Other than in the ordinary course of
business, make or change any material election in respect of Taxes, adopt or
change any accounting method in respect of Taxes, file any material Tax Return
or any amendment to a material Tax Return, enter into any closing agreement,
settle any claim or assessment in respect of Taxes, or consent to any extension
or waiver of the limitation period applicable to any claim or assessment in
respect of Taxes;
(q) NOTICES. Target shall give all notices and other
information required to be given to the employees of Target, any collective
bargaining unit representing any group of employees of Target, and any
applicable government authority under the WARN Act, the National Labor Relations
Act, the Internal Revenue Code, COBRA, and other applicable law in connection
with the transactions provided for in this Agreement;
(r) REVALUATION. Other than as set forth in the Target
Balance Sheet, revalue any of its assets, including without limitation writing
down the value of inventory or writing off notes or accounts receivable other
than in the ordinary course of business; or
(s) OTHER. Take or agree in writing or otherwise to
take, any of the actions described in Sections 4.2(a) through (r) above, or any
action which would make any of its
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representations or warranties contained in this Agreement untrue or incorrect or
prevent it from performing or cause it not to perform its covenants hereunder.
4.3 NO SOLICITATION. Target and its Subsidiaries and the
officers, directors, employees or other agents of Target and its Subsidiaries
and Target Stockholder will not, directly or indirectly, (i) take any action to
solicit, initiate, encourage or approve any Takeover Proposal (as defined below)
or (ii) engage in negotiations with, or disclose any nonpublic information
relating to Target or any of it Subsidiaries to, or afford access to the
properties, books or records of Target or any of its Subsidiaries to, any person
that has advised Target that it may be considering making, or that has made, a
Takeover Proposal. For purposes of this Agreement, "Takeover Proposal" means any
offer or proposal for, or any indication of interest in, a merger or other
business combination involving Target or any of its Subsidiaries or the
acquisition of any significant equity interest in, or a significant portion of
the assets of, Target or any of its Subsidiaries, other than the transactions
contemplated by this Agreement.
SECTION FIVE
5. ADDITIONAL AGREEMENTS.
5.1 BEST EFFORTS AND FURTHER ASSURANCES. Each of the parties to
this Agreement shall use its best efforts to effectuate the transactions
contemplated hereby and to fulfill and cause to be fulfilled the conditions to
closing under this Agreement. Each party hereto, at the reasonable request of
another party hereto, shall execute and deliver such other instruments and do
and perform such other acts and things as may be necessary or desirable for
effecting completely the consummation of this Agreement and the transactions
contemplated hereby.
5.2 CONSENTS; COOPERATION.
(a) Each of Acquiror and Target shall use its reasonable
best efforts to promptly (i) obtain from any Governmental Entity any consents,
licenses, permits, waivers, approvals, authorizations or orders required to be
obtained or made by Acquiror or Target or any of their subsidiaries in
connection with the authorization, execution and delivery of this Agreement and
the consummation of the transactions contemplated hereunder, including those
required under HSR, and (ii) make all necessary filings, and thereafter make any
other required submissions, with respect to this Agreement and the Merger
required under the Securities Act and the Exchange Act and any other applicable
federal, state or foreign securities laws.
(b) From the date of this Agreement until the earlier of
the Effective Time or the termination of this Agreement, each party shall
promptly notify the other party in writing of any pending or, to the knowledge
of such party, threatened action, proceeding or investigation by any
Governmental Entity or any other person (i) challenging or seeking material
damages in connection with this Agreement or the transactions contemplated
hereunder or (ii) seeking to restrain or prohibit the consummation of the Merger
or the transactions contemplated hereunder or otherwise limit the right of
Acquiror or its subsidiaries to own or operate all or any portion of the
businesses or assets of Target or its subsidiaries.
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(c) Each of Acquiror and Target shall give or cause to
be given any required notices to third parties, and use its reasonable best
efforts to obtain all consents, waivers and approvals from third parties (i)
necessary, proper or advisable to consummate the transactions contemplated
hereunder, (ii) disclosed or required to be disclosed in the Target Disclosure
Schedule or the Acquiror Disclosure Schedule, or (iii) required to prevent a
Material Adverse Effect on Target or Acquiror from occurring prior or after the
Effective Time. In the event that Acquiror or Target shall fail to obtain any
third party consent, waiver or approval described in this Section 5.2(c), it
shall use its reasonable best efforts, and shall take any such actions
reasonably requested by the other party, to minimize any adverse effect upon
Acquiror and Target, their respective subsidiaries and their respective
businesses resulting (or which could reasonably be expected to result after the
Effective Time) from the failure to obtain such consent, waiver or approval.
(d) Each of Acquiror and Target will, and will cause
their respective subsidiaries to, take all reasonable actions necessary to
comply promptly with all legal requirements which may be imposed on them with
respect to the consummation of the transactions contemplated by this Agreement
and will promptly cooperate with and furnish information to any party hereto
necessary in connection with any such requirements imposed upon such other party
in connection with the consummation of the transactions contemplated by this
Agreement and will take all reasonable actions necessary to obtain (and will
cooperate with the other parties hereto in obtaining) any consent, approval,
order or authorization of, or any registration, declaration or filing with, any
Governmental Entity or other person, required to be obtained or made in
connection with the taking of any action contemplated by this Agreement.
