ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of December 22,
1995, by and among ANALYTICAL SURVEYS, INC., a Colorado corpora-
tion ("Buyer"), INTELLIGRAPHICS, INC., a Wisconsin corporation
("Seller"), and A. XXXXXXX XXXXXXXX ("Xxxxxxxx"). Certain of the
capitalized terms used in this Agreement are defined as set forth
in Paragraph 2.
R E C I T A L S :
A. Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, substantially all of the assets of
Seller used in the conduct of its data conversion business (the
"Business") in accordance with the terms and conditions herein-
after set forth.
X. Xxxxxxxx is the majority shareholder of Seller and
will benefit financially from the transactions contemplated
hereby.
NOW, THEREFORE, in consideration of the mutual promises
hereinafter contained, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Purchase of Assets.
1.1. Assets to be Purchased. Subject to the terms and
conditions set forth in this Agreement, Buyer hereby agrees to
purchase from Seller and Seller hereby agrees to sell, assign and
deliver to Buyer, at Closing, except for the Excluded Assets
(described below), all of the assets of Seller owned or used in
connection with the Business, as the same may exist as of the
date of Closing, including, but not limited to, the following:
(a) all Fixed Assets;
(b) all supplies, packaging materials, marketing and
sales literature, consumable materials and other miscellaneous
items of similar character of Seller on hand as of Closing
relating to the Business, wherever located;
(c) all work in process, unbilled services and other
billable charges of the Business;
(d) the Accounts Receivable;
(e) all sales, manufacturing, supplier and customer
lists and records, personnel and payroll records, accounting
records, purchasing and sale records, and all other records of
the Business (except Seller's corporate minute and stock books)
and the other business records of Seller listed on attached
Exhibit 1.1(e);
(f) all product specifications, Patents and Data,
Related Information, formulae, designs, copyright registrations
and applications therefor, whether issued or pending, relating to
the Business and all improvements, and other similar interests
relating to the Business to which Seller has any right of
ownership, use or otherwise;
(g) all of Seller's right, title and interest in and
to the name "Intelligraphics, Inc.," and "Intelligraphics
International, Inc." or any other name, including any derivations
or abbreviations of any name under which Seller is now doing or
has done business in the past;
(h) all of Seller's right, title and interest in, to
and under the Customer Contracts and the Leases and those other
contracts, licenses, permits, purchase orders, sales orders,
service contracts and other agreements of the Business existing
as of Closing, including without limitation, those listed on
attached Exhibit 1.1(h)(the "Assumed Contracts");
(i) all Software; and
(j) the goodwill, if any, of the Business.
All of the assets being purchased by Buyer described in this
Paragraph 1.1 are hereinafter referred to as the "Assets." Buyer
acknowledges that Xxxxxxxx is a partner in both Center City
Plaza, a Wisconsin general partnership, and Center City Leasing
LLC, a Wisconsin limited liability company (collectively, the
"Business Enterprises"), that Seller leases certain office space
and equipment from the Business Enterprises, and that the Assets
shall not include any assets which are set forth on attached
Exhibit 2.2 (the "Excluded Assets").
1.2. Purchase Price. As consideration for the Assets,
Buyer shall pay to Seller the following (the "Purchase Price"):
(a) An amount equal to Three Million Four
Hundred Fifty Thousand Dollars ($3,450,000.00) plus or minus the
amount, if any, by which the Net Current Asset Value (as defined
below) exceeds or is less than, as the case may be, One Million
Dollars ($1,000,000) (the "Cash Payment"); and
(b) Two Hundred Thirty Thousand (230,000) shares of
the Common Stock (subject to the restrictions contained in the
Voting Trust, Investor Letters, and Lock Up Agreement of even
date herewith), appropriately adjusted for any stock splits,
reverse stock splits, stock dividends, or other similar events
occurring between the date of this Agreement and the Closing (the
"Subject Shares"). Good and marketable title to the Subject
Shares shall be transferred to Seller at the Closing, free and
clear of all liens, claims and encumbrances, except the
encumbrances provided for in the terms of this Agreement or the
agreements executed pursuant to this Agreement.
1.3. Payment of Estimated Cash Payment and the Subject
Shares. At the Closing, Buyer shall:
(a) Pay to Bank One, Milwaukee, N.A. by wire transfer
an amount equal to $3,490,000 (the "Estimated Amount"), which
represents the parties' estimate of the amount set forth in
Paragraph 1.2(a) above (which is $3,507,000), less $17,000 as a
"cushion" and less $250,000 (the "Escrowed Amount"), pursuant to
Paragraph 1.3(b) below;
(b) Deliver to the Escrow Agent by wire transfer the
Escrowed Amount and 70,000 of the Subject Shares both of which
shall be held by the Escrow Agent under the terms of the Escrow
Agreement, as follows:
(i) $170,000 shall be paid by the Escrow Agent in
accordance with the terms of the Escrow Agreement upon Seller's
delivery to the Escrow Agent, on or before February 28, 1996, of
a signed Consent by Electronic Data Systems, Inc. ("EDS"),
assigning Seller's $5,000,000 Contract with EDS to Buyer in form
and substance satisfactory to Buyer;
(ii) $80,000 shall be paid in accordance with the
terms of the Escrow Agreement by Escrow Agent upon Buyer's
delivery to Escrow Agent of eight (8) signed Consents, in the
form set forth under Exhibit 1.3(b)(ii). If fewer than eight (8)
signed Consents are delivered by Buyer, Escrow Agent shall pay
$10,000 per signed Consent delivered on or before February 28,
1996. Any funds remaining in the Escrowed Amount by reason of
Buyer's failure to deliver the signed Consents pursuant to (i)
and (ii) above shall be paid by Escrow Agent to Buyer on
February 29, 1996. Seller will cooperate with Buyer's efforts to
obtain the Consents, provided that, direct contact with the
parties to the contracts for which the Consents are necessary
will be limited to Xxxxxxx Xxxxxxx and Xxxxxx Xxxxxx; and
(iii) the Subject Shares shall be held in
escrow pursuant to the terms of Paragraph 1.8 below.
(c) Deliver to the Trustee under the Voting Trust, of
even date herewith, a certificate, in the name of the Trustee,
for the balance (160,000) of the Subject Shares, which shares
shall be held by the Trustee under the terms of the Voting Trust.
As provided in the Voting Trust, the Trustee shall deliver to the
Beneficiaries their respective voting trust certificates.
Prior to Closing, Buyer and Seller and their respective account-
ing firms shall use reasonable good faith efforts to estimate
the Net Current Asset Value and, based upon the estimate of the
Net Current Asset Value, the Cash Payment. For purposes of this
Agreement, the Cash Payment as so estimated shall be referred to
in this Agreement as the "Estimated Amount."
1.4. Post-Closing Adjustments. As promptly as is
practicable and in any event within sixty (60) days following the
Closing, Seller will prepare and deliver to Buyer a balance sheet
dated as of the Closing Date (the "Final Balance Sheet") and a
statement setting forth the proposed calculation on the Net Cur-
rent Asset Value (the "Statement"), reviewed by BDO Xxxxxxx. The
Final Balance Sheet and Statement shall be prepared in accordance
with GAAP and on a basis consistent with the audited balance
sheet of Seller as at December 31, 1994 and shall be reviewed by
BDO Xxxxxxx. Buyer shall permit Seller and BDO Xxxxxxx access to
all of the accounting records of the Business in Buyer's
possession as may be necessary for the preparation and
certification of such balance sheet and statement. Seller shall
permit Buyer and its independent certified public accountant to
review all accounting records and all work papers and computa-
tions used in the preparation of the Final Balance Sheet and
Statement. If Buyer does not notify Seller within thirty (30)
days of receiving the Final Balance Sheet and Statement that
Buyer disagrees with the calculation of the Net Current Asset
Value reflected therein, then the Net Current Asset Value shall
be the amount reflected in the Statement. If Buyer notifies
Seller that Buyer disagrees with such calculation within such
thirty (30) day period, Seller and Buyer shall negotiate in good
faith to resolve the dispute. If, within fifteen (15) days from
the date notice of dispute is given, Seller and Buyer cannot
agree on the resolution of the dispute, then the dispute shall be
resolved a "Big 6" accounting firm (other than KPMG Peat Marwick)
chosen by Seller and Buyer, provided that, in the event that
Seller and Buyer cannot agree on a firm, Seller and Buyer will
each choose two of the firms referenced previously in this
sentence and a firm will be chosen from those four by a random
draw.
1.5. Payment of Adjustment Amount. If the adjustment
provided in Section 1.2(a) requires a payment by Buyer to Seller
(after taking into account the cushion provided for in
Section 1.3(a), then within ten (10) days of the final
determination of the Net Current Asset Value, Buyer shall pay to
Bank One, Milwaukee, N.A. an amount equal to such adjustment (the
"Adjustment Amount"); provided, that in no event shall the
Adjustment Amount payable by Buyer exceed $35,000 (taking into
account the cushion). If the adjustment provided for in Section
1.2(a) requires a payment by Seller to Buyer (after taking into
account the cushion), then within ten (10) days of such final
determination, Seller and Xxxxxxxx, jointly and severally, shall
wire transfer to Buyer an amount equal to such adjustment.
1.6. Allocation of Purchase Price. The Purchase Price
shall be allocated among the Assets based on their respective
fair market values as set forth on attached Exhibit 1.6.
1.7. Assumption of Liabilities. As of the Closing
Date, Buyer shall assume and hereby agrees to pay and perform
when due (i) all liabilities which accrue and which are based on
performance obligations arising from and after the Closing Date
under the Assumed Contracts, and (ii) all current liabilities of
Seller considered in the final calculation of the Net Current
Asset Value, including, without limitation, (a) trade accounts
payable, (b) total payroll taxes and withholding, (c) accrued
wages and salary, (d) accrued FICA taxes, (e) accrued property
taxes, (f) trade accounts payable to related parties, (g)
xxxxxxxx in excess of costs and estimated earnings, (h)
unemployment compensation taxes, and (i) in addition to total
payroll taxes and withholding, any employee withheld amounts, in
each case as reflected on the Final Balance Sheet except that
Buyer need not assume any liability reflected on the Final
Balance Sheet that is unliquidated or is not fixed in amount or
involves an obligation other than the payment of money, if Buyer,
on or prior to the date specified in Section 1.5 for the payment
of adjustments, identifies such liability by notice to Seller and
pays to Bank One, Milwaukee, N.A. cash in an amount equal to the
amount of the liability reflected on the Final Balance Sheet.