5.3 ACCESS TO INFORMATION.
(a) Target shall afford Acquiror and its accountants,
counsel and other representatives, reasonable access during normal business
hours during the period prior to the Effective Time to (i) all of Target's and
its Subsidiaries' properties, books, contracts, commitments and records, and
(ii) all other information concerning the business, properties and personnel of
Target and its Subsidiaries as Acquiror may reasonably request. Target agrees to
provide to Acquiror and its accountants, counsel and other representatives
copies of internal financial statements promptly upon request. Acquiror shall
afford Target and its accountants, counsel and other representatives, reasonable
access during normal business hours during the period prior to the Effective
Time to (i) all of Acquiror's and its subsidiaries' properties, books,
contracts, commitments and records, and (ii) all other information concerning
the business, properties and personnel of Acquiror and its subsidiaries as
Target may reasonably request. Acquiror agrees to provide to Target and its
accountants, counsel and other representatives copies of internal financial
statements promptly upon request.
(b) Subject to compliance with applicable law, from the
date hereof until the Effective Time, each of Acquiror and Target shall confer
on a regular and frequent basis with one or more representatives of the other
party to report operational matters of materiality and the general status of
ongoing operations.
(c) No information or knowledge obtained in any
investigation pursuant to this Section 5.3 shall affect or be deemed to modify
any representation or warranty
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contained herein or the conditions to the obligations of the parties hereto to
consummate the Merger.
5.4 CONFIDENTIALITY. Any information concerning any party hereto
disclosed to any other party hereto or nay party's affiliates or representatives
in connection with this Agreement or the transactions contemplated hereby, which
has not been publicly disclosed shall be kept strictly confidential by such
party, its affiliates and/or representatives. Each party hereto shall keep, and
shall cause its affiliates and/or representatives to keep, such confidential
information in strict confidence.
5.5 PUBLIC DISCLOSURE. Unless otherwise permitted by this
Agreement, Acquiror and Target shall consult with each other before issuing any
press release or otherwise making any public statement or making any other
public (or non-confidential) disclosure (whether or not in response to an
inquiry) regarding the terms of this Agreement and the transactions contemplated
hereby, and neither shall issue any such press release or make any such
statement or disclosure without the prior approval of the other (which approval
shall not be unreasonably withheld), except as may be required by law.
5.6 FIRPTA. Target Stockholder shall, prior to the Closing Date,
provide Acquiror with a properly executed certificate with respect to the
Foreign Investment and Real Property Tax Act of 1980 ("FIRPTA") in the form
attached hereto as Exhibit C ("FIRPTA Certificate").
5.7 STATE STATUTES. If any state takeover law shall become
applicable to the transactions contemplated by this Agreement, Acquiror and its
Board of Directors or Target and its Board of Directors, as the case may be,
shall use their reasonable best efforts to grant such approvals and take such
actions as are necessary so that the transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effects of such state takeover law on
the transactions contemplated by this Agreement.
5.8 BLUE SKY LAWS. Acquiror shall take such steps as may be
necessary to comply with the securities and blue sky laws of all jurisdictions
which are applicable to the issuance of the Acquiror Common Stock in connection
with the Merger. Target shall use its best efforts to assist Acquiror as may be
necessary to comply with the securities and blue sky laws of all jurisdictions
which are applicable in connection with the issuance of Acquiror Common Stock in
connection with the Merger.
5.9 MAINTENANCE OF TARGET INDEMNIFICATION OBLIGATIONS.
(a) Subject to and following the Effective Time, the
Surviving Corporation shall, and Acquiror shall cause the Surviving Corporation
to, indemnify and hold harmless the Indemnified Target Parties (as defined
below) to the extent provided in the Bylaws or Articles of Incorporation of
Target, in each case as in effect as of the date of this Agreement. The
Surviving Corporation shall, and Acquiror shall cause the Surviving Corporation
to, keep in effect such provisions, which shall not be amended except as
required by applicable law or to make changes permitted by applicable law that
would enlarge the rights to indemnification
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available to the Indemnified Target Parties and changes to provide for
exculpation of director and officer liability to the fullest extent permitted by
applicable law. For purposes of this Section 5.9, "Indemnified Target Parties"
shall mean the individuals who were officers, directors, employees and agents of
Target on or prior to the Effective Time.
(b) Subject to and following the Effective Time,
Acquiror and the Surviving Corporation shall be jointly and severally obligated
to pay the reasonable expenses, including reasonable attorney's fees, that may
be incurred by any Indemnified Target Party in enforcing the rights provided in
this Section 5.9 and shall make any advances of such expenses to the Indemnified
Target Party that would be available under the Bylaws or Articles of
Incorporation of Target (in each case as in effect as of the date of this
Agreement) with regard to the advancement of indemnifiable expenses, subject to
the undertaking of such party to repay such advances in the event that it is
ultimately determined that such party is not entitled to indemnification.
(c) The provisions of this Section 5.9 shall be in
addition to any other rights available to the Indemnified Target Parties, shall
survive the Effective Time of the Merger, and are expressly intended for the
benefit of the Indemnified Target Parties.