The liabilities so assumed by Buyer are referred to as the
"Assumed Liabilities." Except for the Assumed Liabilities, Buyer
shall assume no obligations or liabilities of Seller and Seller
covenants and agrees to pay, perform and discharge all
liabilities and obligations of Seller which are not specifically
assumed by Buyer hereunder.
1.8. Escrow of Subject Shares. Unless a claim is
timely made under the terms of the Escrow Agreement, the Escrow
Agent shall transfer the certificate for the Subject Shares held
under the Escrow Agreement to the Trustee of the Voting Trust on
the first anniversary of the Closing Date, to be held under the
terms of the Voting Trust. If a claim is timely made under the
Escrow Agreement, the Subject Shares shall be disbursed in
accordance with the terms of the Escrow Agreement. As provided
in the Voting Trust, the Trustee shall issue voting trust
certificates to the Beneficiaries and Bank One Milwaukee, N.A.
for any such Subject Shares disbursed by the Escrow Agent to the
Trustee.
2. Definitions. As used herein, the following terms
shall have the following meanings, respectively:
"Accounts Receivable" shall mean all accounts
receivable of Seller on hand as of the Closing Date.
"Assets" shall be defined as set forth in Paragraph
1.1.
"Assumed Contracts" shall be defined as set forth in
Paragraph 1.1(h).
"Assumed Liabilities" shall be defined as set forth in
Paragraph 1.7.
"Audited Financial Statements" shall be defined as set
forth in Paragraph 3.3.
"BDO Xxxxxxx" shall mean the Milwaukee, Wisconsin
office of the independent certified public accounting firm of BDO
Xxxxxxx.
"Beneficiaries" shall be defined as set forth in the
Voting Trust.
"Claiming Party" shall be defined as set forth in
Paragraph 6.3(a).
"Closing" shall be defined as set forth in Paragraph
11.1.
"Closing Date" shall mean December 22, 1995, or such
other date as may be mutually agreed by the parties as provided
in Paragraph 11.1.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Common Stock" shall mean the authorized no par value
Common Stock of Buyer.
"Customer Contracts" shall mean those written contracts
between Seller and any person, firm or corporation for the
provision by Seller of products and/or services related to the
Business (i) entered into at or prior to the Closing Date as to
which Seller has not completed performance as of the Closing Date
or (ii) received and to be completed after the Closing Date,
including only those contracts listed on Exhibit 1.1(h) between
Seller and its customers.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
"Escrow Agent" shall mean Xxxx Xxx, Xxxxxxxx, XX,
Xxxxxx, Xxxxxxxx.
"Escrow Agreement" shall mean the Escrow Agreement in
the form attached to this Agreement as Exhibit 2-1 to be entered
into among Buyer, Seller and the Escrow Agent at the Closing.
"Excluded Assets," if any, shall mean those assets
listed as being specifically excluded on attached Exhibit 2-2.
"Final Balance Sheet" shall be defined as set forth in
Paragraph 1.4.
"Fixed Assets" shall mean all fixed assets of Seller on
hand as of Closing of every kind and description, wherever
located, including without limitation, machinery, equipment,
hardware, computers, office equipment, furniture, furnishings,
fixtures, tools, automobiles, trucks, other vehicles, racks,
supplies, leasehold improvements, and other fixed assets of
Seller utilized in any manner by Seller in connection with the
Business.
"GAAP" shall mean generally accepted accounting
principles consistently applied.
"Indemnifying Party" shall be defined as set forth in
Paragraph 6.3(a).
"Knowledge of Seller" or similar phrases such as
"Seller's Knowledge" or to the "best of Seller's knowledge" means
matters known to any of Xxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxx
and Xxxxx Xxxxx and matters which would come to any of their
attention in the normal course of due diligence to verify the
warranties and representations set forth in Paragraph 3.
"Leases" shall mean all of the leases for equipment and
facilities under which Seller is lessee, utilized by Seller in
the Business, including without limitation, those leases listed
on attached Exhibit 1.1(h).
"Market Price" shall mean the average of the closing
bid and asked prices for the Common Stock on the applicable date
as reported on the National Market System of NASDAQ (or, if the
NASDAQ is closed on such date, on the next preceding date on
which the NASDAQ is operated).
"NASDAQ" shall mean the National Market System of the
National Association of Securities Dealers Automated Quotation
System.
"Net Current Asset Value" shall mean the sum of the
book value of the trade accounts receivable, work in progress,
unbilled work, prepaid expenditures and other current assets of
Seller as reflected on the Final Balance Sheet (excluding any
current assets included among the Excluded Assets), minus the sum
of the trade accounts payable, accrued expenses, xxxxxxxx in
excess of charges, and other current liabilities of Seller as
reflected on the Final Balance Sheet, in all cases determined in
accordance with GAAP.
"Obligations" shall mean all obligations under the
Assumed Contracts and the Assumed Liabilities.
"Patents and Data" shall mean such of the following in
which Seller has any right, title or interest: patents or
applications for patents (domestic or foreign) and trade secrets
with respect to such patents or applications for patents and
trade secrets, as well as all technical know-how and knowledge,
discoveries, inventions, processes, secret processes, machines,
manufacture or compositions of matter or any other similar infor-
mation, conversion data, and all documents pertaining to such
patents or applications for patents and trade secrets (including
both written and oral recordings or representations).
"Plan" or "Plans" shall be defined as set forth in
Paragraph 3.27.
"Related Information" shall mean such of the following
in which Seller has any right, title or interest: trademarks,
trademark registrations, applications for trademark
registrations, trade names, copyrights, copyright applications,
license agreements (as licensee), technical reports, vendor and
customer lists, and all other documents and business records of
Seller.
"Required Consents" shall be defined as set forth in
Paragraph 8.6.
"Shareholders" shall mean A. Xxxxxxx Xxxxxxxx, Xxxx
Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx Xxxxx
and Mahid Ahkavan.
"Software" shall mean all software in which Seller or
Xxxxxxxx have any rights and which is utilized by Seller in any
manner in the Business, whether or not said software is fully
developed or in the process of development, and including, but
not limited to, any enhancements or modifications to said
software and all software licenses and all source codes therefor
which may be in Seller's possession or control.
"Statement" shall be defined as set forth in Paragraph
1.4.
"Subject Shares" shall be defined as set forth in
Paragraph 1.2(b).
"Trustee" shall be defined as set forth in Paragraph
11.5.
"Uncollected Receivables" shall be defined as set forth
in Paragraph 7.
"Voting Trust" shall be defined as set forth in
Paragraph 11.5.
3. Representations and Warranties of Seller and
Xxxxxxxx. Except as set forth in the schedule attached to this
Agreement (the "Schedule of Exceptions"), Seller and Xxxxxxxx
jointly and severally covenant, represent and warrant as follows,
each of which is true and correct as of the date of this
Agreement and shall be true and correct on the Closing Date and
each of which shall survive the Closing Date and the transactions
contemplated hereby, to the extent set forth in Paragraph 16.16.
3.1. Corporate Existence, Qualifications and Power
of Seller. Seller is a corporation duly organized and validly
existing under the laws of the State of Wisconsin. Seller has
the corporate power and authority to own and use its properties
and to transact the Business, and is licensed or qualified as a
foreign corporation in all jurisdictions in which such licensing
or qualification is required and where the failure to be so
licensed or qualified could reasonably be anticipated to have a
material adverse effect on the Business. Seller has the
corporate power to enter into and consummate the transactions
contemplated by this Agreement. Seller does not have any
subsidiaries or any interest or investment in any partnership,
joint venture, corporation or other entity, except as disclosed
on attached Exhibit 3.1.
3.2. Authorization of Agreement by Seller. The
execution and delivery of this Agreement do not, and, subject to
the receipt of the consents referred to in Paragraph 8.6, the
consummation of the transactions contemplated by this Agreement
will not, violate or conflict with any provisions of applicable
law or the Articles of Incorporation or Bylaws of Seller or
result in a breach of, or constitute a default under, or result
in the acceleration of, any obligation or loans under any
agreement or instrument to which Seller or Xxxxxxxx is a party or
by which either of them is bound or violate any order, judgment,
award or decree to which either of them is a party or by which
either of them is subject, which violation, conflict, breach or
default could have a material adverse effect on (i) the Business,
the Assets, or the Obligations or (ii) the consummation of the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation by Seller of the transactions
contemplated herein have been approved by the Board of Directors
and shareholders of Seller, which constitutes all action required
by applicable law and the Articles of Incorporation and Bylaws of
Seller to authorize and approve the execution, delivery and
performance of this Agreement by Seller and the consummation
by it of the transactions contemplated herein.
3.3. Financial Statements. Seller has delivered to
Buyer an audited balance sheet of Seller as of December 31, 1994,
audited financial statements of Seller for its fiscal year ended
December 31, 1994, and audited financial statements of Seller for
the period from January 1, 1995 to September 30, 1995
(collectively, the "Audited Financial Statements"). The Audited
Financial Statements have been prepared based upon the accounting
records of Seller in accordance with the normal and customary
practices of Seller in the preparation of audited financial
statements and in the ordinary course of its business, and on a
consistent basis. In addition to the Final Balance Sheet to be
delivered pursuant to Paragraph 1.4, Seller not later than
February 29, 1996 will also cause to be prepared and delivered to
Buyer an audited statement of earnings for the period from
January 1, 1995, through the Closing Date (the "Final Statement
of Income"). The Final Statement of Income will be reviewed by
BDO Xxxxxxx and will be prepared in accordance with GAAP.
3.4. Full Disclosure. Neither this Agreement nor any
other agreement, document, certificate or statement furnished or
to be furnished to Buyer or to any other party in connection with
the transactions contemplated hereby, contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were
made, not misleading.
3.5. Events Subsequent to Non-Binding Term Sheet.
Since September 15, 1995, except as set forth on attached Exhibit
3.5 hereto, there has been no (i) change in the condition of the
Assets or liabilities of Seller or the Business (other than
changes in the ordinary course of business, none of which
individually has or cumulatively have had a material adverse
effect on any of the Assets, the Obligations, or the Business) or
(ii) damage, destruction or loss, whether covered by insurance or
not, which individually or cumulatively have had a material
adverse effect on any of the Assets, the Obligations or the
Business.
3.6. Accounts Receivable. Except as set forth on
attached Exhibit 3.6, the Accounts Receivable will be (a) valid
and subsisting, (b) subject to no known defenses, offsets or
counterclaims, and (c) good and collectible within six (6) months
of the Closing Date in the ordinary course of business at the
aggregate amounts of the Accounts Receivable, net of the reserves
therefor reflected on the Final Balance Sheet.
3.7. Undisclosed Liabilities. Except as set forth on
attached Exhibit 3.7, Seller does not have, and through the
Closing Date will not have, any material liabilities, fixed or
contingent, liquidated or accrued, primary or secondary, by
agreement or by operation of law, including, without limitation,
liabilities for federal, state, local or foreign taxes or
liabilities to customers or suppliers for which adequate
provisions have not been made on the Final Balance Sheet (other
than liabilities incurred in the ordinary course of business,
none of which individually or in the aggregate will have a
material adverse effect on the Business).
3.8. Tax Returns and Audit. Seller has filed, or
caused to be filed, with the appropriate federal, state and local
agencies, all tax returns and tax reports required by law to be
filed by them. All income, profits, franchise, sales, use,
ownership, occupation, property, excise, ad valorem, and any
other taxes due have been fully paid, or adequate reserves have
been established for the same and are reflected on the Audited
Financial Statements, except for such as may have accrued or been
incurred in the ordinary course of business since September 30,
1995, and there exist no liens, and to the knowledge of Seller,
there are no facts or circumstances which could reasonably be
anticipated to result in any liens for unpaid or delinquent
taxes, except for liens for current taxes not yet due.
3.9. Title to Assets. Seller has good and marketable
title to all Assets, free and clear of any liens, mortgages,
pledges, encumbrances, claims, charges of any kind, except (i)
liens shown on the Audited Financial Statements or incurred in
the normal course of business since September 30, 1995 and
reflected on the Final Balance Sheet as securing specified lia-
bilities, (ii) liens for current taxes not yet due, (iii) minor
imperfections of title and encumbrances, if any, which are not
substantial in amount, do not detract from the value of the prop-
erty subject thereto or impair the operations of the Business and
have arisen only in the ordinary course of business and
consistent with past practice, and (iv) as identified on attached
Exhibit 3.9.
3.10. Patents and Data, Software and Related
Information. Set forth on attached Exhibit 3.10 is a list and
brief description of each patent, application for patent,
trademark, service xxxx, trade name and copyright included within
(but not comprising the whole of) the Patents and Data, Software,
and the Related Information, including (as appropriate) where
such items are filed, issued and/or registered. Except as set
forth on attached Exhibit 3.10, title to all such items is held
by Seller, free and clear of all adverse claims, liens, security
interests, restrictions and other encumbrances, and there are no
interferences, proceedings or infringement suits pending or, to
the knowledge of Seller, threatened, and neither Seller nor
Xxxxxxxx has received any notice that Seller is infringing upon
the right of any other person under any other intellectual
property, copyright, patent, trademark, service xxxx or trade
name in the conduct of the Business. Neither Seller nor Xxxxxxxx
has received any notice in writing of any claim, lien, security
interest, restriction or encumbrance adversely affecting Seller's
rights to all other items comprising the Patents and Data and
Related Information. Xxxxxxxx has no interest in any of the
Patents and Data and the Related Information. Seller has the
right (subject to the rights of any third parties set forth on
attached Exhibit 3.10) to use the intellectual property,
software, patents, trademarks, service marks, trade names and
copyrights upon the products or with respect to the services upon
or in respect of which they have been or are currently being used
by Seller. Except as listed on attached Exhibit 3.10, there are
no claims, demands or proceedings instituted, pending (or to the
best knowledge of Seller, threatened) nor does Seller have actual
knowledge of any facts and circumstances which could reasonably
be anticipated to result in any claims, demands or proceedings,
pertaining to or challenging the right of Seller to obtain,
maintain or use any such intellectual property, patents,
trademarks, service marks, trademarks or copyrights, or any
application or registration therefor, or any copyrighted or trade
secret material, or any invention, process, machine, manufacture
or composition of matter included in the Patents and Data, Soft-
xxxx or Related Information. Except for rights granted pursuant
to the Customer Contracts or as listed on attached Exhibit 3.10,
Seller has not granted any licenses, sublicenses or other rights
under any of the patents (or any applications or registrations
therefor), software, trade secrets, inventions, copyrights, trade
names or trademark (or any applications or registrations
therefor), service marks (or any applications or registrations
therefor), know-how or other intellectual property owned by or
licensed to Seller and including the Patents and Data, Software
and the Related Information.
3.11. Necessary Property. The Assets constitute
all of the assets, property and contracts used in the operation
of the Business in the manner and to the extent operated by
Seller, as of September 30, 1995. Neither Xxxxxxxx nor any of
the officers, directors or employees of Seller have any rights of
ownership, use or any other rights with respect to any of the
Assets.
3.12. Leases. Set forth on Exhibit 3.12 is a list
of each lease for real or personal property involves payments by
Seller aggregating in excess of $1,000 annually. [Seller has
previously delivered to Buyer a true and correct copy of each
lease listed on attached Exhibit 3.12.] The property covered by
the terms of the leases is currently occupied or used by Seller
as lessee under the terms of said leases for the Business, and,
in particular, in the case of any leases for real property,
Seller is entitled, by the terms of said leases, to use any
leased premises for the purposes for which and in the manner
in which they are currently being used by Seller, and such use
complies in all material respects with all applicable zoning and
building code ordinances and any other applicable ordinances,
laws or regulations, including those that relate to the use,
storage, and disposal of hazardous materials. Except as set
forth on attached Exhibit 3.12, all rentals due under the Leases
have been paid and there exists no default by Seller under any of
the Leases which would have a material adverse effect on the
operation of the Business which cannot be cured without material
penalty to Seller under the terms of said Leases and no event has
occurred which, with the passage of time or the giving of notice,
or both, would result in any event of default thereunder by
Seller or prevent Seller, currently, or Buyer, after consummation
of the transactions contemplated hereunder, from exercising or
obtaining the benefits thereunder. Except as noted on attached
Exhibit 3.12, all of the Leases are valid and in full force and
effect.
3.13. Customer Contracts. Set forth on attached
Exhibit 3.13 is a list of all of the Customer Contracts and of
all customers who have generated any revenue for Seller from and
after January 1, 1992. Each of the Customer Contracts is valid
and subsisting, has not been subsequently amended (except as set
forth on Exhibit 3.13) and is currently in full force and effect
according to the terms of such Customer Contract; and Seller has
not assigned any rights thereto, except for liens listed on
attached Exhibit 3.13. Except as set forth on attached Exhibit
3.13, (i) there exists no event of default under any Customer
Contract by Seller or, to the knowledge of Seller, by the other
party thereto, and (ii) no event of default by Seller has
occurred and is continuing which would prevent Buyer from
exercising or obtaining the benefits thereunder (including any
options contained therein), would cause the acceleration of any
obligation of Seller under any of such contracts, or would cause
the creation of a lien or encumbrance upon any of the Assets
which are material to the Business.
3.14. Contracts and Commitments. Except as set
forth on attached Exhibit 3.13, Seller does not have outstanding:
(a) Any single contract, including consulting
contracts providing for an expenditure in excess of $1,000, or
contracts in the aggregate providing for expenditures in excess
of $1,000 for the purchase, leasing or licensing of any real
property, machinery, equipment, software or other items which are
in the nature of a capital investment, or for consulting
services.
(b) Any loan agreement, indenture, promissory note,
mortgage, conditional sales agreement, guaranty, surety
agreement, installment debt agreement or other similar type
agreement.
(c) Any contract for sale or purchase of materials,
products, or supplies which contains an escalator, renegotiation
or redetermination clause or which establishes a commitment for
sale or purchase for a fixed term, except for those contracts
which (A) are cancelable by Seller on thirty (30) days notice or
less without penalty or (B) involve payments by Seller of less
than $5,000 per year.
(d) Any other material contract or commitment (other
than the Customer Contracts) which is not cancelable on thirty
(30) days notice or less without penalty.
3.15. Use and Condition of Property. Except as set
forth on Exhibit 3.15, to the Knowledge of Seller, all of the
Fixed Assets are suitable for the uses for which they are
intended, in good operating condition and repair, and free from
any known defects except normal wear and tear. Except as set
forth in any Exhibit attached hereto, to the Knowledge of Seller
the Business is in compliance with applicable laws, rules or
regulations relating to the Fixed Assets or any improvements
thereto.
3.16. No Breach of Statute, Decree, Order or
Contract. Seller is not in default under, or in violation of the
provisions of (a), any provisions of its Articles of
Incorporation or Bylaws or (b) any provision of any franchise or
license or of any promissory note, indenture or any evidence of
indebtedness or security therefor, any lease, contract, purchase
or other commitment or any other agreement by which it or any of
its property is bound, which in any such case as to matters
described in (b) could materially adversely affect the
consummation of the transactions contemplated in this Agreement,
the Business, the Assets or the Customer Contracts, nor is Seller
in violation of any applicable statute, law, ordinance, decree,
order, rule or regulation of any governmental body which may
reasonably be anticipated to result in any material adverse
effect on the transactions contemplated by this Agreement, the
Business, the Assets or the Customer Contracts.
3.17. Approvals and Consents. Except as set forth
on attached Exhibit 3.17, no authorization, consent, permit,
license or approval of, or declaration, registration or filing
with, any person or governmental, quasi-governmental or
regulatory authority or agency is necessary for the execution and
delivery by Seller or Xxxxxxxx of this Agreement and the other
agreements required to be executed in connection with the
transactions contemplated by this Agreement.