5.10 TERMINATION OF 401(k) PLAN. Prior to the Closing, Target
shall terminate the AHP 401(k) Plan.
5.11. RESTRICTIONS ON TRANSFER.
(a) The securities to be issued to Target Stockholder
pursuant to the Merger, and any securities issued as a dividend or otherwise
distributed thereon (collectively, "Acquiror Securities"), shall not be sold,
transferred, assigned, pledged, encumbered or otherwise disposed of (each, a
"Transfer7.2(a)") except upon the conditions specified in this Agreement, which
conditions are intended to insure compliance with the provisions of the Act. The
Stockholder shall observe and comply with the Act and the rules and regulations
promulgated by the Securities and Exchange Commission ("SEC") thereunder as now
in effect or hereafter enacted or promulgated, and as from time to time amended,
in connection with any Transfer of Securities beneficially owned by the
Stockholder.
(b) Each certificate representing Acquiror Securities
issued to the Target Stockholder and each certificate for such Acquiror
Securities issued to subsequent transferees of any such certificate shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES OR "BLUE-SKY" LAWS. THESE SECURITIES MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF
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SUCH REGISTRATION OR AN EXEMPTION THEREFROM. ADDITIONALLY, THE
TRANSFER OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS
SPECIFIED IN SECTION 5 OF THE AGREEMENT AND PLAN OF MERGER AMONG
PRINTCAFE, INC., AHP SYSTEMS, INC., PRINTCAFE SYSTEMS, INC. AND
XXXX XXXXXX AND NO TRANSFER OF THESE SECURITIES SHALL BE VALID
OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. COPIES
OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF PRINTCAFE, INC."
(c) prior to any Transfer of any Acquiror Securities,
the Target Stockholder or permitted transferee will give written notice to the
Acquiror of such Stockholder's intention to effect such Transfer and to comply
in all other respects with the provisions of this Agreement. Each such notice
shall describe the manner and circumstances of the proposed Transfer and, if
requested by the Acquiror, shall be accompanied by the written opinion,
addressed to the Acquiror, of counsel for the holder of such Acquiror
Securities, stating that in the opinion of such counsel (which opinion and
counsel shall be reasonably satisfactory to the Acquiror) such proposed transfer
does not involve a transaction requiring registration or qualification of such
Securities under the Act or the securities or "blue-sky" laws of any relevant
state of the United States. The holder thereof shall thereupon be entitled to
Transfer such Acquiror Securities in accordance with the terms of the notice
delivered by it to the Acquiror. Each certificate or other instrument evidencing
the securities issued upon the Transfer of any such Securities (and each
certificate or other instrument evidencing any untransferred balance of such
Acquiror Securities) shall bear the legend set forth in Section 5(b) hereof
unless (x) in such opinion of counsel of Acquiror registration of any future
Transfer is not required by the applicable provisions of the Securities Act or
(y) Acquiror shall have waived the requirement of such legends. The Stockholder
shall not Transfer any Securities until such opinion of counsel has been given
(unless waived by the Acquiror or unless such opinion is not required in
accordance with the provisions of Section 5).
(d) Notwithstanding the foregoing provisions of Section
5(a) through (c) hereof, the restrictions imposed by Section 5(c) upon the
transferability of Acquiror Securities shall cease and terminate when (i) any
such shares are sold or otherwise disposed of pursuant to an effective
registration statement under the Act, (ii) pursuant to Section 5(c), the
securities so transferred are not required to bear the legend set forth in
Section 5(b) or (iii) the holder of such Acquiror Securities has met the
requirements for Transfer of such Acquiror Securities pursuant to subparagraph
(k) of Rule 144. Whenever the restrictions imposed by this Agreement shall
terminate, as herein provided, the holder of Acquiror Securities as to which
such restrictions have terminated shall be entitled to receive from the
Acquiror, without expense, a new certificate not bearing the restrictive legend
set forth in Section 5(b) hereof and not containing any other reference to the
restrictions imposed by Section 5(b) hereof; provided that the restrictions set
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forth in Section 8 of this Agreement, which are expressly incorporated by
reference herein and made a part hereof, shall survive in accordance with their
terms.
The Target Stockholder understands and agrees that the
Acquiror, at its discretion, may cause stop transfer orders to be placed with
its transfer agent with respect to certificates for Acquiror Securities owned by
the Stockholder, in the event of a proposed transfer in violation or breach of
this Agreement or that is or may otherwise be unlawful.
5.12 ASSUMPTION OF PERSONAL GUARANTEES. Acquiror, or any parent
or affiliate of Acquiror, shall assume the Personal Guarantees of Target
Stockholder and Acquiror shall indemnify Target Stockholder and hold Target
Stockholder harmless from any claims arising solely and directly in connection
with the assumption of such Personal Guarantees.
SECTION SIX
6. CONDITIONS TO THE MERGER.
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE
MERGER. The respective obligations of each party to this Agreement to consummate
and effect this Agreement and the transactions contemplated hereby shall be
subject to the satisfaction on or prior to the Effective Time of each of the
following conditions, any of which may be waived, in writing, by agreement of
all the parties hereto:
(a) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal or regulatory
restraint or prohibition preventing the consummation of the Merger shall be in
effect, nor shall any proceeding brought by an administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, seeking any of the foregoing be pending; nor shall there be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the Merger, which makes the consummation of the Merger
illegal. In the event an injunction or other order shall have been issued, each
party agrees to use its reasonable diligent efforts to have such injunction or
other order lifted.