3.18. Litigation. There is no suit, claim, action
or proceeding now pending before any court, administrative or
regulatory body, or any governmental agency, or to Seller's
Knowledge, any threatened claim which may result in any judgment,
order, decree, liability or other determination which will, or
could, have a material adverse effect upon the Business, the
Assets or the Customer Contracts or the consummation of the
transactions contemplated hereby. Seller is not subject to any
such judgment, order, decree, liability or other determination
which has, or could reasonably be expected to have such effect.
3.19. Discrimination, Occupational Safety and other
Statutes and Regulations. No person or party (including, but
not limited to, governmental agencies of any kind) has any claim
against Seller pending before any court or administrative agency,
and, to Seller's Knowledge, no claim of such nature has been
threatened against Seller arising out of any statute, ordinance
or regulation relating to discrimination in employment or employ-
ment practices or occupational safety and health standards
(including, but without limiting the foregoing, the Fair Labor
Standards Act, Title VII of the Civil Rights Act of 1964, or the
Age Discrimination in Employment Act of 1967, all as amended,
where applicable).
3.20. Employees. Set forth on attached Exhibit
3.20 is a list of all employees of Seller as of the date of this
Agreement and their respective base rates of pay during Seller's
fiscal year ended December 31, 1994 (including all incentives,
bonuses, commissions and similar cash payments, all identified
separately from the employee's base rate of pay), and all
employees of Seller retained since January 1, 1995, together with
their respective rates of compensation and the actual amounts, if
any, paid to each such employee through November 25, 1995.
3.21. Environmental Matters. Seller's ordinary
course business activities have no material environmental impact.
Seller has not violated, is not violating and neither Seller nor
Xxxxxxxx has received, with respect to the Seller or the
Business, a notice or charge asserting any violation by Seller of
the Federal Solid Waste Disposal Act, the Federal Clean Air Act,
the Federal Clean Water Act, the Federal Resource Conservation
Recovery Act of 1976 ("RCRA"), the Federal Comprehensive
Environmental Responsibility Clean-Up and Liability Act of 1980
("CERCLA"), the Toxic Substance Control Act of 1976 or any other
federal, state, local or foreign laws including rules and regu-
lations thereunder, regulating or otherwise affecting the envi-
ronment ("Environmental Laws") as the same may have been amended
prior to the date of this Agreement. Except as set forth on
Exhibit 3.21, no asbestos, PCBs, urea formaldehyde or
polychlorinated biphenyls are present on the premises utilized by
Seller in operation of the Business (the "Leased Premises").
None of the equipment or machinery of Seller employed in the
Business is required to be upgraded or modified to be in compli-
ance with Environmental Laws. During Seller's use of the Leased
Premises, neither Seller nor any third party has disposed of any
substance in any manner on the Leased Premises and the
improvements thereon in violation of any Environmental Laws.
With respect to Seller and the Business, no environmental claims
have been asserted and none have been threatened or are
anticipated to be asserted against Seller, Xxxxxxxx, the Assets
or the
3.22. No Additional Liabilities. Other than the
obligations specifically assumed by ASI at Closing, ASI is not
assuming and will not be responsible or liable for any
liabilities (including but not limited to warranty liability or
product liability on any products) relating to Seller or the
Business being transferred because of this Agreement, or the
Assets.
3.23. Complete Business. Except for the Excluded
Assets, the Assets are all of the assets used by Seller in
connection with the Business being transferred hereby and, with
the exception of working capital, no other assets are needed to
continue to conduct the Business as it is currently being
conducted.
3.24. No Limitation of Representations or
Warranties. Any inspection or investigation by or on behalf of
Buyer shall not limit or affect any of the representations or
express or implied warranties of Seller and Xxxxxxxx which are
contained herein, except that, notwithstanding any provision of
this Agreement to the contrary, in the event that Seller or
Xxxxxxxx can prove that Buyer had actual knowledge (which in this
context is intended to mean that Buyer had actual knowledge of a
fact or condition and that the significance of such fact or
condition was or should have been apparent to a person not
involved in the business on a day-to-day basis), of a breach of
any covenant, representation or warranty of Seller or Xxxxxxxx
set forth in this Agreement or any agreement or instrument
executed pursuant hereto, then neither Seller nor Xxxxxxxx shall
be liable hereunder for any loss to the extent that such loss
results from or arises out of any such breach.
3.25. Insurance. Attached Exhibit 3.25 contains a
true and correct list of all policies of insurance in respect to
the Business (including the amounts) in which Seller is named as
the insured party. Seller will continue to maintain the present
coverage afforded by such policies in full force and effect up to
and including the Closing Date.
3.26. Licenses, Etc. Attached Exhibit 3.26
contains a true and correct list setting forth all licenses,
rights and authorities issued by the State of Wisconsin and other
states, the United States, and any municipality, foreign or
domestic governmental or quasi-governmental agency or
administrative body, and any and all applications for same, which
authorize Seller to conduct the Business. Except as set forth in
attached Exhibit 3.26, such licenses, rights, and authorities to
Buyer. In addition, attached Exhibit 3.26 contains a detailed
summary of any and all claims and actions asserted against Seller
by notice in writing to Seller within the past five (5) years by
any of the above referenced governmental bodies on account of any
alleged violation of any such license, right or authority.
3.27. Ongoing Business. Seller shall (a) keep the
operations and business of the Business intact until the Closing
Date, (b) use reasonable efforts to keep available to Buyer the
services of the present employees of the Business, and (c)
preserve the business relations of the subcontractors and
customers of Seller and the business relations of others with
whom Seller and Xxxxxxxx have business relations in respect of
the Business.
3.28. Access to Seller. Seller will, and will
cause its employees and agents (including bankers, in-house and
other accountants, attorneys and insurance representatives) to,
allow the officers, employees and authorized representatives of
Buyer free and full access during normal business hours to the
plants, properties, books and records of Seller, including,
without limitation, the right to perform environmental liability
audits, contact customers, employees, suppliers, bankers,
accountants, attorneys, insurance representatives, state and
federal regulatory agencies and others, and will from time to
time promptly furnish Buyer with such additional financial and
operating data and other information as to the business and prop-
erties of Seller as may from time to time be requested by Buyer.
Xxxxxxxx hereby agrees to cause Seller to fulfill its obligation
under this Paragraph 3.28.
3.29. Labor Controversies. With respect to the
employees of the Business, Seller is in compliance in
all material respects with all federal, foreign, state and local
laws, rules and regulations relating to the employment of labor,
employment discrimination, employee welfare and labor standards
which are applicable to it. No proceedings are pending before
any court, government agency or instrumentality or arbitrator
relating to labor matters, and to the knowledge of Seller, there
is no pending investigation by any governmental agency or threat-
ened claim by any such agency or other person with respect to
Seller relating to labor or employment matters. Seller is not a
party to any agreement or contract with any union, labor organi-
zation, employee group, or other entity or individual which
affects the employment of employees of the Business, including
but not limited to, any collective bargaining agreements or labor
contracts.
3.30. ERISA.
(a) Attached Exhibit 3.30 lists all profit sharing,
pension or retirement plans, programs, arrangements or
agreements, and each other employee benefit plan, program or
agreement maintained or contributed to or required to be
contributed to for the benefit of any employee or terminated
employee of the Business, whether formal or informal (the "Plan"
or "Plans"). Seller does not have any formal plan or commitment,
whether legally binding or not, to create any additional Plan or
modify or change any existing Plan that would affect any employee
or terminated employee of the Business.
(b) No Plans are covered by Title IV of ERISA, nor has
Seller ever maintained any Plan covered by Title IV of ERISA with
respect to employees or former employees of the Business. With
respect to each Plan, the Seller and each such Plan is, and at
all times has been, in compliance in all material respects with
all applicable laws including, without limitation, the Code and
ERISA. All contributions, premiums or other payments required by
the Plans have been made on or before their due dates. There are
no pending or threatened claims under, by or on behalf of any of
the Plans, by any employee or beneficiary covered by any such
Plan, or otherwise involving any such Plan (other than routine
claims for benefits), nor have there been any "prohibited
transactions" within the meaning of ERISA or the Code. Each Plan
that is intended to qualified under Section 401(d) or Section
401(k) of the Code has received a favorable determination letter
from the Internal Revenue Service to that effect, and no fact or
event has occurred from the date thereof which would adversely
affect the qualified status of such Plans. The 401(k) Plan main-
tained by Seller is not "top heavy" within the meaning of Section
416(g) of the Code.
3.31. Vyas Consulting Services.
(a) The Service Agreement between Seller, Interra
Technologies (India) PVT. Ltd. ("Interra-India") and Interra
Technologies, Inc. ("Interra") dated December 1, 1995 (the
"Services Agreement") is currently on a month to month basis and
is in full force and effect according to its terms.
(b) There exists no event of default (including
any payment default) by Seller under the agreement in effect
immediately prior to the Services Agreement or under the Services
Agreement and to the knowledge of Seller, there exists no event
of default by Interra and Interra-India.
(c) To the knowledge of Seller, no dispute exists
between Seller, Interra and Interra-India under the agreement in
effect immediately prior to the Services Agreement or under the
Services Agreement.
(d) No authorization, consent, permit, license or
approval of, or declaration, registration or filing with, any
person or governmental, quasi-governmental or regulatory
authority or agency is required of Seller, or to the knowledge of
Seller, of Interra or Interra-India, in connection with the
execution, delivery or performance of the Services Agreement by
Seller, Interra and Interra-India, respectively.
(e) No authorization, consent, permit, license or
approval of, or declaration, registration or filing with, any
person or governmental, quasi-governmental or regulatory
authority or agency would be required of Buyer, Interra or
Interra-India in connection with any assignment of the Services
Agreement to Buyer and, if so assigned, the performance of the
Services Agreement by Interra, Interra-India and Buyer.
4. Representations and Warranties of Buyer. Buyer
hereby makes the following representations and warranties, each
of which is true and correct as of the date of this Agreement and
as of the Closing Date and shall survive the Closing Date and the
transactions contemplated hereby, to the extent set forth in
Paragraph 16.16.
4.1. Corporate Status. Buyer is a corporation duly
organized and validly existing under the laws of the State of
Colorado, and has the corporate power and the authority to own
and use its properties and to transact the business in which it
is engaged. Buyer has the corporate power and authority to enter
into and consummate the transactions contemplated by this
Agreement.
4.2. Authorization of Agreement. The execution and
delivery of this Agreement does not, and the compliance with and
the fulfillment of, and the consummation of the transactions con-
templated by, this Agreement will not violate or conflict with
any provisions of the Articles of Incorporation or Bylaws of
Buyer or result in a breach of, or constitute a default under, or
result in the acceleration of, any obligation under any agreement
or instrument to which Buyer is a party or by which it is bound,
or violate any order, judgment, award or decree to which it is a
party or to which it is subject which could have a material
adverse effect on (i) Buyer or its assets or (ii) the consumma-
tion of the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation by Buyer of the
transactions contemplated herein have been approved by the Board
of Directors of Buyer, which constitutes all action required by
law, Buyer's Articles of Incorporation, its Bylaws or otherwise
to authorize and approve the execution, delivery and performance
of this Agreement by Buyer and the consummation by it of the
transactions contemplated herein.
4.3. Litigation. There is no suit, claim, action or
proceeding now pending or, to the knowledge of Buyer, threatened
before any court, administrative or regulatory body, or any
governmental agency which may result in any judgment, order,
decree, liability or other determination which will, or could,
have a material adverse effect of any kind upon (i) Buyer or its
assets or (ii) the consummation of the transactions contemplated
hereby. Buyer is not subject to any such judgment, order,
decree, liability or other determination which has or reasonably
could be expected to have such effect.
4.4. Shares. The Subject Shares to be issued by Seller
to Buyer hereunder, have been duly and validly authorized and,
when issued as provided herein, will be duly and validly issued
and fully paid and non-assessable, free and clear of all liens,
claims, and encumbrances except those in favor of Buyer as
specifically provided in this Agreement.
4.5. Capitalization. Buyer has delivered true and
complete copies of its Articles of Incorporation and Bylaws to
Seller. The Authorized capital stock of Buyer consists of
100,000,000 shares of Common Stock and 2,500,000 shares of
preferred stock, no par value ("Preferred Stock"). As of the
date of this Agreement, (i) 2,832,349 shares of Common Stock are
issued and outstanding, (ii) no shares of Preferred Stock are
issued and outstanding, and (iii) 711,275 shares of Common Stock
are subject to issuance pursuant to stock options, warrants or
similar agreements. Except as set forth in clause (iii) above,
as of the date of this Agreement, there are no options, warrants
or other rights of any character obligating Buyer to issue or
sell any shares of its capital stock. None of the issued and
outstanding shares of Common Stock were, and none of the Subject
Shares will be, issued in violation of any preemptive rights.
4.6. SEC Documents.
(a) Buyer has filed all forms, reports and documents
required to be filed with the Securities and Exchange Commission
(the "SEC") since September 30, 1994, and as of the date of this
Agreement has delivered to Seller in the form filed with the SEC
(i) its Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1994, (ii) its Quarterly Reports on Form 10-QSB for
the periods ended December 31, 1994, March 31, 1995 and June 30,
1995, (iii) the definitive Proxy Statement for any meeting of
shareholders of Buyer held since September 30, 1994, (iv) all
Current Reports on Form 8-K filed since September 30, 1994, (v)
all registration statements filed with the SEC since September
30, 1994, and (vi) all amendments and supplements filed with the
SEC to all such reports and registration statements
(collectively, the "Buyer SEC Reports").
(b) The Buyer SEC Reports, and all reports filed by
Buyer with the SEC after the date of this Agreement and on or
prior to the Closing, (i) were or will be prepared in accordance
with applicable rules and regulations in all material respects,
and (ii) did not at the time they were filed, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(c) Since the date of the last Buyer SEC Report filed
prior to the date of this Agreement, there has not been any
change in the financial condition, results of operations, or
business of Buyer which has a material adverse effect on Buyer.
4.7. Securities Act Compliance. The issuance of the
Subject Shares will comply with all applicable federal and state
securities laws.
4.8. NASDAQ. Seller will comply with any applicable
NASDAQ requirements regarding the Subject Shares.
5. Opinions of Counsel.
5.1. Opinions of Counsel of Seller. Buyer shall have
received as of the Closing Date, an opinion from Seller's
counsel, Xxxxxxx & Xxxx, S.C., dated as of the Closing in the
form attached to this Agreement as Exhibit 5.1.
5.2. Opinion of Counsel of Buyer. Seller shall have
received as of the Closing Date, opinions from Buyer's counsel,
Xxxxxx X. Xxxxxxx, P.C., and from Xxxxxxx & Xxxxxx L.L.C., dated
as of the Closing Date, in the form attached to this Agreement as
Exhibits 5.2 and 5.2.1, respectively.
6. Indemnification.
6.1. Indemnification of Buyer.
(a) Seller and Xxxxxxxx jointly and severally agree to
indemnify Buyer and Buyer's officers, directors, shareholders,
agents and employees and to hold them harmless from and against
any and all damages, losses, deficiencies, actions, demands,
judgments, costs and expenses (including reasonable attorneys'
and accountants' fees) (collectively, "Losses") of or against
Buyer resulting from (i) any misrepresentation or breach of
warranty on the part of Seller or Xxxxxxxx in this Agreement or
in any document or agreement executed and/or delivered by Seller
or Xxxxxxxx in connection herewith; (ii) any nonfulfillment of
any agreement or covenant contained herein or in any certificate,
documents, agreement or instrument delivered hereunder on the
part of Seller or Xxxxxxxx; and/or (iii) any failure of Seller or
Xxxxxxxx to pay and/or perform any liability or obligation of
Seller, Xxxxxxxx or the Business other than the Assumed
Liabilities; and (iv) any loss, liability, or expenses, including
reasonable attorneys' fees and costs, incurred by Buyer in
pursuing a claim against Intelligraphics, Inc. of Texas for
infringement of the name "Intelligraphics"; provided for this
purpose, the parties acknowledge that Xxxxxxx & Xxxx, S.C. has
been retained to pursue such claim and will continue to be the
counsel which will pursue the matter subsequent to the Closing.
(b) Notwithstanding anything in this Agreement to the
contrary, Seller and Xxxxxxxx shall not be obligated to
indemnify, defend or hold harmless Buyer pursuant to Paragraph
6.1(a)(i) of this Agreement, in respect of any breach of any
representation or warranty made in this Agreement or any document
executed in connection herewith unless, the aggregate Losses for
which Buyer is entitled to indemnification under said Paragraph
6.1(a)(i) shall exceed twenty-five thousand dollars ($25,000.00)
(in which event the entire loss will be payable), and in no event
shall Seller's and Xxxxxxxx'x aggregate liability to indemnify
Buyer in respect of all Losses under said Paragraph 6.1(a)(i)
exceed $4,300,000. Notwithstanding the foregoing, no Loss
arising from a breach of a representation and warranty in
Sections 3.8, 3.9 or the second sentence of Section 3.10 will be
subject to the $25,000 "basket" provided for above; that is, any
such Loss will be payable by Seller and Xxxxxxxx without dilution
or effect against the $25,000 "basket.".
(c) Seller and Xxxxxxxx may satisfy their obligations
under Paragraph 6.1(a) of this Agreement by transferring Subject
Shares to Buyer except with respect to any claim by Buyer
relating to the failure to obtain Consents specified in
Section1.3(b)(1) and (ii), which shall be paid in cash to Buyer.
Such shares shall be valued at fifty percent (50%) of the Market
Price of the Common Stock as of the most recent business day
preceding the date of transfer. If applicable, Seller and Buyer
shall direct the Escrow Agent to transfer to Buyer such number of
Subject Shares as Seller may designate in accordance with the
provisions of this Paragraph 6.1(c).
6.2. Indemnification of Seller and Xxxxxxxx.
(a) Buyer agrees to indemnify Seller and Xxxxxxxx and
to hold each of them harmless from and against any and all Losses
of or against Seller or Xxxxxxxx resulting from (i) any
misrepresentation or breach of warranty or representation on the
part of Buyer in this Agreement or in any document or agreement
executed and/or delivered by Buyer in connection herewith; (ii)
any nonfulfillment of any agreement or covenant contained herein
or in any certificate, document or instrument delivered hereunder
on the part of Buyer; and/or (iii) any failure of Buyer to pay
and/or perform when due any of the Assumed Liabilities.
(b) Notwithstanding anything in this Agreement to the
contrary, Buyer shall not be obligated to indemnify, defend or
hold harmless Seller or Xxxxxxxx pursuant to Paragraph 6.2(a)(i),
in respect of any breach of any representation or warranty made
in this Agreement or any document executed in connection herewith
unless, and only to the extent, the aggregate Losses for which
Seller and Xxxxxxxx are entitled to indemnification under said
Paragraph 6.1(a)(i) shall exceed twenty-five thousand dollars
($25,000.00) and in no event shall Buyer's aggregate liability to
indemnify Seller and Xxxxxxxx in respect of all Losses under said
Paragraph 6.2(a)(i) exceed the purchase price set forth in
Section 1.2 above.
6.3. Procedure Relative to Indemnification.
(a) In the event that any party hereto shall
claim that it is entitled to be indemnified pursuant to the terms
of this Paragraph 6, it or he (the "Claiming Party") shall so
notify the party or parties against which the claim is made (the
"Indemnifying Party") in writing of such claim within forty-five
(45) days after receipt of a notice of such claim or notice of
any claim of a third party that may reasonably be expected to
result in a claim by such party against the party to whom such
notice is given. Such notice shall specify the breach of
representation, warranty or agreement claimed by the Claiming
Party and the liability, loss, cost or expense incurred by, or
imposed upon, the Claiming Party on account of any such
liability, loss, cost or expense. Failure to give such notice
will not relieve Indemnifying Party of its indemnification
obligation, except to the extent the defense of the Indemnifying
Party against such claim was prejudiced. If such liability,
loss, cost or expense is liquidated in amount, the notice shall
so state and such amount shall be deemed the amount of the claim
of the Claiming Party. If the amount is not liquidated, the
notice shall so state and in such event a claim shall be deemed
asserted against the Indemnifying Party on behalf of the Claiming
Party, but the amount of the claim of the Claiming Party shall be
deemed undetermined.