(b) GOVERNMENTAL APPROVAL. Acquiror, Target and Merger
Sub and their respective subsidiaries shall have timely obtained from each
Governmental Entity all approvals, waivers and consents, if any, necessary for
consummation of or in connection with the Merger and the several transactions
contemplated hereby, including, without limitation, such approvals, waivers and
consents as may be required under the Securities Act and under any state
securities laws.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF TARGET. The
obligations of Target to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Effective Time of each of the following conditions, any of which
may be waived, in writing, by Target:
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(a) REPRESENTATIONS, WARRANTIES AND COVENANTS (i) Each
of the representations and warranties of Acquiror and Merger Sub in this
Agreement that is expressly qualified by a reference to materiality shall be
true in all respects as so qualified, and each of the representations and
warranties of Acquiror and Merger Sub in this Agreement that is not so qualified
shall be true and correct in all material respects, on and as of the Effective
Time as though such representation or warranty had been made on and as of such
time (except that those representations and warranties which address matters
only as of a particular date shall remain true and correct as of such date), and
(ii) Acquiror and Merger Sub shall have performed and complied in all material
respects with all covenants, obligations and conditions of this Agreement
required to be performed and complied with by them as of the Effective Time.
(b) CERTIFICATES OF ACQUIROR.
(i) COMPLIANCE CERTIFICATE OF ACQUIROR. Target
shall have been provided with a certificate executed on behalf of Acquiror by
its President or its Chief Financial Officer to the effect that, as of the
Effective Time, each of the conditions set forth in Sections 6.2(a) has been
satisfied with respect to Acquiror.
(ii) CERTIFICATE OF SECRETARY OF ACQUIROR.
Target shall have been provided with a certificate executed by the Secretary or
Assistant Secretary of Acquiror certifying:
(A) Resolutions duly adopted by the Board of
Directors and the stockholders of Acquiror authorizing the execution of this
Agreement and the execution, performance and delivery of all agreements,
documents and transactions contemplated hereby; and
(B) the incumbency of the officers of
Acquiror executing this Agreement and all agreements and documents contemplated
hereby.
(c) CERTIFICATES OF MERGER SUB.
(i) COMPLIANCE CERTIFICATE OF MERGER SUB. Target
shall have been provided with a certificate executed on behalf of Merger Sub by
its President or its Chief Financial Officer to the effect that, as of the
Effective Time, each of the conditions set forth in Section 6.2(a) has been
satisfied with respect to Merger Sub.
(ii) CERTIFICATE OF SECRETARY OF MERGER SUB.
Target shall have been provided with a certificate executed by the Secretary or
Assistant Secretary of Merger Sub certifying:
(A) Resolutions duly adopted by the Board of
Directors and the sole stockholder of Merger Sub authorizing the execution of
this Agreement and the execution, performance and delivery of all agreements,
documents and transactions contemplated hereby; and
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(B) the incumbency of the officers of Merger
Sub executing this Agreement and all agreements and documents contemplated
hereby.
(d) LEGAL OPINION. Target shall have received a legal
opinion from Acquiror's legal counsel substantially in the form of Exhibit D
hereto.
(e) NO MATERIAL ADVERSE CHANGES. There shall not have
occurred any material adverse change in the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations, results of operations or prospects of Acquiror and its subsidiaries,
taken as a whole.
(f) GOOD STANDING. Target shall have received a
certificate or certificates of the Secretary of State of the State of Delaware
and any applicable franchise tax authority of such state, certifying as of a
date no more than five (5) business days prior to the Effective Time that each
of Acquiror and Merger Sub has filed all required reports, paid all required
fees and taxes and is, as of such date, in good standing and authorized to
transact business as a domestic corporation.
(g) EMPLOYMENT AGREEMENT. The Acquiror shall cause
printCafe Systems, Inc. to deliver to Target an executed copy of the Employment
Agreement between printCafe Systems, Inc. and the Acquiror, substantially in the
form of Exhibit E attached hereto.
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF ACQUIROR AND
MERGER SUB. The obligations of Acquiror and Merger Sub to consummate and effect
this Agreement and the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by Acquiror:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) Each
of the representations and warranties of Target in this Agreement that is
expressly qualified by a reference to materiality shall be true in all respects
as so qualified, and each of the representations and warranties of Target in
this Agreement that is not so qualified shall be true and correct in all
material respects, on and as of the Effective Time as though such representation
or warranty had been made on and as of such time (except that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date), and (ii) Target shall have
performed and complied in all material respects with all covenants, obligations
and conditions of this Agreement required to be performed and complied with by
it as of the Effective Time.
(b) NO MATERIAL ADVERSE CHANGES. There shall not have
occurred any material adverse change in the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations, results of operations or prospects of Target and its subsidiaries,
taken as a whole.
(c) CERTIFICATES OF TARGET.
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(i) COMPLIANCE CERTIFICATE OF TARGET. Acquiror
and Merger Sub shall have been provided with a certificate executed on behalf of
Target by its President or its Chief Financial Officer to the effect that, as of
the Effective Time, each of the conditions set forth in Section 6.3(a) and (b)
above has been satisfied.
(ii) CERTIFICATE OF SECRETARY OF TARGET.
Acquiror and Merger Sub shall have been provided with a certificate executed by
the Secretary of Target certifying:
(A) Resolutions duly adopted by the Board of
Directors and the stockholders of Target authorizing the execution of this
Agreement and the execution, performance and delivery of all agreements,
documents and transactions contemplated hereby;
(B) The Articles of Incorporation and Bylaws
of Target, as in effect immediately prior to the Effective Time, including all
amendments thereto; and
(C) the incumbency of the officers of Target
executing this Agreement and all agreements and documents contemplated hereby.
(d) THIRD PARTY CONSENTS. Acquiror shall have been
furnished with evidence satisfactory to it that Target has obtained those
consents, waivers, approvals or authorizations of those Governmental Entities
and third parties whose consent or approval are required in connection with the
Merger.
(e) LEGAL OPINION. Acquiror shall have received a legal
opinion from Target's legal counsel, in substantially the form of Exhibit F.
(f) GOOD STANDING. Acquiror shall have received a
certificate or certificates of the Secretary of State of the State of Illinois
and any applicable franchise tax authority of such state, certifying as of a
date no more than five (5) business days prior to the Effective Time that each
of Target has filed all required reports, paid all required fees and taxes and
is, as of such date, in good standing and authorized to transact business as a
domestic corporation.
(g) FIRPTA NOTIFICATION LETTER. Target Stockholder
shall, prior to the Closing Date, provide Acquiror with a properly executed
FIRPTA Certificate.
(h) NON-COMPETITION AGREEMENTS. Target Stockholder shall
have executed a Non-Competition Agreement substantially in the form attached
hereto as Exhibit G.
(i) GOOD STANDING. Acquiror shall have received a
certificate or certificates of the Secretary of State of the State of Illinois
and any applicable franchise tax authority of such state, certifying as of a
date no more than 5 business days prior to the Effective Time that Target and
has filed all required reports, paid all required fees and taxes and is, as of
such date, in good standing and authorized to transact business as a domestic
corporation.
(j) RELEASE. Target shall deliver to Acquiror a release
from the Stockholder in the from of Exhibit H attached hereto.
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(k) PLAN TERMINATION. Target shall have terminated the
AHP 401(k) Plan and delivered evidence of such termination to Acquiror.
(l) ACCRUED FEES. Target Stockholder shall have paid any
and all accrued and unpaid liabilities (the "Accrued Fees") owed to (i)
accountants for Target and/or Target Stockholder in excess of $200,000 (the
"Xxxxxxx Xxxxx Payment"), (ii) legal counsel, other than (A) reasonable fees and
expenses incurred solely and directly in connection with this Agreement and the
transactions contemplated herein, which fees and expenses shall not exceed
$150,000 and (B) fees and expenses incurred in the ordinary course of business,
consistent with past practice. Accountants for Target owed accrued and unpaid
fees and expenses shall have executed and delivered a release substantially in
the form attached hereto as Exhibit I.
(m) RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT. Target
Stockholder shall deliver to Acquiror an executed copy of the Second Amended and
Restated Right of First Refusal and Co-Sale Agreement among the Acquiror and
certain stockholders of the Acquiror, substantially in the form of Exhibit J
attached hereto.
(n) VOTING AGREEMENT. Target Stockholder shall deliver
to Acquiror an executed copy of the Second Amended and Restated Voting Agreement
among the Acquiror and certain stockholders of the Acquiror, substantially in
the form of Exhibit K attached hereto.
(o) TARGET COMMON STOCK CERTIFICATES. The Target
Stockholder shall deliver to Acquiror for cancellation the stock certificates,
in form suitable for transfer, evidencing all the issued and outstanding shares
of Target Common Stock endorsed in blank or with an executed blank stock
transfer power attached.
SECTION SEVEN
7. TERMINATION, AMENDMENT AND WAIVER.
7.1 TERMINATION. At any time prior to the Effective Time,
whether before or after approval of the matters presented in connection with the
Merger by the stockholders of Target, this Agreement may be terminated and the
Merger may be abandoned:
(a) by mutual consent duly authorized by the Boards of
Directors of each of Acquiror and Target;
(b) by either Acquiror or Target, if, without fault of
the terminating party,
(i) the Effective Time shall not have occurred
on or before March 9, 2000 (or such later date as may be agreed upon in writing
by the parties hereto); or
(ii) there shall be any applicable federal or
state law that makes consummation of the Merger illegal or otherwise prohibited
or if any court of competent jurisdiction or Governmental Entity shall have
issued an order, decree, ruling or taken any other action restraining, enjoining
or otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and nonappealable.