(b) If such claim shall involve a suit, claim or
demand of a third party, the Indemnifying Party shall, upon
receipt of such written notice and at its expense, defend such
claim in its own name or, if necessary, in the name of the
Claiming Party; provided, however, that if the proceeding
involves a matter solely of concern to the Claiming Party in
addition to the claim for which indemnification under this
Paragraph 6 is being sought, such matter of sole concern shall be
within the sole responsibility of the Claiming Party and its
counsel. The Claiming Party will cooperate with and make
available to the Indemnifying Party such assistance and materials
as may be reasonably requested of it, and the Claiming Party
shall have the right, at its expense, to participate in the
defense. The Indemnifying Party shall have the right to settle
and compromise such claim only with the consent of the Claiming
Party (which consent shall not be unreasonably withheld;
provided, that such consent can be reasonably withheld if the
party from which such consent is requested is not fully released
by the settlement).
(c) In the event the Indemnifying Party shall notify
the Claiming Party that it disputes any claim made by the
Claiming Party and/or it shall fail to undertake a defense
against such claim, then the Claiming Party shall have the right
to conduct a defense against such claim and shall have the right
to settle and compromise such claim upon five (5) days notice to,
but without the consent of, the Indemnifying Party. Once the
amount of such claim is liquidated and the claim is finally
determined, the Claiming Party shall be entitled to pursue each
and every remedy available to it at law or in equity to enforce
the indemnification provisions of this Paragraph 6 and, in the
event it is determined, or the Indemnifying Party agrees, that it
is obligated to indemnify the Claiming Party for such claim, the
Indemnifying Party agrees to pay all costs, expenses and fees,
including all reasonable attorneys' fees which may be incurred by
the Claiming Party in its efforts to enforce indemnification
under this Paragraph 6, whether the same shall be enforced by
suit or otherwise.
7. Accounts Receivable. After the Closing Date, all
payments collected for those accounts which were included within
the Accounts Receivable on the Final Balance Sheet shall, unless
otherwise designated for payment of a specific invoice by the
account debtor, first be applied against outstanding invoices in
the order of issuance (i.e., against the oldest invoices first).
Buyer agrees to use normal and customary efforts in collecting
the Accounts Receivable; provided that nothing contained herein
shall be construed as requiring Buyer to file suit, employ the
services of a collection agency or commence any other official
proceeding in order to collect any delinquent accounts included
with the Accounts Receivable. Buyer will provide Seller with
written progress reports as reasonably requested by Seller as to
the status of the collection of the Accounts Receivable. If at
the end of six (6) months from the Closing Date hereunder there
remain any Accounts Receivable which are uncollected (over and
above the amount of the reserves as reflected on the Final Bal-
ance Sheet), Buyer shall give written notice to Seller within
fifteen (15) days of the expiration of said six (6) month period
stating such fact and setting forth the amount of the Account
Receivable uncollected (the "Uncollected Receivables") after
deducting any applicable reserves, and by delivering such notice
Seller will be deemed to have made a claim (an "Accounts Receiv-
able Claim") for such amount. Within fifteen (15) days of the
delivery by Buyer of any such notice to Seller, Seller shall pay
the amount of such Accounts Receivable Claim to Buyer, in cash,
or from the Subject Shares escrowed pursuant to Section 1.8
above. Seller's obligation to pay any Accounts Receivable Claim
hereunder shall be subject to any specific rights Seller may have
hereunder or may have in general at law to dispute the amount or
propriety of any such Accounts Receivable Claim. Upon payment to
Buyer by Seller of an Accounts Receivable Claim, Buyer shall be
deemed to have assigned to Seller (or its designee) all such
Uncollected Receivables. In the event that Buyer should receive
payment for any such Uncollected Receivables, any amounts so
received by Buyer shall promptly be paid over to Seller (or its
designee).
7.1. Remedies Cumulative. Except as herein expressly
provided, the remedies provided herein shall be cumulative and
shall not preclude assertion by any party hereto of any other
rights or the seeking of any other remedies against any other
party hereto, provided they are consistent with this Agreement.
8. Conditions Precedent to Buyer's Obligation to
Close. All obligations of Buyer to complete the transaction
contemplated under this Agreement are subject to the satisfaction
by Seller and Xxxxxxxx or waiver by Buyer, prior to or at Clos-
ing, of each of the following conditions, with respect to which
Seller agrees to use its good faith efforts to fulfill on or
before Closing:
8.1. Continued Validity of Representations and War-
ranties. All representations and warranties made by Seller and
Xxxxxxxx contained in this Agreement shall be true at and as of
the Closing as though such representations and warranties were
made at and as of such time, except for those waived as provided
below.
8.2. Performance Conditions and Completion of Agree-
ments. Seller shall have performed and complied with all
agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at Closing.
8.3. Satisfaction with Financial Condition. There
shall have been no material adverse change in the Assets or in
the financial condition or prospects of the Business since
September 30, 1995.
8.4. Delivery of Documents. Prior to or at the Clos-
ing, true and complete copies of all documents listed on any
Exhibit hereto shall have been delivered to Buyer in a form
acceptable to Buyer and Buyer's counsel.
8.5. Employment Agreements. Buyer shall have entered
into employment agreements and non-competition agreements with
Xxxxxxx Xxxxxxx, Xxxxx Xxxxx and Xxxxx Xxxxxx in substantially
the form attached hereto as Exhibits 8.5-1, 8.5-2 and 8.5-3,
respectively (collectively, the "Executive Employment
Agreements"), and with the additional employees listed in Exhibit
8.5-4 attached hereto. Seller, Buyer and Xxxxxxxx shall
cooperate fully in arranging for such executive employment agree-
ments.
8.6. Other Agreements. Seller and Xxxxxxxx shall have
entered into a Voting Trust Agreement in the form attached hereto
as Exhibit 8.6-1; an Arbitration Agreement in the form attached
hereto as Exhibit 8.6-2, an Investor Letter in the form attached
hereto as Exhibit 8.6-3, a Lock Up Agreement in the form attached
hereto as Exhibit 8.6-4, and any other agreements reasonably
required by counsel for Buyer, in addition to that required under
Paragraph 8.7 below, to substantiate, to Buyer's satisfaction,
the relationship among Seller, INTERRA, and Xxxxxx X. Xxxx.
8.7. Consents Obtained. Except for those Customer
Contracts listed on Exhibit 8.7, all consents to the consummation
of the transaction contemplated in this Agreement to the leases
between Seller and Business Enterprises and shall remain in full
force and effect at and as of the Closing (the "Required
Consents").
8.8. No Action. No suit, action, investigation,
inquiry or other legal or administrative proceeding by any
governmental authority or other person shall have been instituted
or threatened which seeks to enjoin, restrain or prohibit, or
which questions the validity or legality of, the transactions
contemplated hereby or which otherwise seeks to affect or could
affect the transactions contemplated hereby or the Assets or
impose damages or penalties upon any party hereto if such
transactions are consummated.
8.9. Name Change. Intelligraphics shall have taken all
requisite action to change its corporate name to a name which is
not in any way similar to Intelligraphics and shall have
transferred to Buyer all rights to any such names.
8.10. Termination Statements. Seller shall have
delivered UCC-3 termination statements in form and substance
acceptable for filing with the applicable Wisconsin authorities,
to terminate and release all prior UCC filings with respect to
the Assets, as of the Closing Date.
9. Conditions Precedent to Seller's Obligation to
Close. The obligations of Seller and Xxxxxxxx to consummate the
transactions contemplated under this Agreement are subject to the
following conditions:
9.1. Continued Validity of Representations and War-
ranties. All representations and warranties of Buyer contained
in this Agreement shall be true at and as of the Closing as
though such representations and warranties were made at such
time.
9.2. Performance Conditions and Completion of Agree-
ments. Buyer shall have performed and complied with all agree-
ments and conditions required by this Agreement to be performed
or complied with by it prior to or at Closing.
9.3. Delivery of Documents; Purchase Price. Prior
to or at the Closing, true and complete copies of all documents
required to be delivered by Buyer to Seller hereunder shall have
been delivered to Seller in a form acceptable to Seller and
Seller's counsel, and Buyer shall have delivered the Estimated
Amount to Seller by wire transfer and shall have transferred the
Subject Shares to the Escrow Agent and the Trustee as provided in
Paragraph 1.3.
9.4. No Action. No suit, action, investigation,
inquiry or other legal or administrative proceeding by any gov-
ernmental authority or other person shall have been instituted or
threatened which seeks to enjoin, restrain or prohibit, or which
questions the validity or legality of, the transactions contem-
plated hereby or which otherwise seeks to affect or could affect
the transactions contemplated hereby or the Assets or impose
damages or penalties upon any party hereto if such transactions
are consummated.
10. No Additional Liabilities. Other than any
obligations specifically assumed by ASI at Closing, ASI is not
assuming and will not be responsible or liable for any
liabilities relating to Intelligraphics or Xxxxxxxx or the
Business being transferred because of this Agreement, or the
Assets transferred pursuant hereto, and Intelligraphics and
Xxxxxxxx hereby agree to indemnify and hold harmless ASI against
any such unassumed obligations or claims against ASI arising from
such obligations, under the terms of Paragraph 6.3.
11. Closing.
11.1. Closing. Subject to the satisfaction or
waiver of all conditions to the obligation of the parties hereto
to close as set forth herein, the closing of the transaction pro-
vided for in this Agreement ("Closing") shall take place at the
offices of Xxxxxxx & Xxxxxx L.L.C., in Denver, Colorado on
December 22, 1995 at 8:00 A.M. MST, or at such other date, time
and place as may be mutually agreed by the Buyer and Seller,
after all Required Consents have been obtained as designated by
Buyer by written notice given to Seller and Xxxxxxxx five (5)
days in advance of Closing, unless Buyer and Seller agree
otherwise. For purposes hereof, the Closing shall be deemed to
have occurred effective 12:01 A.M., MST, on December 22, 1995.