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(c) by Acquiror, if Target shall materially breach any
of its representations, warranties or obligations hereunder and such breach
shall not have been cured within 2 business days of receipt by Target of written
notice of such breach, provided that Acquiror is not in material breach of any
of its representations, warranties or obligations hereunder, and provided
further, that no cure period shall be required for a breach which by its nature
cannot be cured;
(d) by Target, if Acquiror shall materially breach any
of its representations, warranties or obligations hereunder and such breach
shall not have been cured within 2 business days following receipt by Acquiror
of written notice of such breach, provided that Target is not in material breach
of any of its representations, warranties or obligations hereunder, and provided
further, that no cure period shall be required for a breach which by its nature
cannot be cured.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 7.1, this Agreement shall forthwith become void
and there shall be no liability or obligation on the part of Acquiror, Merger
Sub or Target or their respective officers, directors, stockholders or
affiliates, except to the extent that such termination results from the breach
by a party hereto of any of its representations, warranties or covenants set
forth in this Agreement; provided that, the provisions of Section 5.4
(Confidentiality), Section 7.3 (Expenses) and this Section 7.2 shall remain in
full force and effect and survive any termination of this Agreement.
7.3 EXPENSES . Whether or not the Merger is consummated, all
actual costs and expenses incurred solely and directly in connection with the
letter of intent, this Agreement and the transactions contemplated herein
including, without limitation, filing fees and the fees and expenses of
advisors, accountants, legal counsel and financial printers, shall be paid by
Acquiror, with such costs and expenses to be paid at Closing; provided, however,
that the Target Stockholder shall bear all accrued and unpaid costs and expenses
of (i) accountants to the Target and/or the Target Stockholder in excess of
$200,000 and (ii) legal counsel to the Target and/or the Target Stockholder in
excess in $150,000. Upon the Closing, Acquiror shall also pay (i) upon receipt
of an invoice therefor, the legal fees and expenses of Xxxxxxx & Xxxxxxxx Ltd.
in an amount not to exceed $17,000 and (ii) the Xxxxxxx Xxxxx Payment.
7.4 AMENDMENT. The boards of directors of the parties hereto may
cause this Agreement to be amended at any time by execution of an instrument in
writing signed on behalf of each of the parties hereto; provided that an
amendment made subsequent to adoption of the Agreement by the stockholders of
Target or Merger Sub shall not (i) alter or change the amount or kind of
consideration to be received on conversion of the Target Capital Stock, (ii)
alter or change any term of the Certificate of Incorporation of the Surviving
Corporation to be effected by the Merger, or (iii) alter or change any of the
terms and conditions of the Agreement if such alteration or change would
adversely affect the stockholders of Target or Merger Sub.
7.5 EXTENSION; WAIVER. At any time prior to the Effective Time
any party may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered
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pursuant hereto, and (iii) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party.
SECTION EIGHT
8. ESCROW AND INDEMNIFICATION.
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All covenants to
be performed prior to the Effective Time, and all representations and warranties
in this Agreement or in any instrument delivered pursuant to this Agreement
shall survive the consummation of the Merger and continue until the twelve (12)
month anniversary of the Closing Date (the "Escrow Termination Date"), except
for (A) the representations and warranties contained in Section 2.14, Section
2.15 and Section 2.16 hereof, and (B) the obligation to pay the Accrued Fees,
each of which shall survive the Closing Date until 30 days after the expiration
of the applicable statue of limitations, giving effect to any extension thereof
(the "Special Indemnity Termination Date"); provided that if any claims for
indemnification have been asserted with respect to any such representations and
warranties prior to the Escrow Termination Date or, with respect to the
representations and warranties contained in Sections 2.14, 2.15 and/or 2.16
hereof, the Special Indemnity Termination Date, the representations and
warranties on which any such claims are based shall continue in effect until
final resolution of any claims; provided further, that Fraud Claims (as defined
below) shall survive in accordance with the applicable statute of limitations
related to such representations and warranties or such Fraud Claims. All
covenants to be performed after the Effective Time shall continue indefinitely.
"Fraud Claim" shall mean any claim, demand, suit or cause of action otherwise
available to the Indemnified Persons based upon an allegation or allegations
that the Target and/or the Target Stockholder had an intent to defraud or made a
willful or intentional misrepresentation or willful omission of a material fact
in connection with this Agreement, including the Exhibits and Schedules attached
hereto, or any of the agreements referred to herein.
8.2 ESCROW FUND. As soon as practicable after the Effective
Time, one hundred thousand (100,000) of the Consideration Shares to be issued in
the Merger (together with any stock dividends or stock distributions or any
securities of Acquiror issued in respect thereof (including, without limitation,
any shares issued pursuant to any stock dividend, stock split, reverse stock
split, combination or reclassification thereof)) shall, without any act of any
stockholder of Target, be registered in the name of, and be deposited with,
Merger Sub as escrow agent (the "Escrow Agent"), such deposit to constitute the
escrow fund (the "Escrow Fund"), to be governed by the terms set forth herein.
In the event that any Damages (as defined below) arise, the Escrow Fund shall be
available to compensate the Indemnified Persons (defined below) pursuant to the
indemnification obligations of the stockholders of the Target pursuant to
Section 8.3.