11.2. Deliveries by Seller. Seller and Xxxxxxxx
agree to execute and deliver to Buyer or cause to be delivered to
Buyer, at the Closing, the following:
(a) A certificate executed by a duly authorized
officer of Seller and by Xxxxxxxx to the effect that all
warranties and representations of Seller and Xxxxxxxx contained
in this Agreement, as supplemented pursuant to Paragraph 16.19,
are true and correct in all material respects at and as of the
Closing and all conditions precedent to the obligations of Buyer
to consummate the transaction contemplated herein not waived by
Buyer have been fulfilled by Seller and Xxxxxxxx;
(b) An opinion of Xxxxxxx & Xxxx, S.C., legal counsel
for Seller and Xxxxxxxx, as described in Paragraph 5.1;
(c) To the extent available prior to Closing,
certificates of taxes due from each jurisdiction in which Seller
conducts business;
(d) A general warranty xxxx of sale and other
appropriate instruments of assignment and conveyance, in form and
substance satisfactory to Buyer, dated as of the Closing Date,
conveying to Buyer good and marketable title to the Assets, free
and clear of all encumbrances, security interests, liens,
contracts of sale and matters of record;
(e) General warranty assignments (and such other
documents as may be satisfactory to Buyer) of the Customer
Contracts and the other Assumed Contracts and the Required
Consents;
(f) Copies (dated as of the Closing Date) of the
resolutions of Seller's Board of Directors and shareholders
authorizing and approving this Agreement and the consummation of
each and every transaction contemplated by this Agreement,
together with a certificate of incumbency, certified by Seller's
Secretary;
(g) New Employment Agreements or letters, containing
non-competition agreements and confidentiality agreements, in
form and content satisfactory to Buyer, from those former
employees of Seller, as set forth on Exhibit 11.2(g), including,
but not limited to acknowledgment of their termination of
employment by Seller, their subsequent employment by Buyer, and a
release of Buyer from any liabilities arising under their
employment with Seller;
(h) The Executive Employment Agreements duly executed
by Xxxxxxx Xxxxxxx, Xxxxx Xxxxx and Xxxxx Xxxxxx;
(i) Those additional agreements set forth in
Paragraph 8.6;
(j) The Escrow Agreement duly executed by Seller and
the Escrow Agent;
(k) The Required Consents as set forth in
Paragraph 8.7;
(l) The Confidentiality Agreements as set forth
in Paragraph 14.2;
(m) Evidence satisfactory to Buyer that
Intelligraphics has changed its corporate name and evidence
satisfactory to Buyer that Buyer shall have all rights to any
such names.
(n) UCC-3 termination statements, to terminate
all prior UCC filings in connection with the Assets; and
(o) Such other documents or instruments as Buyer
or its counsel may reasonably request.
11.3. Buyer's Delivery. Subject to the
performance by Seller and Xxxxxxxx of their obligations
hereunder, at the Closing Buyer shall deliver to Seller:
(a) A certificate executed by a duly authorized
officer of Buyer to the effect that all warranties and
representations of Buyer contained in this Agreement are true and
correct in all material respects at and as of the date of Closing
and all conditions precedent to the obligations of Seller to
consummate the transaction contemplated herein have been
fulfilled by Buyer or waived by Seller and Xxxxxxxx;
(b) Opinions of Xxxxxx X. Xxxxxxx, P.C., and Xxxxxxx &
Xxxxxx L.L.C., legal counsel for Buyer, as described in Paragraph
5.2;
(c) The Estimated Amount, by wire transfer, and
certificates for the Common Stock in the name of the Voting
Trustee (as defined below), and subject to the Escrow Agreement;
(d) The Executive Employment Agreements, duly executed
by Buyer; and
(e) An assumption in form attached as Exhibit 11.3(e),
and to Buyer and its legal counsel, under which Buyer shall
assume all executory obligations under the Assumed Contracts.
11.4. Escrow Agreement. At the Closing, Buyer,
Seller and the Escrow Agent shall enter into the Escrow
Agreement. Furthermore, Buyer shall at the Closing execute and
deliver to the Escrow Agent a certificate for the Subject Shares
to be held in escrow by the Escrow Agent under the terms of the
Escrow Agreement as provided in Paragraph 1.3(b).
11.5. Voting Trust Agreement. Buyer, Seller,
Xxxxxxxx and those persons listed on Exhibit 11.5-1 (the
"Additional Holders") shall enter into a Voting Trust Agreement
in the form attached hereto as Exhibit 8.6-1 and, together with
the members of the board of directors of Buyer who are voting
trustees under the Voting Trust Agreement, as Trustee
("Trustee"), a Voting Trust (the "Voting Trust") for the Subject
Shares referred to in Paragraph 1.3(c). Furthermore, Buyer shall
execute and deliver to the Trustee a certificate for the Subject
Shares to be held by the Trustee under the terms of the Voting
Trust with respect to the Subject Shares transferred to the
Voting Trust. As provided in the Voting Trust, appropriate
voting trust certificates shall be issued to the beneficiaries of
the Voting Trust. As a condition to the delivery of the voting
trust certificates, Seller and Xxxxxxxx shall arrange for the
execution of such agreements by the Additional Holders. Buyer
acknowledges and agrees to permit the transfer of the voting
trust certificates as contemplated in the Voting Trust.
12. Termination. The Agreement may be terminated
prior to Closing only as follows:
(a) by mutual written consent of all parties hereto;
(b) by any party hereto if the Closing has not
occurred on or before December 31, 1995, provided that the
failure of the Closing to occur is not due to any breach of this
Agreement by the terminating party;
(c) by Buyer in the event of a substantial loss of or
damage to the Assets or the Business prior to Closing as the
result of theft, fire, flood, explosion or other casualty, act of
God or otherwise, whether or not covered by insurance, or a
material adverse change in the Business prior to Closing; or
(d) by Buyer, in the event of a material breach of any
covenant, agreement, warranty, or representation of Seller, or in
the event of a material change of any representation or warranty,
as set forth in Paragraph 15.19.
Any such termination under the foregoing paragraphs shall not
preclude the terminating party from seeking any legal or equit-
able remedy which may be available as a result of the breach of
any warranty, representation or covenant in this Agreement.
13. Brokers Indemnification; Fees and Expenses.
13.1. Brokers; Indemnification. Buyer represents
and warrants to Seller and Xxxxxxxx and Seller and Xxxxxxxx,
jointly and severally, represent and warrant to Buyer, that
neither of them has employed any broker or finder in connection
with the transactions contemplated by this Agreement, except as
expressly set forth below. Seller and Xxxxxxxx hereby agree that
they will indemnify and save Buyer harmless, and Buyer hereby
agrees it will indemnify and save Seller and Xxxxxxxx harmless,
from any claim for a commission, finder's fee or other obligation
as a result of anyone claiming a commission as a broker or finder
for the transactions contemplated by this Agreement, based on the
respective acts of the other.
13.2. Fees and Expenses. Seller and Buyer agree
that they will each bear their own costs and expenses, including,
without limitation, fees and expenses of counsel, financial
advisors, accountants and other experts in connection with the
discussions, due diligence investigations, negotiations, docu-
mentation concerning this proposed transaction, the preparation
of this Agreement and related documentation and the consummation
of the transaction contemplated herein. Seller and Xxxxxxxx have
engaged Resource Financial Corporation to act in investment bank-
ing and financial advisory capacities with respect to this trans-
action. Buyer, on its part, has retained Xxxxxxx, Xxxxxx Inc. to
render certain financial advisory services in connection with the
proposed transaction. It is agreed that neither party will be
responsible for the fees, commissions, or expenses payable to
either investment banking firm by the other by reason of this
proposed transaction, and each agrees to indemnify the other
against any such fees, commissions and expenses due and payable
to their respective investment banking firms by reason of consum-
mation of the transactions contemplated in this Agreement.
14. Seller's Employees and Benefit Plans.
14.1. On the Closing Date, Seller will terminate
the employment of all of the employees of Seller. Buyer
presently intends, after the Closing Date, to hire substantially
all of the employees employed by Seller in the Business prior to
the Closing Date, but it is totally within the discretion of
Buyer to decide which (if any) of Seller's current employees will
be offered continued employment and upon what terms and
conditions.
14.2. It is understood by the parties that Buyer
does not guarantee that it will carry over or establish
retirement, savings, health insurance, life insurance, fringe
benefit or other plans or personnel policies or practices similar
or identical to those maintained for Seller's employees prior to
the Closing Date.
15. General Matters.
15.1. Access to Books and Records and Employee
Services. For a period of five (5) years after the Closing Date,
Seller, Xxxxxxxx and Buyer agree that prior to the destruction of
disposition of any books or records of or to the Business in its
possession or control, such party shall provide not less than
ninety (90) days prior written notice to the other party of any
such proposed destruction or disposal. If such other party
desires to obtain any of such documents, it may do so by noti-
fying such party in writing at any time prior to the scheduled
date for such destruction or disposal. Such notice must specify
the documents which such party wishes to obtain. The parties
shall then promptly arrange for the delivery of such documents.
All out-of-pocket costs associated with the delivery of the
requested documents shall be paid by the receiving party. In
addition, the parties agree that for a period of six months after
the Closing, Buyer will provide Seller with reasonable access to
the services of Xxxxx Xxxxx for the purposes of preparing tax
returns, tax reports and other reports, provided that such access
shall not interfere with Buyer's business and shall be provided
at mutually agreeable times.
15.2. Best Efforts. The parties covenant, promise
and agree that they will use their best efforts to consummate the
transactions contemplated by this Agreement, including, without
limitation, removing all conditions precedent to the other
party's obligations at the Closing, and obtaining any and all
approvals and consents, and executing and delivering all docu-
ments, certificates, schedules, exhibits, consents and other
instruments necessary to effect the transfer of the Assets from
Seller to Buyer.