8.3 INDEMNIFICATION TARGET AND TARGET STOCKHOLDER.
(a) INDEMNIFIED DAMAGES. Subject to the limitations set
forth in this Section 8, from and after the Effective Time, Target (in the event
that Merger does not Close)
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and Target Stockholder shall jointly and severally protect, defend, indemnify
and hold harmless Acquiror and the Surviving Corporation and their respective
affiliates, officers, directors, employees, representatives and agents
(Acquiror, Surviving Corporation and each of the foregoing persons or entities
is hereinafter referred to individually as an "Indemnified Person" and
collectively as "Indemnified Persons") from and against any and all losses,
costs, damages, liabilities, fees (including without limitation attorneys'
fees)and expenses (collectively, the "Damages"), that any of the Indemnified
Persons incurs by reason of or in connection with any claim, demand, action or
cause of action alleging misrepresentation, breach of, or default in connection
with, any of the representations, warranties, covenants or agreements of Target
contained in this Agreement, including any exhibits or schedules attached
hereto, and the Certificate of Merger, which becomes known to Acquiror during
the Escrow Period or, with respect to the representations and warranties
contained in Sections 2.14, 2.15 and/or 2.16 hereof, the Special Indemnity
Termination Date. Damages in each case shall be net of the amount of any
insurance proceeds and indemnity and contribution actually recovered by Acquiror
or the Surviving Corporation.
(b) LIMITATIONS. The maximum liability of Target
Stockholder for any breach of a representation, warranty or covenant of Target
or Target Stockholder contained in this Agreement, including all Exhibits and
Schedules attached hereto, shall be limited to the amount of the Escrow Fund;
provided, however, that nothing herein, including the termination of the Escrow
Fund on the Escrow Termination Date shall limit the liability: (i) of Target for
any breach of representation, warranty or covenant if the Merger does not close,
(ii) of Target or Target Stockholder in connection with any breach of any of the
representations and warranties contained in Sections 2.1, 2.3, 2.4, 2.14, 2.15
and 2.16, (iv) of any officer, director or Target Stockholder in connection with
a Fraud Claim and (v) of Target Stockholder in connection with the failure to
pay any Accrued Fees.
8.4 DAMAGES THRESHOLD. Notwithstanding the foregoing, Acquiror
may not receive any amount from the Escrow Fund unless and until a certificate
signed by an officer of Acquiror (an "Officer's Certificate") identifying
Damages has been delivered to the Escrow Agent and such amount is determined
pursuant to this Section 8 to be payable, in which case Acquiror shall receive a
proportional amount of escrowed shares and escrowed cash from the Escrow Fund
equal in value to the full amount of such Damages without deduction. In
determining the amount of any Damages attributable to a breach, any materiality
standard contained in any representation, warranty or covenant of Target and
Target Stockholder shall be disregarded.
8.5 ESCROW PERIOD. Subject to the following requirements, the
Escrow Fund shall remain in existence until the Escrow Termination Date (the
"Escrow Period"). Upon the expiration of the Escrow Period, the Escrow Fund
shall terminate; provided, however, that the the number of escrowed shares in
the Escrow Fund, which, in the reasonable judgment of Acquiror, subject to the
objection of Target Stockholder and the subsequent arbitration of the claim in
the manner provided herein, are necessary to satisfy any unsatisfied claims
specified in any Officer's Certificate delivered to the Escrow Agent prior to
the expiration of such Escrow Period with respect to facts and circumstances
existing on or prior to the Escrow Termination Date shall remain in the Escrow
Fund (and the Escrow Fund shall remain in existence) until such claims have been
resolved. As soon as all such claims have been resolved, the Escrow Agent
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shall deliver to Target Stockholder all escrowed cash, escrowed shares and other
property remaining in the Escrow Fund and not required to satisfy such claims.
8.6 METHOD OF ASSERTING CLAIMS. In the event any Parent
Indemnified Person (the "Claiming Person") asserts a right of indemnity against
the Target Stockholder under this Section 8, Acquiror or Merger Sub shall
execute and deliver to the Target Stockholder a written notice to such effect (a
"Notice of Claim"; and the right of indemnity asserted in a Notice of Claim
being hereinafter referred to as a "Claim") and instruct the Escrow Agent to
deliver that portion of the Escrow Fund the Fair Market Value (as defined below)
of which shall equal the amount of the Claim to such Claiming Person.
8.7 CASH PAYMENTS. Upon receipt of a Notice of Claim, Target
Stockholder shall have the right and option to elect to make a cash payment
within five (5) business days of receipt of the Notice of Claim. In the event
the Target Stockholder makes a cash payment to the Indemnified Person in
settlement of any Claim asserted in a Notice of Claim, then the Escrow Agent
shall release a number of shares of escrowed shares in the Escrow Fund to the
Target Stockholder in an amount equal to the quotient of (A) the total amount of
the cash payment divided by (B) the Fair Market Value per share. Target
Stockholder shall have no right or entitlement to replace escrowed shares with
cash, other than in connection with a Notice of Claim and only up to the total
amount of such Claim.