15.3. Binding Effect and Assignment. This
Agreement shall inure to the benefit of and be binding upon the
parties hereto, their successors and assignees. Neither party
shall, without the written consent of the other party, assign or
transfer any of the rights, benefits, obligations, or other
interest under this Agreement to any other party, which consent
shall not unreasonably be withheld; provided that Buyer may, at
its sole election, assign to a wholly owned subsidiary its rights
to purchase the Assets hereunder, but in that event Buyer shall
not be relieved of its obligations to perform hereunder.
15.4. Confidentiality. The parties hereto agree to
maintain the confidentiality of the transactions contemplated
hereby and the information contained herein and in the Exhibits
and Schedules attached hereto and that no disclosure related
thereto will be made other than in order to comply with appli-
cable laws or other than to such officer, employees and profes-
sional advisors of the parties to the extent necessary in order
for such persons to carry out their duties with respect to
consummation of the transaction contemplated hereby. All parties
acknowledge Buyer, as a publicly owned company, listed on NASDAQ,
and reporting to the SEC, must comply with applicable SEC
disclosure rules.
15.5. Construction and Representation by Counsel.
The parties hereto represent that in the negotiation and drafting
of this Agreement they have been represented by and relied upon
the advice of counsel of their choice. The parties affirm that
their counsel had a substantial role in the drafting and
negotiation of this Agreement and, therefore, the rule of
construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any Exhibit or Schedule
attached hereto.
15.6. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
15.7. Enforcement of Agreement. In the event of
any lawsuit to enforce the provisions of this Agreement, the
prevailing party shall be entitled to an award of reasonable
attorneys' fees.
15.8. Entire Agreement. This Agreement (and the
other agreements required hereby to be executed and delivered)
embodies the entire agreement of the parties hereto relating to
the subject matter of this Agreement expressly replacing the non-
binding term sheet dated September 15, 1995, between the parties,
except the Confidentiality Agreement between Seller and Buyer,
which shall terminate if, as and when the Closing occurs. No
amendment or modification of this Agreement shall be valid or
binding upon Buyer unless made in writing and signed by a duly
authorized officer of Buyer, or upon Seller unless made in
writing and signed by a duly authorized officer of Seller, or
upon Xxxxxxxx unless made in writing and signed by Xxxxxxxx.
15.9. Further Assurances. From time to time, at
the request of Seller or Xxxxxxxx or Buyer and without further
consideration, Seller or Buyer, as appropriate, will execute and
deliver to the other such documents and take such other action
as the other may reasonably request in order to consummate more
effectively the transactions contemplated hereby. Without limit-
ing the foregoing, Seller and Xxxxxxxx agree, at any time and
from time to time after the Closing, upon request by Buyer, to
do, execute, acknowledge, and deliver, or to cause to be done,
executed, acknowledged, and delivered, all such further acts,
deeds, assignments, transfers, conveyances, powers of attorney
and assurances as may be reasonably required for the better
assigning, granting, transferring, conveying, assuring and
confirming to Buyer, or to its successors and assigns, or for
aiding and assisting in collecting and reducing to possession,
any or all of the Assets to be sold to Buyer pursuant to this
Agreement.
15.10. Governing Law. This Agreement shall be con-
strued, interpreted and enforced, both as to substance and
remedies, in accordance with the internal laws of Colorado.
15.11. Notices. All notices, consents, approvals or
other notifications required to be sent by one party to the other
party hereunder shall be in writing and shall be deemed given to
and received by the other party in all respects when delivered by
hand or sent by reputable overnight delivery service or when
transmitted via facsimile and actually received by the receiving
equipment or two (2) days after the date sent by United States
registered or certified mail, postage prepaid, with return
receipt requested, in each case addressed to such other party at
the address set below, or the last address of such party as shall
have been communicated to the other party. If a party changes
its address, such party shall give written notice promptly to the
other parties of the new address.
15.12. Notification. Upon the occurrence of any
event, whether by omission, commission or acquiescence, which
causes any of the representations and warranties contained herein
to no longer be true, or which will prevent any party from per-
forming its covenants or satisfying the conditions contained
herein, the party whose representation and warranty is no longer
true will give prompt notification in writing to the other party
describing the relevant circumstances in detail.
15.13. Risk of Loss. All risk of loss relating to the
Assets shall remain upon Seller and Xxxxxxxx through the delivery
of the Assets to Buyer at Closing, in accordance with the terms
of this Agreement, at and after which time Buyer shall bear such
risk.
15.14. Paragraph Headings. The parties agree that the
section and article headings are inserted only for ease of refer-
ence, shall not be construed as part of this Agreement, and shall
have no effect upon the construction or interpretation of any
part of this Agreement.
15.15. Severability. A determination that any portion
of this Agreement is unenforceable or invalid shall not affect
the enforceability or validity of any of the remaining portions
of the Agreement or of this Agreement as a whole. In the event
that any part of any of the covenants, sections or provisions
herein may be determined by a court of law to be overly broad
thereby making such covenants, sections or provision invalid or
unenforceable, the parties hereto agree, and it is their desire
that, such court shall substitute a reasonable and judicially
enforceable limitation in place of the invalid and unenforceable
part of such covenants, section or provisions, and that, as so
modified, the covenants, sections or provisions shall be as fully
enforceable as if set forth herein by the parties themselves in
the modified form. If, however, any court of law shall delete
any covenants, sections or provisions of this Agreement and shall
refuse to substitute any reasonable and judicially enforceable
provisions in their place, the parties shall attempt to reach
agreement with respect to a valid and enforceable substitute for
the deleted provisions, which shall be as close in its intent and
effect as possible to the deleted portion.
15.16. Survival of Representations and Warranties.
The representations and warranties contained herein or in any
schedule or other certificate or letter (including letters
referred to herein) delivered by, or on behalf of, any of the
parties pursuant to this Agreement and the transactions contem-
plated hereby shall be deemed representations and warranties by
the party by whom, or on whose behalf, the same is delivered, and
all representations and warranties made by the parties in this
Agreement, or delivered pursuant hereto, are incorporated in and
constitute a part of this Agreement and shall survive the Closing
Date as follows:
(a) The warranties and representations of Buyer in
Paragraphs 4.4 and 4.5 of this Agreement and of Seller and
Xxxxxxxx in Paragraph 3.9 will survive forever.
(b) All warranties and representations of Seller and
Xxxxxxxx in Paragraphs 3.8, 3.21 and 3.30 will survive for the
applicable statute of limitation, plus thirty (30) days.
(c) All other warranties and representations of the
parties herein or in any agreement or instrument executed in
connection herewith shall terminate on December 31, 1997.
(d) Notwithstanding the limitations described in
subsections (b) and (c) above, if a Claiming Party has a
reasonable basis for the belief that a claim for indemnification
exists or will arise and notice regarding such claim is received
in writing by the Indemnifying Party describing in reasonable
detail the facts or circumstances with respect to the subject
matter of such claim on or before the date on which the
representation, warranty, covenant or agreement on which such
claim or action is or will be based ceases to survive as set
forth in this Section 15.16, such claim will survive irrespective
of whether the subject matter of such claim or action shall have
occurred before, on or after such date.
15.17. Taxes. The parties hereto agree that any
federal, state or local sales or other similar transfer taxes,
levies or assessments (including interest and penalties relating
thereto) resulting from the consummation of the transactions
contemplated hereby shall be the liability or responsibility of
Seller.
15.18. Waiver. The failure of any party to exercise
any of its rights hereunder or to enforce any of the terms or
condition of this Agreement on any occasion shall not constitute
or be deemed a waiver of that party's rights thereafter to exer-
cise any rights hereunder or to enforce each and every term and
condition of this Agreement.
15.19. Supplementary Disclosures; Waiver. The parties
acknowledge and agree that all exhibits or schedules delivered to
Buyer by Seller or Xxxxxxxx or warranties or representations made
by Seller or Xxxxxxxx herein on or prior to the date of this
Agreement may be amended or supplemented in writing by Seller or
Xxxxxxxx, but not later than five (5) business days prior to the
Closing Date; provided, that if such amendment or supplementation
constitutes a material change, in Buyer's opinion, Buyer may
terminate the Agreement, and will be reimbursed by Seller upon
demand for Buyer's expenses and reasonable attorneys fees
incurred to the date of termination in connection with this
transaction. Buyer shall be deemed to have accepted such amended
or supplemented exhibit, schedule, warranty or representation
unless Buyer notifies Seller prior to the Closing Date of its
objection to such amendment or supplement. Unless Buyer so
notifies Seller, Buyer shall be deemed to have waived (i) its
rights under Paragraph 12.1 to terminate this Agreement, and (ii)
any claim against Seller or Xxxxxxxx based on any exhibit,
schedule, warranty or representation as it existed prior to being
amended or supplemented in accordance with the provisions of this
Paragraph 15.19.
16. Dispute Resolution. All disputes arising out of
or related to this Agreement, including any claims that all or
any part of this Agreement is invalid, illegal, voidable, or
void, will be settled by arbitration, pursuant to an Arbitration
Agreement between Buyer, Seller, the Shareholders, the members of
the board of directors of the Company who are voting trustees
under the Voting Trust Agreement and Bank One, Colorado, NA dated
December 22, 1995.
IN WITNESS WHEREOF, the parties hereto, by and through
their duly authorized representatives have executed this Agree-
ment, as of the day and year first above written.
Address for notice: INTELLIGRAPHICS, INC.,
000 X. Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000 By:__/s/ A. William Huelsman__
Attn.: A. Xxxxxxx Xxxxxxxx A. Xxxxxxx Xxxxxxxx, Chairman
and Chief Executive Officer
Address for notice:
A. XXXXXXX XXXXXXXX
000 X. Xxxxxxxx
Xxxxx 00
Xxxxxxxx, XX 00000 __/s/ A. William Huelsman__
Fax: (000) 000-0000
Address for notice: ANALYTICAL SURVEYS, INC.,
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000 By:_/s/ Xxxxxx X. Xxxxxx
President and
Chief Executive Officer