8.8 DEFINITION OF "FAIR MARKET VALUE". For purposes of this
Section 8, "Fair Market Value" shall mean (i) (A) if the Common Stock of the
Acquiror is not then traded on a national securities exchange, the average of
the closing prices quoted on the National Association of Securities Dealers,
Inc. Automated Quotation National Market System, if applicable, or the average
of the last bid and asked prices of the Common Stock quoted in the
over-the-counter-market or (B) if the Common Stock is then traded on a national
securities exchange, the average of the high and low prices of the Common Stock
listed on the principal national securities exchange on which the Common Stock
is so traded, in each case for the five (5) trading days immediately preceding
the date of the Notice of Claim or, if such date is not a business day on which
shares are traded, the next immediately preceding trading day or (ii) in all
other circumstances, the fair market value per share of Common Stock as
determined by the Acquiror's Board of Directors.
8.9 INDEMNIFICATION ACQUIROR.
(a) INDEMNIFIED DAMAGES. Subject to the limitations set
forth in this Section 8, from and after the Effective Time, Acquiror shall
protect, defend, indemnify and hold harmless Target (in the event that Merger
does not Close) Target Stockholders and their respective affiliates, officers,
directors, employees, representatives and agents (Target, Target Stockholders
and each of the foregoing persons or entities is hereinafter referred to
individually as an "Indemnified Person" and collectively as "Indemnified
Persons") from and against any and all losses, costs, damages, liabilities, fees
(including without limitation attorneys' fees) and expenses (collectively, the
"Damages"), that any of the Indemnified Persons incurs by reason of or in
connection with any claim, demand, action or cause of action alleging
misrepresentation, breach of, or default in connection with, any of the
representations, warranties, covenants or agreements of Acquiror and Merger Sub
contained in this Agreement, including any exhibits or
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schedules attached hereto, and the Certificate of Merger, which becomes known to
Target or Target Shareholders during the Escrow Period. Damages in each case
shall be net of the amount of any insurance proceeds and indemnity and
contribution actually recovered by Target or Target Shareholders.
(b) LIMITATIONS. The maximum liability of Acquiror and
Merger Sub for any breach of a representation, warranty or covenant of Acquiror
or Merger Sub shall be limited to the amount of $400,000 in the aggregate;
provided, however, that nothing herein shall limit the liability of any officer,
director or Acquiror for such person's or entity's fraud or intentional
misrepresentation.
SECTION NINE
9. GENERAL PROVISIONS.
9.1 NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
forty-eight (48) hours after being deposited in the regular mail as certified or
registered mail (airmail if sent internationally) with postage prepaid, if such
notice is addressed to the party to be notified at such party's address or
facsimile number as set forth below, or as subsequently modified by written
notice,
(a) if to Acquiror or Merger Sub, to:
printCafe, Inc.
Fourty 00xx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: President
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
(b) if to Target or Target Stockholder, to:
A.H.P. Systems, Inc.
0000 Xxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile No.: 000-000-0000
Telephone No.: 000-000-0000
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with a copy to:
Xxxxxx X. Xxxxxxxxxx, P.C.
000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
email: xxxxxxx@xxx.xxx
Facsimile No.: 000-000-0000
Telephone No.: 000-000-0000
and to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
9.2 INTERPRETATION. When a reference is made in this Agreement
to Exhibits or Schedules, such reference shall be to an Exhibit or Schedule to
this Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The phrase "made available" in this Agreement shall
mean that the information referred to has been made available if requested by
the party to whom such information is to be made available. The phrases "the
date of this Agreement," "the date hereof," and terms of similar import, unless
the context otherwise requires, shall be deemed to refer to the date first set
forth above. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
9.4 ENTIRE AGREEMENT; NONASSIGNABILITY; PARTIES IN INTEREST.
This Agreement and the documents and instruments and other agreements
specifically referred to herein or delivered pursuant hereto, including the
Exhibits, the Schedules, including the Target Disclosure Schedule and the
Acquiror Disclosure Schedule (a) constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties hereto
with respect to the subject matter hereof, except for the Confidentiality
Agreement, which shall continue in full force and effect, and shall survive any
termination of this Agreement or the Closing, in accordance with its terms; (b)
are not intended to confer upon any other person any rights or remedies
hereunder, except as set forth in Sections 1.6(a)-(c) and (g), 1.7. 1.8, 1.12;
and (c) shall not be assigned by operation of law or otherwise except as
otherwise specifically provided.
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9.5 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties hereto agree to
renegotiate such provision in good faith, in order to maintain the economic
position enjoyed by each party as close as possible to that under the provision
rendered unenforceable. In the event that the parties hereto cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
9.6 REMEDIES CUMULATIVE. Except as otherwise provided herein,
any and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.
9.7 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.
9.8 RULES OF CONSTRUCTION. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
9.9 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the parties hereto or their
respective successors and assigns. Any amendment or waiver effected in
accordance with this Section 9.9 shall be binding upon the parties hereto and
their respective successors and assigns.
[Signature Page Follows]
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Acquiror, Merger Sub, Target and Target Stockholder have executed this
Agreement as of the date first written above.
PRINTCAFE, INC.
By:
---------------------------------
Name:
-------------------------------
(Print)
Title:
------------------------------
AHP PRINTCAFE, INC.
By:
---------------------------------
Name:
-------------------------------
(Print)
Title:
------------------------------
A.H.P. SYSTEMS, INC.
By:
---------------------------------
Name:
-------------------------------
(Print)
Title:
------------------------------
------------------------------------
XXXX XXXXXX
